If you spend more than a hot second discussing startups, you have undoubtedly heard the term "product-market fit," a reference to whether a product is clicking with a certain customer base.
It’s typically used in two ways. One is negative: When teams say, “We haven’t yet found product-market fit,” they almost always mean that a product isn’t good. The second, positive use: “We found product-market fit and now we are scaling like crazy.” That is meant to imply a company is on the verge of stratospheric growth and success.
Both phrases represent an overly naive and fuzzy view of what a market really is, and what the process of building great products usually entails. If both phrases and the thinking they represent were banished from the startup vocabulary handbook, we’d all be better off.
There never is a singular one market that you just have to crack and then everything works. Early on, startups shouldn’t be thinking about markets at all, but instead simply matching product with specific individual customers. On the flip side, just having momentum with some people that you can think of as a type doesn’t mean you have solved the market. It means you have a solution that works for some, and will certainly have to change and refine over and over if you hope to reach more and more people. Don’t be fooled by pockets of growth or groupings of people that look deceptively similar.
Facebook is an obvious and interesting example I feel like I can speak to. I would argue that at no point in the company’s history has it had product-market fit and “just needed to scale”. The earliest versions of Facebook had amazing appeal to a few thousand undergraduates at Harvard, but the product had no fit in a broader sense. If Facebook had been widely available in the early years it almost certainly wouldn’t have looked like it had broad market fit, and likely would have failed under a rush of early users for whom it didn’t have a viable product.
Even the main Facebook app circa 2010 didn’t have even close to global product-market fit. As the company has continually pushed for a bigger and bigger user-base it has constantly had to reinvent itself and what services it offers to fit the needs of wider sets of users. It turns out that as it moves towards a market of everyone, more and more focus has to go into messaging technology because it has the most broad appeal of basically anything you can do with bits.
Twitter is another good example. Does Twitter have product-market fit? Well, of course, that depends on how you define the market. If the market is defined as valley technorati, perhaps. Journalists in their 20s and early 30s, from my experience—yes. The elderly, probably not.
Numerous times in the history of a company like Twitter I am sure internally and externally people have said that the company has product market fit and just needs to scale like crazy now, but the reality is obviously much more nuanced. They have some people who engage with the product, and many who don’t. They have a product that fits some people, but doesn’t fit most.
The Information, the publication at which I intern, is also an interesting example. It currently very successfully fits a specific market of people who value the types of articles they write and news they break and can afford the price. Does this mean the team just has to scale the current product it offers? Of course not. The bigger opportunity is to continue to evolve the product to reach more people over time.
One might try to argue that with search, Google instantly had ubiquitous product-market fit, but—unsurprisingly—I would take issue with that read. Original Google fit a small segment of users who understood how to use the Internet and what search was. It has taken generations of refinements—and things like bringing Google search directly into browsers—to actually grow the company’s base.
My basic advice to startups is: Don’t even consider product-market fit. Instead, build your product for specific people, and then screen out and hunt those users. Too many consumer startups are afraid to actively hunt for those people for whom their product makes sense. I always find it easiest if you are in the consumer space to build for yourself first, so long as you can be an honest and objective observer of what works for you. If you find something that works for you, go hunt more people like you.
Once you have found and engaged a bunch of early users who benefit from your product, don’t you dare declare product-market fit and sit back. Just because you have users doesn’t mean you have a product that will work for more users. Instead, you have to constantly evolve and grow what you are doing, person by person — and keep actively hunting for the right people to drive to adoption.
And of course, if you are investing in public companies, don’t ever be lulled into believing that a product ever has a market and just needs to scale.