A lot of startups wander into failure toward product-market fit. It appears an elusive target. One cause, I argue, is in our treatment of both product and market as random variables—an unsolvable equation. All originates in our definition of markets.

The majority of companies are in the habit of defining markets around products. This definition does not marry well with the consensus that customers do not know what they want. As a result, customer insights are limited and startups struggle to paint the entire picture, to uncover all customer needs. The reason for existence of a company and product is to serve customer needs. With customer needs seemingly random, latent, and unknowable, we face a dilemma. What to do?

In the past, we used to ignore this issue altogether, simply pressing ahead with Product Development. Today, most startups employ Customer Development. Customer Development is an upgrade to the past. Startups iterate on the market (random variable) while simultaneously developing the product (fixed variable). The intention is to iteratively discover a market for the product. That keeps startups honest and nimble. Nevertheless, the methodology has a drawback: products, in truth, are not fixed variables. More often than not, product hypotheses, like market hypotheses, prove incorrect. That resets the process and practitioners arrive back to two random variables. It is at this point that so many companies go astray.

The proposal of this series is to fix the market variable instead. First, let’s define product-market fit.