Product-market fit, definition:
When you have more leads than you know why
— Jason ✨Be Kind✨ Lemkin (@jasonlk) July 30, 2021
Dear SaaStr: How Do You Know in the Early Days if You Really Have Product-Market Fit?
A few signs you finally have a “real company” in SaaS:
- Your customer count is doubling monthly, even from a small base
- You are getting word-of-mouth customers from existing customers
- You are growing > 100% at $500k+ in ARR
- Enterprise prospects and potential customers are finding you
- You have more leads than you can call back
Those are all good signs.
In the end, if you hit $1m ARR and are growing < 100% annually in this day-and-age, you don’t quite have product-market fit.
But the flip side is the Cloud is just too big, and growing too quickly, to not grow 100% by $1m or so ARR >if< you really have something of true and differentiated value in your market.
Although you may be close if your customers are happy. Growing, say, 40% at $1m ARR with high NPS is usually a sign you are solving a problem for your customers. Just not quite a big enough one yet. So figure out what the minimum feature set to truly solve their problem is … and watch growth accelerate.
A related post here: When You Fall Out of Product-Market Fit | SaaStr