Product-market fit can be accidental. Even companies with millions in ARR may not initially understand *why* customers buy. They must retroactively apply frameworks to uncover the true demand drivers, which is critical for future growth, replication in new segments, and avoiding wrong turns.
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Product-market fit isn't just growth; it's an extreme market pull where customers buy your product despite its imperfections. The ultimate signal is when deals close quickly and repeatedly, with users happily ignoring missing features because the core value proposition is so urgent and compelling.
For Ethic, the feeling of true product-market fit wasn't just hitting metrics, but the moment they helped an advisor win a major new client. The founder realized this success was a replicable playbook that could be repeated, creating a flywheel for growth. The metrics then followed this initial breakthrough.
The idea that startups find product-market fit and then simply scale is a myth. Great companies like Microsoft and Google continuously evolve and reinvent themselves. Lasting success requires ongoing adaptation, not resting on an initial achievement.
When a startup finally uncovers true customer demand, their existing product, built on assumptions, is often the wrong shape. The most common pattern is for these startups to burn down their initial codebase and rebuild from scratch to perfectly fit the newly discovered demand.
PMF isn't a fixed state achieved once. It's a continuous process that must be re-evaluated at every stage of growth—from $1M to $1B. A company might have PMF for one scale but not for the next, requiring a constant evolution of strategy and product.
Having paying customers doesn't automatically mean you have strong product-market fit. The founder warns against this self-deception, describing their early traction as a "partial vacuum"—good enough to survive, but not to thrive. Being "ruthlessly honest" about this gap is critical for making necessary, company-defining pivots.
