1.1 What is Product Market Fit?

When you have Product Market Fit (PMF), it means you have 1) identified a problem that a sizeable group of people really need solved, 2) a product that can be built well to fully solve that problem, and 3) a business model that can be executed to be profitable at some point in time.

 
 
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“Product market fit means being in a good market with a product that can satisfy that market."
Marc Andreessen

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“Product market fit is the moment when a startup finally finds a widespread set of customers that resonate with its product.”
Eric Ries

 

1.2 Why is PMF so important?

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“First-to-market seldom matters. Rather, first to product market fit is almost always the long-term winner.”
Andy Rachleff

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“In general, hiring before you get product market fit slows you down, and hiring after you get product market fit speeds you up.”
Sam Altman

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“The life of any startup can be divided into two parts – before product market fit and after product market fit. When you are BPMF, focus obsessively on getting to product market fit.”
Marc Andreessen

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“Startups need 2-3 times longer to validate their market than most founders expect. We found that 70% of startups scaled prematurely along some dimension.”
The Startup Genome

 

1.3 How do I separate product and market?

The Product Market Fit Pyramid is an actionable framework that defines PMF in a chronological fashion using five key levels of understanding. A strong grasp of the market components at the base of the pyramid will support understanding the product components above.

The Product Market Fit Pyramid from  The Lean Product Playbook , by Dan Olsen

The Product Market Fit Pyramid from The Lean Product Playbook, by Dan Olsen

The Lean Product Process, as outlined in The Lean Product Playbook, is a useful guide for working through the pyramid layers, from bottom to top.

  • The pyramid separates the market into its two distinct components: the target customers and their needs.

  • Product market fit can be thought of as the measure of how well your product (the top three layers of the pyramid) satisfies the market (the bottom two layers of the pyramid).

  • When defining and building products, a startup forms a hypothesis in each of the five levels of the pyramid, starting from the bottom and working to the top.  Each layer is directly related to the layers above and below it.

  • It’s important to understand that without a solid understanding of the base layers - The Market - companies may require hard pivots or waste resources on the wrong target customer or problem set.

 

1.4 The PMF Journey

The journey below outlines the steps for working toward product market fit. Similar to the pyramid model above, these steps are taken in order and then repeated iteratively, as you improve and refine PMF.

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