Product/Market Fit: Experience & Data

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Top Highlights

• Some people call this “a fit, but not sustainable” or “a fit, just with limited upside.” I call it a lack of fit, because if customers are leaving, it’s not a fit. Don’t get distracted by dollars. Pay attention to customer behavior.

• Companies that achieve Product/Market Fit – both self-funded and VC-funded – exhibit the same prototypical metrics curves and subjective experiences.

• If every day it’s a struggle to keep up with demand, it’s working.

• It’s a change from “how do we get more customers” to “how do we handle the influx of demand?”

• who cares how some article defines some term like “Product/Market Fit?” But it does matter, because it determines whether the company is sustainable, and fundamentally changes how you operate each day, how you plan for the future, whether and who you need to hire, and what you need to build, and whether you’re going to start tackling scale.

• Easy growth (Pull, not push)

• High retention

• Critical mass

• The bottom line is, these growth curves matching “fit” are common with all business models—B2B and B2C, recurring-revenue or one-time revenue, products or media, self-funded or VC-funded.

• The numbers are the objective measure that this is happening, but they’re not the point. The point is that customers don’t want to stay. That means it’s not a fit.

• cancellation higher than 3% for B2B or 5% for B2C indicates a lack of Product/Market Fit.

• Some people call this “a fit, but not sustainable” or “a fit, just with limited upside.” I call it a lack of fit, because if customers are leaving, it’s not a fit. Don’t get distracted by dollars. Pay attention to customer behavior.