Thread by @franciscohmello

Product-market fit is one of the most (mis)used expressions in the startup world.

It's amazing how little agreement there is on what it really means.

A thread 🧐

The first searches for the term go back to 2005:

The first reference I found to the term goes back to 2005 as well, from a quote website. It attributes "it's all about product market fit" to @arachleff

The term got widespread attention, from what I found, after Marc Andreessen spoke about it in "The Only Thing That Matters," one of his most widely shared blog posts.

pmarchive.com/guide_to_start…

In the post, Andreessen doesn't define what product market fit means. But he describes how product market fit feels like from within.

“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.”

He says that product market fit means being in a good market with a product that can satisfy that market. His definition is kinda recursive because he goes on to define a good market as a market with lots of real potential customers — the market pulls product out of the startup.

Andreessen says that when a startup is tackling a great market and manages to make a product that solves its need, the market will almost effortlessly pull the product from the startup.

The product will almost sell itself, and growth will be so intense that it breaks the organization over and over while it grows to capture the opportunity. It’s almost as if “great” is the product of “big” and “where the product is pulled.”

First, it’s interesting that he says in terms of product-market fit, it’s not enough to have a good solution for a big, rich market: it’s also crucial for the product to be being pulled.

That means, among other things, that users are prone to getting the problem solved now, but also that they actually do it. There’s a big problem with that, which we’ll discuss later: since "pull" is a lagging indicator, it’s very hard to optimize for it.

The company may identify a big market, build something that solves its need, but end up not feeling the pull.

I think a better definition for what Rachleff and Andreessen meant would be "product/great market fit." It would reduce a lot of confusion.