Yesterday, I had a fascinating 15-minute call with a founder who connected with me via Intro.co/seanellis. Their startup has a strong product-market fit (PMF) signal, with 55% of surveyed users stating they would be "very disappointed" without the product. This score is significantly above the 40% threshold I recommend as a key benchmark for PMF. Yet, they were struggling with a low retention rate—another critical indicator of product-market fit.
Pretty helpful post Sean! Even I find myself getting confused with retention vs activation metrics, what would be the good examples to clearly define those?
Great post Sean! Could you explain on how using data they defined or arrived at activation? Always find that to actually be the trickiest part (after getting past segmentation)
Thanks, Seth. It really came down to the questions I was asking. When he mentioned they had a high PMF score but a low retention rate, I asked two key questions:
1. How did you select who took the survey?
2. What was the starting event for the retention cohort?
It quickly became clear that the survey respondents were active users, while the retention analysis included many users with no activity. This disconnect led me to ask about activation rates and whether they had defined a clear activation event.
Great insights.
Pretty helpful post Sean! Even I find myself getting confused with retention vs activation metrics, what would be the good examples to clearly define those?
Great post Sean! Could you explain on how using data they defined or arrived at activation? Always find that to actually be the trickiest part (after getting past segmentation)
Thanks, Seth. It really came down to the questions I was asking. When he mentioned they had a high PMF score but a low retention rate, I asked two key questions:
1. How did you select who took the survey?
2. What was the starting event for the retention cohort?
It quickly became clear that the survey respondents were active users, while the retention analysis included many users with no activity. This disconnect led me to ask about activation rates and whether they had defined a clear activation event.