Dear SaaStr: How Do I Find Product Market Fit In the Early Days?
Find a little bit of it first ;). Just a little bit. And then relentless build on top of that.
Finding product-market fit is the single most important milestone for any startup. Without it, nothing else really matters. Here’s how I’d approach it:
1. Start with a Narrow ICP (Ideal Customer Profile):
Focus on a specific customer segment where you can deliver the most value. Don’t try to be everything to everyone. For example, when we built EchoSign, we initially targeted SMBs who needed a simple, fast way to get contracts signed. And specifically, folks that sold in a very high velocity sales environment. Where every sales rep was closing 20-100 deals a month. That focus helped us iterate quickly and build something people loved. Even when the product was pretty feature poor.
2. Talk to Customers Relentlessly:
You can’t find product-market fit in a vacuum. Get out there and talk to your customers. Ideally, in person. Understand their pain points deeply. What problem are you solving for them? Is it a “nice-to-have” or a “must-have”? If they’re not willing to pay for it—or if they’re not using it regularly—you don’t have it yet.
3. Look for Any Signs of Pull. Even Seemingly Small Ones.
True product-market fit feels like a pull from the market. You’ll know you’re getting there when:
- You have more leads than you can handle.
- Customers are finding you through word of mouth.
- Your customer count is doubling monthly, even from a small base.
- You’re growing >100% annually at $500k+ ARR
4. Land a Lighthouse Customer. And Make Them Insanely Happy. There is Always Another One Like Them.
Sometimes, one big, recognizable customer in your target market can unlock the rest. For example, if you’re selling to enterprise, landing a respected brand can make others in the space take notice. This is often worth doing “unnatural acts” like discounted pricing and tons of extra hand-holding to secure that first big win.
5. Iterate Relentlessly
Your first version of the product likely won’t be the one that nails it. Keep iterating based on customer feedback. If your 1.0 doesn’t resonate, maybe your 1.1 or 1.2 will. The key is to stay close to your customers and keep improving until you hit that sweet spot. You may stay at the edge of product-market fit for a while until you hit it.
6. Measure NPS and Retention:
High Net Promoter Scores (NPS) and strong retention are critical indicators of product-market fit. If customers are sticking around and recommending your product to others, you’re on the right track. If not, you’ve got work to do.
7. Be Patient but Persistent: It Will Feel Slow at First.
Finding product-market fit takes time. It’s not uncommon for it to take 12-24 months of grinding. But if you’re seeing any signs of traction—happy customers, growing revenue, strong retention—don’t give up. Keep pushing.
