Well, I was watching a Sam Ovens video where he was talking about how, as an entrepreneur, you need to scale up. He defined the three phases that require scale up at the start of each transition. Well, I am not here to talk about the 3 phases, but I am really intrigued by the sequence he has talked about. He essentially says that at start, you are supposed to find product-market fit. Then you are supposed to figure out how to distribute it and then how you can delegate the work.
While finding product-market fit, he describes it as looking at a market and what might be a binding force inside a certain market. Those are the people, and you figure out a problem with them and how you can solve that problem with the product or service. So, identification of a subset of people in a market and then creation of a product to solve one or more of their problems is what he calls product-market fit. Essentially boils down to observation that hey, this is a market. These are the people in it. This is the problem they have. This is the way I can solve that problem. Of course, you would have to create products and iterate them till people also feel that that product is solving that problem. Also, you have to work on your communication so that can let them know that this is the thing that is going to help them. So product-market fit is not a very ominous thing. It is just basic observation and trial and attempts. It’s not something that is unattainable or too big to do. Millions have done it before, and millions will do it in the future. Thousands are doing it right now. Of course, some problems are way too prevalent, and you can notice them easily. Hundreds of people are trying to solve it. Product-market fit already exists there. And some are problems that are kind of hidden underneath, and people have not noticed them or very few people are servicing them. There might be reasons for that also, but yeah, it is all problem-dependent. So yeah, if you have identified a problem and created a product for it, and people are saying they will buy it, they have bought it, they are using it, then you have found product-market fit. That’s where it stops. It’s a concept where people are just willing to buy something from you to solve the problem. If that social contract has been established, then you have a product-market fit.
Then comes the distribution part.
That hey, if you have something that can solve problems which people are willing to pay for, then the next stage of the challenge is to have that product be delivered to them. You can have product-market fit and people not be aware of your existence. Thus product-market fit and people being aware are decoupled. Both can be true, and one can be false while the other is true. You might have prebuilt your distribution, so people know about you. But you don’t have product-market fit, or you can have product-market fit, but people don’t know about you. Distribution does the job of people knowing you and you delivering the product to them.
So distribution can be a service that you are providing to people who might or might not have a product-market fit.It can be of 3 types:
- Building awareness
- Delivering the product to buyers
- Providing both
One can be thought of as the marketing part, and another can be the logistics part. I do believe that tactics exist out there that you can build awareness without actually having product-market fit about a brand or name or some concept that is no issue. I think you can also deliver something even if it does not do anything. You can definitely build awareness about things that don’t have product-market fit, and you can also deliver things that don’t have product-market fit if they exist.
Like a house in a city can always have product-market fit. People do need spaces to live in those damn cities. But now it is up to the distribution network to get it rented. The real estate agents might go and find customers for it. Thus, the distribution network is responsible for making people who are trying to rent aware about this house and then making the rent agreement happen so that they can get a piece of the pie.
Or some abandoned land by the road. It can be under some government restriction that you cannot do this or that on this land. The product-market fit is under question. The buyer might want to do something, but it’s not very clear that if he could do that. By hiring some real estate agents, you might be able to find some customer for that land and sell it.
Thus distribution is the kingmaker that can make sales happen regardless of whether you have product-market fit or not. And those who can do distribution well, can do business well either by selling their own product (regardless of whether it has product-market fit or not) or by being able to do it for others as consultants.
Product-market fit might not even be as elusive as one thinks because when we look around us, we see so many products that were sold successfully. Those products were sold because they were an object that worked well with the distribution mechanism they had, regardless of whether they had product-market fit or not. If they reached the market, they were sold on mass quantity. The product has had tens of millions of dollars in revenue. Thus, if you look at your computer, look at some app and say, “Hey, I’m going to compete on this.” That means, if you can distribute it better, you will win. If you look at the tablecloth on your table, (duh), you are of course going to be able to sell it because someone has sold it to you. Well, how do you know tablecloth is the optimal solution to that problem? What problem do you even have? Does your modern poly-coated table need it? Does the tablecloth have the correct form? Is it the correct material? What if I wanted something else? It is not on your table because it is the optimal way to solve the problem, but because it is compatible with distribution. A product that is around you, a product that has done numbers in revenue, does not have to hold itself to the standards of product-market fit. Product-market fit might be a thing that helps with distribution, generate a bit of word of mouth, but it is in no way a necessary condition for commercial success.
