Finding Product-Market Fit

Chapter 1: Product-Market Fit Comes First

Product-Market Fit (PMF) is the multiplier of growth. It’s not binary. It exists on a spectrum from weak to exponential, and the strength of your fit determines the effectiveness of your sales efforts.

Strong PMF means your product solves a real, urgent need in a large market. In one campaign, the same sales effort delivered 33× better results with strong PMF than with weak PMF. That’s not talent. It’s fit.

Sales Finds Demand. It Doesn’t Create It.

Early sales wins can be misleading. Visionaries and early adopters will buy things mainstream customers won’t. If your early traction can’t be replicated by someone else, in a different segment, you don’t have PMF. You have a one-off.

This is where most teams get stuck: they confuse early wins with scalable demand and burn resources trying to brute-force growth. But no sales hire, no matter how skilled, can overcome a weak fit between product, market, and unmet need.

PMF is the Foundation of Predictable Growth

Weak PMF leads to wasted spend, bloated teams, and failed GTM. You can’t outsource your way out of it. Before scaling, test whether others can replicate your results.

Ask:

Can a top performer get results in new segments?
Do customers pull the product, or are you pushing?
Is the problem urgent enough that people seek you out?

Action Framework

Test Before You Scale: Prove the fit is strong enough to support repeatable sales.
Treat PMF as Ongoing: Needs shift, markets change. So should your fit.
Replicability Is the Bar: If others can’t close deals where you did, you don’t have PMF yet.

Chapter 2: The Founder Drives the First $1M

You can’t outsource your way to $1M ARR. Early growth is volatile, wins feel massive, losses feel fatal, and only the founder can carry the business through that chaos.

This is not optional. If you skip it, you don’t learn the customer, the problem, or what it takes to win.

Growth Demands a Different You at Every Stage

Each stage requires a new playbook:

$0 – $1M: Hustle. Talk to customers. Close deals. Learn everything.
$1M – $5M: Build repeatability. Codify what works.
$5M – $10M: Drive efficiency. Scale what’s proven.

Most teams get this wrong. They hire too early, expecting someone else to figure out the messy middle. It doesn’t work.

Don’t Confuse a PMF Problem with a People Problem

Swapping sales leaders won’t fix broken fundamentals. That’s the “Fire the VP” fallacy: when growth stalls, founders assume it’s a leadership issue, when it’s often weak PMF or premature scaling.

The right question isn’t “Who can sell this?”
It’s “Can this be sold, reliably, repeatedly, and profitably?”

Your Role as a Founder:

Be Your First Seller: You understand the problem better than anyone. Use that. Sell. Learn. Iterate.
Time GTM Carefully: Move too early, and you burn cash. Move too late, and you lose the market.
Raise Your Game With Each Milestone: Each revenue tier demands a new system. Hitting $1M doesn’t mean you’ve made it. It means the bar just got higher.

The Growth Formula

Growth is not magic. It’s a multiplier: Growth = Cash Invested × PMF Strength × Execution Quality.

You control all three.

Chapter 3: Growth Is Math, Not Magic

Startup growth feels chaotic, but under the surface, it’s math. A simple formula reveals where things break down and what to fix:

Growth = Cash × Product-Market Fit × Execution

If any variable is weak, the whole system suffers. More spending won’t save you from a weak fit or sloppy execution. Most early-stage burnout happens when founders ignore this math and scale too soon.

The Ceiling: How Big Can This Get?

Another useful equation:

MRR Ceiling = New Customers × Customer Lifetime × Average MRR

This tells you how big your monthly revenue can get before you think about hiring or raising. If your lifetime is short or the deal size is small, no matter how many new customers you acquire, it won’t build a big business.

Don’t just chase logos. Understand your ceiling.

Why Founders Get This Wrong

They overspend before PMF is strong: High CAC, high churn, low margins.
They confuse effort with outcome: No amount of sales hustle can compensate for a weak fit.
They ignore durability: If it works now but competitors can copy it tomorrow, it won’t last.

