Why Founder Market Fit is More Important than PMF (and when that changes)

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Onto the newsletter, this week’s post is about why founder-market fit actually matters more than PMF, at least in the early days, and if / when that switches (hint: it’s later than you might think) 👇

Read time: 3 minutes

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Why Founder-Market Fit > PMF

Quick, what are PMF and FMF?

If you’re reading this newsletter, you likely know and have seen definitions for PMF, and may be familiar with FMF (but might not have seen it concisely defined anywhere):

• PMF → From Andrew Chen’s great PMF deck: “when people who know they want your product are happy with what you're offering”

• FMF → I couldn’t find a definition I loved, so here’s mine: “when founders are obsessed with a big, fast-growing market they understand well”

Why FMF Matters More in the Early Stages

Reaching PMF is always the initial goal as a founder, but when you’re in the early stages of starting something new the actual product you have doesn’t matter much yet.

What you’re really trying to use the product to do is to get signals from potential users who fit your target persona and are experiencing the problem you’re trying to solve.

The reality is that the product will change (and good investors know this). Slack is a classic example, their team started out building a game, and Slack was just an internal tool they built. Eventually, because their team was great, they realized selling Slack was the bigger opportunity.

It’s also true from an investor’s perspective. Early stage investors are looking for:

• A big, fast-growing market

• A team that is obsessed with and can effectively capture that market

• A deep understanding of the users within that market

Notice I didn’t say “product” anywhere there. In the early stages it’s typically a bet on the founders and the market.

When Does PMF Become More Important?

You may think PMF automatically becomes more important once a startup raises money and starts having firm growth targets.

Or maybe it’s when you raise a Series A and suddenly need to execute against a scalable growth channel in order to reach the B.

These are intuitive thoughts, since you likely need some level of PMF in order to hit those targets in the amount of time before you need to raise money again.

But even at a Series A, the startup still lives and dies by its founder and their vision. Pivots can still happen, and the team likely isn’t big enough to create self-sustaining progress.

It isn’t until the startup is large and mature enough to sustain its own momentum that PMF becomes more important than FMF. Here’s a radically oversimplified version of what I mean:

Consider the question “would this startup survive if the founder(s) left?” If the answer isn’t “yes” then FMF is still more important.

Like Marc Andreessen I would never advocate for hiring a professional CEO, but being theoretically able to is a fair benchmark for when things switch and PMF becomes more important.

Typically this happens sometime after a Series B, once a large enough team has been hired and they’ve had time to settle in and build processes.

Even then, you could make the case that it’s never true, too.

What this Means for Founders

All of this is good news for founders. Some takeaways:

1. How quickly you learn about your target user matters much more than what your product looks like, for quite a while

2. Build a little as possible until you have conviction. How much of your founder mindshare is being spent on product? Maybe too much

3. It’s more important to build systems than products

4. Lead your investor conversations with confidence, even if your product isn’t in great shape yet

Nikita agrees:

📚️ Founder’s Corner

1. Lenny Rachitsky put together a great guide on how to recognize the signs of PMF

2. I put together a 1 week email course about how founders can communicate better with investors, users, your team, and more. For now, it’s 40% off before I take it live

3. In addition to the deck, above, Andrew Chen also has two other great pieces about PMF