Are You on Track? How to Know If You Have Product/Market Fit

"That will never work."

Netflix co-founder Marc Randolph heard it over and over when he pitched mail-order DVD rentals. Even his wife had almost zero confidence in the idea.

And you know what? The doubters were right.

The first versions of Netflix didn't work, because they didn't have product/market fit. The seed of a good idea was there, but it took a lot of experimenting to get to the Netflix we know.

Small benefits helped massively. Netflix was up against Blockbuster, so it removed the most annoying parts of being a Blockbuster customer: no due dates and no late fees.

Then came the subscription. Pay a set amount each month and rent as many DVDs as you like. People loved it.

Marc put it this way: "If there was a moment when Netflix stopped being a start-up and became a real company, it was then."

Engagement shot up. Churn dropped like a stone.

Then streaming arrived, and Netflix jumped on it before anyone else. That gave it the final piece of the puzzle: convenience.

The result? Pop into your local Blockbuster to see. Oh, wait... you can't.

What is product/market fit?

I've mentioned product/market fit throughout the book, because it's a crucial part of the moat around any subscription business.

So what is it? The answer is simple.

Product/market fit means you've created an offer people genuinely want. It fits the market so well that your ideal customers sign up, stay and get all the value they need from you.

Every strong subscription business has it. Without it, you don't have a business. You have a product that won't sell, no matter how clever it is.

What does product/market fit feel like? Four stories

Sometimes you can't put a number on it. The market just tells you. Here are three more moments when businesses knew.

Looker and the big market shift

Looker launched with an unusual proposition for business intelligence. Instead of simple analytics tools, it offered a developer-oriented platform. Engineers could work in the back end to shape the data people saw on the friendlier front end.

That's not an easy sell in a market that values convenience. After twelve months of pre-launch selling, Looker had just ten customers when it went to market.

No fit... yet.

Then, within about five months, the market moved. A new generation of data professionals wanted more control over their data, which Looker gave them. And Amazon Web Services released Redshift, a cloud data warehouse that suddenly made warehousing affordable for smaller companies.

Looker had fit.

The lesson: a good idea can be ahead of its time. If you can see market forces moving your way, staying the course may be all you need.

Looker's story kept going. Google completed its $2.6 billion acquisition in February 2020, and in 2026 it markets Looker as an "agentic BI" platform. The semantic layer that made the developer approach work is now what AI agents query, and its conversational analytics are metered in tokens ($3 per million input tokens and $20 per million output tokens beyond the monthly allowances). The "too technical" part of the product became the moat.

Patreon and the overwhelming customer response

You know the basics from the land and expand chapter. Jack Conte put a link to his new platform in a YouTube video, fans paid, and a business was born.

Co-founder Sam Yam described the moment he and Jack knew:

"For Patreon, it was right after we launched with Jack's music video on YouTube and patrons and creators started writing in. I'd never seen that level of passion and immediate resonance, and our launch was particularly fraught with stress since weeks before all the creators that were asked to launch rejected us."

Mixed messages: rejection from creators, then a flood of passion. But the response couldn't be denied. By August 2025, fans had sent creators more than $10 billion through Patreon.

You won't always know if you have fit at launch. Your customers will tell you, one way or the other.

GitHub's users ask to pay

GitHub had a simple plan for its private beta: offer it free, and people will come.

They came. With an odd request. Co-founder Tom Preston-Werner recalls:

"To our surprise, users started writing to us asking, 'Can we pay for this?'. They liked it so much they wanted to pay for it. That was the first sign this was going to work."

If customers ask to pay, you're onto a winner.

GitHub found a second wave of willingness to pay with Copilot, which had more than 20 million all-time users by July 2025. Then AI costs forced a rethink. From 1 June 2026, every Copilot plan moved to usage-based billing with monthly AI Credits, while plan prices stayed the same. Read the GitHub Copilot case study for why.

