Product-Market Fit, the only metric that matters initially

A lot of us talk about Product-Market Fit and to the highest degree in the startup world. In this post, we’ll touch base on the topic, its context, etc. so it acts as a good refresher.

What is Product-Market Fit?

Product-Market Fit is building a product that the market is fully satisfied with, a product that solves top problems for the targeted customers and they are willing to pay for it.


Additional definitions from various sources

  • Product/market fit is identifying a compelling value hypothesis. (Andy Rachell)
  • Product-Market fit is when you build something that people want. (Paul Graham)
  • Product-Market fit is when you have the right solution to a problem that’s worth solving. (Ash Maurya)
  • Product-Market fit is when users love your product so much they tell other people to use it. (Sam Altman)
  • Product-Market fit is when your customers become your salespeople. (Michael Porter)
  • Product-market fit is the degree to which a product satisfies a strong market demand. Product/market fit has been identified as a first step to building a successful venture wherein the company meets early adopters, gathers feedback and gauges interest in its product(s). (Wikipedia)

Why is Product-Market Fit important?

Product-Market Fit is the most important metric, probably the only metric that matters, when introducing a novel product (a new product of its kind) in the market.


In the introduction phase, after launching the MVP, it is almost incumbent on the product team to continuously assess customer feedback and iterate the product to improve its relevance & acceptance and thereby achieve Product-Market Fit sooner than later. There’s usually no competition at this stage, so it is only obvious to achieve Product-Market Fit as soon as possible, because a faster fit means the product will enjoy maximum differentiation for a longer period of time. Achieving Product-Market Fit is an important milestone for all product teams and esp. startups as it ensures we have built the right product.

How to achieve Product-Market Fit?

Product-Market Fit is best achieved by having a strong product discovery process. Continuous validation with target customers and refining your offering is the key to success. Typically, you start with a hypothesis, build an MVP, validate it, and iterate based on what you’ve learnt.

How to determine if Product-Market Fit is achieved?

Below are some commonly used methods:

  • High cohort retention (asymptotic churn)
  • High Mom and YoY growth rate
  • Your product is 10x better than the leading alternatives
  • Passionate user feedback & when people sell for you (high NPS)
  • Willingness to pay (business model)
  • High Customer Lifetime Value
  • The 40% rule – if at least 40% percent of surveyed customers indicate that they would be “very disappointed” if they no longer have access to your product

That’s the wrap on Product-Market Fit.

And here is a bonus.

There’s a chasm out there

To reiterate, Product-Market Fit is to be achieved in the introduction phase — however, that doesn’t automatically qualify the product to be acceptable to the mass market (early/late majority).

In other words, Product-Market Fit was achieved for the Early Adopters, but the expectations from the mass market (Early Majority) are different. There’s a chasm that needs to be bridged!


According to Geoff Moore, author of ‘Crossing the chasm’, the early majority are looking to minimize the discontinuity with the old ways. They want evolution, not revolution. They want technology to enhance, not overthrow the established ways of doing things/business. And above all, they do not want to debug somebody else’s product. By the time they adopt it, they want it to work properly and to integrate appropriately with their existing technology base. The early majority / pragmatists want to buy from market leaders — be a market leader niche by niche.

A good approach, mentioned in his book is the Beachhead strategy — in business, particularly startups, the beachhead strategy is about focusing your resources on one key area, usually a smaller market segment or product category, and winning that market first, even dominating that market, before moving into larger markets.

Let’s stop here, and cover this topic in a separate & dedicated post.

Hope this post is useful!

Key product metrics through the product life cycle

Most of us are aware of the typical Product Life Cycle curve (PLC) but product management leaders ought to be on top of key metrics that define success in each of the PLC stages.

The purpose of chasing the right metrics in each of the life cycle stages is to ensure the developed/built product delivers value to customers, is viable to the team, and profitable for the company.




There is, of course, the market discovery and product discovery phases before you develop a product and introduce it in the market.

Market discovery is about identifying a problem worth solving and identifying the right opportunities worth pursuing.

