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data-unpinned-container-id="vector-appearance-unpinned-container" > <div class="vector-pinnable-header-label">Appearance</div> <button class="vector-pinnable-header-toggle-button vector-pinnable-header-pin-button" data-event-name="pinnable-header.vector-appearance.pin">move to sidebar</button> <button class="vector-pinnable-header-toggle-button vector-pinnable-header-unpin-button" data-event-name="pinnable-header.vector-appearance.unpin">hide</button> </div> </div> </div> </nav> </div> </div> <div id="bodyContent" class="vector-body" aria-labelledby="firstHeading" data-mw-ve-target-container> <div class="vector-body-before-content"> <div class="mw-indicators"> </div> <div id="siteSub" class="noprint">From Wikipedia, the free encyclopedia</div> </div> <div id="contentSub"><div id="mw-content-subtitle"><span class="mw-redirectedfrom">(Redirected from <a href="/w/index.php?title=Product/market_fit&redirect=no" class="mw-redirect" title="Product/market fit">Product/market fit</a>)</span></div></div> <div id="mw-content-text" class="mw-body-content"><div class="mw-content-ltr mw-parser-output" lang="en" dir="ltr"><div class="shortdescription nomobile noexcerpt noprint searchaux" style="display:none">Degree to which a product satisfies a strong market demand</div> <p><b>Product-market fit</b>, also known as <b>product/market fit</b>, is the degree to which a product satisfies a strong market demand. </p><p>Product-market fit has been defined by its inventor as "a unique product offering that people desperately want."<sup id="cite_ref-:0_1-0" class="reference"><a href="#cite_note-:0-1"><span class="cite-bracket">[</span>1<span class="cite-bracket">]</span></a></sup> It is a first step to building a successful venture in which the company meets early adopters, gathers feedback and gauges interest in its product(s). </p> <meta property="mw:PageProp/toc" /> <div class="mw-heading mw-heading2"><h2 id="History">History</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Product-market_fit&action=edit&section=1" title="Edit section: History"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>According to <a href="/wiki/Benchmark_Capital" class="mw-redirect" title="Benchmark Capital">Benchmark Capital</a> co-founder <a href="/wiki/Andy_Rachleff" title="Andy Rachleff">Andy Rachleff</a>, <a href="/wiki/Sequoia_Capital" title="Sequoia Capital">Sequoia Capital</a> founder <a href="/wiki/Don_Valentine" title="Don Valentine">Don Valentine</a> developed the thinking behind product-market fit,<sup id="cite_ref-2" class="reference"><a href="#cite_note-2"><span class="cite-bracket">[</span>2<span class="cite-bracket">]</span></a></sup> but it was Andy who first put a name to it.<sup id="cite_ref-3" class="reference"><a href="#cite_note-3"><span class="cite-bracket">[</span>3<span class="cite-bracket">]</span></a></sup> Venture capitalist <a href="/wiki/Marc_Andreessen" title="Marc Andreessen">Marc Andreessen</a> of <a href="/wiki/Andreessen_Horowitz" title="Andreessen Horowitz">Andreessen Horowitz</a> later popularized the term in the mid-2000s. Andreesen credits Rachleff for the concept, referring to the idea as Rachleff's Corollary of Startup Success: "The only thing that matters is getting to product/market fit."<sup id="cite_ref-4" class="reference"><a href="#cite_note-4"><span class="cite-bracket">[</span>4<span class="cite-bracket">]</span></a></sup><sup id="cite_ref-5" class="reference"><a href="#cite_note-5"><span class="cite-bracket">[</span>5<span class="cite-bracket">]</span></a></sup> </p><p><a href="/wiki/Marc_Andreessen" title="Marc Andreessen">Marc Andreessen</a> defined the term as follows: "Product/market fit means being in a good market with a product that can satisfy that market."