Are You Building a SaaS Product People Actually Want?
You’ve got a great idea, a solid product, and maybe even a few early users. But here’s the real question—do you have a product-market fit? In SaaS, it’s the difference between scaling successfully and burning through cash without traction.
Without product-market fit, growth stalls, churn skyrockets, and sales feel like an uphill battle. But when you nail it, everything changes—users stick around, referrals increase, and marketing becomes way more effective.
So, how do you know if you’ve truly reached product-market fit? More importantly, how do you get there faster? This guide breaks it all down—clear signs, key metrics, and actionable steps to ensure your SaaS product isn’t just built but built for the right market.
What Is Product-Market Fit for SaaS?
Product market fit for SaaS means a new product solves a real problem for a well-defined
target customer audience—so well that users can’t imagine going back to life without it. It’s not just about having customers; it’s about having the right customers who actively use, love, and advocate for your product.
Marc Andreessen, who popularized the term in his essay "The Only Thing That Matters," put it simply: “Product market fit for SaaS means being in a good market with a product that can satisfy that market and attract potential customers.” In other words, you’ve built something people genuinely need and are willing to pay for.
Without product-market fit, you’re forcing sales, struggling with high churn, and constantly battling objections. When you have it, growth feels almost effortless—customers stick around, refer others, and drive organic demand.
Why Product Market Fit For SaaS Matters?
Product-market fit (PMF) is the single biggest factor that determines whether your small team SaaS company thrives or struggles. It’s what separates companies that scale smoothly from those that burn through cash with little to show for it. A great user experience is essential; without it, no amount of sales or marketing strategies can save you.
1. Product-Market Fit Changes Your Priorities
Before PMF, your focus should be on building the right product—not scaling the business. At this stage, everything is an assumption. You’re testing ideas, reshaping features, and maybe even pivoting. Sales, marketing, and customer success efforts should be experiments, not full-scale investments.
Once you hit PMF, the game changes. You have proof that your product solves a real, painful problem, and the market is willing to pay for it. Now, it’s time to scale—hiring a VP of Sales, expanding your team, improving onboarding, and ramping up marketing efforts. But if you make these moves too soon, you risk throwing money at a product no one truly needs.
2. Scaling Before PMF Is a Costly Mistake
Many SaaS companies fail because they scale prematurely. They pour money into sales and marketing for a product that doesn’t fully resonate with users. The result? Low conversions, high churn, and an endless cycle of wasted resources.
No amount of clever growth hacks can fix a product that doesn’t have a real market. And when growth stalls, you’ll be left wondering: Is it a sales problem, or is it a product problem? Without PMF, it’s usually the latter.
3. Misjudging PMF Can Kill Your Business
A common SaaS pitfall is mistaking early traction for PMF. Some companies shift focus from product development to aggressive growth too soon. They get customers—but those customers quickly realize the product doesn’t fully meet their needs. This leads to:
High churn
Overloaded support teams
Negative reviews and refund requests
A damaged reputation that’s hard to recover from
PMF isn’t about getting customers—it’s about keeping them. If retention is low, scaling only accelerates failure.
4. PMF Is an Ongoing Process
Even if you’ve achieved PMF today, it doesn’t mean you’ll have it forever. Markets evolve. Customer needs shift. Competitors emerge. The solution that’s perfect now might become obsolete in a year.
Smart SaaS companies treat PMF like a health check—constantly testing assumptions:
Does the problem we solve still exist?
Is it still urgent enough for customers to pay for it?
Is our market still growing, or is it shrinking?
Instead of getting comfortable, use customer feedback and product-market fit surveys to keep evolving. The companies that stay ahead don’t just find PMF once—they redefine and strengthen it continuously.
Without product market fit for SaaS products, scaling is a gamble. Get it right, and growth becomes a natural, repeatable process.
How to Measure Product Market Fit for SaaS Products?
A strong product market fit for the SaaS industry can attract potential investors, ensuring that your product resonates with market dynamics. Without it, scaling is risky—too early, and you waste resources; too late, and you lose market opportunities.
But PMF isn't a simple yes-or-no answer. Instead, it's a spectrum that requires multiple indicators to confirm whether your product truly meets market demand. here's how you can measure yours.
1. The Sean Ellis Test: Do Users Really Need Your Product?
One of the simplest ways to gauge product market fit for SaaS is the Sean Ellis Test, a single-question survey:
"How would you feel if you could no longer use [product]?"
