Using Sean Ellis Test For Measuring Your Product/Market Fit
Sean Ellis, who is the author of “Hacking Growth,” as well as the first marketer at Dropbox and the guy who coined the phrase “growth hacking,” has a simple technique that helps product teams to measure whether they reached their product/market fit or not. The test, which is called the Sean Ellis Test (also known as The 40% Test), is a qualitative survey collected from the customers of the business. It is a really simple test: if 40% of surveyed customers say that they would be “very disappointed” if they could no longer access the given product, then the product is on the winning side. The main question of this survey and its possible options are the following:
How would you feel if you could no longer use [product]?
- Very disappointed
- Somewhat disappointed
- Not disappointed
- I no longer use this product
The option “very disappointed” indicates that the product is a must-have for the customer. Once the product team gets 40% of the interviewed customers to vote for “very disappointed,” then there is a good chance that the product is on its way towards sustainable and scalable growth. The magic number 40% was taken after the comparison of results from hundreds of startups who run this test. Startups that received at least 40% of their customer responses as “very disappointed” managed to build high-growth business models. Whereas, startups that got their results below 40% had issues with sustainability.
When selecting the target group of customers to be surveyed, Ellis recommends the following qualifications as the requirements for participation in order to make sure you are interviewing the right target group:
- Customers who have experienced the core of your product.
- Customers who have experienced your product at least twice.
- Customers who have experienced your product in the past two weeks.
I recommend that besides analyzing the combined results from all these customer segments, the product manager should also examine the numbers from each segment separately. There might be a case when the product doesn’t give that much feeling for stickiness from the first two tries, however, it gets really sticky after a while. One potential reason for this could be the non-effective demonstration of value propositions to the customer in their first few interactions with the product. I say that in this case, the customer has revealed the value propositions, rather than they were told about that. This can be something that a product manager might want to improve in the later stages of their product work.
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Rafayel Mkrtchyan is a product management consultant who helps companies improve their product discovery and delivery processes. He teaches teams how to set up a winning product strategy, run customer and product development processes, as well as robust their lean, agile, and design thinking skills. Contact him via contact@productguy.io.
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