Operations
What is product-market fit?
Quick Answer
Product-market fit (PMF) is when a product satisfies strong market demand — users love it, retention is high, and growth becomes organic. Marc Andreessen defined it as being in a good market with a product that can satisfy that market.
Detailed Answer
Product-market fit (PMF) is the most important milestone for any startup. It's the point where your product clearly solves a real problem for a defined market, and customers demonstrate this through behavior — not just words.
Signs of PMF: - Users actively recommend the product (NPS >40) - Organic/word-of-mouth growth accelerates - Retention curves flatten (users stick around) - Sales cycles shorten - Customers complain when the product is unavailable - You're struggling to keep up with demand
Sean Ellis test: If >40% of users say they would be "very disappointed" without the product, you likely have PMF.
Why it matters for fundraising: - **Pre-PMF** — Raise enough to find PMF (pre-seed/seed). VCs invest in team and market. - **At PMF** — Series A sweet spot. VCs invest to scale what's working. - **Post-PMF** — Series B+ scales distribution, not discovery.
Common mistakes: - Confusing early traction with PMF - Raising too much before PMF (creates pressure to scale prematurely) - Changing markets instead of iterating on product - Declaring PMF based on revenue alone (revenue from manual sales ≠ PMF)