Introduction

In the fast-paced world of early-stage startups, navigating the complexities of product-market fit (PMF) can feel overwhelming. Many teams find themselves prioritizing agile execution over data-driven insights, often downplaying the importance of metrics in their quest for growth. Silicon Valley veterans know that while it's important to move fast, it's also important to understand how users behave and how the market works. Without this knowledge, startups might waste resources, misaligning their product with customer needs, and ultimately facing higher churn rates.

This playbook is designed to cut through the noise. We focus on essential metrics and concrete steps to help you make sense of your data. By following this guide, you'll be able to make smarter decisions and steer your product towards real growth. Let's create actionable routine for you to be on top of your metrics on your way to product-market fit.

Section 1 Where Are the Users Coming From?

To effectively understand user acquisition, it’s essential to create funnels in LiveSession that visualize the journey from initial engagement to activation.

Start by setting up a funnel specifically for user onboarding, which will allow you to track how new users navigate through your app after signing up. This funnel should include key stages such as first time visit, first login, and completion of essential onboarding tasks.

Right after that I would consider adding a total number of sign ups just to eliminate confusion.

Additionally, monitor the performance of various acquisition channels—like social media and email campaigns—by a dimensional metric with each acquisition channel that gets you sign ups.

This will help you identify which sources yield the highest conversion rates and where to allocate your marketing resources most effectively.

Lastly, let's get a quick view of your most-used features. You can set up a simple dimensional metric for this. First, add pages with substrings unique to each tab in your app. Then, create a metric grouped by these pages. This straightforward approach will give you insights into which features are most popular among your users.

Section 2 Why are your users churning?

Early-stage startups need to know not just who’s leaving but why they’re leaving. LiveSession offers a direct view into the patterns leading to churn. Through actionable dashboards, you can set up a constant pulse on churn rates. Imagine being able to analyze session replays of users who churned and seeing their exact journey—from the point of engagement to the moment they left. This visual data transforms your churn rate from a static number into a narrative.

Start by creating a segment for users who failed to stay active for more than 2 minutes. This can help identify disengaged users who don’t fully explore the product, making them more likely to churn. Additionally let’s segment them by paying customers and those who are testing with a free trial

Track where users most commonly exit the app by grouping sessions by exit URL. This identifies specific pages or features where users drop off, signaling potential friction points or areas needing improvement.

Another crucial data point is the Onboarding Incomplete Funnel. Set up a funnel to track how many users start but don't finish the onboarding process. A high percentage of users failing to complete onboarding is a strong indicator that they may never fully engage with your product.

Pro Tip: Go to drop-off in the funnel and regularly watch the sessions of users who didn’t complete the steps in the funnel

This metric is crucial to monitor as it indicates when users begin the process of canceling their subscription. By grouping users who click the "cancel subscription" button (change it accordingly to how your cancel button is designed. Optionally, you can select exact css selector), you can gain valuable insights. Session replays offer a view into their behavior leading up to this decision, helping you understand what might be driving churn.

Pro tip: Optionally, create segments for users who clicked this element and comparing other metrics and funnels for this specific group of users.

Create a metric with a number of users who log in but never interact with core features. This can help identify disengaged users who don’t fully explore the product, making them more likely to churn. You can use custom property filters for one of the main

Section 3 Growth Channels Performance

Understanding where your most engaged and loyal users come from is key to scaling a successful startup. LiveSession enables you to assess the effectiveness of your various growth channels, revealing critical patterns about how different users engage with and retain your product.

Start by creating 3 funnels to measure user engagement by channel, highlighting the key touchpoints where users convert or drop off. To do so you might add referrer’s host url like “facebook.com” to a segment called “Users Acquired from Social Media”.

When it comes to the funnel define a few steps in the journey to activation. One funnel will be enough to compare 3 different segments of users like “Users Acquired from Social Media” or “Users Acquired from Paid Ads”.

Qualitative Analysis

In early startup stages, qualitative analysis is key. Numbers alone do not tell the whole story when your user base is small. Session replay becomes the main tool for understanding users. It shows exactly how people use your product, with recordings of their actions. LiveSession mixes this detailed view with numbers, giving a full picture of user behavior.Watching users interact with your product reveals things you might miss otherwise. You see where they struggle or what they like. LiveSession lets you group users based on how they act, making it easier to study specific types of users. That way watching sessions is not a waste of time but a powerful routine for product teams.Adding user interviews and surveys, using tools like Formbricks, brings in direct feedback. Users tell you what they think, pointing out problems and suggesting improvements.

To measure product-market fit (PMF), startups can use specific surveys. Here are examples of effective surveys:

Sean Ellis Test

This survey asks one key question: "How would you feel if you could no longer use our product?"Options:

If more than 40% say "Very disappointed," it suggests good product-market fit.

• Very disappointed
• Somewhat disappointed
• Not disappointed
• I no longer use the product

Net Promoter Score (NPS)

Ask: "On a scale of 0-10, how likely are you to recommend our product to a friend or colleague?"Categorize responses:

Calculate NPS by subtracting the percentage of Detractors from Promoters.

• 9-10: Promoters
• 7-8: Passives
• 0-6: Detractors

Product-Market Fit Survey: Questions to include

• What is the main benefit you get from our product?
• How can we improve our product?
• Who do you think would most benefit from our product?
• What would you use as an alternative if our product was not available?

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