The Mirage of Product-Market Fit
The Mirage of Product-Market Fit
In the startup world, everyone talks about getting to "Product-Market Fit" (PMF).
Essentially, PMF is the validation that you’ve made something people want.
But here's a secret that most founders won't admit: they're never quite sure when they've reached it.
I gotta feeling
The conventional wisdom is: "You'll feel it.”
In his highly referenced blog post "The Only Thing That Matters," Marc Andreessen describes PMF as follows:
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.
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.
But feelings aren't always the most reliable compass, especially when founders are naturally overly optimistic about their startups.
According to the Harvard Business Review, there's a nine-fold gap between what founders think consumers want and what consumers really want.
When you factor in the emotional ups and downs of the entrepreneurial journey and the peer pressure to broadcast success, you have fertile ground for false positives.
Maybe it's an award nomination, a flattering TechCrunch article, or a popularity vote. As great as they are, these signals don't necessarily reflect market demand.
Numbers don’t lie?
For many startups, metrics are the guiding light.
They promise the certainty that subjective "feelings" cannot.
Retention rates, PMF surveys, and NPS scores are considered the gold standards for measuring PMF.
But these numbers (especially when they come from early adopters) can be misleading, too. Your high retention rate, stellar PMF survey results, or impressive NPS scores may only capture the enthusiasm of a small group, not the sentiment of the broader market.
Building on Geoffrey Moore's "Crossing the Chasm," Seth Godin points out a common misconception: we often think that innovations win over early adopters and then spread organically to everyone else.
But, as Godin notes, there is a chasm between the early adopters and the rest. Early adopters are thrill-seekers drawn to novelty. The majority, however, are risk-averse, prioritizing reliability, ease of use, and social acceptance.
Look, I'm not advocating that you get rid of these KPIs, far from it.
But here's the thing: there is no single, definitive metric for measuring PMF.
While data can provide some clarity, it's important to remember that gaining traction with early adopters doesn't guarantee broader market adoption.
Are you truly experiencing PMF or an optical illusion fueled by what you hope to see? Every number tells a story, often more nuanced than we expect.
Ephemeral equilibrium
The product-market fit many successful startup founders claim to have experienced seems unpredictable.
It's not only intangible, but it can vanish without warning.
Ben Horowitz alerts founders in his blog post "The Revenge of the Fat Guy":
Product market fit isn’t a one-time, discrete point in time that announces itself with trumpet fanfares. Competitors arrive, markets segment and evolve, and stuff happens—all of which often make it hard to know you’re headed in the right direction before jamming down on the accelerator.
Maybe we've been approaching it from the wrong perspective. Given its unpredictable nature, achieving PMF may not be a destination you “get to.”
Ultimately, striving for PMF is like chasing a mirage: you might see it but never truly grasp it. Founders, remember that the journey matters, not just the destination.
Until next time,
@OdeparPS: I’m hosting a group discussion in two weeks to chat about product-market fit and exchange insights and experiences. To make sure everyone gets a chance to participate actively, I'm limiting it to 10 seats. You can register here. Hope to see you!
Update 24/10:
Following this article, I was invited to discuss this topic on the Datadrivet podcast. You can listen to the full episode on Spotify or wherever you get your podcasts.