Myth #1: Product market fit is always a discrete, big bang event. Some companies achieve primary product market fit in one big bang. Most don’t, instead getting there through partial fits, a few false alarms, and a big dollop of perseverance.
Myth #2: It’s patently obvious when you have product market fit. I am sure that Twitter knew when it achieved product market fit, but it’s far murkier for most startups. How many customers (or site visits or monthly active uniques or booked revenue dollars, etc.) must you have to prove the point? There may be multiple sub-markets, each of which need their own product.
Myth #3: Once you achieve product market fit, you can’t lose it. Four months after founding Loudcloud, we had product market fit by most measures. But in September 2001, the market for cloud services from semi-viable companies went to zero and we lost product market fit as a cloud services provider. We had to rebuild completely and would ultimately find product market fit in a different set of markets altogether.
Myth #4: Once you have product-market fit, you don’t have to sweat the competition. It’s fine to stay lean if you are not quite sure that you have product market fit and there are no competitors in your face every day. But usually there are. In fact, the best markets are usually the ones in which competition is fierce because the opportunity is big. How long should you stay lean before attacking?
(1) Ben disputes Fred Wilson’s argument that you should only scale after you have product-market fit. If product-market fit isn’t a discrete event, and if it’s often unclear whether you have product-market fit, how can you wait for product-market fit to scale?
(2) My personal view is that product-market fit is a continuum; there are degrees of product-market fit. You should only scale when it’s clear that you’re fairly far along the continuum of product-market fit.
(3) Cf. How you know when you’ve hit product-market fit.