So stop being insecure about your product or your ability to find a problem to solve. Look around you, find a thing, look at how it is distributed and how it is solving a a problem and how you can reduce the time to value, effort to value, and create something closer to instant gratification. Figure out how you can distribute it better. Because that’s all you need for commercial success. This whole idea of product-market fit creating product this stemmed from Silicon Valley and all the people around there. These nerds who like to create code. Their attachment to creating something has clouded our current sense of what commerce actually is. Creation or utility is not the thing needed to sell. A promise that you will feel good if you buy this, or if you have this, is what is needed to sell. That good might emerge from the consequences of having or using that product. It might be moral or immoral, doesn’t matter. It is all about the good we promise to the user and buyer. You can win without product-market fit, but hey, you gotta sell. You got to distribute. You should not be in the business of finding product-market fit at all. That is the worst thing you can do to yourself if you are trying to make money.
Yes, I will say it again: You should not be in the business of trying to find product-market fit.That is the way to burn money, it is an experiment territory. It is like the R&D department of a pharmaceutical company. Of course, it’s necessary, but it’s not something you would wanna do if you want to make money relatively easily. The R&D department is going to have a lot of failures. It’s going to burn a lot of cash, and once in a while, it is going to create something of value. Something that can be a commercial success. A lot of the things, even if they might be a success on paper, might not be a commercial success because it might cannibalize your own sales or you don’t know how to even distribute it. And the last thing that you should take away is that not all product-market fit is something you can distribute. Sometimes, it’s just not the correct era for a thing to be made and sold. You can see a lot of technological devices that are currently popular had a predecessor which was completely flop. It had a product-market fit, but hey, it didn’t work. The distribution incompatibility was the death of it.
And thus you should be in the business of distribution, to be able to see products around you. To never be in product poverty, regardless of whether you are the inventor or just a reseller. You should be able to look around and see something to sell, raise awareness for it, and deliver it to people. You might not do all of it on your own; you might have third-party partners. But hey, get the money. Product-market fit is irrelevant as long as the product is compatible with distribution. And the only thing standing between compatibility with distribution is if you can promise people on a mass scale that “hey, this product is going to make you feel good.”
If you are curious about what I mean by “good,” look at this article.
At this point, I wonder if all this praise for product-market fit or problem-solving etc. is just good PR for the people who have hoarded money via commerce. Because commercial success does not seem to hinge entirely on the ability to solve the problem. It is on the ability to distribute it. Well, yes, when you are selling your labor to someone, you have to solve a problem, you have to simplify your process. But even in labor markets, signaling often beats substance . A guy from a prestigious university will have priority access and higher pay to opportunities than someone from a no-name place.
I thought the service industry might be a place where you actually have to provide utility but in service industry we have seen contradictory evidence when it comes to Big 4 selling AI-generated reports or MBB selling borderline useless consulting advice to governments. Utility does not seem to be the factor here or problem-solving also. It is their ability to promise that hey, you will feel good, and of course that promise’s strength is strengthened by their prestige, their background, their social proof, etc. They got paid for the promise. Value? Or problem-solving? I don’t really know.
Like hey, go on kids, try to chase the product-market fit. Keep iterating your products, trying to solve problems, while we get the contracts via our government contacts. Or maybe we will just keep a circular economy by investing in each other and buying each other’s products, like the AI industry is doing. Like if you want any bigger example of distribution overpowering the lack of product-market fit, just look at AI. It had no utility but still it had acquired users the fastest of any software we have ever seen. Commercial success pre-product market fit is there, and a smart man in the software industry has said that AI are a solution looking for a problem. So, without a problem, where is your product-market fit?
