Why Finding Product Market Fit is Key to the Success of Your Startup
If you think your startup has found product market fit (PMF) because you have customers, revenue, and profit to show for it, think again.
Contrary to what some business owners believe, finding PMF is more than just proving that someone wants to buy your product. Achieving PMF is defined by Product Plan as a scenario in which your company’s target customers are buying, using, and telling others about your product in numbers large enough to sustain that product’s growth and profitability. Or as the founder behind the concept of PMF and co-founder of Benchmark Capital, Andy Rachleff, defines it, “Product market fit means being in a good market with a product that can satisfy the market.”
To examine how vital PMF is to the long-term success of any product, my co-host, Tam, and I recently recorded an episode on The Drops Podcast about what real PMF looks like, what you can learn from the rise and fall of Peloton, and the importance of pivoting.
But if there’s one main takeaway from the podcast, it’s that even though Peloton was acquiring customers and growing like crazy during the pandemic, they never actually achieved PMF, aka sustainable growth. If they had, they wouldn’t be laying off hundreds of people, halting production, and trading well below the IPO price of $29 per share.
