Jason Cohen, among other things CEO and founder of WP Engine, has written a good article about product/market fit with real-life examples.
He defines product/market fit as all of the following:
- Easy growth (Pull, not push): Growth rate suddenly spikes up, and sustains at the new rate. You often don’t know why.
- High retention: Cancellation at or under 3%/mo (for B2B) or 5%/mo (for B2C), because if customers are leaving in droves, you are not a “fit.”
- Critical mass: At least $20,000/mo in revenue or increasing WAU’s by at least 200/mo. Everyone can grow 1000% month-of-month when the baseline is 7 customers; the fact that you have only 7 customers means there’s not yet evidence of “fit.”