How do you measure product/market fit? Superhuman's engine

Rahul Vohra knew a product that won't sell is a failure. So when he was preparing to launch Superhuman, with its simple promise of "the fastest email experience in the world," fit was at the top of his agenda.

The year was 2017. He and his engineers had been building since 2015, and they still hadn't launched. Rahul felt the fit wasn't there yet, despite huge pressure to ship.

He read everything he could find. Most articles explained how to recognize fit after launch, when it's often too late. But one post by Marc Andreessen rang true:

"You can always feel when product/market fit is not happening. The customers aren't quite getting value out of the product, word of mouth isn't spreading, usage isn't growing that fast, press reviews are kind of 'blah,' the sales cycle takes too long, and lots of deals never close."

Rahul knew that feeling. So he designed a survey for every pre-launch user, with four questions:

1. How would you feel if you could no longer use Superhuman? (Very disappointed / Somewhat disappointed / Not disappointed)
2. What type of people do you think would most benefit from Superhuman?
3. What is the main benefit you receive from Superhuman?
4. How can we improve Superhuman for you?

The benchmark came from growth expert Sean Ellis, who ran early growth at Dropbox, LogMeIn and Eventbrite. After surveying nearly a hundred start-ups, he found that companies where at least 40% of users said "very disappointed" tended to have strong fit. My page on the Sean Ellis 40% test explains the method in full.

When Superhuman's results came in, the number was disheartening.

22%.

Rahul's suspicions were right. But now he had a way to fix it.

Step #1: Find your supporters and build a persona for high-expectation customers

Early on you'll attract all sorts of customers, and not all of them fit.

Segment them. Superhuman focused on the users who said "very disappointed" and worked out who they were. Just narrowing to that segment lifted the score from 22% to 33%.

Then talk to the people who aren't getting what they need. Sometimes the product isn't for them. But often the most disappointed users are the ones with the highest expectations, because they've identified your product as ideal for them. They just aren't happy with the execution yet. Build a persona around them and let them tell you what they need.

Step #2: Figure out why people love the product

Talk to the people who love you first. Find out what they adore, and build more of it. Then pair that with fixing what's holding back the fence-sitters.

Superhuman split its roadmap in half. Half doubled down on what the fans loved (speed, keyboard shortcuts, automation, design details). The other half addressed what held back the "somewhat disappointed" users who valued speed, such as a mobile app, integrations and calendaring.

Improve what's great while fixing what isn't working.

Publish the roadmap, too. When fence-sitters and high-expectation users can see you're working on their issues, they stay with you.

Then, make it happen. I know that sounds a little blasé. But once you know what needs work, there's nothing for it but to buckle down and do it.

Step #3: Measure, repeat, succeed

Within three quarters of that work, Superhuman's score had nearly doubled to 58%, according to Rahul's own account in First Round Review.

There's no such thing as the perfect product. What fits today may not work tomorrow. Measure your fit and repeat these steps at least once a year, and keep talking to customers about what they love and what isn't working. This is where the feedback loop from the churn chapter comes into its own.

Want to run it yourself? Copy my Sean Ellis PMF survey template.

What are the signs of product/market fit?

The survey is the best single measure. But I'd look at several signals together.

A retention curve is simply a chart of how many customers from each month's sign-ups are still active one, two, three months later. Every curve drops at first. What you want is for it to level off, because that flat line is a core group of customers who need you. If it keeps sliding, no amount of acquisition will fix it.

You can find more real-world product/market fit examples on their own page.

Making subscription businesses work on small budgets

I've covered a lot of big, branded companies in this book. You might be thinking: "That's great, but I don't have millions to invest. Can I even do this?"

Yes, you can.

So pull up a chair by my little imaginary fire. Let's hear from some of the little guys, people who started on a shoestring.

How The Food Boss Academy started subscription on a shoestring

Lauryn's business idea came from her own life. Studying while working full-time, she let her nutrition slide under the stress and started putting on weight. A trip to the doctor was her wake-up call: high blood pressure, and the prospect of medication for life.

