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What Is Product-Market Fit? Definitions And Examples

Product-market-fit, often referred to as ‘product/market’ or ‘product-market’ fit, happens when you have successfully identified your target customer and are serving them with the right product.

Keith Peterson
Keith Peterson
Mar 17, 2022129 Shares2.2K Views
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  1. Defining Product-Market Fit
  2. Why Is It Important?
  3. Who Is Responsible For Product-Market Fit?
  4. Examples Of Product-Market Fit
  5. Netflix
  6. Google
  7. Slack
  8. Conclusion

As a general rule, you can measure product-market fitby taking surveys to find out how many people think your new product should be a "must-have."When it comes to product/market fit, numbers and percentages aren't always the best way to figure it out. Instead, it's more important to know who your customers are and how they feel about you and your product.Do people spread the word on their own?Are people willing to pay for what you make?If they are, you have a good fit between your product and the people who use it.People often find customers through word of mouth before you build a marketing engine that can get a lot of people to use your product.

As a startup or early-stage company, your product or service will likely only be useful to a small group of people (hopefully a good group!).As you learn more about the problem you're trying to solve, you may change your customer profile to better match what you know about the people who use your service.

Find Product Market Fit [How To In 5 Steps]

Defining Product-Market Fit

In Marc Andreessen's words, "Product-market fit" means that you're in a good market with a product that can meet the needs of that market.Product-market fit is when an entrepreneur sees a need in the market and makes a product that people want to buy.

This idea might seem obvious, but it's important to make sure there are enough people who want what your businesshas to offer and to write your value proposition in a way that makes sense for your business.Product-market fit can be more important to the future of your business than creative ideas, brilliant teams, or anything else. It's important to think about when you build the product.For any business to last, there must be people who will buy the things it sells.

Why Is It Important?

Alex Schultz, Facebook's VP of Growth, says that the biggest problem he sees with the businesses he helps is that they don't have product-market fit when they think they do, even though they do.

So why is it so important to get it?There are a lot of venture capitalists who want to see proof that a company's product and market are a good match before investing in it.Before product-market fit (BPMF) and after product-market fit (APMF) are the two main stages in the life of every startup.

It's very simple: Before you make a product that people want to pay for, your team can't work on other important goals, like growing or selling more to people who already use the product.First, you need to make sure your product has enough of a market and can make money. Then, you can start those projects.

Who Is Responsible For Product-Market Fit?

People usually think of marketing and product management when they hear the word.In reality, everyone in the company has a role in making it happen.Every department in the company works together to help the company reach this important goal.

Examples Of Product-Market Fit

Some companies have done such a good job of making a product that fits the market that their success can be used as a model before you start making your own product, either in the process of making it or in the process of getting to know your customer.


They first gained popularity in the early 2000s.Moviegoers were getting tired of having to pay late fees at DVD rental stores that were in person.If you want to subscribe to Netflix and get DVDs by mail, you can keep them for as long as you want.

But if Netflix had been a DVD-by-mail service, it would have died out when DVD players died out.Instead, Netflix positioned itself as the easier and cheaper alternative to what's already popular in the entertainment market: brick-and-mortar rentals, DVDs, or TV shows.Netflix changes its product when the needs of the market change, so it always stays in shape.

A good thing to remember is that Netflix's success is a good example of how toadapt to changing markets and keep an eye on the future.


In the early days, Google competed with many other search engines for the market share of people who used them.They made moneyby selling adsnext to search results, just like the other businesses in their field did, too.But in 2003, they took the lead when they came up with a new idea called AdSense.

Google's leaders knew that businesses would pay to have their ads show up outside of the search page, so they came up with AdSense to meet that demand.AdSense used new technology to scan web pages and show ads that were relevant.People who run businesses that sell suitcases could pay for AdSense so that their ads would show up on travel websites without them having to do anything.

There were 11 million people who used AdSense in 2017, and they were paying Google $95 billion a year.Google found a need that no other search enginewas meeting, and then it filled it.

You can use Google's AdSense method to run your business, too.To set yourself apart from your competitors, look for things your competitors aren't doing and figure out how to fill gaps in the market.


Slack, an instant messaging platform that is often used for work communication, started out as a completely different business idea that didn't work out at all.As they worked on a role-playing game, the founders came up with Slack as a way for the team to communicate with each other.

There were a lot of role-playing games out there, but there was nothing like Slack in the world.So, they turned away from making games.Today, 10 million people use it.

Change your focus to improve your product-market fit, and Slack shows that it can be worth your time.Don't be afraid to change your mind when you see a better chance.


You can make your product and the people who use it work together in many different ways.It is possible to adapt your core product to new markets, find a strong market demand, reuse old ideas, go to where the market is, or even start a new service.

Keep in mind that fit isn't a one-to-one thing.Product-market fit doesn't look the same from business to business, and customer retention curves are also different from one company to the next.However, there are some well-known steps you can follow to help you get there while making a minimum viable product prototype.

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