MBA2060 Q&A Wednesday: How many customers do I need to have product/market fit?

Let me tell you about Intuit QuickBooks. When I was starting out my business, I remember sitting at my desk late at night not working on my business but cleaning up numbers, tracking and reconciling payments and wondering how this became my life. But once I automated the admin side of things of my finances, those nights had disappeared and I felt a whole lot better. Outdo it with intuit QuickBooks QuickBooks is the trusted end to end solution that businesses rely on for getting paid, managing finances, paying employees, finding new customers, and more. QuickBooks provides a team of AI agents and trusted experts, so doing it yourself no longer means doing it alone. Their payment agent gets you paid faster, their customer agent finds leads, follows up and secures more sales, and the accounting agent automates and categorizes transactions. Get your critical business jobs done with QuickBooks on the Intuit platform.

Ready to save on new tech? It's time for Dell Tech Day's annual sales event celebrating our customers with fantastic deals and benefits. Product perks include Dell Rewards, free shipping, premium Support and more. PCs like the Dell 14 with Intel Core Ultra processors will help you do more faster and with a premium suite of monitors and accessories, you can upgrade your whole setup with amazing savings. Visit Dell.com deals.

Hey O. Welcome to the Dollar welcome to the RMBA show. Helping you along your business journey every single day with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of Webinar Ninja, an independent software company I started with my co founder back in 2014 and today's episode is Q and A Wednesday. On Q and A Wednesdays I answer a question from one of you, one of our listeners. If you got a question you want to ask just go ahead and email me over@omar100mba.net Today's question is from Craig and Craig hey Omar, I have just started a software company, a small web app and I've been running it for about six months now. I've been wondering how many customers do I need to have product market fit? I know how important product market fit is to the success of a business and I wanted to know if I've achieved it yet. Would love your thoughts. Thanks Craig. Love this question Craig, because regardless of what your product or service is, product market fit is incredibly important. Product market fit? Well, it's basically do you have a product that the market really wants? It should be really the goal of every business because once you have product market fit, your life just becomes so much easier because the demand for what you're selling is so high. Having Product Market Fit basically allows you to overcome any challenge you have. It's very hard to mess up a business as Product market fit doesn't matter if you have other competition. It doesn't matter if you're new to the game. Basically, Product Market fit solves all your problems. But how long does it take to get Product Market Fit? How do you know that you have Product Market Fit? Well, that's what we're going to talk about in today's lesson. I have a bit of experience in this area and I want to share with you what I've learned along the way, not only from my own experiences, but from other experts in business, in startup land, and even in the world of small businesses. So let's get into it. Let's get down to business.

You love what you do. You also love the idea of not doing it one day. But it's getting harder to know the best way to move into the future towards retirement. We hear about inflation, rate hikes, the changing market, gotta get the kids through college, build an emergency fund, and then there's retirement. Here's where Fidelity comes in. Fidelity can help you find clarity in saving for the future, even as your path and priorities evolve.

How?

Well, they'll help you create a free, personalized plan that adapts as your priorities change. They'll also show you what's called timely insights, small tips on ways to save and invest to help meet your goals. And you can monitor your plan so you stay on target. The future's coming and so's retirement. Fidelity can help you take it on your way. Learn more@fidelity.com future expenses charged by your investments and other costs and fees associated with trading or transacting in your account apply Fidelity Brokerage Services member NYSE SIPC.

