It is generally acknowledged that the key aims of a tech start-up are to develop a differentiated proposition that delivers a benefit to target customers at a price point that delivers economic benefits and ideally in a market that is expanding. This is of course encapsulated in the term ‘Product Market Fit’ (“PMF”) and it is widely accepted that achieving this should be the key focus of a tech start-up looking to scale.
By seeking to achieve PMF, we are accepting a binary position – an enterprise has either achieved PMF or it has not. But is it that simple?
Clearly the binary extremes doexist: an early stage start-up with an MVP in beta trials does not have PMF andconversely, a longstanding dominant product in a mature market will(currently!) have achieved PMF. However, I would suggest that there is a largegrey area between these extremes and that PMF is not a binary concept. Nomatter how great the product, the target market won’t stand still and neithercan the product. It is therefore an ongoing, iterative process and mostscale-ups will continue to overhaul their products for many years after theyhave apparently achieved PMF. PMF is therefore a transient concept althoughmarket dominance at scale will protect incumbents.
There are several metrics that demonstratewhether an enterprise has achieved PMF. Clearly these can be useful, but thepursuit of generic metrics (and aggressive growth) may not be the rightstrategy for a start-up, where instead they should focus on establishing asustainable, profitable business.