Product-Market Fit (PMF)

Marc Andreessen defined PMF as being in a good market with a product that can satisfy that market. But how do you know you have it? Signs you have PMF: (1) Organic growth without heavy marketing spend, (2) Users get angry if you take the product away, (3) Word-of-mouth referrals drive significant growth, (4) High retention—people who try it keep using it, (5) Clear value prop that users can explain in their own words. Signs you don't have PMF: (1) You're constantly pitching and convincing, (2) High churn—users try it once and never return, (3) Growth only happens when you pay for it, (4) Users can't articulate what problem you solve, (5) You're pivoting features every month hoping something sticks. The PMF treadmill trap: Some founders think they're close to PMF and just need one more feature. This leads to feature bloat. Instead, focus on making your core value proposition undeniable for a narrow audience first. How to measure PMF: Sean Ellis' test—ask users how they'd feel if they could no longer use your product. If 40%+ say "very disappointed," you likely have PMF. Track cohort retention curves: if they flatten after initial drop-off, you're retaining users. Monitor NPS: promoters should significantly outnumber detractors. PMF isn't binary. You can have strong PMF with one customer segment and weak PMF with another. Start narrow, nail it, then expand.

Slack had PMF when teams who tried it during beta literally begged to keep using it after the trial ended. They had 8,000 teams using it before public launch—all from word-of-mouth.