Very disappointed
Somewhat disappointed
Not disappointed
N/A – I no longer use [product]
If 40% or more of respondents answer "Very disappointed," you likely have product-market fit. This threshold is based on research across hundreds of startups. Companies that surpassed 40% were able to scale successfully, while those below it struggled to gain traction.
Why It Works:
Simple & Direct – Instead of complex data models, it taps into how customers actually feel.
User-focused – It prioritizes what real users say about the product.
Leading Indicator – If a significant percentage of users can’t live without your product, retention and word-of-mouth growth will follow.
Limitations:
Intent vs. Action – Users might say they’d be disappointed, but that doesn’t guarantee they’ll stay or refer others.
Correlation, Not Causation – A 40%+ score suggests PMF but doesn’t guarantee long-term success.
To get meaningful results, survey active users who have engaged with the core product features recently. A sample size of 40-50 users is typically enough for statistical significance.
2. The David Cummings Test: Is Your Business Ready to Scale?
David Cummings, founder of Pardot, outlined five key signs of PMF based on real-world usage patterns:
10+ paying customers in a short period (3-9 months) who aren’t just friends or early testers.
At least 5 customers actively using the product without requiring major customizations.
5+ customers using the product for over a month without major bugs or complaints.
Customers use the product in a similar way and achieve similar results, indicating a repeatable value proposition.
A repeatable acquisition and onboarding process—customers discover, sign up, and start using the product in a predictable way.
Why It Works:
Focuses on real usage – Unlike survey-based methods, this approach tracks what customers actually do.
Scalability Check – Ensures the product is solving problems consistently across multiple customers.
Helps B2B SaaS Companies – Especially useful for enterprise SaaS, where long sales cycles and deep adoption are key.
Limitations:
Less suited for B2C SaaS – B2C companies need larger sample sizes to confirm trends.
Doesn’t Analyze Market Size – It checks if existing users love your product but doesn’t confirm if the total addressable market is big enough.
3. Retention & Churn Rates: Do Users Stick Around?
One of the best ways to measure PMF is to look at retention metrics. A high churn rate usually means customers don’t find enough value in the product.
Key retention metrics:
Net Revenue Retention (NRR) – Measures revenue growth from existing customers, factoring in expansion, downgrades, and churn. Customer lifetime value is essential for understanding the total value of these relationships. Above 100% is a strong sign of PMF.
Customer Retention Rate (CRR) – Tracks how many customers stay over time. If retention drops significantly after sign-up, you might not have PMF yet.
Early-stage SaaS companies should analyze cohort retention curves—if usage stabilizes instead of falling to zero, it’s a sign that users are sticking around.
4. Organic Growth & Word-of-Mouth
If you’ve truly hit PMF, people won’t just use your product—they’ll tell others about it. Strong PMF leads to:
High referral rates – Customers recommending your product without incentives.
Inbound sign-ups – A steady stream of organic users rather than relying purely on paid ads.
Virality metrics – If existing users bring in new ones at a high rate, it’s a strong PMF signal.
Tracking Net Promoter Score (NPS) can help here. A score above 50 indicates strong user enthusiasm.
5. Customer Feedback & Feature Requests
Customers who truly love a product will actively request features that enhance their experience. Signs of PMF include:
Customers proactively suggest improvements.
A clear pattern in feedback—customers ask for the same enhancements, indicating a defined market need.
Willingness to pay for additional features or upgrades is an indicator of the perceived value of your product and your market share.
There’s no single magic test for Product-Market Fit (PMF). If you want to be sure your SaaS product is on the right track, you need to look at it from different angles. Here’s a simple breakdown of key indicators and how to measure them:
What You’re Measuring | How to Measure It |
|---|---|
User sentiment | Sean Ellis Test (Do users care?) |
Adoption & repeatability | David Cummings Test (Is usage consistent?) |
Retention & churn rates | Real-world usage data (Do users stick around?) |
Organic growth & referrals | Word-of-mouth traction (Are people recommending it?) |
Customer feedback | Feature requests & adoption (Are users asking for more?) |
How to Create a Product-Market Fit (PMF) Survey?
Creating a Product Market Fit for SaaS (PMF) survey, also referred to as a product market fit survey, is one of the easiest ways to gauge how much users truly
value your SaaS product. The key is to keep it simple, ask the right people, and use the results to guide your next steps. Here’s how to do it:
1) Choose Your Survey Questions
The go-to method for measuring PMF is the Sean Ellis Test, which relies on a single, powerful question:
"How would you feel if you could no longer use [product]?"
Very disappointed
Somewhat disappointed
Not disappointed (it isn’t really that useful)
N/A – I no longer use [product]
If 40% or more of your respondents say, "Very disappointed," you’re likely on track for PMF.
