Identifying Product-Market fit
Product + Market fit (PMF) is the degree to which a product satisfies strong market demand. It shows how people interact with the product and whether it is valuable to the users.
You can identify PMF qualitatively by asking users how they will feel without the product or quantitatively by tracking retention to see how many users still use the product after some time. Ideally, do both.
Sean further shared that the best way to achieve PMF is to:
- First and foremost, create a product that solves people’s genuine problems.
- Find out who needs it and get them to try it. Ensure that you are solving the right problem for the right audience. In your early days, your focus is to find the audience that is the best fit for your product and get them to use it repeatedly.
Retention is everyone’s problem.
Not too far from PMF is talk about retention. Retention is the ability to hold a user’s attention. Sean believes that during the early days of a startup, retention should be the job of everyone on the team (product, founders, marketing, CS) and that founders need to keep costs low until you hack retention.
As you grow and expand, marketing will focus on how to bring in new (and the right) customers. In contrast, product will focus on getting new customers to experience the product right in the first place (because the first experience with a product is significant), and that’s how you get fo retention will occur.
But ultimately, a great product results in good retention.
According to Sean, if there is one part of the funnel he’d focus on above all else, especially in the early days, it’d be ACTIVATION. Retention doesn’t happen without effective activation. If your users don’t experience the product, there’d be nothing and no one to retain in the first place. So if you ignore all else, don’t ignore activating the customers that come.
How do you get the right users in and get them to experience the product immediately? How do you ensure their first experience is great enough to bring them back? Hack activation, and you’d have a smoother funnel. The users you activate well become the ones you can easily retain and the ones that will refer others.
hehe! This is a very controversial opinion, but I love it, cause in many ways, I can see the reason (from my own experiences).
Sean says, don’t take a growth role for a product that has not already validated PMF – because the stress mehn!. Keep moving if you take it and the product doesn’t have PMF in six months. Take this advice with a pinch of salt.
But here’s the thing, what are you growing if there is no PMF? A lot of early-stage startups make the mistake of trying to scale from day one instead of focusing on PMF. I have made this mistake a couple of times as well. In the early days, focus on building an engaged audience and activating and retaining the right audience.
If you do take a pre-product market fit role, please ensure to enjoy it. Be sure you have chemistry with the team and that you love the product. It would be best if you also had a few ideas before getting into it.
Having growth ideas before starting a role is a good indicator that you are the right fit and would excel there. If you have no ideas before entering, then something might be wrong.
Watch the entire conversation with Sean Ellis below.