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Marketing Manager
Anastasia Shevchuk


Let's imagine for a moment that you are a successful startup founder with a brilliant product idea, or at least you think so! You have spent many nights drinking a ton of coffee with your co-founders while slaving over thousands of lines of code until, finally, your MVP (Minimum Viable Product) is ready.

Once your product has gone live, you contact co-workers, family members, friends, friends of friends, and anyone else who will listen to you, and start telling them all how fantastic your idea is.

You even get a load of lovely feedback from them. Things like:

"Perfect idea!"

"Wow, great! I'll definitely use it!"

"I've been waiting for something like this!"

Then you give them access to your beta version, but after several weeks it becomes apparent that these people are not as passionate about your product as you might have hoped.

When launching startups, founders often believe they are solving a huge problem the market desperately needs to solve, but sometimes the problem simply isn't as big as they first thought.

This is a clear indication that a startup doesn't have a product-market fit and that you should be asking yourself "why is product market fit important?".

Finding problems that real customers actually need to be solved takes time, hard work, dedication, the right strategy, flexibility, and even a little bit of luck!

If you take all these factors into account, you will give yourself an excellent chance of succeeding, but this is only the beginning of a long journey.

Achieving product-market fit is one of the most important goals for every startup.

Let's take a look at what product-market fit means, some product-market fit successful stories, and a few key indicators for measuring product-market fit so you can make a product that customers will want to buy!


Product-Market Fit is the degree to which a product satisfies strong market demand.

When developing and making products you always have a problem to solve, whether it's improving something or making it easier. Product-market fit can be achieved when your products meet customer needs better than the other alternatives available on the market.

The indicators of a fitting and successful product-market fit include:

  • Customers buying your products faster than you can produce them;

  • Many repeated sales;

  • The need to hire more people to meet demand;

  • 40% of your customers will be very disappointed if your product disappears from the market;

  • A large community of brand ambassadors;
A well-designed product increases your chances of building a loyal customer base, increasing brand visibility, and generating conversions.


The Product-Market Fit Pyramid is an actionable model which defines product-market fit according to five key factors.

From bottom to top, the five layers of the Product-Market Fit Pyramid are: your target customer, your customer's underserved needs, your value proposition, your feature set, and your user experience (UX).

In the process of building a successful product, it is important to form detailed hypotheses for all five of these areas. The Product-Market Fit Pyramid helps you be more explicit and accurate about your hypotheses.

Why is product-market research important? Let's take a look at a few reasons.

Product-Market Fit Pyramid

Target audience research

Who are you selling to?

This component provides you with an in-depth understanding of your target customers and their specific needs.

It is important to conduct market research and segment your customers into smaller groups based on their common characteristics, like similar needs, interests, lifestyles, or demographic profiles, in order to be more specific about your target audience. This is the first step for how to achieve product-market fit. You define "buyer personas" so you know exactly who you are designing and building your product for.

Ask yourself:

1. Who will benefit from this product? Either consumers or companies.
2. What are the attributes of these people?
3. What challenges do the target customers face?

Identify Underserved Customer Needs

What problems are your customers facing?

Once you know who your target customers are, you can move on to identifying the problems they have which your product can solve. If an existing product is already tending to their needs, creating a similar product would make no sense.

Similarly, if an existing product is falling short of satisfying a customer need, you have a golden opportunity to fulfil this need and gain a competitive advantage.

Know what you offer as a Value Proposition

How will you do things differently?

A value proposition is your plan for exactly how the product you are offering will meet customer needs better than its competitors.

It's important to know precisely how your product will outperform the others and what unique features it has that will delight and entice customers. This is the essence of product strategy.

Define the MVP Feature Set

What are the must-have features you can't skip on?

The MVP should support all the product's must-have features.

Refer to the MosCow method for feature prioritization. This method involves specifying requirements based on:

Must-have Features — essential for the MVP
Should-have Features — essential for the MVP
Could-have Features — can be saved for later
Won't-have Features — need to be dropped off

Why is including a full feature set in an MVP a bad idea? Find out the answer in this article: "MVP or why you shouldn't create a "perfect" product right away"

Create an MVP Prototype

What will the UI/UX of the product look like?

This section focuses on validating the UI/UX design of the product. The emphasis should be on usability, findability, and discoverability — the three elements of good UI/UX design.

Test MVP

At this stage initial feedback is gathered from customers.

Give free access to your design prototype to anyone who you want to test it with, like potential users and people likely to buy the product when it's eventually ready.

Throughout any kind of interaction with potential users, be sure to observe whatever they say or do while using the prototype. Ask questions to clarify things for you so you can get as much insight as possible. Don't ask closed questions that involve simple Yes or No answers, instead, encourage participation, brainstorming, and idea generation to find ways you can improve the product.

Iterate, iterate, iterate

You will almost certainly end up revising your MVP prototype at each iteration of the process, hoping to see an increase in positive customer feedback and a decrease in negative feedback. If you aren't seeing much progress despite trying several iterations, it's a good idea to take a step back and revise your initial hypotheses. Sometimes you need to pivot (change strategy without a vision change) to achieve higher levels of product-market fit.

Let's take a look at several types of pivots:

Usability: The product should be easy to use and navigate through

Findability: It should be easy to locate and use the product features the customers know about

Discoverability: It should be easy to identify and use new product features that the customers don't have knowledge about initially

Zoom-In: A single feature becomes the whole product

Zoom-Out: The entire initial product becomes a feature of a new product

Customer segment: Good product, bad customer segment

Customer need: Repositioning, designing a completely new product while still sticking to the original vision

Platform: Changing from an application to a platform, or vice versa.


