The origin of Product-Market Fit?
In case you’ve never read it, here is the origin of the term “product/market fit”. It comes from VC Marc Andreessen, who in a series of blog posts in the summer of 2007 called PMarca’s Guide to Startups established many of the concepts that have become standard operating procedure in today’s startup world. In the fourth post in the series Andreessen explains the notion of product/market fit: (Andreessen calls this Rachleff’s Corollary of Startup Success, named after Andy Rachleff who provided the framework for the entire post on products and markets)
The only thing that matters is getting to product/market fit.
Product/market fit means being in a good market with a product that can satisfy that market.
You can always feel when product/market fit isn’t happening. The customers aren’t quite getting value out of the product, word of mouth isn’t spreading, usage isn’t growing that fast, press reviews are kind of “blah”, the sales cycle takes too long, and lots of deals never close.
And you can always feel product/market fit when it’s happening. The customers are buying the product just as fast as you can make it — or usage is growing just as fast as you can add more servers. Money from customers is piling up in your company checking account. You’re hiring sales and customer support staff as fast as you can. Reporters are calling because they’ve heard about your hot new thing and they want to talk to you about it. You start getting entrepreneur of the year awards from Harvard Business School. Investment bankers are staking out your house. You could eat free for a year at Buck’s.
Lots of startups fail before product/market fit ever happens.
My contention, in fact, is that they fail because they never get to product/market fit.
For some reason, Andreessen took down the original blog on which he wrote the series but the articles have since republished as an archive at pmarchive.com/. An amazing resource that anybody in the startup world should read.