The Product-Market Fit Scale
How close are you to product-market fit?
Everyone aims for product-market fit.
But, how do you know if you are on track to get there?
Listen for the right signals
The diagram
Ask yourself: What is the furthest to the right signal you have generated?
How to interpret
If the signals increasingly come from further to the right, you are nearing product-market fit
If the signals increasingly come from further to the left, you are moving away from product-market fit
Disagree with a signal?
Check out the FAQ below or let me know in the comments.
FAQ
Q: Why should I start with ad-clicks or startup contests?
You shouldn’t. Start with talking to some people, sell your free or paid pilot.
Q: Should I follow this left to right? Is this a roadmap?
No, definitely not. This is about PM-Fit signal strength. If you want a roadmap or instructions, check out my playbook.
Q: How did you come up with these signals and position on the scale?
Gut feeling, based on my experience mentoring 250+ startups. This graph is not backed by a scientific study. Even though I’ve seen many startups go through these steps in this order, for every step there are exceptions.
Q: These metrics are fairly simple.
True. It’s hard to measure early-stage innovation. Getting hung up on metrics is the worst thing you can do early-stage. A metric is just one of the signals you can look into. I rather have you handcraft 10 pilots to learn what makes your customer happy than to obsess over your ‘landing page to email sign-up’-conversion rate.
Q: Are 100k followers worse than 1 problem interview?
Likely not. Someone with 100k followers probably has a bunch of sales already. You should consider the signals as isolated signals. What is the furthest to the right signal you have generated? If somebody has 100k followers without any sales, that’s a red flag, right? Consider 50 paid pilots without any followers vs. 0 paid pilots with 50k followers. You choose what’s more valuable.
Q: What about skipping the free pilot phase?
If you can do that, great. You will learn about ps-fit and business-model fit in the same pilot. If not, it’s fine to do a free pilot first. Read more on free vs paid pilot here.
Q: Why isn’t media writing about you higher on the scale?
This scale is from the perspective of the customer wanting your product by the masses. The fact that a journalist likes your startup, doesn’t mean customers will love your product. I’ve spoken to founders whose startup was featured on national TV with 1M viewers, with barely a spike in website visits. I’m not against PR as a marketing strategy, it can work quite effectively, but as a signal for product-market fit, it’s weak.
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Q: Why are startup contest not higher on the scale?
The fact that a contest jury likes your startup idea doesn’t mean your customer will. Furthermore, there’s a greenwashing/impact bias in these competitions, that sympathetic and admirable startups tend to win. Just ask yourselves, would you rather win 5 contests, or have 5 paid pilots? Where to spend your time?
Q: What about going viral?
Whether it’s a Tweet, Product Hunt or on Reddit: going viral is just a boost in website traffic and sometimes downloads. A random tweet of mine once got half a million likes and barely converted to new subscribers. Virality is not a strategy, product-led growth can be one.
Q: Where is raising money?
Sure, I could’ve included raising money. It’s less likely for most startups that they will raise money (less than 1% raise VC). As with media writing about you, raising money doesn’t equal market validation. It shows others believe you have the potential to return their investment. Furthermore, raising money can occur in any phase of a startup, but mostly covers stages close to or beyond product-market fit.
Q: Why is a paid pre-order better than happy free pilot users?
These two are very close together. In all honesty, I could’ve switched them around. One proves the willingness to pay, the other proves problem-solution fit. Both are required for a successful startup. I wouldn’t obsess over which one comes first: it’s about that both are far superior signals compared to a validated problem, for instance.
Q: What about ARR, MRR & Churn?
I created this graph to highlight the things others aren’t talking about. As I wrote earlier, many ‘startup metrics’ overviews exist. Yet for super early-stage products, you can’t measure much. This is aimed at founders who still are building their initial business model, to show how their current milestones build up towards product-market fit.
Q: Repeatable sales also has many metrics, why don’t you include those?
Each channel has its unique metrics. The bottom line: it should be a repeatable sales channel. Maja writes excellent content on GTM strategies, and how to find a channel that works for you, repeatably, covering metrics there. Also, consider Rob Snyder’s repeatable case study framework if you get to this phase. Their content on that phase is better than what I’ve currently covered here.
Q: What is up with the weird orange with a red border for business-model fit?
In an early paid pilot, you are still asking a lot from your customer. Effort is a dominant currency, yet also is money comes into the picture for the first time. I wanted to highlight both aspects. I show the gradient from effort to effort and money, to full money. I didn’t have a better visual solution for this yet. If you have ideas, let me know.
Q: I feel like I’ve seen this before
Yes, this is an updated version of my desirability scale. I felt that one was a bit too complicated. Let me know what you think in the comments. I’ve posted that one almost two years ago, meaning most current subscribers haven’t seen it yet. Surprise!
Love this!
Good insight, thanks 👍. Can I translate part of this article into Spanish with links to you and a descripción of your newsletter?