There are a ton of a articles, books, blogs and postcasts out there detailing when you know you have Product Market Fit. Marc Andreessen is usually credited with coining the original term so I won’t deviate here. Product Market fit is generally accepted as having a product that satisfies the needs of a target market.
So how do you know you have product market fit? Much like everything in the world there are tons of possible and correct answers. But it really does vary with your business, product and market.
I’m going to explain how I see product market fit for my SaaS business, Resgrid, which targets non-profit, volunteer organizations. Which if your trying to sell a reoccurring service to has to be the worst combination of attributes to a quick and efficient sales cycle.
On a Quora Answer Nadim Hossain founder of BrightFunnel notes that the average sales cycle for companies in their network is 112 days. For Resgrid our sales cycle is over double that at 294 days. This is observable from our paying customers from initial account creation (we have free accounts) to first payment or first contact via email. So it takes about a year for our sales cycle to fully complete, this means that evaluating product market fit based on companies falling out of a sales cycle too slow for actionable feedback.
So how is another way we at Resgrid determine if we have product market fit? It’s easy, we talk to potential customers in our target market. We focus on first responders and at the moment we are focused on all volunteer or combination fire, search and rescue and CERT departments. When we talk to those customers and they ask us if our software can meet their needs the more times we can say “Yes” the better our fit is.
Of course we will never be able to say “Yes” to every question, but when we first started out there were far more “No”’s or “We’re working on that in the future”’s then “Yes”’s. So for us, we know when were zero’ing in on product market fit when we honestly say to customers that at the time they ask the question we can fulfill the need.
If you have a faster sales cycle, then using your funnel to determine product market fit is a good way to go, but let that from interacting directly with your potential customers. This of course doesn’t mean were stopping developing or enhancing features. Quite the opposite, we have a very health backlog of features to add and enhance. To full our backlog we taken input from existing customers, potential customers and our own roadmap\experiences.
The one thing we’ve never done to fill our backlog is look at our competitors. Chasing features is a great way to forever stay behind the curve and we at Resgrid want to set the curve and thus solidify our product market fit.
Resgrid is a SaaS product utilizing Microsoft Azure, providing logistics, management and communication tools to first responder organizations like volunteer fire departments, career fire departments, EMS, search and rescue, CERT, public safety, disaster relief organizations, etc. It was founded in late 2012 by myself and Jason Jarrett (staxmanade).