Achieving Product Market Fit and Building Great Products: A Comprehensive Approach

Achieving Product Market Fit and Building Great Products: A Comprehensive Approach

Introduction:

In the world of product development, achieving product market fit is a crucial milestone. It signifies that a product has reached a point where it can shift focus from product improvement to scaling distribution channels. While there are various metrics to measure product market fit, the cohort retention rate stands out as the most important one. In this article, we will explore the significance of cohort retention rate and delve into the process of conducting a product critique to understand people's desires and reactions. By combining these approaches, we can gain valuable insights into building great products that resonate with users.

Understanding the Cohort Retention Rate:

The cohort retention rate serves as an indicator of product market fit. It measures the percentage of users who continue to use a product over a specific period of time. A product with a high cohort retention rate demonstrates that users find value in it and are likely to continue using it. This is crucial for building scalable acquisition channels and achieving sustainable growth.

The Importance of Cohort Retention Triangle Chart:

To track the progress of cohort retention rate, it is essential to create a cohort retention "triangle" chart. As the product improves, newer cohorts should exhibit high retention rates. By analyzing this chart, you can identify when your product has achieved product market fit. It is worth noting that the benchmark for product market fit varies across different types of products. For consumer products, a 25% retention rate is a good floor, while for B2B SaaS products, a 70% retention rate is considered favorable.

The Amplifying Effect of Good Retention:

Good retention not only ensures that the users you acquire stay, but it also amplifies your acquisition efforts. When users love your product and continue to use it over time, they are more likely to recommend it to their friends. Word-of-mouth becomes a powerful growth driver, leading to organic user acquisition. Therefore, focusing on improving retention is crucial for sustainable growth.

The Product Critique Process:

To create a great product, understanding people's desires and observing their interactions with the product are key. Conducting a product critique allows you to gain valuable insights into what works and what doesn't. By following a few core tenets, you can improve your product instincts and build better things.

First Impressions Matter:

Most opinions about a product are formed within the first few minutes of interaction. Therefore, it is important to pay attention to the value proposition, usability, and overall craftsmanship of the app. By considering the ways in which your first impressions are formed, you can better understand the app's strengths and weaknesses, as well as the intentions of the development team.

Gathering Multiple Perspectives:

One of the quickest ways to learn about a product's effectiveness in the broader market is by seeking additional perspectives. Reading reviews, comments in blogs, and tweets about the app can provide valuable insights. By understanding how others perceive the product, you can identify areas for improvement and gain a better understanding of user preferences.

The Power of Curiosity:

Building great experiences requires curiosity. By continuously observing, learning, and understanding what motivates and delights users, you can create products that resonate with their needs. Great designers and product thinkers possess a deep understanding of people and their desires. By tapping into this knowledge, you can build products that truly meet users' expectations.

Actionable Advice:

• 1. Actively measure your cohort retention rate using a "triangle" cohort retention chart to track progress towards product market fit.

• 2. Seek out multiple perspectives by reading reviews, comments, and tweets about your product to gain a broader understanding of its strengths and weaknesses.

• 3. Cultivate curiosity and continuously observe user behavior to develop better product instincts and build products that meet users' desires.

Conclusion:

Achieving product market fit and building great products require a holistic approach that combines the measurement of cohort retention rate and the process of conducting a product critique. By understanding the importance of cohort retention, tracking progress through retention charts, and gaining insights into user desires and reactions, you can create products that not only meet user needs but also drive sustainable growth. Through active measurement, seeking multiple perspectives, and nurturing curiosity, you can improve your product instincts and create products that truly resonate with users.