For deeper insights, consider adding these follow-up questions:
"Why did you choose that answer?" (Helps understand what users love or dislike)
"What would you use instead if [product] were no longer available?" (Reveals your closest competitors)
"Have you recommended [product] to others?" (Measures organic growth and word-of-mouth traction)
2) Find the Right Users to Survey
Not all users will give you valuable feedback. Focus on those who:
Have experienced the core of your product
Have used it at least twice
Have been active for the last two weeks
A good sample size is 40-50 users for meaningful results.
3) Send Out the Survey
You can distribute the survey using:
Email campaigns (Simple and direct)
In-app pop-ups (Engages active users)
Survey tools (Google Forms, Typeform, HubSpot, etc.)
4) Analyze the Results
Once the responses are in, focus on the percentage who answered "Very disappointed."
40% or higher: Strong PMF signal—time to scale!
Below 40%: You still need to refine your product or positioning.
Use open-ended responses to pinpoint weaknesses and areas for improvement.
5) Take Action
A PMF survey isn’t just a one-time test—it’s an ongoing process. Based on feedback, you can:
Improve onboarding if new users don’t "get it" fast enough
Adjust positioning if users don’t fully understand the product’s value
Prioritize feature requests that would make a real impact
Run the survey periodically to track progress. PMF isn’t a fixed state—it evolves as your product and market change.
You’ve Found a Product Market Fit for SaaS. Now What?
Hitting Product-Market Fit is a huge milestone—but it’s just the beginning. Now, you need to turn that validation into real growth by understanding your target audience. That means getting your product in front of the right people in a way that clicks instantly.
The best way to do that? Personalized, hands-on demos.
Your ideal customers don’t want generic sales pitches. They want to see exactly how your product solves their specific problems. A well-crafted demo does just that—it shows, not tells. It bridges the gap between interest and commitment, making it easier for prospects to say, “Yes, this is exactly what we need.”
At this stage, we suggest tying up with a platform that offers early-stage startup support while also giving you scalability options as you grow.
Now, you could spend time researching and testing different tools—or you could start with SmartCue.
Why SmartCue? Because Speed, Personalization, and Scalability Matter
Crafting a compelling demo shouldn’t take hours, and it definitely shouldn’t be a bottleneck in your sales and marketing efforts. SmartCue makes demo creation faster, smarter, and more effective across your entire go-to-market team.
For Sales Teams – Close Deals Faster
Instantly record and customize demos with a one-click Chrome extension
Tailor every demo to fit your prospect’s pain points, role, and use case
Track engagement to see what resonates and refine your pitch
For Product Marketing – Tell Better Stories
Embed demos in website CTAs, blogs, and campaigns to boost engagement
Launch new features with interactive product walkthroughs instead of dull PDFs
A/B test demo variations to see what drives higher conversions
For Demand Gen & Growth – Scale Demo-Led Pipeline Growth
Use SmartCue for ABM and outbound campaigns—personalized, scalable, and easy
Share interactive demos on landing pages and review sites to increase MQL-to-SQL conversion
Repurpose demos across multiple channels (export as PDF, GIF, or video)
Want to see how SmartCue fits into your workflow?
Here’s how to get started for free in 4 easy steps.
Step 1- Sign Up & Log In
Start with a free trial and explore SmartCue’s intuitive interface.
Step 2- Create a New Showcase
Create a showcase by manually uploading or downloading an extension.
Step 3- Build the showcase
Add text descriptions and enhance your showcase with integrated tools.
Step 4- Publish the Showcase
Tap on the Publish button once you are done with the customization and save your progress.
Or skip the back and forth—book a one-on-one call today.
Frequently Asked Questions
What is the relation between product market fit for SaaS products and scaling my SaaS business?
Achieving product market fit for SaaS is crucial for scaling your solution business success. It ensures that your product meets market needs, increasing customer satisfaction and retention. Without this alignment, scaling can be challenging and unsustainable.
How important are customer reviews and feedback in determining product market fit for SaaS products?
Customer reviews and user feedback play a critical role in determining product-market fit. They provide valuable insights into customer satisfaction, preferences, and areas for improvement, reflecting a company's commitment to corporate social responsibility. Analyzing these inputs helps companies refine their offerings to align with market needs better.
How can I improve the chances of achieving product market fit for SaaS products?
By conducting thorough market research to understand the needs of your target market, honing your value hypothesis, building an MVP for validation, and continuously iterating based on feedback, you can enhance the likelihood of attaining product-market fit for your SaaS product with the support of quantitative data.
