Product-market fit is the point where your product satisfies a strong market demand: customers actively seek your solution, usage grows organically, and retention stabilizes at healthy levels. Marc Andreessen described it as "being in a good market with a product that can satisfy that market." Before PMF, everything is a struggle. After it, growth feels natural.
Key Concepts
PMF is not a binary switch; it exists on a spectrum. Early signals include users returning without prompting, organic word-of-mouth referrals, and customers getting upset when the product breaks. The Sean Ellis test offers a quantitative measure: survey users asking "How would you feel if you could no longer use this product?" If 40% or more answer "very disappointed," you likely have PMF.
Other indicators: your DAU/MAU ratio exceeds 25% (users engage frequently), your organic growth outpaces paid acquisition, support requests shift from "how do I use this?" to "can you add this feature?", and customers describe your product in their own words differently than your marketing.
Why It Matters
Building features, hiring, and spending on marketing before PMF is like pouring water into a leaky bucket. Nothing compounds. After PMF, every dollar of marketing investment compounds because satisfied users retain and refer. Premature scaling is the leading cause of startup failure. Spending ahead of product-market fit burns cash without building a sustainable business.
Investors evaluate PMF rigorously. Seed-stage companies can raise on potential, but Series A investors expect clear PMF evidence: cohort retention curves that flatten, net revenue retention above 100%, or exponential organic growth.
In Practice
Superhuman systematically measured PMF by surveying users weekly with the Sean Ellis question. They tracked their "very disappointed" percentage, identified what disappointed users valued most, and built features specifically for that segment. Over months, they pushed the metric from 22% to over 58% before scaling their go-to-market efforts.
Common Mistakes
PMF is not a one-time achievement. Market conditions change, competitors emerge, and customer needs evolve. Many companies achieve PMF in one segment but assume it transfers to adjacent markets. Continuously validate with retention metrics, not vanity metrics like sign-ups or page views.