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Product Management

Product-market Fit


What is Product-Market Fit?

Definition: Product-market fit refers to the way in which a brand’s product is capable of satisfying the current market, by supplying enough units — of a high-enough quality — to meet demand.

To go a little deeper, proper product-market fit means releasing a product that makes such a positive impact on your target buyers they actually start selling it for you.


Through sharing their experience with fellow buyers. Not only do they offer an insight into how the product has improved their life or work, they also create a sense of reassurance. One potential customer sees that a like-minded person has had a good experience with said product, and realizes it could benefit them, too.

Essentially, customers become advocates and may help you achieve higher sales figures down the line. 

Product-market fit, as a term, was developed by CEO of Wealthfront, Andy Rachleff. It was popularized by Sean Ellis, CEO of GrowthHackers and former-CEO of Qualaroo, but has been interpreted and expanded upon by other notable figures, such as Steve Blank and Marc Andreessen. 


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Product-market fit is important because businesses must know whether they have a product with market appeal before they dive into the production phase. Investing funds into developing goods nobody’s looking for, or which are inferior to existing products, is a waste of money and time.

As a result, product-market fit is considered a crucial early step in laying the foundation for a successful enterprise. It revolves around identifying market opportunities, gathering feedback, and determining the level of interest in the product itself. 

The benefits of product-market fit

Finding product-market fit helps validate and lay the groundwork for your business. 

Product-market fit shows you:

  • Which features or elements your product needs to satisfy audience expectations/demands

  • What demographics are likely to care about the product and why

  • How you can grab prospects’ attention and persuade them to buy the product 

  • What steps you need to take to drive growth and turn your satisfied buyers into advocates.

Developing an in-depth insight into each of these factors empowers you with a terrific competitive advantage that has failed to find its product-market fit. You’ll stand a better chance of cultivating a loyal customer base, gaining visibility online, securing recommendations, and boosting conversions as positive word of mouth leads website traffic your way.

The best product-market fit will see your company developing and distributing products in constant demand. Sales will be strong and buyers will be creating glowing reviews online, persuading others to invest for the same (or similar) reasons. You’ll know you have a product with a clear place in the market and which addresses very real pain points.

Examples of product-market fit

Businesses can use different metrics to analyze their product-market fit. Common examples include:

40% rule 

This simple metric is a way to determine the impact your product makes on the market — or, rather, the impact it would make if it were no longer available. 

It refers to knowing whether a minimum of 40% of customers questioned would be disappointed to lose access to your product or consider it an essential purchase. 


NPS (Net Promoter Score) is another valuable metric for finding your product-market fit. 

Basically, NPS measures the number of people who would be willing to recommend your product to others. Those that indicate they would be happy to share their experience and lead fellow customers to buy can help drive new purchasers to your business. 

Customer lifetime value 

This metric identifies the financial worth of each customer. Obviously, if you have a high number of buyers with significant Customer Lifetime Value, you have achieved a satisfactory product-market fit. 

Your product doesn’t just serve a purpose on one occasion — it continues to do so enough to keep customers coming back over months or years. 

Returning visitors

This metric is one of the website metrics that tie in with Customer Lifetime Value, though it’s slightly different. Returning visitors may or may not make a purchase — at least, not at first. 

For example, prospects who see an ad or recommendation from another buyer may visit your site to investigate the product. They might come back once, twice, or multiple times before converting. If they continue to return after making a purchase, their Customer Lifetime Value could potentially be high. 

Regardless, a strong rate of returning visitors means your product is capable of attracting consumers and retaining their interest.

Media interest

Finally, another example of finding product-market fit is gaining traction in the media. Are reputable websites publishing blog posts or videos about your product? Are journalists reaching out for interviews? Are YouTubers driving interest in your goods?

Setup alerts for mentions of your business and/or product online. Try to track people’s response as closely as possible.

When do you need product-market fit?

Finding your product-market fit is a huge advantage when launching a startup and/or developing a new product.

Securing a foothold in competitive markets is a challenge for even well-funded companies with a groundbreaking concept, so small businesses lacking significant capital have to make every cent count.

Investing time and resources into finding your product-market fit can help you target the right consumers, channel funds into the best features/design elements, and gain a deep understanding of your target audience. 

You want to create a product that satisfies buyers enough for them to feel as if your brand has made their life or work infinitely easier. If you can manage this, they’ll be more likely to share their experiences and opinions with others. 

Hopefully, enough to increase your product’s profitability and expand your audience, encouraging satisfied shoppers to perform free marketing on your behalf.

What Is Product-Market Fit

General FAQ

How to establish product-market fit?
Product market fit can be achieved through adapting your product to the market requirements and needs. This means that your product is satisfying the market through the quality, quantity or efficiency of your product.
How startups achieve product-market fit?
Most successful startups are created to solve a certain problem the market has. To achieve product market fit the startup needs to understand the problem and provide a good solution to the market.
airfocus eBook All You Need To Know About Product Management
All You Need To Know About Product Management
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