The Product Market Fit Lie
When I was pitching our startup many years ago, we’d hear product market fit as the excuse for not investing. “You haven’t reached product market fit yet”. It was a guise for some other reason that the investor couldn’t put their finger on… they might not have felt we were the entrepreneur type, our tech was boring to them, or they didn’t have enough to eat and lunch time was just after our pitch meeting.
After hundreds of pitches and now years of reflecting back, I can see that product market fit (let’s call it PMF) reason for not investing seems more like an excuse than ever before. There a few reasons for this:
- PMF is the last stage after extensive development. By the time there’s PMF, you’re seeing large growth and the opportunity to get in early has already been passed.
- Development needs to happen before a product is ready for PMF and that is usually before revenue. The investment is needed to develop the product that will see sales growth.
- When you’re seeing huge adoption, you can usually monetize it a way to turn the fly wheel and self fund. You’ll find gasoline to pour on a fire, so to speak. However, continuing with that metaphor, that’s a bad way to grow a fire.
Some clearer interpretations of when you hear “you haven’t seen PMF yet” are:
- I don’t believe the product you’re developing now will sell well or attract users.
- By now, what you’ve developed should already be selling well if it’s really so great and will change the world.
- Your current development team or funding doesn’t give you the capability to develop the product that should be well received by the market.
For the first two bullet points, a pivot might be able to address those concerns. For the last bullet, new team members and funding can address this. When you hear PMF as the excuse for why an investor doesn’t want to invest, you can ask them to clarify which of the above they mean.