<sup id="cite_ref-6" class="reference"><a href="#cite_note-6"><span class="cite-bracket">[</span>6<span class="cite-bracket">]</span></a></sup><sup id="cite_ref-7" class="reference"><a href="#cite_note-7"><span class="cite-bracket">[</span>7<span class="cite-bracket">]</span></a></sup><sup id="cite_ref-8" class="reference"><a href="#cite_note-8"><span class="cite-bracket">[</span>8<span class="cite-bracket">]</span></a></sup> Many people interpret product-market fit as creating a so called <i><a href="/wiki/Minimum_viable_product" title="Minimum viable product">minimum viable product</a></i> that addresses and solves a problem or need that exists. </p><p><a href="/wiki/Steve_Blank" title="Steve Blank">Steve Blank</a> referred to the concept of product-market fit as a step in between customer validation (step #2 in his book <i>The Four Steps to the Epiphany</i>) and customer creation (step #3).<sup id="cite_ref-9" class="reference"><a href="#cite_note-9"><span class="cite-bracket">[</span>9<span class="cite-bracket">]</span></a></sup><sup id="cite_ref-Blank-Dorf-book-2012_10-0" class="reference"><a href="#cite_note-Blank-Dorf-book-2012-10"><span class="cite-bracket">[</span>10<span class="cite-bracket">]</span></a></sup><sup id="cite_ref-11" class="reference"><a href="#cite_note-11"><span class="cite-bracket">[</span>11<span class="cite-bracket">]</span></a></sup> </p> <div class="mw-heading mw-heading2"><h2 id="Interpretations">Interpretations</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Product-market_fit&action=edit&section=2" title="Edit section: Interpretations"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>Product-market fit might be interpreted in terms of <a href="/wiki/Alexander_Osterwalder" title="Alexander Osterwalder">Alexander Osterwalder</a>'s <a href="/wiki/Business_Model_Canvas" title="Business Model Canvas">Business Model Canvas</a> paradigm as comprising <a href="/wiki/Value_proposition" title="Value proposition">value proposition</a>, <a href="/wiki/Customer_segment" class="mw-redirect" title="Customer segment">customer segment</a>, <a href="/wiki/Business_networking" title="Business networking">relationship</a>, and <a href="/wiki/Distribution_channel" class="mw-redirect" title="Distribution channel">channel</a>. Achieving product-market fit implies these are set without requiring additional changes or pivots. </p> <div class="mw-heading mw-heading2"><h2 id="Popular_metrics">Popular metrics</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Product-market_fit&action=edit&section=3" title="Edit section: Popular metrics"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <div class="mw-heading mw-heading3"><h3 id="The_40%_rule"><span id="The_40.25_rule"></span>The 40% rule</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Product-market_fit&action=edit&section=4" title="Edit section: The 40% rule"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>One metric for product-market fit is if at least 40% percent of surveyed customers indicate that they would be "very disappointed" if they no longer have access to a particular product or service. Alternatively, it could be measured by having at least 40% of surveyed customers considering the product or service as "must have". Sean Ellis is noted for popularizing this <a href="/wiki/Heuristic" title="Heuristic">heuristic</a> after examining many startups.<sup id="cite_ref-12" class="reference"><a href="#cite_note-12"><span class="cite-bracket">[</span>12<span class="cite-bracket">]</span></a></sup><sup class="noprint Inline-Template" style="margin-left:0.1em; white-space:nowrap;">[<i><a href="/wiki/Wikipedia:Manual_of_Style/Words_to_watch#Unsupported_attributions" title="Wikipedia:Manual of Style/Words to watch"><span title="The material near this tag may use weasel words or too-vague attribution. (February 2019)">according to whom?</span></a></i>]</sup> </p> <div class="mw-heading mw-heading3"><h3 id="Analytics_metrics">Analytics metrics</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Product-market_fit&action=edit&section=5" title="Edit section: Analytics metrics"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>There are five metrics any online business can measure to empirically verify if they achieved product-market fit. They are<sup class="noprint Inline-Template Template-Fact" style="white-space:nowrap;">[<i><a href="/wiki/Wikipedia:Citation_needed" title="Wikipedia:Citation needed"><span title="This claim needs references to reliable sources. (February 2019)">citation needed</span></a></i>]</sup>: </p> <ul><li>Bounce Rate;</li> <li>Time on Site;</li> <li>Pages per Visit;</li> <li>Returning Visitors;</li> <li>Customer Lifetime Value.