An easy way to go about Product Market Fit?

That’s the key question you will ask yourself over and over and investors will never stop asking you: Do we have product market fit (PMF)?

Most founders we have been working with have struggled with this question and how to demonstrate they have PMF.

We like to keep things simple at Activate Ventures so for us PMF is retention. That’s right. We want to use data to figure out whether we made something that people really want. And the best way to do that is showing that people keep coming back because they love what the founders have built.

How do we do that in practice?

We pick one metric that represents the value my customers get from my product (e.g. listening to music for a music subscription service).

We pick the right frequency i.e. how often do we expect users to engage with our product, is it weekly? Monthly? Yearly?

We measure the repeat usage for the metric we picked e.g. if we had 10 customers listening to music this week, how many of these 10 customers are still active in week 2, week 3, week 4 etc.

If we retain a good portion of these active users after a number of weeks (70-80%) we know that we built something that people love, use and keep coming back to. We showed we have retention. Hence we demonstrate we have PMF.

It doesn’t have to be more complicated than that at the very beginning. And you can show PMF with your friends and family network (if you’re building something that resonates with them). Surely you have 10 people in your network who might benefit from what you're building.

Need help with your PMF and Go-to-market? Our team of mentors can help you.