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.

Related reading: See our articles on bootstrapping vs fundraising and side projects that became empires for more insights.

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.

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Further Reading:

• Y Combinator: Product-Market Fit - Startup wisdom and PMF frameworks from the world's most successful accelerator.
• a16z: Finding Product-Market Fit - Insights on measuring and achieving PMF from Andreessen Horowitz's venture capital experts.
• Learn more about our editorial team and how we research our content.