A New Way to Think About Product-Market Fit

I made my team waste two years of their lives building and refining the wrong product. Yes, we had a good time and we learned a few things, but nobody wishes to spend two grueling years on something that doesn’t matter.


What went wrong? I had an oversimplified understanding of product-market fit. And there’s a chance that you do too.


If you’re looking for product-market fit, by the end of this article you’ll have a better chance of finding it.


Popular Product Market Fit Misconceptions

Everything should be made as simple as possible, but no simpler. -Einstein


The reason people, my past self included, get PMF wrong is oversimplification. We reduce reality to something that is no longer useful. The result is two common, and dangerous, PMF misconceptions.


The first product-market fit misconception is that it’s binary. You either have it or you don’t. If you have it then everything is incredible, if you don’t then absolutely nothing is working. Annoying people in this camp tend to describe PMF as “people are buying your product faster than you can make it.”


This misconception is dangerous because it makes you look for a silver bullet that doesn’t exist. In the real world, it is very possible to have an initial product-market fit and strengthen it into full PMF through iteration.


The second product-market fit misconception is that it’s a spectrum. You are somewhere along this spectrum and you want to continue iterating towards stronger and stronger product-market fit.


This misconception is even more dangerous because it blinds you from a very common scenario where something is fundamentally wrong with your business. That is how I made my team iterate for two years without making actual progress.


The good news is that both misconceptions have some truth to them, and can be combined into a single model that actually represents reality. And don’t worry, it’s still pretty simple.


The Product Market Fit Landscape


To understand how PMF actually behaves you’ll need to imagine a landscape. This landscape has 3 areas:

  • PMF Desert

  • PMF Mountain

  • PMF Mountain Peak

You’ve already guessed how this landscape maps to PMF:

  • PMF Desert - This is a big hot desert with zero PMF in it. Given enough time, this desert will kill you

  • PMF Mountain - This is a very big mountain. If you’re anywhere around it then you have some PMF

  • PMF Mountain Peak - Being here means that you have full blown PMF

The single thing you must remember is that you need to behave very differently in each area:

  • PMF Desert - Take extreme measures to get out of here as soon as you can

  • PMF Mountain - You’re onto something. Take steps towards the peak, and don’t expect it to be easy

  • PMF Mountain Peak - Time to scale and build a real company

Seriously, you should remember this.


Now that we understand the map, we need to understand the territory.


The PMF Desert


A prolonged visit to the PMF desert will kill you, so you better realize if you’re there. It nearly killed my startup.


Am I in the desert?


In the desert nothing is working consistently and everything is harder than it should be. Here’s what the desert felt like:

  • We had somewhat happy customers but no tangible successes

  • Every single customer acquisition was a stroke of luck

  • User behavior was all across the board. The only commonality was not using our product for weeks at a time

  • The team, myself included, couldn’t articulate our value

Objectively, it’s not that hard to know that you’re in the desert because nothing works consistently. Subjectively, it’s very hard because you're already in love with your idea and product, and every tiny bit of progress seems meaningful. You need to be very honest with yourself.


Yikes, I’m in the desert. Where do I go from here?


Accepting it is truly the hardest part, so congrats. Now stop refining and building features that don’t matter. You’re in the desert. you got something fundamentally wrong. Stop. Then go back to the fundamentals:

  • Is the problem I’m solving real and painful?

  • Whose hair is on fire because of this problem?

  • Is there really an opportunity to build a business here?

  • How am I solving the problem in a meaningfully better way?

Once I faced reality the answer was clear. We were solving a minor problem and avoided the real fundamental problem that was right in front of us. We were not bold enough. I was not bold enough. We ended up making a complete, and successful, pivot.


Don’t be afraid to take bold moves. You are in the desert, you cannot walk yourself out of it. There is nothing to lose but time itself.


The PMF Mountain


The PMF Mountain is not always easy to identify. Yes, few companies land on some clear area of it, but close to the bottom there’s a good amount of fog.


Am I on the mountain?


On the mountain, there’s some spark of consistency and clarity, something is starting to click, but it might be small. It can take different forms:


  • You can articulate the problem very clearly, and find people who beg you to solve it

  • You are getting paid and have a way to find the next customer

  • However small it is, your solution makes a difference


What’s important is that these signs are objective external signals, not internal assessments. For us this first spark was hearing people speak about the problem very consistently and passionately. So much that we could predict what they were about to say and have them commit to giving us their precious time so that we could solve it for them.


Okay good, you’re not in the desert anymore, what’s next?


Feel good about yourself, few reach the mountain. Now follow that spark, whatever it is, and dig deeper, spend time with your users, and iterate quickly in that direction.


One common mistake when you get to the mountain is to become too conservative. As things started working for us, the iterations suddenly became slower and more calculated, and we were hesitant to introduce major capabilities until the existing ones were awesome. Resist this temptation and keep moving quickly, you’ve got a big mountain to climb.


The PMF Mountain Peak


As you reach the peak you will experience a sense of clarity and confidence. You’ve cracked it. You know precisely what problem you’re solving and who has this problem, you have a process to find these people and get them onboard, you’ve got users who receive tangible value and are coming for more.


You’ve created something of value.


Am I done?


lol. The whole point of startups is to 1) create something valuable and 2) replicate it cheaply and quickly. The first part is the PMF journey, the second part, which you are now entering, is the scaling race. 3 things to remember in this race:

  • You have a new role. You are no longer the person who is involved in everything and pulls their sleeves up to solve every single problem. Your role is building, scaling, and leading a company

  • Priorities have changed. Until now PMF was the sole goal for your startup, every single thing was in service of reaching PMF. Now for the first time you’ll have priorities that stand on their own--hiring, culture, sales, scale, fundraising, etc. This requires a new way of operating

  • PMF still matters. It is the basis of everything you do. Keep strengthening it and don't stop being bold

Hit the gas as hard as you can.


Conclusion


Don’t be tempted to oversimplify PMF, or you’ll end up like me wasting 2 years and nearly killing your startup. PMF is a landscape with 3 wildly different areas that you need to understand in order to survive and reach the peak:

  • PMF Desert - You are too far off from PMF. You got something fundamental wrong. Go back to the basics and make bold moves. Don’t try to walk (iterate) your way out of this but be bold and make big changes

  • PMF Mountain - You can see the peak, but barely. Go up the mountain fast. Remain bold while holding on to what’s working

  • PMF Mountain Peak - It’s time to build a real company. Hit the gas


See you at the top.


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