This seems more like a companion article to David Skok’s SaaS Metrics 2.0:

https://www.forentrepreneurs.com/saas-metrics-2/

I found it to be more about SaaS metrics and less about product/market fit.

For example, you could have great product/market fit with poor pricing, in which case you might have awful SaaS metrics and sluggish revenue growth while having great usage metrics and rapid organic/viral user growth.

For example, imagine if PagerDuty or Slack were free for enterprises: they’d have terrible SaaS metrics but wonderful product/market fit, IMO.

If you give something away for free do you really have product/market fit? If you continue this sort of thinking by giving every user $100 you can make every product a huge success with massive viral growth.

Sustainable product/market fit is rare, the fake kind can be easily bought by selling a dollar for 50c.

Isn't this what Uber and Lyft have done? They've been selling dollars for $.75 and still have not proven they have a market at sustainable pricing as far as I know. Meanwhile they have a market cap greater than the big three US auto makers combined.

That is certainly the suspicion. In the end, like gravity, reality always wins.

Interesting, but seems pretty complex. I prefer the model employed by Superhuman: https://firstround.com/review/how-superhuman-built-an-engine...

Yeah I know, they're the joke of last week, but that methodology is pretty simple (just ask four questions) and (importantly) is trackable over time, while working for businesses of all kinds.

Is anybody else using that at the moment? How has it worked out?

I like that approach. To me the essential question of product-market fit is whether you are delivering sufficient value to your users. But I think "sufficient" has at least three characteristics that one can measure.

One is whether the user likes it enough to keep using it. I think that's well captured by the "how disappointed" approach (and actual usage stats). Another is whether they'll be evangelical about it, and I think that's measurable with Net Promoter Score (and actual viral behavior). And a third is whether you can build a sustainable business, which early on can be pretty simple, but eventually requires a fairly complex numerical analysis.

I think a numerical approach like this one is especially valuable if the business isn't self-funding. Because a) you need to be able to prove the value of the equity you're selling, and b) if you don't price your equity properly, it's just a gift to the VCs who do that work.

Interesting, but this seems more suited for subscription-type software businesses, not anything related to products with longer periods between repeat purchases. You'd have to wait for a couple of years or more to build out churn/resurrection/expansion, etc. and cohort data for a hardware or durable goods business. No wonder VCs don't really like to fund hardware/infrastructure businesses

metrics are helpful, but creation is art