What Protects You Over Time

In 7 Powers, Hamilton Helmer outlines the forces that protect margins once competitors show up. This matters because a strong PMF attracts attention, and without a moat, you bleed margin fast.

Build execution, find fit, and prepare for competition.

Chapter 4: Finding Early Product-Market Fit

Product-Market Fit doesn’t arrive all at once. It starts the moment you commit to solving an urgent problem, either something brand new or something existing but solved 10× better. Anything less is just noise.

The Product Journey

Finding PMF is a progression:

Choose a space: Where do you want to play?
Find unmet needs: What’s broken, costly, or risky?
Solve: Build the simplest possible way to remove that pain.
Earn word-of-mouth: If customers talk about you without being asked, you’re onto something.

Momentum is the signal. Early PMF doesn’t look like polished dashboards or big logos. It feels like:

Customers leaning in with “ahhhh, finally.”
Referrals happening before you ask.
People eager to use an unfinished product because the pain is that sharp.

The Trap: Weak PMF in Disguise

Not all traction is real. Weak PMF hides in:

Polite praise without engagement.
“Cool idea” compliments that don’t turn into usage.
Interest with no urgency.

If customers aren’t leaning forward, you don’t have it yet.

Founder Moves

Be brutally honest: Incremental improvement won’t get adoption. If you can’t say you’re 10× better, you’re not.
Use Michel’s Rule: Don’t try to create a new category unless you see three or more major shifts in the buyer’s world (new regulation, new tech, new cost pressures). Without them, buyers won’t budge.
Hunt messy ball pits: Look for chaotic moments where change creates openings, such as broken workflows, sudden cost spikes, and new compliance risks. That’s where urgency lives.

Chapter 5: Customer Development Is Not a Pitch

Your goal isn’t to convince someone your idea is excellent. It’s to uncover unmet needs so sharp and painful that people will pay to solve them. That’s the real job of customer development, and when done right, it gets you your first 10 paying customers.

The Process: From Discovery to Dollars

Context – Understand their world:

Daily workflows.
The tools they use.
Goals they’re measured by.

Progress – Surface real pain, then quantify it:

What’s hard right now?
Rate it: Importance (1–10), Satisfaction (1–10).
Gaps = opportunity.

Impact – Tie that pain to business outcomes:

Does it cost them revenue?
Waste time?
Increase risk?

The goal isn’t validation, it’s insight. You’re looking for problems that are both important and underserved, and early revenue, when it shows up, is just proof that someone’s serious enough to pay.

Founder Moves: Turn Insight Into Action

Make an offer after each call: A manual service, a prototype, or a design partner deal.
Ask for referrals: “Who else should I talk to?” Keep going until it feels awkward. Then go one more.
Book next steps before you hang up: Never leave it open-ended.

How You Get to 20 Paying Customers

The first 10 come from these interviews.
The next 10 come from their referrals.

If that loop breaks, it’s a signal: either the pain isn’t urgent, or the offer isn’t compelling.

Referrals = Proof of Pull

If people send you to others, it means the pain is real, and your solution is landing. Track this, it’s your best early signal of PMF.

Chapter 6: How to Find People to Interview

You can’t find Product-Market Fit in a spreadsheet. It starts with conversations. PMF signals come from hearing real pain, in the words of your potential buyers.

The only way to get those signals is by consistently talking to people. That means building a pipeline of interviewees like your business depends on it. (Because it does.)

Start Warm, Then Go Cold

Start with your network: friends, family, ex-colleagues. Don’t overthink it.
End every conversation with a referral ask: “Who else should I talk to?” Ask until it gets awkward.
No warm network? Go outbound:
- 100 personalized LinkedIn messages/week.
- Show up at relevant events and conferences.
- Join niche online communities where your buyer hangs out.

This isn’t a one-off sprint. It’s a pipeline. Keep it moving.

