A startup has only one goal: get to product-market fit. A startup with product-market fit can have lousy employees, poor design, terrible processes, and still be a wild success. Vice versa, do everything right except product-market fit, and your startup will be on the fast track to imminent death.
So how do you know if you have product-market fit? Marc Andreessen, co-founder of Netscape and the VC firm a16z, gives the following description:
“You can always feel when product-market fit isn’t happening. The customers aren’t quite getting value out of the product, word of mouth isn’t spreading, usage isn’t growing that fast, press reviews are kind of ‘blah’, the sales cycle takes too long, and lots of deals never close.
And you can always feel product-market fit when it’s happening. The customers are buying the product just as fast as you can make it—or usage is growing just as fast as you can add more servers. Money from customers is piling up in your company checking account. You’re hiring sales and customer support staff as fast as you can. Reporters are calling because they’ve heard about your hot new thing and they want to talk to you about it.”
The problem with this description? It only tells if you have reached product-market fit after the fact. There is no metric to show how close you are before you get there. Founders are thus left wondering: