Product-market fit is a term that describes how well your product or service meets the needs and expectations of your target market. It is a crucial factor for the success and growth of any business, especially startups. However, achieving product-market fit is not a one-time event, but a continuous process that requires constant validation and adaptation. If you fail to do so, you may end up with broken product-market fit, which can have serious consequences for your business.

Broken product-market fit occurs when your product or service no longer satisfies the changing needs, preferences, or behaviors of your customers, or when you lose your competitive edge in the market. It can also happen when you launch a product or service without validating the market demand or customer feedback in the first place. Broken product-market fit can lead to low customer satisfaction, retention, and loyalty, as well as reduced revenue, growth, and profitability.

So how can you tell if your business has broken product-market fit? Here are some common signs to look out for:

You have high customer churn or low retention rates. 

If your customers are leaving your product or service at a high rate, or if they are not using it frequently or consistently, it may indicate that they are not getting enough value from it, or that they have found better alternatives elsewhere. You should monitor your churn and retention metrics regularly and try to understand the reasons behind them. You should also collect feedback from your customers and analyze their behavior patterns to identify their pain points and unmet needs.

You have low customer referrals or word-of-mouth.

One of the best indicators of product-market fit is when your customers are happy and satisfied enough to recommend your product or service to others. This can generate organic growth and reduce your customer acquisition costs. However, if your customers are not referring your product or service to their friends, family, or colleagues, it may mean that they are not impressed by it, or that they do not trust it enough. You should measure your net promoter score (NPS) and other customer advocacy metrics regularly and try to improve them by delivering exceptional value and customer experience.

You have low conversion rates or high acquisition costs.

If you are struggling to convert your prospects into paying customers, or if you are spending too much money on marketing and sales efforts to acquire them, it may indicate that you have not validated the market demand for your product or service, or that you have not communicated its value proposition clearly and effectively. You should conduct market research and customer interviews to validate the problem-solution fit and the product-market fit before launching your product or service. You should also craft a compelling value proposition and a clear marketing message that resonates with your target audience.

You have stagnant or negative growth.

If your revenue, user base, or market share is not growing over time, or if it is declining, it may indicate that you have lost your competitive advantage in the market, or that the market itself is shrinking or saturated. You should monitor your growth metrics regularly and compare them with your competitors and industry benchmarks. You should also conduct a SWOT analysis to assess your strengths, weaknesses, opportunities, and threats in the market. You should also explore new markets, segments, channels, or features that can help you grow your business.

You have low innovation or differentiation.

If your product or service is similar to many others in the market, or if it does not offer any unique benefits or features that set it apart from the competition, it may indicate that you have not invested enough in innovation or differentiation. You should conduct a competitive analysis to identify the gaps and opportunities in the market. You should also adopt a lean startup methodology to test and iterate on new ideas quickly and cheaply. You should also seek feedback from your customers and stakeholders to validate your assumptions and hypotheses.

“The only man who behaved sensibly was my tailor: he took my measure anew every time he saw me, whilst all the rest went on with their old measurements and expected them to fit me.”
― George Bernard Shaw, Man and Superman

Achieving product-market fit is not easy, but maintaining it is even harder. You need to constantly monitor the market trends and customer feedback, and adapt your product or service accordingly. You also need to innovate and differentiate yourself from the competition, and deliver value and satisfaction to your customers. By doing so, you can avoid broken product-market fit and ensure the long-term viability and success of your business.