Decoding Product-Market Fit

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Earlier this summer, we wrote a piece about “Founder-Market Fit and How It Impact's Startup Success”, spotlighting one of the most crucial frameworks in the Pre-Seed and Seed stages. As companies mature and push their product to market, there comes another important framework into play, Product-Market Fit (PMF).

PMF is a crucial milestone, usually at the inflection point between Seed and Series A. Finding PMF signals that you’ve moved beyond the experimental phase of building a company and proves that your product has real traction.

For investors, PMF is one of the most critical dimensions when evaluating whether a startup is ready for Series A funding because it validates the core hypotheses of the founders and confirms genuine demand for the product.

Reaching PMF marks the beginning of significant revenue growth and scaling, as companies shift focus from exploration and product development to operational expansion. While PMF is often described as a blend of art and science, it’s not as vague or context-dependent as it might seem.

In fact, there are concrete ways to measure it. Y-Combinator (2018) offers a handy shorthand: If you have PMF, customers are buying your product a) in an explosive manner, and b) as fast as you can provide it, whether that means producing goods, scaling services, or adding new features.

But beware, PMF isn’t a one-and-done achievement. As your market evolves or you target new segments, PMF must be continuously reevaluated. Startups that lose sight of this often risk losing their fit as they scale.

While growth metrics like revenue and user acquisition are important, qualitative signals (e.g., passionate customer feedback, retention, or organic referrals) are just as telling. Startups often mistakenly focus solely on the numbers, but it’s that deeper connection with your customers that really confirms PMF.