Product-market fit

Product-market fit (PMF) refers to the degree to which a product satisfies a strong market demand, meaning it effectively addresses a significant problem for a specific target audience. It's a critical concept for startups and businesses, as it indicates whether a product aligns with customer needs and if there's sufficient demand to sustain growth and success.

Product-market fit is a term coined by Marc Andreessen to describe the moment when a startup finally finds a widespread set of customers that resonate with its product. It is the point at which the product is so compelling that it starts to grow on its own.

When a startup has achieved product-market fit, it is obvious. The product is flying off the shelves, customers are telling their friends about it, and the company is growing rapidly. If you have to ask whether you have product-market fit, you don't.

The engines of growth framework can be used to put the idea of product-market fit on a more rigorous footing. Each engine of growth has a unique set of metrics that can be used to evaluate whether a startup is on the verge of achieving product-market fit.

For example, a startup with a viral coefficient of 0.9 or more is on the verge of success. A startup with a high retention rate and a low churn rate is also on the verge of success.

By focusing on the right metrics, a startup can get a better sense of whether it is getting closer to product-market fit. This will help it to make better decisions and increase its chances of success.