Regardless of identifying a new problem via market discovery or deciding to solve an existing problem innovatively, it’s essential for companies to do a good job at product discovery – it’s about identifying the right product to build which will be valuable to the target customer and feasible & profitable for the company.

Now onto the metrics…

Product Introduction Stage

  • Goal: Achieve product-market fit ASAP
    • A good and a faster fit means the product will enjoy maximum differentiation for a longer period of time
  • Key metrics
    • NPS
  • Product management strategies
    • Take the MVP approach with a sincere product discovery process
    • Induce product trials (as needed)
    • Understand who’s really using the product, which aspects of the product are resonating the most
    • Discover unmet needs & new insights from customers and the overall market
    • Iterate fast on the learnings

Growth Stage

  • Goal: Maximize market-share
    • After product market fit is achieved, and as the news of a new good product arrival spreads, there will be new players jumping into the ring for a fight. So, market share becomes the obvious metric to focus on.
  • Key metrics
    • Primary
      • Market Share Growth Rate
      • Customer Acquisition Rate
      • User Engagement
      • NPS
    • Secondary
      • Unit Economics
  • Product management strategies
    • Product differentiation becomes key
    • Mine data to uncover patterns and new insights
    • Automate customer on-boarding
    • Continue iterating and improving the product
    • Continue scaling to support growing numbers & increased usage
    • Do not compromise on product quality

Maturity Stage

  • Goal: Retain market-share
  • Key metrics
    • Hold/grow market share
    • Unit Economics & ARPU
    • Repeat usage
    • Customer churn
  • Product management strategies
    • Optimize COGS
    • Create fine product distinctions, focus on enhancements with high ROI
    • Consider new market segments and uncover unique needs the product could address

Declining Stage

  • Goal: Decline gracefully, with a win-win strategy for the customer and the company
  • Product management tactics
    • Ensure the product works and is compatible with the latest OS/browsers/etc.
    • Address critical/trending field issues that could potentially become a PR nightmare
    • Address security issues
    • Scale down infra to optimize cost
    • Give long lead time to customers

Hope the post is useful, feedback is welcome.


Top 4 traits a Product Leader should NOT have

A lot has been said about qualities that product leaders must possess. Let’s spin it around a bit and look at the topic from the opposite direction, and crack down the top traits a product leader should NOT possess.

Here’s my top 4.

1. NOT having a vision

Knowing where we are heading to is a fundamental know-how a product leader must obviously be aware of. Product leaders are required to inspire their teams, they can’t inspire if they don’t have a vision.

Not having a vision leads to loss in focus, lost focus leads to nothing but a me-too product.

2. NOT having a strategy

It’s not sufficient to just have a vision and not know how to get there. Strategy is the chosen path to achieve the vision and make it a reality.

Product Strategy has to be crafted meticulously to ensure it aligns with the organization’s values, capabilities, and resources with the opportunities in the external environment.

3. NOT innovating consistently

Every competitive advantage has a lifespan, so consistent innovation is the key to stay relevant in the market.

4. Aspiring for more followers

What are you going to do with more followers, anyway? As someone put it “the function of leadership is to produce more leaders, not followers“. A leader’s job is to groom his subordinates to become leaders in their respective area of ownership. Product leaders must focus on the success of the product and eventually the business, and not aspire to have more followers.

Hope you liked the post, please do comment on what you think!


Top 9 differences between Terrific Companies & Terrible Companies

Sometimes the difference between success and failure is the result of how some companies approach their business and the values they stick to.

Here’s a list of differences between Terrific Companies & Terrible Companies, at least how I perceive them. Whilst the list could be long, I’ve trimmed it to the important ones.

This is a topic that is close to my heart, and has been sitting in the drafts for a while.

Hope you enjoy the list.

Terrific Companies Vs. Terrible Companies

Please do share your thoughts!

