Finding Product Market Fit: The Key to Success


Hatched by Glasp

Sep 14, 2023

3 min read


Finding Product Market Fit: The Key to Success


Product market fit is the holy grail for startups. It means being in a good market with a product that can satisfy that market. In other words, it's about finding the perfect match between your product and the market you're targeting. But how do you know when you've achieved product market fit? In this article, we will explore the concept of product market fit, debunk some myths surrounding it, and provide actionable advice to help you achieve it.

The Importance of the Market:

One common misconception about product market fit is that it's all about the product. However, the market itself plays a crucial role. Focusing on the market first is key to finding product market fit. To understand your market, start by identifying the keywords people use to find your site. Tools like Google Keyword Tool can help you determine how many people are searching for those keywords. By understanding the demand for your product in the market, you can better position yourself for success.

Debunking Product Market Fit Myths:

There are several myths surrounding product market fit that need to be addressed. Firstly, product market fit is not always a discrete, big bang event. It's a continuous process of aligning your product with the market. Secondly, it's not always obvious when you have achieved product market fit. It requires ongoing evaluation and feedback from users. Thirdly, once you achieve product market fit, you can still lose it. The market is dynamic, and you need to constantly adapt to stay relevant. Lastly, even with product market fit, competition is still a concern. You must continue to innovate and differentiate yourself from competitors.

Retaining Users as a Metric:

Cohort retention rate is a fair metric to gauge product market fit. When 40% of your users say they would be "very disappointed" without your product, it's a good sign of product market fit. However, this should not be the sole method of verification. It's important to consider other factors such as user engagement, satisfaction, and long-term retention. Strive to make something that a small number of people want in large quantities, rather than something that a large number of people want in small quantities. This ensures a strong market fit.

Activation Rate: A Leading Indicator:

Activation rate is another important metric to consider. It measures the percentage of users who hit a specific milestone in your product. A good activation rate should be highly predictive of long-term value delivery and directly impactable by growth teams. For SaaS products, the average activation rate is 36%, with a median of 30%. It's crucial to define the activation milestone carefully, ensuring it showcases the value of your product and predicts long-term retention.

Actionable Advice:

  • 1. Focus on the market first: Understand the demand for your product by analyzing keywords and user search behavior. Align your product with the needs of the market.
  • 2. Continuously evaluate and adapt: Product market fit is not a one-time event. Keep a pulse on the market and make necessary adjustments to stay relevant.
  • 3. Define meaningful activation milestones: Choose a milestone that strongly correlates with long-term retention. It should showcase the value of your product and encourage users to stick around.


Product market fit is the foundation of startup success. By understanding the market, debunking myths, and engaging with meaningful metrics, you can increase your chances of achieving product market fit. Remember to focus on the market first, continuously adapt to changing market dynamics, and define actionable activation milestones. With these strategies in place, you'll be on your way to finding the perfect fit between your product and your target market.

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