By Maddie Wang
As an early-stage founder, achieving product-market fit is the most critical milestone to pursue. According to Mar Hershenson, managing partner at Pear VC, there are two engines required to find product-market fit:
The first engine is building a product that customers genuinely like and value.
➕ 90% of new users are still engaged after 30-90 days.
For my business, if 90% of people who joined this month are still engaged and 80% of people who joined 3 months ago are still engaged, that shows strong product-market fit.
➕ New cohorts are increasingly engaged.
Each new group of users you bring in should be stickier and more engaged than the last. This shows you're improving the product and experience.
➕ Usage and revenue are growing steadily.
Whether it's transactions, time spent, or dollars, metrics should be moving up and to the right.
A good growth engine has a few key attributes:
➕ It's repeatable and scalable.
The growth tactics work for new customer cohorts and at higher volumes. They aren't reliant on the founder's "superpowers."
➕ The CAC:LTV ratio is efficient.
The cost to acquire a new customer (CAC) compared to the lifetime value of that customer (LTV) is greater than 1. For many companies, 3x or higher is a good target. This shows customers are profitable and the business model works.
➕ Growth is accelerating.
It's getting easier and faster to acquire new customers over time. This indicates strong product-market fit and a scalable growth engine.
➕ Someone other than the founder can drive growth.
If growth relies entirely on the founder, it likely isn't scalable or repeatable. A good growth engine can be operated by another team member.
In summary, finding product-market fit requires building both a product people genuinely love and value as well as a scalable growth engine to reach new customers. Focus on these two engines, achieve strong metrics in both, and you'll be well on your way to product-market fit and startup success.
Best of luck from founderscafe.io