Practice product-market fit vocabulary: PMF signals, retention curves, Sean Ellis test, pivot decisions, and ICP (Ideal Customer Profile) changes.
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A startup founder says 'we're searching for PMF'. What does PMF stand for and what does searching for it mean?
Product-Market Fit (PMF) is the state where a product satisfies a strong market need — users love it, retention is high, and word-of-mouth grows organically. 'Searching for PMF' means the team is still iterating, testing hypotheses, and pivoting until they find the combination of product and market that produces this strong pull.
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'The retention curve flattens — signal of PMF.' What does a flattening retention curve indicate?
A retention curve plots the percentage of users still active over time. For most products it drops steeply — if it flattens above zero, it means a cohort of users is sticking around long-term and repeatedly returning. This flattening is a strong quantitative signal of PMF — those users have found genuine ongoing value.
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What is the 'Sean Ellis test' for product-market fit?
The Sean Ellis test asks users: 'How would you feel if you could no longer use [product]?' If 40% or more respond 'very disappointed', it's a strong signal of PMF. Below 40% suggests the product hasn't yet become essential to enough users. It's a quick qualitative benchmark popularised by growth expert Sean Ellis.
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'We pivoted based on user feedback.' What is a pivot in startup vocabulary?
A pivot is a deliberate, strategic change to one or more core business assumptions based on validated learning. Famous pivots include Instagram (from a check-in app), Slack (from a gaming company's internal tool), and YouTube (from a video dating site). Pivoting is distinct from incremental iteration — it changes a fundamental assumption.
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'The ICP (Ideal Customer Profile) changed.' What does this mean for the startup?
The ICP defines the characteristics of the company or person who gets the most value from the product and is most likely to buy. If the ICP changes — say, shifting from SMBs to enterprise, or from marketers to developers — the startup must re-align its sales, marketing, product, and pricing strategy. ICP evolution is common on the path to PMF.