Product-Market Fit (PMF)
Product-market fit (PMF) is the degree to which a product satisfies a strong market demand — the state where your product is so valuable that users naturally recommend it and return to it.
In depth
Marc Andreessen coined the term: 'the only thing that matters is getting to product-market fit.'
Signs you have PMF: - Organic growth without paid marketing - Users are disappointed if they can't use your product (40%+ say 'very disappointed' in Sean Ellis test) - NPS above 40 - Retention curves flatten — a cohort stabilizes and doesn't drop to zero - Customers are telling friends unprompted - Press is writing about you without your PR effort - You can't build fast enough
Signs you don't have PMF: - High churn (>5% monthly for B2B) - Long sales cycles with lots of objections - Users need hand-holding constantly - Growth requires constant paid acquisition
The Sean Ellis test: 'How would you feel if you could no longer use this product?' — 40%+ answering 'very disappointed' is the threshold for PMF.
Real example
Slack knew they had PMF when teams started passing the product around internally without any sales effort. The day they launched, engineers at other companies were sharing it with their teams before Slack had made a single outbound sales call.
Tools & calculators
Related terms
MVP (Minimum Viable Product)
A Minimum Viable Product (MVP) is the simplest version of a product that can be released to early users to validate core assumptions, gather feedback, and begin learning — with the minimum amount of effort and cost.
MRR (Monthly Recurring Revenue)
Monthly Recurring Revenue (MRR) is the predictable, normalized monthly revenue generated from all active subscriptions. It's the north star metric for SaaS companies.
Churn Rate
Churn rate is the percentage of customers (or revenue) that cancels or doesn't renew in a given time period. It's the single most important retention metric for subscription businesses.
NPS (Net Promoter Score)
Net Promoter Score (NPS) is a customer loyalty metric based on a single question: 'How likely are you to recommend [product] to a friend or colleague?' on a scale of 0–10.
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