The Exchanges

Q if my company is going to grow right now, I think that the obvious next question is what do I do? Do I simply just ask this question or Who do I ask this question to? How often do I ask the question? What is kind of the step by step playbook for actually embedding this way of measurement around product market fit into your business on an ongoing basis?

A I'll use superhuman as a running example, and the process is about five steps. Step one is survey. Step two is segment. Step three is analyze. Step four is implement, and step five is track. So let's just go through these steps, each one in turn. And starting with, of course, step one, survey. In this step, you email four questions to every user. How would you feel if you could no longer use the product and give people three possibilities? A very disappointed, somewhat disappointed, not disappointed. What type of people do you think would most benefit from the product? That's a freeform answer. What is the main benefit you receive from the product? Also freeform. And how can we improve the product for you? Also freeform. Now, you should send these questions when users have experienced the core of your product. At Superhuman, we wait until they've had about three weeks. They've sent a certain number of emails. If this was Uber, it would be after you've taken your first ride. If it was Airbnb, it would be after you've, uh, done your first stay. Then analyze the results to this question. For Superhuman, in the summer of 2017, we ended up with 22% very disappointed, 52% somewhat disappointed, and 26% not disappointed. So the core number there is 22. We very clearly did not have products market fit. Now that may seem sad, but I could at least explain our situation to the team, and m…

AI assessment note: “the process is about five steps. Step one is survey. Step two is segment.”

Q Nicole as your HXC and you use these paragraphs to describe her, is that Are you using those two paragraphs to then ask yourself, what are the personas that most exemplify this, uh, HXC, and is it that founder, manager, uh, executive, and business development? Your belief is those, it's these classifications of personas that are most similar to the person that Nicole is describing, or are these separate ideas?

A They are ideas that are sort of tied up in a loop. So, Take your survey results. Focus on the ones where people said, I'd be very disappointed without your product. Look at their answers to question number two. Who do you think this is best for? Use the insights that happy users will almost always describe themselves. Use those words to come up with the HXC. Go back to the list of the entire survey results. You now have your HXC. Discard All those folks who, uh, who are somewhat disappointed and who are not disappointed, who the HXC doesn't describe, you'll have some HXCs in there who may be, um, somewhat disappointed or not disappointed, and you'll now have a subset of your survey results. Then recalculate your very disappointed score, and it will be significantly higher than where you started. In our case, we jumped from 22% to 32%. And what this is telling you is that if you focus your positioning, your pricing, your marketing, and your product development solely on the highest expectation customer, you're so much closer to product market fit.

AI assessment note: “They are ideas that are sort of tied up in a loop.”

Q sort of quantitative way or leading way to look at product market fit and embed it into how you build your business and understanding if your product is working or not working for the customers you care about. So can you just break down basically how you arrived at even writing this article or thinking about calculating product market fit as a metric? Like what drove you to doing this?

A You're right. We certainly did not intend the article To blow up in the way that it did. And it's now become the most shared article on first round review and the standard way that entrepreneurs define and measure products market fit. But it all started with asking the question, what is products market fit? And the glib answer is that it's the number one reason why startups succeed. And the lack of products market fit is also the number one reason why startups fail. But what really is it? And so I started looking around at, uh, startup gurus to see what they say. Paul Graham, the founder of Y Combinator, would say it's when you made something that people want. Sam Altman would say it's when users spontaneously tell other people to use your product. But it's Marc Andreessen who has perhaps the most vivid definition. He would say, you can always feel it when product market fit is not happening. Customers aren't quite getting value, users aren't growing that fast, word of mouth is not spreading, press reviews are kind of blah, and the sales cycle takes too damn long. But you can always feel it when product market fit is happening. Customers are buying as fast as you can add servers, you're hiring sales and support as fast as you can, reporters are calling you about your hot new thing, investors are staking out your house, and money is piling up in your checking account. And so tha…

AI assessment note: “staring at through tears in the summer of 2017, because it seemed so subjective”

Q I love it. And I believe there's one last step in the process, so I'd love to finish with that. So you've gone through the survey, you've segmented, uh, you've gotten responses from the users that matter about what they want, what's holding them back, or what more magic they want. That's informed your product roadmap. What's the final step in basically understanding if things are working?

