What Is Product-Market Fit and Why Most Products Fail Without It

Every product has one primary goal — to attract as many users as possible who are willing to pay for the solution it offers. But often, product managers and entrepreneurs face a frustrating problem: a great ad campaign is launched, lots of people show up... but conversions are low.

If that sounds familiar, this article is for you. Today we’ll talk about Product-Market Fit (PMF) — a concept that many teams still overlook, despite its crucial importance.

What Is Product-Market Fit?

Product-Market Fit is the alignment between a product and the expectations of its target audience — a natural fit with the market that drives conversions through the roof and fuels business growth.

The term was coined in 2007 by Marc Andreessen, co-founder of Netscape and a key figure behind the popular Mosaic browser. He famously described Product-Market Fit like this:

• You can always feel when you don’t have product/market fit. Customers aren’t getting value, word of mouth isn’t spreading, usage is slow to grow, press reviews are bland, the sales cycle is long, and most deals fall through.
• And you can always feel when you do have product/market fit.
• Customers are banging down your door, usage is growing faster than you can scale servers. Money is piling up. You’re hiring sales and support as fast as you can. Reporters are calling because they’ve heard about your hot new startup. Harvard Business School invites you to speak. Investment bankers are waiting outside your house."*

There are many translations and definitions of the term. Some call it “product-to-market alignment,” others refer to it as “a happy marriage between a product and its audience.” But the essence is the same: PMF measures how well your product matches customer expectations.

Without PMF, sales remain minimal and your project struggles to gain traction. But when PMF is achieved, growth accelerates rapidly, and revenue climbs day by day. If the product disappears, your target audience will be frustrated and immediately start looking for substitutes.

Sounds great in theory — just find Product-Market Fit and success will follow. But here’s the catch: many don’t know how to achieve it. Even more people misunderstand what it really means.

In the next sections, we’ll explain why PMF matters, how to reach it, and how to measure it effectively.

Why Product-Market Fit Matters

The primary purpose of Product-Market Fit is to create a solid foundation for building a successful and profitable company. Without aligning with user expectations, there are no sales. Without sales — no revenue. It’s as simple as that.

PMF is also a key tool for guiding product improvements. If your product hasn’t reached PMF yet, it’s time to analyze and research. What features or UX improvements need to be made to better align with your target audience?

How to Find Product-Market Fit

Finding PMF is rarely quick — and it almost never happens on the first try. But don’t give up after the first failure. Keep iterating, learning, and adjusting. With enough persistence, success will come.

And once you find PMF — maintain it. Otherwise, users will lose interest and stop paying, or competitors will step in and take your place in the market.

Start by Finding the Right Market for Your Problem

If you already have a product idea — great. If you even have a minimum viable product (MVP) — even better. But before you invest serious time and money, you need to answer two critical questions:

• Is there a real market for the problem you're solving?
• Will your solution meet the expectations of your target audience?

The only way to find out is to talk to people — a lot of people — who actually have the problem your product aims to solve. In other words: customer interviews.

But don’t confuse this with sales or pitching your solution. You're not trying to sell yet — you're still looking for a market. Your goal is to understand whether the problem exists and how important it is in the lives of real users.

When conducting interviews with potential customers, also assess the market size. How large is it today? What are the future growth prospects? In which direction can you scale the business?

There is no point in developing a product for a small market. And if you plan to attract investment, you will need to prove its potential and size to investors.

Don’t fixate on just one direction. Consider all possible options. For example, the founder of Uber was able to convince investors that his company was not only targeting the taxi market. In the future, it would expand into car rentals, encourage people to forgo buying cars in favor of convenient taxi services, and even explore the emerging field of self-driving vehicles. Thanks to this vision, Uber’s current valuation is $56 billion.

Test the Market’s Willingness to Pay for Your Solution

Validate the conclusions made in the initial stage by trying to sell your solution to potential customers. For this, you need a prototype with minimal functionality read our article about MVP. Offer it to the audience you interviewed.

If customers agree to pay for your solution, you are close to PMF and are developing the product in the right direction. Otherwise, you should reconsider your concept or target a different audience segment.

Promote the first version of your product through usual marketing channels: SEO, paid ads, social media, affiliate programs, referral systems, etc.

There’s no sense in spending resources to fully build a solution if the market “ground” hasn’t been tested and sales potential is unclear.

Did you know that the founders of Airbnb followed a similar approach early on? They found people with a “pain” and offered them a solution in exchange for money! After securing initial sales and real revenue, they confirmed the project’s viability and started full product development.

Start Scaling Your Idea

Once you have initial customers and their feedback — reviews, suggestions, recommendations — use this data to guide product improvements. Your solution must meet user expectations, or sales will stay minimal.

This is a cyclical process. Gathering opinions and feedback never ends, because:

• Customer needs and problems evolve; they want new value for their money;
• If your idea is successful, competitors will emerge trying to capture your audience.

