Chapter Chapter 3 3 famousfamous saying saying goes, goe “Ros,m “eR owasmen was’t bunilt’t buin ilta dain ya,” daandy,” sandimil asrlimy,il itarl wy,il itl will take taa kreasone a reasonable aambleo unamt oofun tit mofe titom bue toild bu yoiludr yovisuionr vi sandion getand toget thi tos this missiomisn-s criticalion- critical point point. If you. If’re you cre’reati cnrega ati nngew a nmaewrk maet, rtheketn, theit cnou itld c otauklde take eveneve longen longer. Ther. iThemportant important poin tpoi ton ret mtoe rembmeremb hereer hereis th aist athlla sttart all usptarts ups are differentare different, as are, a stheir are theirproc eprossesce forsses bu forildi bungildi a prodng a ucprodt foruc thet for m theark meta. rket. ThereThere is a ifis nae filinene toline toe to itoen the in dtheevelop developmentm proentc epross cofess yo ofu r your application.application. It’s one It’s thoneat lethadsat le toads either to either mark maet succrket esuccss ore ssfa iloru rfea. ilEuarrley . Early in yoiunr yoprodur uprodct developmeuct development lifencty lifeclec, ycuclstoe, cumstoersm werills liwkelyill li holkelyd holontdo onto productsprod thuctsat aretha itn aretuitive intu anitived e anasdy toeas usy eto, and use ,w andait forwa itn eforw fnuncewtio f nality unctionality to beto in betro dinutroceddu. Aces dyo. Ausr yoprouducr prot ducmattu mreats, uyoreus, nyoeeud n toee eds ttoab elissthab highlish -high- impaimpct fuanctioct functionalityn alitythat thcanat dcoan the do satheme sa (orme b (oretter) better) as c oasm pcaoremdp atreo d to other productsother products that athat re finaree t fiunnee dtun toe md toeet m useeter usneeerds nee. ds. In su mIn, sau prom, ad uproct dshoucut sldho lookuld blookeau btifeuaul, wtiforkul, w workell, wandell ,i dandeall iyd,e acallhievy, ace hieve both, but itboth, but it shou shold nuever ld nbever e mbeed miocreediocre in either in either of the ofse thecategoriese categories. s. 3. Churn3. Churn It’s vitIta’sl vitfora youl for toyou m easto mureeas theure r athete arat tew hiatc hw hiyocuh loyoseu cusloseto cusmertos.m In ers. In additionaddition, you ,n youeed n toee kdn toow k nwhyow yowhyu’re yo lous’rein glo cussingto cusmertos.m Iser thes. Is pro theb leprom blem pricing,pri cserviing, cservie, cocme, copetitiompetition, uptin, umepti, orm seomethi, or something elnseg? else? In theI nearly the earlydays ofdays lau ofnc lahingunc yohingur proyoudur proct,du it’sct n,ot it’ sn neceot ssneceary sstoary me toas meure asure churnc huras youn as’re you still’re trying still trying to deter to determinem wihinec hw cushichto cusmertos mareer sthe are i dtheeal ifidt eal fit for yoforur yobuusiner buss.sine Butss. a Bs utyo ausr yocomurp canomy pgrowany grows revesnu revees,nu highes, highchurn c hrauterns rates can mcaakne m ita impossibleke it impossible to ac hieveto achieve a hea althy he ablthyusin beusss imneossd el.m oFordel. e xaFormpl exaempl, e, if yourif yourstartup sta getsrtup togets $10 to m $10illion m illionin reve inn reveue, an u4%e, am 4%onthly monthly reven reveue cnhurue n churn transltranatess to nearly hlates to nearly half youralf byourusin beuss sibeiness ngbei lostng ea lostch eayecahr. year. That Thatkind kindof ch ofur nc hcuanrn macank ema it kverye it verydifficu diffilt forcu lta forcomp a canompy toan groy tow gro. w. CompanieCompanies focuss foced usoned sm onall sm andall manded imum-edsiuizem-ds busizedin busessiense ssshoesu sldho aium ld aim for 2%for or 2% lower or lower gros sgros mons thlymon reventhly revenue churue n,chur whilen, w enterprihile enterprise-focusse-foed cused businebusinesses sshouldses should aspire a stopire 1% to or 1% lower or lower gross gro mossn thlymon revethly nurevee cnuhuern c. hurn. It’s importaIt’s important to ndetermit to determine chnuer nch rautesrn rwatesitho wuithot incultud incinlgud aninyg uanpsyells up osellsf of your yourprodu product, becctaus, bece austheye theycan often can often mask m aandsk uandndere undstimate erestima thete re theal real rate of rate of churnc.hurn. WhenWhe youn youmea smeurea scuhreu rnc,h uyornu’, reyo u’alreso amlseoasu mrienasug riyourng yourlevel levelof of customercustomer satis fsaactiotisfnactio. Thnat. Thsaiad,t saithered, there are a laware yaslwa thoyss etho cusseto cmusertosm werho s who 4242 4242
Measuring Product/Market Fit Page 4 Page 6