The beginning of something special :)
Finding Product Market Fit
Product market fit means weâve successfully made something that people actually want. Itâs the point where users love our product so much they tell other people to use it out of the blue.
We are going to iterate the product in our initial pilot groups until we reach âproduct market fitâ.
There are a few established ways to measure this. Keeping a close eye on all of these metrics will help us understand if weâve reached this point.
Leading Indicator
Ask users âhow would you feel if you could no longer use the product?â and measure the percent who answer very disappointed. Those who answer very disappointed are our power users. Asking power users their main benefits will help us identify our core strengths.
Ideally, we want the percentage of people who answer âvery disappointedâ to be 40% or greater. If we have not reached this, we need to continue to segment the market, talk to users, identify our strengths and areas of improvement, and keep iterating until we hit this.
Engagement
Our engagement can be measured with two different actions:
- Opening the application and viewing a page (profile, group, oath)
- Creating or agreeing to an Oath
The core engagement loop on Oath is creating and agreeing to an oath. We can measure this action to understand whether users actually have a need for creating binding agreements.
On the other hand, opening the application to view profile reputation, group data, or monitor Oaths will let us know if the information our application is storing is relevant and useful to users.
To monitor engagement we will heavily rely on the âPower User Curveâ. The power user curve works by looking at the number of days users engaged with Oath over the span of a month. On the y-axis is the percentage of users who engaged with Oath, and on the x-axis is the number of days the users engaged with Oath.
Most curves look like this, where usage drops off significantly as days used increases.
The most special, sticky, once-in-a-generation products look like this. They âsmileâ- meaning there are heavy power users that use the application more often and keep coming back. We want to aim to be as close as this as possible while also accepting that people donât buy or sell items every day. At the very least, page visits and app opens can give a good signal on whether the information and content are intriguing to view.
Retention
The last thing that we want to measure is long-term retention: aka for users that sign up, how many of them return to use the app over time. Basically measure if users sign up and see value or leave.
We will plot the % of active users over time (for various cohorts of users) to create the retention curve. IF it flattens off at some point, you have probably found product market fit for some market or audience.
General retention goals:
- 60% retention after day 1
- 30% after day 7
- 15% at day 30
Rolling retention (percentage of users returning at least once after Day X) is crucial for transactional apps.
- Monthly Rolling Retention: 50-70% of users return at least once in a given month.
- Quarterly Retention: ~70% retention over three months reflects solid loyalty.
Stickiness
Apps like Oath are utility-driven, so users typically use them only when needed (e.g., buying/selling/trading, checking user reputation). A stickiness rate of 10-20% indicates good adoption and habitual use for transactions.
Stickiness is measured by dividing Daily Active Users (DAU) by Monthly Active Users (MAU)