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

Big news! I’ve spent over 100 hours putting together a database of 7,000+ VCs, angels, syndicates, accelerators, and more.

For now I’m exclusively giving access to Houck’s Newsletter readers via a new referral program. Here’s how it works:

Each month, I’ll build a new type of founder resource like the investor database. I’ll send it to anyone who refers a couple people to the newsletter during that month. Once the month is over, it’ll be replaced with something else and your referral counter will reset.

Starting now, I’ll send the database to anyone who refers 3 people within the next month.

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

📖 What I’ve Been Reading

Startups.fyi shares real-life examples of growing startups (and side-hustles), and breaks down how much $$$ they actually make.

Sign up for their free weekly newsletter and join 9,500+ founders and early stage builders.

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.