Love this question from Craig. He wants to know if he has product market fit yet. A lot of people have different definitions of product market fit. Some people think it's when you reach the point where you don't need to do any marketing and your business just grows on its own. Some people think it's when you have more customers come in than are leaving. But my favorite definition of product market fit is from Marc Andreessen. He says that your customers are buying your product just as fast as you can make it. The founders are actually overwhelmed by the growth and their biggest challenge is just serving their customers fast enough. Money from customers is just piling up in your bank account and you can't hire Sales and customer service fast enough. Now, that's an abridged version of his definition. If you want to read more, just Google Marc Andreessen on product market fit for startups. You'll see his article, and that's really real product market fit. It's where you have created a product that generates so much demand that you can hardly keep up. That's really what our goal should be. Okay? Now there are stages and steps and phases before you reach that goal. It's not binary. Okay, I'm going to give you a good example of this. Many of you have heard of Twitch tv, which is a very, very popular website that allows people, that allows gamers to stream their content and build communities around their channels. It's basically like YouTube but for live streaming for gamers. Right now, before it was Twitch, it was Justin tv. And one of the founders of Justin TV and Twitch, Michael Siebel shares the story that they spent seven years without product market fit. First they were just a streaming platform for everybody, where people can just stream their life and stream their experiences and kind of see it as a live vlog. And they had millions of users, right? But they're just kind of chugging along and they really didn't explode or they didn't really see massive growth. They were even doing okay financially. But Michael says, we knew we hit product market fit when we started to look at our customers, look at our users of our platform and ask who are the most loyal users, People that use our product despite our problems. And they found out it was gamers. The gamers would love to use our platform. They thought it was fantastic and they would always keep coming back, despite if they had challenges or there were features that were missing. When they learned that this is really their ideal market, they decided to change the product to fit this market. And they turned Justin TV to Twitch and built it around gamers. As soon as they did that, they saw an explosion of growth. They niched down and they had product market fit. So you can have a lot of metrics that kind of show success and have some stages before you hit product market fit. And it could take years, like in this example. And that's just part of the challenge and the kind of struggle of business is getting to the point where you do have product market fit. And it may take years, like I mentioned. So just to go back to Craig's question, how many customers do I need to have product market fit? Well, it's not really about the number of customers. It's more about the velocity of customers. And this applies to anything really, any product, any service. For example, if you're launching a course and if you say I'm going to open up this course to 100 students and you sell out in a week, there's a good chance that this is a really, really good topic and this is something that really people want to know. And the market that you are pitching this course to or is catered to really wants this product. Product market fit. I'll give you an example from my own experience. I love live events and I wanted to run a small retreat for founders in Australia. There are very little conferences here in Australia for founders. Many of them have to travel abroad and there's nothing really that's kind of an enjoyable confere where you can have natural conversations. So I decided to create it. How did I know I had product market fit? Well, I put a landing page together and emailed it to some of my friends in the space and guess what? It sold out in a week. I instantly knew I had product market fit. Now if for some reason it didn't sell out, if I had a hard time selling tickets, I would then say maybe this conference is for somebody else or maybe the product needs to change or maybe the way I am approaching this conference needs to change. I need to get some feedback. People that said no, I want to ask them why did you just say no? And I would start my work towards trying to achieve product market fit. Oh, could this vintage store be any cuter? Right?

And the best part, they accept Discover.

Except Discover in a little place like this? I don't think so, Jennifer.

Oh yeah.

Huh?

Discover is accepted where I like to shop. Come on baby, get with the times.

Right? So we shouldn't get the parachute pants.

These are making a comeback, I think. Discover is accepted at 99% of places that take credit cards nationwide, based on the February 2025 Nielsen report.

To wrap up today's Q and A, Wednesday's question from Craig. The best way I can describe achieving product market fit is your business. And selling your product just becomes easy. It just becomes so easy to sell your product. People want it so bad. You never have a problem with sales. You have no problem with converting customers. If somebody hits your website and they're the market you're targeting, it's like a no brainer for them. They're like, hell yeah, I want this product. When you reach that point, things just become easier because now you have cash flow, now you have a product that people actually want. So it's easy to hire. It's Easy to get investment. If you want to get investment, it's easy for you to improve the product because hey, now you got money and revenue coming in. All our goals as entrepreneurs is to get to that point. And sometimes many of us don't. We settle. We settle for something that is less than product market fit. We get comfortable. We just don't iterate or improve the product or the market we're trying to go after. This is a work in progress constantly until we get there. And even when you hit product market fit, you can even refine more to improve the fit for your customers. Thanks so much for listening to the $100 MBA show. If you got a question you want to ask here on Q and A Wednesday, go ahead and email me over at Omar MBA Net and I'll make sure to answer it right here on Q and A Wednesday for you. Not only will I be helping you, but you'll be helping other entrepreneurs like you get through the same challenges. Thank you in advance for sending over your question. Before I go, I want to leave you with this. One of the things that a lot of people try to do is change their product to get product market fit. And that's a solid strategy. But at the same time you need to ask yourself, am I going after this right market? You really want to go after an audience, a person, people that are desperate for your product, for your solution. People that are desperate will put up with pretty much any flaw if it solves their problem. You want people that when they hit your website, watch your demo video or read your copy to say, I'm in, I'm sold. They don't need convincing. That's how powerful power market can be. If you get it right, if you are targeting the right market with the right product. Thanks so much for listening and I'll check you in tomorrow's episode. I'll see you then. Take care.

Foreign.

Introducing Fidelity Trader plus with customizable tools and charts you can access across all your devices, try our most powerful trading platform yet@fidelity.com TraderPlus investing involves risk, including risk of loss. Fidelity Brokerage Services, LLC Member NYSE SIPC.