Measuring Product-Market Fit: Quantitative Metrics That Don't Lie

Product-Market Fit (PMF) is the holy grail. But it feels mystical. "You'll know it when you feel it," they say. That's terrible advice. You can measure it.

1. The Sean Ellis Test (The 40% Rule)

Ask your users: "How would you feel if you could no longer use this product?"

• Very Disappointed
• Somewhat Disappointed
• Not Disappointed

Benchmark: If >40% say "Very Disappointed," you likely have PMF.

2. Retention Cohorts: The Smile Graph

Look at your user retention over time.

• Bad: The curve goes to zero.
• Good: The curve flattens out (some users stay forever).
• Great: The curve smiles (users come back and re-engage more over time).

3. Organic Growth vs. Paid Growth

If you turn off Facebook ads, does your growth stop?

• Pre-PMF: Growth is linear to ad spend.
• Post-PMF: Word of mouth drives compounding growth.

4. Engagement Indices

Daily Active Users (DAU) / Monthly Active Users (MAU).

• For a social app, >20% is good. >50% is world-class.

Conclusion

Don't scale until you have proof. Scaling before PMF is the "Leaky Bucket" problem—you're just pouring money into a hole. Measure first, then accelerate.