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Here’s Why Every Startup Should Be Using Analytics To Find Product-Market Fit

Andrew Wolfe

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Puzzle piece product market fit

It goes almost without saying, but if you don’t have the right product-market fit, it’s incredibly difficult to succeed as a company.


Founders often think they know exactly what their customers want. But a lot of the time, they’re actually focusing on what they want their customers to want.

Of course, operating in this idealistic mindset is unwise—but it can happen without you even realizing it. And once you’ve allowed your assumptions to take over, it’s pretty much impossible to find the right product-market fit.  

For those unfamiliar, product-market fit accounts for the health of a market and the potential for a product to succeed within that specific market. It goes almost without saying, but if you don’t have the right product-market fit, it’s incredibly difficult to succeed as a company. So the challenge then becomes finding the right data and information that will help lead you to an accurate product-market fit. That, of course, requires using the right analytics strategies.

Here’s how to do it: 

To find product-market fit, look at how your customers behave, not at what they say. 

Many companies take consumer feedback at face value. This is such a dangerous leap of faith that I like to call “the death leap.” Really. I’ve witnessed so many inexperienced founders create flawed products and sink their companies because they made this mistake. 

That’s why it’s vital to understand that your customers don’t always articulate what they really want all that well. And other times, they don’t even know what they really want. As Henry Ford famously said, “If I had asked people what they wanted, they would have said faster horses.” 

Consumer behavior—and more specifically, analytics that reveal their true behavior—is much more reliable.   

A wealth of tools to help collect this data exist. Just to name a few: Google Analytics, Mixpanel, Hotjar, Kissmetrics, Amplitude, Gamesight, Segment. But whatever tool you choose, make sure it has a good click-tracking feature. Click-tracking tools use heat maps to tell you what features of your product people are using most, where they’re clicking and how often, etc. In other words, these tools tell you how people are using your product. 

Once you have the numbers, you need actual consumer insight. 

So make sure you get the right feedback. 

Your customers are inundated with tons of feedback requests (any online shopper knows this struggle), so it’s tough to gain solid feedback—both in terms of quantity and quality.   

When relying on feedback to make big decisions, it’s best to partner with a software company to help you collect that data. Many founders avoid working with software companies simply because it seems too complicated, or unnecessary. But unless you have the internal resources to collect ample valuable data on your own, it’s a necessary step in the process. 

Because that data will define what will likely make or break your company: its product-market fit. 

And there’s one other reason all of these data-collection steps are necessary: Your company will look naive to investors and competitors without data-backed strategies.   

Think of it this way: If you’re the founder of a startup offering a new coke-type soda, and you don’t go to great lengths to collect all the data and feedback you can, that’s like saying, “I know coke better than Coca-Cola.” 

First, that’s almost certainly untrue. Second, that mindset isn’t going to impress any investors. And third, it won’t be fun watching Coca-Cola laugh you out of the market after stepping into their market unprepared. 

Too many founders make the mistake of barging into an industry thinking they have all the right answers. Don’t be one of these founders.

Instead, work to comprehensively understand your customer through reliable interactions and data sources and optimize your product based on that valuable data.  

That’s the only way to meet your customers’ true needs—and, ultimately, create a successful product and company. 

Here are a few other related articles you might find helpful:

Founders Love The Mantra, “We’re Creating Value In The World.” Here’s How To Tell Whether You’re Actually Succeeding

Why Entrepreneurs Shouldn’t Fundraise—Yes, You Read That Right

I am the CEO of Skiplist, a software company that accelerates development and drives value for organizations of all sizes.

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