You can always feel when product/market fit isn’t happening. The customers aren’t quite getting value out of the product, word of mouth isn’t spreading, usage isn’t growing that fast, press reviews are kind of “blah”, the sales cycle takes too long, and lots of deals never close.
And you can always feel product/market fit when it’s happening. The customers are buying the product just as fast as you can make it — or usage is growing just as fast as you can add more servers. Money from customers is piling up in your company checking account. You’re hiring sales and customer support staff as fast as you can. Reporters are calling because they’ve heard about your hot new thing and they want to talk to you about it. You start getting entrepreneur of the year awards from Harvard Business School. Investment bankers are staking out your house. You could eat free for a year at Buck’s.
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I reference patio11 on this topic a lot: You'll generally get one of 3 responses when you ask.
1) 'No'. This is useful - why not? What would need to change? 2) 'Yes'. This is the most dangerous response. It's impossible to tell a polite response from a promising prospect. Plenty of new businesses chase the wrong product development strategy because "people said they would buy this". What people say and what people do, especially when it comes to money, are different things. 3) "Can I buy this from you right now? How much?" This is the only 'good' response for the state of your current product. If people don't want to buy it now (sign up, whatever) then you haven't found the fit yet.
I'm going through this again with a new business. Lots of the second response - not enough of the third, so much as I'd love to ramp up the marketing I know the product and how I'm explaining it just aren't ready yet.
However, I think that it is better to ask people a) what problem will the given product solve b) How they solve it now? .
Two questions: 1)And how do you convert Yes to Hell Yeah!? 2)What strategies would you apply to find those potential (or initial) customers?
Who are your ideal clients? pg's section on finding the 'Well' - a small group with a deep problem, not a large group with a shallow problem - is relevant here http://paulgraham.com/startupideas.html
Be as specific as you can - geographically, demographically, what do they look like, what do they do etc (Google 'personas' for a slightly more complex take on this). Are you building something for black lesbian vegetarians? College-educated Donald Trump supporters? When you're super clear about this, ask yourself where these people hang-out - where can you find them? (That also helps with channel strategies in the future.)
Converting from Yes to Hell Yeah! involves asking open questions and doing a lot of listening. If your solution addresses a pain, have them explain that pain to you over and over - when does it show up, how does that impact them, what do they currently do, what does it currently cost them, who else do they know with a similar experience, what hasn't worked in the past, what are their concerns, how important is this to them, what will their life be like when it's resolved, how much time and effort do they put into resolving it now etc etc.
And if necessary (and you're comfortable doing so) be direct. "Based on our conversation, I'm going to add xyz in the next week and sell it for $x. Can I take a pre-order from you right now?"
If they say 'yes', you might have backtrack a little on timeframes ("Fantastic. Now, in reality I need to scope that and it may take longer than a week. However I'm going to give you an x% discount / bonus something if we proceed") or if it's a big change let them know that that was a market research question (they know this is a market research interview, so don't worry about that).
If they say No, ask "If I may, can I ask why not? What is still missing?". Keep in mind, the most common answer here is also one many people won't recognise or share - your solution just isn't worth that much to them. You've dug a broad hole, not a deep well. That's why you need more conversations (I recommend at least 10 - you could easily do hundreds, but let's be realistic).
Creating these conversations isn't hard - most people, even business owners, are quite happy to give you an hour of their time if you introduce yourself and ask for help. For programmers in particular, however, leaving the garage and talking to people is outside their comfort zone - and the result is a lot of products built based on assumptions, not conversations with actual customers.
Conversely many massive businesses developed from first identifying the pain and solution - either because of deep experience in a boring industry (something most coders in their 20s lack), or because it was scratching their own itch (reasonable advice, unless your solution is to build something every other 20-something coder would build because then none of them will value it).
Hope that helps!