StartUp Founders: PMF – Phantom Market Fit
Dear Reader,
Founders looking for PMF are never going to find it. At best, you’ll catch a fleeting moment where everything aligns – right product, right problem, right time. Until it’s not. (𝕏)
Build a product so f’n good, be so in tune with your customers, be so fast to iterate on the feedback, that PMF is forced to find you.
TL;DR PMF is not a destination; it’s a relentless, evolving, endless chase. Deceptive POSITIVE data is the kryptonite. (Workbook)
LAST WEEKS FRAMEWORK:
LETS GET INTO IT:
Every founder who’s made it will tell you: customer obsession, observability, and feedback are the holy trinity. Everything else is noise, including your mythical quest for PMF.
PMF is a motion, a north star, a result of your work, research, experience, ignorance, arrogance, luck, and timing. It’s the outcome of relentless experimentation.
Most founders mistake early adopter enthusiasm for true market fit. Confusing vitamins with painkillers. You can be in revenue, have happy customers, have growth, all without PMF. It’s this transition to capturing that increased market share at velocity that defines PMF.
It’s the moment the market is desperate to buy (exchange value) what you’re selling and users are consistent (rabid) in their usage. This means the customers you want are not likely the customers you can have. Big companies are rarely desperate for anything.
PMF Defined (If You Must)
- Growth in Revenue or Value: When market demand drives exponential growth. More than revenue; it’s about clear, sustainable value creation. Revenue, active users, or monetizable data, you’re seeing rapid growth and a working economic model.
- Right Customers at Velocity: Sales volume or user growth alone isn’t enough. You need to acquire the RIGHT customers at speed. It has to be retentive. Without retention, no matter how much they like it, what’s the point of finding more users?
- Market Size That Matters: It’s more than current demand. It’s the long-term market opportunity. If your TAM is smaller than you realize or want, you need to run into adjacent markets/SKUs that are big enough to matter.
PMF is not a one-time, permanent achievement. Complacency kills. Markets shift, customer needs shift, and what worked yesterday can fail tomorrow, and tomorrow, is literally tomorrow.
You have to perpetually validate, revalidate, revalidate, revalidate that your product solves a real, urgent problem. Anticipate changes and adapt faster than anyone else – before you fall OUT of PMF.
Brutal Truths
When you hit real PMF, you’ll know it. Customers are coming to you and demand exceeds your capability to supply. You’re sole job (not your sole job) pivots to recruiting. You are just trying to keep up. If you’re not feeling that, you’re not there yet.
BPMF vs APMF… Your business pre-PMF and post-PMF are two different companies. Before, you’re scrambling. After, you’re scaling. APMF is when you realize the competencies and team that got you here, might not be the team to take you there.
- Feedback: Listen to every complaint, every suggestion, every opportunity to see, to watch, to understand, to learn.
- Data: Metrics tell you everything. Engagement, churn, NPS – combined with the voice of the customer tell a story. If you read it.
You can create innovation in a garage, but the market defines if it’s innovative. The market is the ultimate judge of your product’s value and relevance.
As always, if I can be of service, feel free to grab time with me.
(YC23 StartUp: It was the most useful advice I’ve received so far – both candid and actionable. Within 5 minutes of the call, it’s apparent that James is the real deal.)
— James