The Originals…

“Here’s to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in the square holes… The ones who see things differently — they’re not fond of rules… You can quote them, disagree with them, glorify or vilify them, but the only thing you can’t do is ignore them because they change things… They push the human race forward, and while some may see them as the crazy ones, we see genius, because the ones who are crazy enough to think that they can change the world, are the ones who do.” — Steve Jobs

A while ago, I bumped into a TED Talk called ‘The surprising habits of original thinkers‘ by Adam Grant and this blog post is inspired by it.



Image/screen-grab credit: Adam Grant

Two key takeaways from this talk are:

  1. Originals start fast and let the idea incubate in their minds for long periods
  2. It’s okay to be not the first mover, you just have to be different and better

I see a correlation between the ‘crazy ones’ mentioned by Steve and the ‘originals’ in Adam’s talk.

Both (the crazy ones and the originals)

  • Do not care for the status quo
  • See things differently
  • Have a burning desire to succeed
  • Want to a make a valuable impact
  • Are in their own creative world
  • Take calculated risks
  • Are not afraid of failures
  • Do not want to finish first just to look good

Would love to hear your thoughts!

Thank you @AdamMGrant, for the topic and the inspiring talk.

Strategic Planning

When you realize your current business is not growing or is declining fast, the best thing to do, after a sincere prayer to the Almighty God, is Strategic Planning.

In simple words, Strategic Planning is the process of retreating to the drawing board, understanding your mission & vision, assessing the current business situation, and aligning on strategic & tactical course corrections to realize your vision.

Let’s take a deeper look…

Strategic Planning

Typically, the participants in the process include:

  • Leadership team – CEO, Business Unit Heads, Heads of Product, Marketing, Sales, Engineering, Support, and Operations
  • External consultants – to ensure there is a third eye

The participants are required to do some assessment of various aspects of the current business situation.

Inputs to the Strategic Planning process/discussions

  • Vision/Mission
    • A mission statement clarifies the purpose of why you are doing the business
    • A vision statement is the end goal of where you want to get to, what you want to achieve
  • Current situation
    • Business
    • Operating environment
    • Organizational challenges
    • Challenges & obstacles
  • SWOT Analysis
  • PEST Analysis

During the process/discussions

  • You refresh and re-understand your mission and vision
  • You come up with ideas for course corrections on the way forward, both strategic and tactical moves
  • Align on the way forward to achieve your vision, with sub-goals & milestones in the form of roadmap(s)

Outputs from the Strategic Planning process

  • Clarity (vision/mission)
  • Improved Strategy
  • Revised Roadmap (goals/timelines)
  • Alternate Tactics
  • Stakeholder & org alignment

It’s essential to communicate the outcome with your organizations so they are aligned on the new direction with renewed energy and focus.


  • The frequency at which a strategy planning is required is whenever there is a need to refresh the basics and the business direction and/or every 6/12/18 months as deemed appropriate for the company.

Would love your feedback on this short and simple article!



Product Life-Cycle Management using BCG Growth-Share Matrix

Here’s an interesting thought on using the BCG Growth-Share matrix as a product life-cycle management tool, with a tweaked representation of relative opportunities for investment across your products. Hope the idea is relevant and useful.

The traditional product life-cycle curve will look like this:


Through the years I’ve discovered a couple of limitations with this curve:

  1. It doesn’t tell us when to invest in a product vs. when not to
  2. It doesn’t tell us which product(s) to invest and which ones not to

Clearly I see two reasons for these limitations:

  1. Lack of relative performance indicators of a product within your portfolio
  2. Lack of relative performance indicators of your product(s) against your competitors’ products

I believe these two pieces of information are required to determine when to invest in a product and when not to, and in which products to invest and which ones not to.

A few years ago I bumped into Growth-Share Matrix, a 2×2 matrix from Boston Consulting Group, created for corporations to analyze their business-units / product-lines.

BCG Matrix

As many of us are aware, the BCG Growth-Share matrix has four quadrants to rank products on the basis of relative market share and market growth rate. The description of this matrix is widely available in the Internet.

Back to the product life-cycle management topic…

It is important to note that the BCG matrix helps us determine product priorities by classifying products based on their current value & position (as measured by market share) and future value & potential (as measured by market growth).