</li></ul> <p>Low <a href="/wiki/Bounce_rate" title="Bounce rate">bounce rates</a> means a visitor's expectation is being met. High Time on Site and Pages per Visit indicate that the experience of the user is satisfactory. High Returning Visitor reflects the lasting impact a product has on their customers, causing them to come back, and Customer Lifetime Value measures the profitability each customer brings to the company. If these 5 metrics are above average and your 40% rule is met, you'll know you have a product-market fit company.<sup class="noprint Inline-Template" style="margin-left:0.1em; white-space:nowrap;">[<i><a href="/wiki/Wikipedia:Manual_of_Style/Words_to_watch#Unsupported_attributions" title="Wikipedia:Manual of Style/Words to watch"><span title="The material near this tag may use weasel words or too-vague attribution. (February 2019)">according to whom?</span></a></i>]</sup> </p> <div class="mw-heading mw-heading3"><h3 id="Common_mistakes">Common mistakes</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Product-market_fit&action=edit&section=6" title="Edit section: Common mistakes"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>Andy Rachleff says there are four common product-market fit mistakes:<sup id="cite_ref-:0_1-1" class="reference"><a href="#cite_note-:0-1"><span class="cite-bracket">[</span>1<span class="cite-bracket">]</span></a></sup><sup id="cite_ref-13" class="reference"><a href="#cite_note-13"><span class="cite-bracket">[</span>13<span class="cite-bracket">]</span></a></sup> </p> <ol><li>Prioritizing well-known customers over desperate ones: "The counterintuitive thing is that you should not go after the big market first. It's the exact opposite of what everyone tells you."</li> <li>Iterating on the <i>what</i> instead of the <i>who</i>: If a product doesn't resonate with an audience, founders often want to change the product. But Andy says founders should instead focus on shifting the customer they’re creating the product for.</li> <li>Pursuing growth before value: Many founders are tempted to engineer growth with ads and other scale tactics too early, but that artificial growth can cause them to wrongly assume they've truly found product-market fit.<sup id="cite_ref-14" class="reference"><a href="#cite_note-14"><span class="cite-bracket">[</span>14<span class="cite-bracket">]</span></a></sup></li> <li>Slowing down on innovation: Product-market fit is a process, not a one-time achievement. As markets, customers, and competitors shift, product-market fit must be continually reassessed and pursued.</li></ol> <p><br /> It is important to differentiate between product-market fit and problem/solution fit when measuring a company's customer base. More specifically, when gauging a customer's desire, companies need to be sure they are measuring desire for the product or service—not just for a solution. Misinterpreting customers' desire for a solution as desire for a company's product or service will end up being a <a href="/wiki/False_positive" class="mw-redirect" title="False positive">false positive</a> for product-market fit. </p><p>Product-market fit is not binary. For a fledgling startup, a <i>minimum</i> degree of product-market fit will not be adequate in order to achieve market traction and success. Rather, what is actually required is a high degree of product-market fit, or <i>extreme</i> product-market fit.<sup class="noprint Inline-Template Template-Fact" style="white-space:nowrap;">[<i><a href="/wiki/Wikipedia:Citation_needed" title="Wikipedia:Citation needed"><span title="This claim needs references to reliable sources. (February 2019)">citation needed</span></a></i>]</sup> </p> <div class="mw-heading mw-heading2"><h2 id="See_also">See also</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Product-market_fit&action=edit&section=7" title="Edit section: See also"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <ul><li><a href="/wiki/Cohort_analysis" title="Cohort analysis">Cohort analysis</a></li> <li><a href="/wiki/Customer_churn" class="mw-redirect" title="Customer churn">Customer churn</a></li> <li><a