These are the important questions that many early-stage founders are wrestling with. 90% of startups fail, and 30% fail within their first two years. Often this is because they don’t find product-market fit. Something that, for reasons I’ll go into below, is often harder in edtech.

There’s lots of advice out there. But some of it is conflicting and little of it is really practical for those at the beginning of the journey. Particularly, in how it relates to education.

Product-market fit was originally coined by Marc Andreessen in his article The Only Thing That Matters. He described it — very broadly — as “being in a good market with a product that can satisfy that market”.

He contended that the market always wins:

Many have built on this concept. Notably, Eric Ries in The Lean Startup who talked about finding the viral engine of growth through a build-measure-learn feedback loop and established the concept of Minimum Viable Products.

This was subsequently brought to life by Dan Olsen in the Lean Product Playbookand many have subsequently cited the steps he proposes:

He also updated the definition of product-market fit to be more specific: “meeting the underserved needs of target customers better than the competition (or the alternative)”. He suggests that the key measure of product-market fit is retention.

Dan Olsen’s visual representation of how to get to product-market fit

More recently, the founder of the super-hot cohort-based learning marketplace Maven and edtech behemoth Udemy, Gagen Biyani wrote a great thesis on the need to focus first on Minimum Viable Tests. He suggested that the much cited MVP wasn’t minimal enough.

In terms of understanding if you have it, GrowthHackers’ Sean Ellis is generally considered the reference point for how to measure product-market fit in user satisfaction terms.

The ‘40% rule’ proposes that if 40% or more people answer “very disappointed” to the question “How would you feel if you could no longer use our product?” then you (probably) have product-market fit. Although some have contended that this is the best way to validate it, not to help you find it.

This approach has been built upon by SuperHuman’s Ralph Vohra who provides a great process for others to follow.

Lenny Rachitsky, Silicon Valley PM veteran and author of the brilliant influential Lenny’s newsletter, has also suggested that “Nothing matters more than retention. But, there are other indicators you should pay attention to along the way.”

He proposes the following important components based on canvasing a range of expert opinions:

Lenny’s definition of product-market fit

Intercom have also explored the topic and agree that you need to consider monetisation and finding users sustainably. Their founder Des Traynor says it’s when you have:

He adds that the key is customer understanding, segmentation and ruthless measuring and prioritisation.

Their Group Product Manager Greg Davis has also tried to debunk some of the myths that exist and says that finding a niche market and then growing and iterating (counter to Marc Andreesen’s big market proposal), having an opinion (a point of distinction) and remembering that product-market fit is not a mote and something you can do once, are also crucial.

This last point is perhaps the most important point:

Lenny again:

Finally, in general, there is agreement that it is unwise to grow until you have it.

So how does all this apply in our specific context?

Much of the literature out there suggests that product-market fit and how to measure it is different for every company. Another important point to bear in mind when applying it to your own context. But there are some common themes in education that are worth noting that we have factored in.

In education, the audience and needs are complex. There are often multiple audiences that you need to understand and the relationship between them. This includes at a fundamental level the learner. Typically there is a teacher. Often there are peers or a cohort. Sometimes there is a parent. Or a manager or an HR team. Or a school or university. There are funders and regulators… These audiences, needs and the relationship between them need to be understood.

The ultimate beneficiary — the learner — is often not the person that pays for it. Jamie Brooker from We Are Human has written a great piece on why edtech products often forget the learner — and learning — because of this.

Sometimes, there are expectations that it should be provided for free as a benefit to society (see MOOCs) and it often carries an artificial price tag not driven by the market but instead by regulation and outdated assumptions about signals of quality (see degrees).

Two sided marketplaces are complicated (more from Lenny on this). In education and the future of work there are sometimes multiple sides. For example, learners, educators and employers. This also complicates how to find your audience and your route to market and who pays. And many of the stakeholders involved are slow moving and complex organisations.

Metrics and retention as perhaps one of the most important measures of product-market fit is also complex. Learning is about more than simply consumption, although engagement is important.

Learning isn’t a constant in most people’s lives, even if you believe it should be. It often is sought in moments of transition, transformation and sudden need. Therefore measures like daily active users are often not appropriate.

Learning also takes time. Courses normally take weeks, months or years. There are often long loops and lagging indicators that make it hard to build-measure-learn quickly and this might require proxies or building shorter form or unbundled versions of the higher value product.

All markets, industries and verticals have their own complexities. However, education is perhaps one of the most complicated.

But it’s this complexity that is what makes it particularly interesting and exciting. And these facets we should factor into our definition.

Taking the above into account, our definition for Product-market fit for edtech and the future of work is where you have:

Here’s the checklist:

These are the components that you need to get confident about as an early-stage edtech and future of work founder. And doing so is really hard: I know, I’ve done it and not always successfully.

It’s this definition that has informed the curriculum for my course.

Some of the most influential articles on the topic.

Defining product-market fit

Measuring product-market fit

Playbooks for product-market fit

Podcasts