Qualitative methods

One-to-One Customer Interviews
Communicating directly with the product users, don't just ask them to rate a product out of 10, or ask if they like it or not.

Come up with questions that will give you more informative answers, such as:

1. Would you be disappointed if you couldn't use this product anymore?
2. What are the deciding factors for using this product over other options?
3. Does anything make this product special? What do you love about it?
4. What could improve the product for you?

Reach out to Customer Support Team.

Seek a report from your customer support team to get a glimpse of the complaints and queries you have already received. This will help understand and improvise what next steps to take to ensure you achieve an ideal product-market fit.
The 40% rule

One metric to test product-market fit is the so-called "40% rule." And it's really simple: if 40% of surveyed customers say that they would be "very disappointed" if they could no longer access your product or service, then you are on the winning side. Also, if at least 40% of your surveyed customers say that they consider your product a "must-have" then again, you are still on the winning side.

Let's consider answers in detail:

Not disappointed
If the majority of customers would not be disappointed if they could no longer use your product, you've got a problem and not one you can ignore.
It is time to dig through all the responses and find out why they don't care. Also, look at the people who said "very disappointed" or "somewhat disappointed" and see if their responses can give some guidance on how to rebuild your product.

Somewhat disappointed
When the majority says "somewhat disappointed," you're close! Spend time segmenting the responses based on the other questions to identify the customers that said "somewhat" versus "very" and compare them.

Learn what the difference is between those segments, spend time talking to those customers, and make a plan for improving the product.

Very disappointed
If the majority say they would be "very disappointed", then congrats! You've got product-market fit!

Spend time optimizing marketing messaging based on the responses to the other questions in the survey. Don't hold back on resources (money, time, etc) that fuel growth and continue filling the product with new amazing features.

Bounce Rate

The bounce rate is the percentage of users who visit a page on your product and then leave it before taking any primary action, such as registration or starting a free demo. The bounce rate is calculated by counting the number of visits without any further action and dividing that by the total number of visits. The actual number is then represented as a percentage of total visits.

A high bounce rate typically indicates that the product is not doing a good enough job of attracting visitors. Whereas, the low bounce rate indicates that the visitor's expectations are met and that the product is giving a nice first impression to its visitors. Interestingly, the bounce rate tells a lot whether you are close to your product/market fit or not. The low bounce rate directly indicates how important is the problem you are trying to solve and how great your product is. It doesn't prove yet that your product offering has already outperformed your competitors, but it is a good starting point.

Returning Visitors

Returning visitors are the ones who have been to your website once and have decided to come back. Compare the number or percentage of returning visitors weekly and monthly for your website.
A big number of returning visitors reflects the lasting impact a product has on the customers. And if the rate of returning visitors is below 25%, then you have to work on your product harder.

Net Promoter Score (NPS)

To measure how much your audience likes your product, ask them if they would be willing to recommend it to others. That's a basic technique to learn how successful your product is and how loyal your customers are.

To motivate consumers to refer your product to others and raise your NPS, add some benefits to it. Offer additional services, free trials, discounts, and other things that can influence customer decisions.
Measuring the results begins with clear goals, which you set at the prototyping stage. To find out if you've reached your desired results, define key metrics for product-market fit to track. There are qualitative and quantitative methods for measuring product-market fit.

Quantitative methods




An ideal product-market fit example is Netflix. People wished they could avoid paying the late fees they incurred at DVD rental stores back in the day. Netflix proved to be a product-market fit by mailing the DVDs to the users on a subscription basis and allowing them to keep the DVDs without any time constraints.

With the DVD trend fading, Netflix again reviewed their business model by shifting to a subscription-based model for their streaming service, allowing them to provide a better and cheaper way to deliver entertainment. Netflix modified its business model several times to meet customers' changing demand, setting a perfect example of how a product-market fit should work.


Slack, an instant messaging platform often used for workplace communication, started out as a completely different business idea. The founders were in the process of developing a role-playing video game, and Slack was something they had quickly put together as an internal communication tool for the team.

The team soon realized that the market had plenty of role-playing games, but there was nothing out there quite like Slack, so they pivoted away from game creation.

Slack's quick turnaround proves that changing your focus towards a better product-market fit can be worth your time.


Uber captured product-market fit by initially offering free rides between regional tech events in San Francisco. Uber's co-founders recognized that the taxi system was expensive and outdated, and few people used it. Once the Uber app gained pace, Uber offered 50% discounts to first-time users.

Experts point to Uber's ability to both solve a problem and create a need at the same time. Consumers weren't demanding better taxi service, but once a more convenient, simpler option emerged, users began to rely on the concept. Users were thrilled with the app and began sharing their experiences on social media, providing social proof for the startup.

product-market fit examples


So, why is product-market fit important? Hopefully you found a few good answers to your questions in this article, as well as some good answers for how to achieve product-market fit. Product-market fit is about creating a product that solves the problems of your customers. Don't find customers for your products, find products for your customers.

When following the stages of the product-market fit pyramid, it becomes easier and faster to understand the strategy of achieving it.

Your product should be life-changing and excite people! Think about the difference between "Nice" and "Wow!", and keep that in mind while you're building your next product.