Pluto is now my second endeavour in the startup world and over time you start to notice patterns in what constitutes as “Product Market Fit”.
Surprisingly, it’s not that complex — and you can truly ‘vibe feel it’.
No one can quantifiably tell you that you have “PMF”. “PMF” is ever changing based on market conditions, your funding round, your competitors, macro-policies, interest rates, cash on hand & a thousand other factors. What feels like PMF today can disappear tomorrow and you will once again have to chase it… from scratch.
That being said, here are some indicators I have found to be useful to know when I am getting close:
1. There is no “PMF”. There is “Product – Positioning – Segment – Market – Founder – Fit” instead.
Good Product + Bad Positioning = you are dead. Read Obviously Awesome by April Dunford.
Good Product + Bad Segment + Good Positioning = you are dead. You need to try and operate in a segment of your own in the 0 → 1 phase. This is not true if you have enough capital that it can act as a weapon. Read Zero to One, Competition is for Losers, and Category Pirates.
Bad Market (low TAM) + VC funding = dead. Venture Capital inherently requires you to have minimum 30% MoM growth in the early stages; hard to do that if your TAM is tiny.
Good Everything + You hate the market / can’t sell to it as founders = dead. Startups are incredibly difficult; don’t choose a game you don’t want to play.
2. Minimum 25% MoM growth for 24+ months.
This is the minimum bar. Until you are here, you don’t have PMF. Trust me.
3. High number of logos > Whales
This is counterintuitive; founders understandably get excited when they get large scale deals or shiny logos. Bad idea to rely on those in the early stage. If 60%+ of your revenue comes from 1-2 deals you have severe concentration risks and chances are you built a whole bunch of excess to serve these few customers.
Enterprise deals feel validating. Big numbers. Logo recognition. But they’re often a trap. You end up building custom features for one client’s edge case. When you have real PMF, you’re stacking small-to-mid logos. Lots of them. Similar use cases. Repeatable sales motion. Until then, you may have a business, but you don’t have PMF. You want a school of fish, all demanding similar things.
4 – 12. The rest of the checklist
Positive ROAS / you found 3-4 ad creatives that actually work consistently. You know you can put more $$$ in to get more $$$$ out — you found a good positioning.
For the marketing folks: you can create lead magnets your customers actually give a shit about.
Customers are annoyed if you have downtime or issues.
Queries coming in from customers are actually in-depth product usage questions.
You can charge a lot of customers some meaningful amount / you can convert from free to paid without climbing a hill.
There is a clear path to make the customer more valuable with time, i.e. upsells.
Your customers are impatient and want you to resolve their issues without threatening to leave.
Low activation time post-sales: if your sales team signs contracts and customers aren’t chasing you to activate — you don’t have PMF. Also, if you send invoices and a large chunk of customers don’t pay for months even with the threat of discontinuing your service — you don’t have PMF.
If you were in a problem-unaware segment and you start to see shifts to problem-aware in sales calls without you teaching them — and it happens often — you are getting close.
As a rule of thumb, your PMF variables change after every raise at the bare minimum. New raise, new goals, new search for PMF unless it’s a Series A (where you will most likely be doing more of the same but with greater firepower).
Good luck!