CustomerBehavior

What is WTP?
Willingness To Pay is not simply about asking:
“Will customers pay?”
but rather:
“Are customers willing to pay the right price, without subsidies or external support, and continue paying repeatedly over time?”

A common and risky misconception
Many startups assume:
“Customers have paid → therefore the product has value.”

However, KisStartup’s practical observations show that customers may pay:

• for a pilot project,
• due to grant or donor funding, or
• because there are no alternatives at the time.

Yet they may not:

• purchase a second time,
• expand usage, or
• recommend the product to others.

In such cases, WTP exists momentarily, but Product–Market Fit (PMF) does not.

WTP alone is not enough – repurchase and continued usage matter
A product with genuine PMF typically shows that:

• customers return for second and third purchases,
• perceived value increases over time rather than declines,
• customers proactively request additional features, service tiers, or expansions.

Conversely, when:

• only a small number of customers pay,
• the observation period is too short, and
• data is not analyzed by cohorts and cycles,

startups are highly prone to false positives about PMF.

KisStartup’s perspective: PMF is a process, not a milestone
Across our incubation and acceleration programs, we emphasize that PMF is not something you “achieve” in a single month.
PMF is an ongoing process of validating assumptions through real behavior and real data.

We therefore advise startups to:

• observe at least 3–6 months before declaring PMF,
• track activation, retention, and WTP simultaneously, and
• avoid premature scaling when evidence is still weak.

Do not celebrate too early
The first paying customer matters.
But PMF only emerges when customers stay, return, and pay repeatedly.

If you are building a startup, ask yourself:

• Do customers come back?
• How long do they continue using the product?
• Do they buy more or upgrade?
• Will they still pay when support or incentives are removed?

Only when these questions are answered with data rather than intuition are you truly approaching PMF.

© Copyright KisStartup. Any reproduction or citation must clearly acknowledge KisStartup.

 

In many mentoring, coaching, and startup evaluation sessions at KisStartup, we often hear this statement:

“Our product already has PMF because customers are paying for it.”

It sounds reasonable, but in reality, this is one of the most dangerous misunderstandings about Product–Market Fit (PMF).

PMF is not about:

• having a few trial customers,
• generating your first revenue,
• or signing one large contract.

PMF answers a much harder question:

Is this product solving a sufficiently large and important problem, for a clearly defined group of users, in a way that makes them come back and willingly pay again and again?

What is PMF? (A concise explanation)

Product–Market Fit (PMF) is the state where:

• you have a specific customer segment,
• they face a real and meaningful problem,
• your product solves that problem, and their behavior repeats over time (reuse, repurchase, and referrals).

Key insight: PMF is revealed through behavior, not compliments.

Three core metrics to “read” PMF

To avoid relying on gut feelings, PMF is usually assessed through three metric groups: Activation – Retention – Willingness to Pay (WTP).

1. Activation – Do users actually start using the product?

What is Activation?
Activation measures whether users reach the moment when they first experience the product’s core value.

Examples:

• For a sales platform: listing a product and getting the first order
• For management software: completing the first report or workflow
• For an agri-tech startup: completing one real usage cycle (e.g. data input → tracking → decision-making)

Common misunderstanding
Many startups count sign-ups but never measure whether users reach the core value of the product.

KisStartup’s perspective:
We have seen startups with hundreds of accounts, but only 10–15% of users actually use the product correctly. The rest “sign up just in case.”

If activation is low, PMF cannot exist.

2. Retention – Do customers come back over time?

What is Retention?
Retention measures:

• after 1 week, 1 month, or 3 months,
• how many customers continue using or repurchasing the product.
• This is the most important metric for validating PMF.

Why KisStartup calls retention “the reality check”
From our experience working with startups and SMEs:

• many customers buy once out of curiosity,
• because of discounts, personal relationships, or project-based support,
• but never return afterward.

In these cases:

• there is revenue,
• but there is no PMF.

Common mistakes

• Reporting total customers without tracking them over time
• Not analyzing customer cohorts
• Failing to distinguish first-time buyers from repeat customers

A good product should not require you to constantly beg customers to come back.

© Copyright KisStartup. Any reproduction, quotation, or reuse must clearly credit KisStartup.