Every startup founder has heard the term “Product Market Fit”.
It’s often used in a hand-wavy way to convey that people really like what you’ve built. It’s difficult to concisely define or definitively quantify.
In fact, when asked to define PMF, Marc Andreessen famously said:
“You’ll know it when you have it. Everything will be flying off the shelves”
– Marc Andreessen, famous investor with cute, but possibly unhelpful, definition
As a metrics wonk, I’ve tried many times to put some numbers to it.
The best way to measure PMF, in my opinion, is by customer retention cohorts. This measures “how long do your customers stick around for?”
Other metrics to gauge Product Market Fit include (but are not limited to):
- Revenue Growth: Can you triple, triple, triple, double, double?
- Net Dollar Retention: Do your customers who stick around expand over time?
- Burn Multiple: How efficient is each unit of growth?
- LTV / CAC: What’s the ratio of customer value to cost?
But at the end of the day, as much as I hate to admit it, Andreessen was right. PMF is a feeling. So here are ten videos to give you all the PMF feels so you’ll be able to identify it when you’ve got it. Click to continue reading and to see PMF videos.