Milestone: When You Know It’s Working

You’ll know your discovery motion is working when you start seeing these signals:

A clear shift in the buyer’s world (new risk, cost, pressure).
A HILS problem: Hair on fire, Important, Latent, Solvable.
Frequent “Ahhh, yes” moments. Not just polite nods.
Strong hypotheses forming: you can describe the market, need, and solution.
If they’re sending you to others, it confirms pull is building. Track it.

Chapter 7: How to Measure Product-Market Fit Strength

Product-Market Fit isn’t a feeling. It’s pull, and pull can be measured.

The PMF Funnel

Acquisition: Are people interested in the problem you solve?
- Measure: Email opt-ins, demo requests, open rates on cold outreach.
Activation: Are they taking action?
- Measure: Sign-ups, paid conversions, feature usage in the first 7 days.
Retention: Are they coming back?
- Measure: Usage frequency, logins, repeat purchases.
Referral: Are they telling others?
- Measure: NPS, organic invites, referrals per user.

Referral is a top-of-funnel metric for pull. Use it to identify strong ICP pockets.

Each step tells you how strong your fit is. But referral is the most important signal. People only refer when the value is real, and the pain solved is urgent.

Why This Matters

High acquisition but no retention? You’re interesting, but not valuable.
High activation, low referrals? You’re solving a “meh” problem.
Strong referrals in one segment? You just found your ICP.

Tag every user by ICP (Ideal Customer Profile). PMF is rarely universal at the start. You’re looking for the pockets of pull where go-to-market gets easier, not harder.

If nobody’s referring you, you may still have a business. But you don’t have momentum, and momentum is what lets you scale without burning out.

Chapter 8: How to Use the PMF Strength Score

Product-Market Fit isn’t just a story. It can be scored.

The Formula

PMF-S = (Conversation-to-Referral Rate) × (1 ÷ Time-to-Referral) × 1000

The faster and more frequently people refer, the stronger your pull. Multiply it out, and you’ve got a single number to track.

How to Use It

Compare Segments: Run discovery across different ICPs, calculate PMF-S, and focus on the highest scoring segments.
Track Change Over Time: Improvement matters more than absolute values. Use it as your internal benchmark.
Don’t Compare Across Companies: Everyone defines “conversation” and “referral” differently. The score is a relative tool, not a universal metric.

Example

Athlon: PMF-S = 6.27 → modest pull, hard to scale.
Carb.io: PMF-S = 56 → strong pull, momentum compounding.

Why It Works

Referrals compress the cycle. If customers introduce you quickly and often, it means you’ve tapped into something urgent, important, and viral.

Chapter 9: Milestones Before Go-to-Market

Most startups fail because they scale too soon. The temptation is real: hire a team, spend on ads, chase growth. But if your foundations aren’t solid, every dollar just amplifies inefficiency.

You’re Ready When:

Funnel efficiency > 20% → At least 1 in 5 customers refers you onward.
Confidence in the core → You can clearly state the market, need, and solution, and back it up with proof.
MVP → V1 → You’ve moved past sketches and hacks into a product that solves the problem reliably.
Early revenue exists → Not just “interest,” but actual dollars, with pricing expectations validated.

Why These Milestones Matter

Referrals are your pull signal. Track funnel efficiency before you scale.
Revenue proves commitment. Early dollars aren’t about ARR, they’re about proving customers take you seriously.
V1 proves repeatability. A solution that works once doesn’t scale. A stable V1 can.

Cautions Before You Scale

Don’t scale hypotheses. Lock your ICP, need, and pricing first. Scaling assumptions = expensive lessons.
Avoid vague or unlimited terms. “Free forever” or “unlimited access” deals often backfire. Customers anchor on them, making future monetization painful.
Remember: early revenue’s real value is proof and referrals, not cash flow.

Go-to-market is not the start of the race. It’s the start of scaling what you’ve already proven.