href="/w/index.php?title=Founder-market_fit&action=edit&redlink=1" class="new" title="Founder-market fit (page does not exist)">Founder-market fit</a></li> <li><a href="/wiki/Lean_startup" title="Lean startup">Lean startup</a></li> <li><a href="/wiki/Revenue_stream" title="Revenue stream">Revenue stream</a></li></ul> <div class="mw-heading mw-heading2"><h2 id="References">References</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Product-market_fit&action=edit&section=8" title="Edit section: References"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <style data-mw-deduplicate="TemplateStyles:r1239543626">.mw-parser-output .reflist{margin-bottom:0.5em;list-style-type:decimal}@media screen{.mw-parser-output .reflist{font-size:90%}}.mw-parser-output .reflist .references{font-size:100%;margin-bottom:0;list-style-type:inherit}.mw-parser-output .reflist-columns-2{column-width:30em}.mw-parser-output .reflist-columns-3{column-width:25em}.mw-parser-output .reflist-columns{margin-top:0.3em}.mw-parser-output .reflist-columns ol{margin-top:0}.mw-parser-output .reflist-columns li{page-break-inside:avoid;break-inside:avoid-column}.mw-parser-output .reflist-upper-alpha{list-style-type:upper-alpha}.mw-parser-output .reflist-upper-roman{list-style-type:upper-roman}.mw-parser-output .reflist-lower-alpha{list-style-type:lower-alpha}.mw-parser-output .reflist-lower-greek{list-style-type:lower-greek}.mw-parser-output .reflist-lower-roman{list-style-type:lower-roman}</style><div class="reflist"> <div class="mw-references-wrap mw-references-columns"><ol class="references"> <li id="cite_note-:0-1"><span class="mw-cite-backlink">^ <a href="#cite_ref-:0_1-0"><sup><i><b>a</b></i></sup></a> <a href="#cite_ref-:0_1-1"><sup><i><b>b</b></i></sup></a></span> <span class="reference-text"><style data-mw-deduplicate="TemplateStyles:r1238218222">.mw-parser-output cite.citation{font-style:inherit;word-wrap:break-word}.mw-parser-output .citation q{quotes:"\"""\"""'""'"}.mw-parser-output .citation:target{background-color:rgba(0,127,255,0.133)}.mw-parser-output .id-lock-free.id-lock-free a{background:url("//upload.wikimedia.org/wikipedia/commons/6/65/Lock-green.svg")right 0.1em center/9px no-repeat}.mw-parser-output .id-lock-limited.id-lock-limited a,.mw-parser-output .id-lock-registration.id-lock-registration a{background:url("//upload.wikimedia.org/wikipedia/commons/d/d6/Lock-gray-alt-2.svg")right 0.1em center/9px no-repeat}.mw-parser-output .id-lock-subscription.id-lock-subscription a{background:url("//upload.wikimedia.org/wikipedia/commons/a/aa/Lock-red-alt-2.svg")right 0.1em center/9px no-repeat}.mw-parser-output .cs1-ws-icon a{background:url("//upload.wikimedia.org/wikipedia/commons/4/4c/Wikisource-logo.svg")right 0.1em center/12px no-repeat}body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-free a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-limited a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-registration a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-subscription a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .cs1-ws-icon a{background-size:contain;padding:0 1em 0 0}.mw-parser-output .cs1-code{color:inherit;background:inherit;border:none;padding:inherit}.mw-parser-output .cs1-hidden-error{display:none;color:var(--color-error,#d33)}.mw-parser-output .cs1-visible-error{color:var(--color-error,#d33)}.mw-parser-output .cs1-maint{display:none;color:#085;margin-left:0.3em}.mw-parser-output .cs1-kern-left{padding-left:0.2em}.mw-parser-output .cs1-kern-right{padding-right:0.2em}.mw-parser-output .citation .mw-selflink{font-weight:inherit}@media screen{.mw-parser-output .cs1-format{font-size:95%}html.skin-theme-clientpref-night .mw-parser-output .cs1-maint{color:#18911f}}@media screen and (prefers-color-scheme:dark){html.skin-theme-clientpref-os .mw-parser-output .cs1-maint{color:#18911f}}</style><cite id="CITEREFVrionisHegde2023" class="citation web cs1">Vrionis, John; Hegde, Sandhya (June 8, 2023). <a rel="nofollow" class="external text" href="https://www.unusual.vc/post/how-to-find-product-market-fit">"How to find product market fit: the counterintuitive secrets"</a>. <i>www.unusual.vc</i><span class="reference-accessdate">. 