What is product market fit?
“Product/market fit means being in a good market with a product that can satisfy that market.” -pmarca
“If you address a market that really wants your product — if the dogs are eating the dog food — then you can screw up almost everything in the company and you will succeed. Conversely, if you’re really good at execution but the dogs don’t want to eat the dog food, you have no chance of winning.” Andy Rachleff
There are two paths to product market fit.
Start with a market. Find a product for the market.
Start with a product. Find a market for the product.
But too often the focus is on latter part of the sentence (a product that can satisfy the market) and not the former (in a good market). Andreessen emphasizes that market matters most: “You can obviously screw up a great market — and that has been done, and not infrequently — but assuming the team is baseline competent and the product is fundamentally acceptable, a great market will tend to equal success and a poor market will tend to equal failure.” That’s why time spent building a business around the product alone is pointless: “Best case, it’s going to be a zombie. … in a terrible market, you can have the best product in the world and an absolutely killer team, and it doesn’t matter – you’re going to fail. (a16z)
Marc Andreessen writes: “In a great market — a market with lots of real potential customers — the market pulls product out of the startup.” (a16z)
“Founders have to choose a market long before they have any idea whether they will reach product/market fit.” Chris Dixon (cdixon)
Product 1st, Market 2nd: Most successful new markets begin with a market-sensitive technologist recognizing an inflection point that enables a new kind of product. The next question becomes: “who wants to buy my product?” Start with the product and search for the market as opposed to vice versa. Evaluating a market trying to find holes and developing solutions for those problems will lead to mundane outcomes. (Medium)
Even though serendipity plays a role here, there is a process — which is why Rachleff later created and teaches a course at Stanford, Aligning Startups with their Markets. Steve Blank also developed a customer development process based on the idea that startups should apply the scientific method just like scientists do: start with a hypothesis, test it, prove it, move on or further iterate on the hypothesis. Similarly, Rachleff observes that “First you need to define and test your value hypothesis. And then only once proven do you move on to your growth hypothesis. The value hypothesis defines the what, the who, and the how. What are you going to build, who is desperate for it, and what is the business model you are going to use to deliver it?” Startups should therefore start with the product and try to find the market, as opposed to starting with the market to find the product. It’s important to emphasize here that the iteration is more about the market and the business model than the product itself. a16z