Product-market fit (P-M fit) means that the people who want your product are happy with what you are offering. It is the situation you should first go after before you focus on getting more users.
The easiest way is to take inspiration from existing products. You offer something familiar and innovative at the same time.
80% of features from existing products. 20% of new features you introduce yourself.
Markets are fixed. Remember that you can only change your product or what market you are targeting, you can rarely create or change existing markets.
Marketing Segments: The world is a collection of minority markets. You should divide your potential customers according to:
Location: physical or virtual market area they operate in. Socio-economic Status: income, viewing habits, personal values Lifestyle: activities, interests, opinions. Hooks: what grabs their attention. Response: how they respond to stimuli. Anew product, what do they do? You are selling vacations: Young Single: freedom and cheap. Young Couples: evening entertainment and adventures. Couples with Children: evening watch. Old: culture.
Divide customers into personas. How a person lives correlates with the most needs of the person. Research lifestyle of a person to find out what he craves.
Demography: Age, Sex Location: Area, Climate, Laws Income: Wealth Socio-economic group: Occupation Type Culture: Beliefs, Art, Morals, Customs
Getting to P-M fit is an iterative process. It can take anything between 3 months and 3 years total.
Create many product mockups. Have a user go through them and see how he likes them. Take the best option. Launch MVP. Get feedback. Be cool. Filter out early adopters. Meet with them and get their feedback. Watch out for non-customers that happen to be your users.
You should track your progress with analytics. For web services and applications, use web analytics. For other products, you must adapt and find your own metrics.
Before product-market fit, improve your product => Focus on activation or retention => Qualitative customer feedback => Quantitative customer surveys => Churn (should be <5% leaving per month) => Daily Active User (the count should be improving) After product-market fit, get more users => Focus on acquisition or referral => Signup percentage => Invite rate
Qualitative data is essential. Although you may analyze how long and how frequently people use the product, but that is not as efficient.
How would you feel if you could no longer use <PRODUCT>? Very Disappointed, Somewhat Disappointed, Not Disappointed, Do Not Use If less than 40% are Very Disappointed -> Focus on activation or retention. If more than 40% are Very Disappointed -> Focus on acquisition or referral. Also ask what makes the product so important for them. After the launch, find people who love you product and ask why. Take 3 of the most important and keep improving those.
After P-M fit, focus on growth. More about growth in growth hacking notes.