Also, the BCG matrix helps classify products into four categories based on competitive position (relative market share) and industry attractiveness (growth rate of that industry).

Accordingly, we could extrapolate the matrix to include sliding markets and declining market share — the graph which encompasses these additional attributes will tweak and look like this:


BCG Matrix - Tweaked

? (Question Marks): New and innovative products (in a growing market) normally start in the question mark quadrant. These are the future Stars and so continuous investment is required in growing the market share.

Stars: ? will evolve into Stars. Stars are in a rapidly growing market and such markets will attract new entrants posing heavy competition. So, Stars need to be groomed continuously to grow their market share at the same or at a faster pace than the market.

Cows: After a period of time, as determined by market forces and technology evolution, the market growth rate will flatten and at this stage if the product has a good market share then companies need to minimize their investments in Cows and use them to milk as much as possible. The cash/investments required to grow ? and Stars will be fueled mostly by the Cows.

War Horses: The Cows will eventually start to see declining market share because of the shrinking market growth, at which point the product is just supportable with near-zero cost.

Dodos: War Horses will eventually bite the dust and become Dodos at which point they are simply out of date and it’s better to retire the product.

BCG Matrix - Tweaked - Lifecycle

Happy to hear what you think.


Management-by-OKRs (MOKRs)

A lot has been said and written about the roles & responsibilities of product managers but not much is discussed about the role of leading a team of product management professionals.

In this article I’d like to share some thoughts around the key responsibilities of a product management leadership role — it could be a Head, Director, or VP depending on the size and structure of your company.

In addition to the usual suspects such as product vision & strategy, I feel a product leader’s key responsibility is to build product managers. Building a great product management team requires best-in-class processes for setting goals and achieving them.

Most of us would have come across Management By Objectives (MBOs), invented by Peter Drucker in the 1950’s.

Some of us (read millennial) will be familiar with the concept of Objectives & Key Results (OKRs), a popular goal setting mechanism used by Google.


OKRs stand for Objectives & Key Results — a lot of information is available on the Internet, but some of its fundamentals are the following:

  • OKRs is a business success enablement tool and helps align individual efforts with company vision, business direction, and product priorities.
  • OKRs are individual goals to move the business forward.
  • OKRs are dated and scoped to a specific time period, usually quarterly.
  • Objectives are bold and ambitious goals that contribute to business & product success and push you to rethink the way you need to work at peak performance. Ambitiousness of the goals should take you out of our comfort zone.
  • Key Results are well defined concrete deliverables with objectively measurable metrics to gauge achievement of the goal.
  • OKRs is not a laundry list of everything you do, it’s a representation of your top priorities.
  • The motivators that started projects in the first place have to be achieved. Instead of tracking delivery of projects and tasks, you should measure the indicators that motivated them in the first place.

Now on to Management by OKRs (MOKRs) — after much thought, I have realized that OKRs is a powerful tool for leading a team of product professionals, hence the term Management-by-OKRs.


Product leaders could use OKRs as the key mechanism to drive their product and project teams to greatness.

And this simplifies the core responsibilities of a product leadership professional into three levels:

  1. Primary focus will be on the vision, strategy, and company level OKRs
  2. Then, focus on the product team’s OKRs. Lead team in setting OKRs and achieving success in them.
  3. After that, think about chores (routine and mundane tasks)

This way almost everyone is focused on things that matter the most to the company and product success.

Would love your thoughts on MOKRs!

3 qualities of leadership folks I most enjoy working with

The leadership team is ultimately responsible for the success of their companies.

They have teams of their own — product, marketing, sales, engineering, etc.

Being product managers sitting in offshore offices across India, as we are not part of the leadership team in the headquarters (due to timezone differences, onsite office vs. offshore office mindset, etc.), it is essential the leadership team attempts to take the product managers along with them in their journey of steering the company.

Essentially, there are some qualities we expect in our leaders and below are the top 3 qualities of leadership folks I most enjoy working with:

Three fingers

1. Groom team members into future leaders
2. Share business, company, and priority updates instantly
3. Give credit to team for successes

Would love to hear what others think!