Measuring product market fit.

When a market actively purchases a product you have created, then you have a product-market fit. This is quite important if a product is to survive, and you may be thinking it’s a no brainer that’s easy to accomplish but for most people however this isn’t always the case. A large percentage of start-ups do not accomplish product-market fit even with years of hard work and adequate funding. The problem usually is, the create a great product however it is not suited to the market. Here’s how to quantify product-market fit to see if your products work.

Retention cohorts

Using retention cohorts are a great way to measure your product-market fit because they show you if the same cohorts of users return to your new products week after week. A cohort of users is usually tracked right from the first week they sign up and every other week afterwards. If your product has product- market fit, it’ll show the users that keep coming back week over week leading to a growth in retention. If your product has no product-market fit will show trends that lean towards zero percent of cohorts every week.

Picking a metric

The best way is to choose a metric that properly represents the value customers get from your product and how often we expect them to use this value. For example, eBay would look at their gross merchandise value every week. Facebook would look at its monthly active users and Airbnb would look at boosting the amount if bookings from each user yearly.

Measuring product – market fit

Measuring your retention rate helps you adequately quantify your product-market fit and allows you test to see whether your customers return to your product or not. This will also help you know if it’s time for your business to scale.

Feeling for product-market fit

The process of finding your product – market fit is as quantitative as it is qualitative, it can be a turbulent and emotional journey from when you struggle with getting product-market fit to the time when customers cannot get enough of your product.

If you are able to effectively combine these two strategies of feeling and measuring, you’ll save yourself valuable time and resources that would have been wasted trying to find your product- market fit.

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Intro to Monetization

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lesson 5

The monetization quick start guide

Monetization and data collection can be a lot to take in as it is a broad topic so what’s the best way to begin? Over the years we have helped tons of companies with their monetization set up and we’re going to share some of our methods in our simple quickstart guide.