After enhancing the product functionality to better match user expectations, begin attracting new customers. A common challenge at this stage is that early adopters are innovators — enthusiasts trying unique solutions different from what they used before. But you need a broader market of users currently solving the problem with traditional methods.

The strategies for attracting innovators and mainstream users differ. Before expanding, consider how to sell to this second group. Your revenue must grow while the cost to acquire each new user decreases.

Don’t forget to analyze marketing campaigns: track expenses, conversions, and so on. Identify the most effective sales channels and focus on them. Cut out the less productive ones.

The cycle of collecting feedback — iterating — scaling — collecting feedback should never stop. Repeat it continuously to maintain Product-Market Fit.

How to Measure Product-Market Fit

Debates about how to measure PMF have been ongoing since 2007, when Marc Andreessen first introduced the concept. Analysts are used to working with concrete numbers in tools like Yandex.Metrica, Google Analytics, and others. But Product-Market Fit is not a single metric or number — it’s a state of the product.

As Marc Andreessen said, if your product meets the expectations of your target audience, you will feel and see it: people will talk about it, recommend it to friends, and the number of users and revenue will grow exponentially. If not, it means you need to keep working and adjust your solution to match customer needs.

There’s no single consensus on how to measure PMF. But you do need some guidance. The team at ProductStar suggests assessing PMF by several components, which we’ll discuss below.

Look at Revenue

The most obvious and widely used metric is the company’s revenue (or product revenue). This is a quick way to gauge PMF without conducting surveys or detailed market reactions.

If your revenue is consistently growing rapidly, chances are your solution matches customer expectations (PMF). If not, you need to identify and fix the problem and monitor again.

Check the “Word of Mouth”

If a product fits customer expectations, they will recommend it to friends, family, and colleagues — known as “word of mouth.” The opposite can also happen: customers may speak badly about a product they dislike.

Conduct a survey asking:
“How likely are you to recommend us to your friends and family?”
Use a 0 to 10 scale.

Divide respondents into three groups:

• Scores 9–10: “Brand Advocates” who actively recommend your product
• Scores 7–8: Neutral users who use your product but don’t actively promote it
• Scores 0–6: “Critics” who share negative opinions when possible

Calculate the difference (in percentage) between advocates and critics. If the result is above zero, your product meets customer expectations; if below, it doesn’t. Note that thresholds vary by industry.

Talk to Customers

Another survey method, based on Sean Ellis’s approach, asks:
“Would you be disappointed if this product disappeared?”

If at least 40% (4 out of 10) of respondents say yes, you have reached PMF.

It’s also helpful to segment respondents by:

• First-time users
• Occasional users
• Regular users

Segmentation provides more detailed insights and helps objectively evaluate product-market fit.

Study Market Reaction

Nothing speaks louder about a product than market response. Are customers leaving positive reviews? Are sales so strong that you struggle to keep up?

If yes, your product likely has achieved PMF.

If reviews are negative, word of mouth is weak, and sales cycles are long, your product likely hasn’t met PMF. Analyze feedback, make improvements, and monitor market reaction continuously.

Final Thoughts

Many companies use one or two of these methods to measure PMF. We recommend a systematic approach — evaluating multiple metrics and feedback sources to confidently determine whether your product has achieved Product-Market Fit.

Myths About Product-Market Fit

There are several misconceptions that beginners often face:

• PMF can be achieved with “quick fixes” or small tweaks (like changing button colors).
  It’s not that simple or fast — achieving PMF requires deep work and iteration.

• PMF can be measured by audience size alone.
  There is no universal benchmark: for some markets, 10 customers mean success, while for others, 2,000 users might be a failure.

• Once achieved, PMF can’t be lost.
  No, the world changes rapidly, with new trends emerging overnight. You must constantly monitor PMF to avoid business decline. Remember what happened to VCR manufacturers? Consumers quickly switched to CDs and DVDs, and those who didn’t adapt went out of business.

• If PMF is reached, competition no longer matters.
  What if a competitor simply copies your product and adds a few features? That could be enough to take a significant share of your audience. In 2007, Apple launched the first iPhone, creating a new market and dominating it initially. But competitors quickly caught up with their own touchscreen phones. Apple still has to monitor PMF to retain loyal customers.

Never fall for these misconceptions. Sooner or later, they can sink your business. Always track Product-Market Fit and strive to meet consumer expectations as closely as possible.

Conclusion

Product-Market Fit is a complex criterion. It cannot be measured by a single metric. It is a state defined by how well your product meets the expectations of your target audience. If your product matches what customers want, your business will grow. Otherwise, losses are inevitable.

Regularly monitor PMF. If you notice a drop in demand or revenue, urgently measure, identify the problem, and fix it. Use all the measurement methods described in this article together to get an accurate picture.