What is Product-Market Fit? — UK Software Development Guide
Direct Answer
Product-market fit (PMF) is the degree to which a product satisfies a strong market demand. Sean Ellis defined achieving PMF as when at least 40% of users would be "very disappointed" if the product went away. Marc Andreessen, who coined the term, described it as "being in a good market with a product that can satisfy that market." PMF is what startups are searching for before scaling.
Product-market-fit in the UK
Product-market fit is central to UK startup and investor culture. UK investors (Seedcamp, Backed, Episode 1, Balderton Capital) consistently cite PMF evidence as the most important Series A criterion. UK MVP builds (£12,000–£65,000) from ClickMasters are designed to generate PMF evidence efficiently — real users, real usage data, real retention metrics. Innovate UK Smart Grant applications benefit from early PMF evidence: "letters of support from potential customers" and "evidence of market demand" are specific assessment criteria. Common UK PMF metrics: Net Revenue Retention above 100% (expansion revenue), DAU/MAU ratio above 40%, and churn below 5% monthly.
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