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Retrieved <span class="nowrap">2024-06-18</span></span>.</cite><span title="ctx_ver=Z39.88-2004&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Ajournal&rft.genre=unknown&rft.jtitle=Emp+Tech&rft.atitle=How+to+find%2C+measure%2C+and+maintain+product-market+fit+for+your+SaaS+company&rft.aulast=Kelsey&rft.aufirst=Margaret&rft_id=https%3A%2F%2Fwww.empat.tech%2Fservices%2Fdiscovery-validation&rfr_id=info%3Asid%2Fen.wikipedia.org%3AProduct-market+fit" class="Z3988"></span></span> </li> <li id="cite_note-14"><span class="mw-cite-backlink"><b><a href="#cite_ref-14">^</a></b></span> <span class="reference-text"><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1238218222"><cite class="citation cs2"><a rel="nofollow" class="external text" href="https://open.spotify.com/episode/7BLy6jGmgiKEaXGQNqfPD7"><i>Andy Rachleff from VC to Entrepreneur</i></a>, 2023-03-22<span class="reference-accessdate">, retrieved <span class="nowrap">2023-06-27</span></span></cite><span title="ctx_ver=Z39.88-2004&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Abook&rft.genre=book&rft.btitle=Andy+Rachleff+from+VC+to+Entrepreneur&rft.date=2023-03-22&rft_id=https%3A%2F%2Fopen.spotify.com%2Fepisode%2F7BLy6jGmgiKEaXGQNqfPD7&rfr_id=info%3Asid%2Fen.wikipedia.org%3AProduct-market+fit" class="Z3988"></span></span> </li> </ol></div></div>    </div><noscript><img src="https://login.wikimedia.org/wiki/Special:CentralAutoLogin/start?type=1x1&useformat=desktop" alt="" width="1" height="1" style="border: none; position: absolute;"></noscript> <div class="printfooter" data-nosnippet="">Retrieved from "<a dir="ltr" href="https://en.wikipedia.org/w/index.php?title=Product-market_fit&oldid=1229771066">https://en.wikipedia.org/w/index.php?title=Product-market_fit&oldid=1229771066</a>"</div></div> <div id="catlinks" class="catlinks" data-mw="interface"><div id="mw-normal-catlinks" class="mw-normal-catlinks"><a href="/wiki/Help:Category" title="Help:Category">Categories</a>: <ul><li><a href="/wiki/Category:Product_management" title="Category:Product management">Product management</a></li><li><a href="/wiki/Category:Entrepreneurship" title="Category:Entrepreneurship">Entrepreneurship</a></li></ul></div><div id="mw-hidden-catlinks" class="mw-hidden-catlinks mw-hidden-cats-hidden">Hidden categories: <ul><li><a href="/wiki/Category:Articles_with_short_description" title="Category:Articles with short description">Articles with short description</a></li><li><a href="/wiki/Category:Short_description_is_different_from_Wikidata" title="Category:Short description is different from Wikidata">Short description is different from Wikidata</a></li><li><a href="/wiki/Category:All_articles_with_specifically_marked_weasel-worded_phrases" title="Category:All articles with specifically marked weasel-worded phrases">All articles with specifically marked weasel-worded phrases</a></li><li><a href="/wiki/Category:Articles_with_specifically_marked_weasel-worded_phrases_from_February_2019" title="Category:Articles with specifically marked weasel-worded phrases from February 2019">Articles with specifically marked weasel-worded phrases from February 2019</a></li><li><a href="/wiki/Category:All_articles_with_unsourced_statements" title="Category:All articles with unsourced statements">All articles with unsourced statements</a></li><li><a href="/wiki/Category:Articles_with_unsourced_statements_from_February_2019" title="Category:Articles with unsourced statements from February 2019">Articles with unsourced statements from February 2019</a></li></ul></div></div> </div> </main> </div> <div class="mw-footer-container"> <footer id="footer" class="mw-footer" > <ul id="footer-info"> <li id="footer-info-lastmod"> This page was last edited on 18 June 2024, at 16:53<span class="anonymous-show"> (UTC)</span>.</li> <li id="footer-info-copyright">Text is available under the <a href="/wiki/Wikipedia:Text_of_the_Creative_Commons_Attribution-ShareAlike_4.0_International_License" title="Wikipedia:Text of the Creative Commons Attribution-ShareAlike 4.0 International License">Creative Commons Attribution-ShareAlike 4.0 License</a>; additional terms may apply. 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