Do You Have Product-Market Fit?

Welcome to the first edition of my newsletter, "Great Question..."

The name is inspired by those pivotal moments in a meeting or panel when someone asks a question that naturally prompts the response, “Great question…”. These thought-provoking questions have the power to steer the conversation in a new direction and often spark even deeper, more meaningful discussions and therefore better outcomes.

Each issue, we'll explore questions that help us think differently about work and life.

Today, we're looking at questions that help a leader know if their product or service has “product-market fit”, which is the primary pursuit of a new product launch.

Great Questions

Here are some great questions that can help you determine if you have product market fit:

1) Do customers get upset or vocal if your product is unavailable or changes? If so, you’re probably on to something.

Now, would at least 40% of users be “very disappointed” if your product disappeared tomorrow? This Sean Ellis test is widely considered the gold standard PMF metric and provides clear, quantifiable feedback. 

2) Are you struggling to keep up with demand? And do sales and marketing feel easier over time? 

If you don't have product-market fit, you feel like you’re pushing a boulder uphill and if you do have it, you're chasing that boulder downhill.

3) Do you have a strong LTV/CAC ratio of 3+ when you’ve moved beyond the “innovators” and “early adopters” cohorts and into the mainstream market? And, do your distribution channels have meaningful depth? In other words, is your business truly economically viable once you move past the easy early customers? And can your acquisition channels scale meaningfully?

Be careful of not properly testing willingness to pay and artificially creating PMF via unsustainable discounts.

4) Are you seeing strong word-of-mouth growth? Are customers actively seeking out your product without heavy marketing push?

Organic referrals indicate your product solves a real problem so effectively that customers become advocates.

Great Finds

• I've been experimenting with Wispr Flow for dictation—it's a voice-to-text AI tool that does some basic but helpful formatting to your voiced thoughts. We talk faster than we type and it corrects issues that would need to be manually edited by other voice-to-text tools so it’s improved my productivity quite a bit.

Great Inspiration

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Onward!

Mike