Is achieving product-market fit necessary and sufficient for a startup's ultimate success?

Howie Liu · Aug 25, 2023

The advice that finding product-market fit means everything after is gravy is wrong — PMF is only the beginning and the real challenges start after takeoff

In his experience the hardest learnings and challenges emerge once you're building and scaling a real business, not while chasing PMF

Scope: based on his own experience

31:51 20Product: Enterprises are not Adopting AI Yet, When Will AI Break Into Enterprise, What are the Blockers, What Do Enterprises Need from AI & Why Services Companies Will Win in the Next 10 Years of AI Implementation with Howie Liu, Founder & CEO @ Airtabl

Harry Stebbings · Sep 20, 2023

Some businesses have real product market fit and customer demand but no business model fit, and are simply not good businesses

Companies like WeWork and Allbirds had demand but the underlying margins and business model were poor

23:18 20VC Roundtable: Is the VC Model Broken? The Biggest Disconnect Ever Between TVPI & DPI, Why Market Size is Dangerous, Why "Go Fast" is Terrible Advice, The Dangers of Raising Large Rounds at High Prices & Why Next Year Will See the Biggest Hiring Spree i

Harry Stebbings · Jan 6, 2025

He has several portfolio companies that have product market fit but are not successful, including Clubhouse

Clubhouse had millions of users engaging daily for hours, which he counts as product market fit, and still didn't succeed

43:41 20VC: How To Do a 10x Seed Fund in 2025 | Three Frameworks to Evaluate Startups an Founders | Lessons from Losing Billions Missing Airbnb and Pinterest & Investing Lessons from Charlie Munger with Mike Maples @ Floodgate

Harry Stebbings · Sep 6, 2023

Investors underestimate the weight of product-market fit; once a company has it, most other concerns fall away

So few companies ever achieve it in the first place

Scope: you still need to find the next stage of product-market fit

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Mike Maples · Jan 6, 2025

He has never worked with a company that got product market fit and was not wildly successful, so product market fit is essentially the only thing that matters in the early days

In his own portfolio experience he has never seen an exception

Scope: based on his own portfolio experience; early stage

43:31 20VC: How To Do a 10x Seed Fund in 2025 | Three Frameworks to Evaluate Startups an Founders | Lessons from Losing Billions Missing Airbnb and Pinterest & Investing Lessons from Charlie Munger with Mike Maples @ Floodgate

Mike Maples · Jan 6, 2025

A company can produce a great return without ever finding product market fit, purely through a lucky chain of acquisitions — a 'forward fumble'

CoTweet had little traction and was nearly out of money, but was bought by ExactTarget, which IPO'd and was then bought by Salesforce, returning 23x

47:51 Success without pmf is possible through lucky acquisition chains

Mike Maples · Sep 20, 2023

Companies with weak business models don't have a separate 'business model fit' problem — bad economics are an emergent property of never having answered what they can uniquely do that people are desperate for

Product-market fit answers the question of what you can uniquely do that people are desperate for; when the product is only one or two out of ten better instead of four out of ten, nobody is desperate and the business model failure follows from that

23:36 Pmf and business model fit are not separate weak economics signal incomplete pmf

Mike Maples · Sep 20, 2023

Strong product-market fit is so rare that it should be weighted far above all other considerations, including apparent risks like leadership instability

The lesson from selling Twitter early: product-market fit is rare, strong product-market fit is extremely rare, and he underestimated its importance relative to everything else

71:41 Strong pmf should be weighted above other risk factors like leadership instability