Product-market fit (PMF) is when your product satisfies strong market demand—customers desperately want it, use it repeatedly, and tell others about it. Marc Andreessen's test: "You can feel it when it happens—growth becomes easier, churn drops, and organic word-of-mouth drives most new users."
Product-market fit is the holy grail of startups. It's the difference between struggling for every customer and having demand pull you forward. Sean Ellis created the "40% test": ask users "How would you feel if you could no longer use this product?" If 40%+ say "very disappointed," you have PMF. Before PMF, you're in search mode—experimenting with value propositions, target segments, and features. After PMF, you shift to execution mode—scaling what works. Key signals of PMF: (1) Retention >40% month 2, (2) Organic growth through word-of-mouth, (3) Users willing to pay, (4) You struggle to keep up with demand, (5) Competitors emerge (validates market). Lack of PMF signals: (1) High churn, (2) Forced growth through paid ads only, (3) Users sign up but don't use product, (4) You can't explain why users choose you. The danger: 74% of startups fail by scaling before PMF. They spend millions on marketing and hiring, only to realize nobody truly wants the product. PMF isn't binary—it's a spectrum. Initial PMF might be 100 passionate users in a niche. Strong PMF is thousands of users with high retention and NPS >50.
Slack: 93% daily active users in beta. Teams physically couldn't imagine going back to email. Clear PMF signal before public launch.
Superhuman: Took 2 years to reach PMF. Started at 22% "very disappointed," focused only on making disappointed users passionate, reached 58% after 6 months.
Dropbox: 75,000 signups from a 3-minute explainer video before product existed. Validated PMF before building.
Typically 1-3 years for B2C, 2-4 years for B2B. Some find it in 6 months, others never do. The key is continuous iteration based on user feedback.
Yes. Market needs change, competitors emerge, or you drift away from what made you successful. BlackBerry had PMF, then iPhone changed the market.
Ideally after. Pre-PMF funding is for validation experiments. Post-PMF funding is for scaling what works. VCs prefer investing in proven PMF.
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How to find product-market fit?
Find PMF by building MVP, getting early users, measuring retention (target 40%+ Month 2), iterating ...
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