The Sean Ellis test helps determine if a product is truly valuable to users. It asks a simple question: "How would you feel if you could no longer use this product?" Users can answer with "very disappointed," "somewhat disappointed," or "not disappointed." If 40% or more of users say they would be very disappointed, the product is likely to be a good fit for the market. This helps companies understand if they are on the right track, even before long-term usage data is available.

Achieving product-market fit is crucial for a company’s success. If fewer users say they would be very disappointed, the product may need changes. Focusing on feedback from users who consider the product essential ensures improvements benefit the most loyal customers. It's important not to over-prioritize feedback from those who are only somewhat disappointed, as this could water down the experience for key users.

Improving user retention often involves making the onboarding process easier rather than adding small changes to the product. Simplifying how users get started and helping them quickly experience the core value of the product can make a big difference. One company increased the number of users using its key feature from 5% to 50% just by improving onboarding.

A company should also focus on a "North Star metric," which is a number that shows how much value the product delivers. This metric helps guide efforts to grow the product. For example, Airbnb might focus on "nights booked," and Dropbox on "files uploaded." The metric should be easy to act on and should grow as the product delivers more value to users, leading to more revenue.

When trying to grow, it’s important to choose the right strategy based on how users find and use similar products. This might include SEO, paid ads, sales, or word-of-mouth referrals. Referral programs work best when users are already enthusiastic about the product. They can’t fix a product that isn’t generating excitement.

The goal is to get as many users as possible to experience the product’s core value and keep using it. Companies need to focus on acquiring new users and ensuring they engage with the product deeply enough to stick with it. By improving onboarding, engagement, and consistently delivering value, businesses can grow successfully over time.

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I encourage you to watch Sean ellis interview at Lenny’s Podcast