That moment started a journey in which she lost ninety-seven pounds. It also gave her a business idea: helping people facing the same problems.

The Food Boss Academy was a subscription education program: monthly video modules, weekly live training, fortnightly access to Lauryn for questions and monthly group coaching sessions. When I wrote the book, it had grown into a full-time career, helping hundreds of people and bringing in recurring monthly revenue, without spending thousands of dollars to start.

The lesson: start small. Begin with a proof of concept and an introductory offer. Check you have fit, delight your first few clients, encourage feedback and build at your own pace.

Since the book: we couldn't fully verify the current business in October 2026. The old Food Boss Academy domain now redirects to Lauryn's own site (spelled Bryght), which offers a coaching program for women over 50 focused on blood-sugar management. If that's the same journey, it's a common one: solo subscription businesses that last tend to narrow their niche to a specific outcome for a specific person.

A low-cost online retailer bolts on subscription

Ruslan Kogan's parents arrived in Australia in 1989 with $90 in their pockets. He grew up in a Housing Commission flat in Melbourne's outer suburbs, built his first computer at nine and, at ten, was cleaning lost golf balls and selling them to golfers in egg cartons.

At twenty-three, working from his parents' garage, he founded kogan.com to sell leading brands for less than most stores. Later, kogan.com added Kogan First, a paid membership that cost $59 a year when I wrote the book, with free shipping, discounts and member deals.

The lesson: you don't have to start with a subscription. A business built on single sales can generate the capital to add one later.

Since the book: Kogan now reports its two paid memberships, Kogan First in Australia and Mighty Ape Primate in New Zealand, together. For the year to 30 June 2026, loyalty subscription revenue was A$61.4 million, up 14.3%, with A$11.3 million of membership fees paid in advance. That's a high-margin, cash-upfront profit stream bolted onto a low-margin retailer. See the Kogan First case study.

How Patrick turned a nine-month "experiment" into a $200M exit

Nine months. That's how long Patrick Campbell, fresh from Google, gave himself to see if this entrepreneur thing could work.

His business, Price Intelligently, would help companies set better prices. Pricing is one of the hardest parts of running a business. Get it wrong and you either tank sales or grow without making money.

Patrick worked eighteen-hour days building the software and publicizing it himself: writing content and shooting videos. A tech journalist at The Boston Globe found one of his posts and ran his story. Price Intelligently found fit, and the services arm kept growing.

Then came another idea: what if he also gave companies their churn and MRR metrics? That became ProfitWell, with a freemium model: basic metrics free, deeper tools paid. ProfitWell reported an average customer lifetime value of $150,000.

Paddle announced it was acquiring ProfitWell on 25 May 2022 in a deal valued at more than $200 million in cash and equity. ProfitWell's free product had been used by about 30,000 companies, and that distribution was a big part of what Paddle bought.

The lesson: you don't need expensive marketing firms. Patrick did the work himself, and his authenticity was the marketing. See the ProfitWell case study.

How Michael turned an excess stock problem into a billion-dollar business

Michael Dubin had just lost his job and was on a flight to Los Angeles, with a vague idea of getting into comedy and no experience whatsoever.

A few directionless months later, a friend messaged him: "Hey Michael, I have a warehouse filled with 250,000 razors from South Korea. Any ideas on how to sell them?"

Michael was tired of the razor routine: find someone with the key to open the cabinet, then pay $20 for blades you knew weren't worth it. So he asked, what if a subscription sent blades every month at a reasonable price?

Dollar Shave Club was born. But it had to take on Gillette with no budget.

What Michael did have was a camera and that vague comedy notion. He filmed a skit. Asked off-camera whether his blades were any good, he replied: "No! They're f***ing great!"

The video went viral, and the 250,000 razors sold out in a single day.

One correction to the book: Unilever bought Dollar Shave Club for $1 billion in cash in 2016. Then, in October 2023, Unilever sold a 65% stake to private-equity firm Nexus Capital Management, keeping 35%, on undisclosed terms. The video built awareness. On its own it didn't build a moat. See the Dollar Shave Club case study.

