VCs & Founders: Here is a PMF finder tool, download now
PMF analyzer for early stage startups or/and a Growth dashboard for a post PMF B2C startup: Download FREE excel dashboard
Q. What is a Product Market Fit?
A. Customers love the product, they are ready to pay/already paying, word of mouth or organic growth has kicked in.
Q. How do you measure it?
A. You just know it.
Q. How do you tell others/VCs that you have achieved PMF?
A. Your gut feel will reflect in some data. Some of it could be the following:
- Organic growth: Low eCPI
- Product love: Low uninstalls, high retention
- Stickiness: High DAU/WAU/MAU ratio
- Willingness to Pay: Transacted/Registered %
- App rating: 4.7+ (ok ignore this, this can be faked — plenty of popular startups have some very happy customers apparently ;)
While growth is the only way of life for startups, tracking it the right way becomes extremely critical. We are inundated with panels, dashboards, visualization tools, complex analytics which apparently makes our lives easier but I personally prefer to manually keep a record of some of the extremely critical growth trackers. Adding it manually ensures that these metrics will always remain on top of your mind. And the cause & effect of features vs impact will be clearly visible while you are filling the sheet. All the product efforts are a waste if it doesn’t impact your top 8–10 KPIs.
I decided to create a very simple sheet comprising of the simplest metrics which can be a great indicative of the health of your startup. I am calling it a PMF tracker as it helps you validate your PMF hypothesis with the actual data.
Note: This sheet is only for B2C startups.
First of all here is the PMF excel dashboard you need to download: https://www.dropbox.com/s/2h8cout7rzwhlsv/PMF%20Tracker.xlsx?dl=0
How to use this sheet: (this sheet has dummy data, replace with actual data)
- Sheet 1 (Dashboard) shows the top App metrics
- Sheet 2 = Input all your key app data here (replace app with website data if you don’t have an app)
- Sheet 3 (Unit economics) = optional for PMF but good for transaction led businesses
- Sheet 4 (Key metrics) = CPI, CAC, LTV finder. Optional for PMF
- Sheet 5, 6, 7 are optional and could be for your internal tracking
- Sheet 8 (benchmark) = Global benchmarks for key app data vs your average
Note: Sheets which are protected can be unprotected by clicking on Review > Unprotect (there is no password)
How to read PMF data in the sheet:
There are 2 confidence levels of PMF in this sheet. If the first box says Yes then some of your metrics are promising. If first box says NO, then you have not achieved PMF yet.
If the 2nd box says YES, then it is an emphatic yes as all metrics points to that. If that says No, and above box says Yes, you are on the right track.
Pre-revenue startups can ignore transacted/registered ratios and modify the PMF formula accordingly (ping me if you need help in editing the formula for pre-revenue model)
This sheet can also be used by any post PMF stage startups for tracking their growth.
Do share your feedback with me at dabbot@gmail.com or tag me on Twitter at twitter.com/deepakabbot
