Product market fit is often talked about like it is a specific destination. A place you arrive at once and know that you’ve arrived. But the reality of growing a SaaS company is that you may not know if you have product-market fit or if you have it, you may not know how good the fit really is.

In this episode of In Demand, Asia Orangio of DemandMaven shares the seven best indicators for when you’ve found product-market fit and how to take action if you haven’t reached them yet. 

TLDL: 

It feels like you are guiding a boulder down a mountain, not pushing it up the mountain. 

When customers are signing up despite some product issues and every new lead or customer doesn’t feel like a lot of work, that is an indicator that you’ve found product-market fit. 

Prospects are willing to pay right now and they don’t bat an eye about the price

When you have customers finding you and signing up right away, that is a great sign of product-market fit.

Retention and active users improve with every new cohort of paying customers 

If you look back 12 months (or 6 in case of being a new venture) and you have retained at least 50% of your customers and that rate is growing over time, that is a great sign of product-market fit. 

Running a product-market fit survey and getting 40% of your customers saying they would be very disappointed if your product disappeared

Using the SuperHuman fit survey (https://firstround.com/review/how-superhuman-built-an-engine-to-find-product-market-fit/) and finding that at least 40% of your customers are every invested in your product shows that you have found product-market fit. 

To quickly recap the survey, ask “How would feel if you could no longer use the product?” With three options: 

Very Disappointed 

Somewhat disappointed 

Not disappointed at all

When one new customer generates two or more customers

When a customer generates two new customer without you having to do anything, you have a great indicator of product-market fit. 

Having this viral growth from word of mouth dramatically decreases your cost of acquisition and is a sign that you have a great segment and fit. 

Cost to acquire a customer is under a third of the lifetime value of a customer

If the lifetime value of a customer