Product/market fit is the make-or-break factor for a company. It helps businesses understand whether their product has market appeal and they can dive into the product growth stage with confidence.

We interviewed experienced product managers from different companies about metrics that help product teams achieve better results at different stages of product development. They shared their thoughts on the following:

  • What approaches and metrics should the product team focus on before reaching product/market fit?
  • What approaches and metrics should the product team focus on after reaching product/market fit? 
  • What changes should product teams make to shift from pre- to post-p/m fit work?

We would like to thank all the experts who shared their experience with us and helped us answer these important questions.

  • Phil Anderson (Senior Product Manager (PM-T) – INTech, Amazon) 
  • Shiva Hullinakatte (Senior Product Manager at AT&T)
  • Alex Merwin (Head of Growth, Healthcare & Life Sciences Startups at Amazon Web Services)
  • Daniel Johnson (Founding Partner at We Scale Startups, Lead Growth Mentor at Google)
  • Sam Juraschka (General Manager & Director of Product at BCG Digital Ventures)

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→ Learn data-driven product management in Simulator by GoPractice.

→ Learn growth and realize the maximum potential of your product in Product Growth Simulator.

→ Learn to apply generative AI to create products and automate processes in Generative AI for Product Managers – Mini Simulator.

→ Learn AI/ML through practice by completing four projects around the most common AI problems in AI/ML Simulator for Product Managers.

Q: What approaches and metrics should the product team focus on before reaching product/market fit?

Before product/market fit, a company is still trying to figure out its ideal customer base and use cases for their product. At this stage it’s important to use qualitative data and be as close to your customers as possible. Here are some of the key ways you can explore customer needs and better navigate product development stage:

  • Directly talk to your customers: arrange surveys and interviews
  • Pay attention to how many users stay with the product and how many churn
  • Validate your assumptions and try to mitigate risks
  • Keep an eye on word of mouth about your product

Shiva Hullinakatte (Senior Product Manager at AT&T)

At this phase, it is important to get qualitative indicators of product performance along with engagement. Surveys can be a great tool to understand product fit and performance.  They help gauge how disappointed customers would be if a feature didn’t exist. In one of my previous roles we launched a rule-based chatbot to help our members get answers to top questions without having to contact our customer care center. We wanted more information on how useful this product was to our customer base. Hence, we implemented a simple survey that took qualitative feedback and asked how much they would miss this feature if it was not available. The number of people who would be disappointed was very low. It also translated to reduced engagement. So we used the responses to pivot and we eventually shelved the product without an ideal use case. 

↓ Entrepreneur and startup advisor Sean Ellis discovered a leading indicator of product/market fit: Just ask users “how would you feel if you could no longer use the product?” and measure the percent who answer “very disappointed.”

→ PMF Survey by Sean Ellis and GoPractice is a free tool that helps you run the Sean Ellis test and measure your company’s product/market fit.

Alex Merwin (Head of Growth, Healthcare & Life Sciences Startups, Amazon Web Services)

In the beginning it’s essential to track customer adoption and recurrent usage metrics. It will help guide your feature development. I used to work for video advertising company SpotX. My team was responsible for the API that our buy-side partners used to access auctions and submit their bids. We measured the number of bids submitted and the bid rate and compared these metrics with the anecdotal insights from our customer success team. We knew there was a customer who had more advertising demand than we saw in their adoption and usage metrics. So we had an in-person review with their product and integration team. They were looking for data to assess the value of an impression opportunity accurately. But our API didn’t provide it. We updated our API to include the new elements, which increased the customer’s service usage. 

Daniel Johnson (Founding Partner at We Scale Startups, Lead Growth Mentor at Google, Mentor at Oasis and GrowthMentor)

There is not a particular set of metrics that can tell any business when it achieves product/market fit. However, the following metrics will help us find out if our company is headed in the right direction.

1. NPS score. The Net Promoter Score is a score that ranges from -100 to 100. It measures customer satisfaction and loyalty towards a brand based on the customer’s overall evaluation of the product or service. 

2. Churn rate. It reflects how a company’s customers stop doing business with it. Churn may also refer to the number of people who cancel or don’t renew their subscriptions. The lower your churn rate, the more customers you retain. At WSS, we measure these metrics by sending out surveys to our past clients and calculating the average working time with our clients. 

3. Word of mouth. If customers talk about our services with others, they will eventually become our product’s sales representative to a certain extent. Clients will be more likely to spread the word about our services if we can meet their expectations and achieve better results than the market average. Therefore, we have been trying to maintain and improve our standards and provide clients with professional services. Moreover, we have also set up a referral program with many benefits on our web page to encourage clients to refer us to their networks even more. 

Sam Juraschka (General Manager & Director of Product at BCG Digital Ventures) 

At a pre-product/market fit stage, a PM should be thinking about metrics to support your qualitative user research. This typically helps to validate and derisk big assumptions across the business, product and tech stack.

In early-stage products I use a whiteboard when working across workstreams like product, operations, and business development. It helps to define the key learning goals and set targets for the test phase. Going workstream by workstream, we share our riskiest assumptions and come up with ways to test them. We can track completion of certain product flows, operational flows, successful user registration, feature usage, or payment processing.

Oleg Ya (Founder at GoPractice, ex-Facebook)

Before product/market fit, qualitative data is much more important than quantitative data. Teams should be as close to the customers as possible. They can use interviews, surveys, or manual onboarding/support to do that. These methods enable you to get feedback quicker and understand your customers better. It helps navigate this unpredictable and ambiguous product development stage where the team is trying to find out how exactly the product can make users’ lives better.

Metrics would be useful too, but usually as additional indicators of the value your product creates for users. At this stage, I would choose just a few key metrics that would represent how much value your product creates for users (value metrics) and a few product metrics to see how users interact with the product. More on product metrics, growth metrics, and added value metrics.