All terms
Product
Product-market fit (PMF)
The state in which a product satisfies strong market demand, evidenced by sustained organic usage, low churn, and customers actively recommending it.
In plain English
When customers pull the product from you faster than you can push it to them. You'll know.
Example
A SaaS where 40%+ of new signups come from word-of-mouth, week-1 retention is above 50%, and customers email asking 'when's the new pricing tier?' — that's PMF.
Why it matters
Before PMF, almost nothing else matters. After PMF, scaling becomes possible. Most founders try to scale before they have it; that's the costliest mistake in startups.
Common mistakes
- Mistaking growth for PMF (you can grow without it via paid acquisition)
- Declaring PMF after 3 happy customers (need cohort data over months)
- Hiring for scale before PMF — burns cash without compounding