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Also known as: PMF, product market fit

Product-Market Fit

FoundationalProductMetrics

Definition

Product-Market Fit: Product-market fit is the degree to which a product satisfies strong market demand. It occurs when a startup has identified a target customer segment, built a product that solves their problem, and validated that customers are willing to pay for it. Achieving PMF is often considered the most important milestone for early-stage startups.

Example Usage

“We knew we had product-market fit when our churn dropped to 2% and customers started referring their friends without being asked.”

Common Misconceptions

PMF is a binary state - you either have it or you don't. In reality, it's a spectrum.
Once you achieve PMF, you're set forever. Markets change, and PMF can be lost.
High revenue means you have PMF. You can have revenue without PMF if you're spending heavily on acquisition.

Origin: Coined by Andy Rachleff, popularized by Marc Andreessen

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