What is Product Market Fit (PMF)
Listen now
Description
In this episode, we're talking about product-market fit (PMF). PMF is one of the most important concepts for any startup founder to understand. It's the point at which your product is so well-aligned with the needs of your target market that it's able to achieve rapid growth and profitability. There are a few key indicators that can tell you if you've achieved PMF. First, you should be seeing a high user growth rate. This means that people are finding your product and loving it. Second, your customer acquisition cost (CAC) should be low. This means that you're not spending a lot of money to acquire new customers. Third, your virality coefficient should be high. This means that your customers are telling their friends and colleagues about your product, which is helping you to grow your user base even faster. Finally, your churn rate should be low. This means that your customers are sticking around and using your product regularly. If you're seeing all of these indicators, then you've achieved PMF. This is a major milestone for any startup, and it means that you're well on your way to success.
More Episodes
Published 10/15/23
Burn rate is the measure of net cash, a company lost in a period, usually a month. Burn = Expenses - Cash inflow Burn multiple is the ratio of revenue earned and the amount of money burned to earn that revenue.
Published 10/15/23
The viral coefficient helps to quantify the extent to which a product reaches a maximum number of people by making minimum spending on marketing activities may be happening. Businesses often run referral campaigns to effect a high virality of the product and achieve a high virality coefficient.
Published 10/13/23