Product Market Fit: what it is and 5 steps guide to success

Developing a product market fit strategy (PMF) can be the key to solving the problems that startups and companies face every day.

To survive and make a difference in a saturated market, it is necessary to fully understand what to focus on and what can be overlooked.

An apparently fantastic business is not enough to guarantee the success of an enterprise. Achieving and sustaining product-market fit over time should be the primary focus because it identifies the thin line between success and failure.

In this article, you will discover the world of product market fit and understand in detail the behaviors that enable you to achieve and maintain it over the years. Specifically, I will indicate:

  • The definition of product-market fit;
  • how to achieve PMF;
  • how to measure and sustain it over time.

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What is Product Market Fit

To explain the product market fit well, I need to provide you with a definition: it is the adaptation of the product to the market, a fundamental condition for the success of any company.

product market fit framework

Keep in mind that no matter how brilliant and innovative an idea is, it cannot take off if there is no awareness of a market that demands it.

To avoid offering a useless product or service, you must be in a state of product market fit.

Indeed, according to the definition of Marc Andreessen, an American computer scientist and entrepreneur, it means “being in a good market with a product that can satisfy that market.”

So, product market fit is also a measure of a product/service’s ability to meet the demands and needs of a specific market.

It goes without saying that to achieve PMF, it is not enough to have a product/service demanded by the market. You need the ability to reach target customers to sell it to.

What makes the product market fit significant? Achieving product-market fit is crucial because it serves as evidence for venture capitalists and provides a strong foundation for your business growth. It ensures:

  • Rapid company expansion
  • Cost-effective customer acquisition with organic growth
  • Customer loyalty and satisfaction by identifying valued product features
  • Smooth scalability due to a clear understanding of consumer needs
  • Well-established system


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How to achieve Product Market Fit in 5 Steps

Once you have achieved product market fit, it is necessary to maintain it over time by constantly monitoring it.

Consider that what satisfies your target audience today may not satisfy them tomorrow, potentially leading to the failure of your startup. In fact, proof that your product/service is the best solution is its purchase by users.

Therefore, once you have identified the target, their needs, and the solutions that satisfy them, PMF should be followed by traction, which is a metric of actual sales.

This occurs when you transition from the awareness of being able to sell to early adopters to the condition where you are truly selling.

So, how to create a successful product-market fit strategy? Below, you will find all the answers to develop an effective process to achieve PMF and establish yourself competitively in the market.

1. Hypothesize the market value

The first step in reaching product-market fit is to hypothesize the value of a product/service, meaning the likelihood that it will be purchased by a customer.

To make this hypothesis, you need to determine the value your product would bring to those who purchase it.

How do you establish this value? Start by conducting a market survey to understand if it addresses real and significant problems and what solutions it offers.

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2. Identify the features of the Minimum Viable Product (MVP)

Once you have clearly identified the problem that your product/service solves, you need to identify the specific features that can address it.

The number of features should be balanced to create a complete but precise solution without becoming overly complex with unnecessary functions.

At this point, you’re talking about the Minimum Viable Product (MVP), which is the number and type of features needed to test the hypothesis.

To obtain the MVP, it’s helpful to undertake various types of research such as surveys, reports, empirical observations, and competitor analysis.

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3. Create the MVP

As mentioned earlier, to create the MVP for product-market fit, you need to identify its features and understand how to make it fully functional. So:

  • Run advertising campaigns targeting a specific audience to test which aspects perform better;
  • Create a prototype: It should be realistic and interactive, faithfully reproducing your solution. Show it to people to test its impact;
  • Create a landing page: You can present your idea through a landing page to collect leads that you can later use to gather feedback;
  • Conduct A/B tests: They are a valuable tool for testing user preferences,
  • Interview Customers: Inquire about the reaction potential customers would have if they had access to your product/service.

Regardless of how you decide to build your MVP, keep in mind that it should allow you to validate the hypothesis of its value.

4. Verify the MVP’s Effectiveness with a Sample of People

You’ve identified the necessary features that balance your MVP, and created it to make it functional, you need to ensure that your Minimum Viable Product meets the needs of your target audience.

To do this, you can use surveys to send to a sample of users, collecting as many opinions as possible, both positive and negative.

5. Learn from the Results

If you’ve completed all the steps mentioned above, you can understand whether your MVP has passed the test or not.

If it has passed, it means that your MVP will enable you to succeed, and you’ve achieved your product-market fit. All that’s left is to continue measuring it and maintaining it over time because, as should be clear by now, achieving it once doesn’t mean you’ll keep it forever unchanged.

If, on the other hand, the test provides a negative result, don’t lose heart! Repeat the process with the necessary corrections, reformulating the hypothesis until it demonstrates the value of your MVP.

How to measure Product-Market Fit

To determine if you are in a product-market fit situation, there is a quick and effective method devised by Sean Ellis known as the “40% rule”, which involves a survey asking customers what they would do if they suddenly couldn’t access a specific product or service.

If at least 40% of respondents say they would be very disappointed, you are in a condition of PMF. This calculation should not be seen as an absolute truth but as a positive reference to consider.

product market metrics

The fundamental judgment criterion for monitoring the progress of upstream-set goals involves appropriate measurement metrics. Among these are:

  • Net Promoter Score (NPS): Satisfied users recommend a product/service. If your users express dissatisfaction, it means they won’t recommend your product/service, and you won’t achieve organic growth; on the contrary, you risk negative word-of-mouth;
  • Retention Rate: To be considered if the product/service is designed for long-term use;
  • Engagement measures how users interact with your product within a specific timeframe;
  • The number of users willing to pay for your product/service provides evidence of how valuable and in-demand your product/service is;
  • Organic user base, which is the number of users you can reach through word of mouth;
  • The Customer Lifetime Value allows you to measure the value of each customer in relation to the expected duration of the relationship;
  • The Churn Rate tells you the percentage of customers acquired within a specified period;
  • The Bounce Rate, Time On Site, Pages Per Visit, Returning Visitors: If your business operates online, you cannot ignore fundamental metrics like these, which help you understand user behavior on your e-commerce site.

When it’s not possible to achieve Product Market Fit

Attaining a balanced situation with product-market fit is not as simple as it seems. If you want to start a startup, you need to face reality and ask yourself if you actually have what it takes to introduce your product/service into the market.

There are situations where achieving product-market fit is virtually impossible. But what are they?

  • Lack of knowledge about your target audience’s needs: if you don’t know who your potential customers are, what their needs are, their fears, and the solutions they are looking for to solve them, you cannot achieve PMF. If it doesn’t address a market need, you’ll have to resign yourself to the fact that your product/service is destined to fail.
  • Your product/service isn’t the best solution on the market: if there are superior products/services to yours at a lower price, achieving PMF is impossible. Before you start, ask yourself if your competitors offer better or more advantageous solutions than yours.
  • Inability to sell the product/service: if your product/service is valid and meets market needs, but the market doesn’t know it exists, you’ll never achieve product-market fit. Without sales, there is no business, and without a business, there is no company.


Product-market fit is not always attainable. There are bad entrepreneurial ideas and ideas that, with the right tests and adjustments, will allow you to achieve and maintain success.

If you’ve made it this far, you definitely have all the tools to test, measure, refine your MVP, and achieve PMF.

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