Achieving Product-Market Fit: Metrics for Sustainable Business Growth

💡 Product Market fit means that a product is good enough to solve the need of a set problem, not just partially but in its entirety. 📊 Monthly retention measures the percentage of users acquired on day zero who actually stayed on day 30, providing a clear indicator of sustainable business growth. 📊 Without high retention rates, a product may not have achieved true product Market fit and may not be able to scale as a sustainable business. 📊 In the early stages, Netflix focused on retention curves to measure the percentage of users retaining to pay the next month, with a 97% retention rate and 3% churn rate. 🛒 Understanding the LTV of a customer is like knowing the value of a loyal customer to a local shop, highlighting the importance of customer retention and long-term revenue. 💡 A high LTV by CAC ratio indicates a great business, with Netflix being an example with a ratio of five. 💰 Understanding the lifetime value metric can help determine the success of achieving product-market fit. 📈 The DHM model emphasizes the importance of creating Delight, Habit-forming, and Margin-enhancing products for scalable and sustainable businesses.