The myth of the Product-Market Fit.

The ideas behind Product Market Fit (PMF) were first articulated by Marc Andreessen in a detailed blog post around 2007 [https://pmarchive.com/guide_to_startups_part4.html]. The concept of PMF had immediate appeal, largely because someone finally structured an inherently unstructured and ambiguous process. The fact that this 'gospel' came from an authoritative source sealed the idea, and PMF made its way into product discussions globally, from unicorn boardrooms to sprint stand-ups.

Even though the core concept of PMF has academic merit, like many other simplifications, it is now commonly abused and its real-world application could use a more nuanced approach.

The meeting that inspired this post was with a VP of product at a Singaporean grocery delivery startup who claimed that they 'have' PMF just because relatively rich Singaporeans used their service. The problem with this claim is that the startup was now trying to target a larger population, including the middle/lower middle class, and was assuming business success was guaranteed because they already had PMF.

The fundamental premise of Marc's original post is that PMF is a discrete event and the journey of a company can be thought of as pre-PMF and post-PMF. My experience with startups shows that this is almost never the case. Not only is PMF not a discrete event, but most founders will be unable to articulate when, and if, PMF has been achieved. Additionally, PMF may not guarantee success and PMF can be lost overtime.

PMF isn't an absolute term and exists only with respect to a clearly defined market. A startup might consider rich Singaporeans as its target market and it might be fair to claim PMF with respect to this market, but if it’s looking to expand its customer base to the middle class, the same PMF might not hold.

Even if you are able to categorically claim PMF, it doesn't guarantee business success. There are a fair number of startups that are able to build out their product, raise investor funding, and gain early traction, only to peter out and never reach growth stages.

PMF can be lost as quickly as it has been gained. In the case of the Singaporean grocery delivery startup, if the startup is able to capture a slice of the middle-class customers, there is a possibility of a new startup cannibalizing its richer customers. Acquiring PMF in new markets can lead to a loss of PMF in existing markets.

Another PMF-inspired practice in vogue is using Google Adwords to channel keyword searches to a dummy product site listing various features. The idea is to establish PMF before even beginning work on the product. A certain click-through rate establishes a clear need and a ready market to consume the product.

The issue here is that just because some people clicked on features they want, it doesn't mean they will pay for it once you launch. Just because some people are using your free features, it doesn't mean they will pay for it once it is paid. Just because you have five paying customers, doesn’t mean it will be easy to find 500 more. Just because you have 500 paying customers, it doesn’t mean what you did to acquire these 500 will scale to the next 5,000. And just because you have 5,000 paying customers, it doesn't mean that there won’t be a new upstart that will dramatically undercut your offering and acquire most of them.

There is a name for this validation process — it's called a ‘startup’. Startups are in someways always validating. And sometimes big companies are too.

There are a fair number of startups that are able to build out their product, raise investor funding, and gain early traction, only to peter out and never reach growth stages. Plancast is a case in point (https://techcrunch.com/2012/01/22/post-mortem-for-plancast/), but hardly the only one. Startup failure happens at all stages for all kinds of reasons, and no amount of Product-Market Fit can guarantee scale.

Most technology companies exist in a complex ecosystem of competing forces. This ecosystem changes all the time. Your product and the market are only two of the multiple factors that could influence business success. Even then, what constitutes your product and how you define your market will also change throughout the course of your startup. PMF is just one piece of the puzzle. Other factors such as distribution channels, partnerships, and technological advancements can significantly influence startup success.

The journey of a product to scale is perhaps better visualised as a continuous series of PMF points where the product evolves to target a continuously changing perception of the target market in the eyes of the founders/product managers.

Obsessing over PMF as a fundamental metric can potentially limit product managers from exploring the true complexity of the ecosystem in which a product operates and can often be a stumbling block in optimizing for their subjective outcomes.