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How to Test Product-Market Fit for Your Startup

Test Product-Market

Person testing product-market fit of the startup product

Understanding your product-market fit or what product-market fit is isn’t a walk in the park. As a young budding entrepreneur who is looking to create a startup or already owns one in its early stages of creation, there’s a lot you need to learn.

However, in the course of your startup’s growth, most of it will come to you, including product-market fit and all it entails. But to make this easier to digest, let me give you a scenario.

You have a great idea for a startup

As a budding entrepreneur, you come up with a great idea and pull all-nighters working on it, putting all your energy into your creation, like a mother trying to birth her unique child into life. And then, before you know it, you create your product. Then your product goes live on the market.

You embark on various marketing schemes, you meet your co-workers and friends, even strangers, telling them about your new product and how beneficial it could be to them.

And of course, you get lovely and mostly all positive feedback from them saying how good the idea was, and your product is, and how they will definitely patronize you. Then after a few weeks, you realize they weren’t that into your product.

When entrepreneurs create a startup, they are always aware that they need to target or solve a problem that the market really needs help solving. But in most cases, the reverse is the case. However, when the problem is not that deep or as extensive as they thought it was, you have a product failure. This costly mistake is clear evidence that they didn’t have the right product-market fit.

Having a product-market fit is crucial

The most important thing to consider in startups is how ready your market is to eagerly utilize your product or service. Don’t get caught up in how cool your idea may sound or look to the general population. So, in business theory, the market is always right, and the market always wins.

It is painfully easy to notice that you don’t have a product-market fit because you won’t get as much patronage as you should. One of the leading causes of startup failures is the total investment in products without carefully considering if customers want what they are selling.

If you face the product-market-fit problem head-on and conquer it, your potential customers or users will be the ones bugging you for your product and wanting to know more about what you offer.

However, it is easier said than done. It takes hard work, dedication, the right strategy, flexibility, commitment, and, most importantly, passion. Possessing all these gives you a greater chance to succeed, but building your startup has only just begun. Achieving the product-market fit is one of the most vital goals for a startup, and it is also one of the most easily failed goals.

Product-market fit is the value of a startup

A product that satisfies strong market demand gives you the power to achieve your product-market fit. Because of its value to a startup, the product-market fit needs to be constantly tracked and supervised, even for established companies. This is done by continuously evaluating how much the customers require your products or services.

Knowing all these, a product-market fit can be said to be a system that informs you of the solution you are trying to provide and how much your product or service measures up to that solution.

Is the problem you are trying to solve that much of a problem? And if it turns out it is, is your solution worth paying for? This is a product-market fit in a nutshell. Understanding this propels you to the next step, which involves testing for product-market fit.

Testing product-market fit

Test Product-Market

PCustomer shopping Online

Testing the product-market fit can be carried out with the following processes:

  • The 40% rule

A good method to test product-market fit is the “40% rule.” If 40% of customers say that they would be “very unhappy” if they could no longer access your product or service, then you are doing well.

Furthermore, if at least 40% of your customers consider your product a “must-have,” then still, you are doing great.

  1. Bounce Rate

The bounce rate is defined as the percentage of users who visit a page on your company website and then leave it without performing any action daily.

When you have a high bounce rate, this can mean that your website is not adequately providing or presenting the product or not giving the right first impression to its visitors.

So, a low bounce rate entails satisfied customer expectations, and a high one suggests unsatisfied expectations and customers.

A high bounce rate can be because of numerous reasons like poor design or poor content. Tools like Google Analytics are used to measure bounce rate. 

  1. Time on Site 

This is another good metric to test your product-market fit. The more time a customer spends on your website, the more they probably like it. To track it, you compare what the average time on site is for other months or weeks. 

Knowing your time on site will enable you to improve your overall site performance. Typically the minimum amount of time on-site should be two minutes.

  1. Per Visit

This is the average number of pages a customer surfs through on your site during a single visit. If the user visits more than 4 to 5 pages, it is termed high; this means that the customer or user is interested and likes what they see on your website.

Higher Time on Site and Pages per Visit prove that your customer or user experience is satisfied.

  1. Returning Visitors

Returning visitors are customers who have been to your website before and found it compelling enough to come back and visit again. The percentage of returning visitors is dependent on the type of product or service you offer.

A large number of returning visitors shows your product has a lasting impact on your customers. If the rate of returning visitors is below 25%, you have much work to do on your product to make it fit for the market.

  1. Customer Lifetime Value

The customer lifetime value is the total average profit from each customer during the entire time they patronize you. If you need your business to thrive, you need constant users who are willing to pay.

If you have a high average customer lifetime value, you will sustain your business model and improve your startup.


Testing your product-market fit as a startup is essential to development. In doing this, it would be best if you use the right strategy, when testing.

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Strategy Newsletter: The 40% Rule
Hubspot: How to determine Product Market Fit in your Industry
Fullscale: What is product market fit?
Uxplanet: Understanding product market fit from start to finish

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