A The fifth and final step is ongoing tracking. As I've said, the framework will work, But of course, there are no silver bullets. So as you double down on what users love, and as you address what holds users back, you should constantly survey new users. And I recommend tracking your products market fit score every week, month, and quarter. And to give you an idea of how fast this can work, in the summer of 2017, after the resegmentation, our products market fit score was 33%. A quarter after that, It was 47%. A quarter after that, it was 56%. And a quarter after that, so a year later, it was 58%. So a year after starting this engine, 58% of our users would have been very disappointed without Superhuman. So the Product Market Fit engine really does work. It gives you this way to define Product Market Fit. It gives you a metric to measure Product Market Fit. And it gives you a methodology to increase products market fit, and it can even create this roadmap for you that will basically make this number go up, and you can also use to rally your team.

AI assessment note: “The fifth and final step is ongoing tracking.”

Q in 2017 and you saw 22%, uh, classifying themselves as very disappointed because I'm almost imagining myself what I would feel and I'd almost feel like this drop in my stomach But also to your point, it's, it's actually, it's so encouraging and helpful in the sense of, like, you actually have a benchmark now. There's actually something you can do. I'm curious, was that your feeling at the time?

A It was, and it's a complicated set of feelings. 22% as a starting point, as we'll see, is actually not that bad. 22 or 20% plus, I would say, tweak your market, tweak your product. You can iterate your way there. It's when you're sort of in the 10 to 15% range That I start to think, well, you know, maybe you should just have an entirely different market or an entirely different product. So it was a feeling of cautious optimism and one where I think you're an entrepreneur. Almost everyone listening to this is or will be an entrepreneur. We've all had that feeling of Something is there, and it's kind of bubbling along under the surface, and I knew it was there. So it was kind of a cautious, excited optimism.

AI assessment note: “It was, and it's a complicated set of feelings.”

Q flowing in or being hit up by reporters because the build time for the product was necessarily way longer. And so my, what I'd love for you to break down now is what is the product market debt, uh, product product, market fit definition that you came across that kind of set off the light bulb for you. And how do you now think about actually using that in practice?

A Absolutely. So it's probably helpful to contextualize the timeline, and then we'll jump into the definition. It was actually the summer of 2015 that we started, much like any other software company, to write code. And in the summer of 2016, a year later, we were still coding. And in the summer of 2017, we were still coding. And so I felt this incredible, intense pressure to launch, both from the team and also from within myself. After all, my last company, you may remember Reportive, had launched, scaled, been acquired in less time, and here we were two years in, and we still had not launched. But deep down inside, I knew that no matter how intensely I felt pressure, a launch would go very badly. So in other words, I did not believe we had products market fit. And although I knew it, I couldn't just say that to the team. It was obvious to me, but these are super ambitious, hyper-intelligent engineers. They've pulled their hearts and souls into the product. And so what I needed was a plan. And in the April of 2017, That's when I really started this search for the holy grail, for a way to define products market fit, for a metric to measure it, and then for a methodology to systematically increase it. And so I searched high and low. I read everything I could find. I spoke with all the experts and I came across this guy, Sean Ellis. Now he ran growth in the early days at Dropbox, L…

AI assessment note: “You just ask your users this. How would you feel if you could no longer use the product?”

Q Absolutely. One other question before we move on to step two is, can you just share a little bit more context on why these four questions? The first question is obvious, right? Like, that is the question that gives you the score that you're going to work off of. But why are questions two through four in the survey important questions to ask?

A The product market fit engine. And as we'll see, we should probably just jump into the steps. The answers to these questions will create this roadmap that increases the product market fit score. So for example, let's take step two segment. Now we want to understand who are the people who really love our product. And for this, I like to use the concept of the high expectation customer, which is a concept that I found from Julie Supan. Now Julie led Early marketing at Dropbox, Airbnb, and many other great companies. The HXC is the most discerning person in your demographic. They will enjoy your product for its greatest benefit and will spread the word. Most importantly, others want to be like them because they seem clever, judicious, and insightful. For example, the Dropbox HXC wants to simplify their life. They're very trusting. They're technically savvy. They're looking to save time, and at the end of the day, they want to know that somebody has their back when it comes to their life's work. I'm an example of the Dropbox HXC, and I'm sure many of our audience are also. The Airbnb HXC does not simply want to visit new places, they want to belong. For example, they want to experience Paris as if they really live there, and Airbnb's early success came from focusing on these influencers and these tastemakers. So the question is, how do you create your own HXC? Take the users who wo…

AI assessment note: “The answers to these questions will create this roadmap that increases the product market fit score.”