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The simplest framework for visualising product-market fit

• Recognising if you are on the right track to product-market fit is hard

• For early-stage startups, popular metrics like revenue are too far away to guide decision-making

• This simple framework helps you to understand where you stand

  • By highlighting which signals to look for instead

  • And spotlighting which alternatives to money you should track

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The core idea

To understand how close you are to product-market fit, you should understand the phase you are in. Even though startups are non-linear, often one big uncertainty dominates — or should dominate — the conversation.

You shouldn’t worry about scale if you haven't found people with the problem. You shouldn’t worry too much about your profitability before you have people allowing you to solve their problem.

To find where you stand, you should look for two things

• The signals you can observe and their strength

• The currency the customer is paying you in

Below, I will explain these core ideas

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Signals strength

Signals are the events you can observe as a founder. They point to a particular dominant question you are answering — or should be answering. And they come in varying strengths.

• Talking to 20 people who acknowledge the problem is better than talking to none.

• Having five people commit to a pilot out of 10 conversations is better than 20 problem conversations with zero pilots.

• Ten fully paid pilots with happy customers are worth more than 1,000 people on your beta list.

There is no need to formalize this too much, as people will start to obsess over the numbers again — something I urge you to avoid.

Customer Currency

Yes, ultimately revenue and profitability are key metrics for any startup. But before money comes in, customers pay you with different currencies. Every phase has a dominant leading currency, which can help you to identify where you stand

• 👀 Attention - Very weak signal, attention is cheap

• ⏰ Time - The first meaningful signal, as taking up space in somebody’s again is something you don’t do for everyone

• ⭐ Reputation - Are they willing to spend their reputation on you, such as in an online review or referring you to someone? That means something.

• 💪 Effort - Are they willing to test and use your MVP? That takes effort, a currency not to ignore

• 💵 Money - The ultimate currency, which is often preceded by the above. Requires little explanation.

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Visualising product-market fit: a journey

This is version 3 of my product-market fit visualisation. Below, I detail my journey with examples of previous never-released versions. Patrons only 🔥