Will it move the needle? Using Product-Market Fit as our guiding light.
This is article 3 of 8 in the Pivot Strategy Series. Hectic launched our web app in Feb 2021 and released an updated design in fall 2021. This series explores the research and decisions that influenced our updated design and strategy.
Once our team validated our product strategy with an MVP and determined our product and marketing guiding principles, it was time to shift from MVP mode to building the real thing. But here’s the trick: we’re already a year into this company and need to turn potential into traction. I’ve heard our COO, Geoff, say that “startups don’t run out of cash, they run out of cash before they pivot enough times to find where they need to be.” So it’s not just important to build the right thing, but to build the pieces in the right order so you can grow, show traction, and raise the funding to stay in business long enough to reach the product you have planned. And the key to figuring out what to build and when is answered by asking, “Will this help us find product-market fit?”
But before you can find product-market fit (PMF), you have to know how to measure it.
Can you measure it through talking to customers? No, while feedback from individuals helps you understand if your strategy is working, one person is not “the market” so one person can’t validate product-market fit.
How can you measure “the market”? You can’t interact with the entire market (on a small budget) but you do interact with a lot more site visitors than you do with people who start conversations to ask for help or give feedback. We are a metrics-loving company, so we know how many signups we get every day, how many of those people come back the next day, how many become active users, and how many subscribe to our paid plan.
Which of those metrics tell us we’ve reached product-market fit? Becoming a regular, active user or converting to our paid plan are both indicators of success, but just being an active user on the free plan still means we haven’t found a pain point bad enough and our solution isn’t good enough for the right kind of person. The only thing that really tells you that is upgrading to the paid plan where you get the full benefit of our product. So we know we have found product-market fit when we see our conversion to paid rate increase. Other factors can suggest we’re on the right path, but the conversation rate needs to be our truest indicator.
So what will take the same number of visitors and get more of them to adopt and upgrade? The answer to that question is in the next article, “All the ingredients are in the kitchen but you haven’t made the meal.”
Photo by Lightscape on Unsplash
