What is Product-Market Fit
Product-Market Fit is the most important milestone in the life of a product.
Product-Market Fit is being in the right market with the right product. It is a key milestone in the life cycle of any product (or feature). It is the intersection between value generated and value captured.
Credits: Dan Olsen
Marc Andreessen coined the term product-market fit in a well-known blog post titled “The only thing that matters.” In that post he writes, “Product-market fit means being in a good market with a product that can satisfy that market.”
If you are generating value but not capturing value back from the market you might by a NPO but not a business.
Product-Market Fit is the point in the life cycle of a product (or feature) where you can objectively verify quantitatively that you are capturing monetizable value from the market.
It is the point where Feasible, Viable and Valuable intersect for first time. You have mostly developed Valuable (your product meets real customer needs and does so in a way that is better than the alternatives), but you are starting to validate Viability (is it profitable?) and Feasibility (can it be built at scale?).
We develop our business model by reducing these three main risks.
Credits: Strategyzer by Alex Osterwalder
At the beginning we mostly tackle Desirability (it is valuable and usable for customers?), as we move towards Product-Market Fit we work on reducing the risk of Viability and when we scale we mostly deal with Feasibility risk.
Credits: Ash Maurya
As you can imagine, these are not independent and sequential phases, but it is important that you keep in mind these three fundamental risks. For technology companies, Viability and Feasibility intersect from the beginning, and you shouldn’t wait too much to evaluate technical risks.