User Value Comes First
In many organizations, obsession with profit can obscure an aspect of sustainable success: product–market fit. With the rapid rise of generative AI reshaping industries, the window for maintaining a strong connection between product and market is narrowing. When companies lose focus on building products that truly resonate with users, they often pivot toward short-term revenue extraction—a strategy that, as Reforge’s article on Product–Market Fit Collapse explains, can trigger a vicious cycle of customer churn, escalating acquisition costs, and ultimately, collapse.
In this post, I argue that product–market fit must come (and stay!) first. Profit should not be the initial goal but rather a byproduct of delivering genuine value to users. Drawing on insights from Kathy Sierra’s Creating Badass Users, real-world product challenges, and the powerful flywheel of net revenue retention, we’ll explore how a value-first mindset not only empowers users but also drives long-term, sustainable growth.
Pitfalls of a Profit-First Mindset
When a company prioritizes profit over user value, it risks making decisions that boost revenue in the short term while undermining long-term engagement. For example, you might see teams pushing outputs—whether it’s rapid feature releases, aggressive monetization tactics, or revenue-centric KPIs. These outputs can be misleading: they mask the reality that the product isn’t addressing user needs.
When everyone focuses on immediate revenue or task completion, strategy loses its cohesion: Different teams within a company can end up chasing disparate metrics. Instead of a unified vision that puts the user first, you get internal silos where each group—be it revenue teams, marketing, or engineering—pulls in a different direction. This misalignment can ultimately stunt growth and make it harder to adapt as user needs evolve.
Net Revenue Retention and Sustainable Growth
A crucial component of sustainable growth is the ability to expand revenue from your existing customers, a concept known as net revenue retention (NRR). When companies invest in enhancing the user experience and consistently deliver ongoing value, they create a flywheel effect: satisfied users not only stay longer, but they also tend to increase their spending over time through upsells, cross-sells, or by referring new users. This organic, self-reinforcing cycle minimizes reliance on aggressive new customer acquisition.
In contrast, a profit-first approach that neglects existing users forces a business into a costly cycle. As users churn or generate diminishing returns, the company must continually acquire new customers to replace lost revenue. The high Customer Acquisition Cost (CAC) associated with this model eats into growth and often results in unsustainable margins.
For a deeper dive into how focusing on net revenue retention can drive long-term growth, check out Net revenue retention: Definition, formula & ways to improve NRR. The article explains how prioritizing existing customer success not only stabilizes revenue but also fuels future expansion.
Profit-first strategies lead to a culture where making decisions solely based on financial outcomes becomes the norm. When the focus is only on bottom-line metrics, products become transactional. Users start to see the product as a means to an end—a tool to complete a task rather than an experience that makes them feel empowered. This transactional view can erode trust and brand loyalty over time, leaving companies vulnerable to competitors who prioritize deeper user engagement. In my experience, it’s a dangerous path that can lead to a downward spiral of declining NRR.
Empowering Users
Kathy Sierra’s Badass: Making Users Awesome isn’t about adding flashy features or superficial cool factors. It’s about empowering users. When users feel that your product genuinely makes their lives better—when they feel more capable, informed, or even inspired—they become more than just customers; they become advocates. They start telling their friends, posting, and turning into organic growth engines for your product. NRR goes up, and the flywheel starts spinning.
A product that makes its users feel badass creates an emotional connection that goes far beyond functionality. Think of a well-designed productivity tool that not only helps you manage tasks but also makes you feel in control of your day. Or a financial app that simplifies complex processes so thoroughly that users feel like they’re mastering their finances. These experiences resonate on an emotional level and are difficult for competitors to replicate through mere feature copying.
Over time, when a company consistently delivers empowering experiences, its brand becomes synonymous with value and trust. From what I’ve seen, this comes from a relentless focus on solving real user problems, refining the experience, and maintaining a deep understanding of what users truly need. In such an environment, profit emerges as users invest more time, trust, and advocacy in the product.
Customer Obsession: Lessons from Amazon
Jeff Bezos’ 2013 investor letter offers powerful insights into the value of relentless customer focus. As he wrote, “We see our customers as invited guests to a party, and we are the hosts. It’s our job every day to make every important aspect of the customer experience a little bit better.” This statement underscores the importance of refining the user experience to leave a positive, lasting impression.
Moreover, Bezos emphasized that a long-term commitment to customer satisfaction invariably leads to greater profitability. He believed that by investing in customer value—even at the expense of short-term gains—companies create a self-reinforcing cycle: improved customer experiences drive loyalty, repeat business, and organic growth, which in turn fuel sustainable profits. In essence, when you make your customers better, your profits will follow.
Prioritizing Outcomes
Outputs are the tangible deliverables—a new feature here, a revenue spike there. Outcomes, on the other hand, are the meaningful changes in users’ lives: improved productivity, enhanced well-being, or greater financial security. While outputs are easy to measure, they often serve as proxies that may not capture the real impact of your product.
In my post on Outcomes over Output, I argued that what truly matters is the impact on the user. If your product helps users solve important problems or achieve significant goals, those outcomes drive engagement, retention, and word-of-mouth. This shift in focus—from counting features delivered to understanding how users benefit—can redefine what success looks like for your organization.
Consider how some of the most successful tech companies operate. They don’t obsess over quarterly revenue figures in isolation; they invest in user research and iterate on product design until they create experiences that resonate.
Applying the Jobs-to-Be-Done Framework
One of the most effective ways to transition from a profit-first to a value-first mindset is by employing the Jobs-to-Be-Done (JTBD) framework. Rather than asking “What features should we add?” JTBD shifts the conversation to “What job is the user hiring our product to do?” This reframing helps teams dive into the underlying problems and aspirations of their users—often revealing that what users initially say they want is not always aligned with what they truly need.
A practical example of JTBD in action occurs when a new feature is released with the assumption that it addresses a specific user need. However, after launch, usage data and feedback may show that users are interacting with the feature in unexpected ways. This divergence can indicate that the underlying job is different from what was initially assumed. Recognizing this, teams can pivot: rather than investing further in the original feature, they can iterate and develop features that address the real JTBD.
Often, users don’t use software in the ways we expect. Their behavior provides clues about their genuine challenges and motivations. By refining our understanding of the JTBD, we can realign development efforts to build solutions that deliver value.
Integrating Value-Driven Strategies in Product Teams
The cornerstone of a value-driven approach is a commitment to understanding your users. This means investing in qualitative and quantitative research, running regular user interviews, surveys, and usability studies. Tools like JTBD help frame these conversations around real problems rather than assumed desires.
Traditional KPIs such as revenue or task completion are important, but they should be superseded by metrics that reflect user success. For instance, measure user retention, (repeat!) engagement rates, and where possible, the tangible benefits users report.
Survival (and Growth) through Product–Market Fit
We cannot adapt to a collapse in product–market fit by resorting to profit extraction. When companies shift their focus from creating genuine user value to chasing short-term revenue, the resulting churn and escalating CAC reveal a hard truth: no amount of profit extraction can substitute for a robust product–market fit. The cautionary tale of product–market fit collapse reminds us that sustainable growth can only be achieved by continuously investing in delivering true value to users.
Thanks to Jeff Portwood and Drazen Urch for feedback on earlier versions of this post.
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