Product-Market Fit
Today’s app market is highly competitive. Tens of thousands of new apps crop up every month just in Google play, and very few actually succeed. If you are hoping your app will be one of those that make it, you’ll find that product-market fit (PMF) is essential. In this article, we’d like to focus on what PMF means and how to make sure your mobile app has it.
What is product-market fit?
Product-market fit is about having the right product for the right market. Even though there’s no clear consensus on how to measure it precisely, there is no arguing that when you have PMF, product purchases and growth tend to soar. When you don’t, the opposite will happen as customers are not getting the value they want out of your product. PMF doesn’t just mean having users who are willing to pay for your product, it often also means having happy customers that will spread the word, and become your greatest salespeople.
Measuring product-market fit
As we’ve mentioned, there is no consensus on this area. Nonetheless, some experts have laid out some guidelines. For Reforge CEO Brian Balfour, you can validate the level of Product-market fit (PMF) through a qualitative survey, engagement indicators, and analyzing your retention curve (you’re looking for one that flattens out). On a different note, specifically for P2B products, Andrew Chen focuses on how to establish a pre-existing demand through search volume analysis regarding the solution your product provides. He suggests using the Google Keyword Tool to determine whether users are really looking for what you are trying to sell them.
Product-market fit for a mobile app
So, how do you determine if your mobile app has product-market fit? Well, drawing on what we saw above and suggestions from other experts, here are a few strategies to help you out.
1. Checking the keyword search volume in the app stores
If you haven’t launched your app yet, this is an excellent starting strategy. Both Google and Apple have data available on this front and there are also tools such as Mobile Action or Sensor Tower that provide data for both stores and can come quite handy. There is no one perfect tool to carry out this research, which means you will have to do the legwork by compiling data from different sources, but if you do it, and you do it well, it will all be worthwhile.
2. Analyzing app store conversion metrics
This is something you can do when your mobile app is already up and running. Both the App Store and Google Play produce data, such as conversion rates, that you can use as leading indicators, which you can then compare to the average in your category. If your conversion rate is not as good as you’d like it to be, don’t panic just yet, as you can always work on app store optimization and find ways to improve conversion.
3. Studying mobile app retention benchmarks
As we saw with Belfour above, having a retention curve that levels out is actually a good thing. Although, of course, it might be a while before you can see this play out. You should also study where your retention curve levels out since that is also an important factor. This is where mobile app retention benchmarks come in. With them, you can focus on early metrics like day 1 or day 7 to give you an idea of how you are doing early on compared to other mobile apps. This will let you adapt and readjust if things are not going as well as you expected. Adjust and AppsFlyer are a couple of companies that periodically publish useful app retention benchmark data.
4. Looking out for Sean Ellis’ 40 percent rule
According to Sean Ellis and his startup pyramid, a good way to measure whether you’ve got Product-market fit (PMF) or not is carrying out a survey to check how users feel about your product. If at least 40% of your users would be “very disappointed” if they did not have access to your app anymore, then you’re definitely on the right track.
It is important to note that we don’t advise you use just one of these four strategies. When it comes to mobile app performance, the more the merrier. Also, keep in mind that you should compare yourself with other apps in the same category as yours that have similar usage patterns, so you get more reliable and useful data.
Product-market fit is forever
It may sound like you should only focus on PMF before launching a product or just after starting out, but it is actually something you should never take for granted. Markets and trends change, which means your product will need to adjust accordingly to stay in the game. Moreover, you may want to add on to your app or expand to new markets, and this also means working on your product-market fit. For all these reasons, PMF is something you should keep in mind throughout your product’s lifespan.
Final thoughts
Succeeding in the mobile app industry is not an easy feat. It takes a lot of work before and after releasing your product into the market. Product-market fit is one of the many tools that will give you a fighting chance out there. We hope this information has proven useful and that you can apply it to your app if you aren’t doing so already.