I think it is because of the mental models we have been using when it comes to business. Especially the ones that come from accounting and the most harmful I think is the assumption of going concern that hey a business is going to live indefinitely. It makes us think of all business opportunities only in terms of something that is going to last perpetually. Because a business is formed for a purpose. If you are going to create a business that is with a mental model of something that lasts forever, you are going to choose problems that are going to last forever. And then the product-market fit. The illusory thing that you are going after is going to be for something that is going to be lasting forever instead of accepting that there are going to be windows of opportunity in time where some things become viable. You sell it, and then you go out. No one understands this concept better than the old school media channel owners. Where they would play media as per the audience psychology, whatever trends are, whatever copyright material they have available. Like all of those constraints they had, where they understood that this is the thing that can blow up right now but won’t after two weeks because the context has changed, the audience feelings have changed, the rights to use the material have changed. This is how we are supposed to think about commerce, like an antique shop which understands that, “Hey, this thing is really cool, I might find one buyer for it back home, so I will buy it. It’s not something I can mass scale or do for perpetuity; this item is unique.” Thus, for some, they may say that hey, distribution is such a weak moat that you are effective for two years. You can sell for that period, and then what is your business going to shut down? You are talking about product-market fit. It is solving for a problem. What if that problem stops existing? The risks are there, also. Just because you have a product-market fit right now does not mean it is going to be there for perpetuity. If opportunities are temporal, then distribution speed matters more than product perfection.
Plus I don’t get this product-market fit talk from a lot of normal businessmen. In India, there are so many great businessmen who do a lot of revenue. Even small-scale shops do more revenue than most startups. They are flexible. They don’t try to problem-solve; they are distributors in a true sense. I guess I don’t want to be a startup. I want to be a commerce hub. I want to be the one who sells things and gets money. That’s all. People from the Silicon Valley were the first to come up with the iteration, product-market fit kind of talk, and it has dominated our discourse for so long. It has shaped what we think is possible and what is not, what we should do and what we should not. It is something that has become a limiting belief, something that is not allowing us to exploit all the commercial activities that we can do. Though it might not sound cool, I would rather not be the startup guy but a commerce guy. After all, what I have done is Bachelor of Commerce.
I will be the one who will thrive off of what is empheral. After all the the foolish wish has been to ask for something eternal even if it is for SaaS products like mine
Another Jibe I want to make at Product-Market fit is their own inability to have good distribution. They are not able to find people for their product at a good price. So they think if they solve a problem so big that people will stick around with them till they can recover their cost to acquire a customer. Or, in their fancy terms, “Solve a problem big enough” so that people don’t churn out till you recover your CAC. It’s like they took a decision based on the wrong mental model, and now to compensate for that mistake, they have to keep making judgment errors down the stream in the same mental model.
And I am not denying the existence of competitive advantages that might come from certain positioning, and it might be because of the product, too. But what I believe the primary factor is access to people. Whoever has the better access to people is going to win. That might be because your product is so good that people are on your side, or your access is to people is so good that people are going to get your product regardless of what competitors exist. It is the time to market, and the amount of time in market that actually matters. How comfortable and willing are people to do business with you? It might stem from the product’s awesomeness, your branding, or your stronghold over the social order.
From Claude
You’re NOT saying product quality is irrelevant. You’re saying it’s just ONE of several ways to get access to people. And often it’s the slowest, most uncertain path.
Other paths to access:
- Format compatibility
- Distribution infrastructure (real estate agents, retail networks)
- Social proof/prestige (Big 4, Ivy League degree)
- Timing (being first, catching a trend)
- Relationships (knowing the right people)
- Capital (buying attention through ads/marketing)
Product quality can CREATE access (word of mouth, organic growth), but meanwhile, someone with existing access can sell a mediocre product and win.