How to tell if you have product/market fit

Millennials taking a selfie. Photo credit to @criene via Twenty20.

TL;DR

  1. You have some organic growth already.
  2. Your existing users send invites.
  3. You have a high NPS score.
  4. Your existing users retain.

You have some organic growth already.

Ideally more than 50% of your new accounts come from direct or organic traffic. Invites and referral programs are both deep veins of upside that your growth team can mine, but if no one is already telling their friends about your product, you do not have product/market fit. Organic growth is the referral that’s hard to measure. It happens when your coworker pops their head up after the design team starts laughing at a joke in Slack. It happens when the girl standing next to you on the train leans over and says, Cute bag!

Your existing users send invites.

For a self-service enterprise app, look for at least 30% of available customers to send invites during their first week. For a consumer app, you want at least 60% of available people to send invites. By “available” I mean people who can or should be sending invites — this will vary based on the specific adoption mechanics of your app.

Someone loves you; someone hates you.

Ultimately what you’re looking for is a high NPS (Net Promoter Score) with your early core customers. But if mixed in with a lot of promoters (9s and 10s) you’re also seeing a handful of detractors (technically anyone with a score of 1–5 is a detractor but your real haters are 0s and 1s), do not despair. Hate is the not opposite of love; meh is the opposite of love. Hatred takes time and energy.

Your existing users retain.

Even in the earliest days of your product’s life you should see high retention. This is possible to measure even with a small beta community, if your MVP is in a state where it’s consistently available to them. To understand which retention metric is right for you, return to the reasonable human behavior you’re looking for to determine a metric that you can reasonably define as “active” for your specific app. For a daily use product like a messaging or photos app, you want over 50% of your monthly active users to be daily active users. You’ll also want more than 20% of your WAU to be active 4 out of 7 days a week. After a week, you want 40% of your activated users (people who’ve taken some key actions in your app) to retain.

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Merci Victoria Grace

Merci Victoria Grace

Advisor & angel investor. Former VC at Lightspeed, former Head of Growth at Slack. Happy to help.