Glossary
Product-Market Fit
The point at which a product clearly serves a real market need, demonstrated by strong demand, retention, and organic growth.
Product-market fit (PMF) is the moment — often obvious in retrospect — when a product and its market click. Signals include fast organic growth, customers pulling the product harder than the team can push it, low early churn, high NPS among target users, and a survey result where 40%+ of users would be "very disappointed" if the product disappeared (Sean Ellis' test).
PMF is not binary and is not permanent. It is achieved per segment and per job, and it can be lost as markets shift. Pre-PMF teams should avoid scaling spend; post-PMF teams should shift focus from search to growth. Most failed SaaS companies scaled go-to-market before reaching PMF and ran out of cash chasing a fit that was not there.
Why it matters
Everything else — pricing, GTM, org design — changes once you have PMF. Misreading the signal burns capital and time.
Related terms
Value Proposition
A clear statement of the specific value a product delivers to a specific customer, and why that value is better than the alternatives.
Jobs to be Done
A theory that customers "hire" products to make progress on a specific job, not because of demographics or features.
Customer Segmentation
Dividing the customer base into groups that share meaningful behaviors, needs, or economics.
Customer Churn
The rate at which customers stop using or paying for a product over a given time window.
Go-to-Market Strategy
The plan for how a company will reach, sell to, and retain its target customers.