Will your startup hit PMF?

Hi Reader, today is THE day.

The day we finally start talking about PMF.

An often talked about, very poorly understood concept in the startup world.

Most startups never achieve it.

So what is PMF?​
And how do you know if you hit PMF?

Let's dig in.

Product. Market. Fit.

I once had a discovery call with a startup founder.

As he was taking me through his startup, he said "we hit PMF".

That made NO SENSE to me.
Why?

They needed my help on paid acquisition.
​A DEFINITE sign you're not in PMF territory.

Achieving PMF is a pivotal milestone for any startup.

It's the moment when your product:

• ​Meets the needs of your market in a way that customers can't live without it.
• When your target customers start buying your product, using it, and telling others about it in a sustainable + scalable manner.

PMF is not just about revenue but also about creating a product that truly RESONATES.

So when do you hit PMF?

It's tough to define PMF in a simple manner.

BUT. There are visible signs that many founders have shared, that helped them know they are in PMF territory.

1. An Outpouring of Customer Love:

You see visible excitement by users.
Talking about your product with enthusiasm.
​Excited to share their experiences and often with overwhelmingly positive feedback.

Praise is coming your way.
Users are proactively reaching out to commend your product.

Users are STILL willing to use your product, even when it BREAKS.​
Your product is so indispensable that users stick around even when it is breaks (Hello recent ChatGPT downtime).

2. Positive Revenue Growth:

Users are willing to pay just to BOOK a spot.
Even before it’s fully launched, users put cash on the table to reserve a spot.

Your sales are growing consistently (and with minimal to moderate effort).​
As more users find and use your product.

3. Strong User Engagement:

Your retention rates are SOLID.​
And you see your retention curve flatten fairly quickly after an initial drop-off.

Growth becomes a challenge for you (in the best way possible).​
The demand grows so rapidly that it becomes challenging to keep up with user growth.
You can't staff up and scale fast enough to keep up.

4. SOLID Signs of Traction:

Your growth is LED by organic traffic.
​A significant portion of your growth comes from organic channels, indicating genuine market demand.

A major portion of your users are coming via REFERRALS.​
Showcasing satisfied customers who promote your product.

You have an efficient CAC to LTV Ratio.​
Customer Acquisition Cost (CAC) is less than the Lifetime Value (LTV) of your customers, ensuring sustainable growth.
(in simple terms, it costs less to acquire a user compared to how much that user spends with you).

You can also "feel" when PMF ISN'T happening.

Your progress is slow.
Your deal pipeline is lagging, with minimal revenue and very little being closed.
​There's no spark in the air when it comes to your product (yet).

So how do you measure PMF?

This wouldn't be the future proof newsletter without an actionable strategy.

Here's a very simple hack to approximate PMF.

The PMF survey, developed by Sean Ellis.

The most critical question in the survey is: "How would you feel if you could no longer use this product?"

The possible responses are:

• Very disappointed
• Somewhat disappointed
• Not disappointed (it isn’t really that useful)
• N/A – I no longer use the product

If at least 40% of your surveyed users indicate they would be "very disappointed" without your product, you’ve likely achieved PMF.

This benchmark helps quantify user sentiment and validates that your product is integral to their needs.

Are you live? Start using the PMF Survey

On a regular basis.
(regular = at least a few months of intervals, or major change in the product that could impact results. Don't spam users).

Bake this survey and its results into your product development and community outreach processes.
Monitor (1) results and (2) evolution over time. Adjust accordingly.

If your numbers are not where they need to be, continue refining your product until it becomes CRITICAL to users.

​You might need to pivot to make it happen.​

If you have very strong indicators you're in the PMF sweet spot, excellent.

KEEP at it.

Remember that PMF is not a moment in time, but a continuous process. Market conditions, competitors, and your own product can get you out of PMF.

So continue investing in making your product ESSENTIAL for your audience.

Let's win together,
Majd