Achieving product / market fit is one of the most difficult things to do as an entrepreneur and the ultimate goal of phase one of the startup process. Most of this first phase of the process is spent building a minimum respectable product and doing whatever it takes to get the product into the hands of users — users provide the required oxygen for the product to improve. While most startups never make it past this phase due to funding, timing, lack of viable market, poor execution, etc., many do complete phase one and enter phase two where they have to build an efficient customer acquisition machine.
Here are five ways to identify that product / market fit has been achieved:
- 10+ customers have signed on in a modest period of time (e.g. 3 – 9 months) and they haven’t been friendlies (people you already knew, favors you called in, etc.)
- At least five customers actively using the product with little / no product customization (e.g. the product is valuable and mature enough that heavy development work isn’t required for each new customer)
- At least five customers have actively used the product for over a month without finding a bug (no matter how great the product is people always find issues with it, which is natural for this beginning stage)
- At least five customers use the product in a similar way and achieve similar results (early on you find that customers use the product in ways you didn’t imagine, which is great, but the goal is to find consistent, repeatable patterns)
- At least five customers exhibited a similar customer acquisition and onboarding process whereby they bought and went live with the product in a timeframe that was consistent with each other (e.g. had a two month sales cycle and took a week to get the product running)
Here, the theme is consistency and a small amount of repeatability. There’s an on going maturation process that takes time, even with extended resources. As a founder deep within the process of developing product / market fit, it’s useful to refer back to these five ways to assess progress.
What else? What are your thoughts on these five ways to identify fit and what other ones would you add?