Product Market Fit Assessment

This Product Market Fit (PMF) framework helps you, especially as a founder or product manager, to consider the current strengths and weaknesses of your product and the conclusions you've reached about your target customer base -- false assumptions and heuristics can lead to immense costs later on in your startup journey. The goal of the PMF assessment is consider your conclusions carefully and reflect on all the facets of PMF you may not have yet considered.

Assessment Instructions: 

  1. This assessment below consists of 6 question groups that examine your organization's skills, assets, tools and traction as they related to Product Market Fit. Answer each question based on your level of comfort with each metric as they apply to your company.

  2. Based on the output of the assessment, you can skip to the sections highlighted for improvement. For a more comprehensive review, you can start reading from Chapter 1.

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a. How well do you understand your customers and their problems?

Very well: I have a clear picture of my target segments, customer personas and pain points (via usage analytics, online surveys, focus groups, client interviews, customer journey mapping).
Somewhat: I reasonably understand the target customer segment and their problems. I have conducted some qualitative interviews and surveys with customers.
Not very well: I do not know my customers needs and challenges very well. Industry market research seems to validate my hypotheses.

b. How sure are you of the value proposition of your product of service for your customer segment?

Very sure: Customer base is growing fast, customers switch to our product or service, stick around and refer our service.
Somewhat sure: Customers express interest but we still struggle to acquire users.
Not very sure: We do not have proof yet that customers want to use our service or product on an ongoing basis.

c. How effective is your product management process?

Very effective: We experiment often and iterate to constantly improve our features and/or processes against a set of product KPIs. Our solutions deliver measurable business results that meet both market needs and company goals. We have a dedicated project manager.
Somewhat effective: We have sketched a product roadmap and have a process to implement it. We are looking to hire a product manager. We do not yet have a set of specific metrics to measure product management success.
Not very effective: We tend to try too many things at once, losing focus on the core functionalities. We have not sketched a product roadmap yet. We don't have a dedicated product manager function.

a. How clear is your process to get traction and your KPIs?

Crisp and clear: We temper our grand ambition with the need to focus on traction. We have key targets, KPIs and dashboards to track results. We know which channels are key for our customer growth (traction, marketing and distribution).
Somewhat clear: Our strategy to gain traction is pretty well defined, we tested several marketing experiments across key channels and have an initial but incomplete set of KPIs.
Not that clear: We have a general sense of what leads to conversions and have sketched a marketing plan for one or two channels. We do not have defined a list of KPIs.

b. How often does your team meet your quarterly objectives and key results (OKRs)?

Almost always meets OKRs: If the 80-20 rule applies, we are a super productive team!
Sometimes meets OKRs: We are on the right track but we overestimate the goals we can deliver on.
Almost never meets OKRs: We do not track consistently and team is demotivated by the frequent changes in direction.

c. How many company priorities does the team have?

Two or Three : We have laser focus on the 2-3 most important priorities. Everything else has to wait.
More than five: We have a hard time prioritizing and currently manage to 5-10 priorities.
Too many to count: We don't know how many priorities we have, it is hard to put them into a list.

a. How many company priorities does the team have?

Two or Three : We have laser focus on the 2-3 most important priorities. Everything else has to wait.
More than five: We have a hard time prioritizing and currently manage to 5-10 priorities.
Too many to count: We don't know how many priorities we have, it is hard to put them into a list.

b. How many company priorities does the team have?

Very accessible: Data access is not an issue, we have all we need. We heavily used data for product development, aiming to make data-driven decisions more than 80% of the time.
Somewhat accessible: We have access to some datasets but not enough to significantly improve the technology or to inform business decisions with detailed insights.
Very inaccessible: Our data sources are difficult to access, expensive or non-dependable. This hampers our ability to develop the product.

c. How tied are you to the technology/platform that your product/service needs to work?

Not locked in: We have full flexibility to use different technology providers and SaaS platforms to run our business.
Somewhat locked in: We heavily depend on one technology for our core business but have flexibility on some of the business modules.
Very locked in: We are tied to one platform and depend on it for our product/service to operate.

a. How aligned/invested are all the management team members in the startup?

Very invested: All team members work full time and are aligned with values and mission of company. There is a clear vesting schedule and everyone at management gets stock options.
Somewhat invested: Co-founders work full time and are well-aligned on the vision and mission of the company. Some management team members are part-time and still need to buy into the vision.
Not very invested: Some co-founders are part time and all invest various levels of effort. Most staff is contracted and are not currently given any stock options.

b. How well-matched are the skills sets of the team with the needs of the startup?

Few skills gaps: We have hired talented individuals whose skills complete and balance the team's ability to achieve the company's objectives.
Some skills gaps: We have the most important roles filled out with talented individuals but lack 1 or 2 key roles and are struggling to find the right talent.
A lot of skills gaps: We need to hire for almost all key functions in the company.

c. How clear are the company values/culture and goals/objectives?

Very clear: We have a crisp set of values, goals and employee incentives aligned with vision and mission.
Somewhat clear: We are trying to build culture from our defined values. We have clear objectives for employee development and company growth.
Not very clear: We have not yet articulated our company's values and culture.

a. How effective have CEO and management team been at fundraising for company needs?

Very effective: We have a track record of raising equity capital and have already validated it with this startup (for instance by getting term sheets).
Somewhat effective: CEO is effective at selling the vision to investors and engaging them in conversations, but we have not closed equity deals in the past.
Not very effective: We talk to every investor that wants to listen but aren't getting many follow-on conversations. We don't enjoy this process and aren't following any plan or method.

b. How effective is the team at business modeling using unit economics such as Customer Lifetime Value (CLV) and Customer Acquisition Cost (CAC)?

Very effective: We build three-year business projections integrated in the model, using a bottom up approach.
Somewhat effective: Team has strong business modeling skills but has not yet developed a business projection model with unit economics.
Not very effective: Not sure how to properly measure those business metrics yet.

c. How attractive is your market to investors?

Very attractive: Investors are rushing into our market or sector and it is clear they see a huge opportunity.
Somewhat attractive: Investors are interested but sometimes find it risky or not big enough.
Not very attractive: Investors do not see a strong opportunity in our market.

d. How diverse are your funding sources?

Very diverse: A wide mix of grant funding, equity and convertible debt. Several funders have follow-on capabilities.
Somewhat diverse: A few sources consisting of grant funding and equity, convertible debt.
Not very diverse: Only one source.

a. How integrated is social impact into the mission and company culture?

Very integrated: The company has inextricably linked product and impact, for instance by customizing it for low-income customers.
Somewhat integrated: The company has a social mission but is also focused on scaling fast, even if this means sacrificing impact for financial returns in the short-term.
Not very integrated: We are focused on rapid growth and profitability over social impact.

b. How committed is the firm to serving low-income customers?

Very committed: The social mission to serve lower-income segments defines the business and drives every decision.
Somewhat committed: We are starting with middle-higher income to grow, and then want to go down market.
Not very committed: Serving low-income customers is not our primary focus.