The lesson: use your hidden talents. If you can write, write. If you can make people laugh on camera, film. Combine that with a product people want and a more convenient model, and you have a winner.

Final advice for bootstrappers on razor-thin budgets

I won't pretend it's easy to launch a subscription business without much money. It isn't. But it can be done.

Don't spend a fortune on your website. Use a website builder and a free template. Your customers won't care that the site is simple if the subscription gives them what they want. In 2026 you can even build a working web app by describing it in plain English to an AI app builder, paying in credits.

Use an off-the-shelf store. If you're selling online, use Shopify or similar. You get a site that works, and a predictable monthly cost.

Do it yourself. Write the content. Film the videos. Do the back-end work. Patrick Campbell did, and you can too.

Money helps you scale. But a lack of money doesn't stop you starting.

Why product/market fit isn't permanent

This is the part of the chapter I'd underline in 2026.

Fit is a moving target. Several of the businesses in this book had strong fit and then watched it erode:

• Chegg had a huge homework-help subscription. Free AI answers made its core product a commodity, and by Q2 2026 its revenue was down 51% year on year.
• DocuSign became "the verb" for e-signature, then saw growth slow to single digits as e-signature commoditized, and built a second product to grow again.
• Peloton's 0.73% monthly churn, measured during the pandemic boom, had become 2.2% by Q4 of fiscal 2026.
• Superhuman had passionate users but ended up inside a bigger suite.

That's why I say measure at least once a year. The market doesn't stand still for your product.

2026 update: product/market fit in the AI era

Here's what I'd add to the chapter now.

Growth can be faster than ever, so check the fit underneath it. Cursor said it passed $1 billion in annualized revenue in November 2025, and Dealroom reported it had topped $4 billion by early June 2026. Lovable said its ARR was tracking towards about $600 million by the end of August 2026. Those are extraordinary pull signals. But in our research on how 2026's fastest-growing companies price, several headline "ARR" figures turned out to be run-rate revenue that included usage or hardware sales. Track contracted revenue, retention and churn, not just the run rate.

Fit without margin isn't a business. AI products carry real cost per use. Cursor was reported to have a negative gross margin of 23% for the quarter to January 2026. If every new customer costs you more to serve than they pay, strong demand makes the hole deeper. Check gross margin per customer as part of your fit test.

Pricing changes can break fit overnight. When Cursor and Replit changed what their plans included in 2025, users revolted until the companies explained, refunded and adjusted. Fit is a relationship between the product, the price and the promise.

Customers asking to pay more is the new GitHub moment. For usage-based products, a strong signal is customers buying top-ups and moving to bigger plans without being pushed.

AI can help you test, but not replace customers. You can now test an offer and price on AI-simulated personas before you talk to anyone, using tools like the Synthetic Customer Panel. It's useful for sharpening your questions. It's not a substitute for real people telling you they'd be very disappointed to lose you.

What to do next

Here's how to use this chapter:

1. Run the survey. Send the four Superhuman questions to customers who have used your product recently. Score it with the PMF Survey Scorer.
2. Segment the answers. Find the group with the highest "very disappointed" score. That's your ideal customer.
3. Split your roadmap. Half on what fans love, half on what holds back the fence-sitters who share the fans' main benefit.
4. Plot your retention curve. Does it flatten? If not, fix retention before you spend more on acquisition.
5. Repeat in three to six months, and at least once a year after that.

A final note

Are you ready to launch or grow your subscription business?

After reading the book, I hope your answer is yes.

The subscription model isn't a catch-all that works for every business. But its many variations make it versatile enough to work in far more industries than most people think. We've covered why subscription is the way to go, the models, the pricing, the moat, network effects, land and expand, growth on a shoestring, churn and, now, fit.

All that's left is to get started.

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Robert is the author of The Subscription Playbook and Feed a Starving Crowd and a Director at BPAG Accountants in Sydney. More about Robert.