Growth Newsletter #256
Product-market fit is startup gospel. Build something people want, and you'll succeed.
But here's the problem, product market fit isn’t the ONLY “fit” you need.
You can build the world's best product that customers desperately want, but if you:
- Price it wrong
- Market it where your buyers don't hang out, or
- Sell it through the wrong channels…
…you'll still fail spectacularly.
The brutal truth: 34% of startups fail because they never find product-market fit. But many of the remaining failures can be traced to ignoring four other critical fits.
Let’s go through the Five Fits Framework.
— Kevin
This week's tactics
The Five Fits That Matter (And One Bonus)
Insight from Demand Curve Growth Program
Think of your startup as a puzzle with five interlocking pieces. Miss one, and growth becomes much more difficult:
- Market-Product Fit: Do people desperately want what you’re building?
- Market-Model Fit: Can your market actually afford what you’re selling?
- Market-Brand Fit: Does your brand resonate with your target audience?
- Market-Channel Fit: Can you reach your market where they hang out?
- Model-Channel Fit: Does your pricing align with your acquisition costs?
*Bonus* Product-Channel Fit: Can someone understand your product's value in the time/format your channel provides?
Each fit is a potential failure point. But get all five (ideally, six) right, and you can unlock scalable, sustainable growth.
Market-Product Fit
Most people call this "product-market fit" or PMF.
Definition: People want your product so badly they’d be upset if you took it away.
The test: When Brian Chesky asked early Airbnb users how they’d feel if Airbnb disappeared, they said “devastated.” That’s market-product fit.
Signs you have it:
- Customers pull your product from you (vs. you pushing it)
- Word-of-mouth becomes your biggest growth channel
- People use your product despite bugs and missing features
- Retention curves flatten (people stick around)
Red flags you don’t:
- You’re constantly convincing people why they need your product
- High churn after trials or POCs
- “It’s nice, but…” is the most common feedback
What founders miss: “Nice to have” and “must have” are very different. If your market can easily live without you, you might not have market-product fit (or you’re just in a crowded space with lots of alternatives).
For early-stage founders, market-product fit is your north star. Without this fit, optimizing anything else is premature. Check out our growth program if you need helping nailing market-product fit.
Market-Model Fit
Definition: Your pricing matches both your market’s ability/willingness to pay and your growth ambitions.
The math:
- 1,000 customers × $100/year = $100K business (lifestyle).
- 1,000 customers × $100K/year = $100M business (venture-scale).
It's hard to build a billion-dollar business selling $10/month to SMBs, the math simply doesn’t work at scale.
If you have a small market size AND low average annual revenue per customer, that's a market-model fit issue (especially if your goal is to build a large company).
This seems like an obvious concept, but it's something startups often get wrong. That's likely because they think their market is bigger than it really is, and/or they think they'll be able to charge more than they really can.
This diagram from founder and investor Christoph Janz demonstrates our point. There's a tradeoff between the number of customers you need to acquire and the price you're able to charge.
Market-Brand Fit
Definition: Your brand instantly connects with your market’s identity and aspirations.
Here’s an example:
Stripe, the payments infrastructure company, had to build trust to scale. Businesses are understandably cautious about who handles their money and customer payment data.
They crafted a brand that emphasizes security, reliability, and technical excellence. Their documentation, website design, and even their API are all highly crafted, communicating trustworthiness without saying a word.
If their brand was cluttered, overly casual, or inconsistent, they’d likely struggle to win trust from developers and finance teams.
Most founders treat branding as an afterthought, but your brand is often your first (and sometimes only) chance to connect with your market.
Like Stripe, your brand should immediately communicate fit with your market.
Market-Channel Fit
Definition: Your ideal customers naturally congregate where you’re trying to reach them.
The test: Ask 10 ideal customers: “Where do you spend your time online or in-person?" Their answers will point towards potential channels.
Combinations that work:
- B2B SaaS → LinkedIn (decision-makers discussing business)
- Gen Z fashion → TikTok (young people seeking trends)
- Developer tools → GitHub/X/Reddit (engineers sharing solutions)
- Enterprise software → Outbound sales (complex deals need human touch)
Combinations that fail:
- Senior healthcare → Snapchat (wrong demographic)
- DevTools → FM radio ads (engineers don’t discover tools there)
- Luxury goods → Groupon (destroys premium positioning)
Choosing channels based on cost or comfort rather than where customers actually hang out can be a costly mistake.
Model-Channel Fit
Definition: Your business model's unit economics align with your customer acquisition channel costs.
This determines which channels you can actually afford to use profitably. The more you charge, the more you can spend to acquire each customer.
A few rules of thumb:
Your model-channel fit can also determine fundraising needs.
For example, if you're bringing an enterprise SaaS tool to market with $100K ACV, expect to spend 15-30% of ACV to acquire customers ($15K-$30K CAC).
If you only raise a $100K friends-and-family round, you'll run out of capital after acquiring 3-7 customers. This might signal you need to raise significantly more to effectively bring the product to market.
Product-Channel Fit: The Bonus Consideration
Definition: Your product's complexity matches your channel's ability to communicate value.
Some products are too complex to explain in low-attention channels. Others are too simple to justify high-touch channels.
The communication test: Can someone understand your product's value in the time/format your channel provides?
Examples that work:
- Simple meditation app + TikTok ads = ✓ (15-second video can show the entire value prop)
- Enterprise security software + direct sales = ✓ (complex product gets dedicated explanation time)
Examples that fail:
- Enterprise security software + Instagram ads (only) = ✗ (impossible to explain compliance features while users scroll)
- Simple task app + 3-hour sales calls = ✗ (wastes everyone's time explaining obvious features)
Smart teams choose an appropriate set of channels that allow them to naturally convey the value of their product (and address objections) rather than forcing complex products through low-touch channels.
Your Next Steps
Audit Your Fits: This doesn’t have to be an academic exercise. Just talk with your co-founders, your team, or yourself, and rate each fit from 1-10. Be intellectually honest, and brainstorm the changes you need to make to improve your score.
Your growth potential is bottlenecked by your weakest score, not your strongest.
The testing hierarchy:
- Validate Market-Product Fit first (nothing else matters without this)
- Confirm Market-Model Fit second (can they afford it?)
- Develop the others in parallel (they’re interdependent)
You can fake fits temporarily with capital. Discounts simulate market-model fit. Ads mask poor channel fit. But eventually, reality wins.
If you could only fix one fit in the next 90 days, which would create the biggest breakthrough?
That’s where you start. Not with your strongest fit, with your weakest.
If you liked this content, check out our growth program. It contains hundreds of in-depth modules just like this.
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