Product people should only be focused on growth i.e. connecting people to the value of a product once they’ve confirmed the product is delivering value.

I define product/market fit as satisfaction that allows for sustained growth.

One thing I love about customers is that they are divinely discontent. Their expectations are never static – they go up. It’s human nature. We didn’t ascend from our hunter-gatherer days by being satisfied. People have a voracious appetite for a better way, and yesterday’s ‘wow’ quickly becomes today’s ‘ordinary’.

Product/market fit is not when customers stop complaining and are fully satisfied. They’ll never stop complaining. They’ll never be fully satisfied.

Product/market fit is when they stop leaving

for most businesses, instead of measuring satisfaction, measuring retention is the best signal of product/market fit.

Once you have a key action and a designated frequency, the cohort graph should have the key action as the y axis and the designated frequency as the x axis.

product/market fit cannot be measured by retention alone. That retention has to create sustainable growth, which means the rate of retention matters.

A flattened retention curve of your key action at the designated frequency plus month over month growth in new customers is the best way I have found to measure true product/market fit.

There are two main schools of thought for how long you should stay in the first phase, which I will oversimplify into calling the Eric Ries model and the Keith Rabois model (unfair to both of them)

The Ries model emphasizes talking to customers early and often to understand what to build, and whether what you have built is actually solving problems for them.

The Rabois model is so driven by the vision of the founders of the company that customer feedback is less important than building what the founders have envisioned before any customers interact with it.

The Ries model tends to target a customer segment and attempt to find out their pain points to build something valuable. The Rabois model starts with a strong vision of both a problem and a target solution and works to build that from the start.

The only goal of launching a product in the Eric Ries model is to generate feedback from the target customer.

The goal of a launch in the Rabois model is to achieve the initial vision that sparked the creation of the product.

A successful vision can turn on a light to that room so everyone can see the door and run toward it. Even many of those major pivots were guided by a strong, albeit new, vision from their founders.

The Rabois model implies product changes will be more difficult. The product vision is usually taxing, so relying on product change to grow is very expensive.

The Eric Ries model is very common in enterprise businesses because founders are confident certain segments have day-to-day problems that aren’t solved and money to pay to create a reliable business model

The Rabois model is more common for hardware because iteration has such long timelines, and consumer models where typically founders have new habits or interactions they need to convince a broad market to try

My personal belief is a strong vision combined with market feedback is a pretty dominant combination of these two approaches whereas many of the other axes depend on the product you are building.

If the retention curves every month flatten and new user numbers increase at a healthy payback period, you can feel confident you have product/market fit.