Lately, I’ve found myself questioning the concept of product-market fit. Not long after Marc Andreessen coined the term, entrepreneurs (and intrapreneurs) starting asking themselves, “do I have it yet?” and often rushing to answer “yes,” with all sorts of bad consequences. I did a tweetstorm/post about the mistakes that come with getting it wrong, but the topic is still bouncing around my brain.
In most cases, product-market fit is not a binary flag that gets set to “true”, whereupon you can flip from invention mode to scaling mode. It’s an ephemeral thing.
Growth does not happen in a smooth curve, up and to the right, for most young companies. You might catch a wave for a moment, enough to raise a hefty VC round, but then it passes and you’re left scrambling to re-ignite growth while your VCs grow increasingly disenchanted.
Or you’ve forced growth through hacks and/or spend and convinced yourself that you’re the next big thing and this! this is finally the time! But you haven’t really solved churn. VC portfolios are littered with companies struggling with these last two issues.
Or you ridden a wave and gotten a lot of adoption, but you haven’t fully connected the dots on your business model and economics. Think Birchbox.
Or competitors come at you from the side and you’ve got to decide how much energy you put into frontal attack/defense versus flanking. Think Dropbox.
If we put aside the fantasies that some investors in Silicon Valley like to spin, these are all common scenarios. None of them are helped by thinking about product-market fit as a checkpoint you pass in the race.
If you assume that you might lose product-market fit at any point, at a broad or at a segment level, that forces you to think really deep and hard about focus versus diversification, about scaling versus innovation, and above all, about capital and spend.