What is product market fit? There may not be a standard definition.

But there shouldn’t be a debate – a drinking game needs to exist where it is required to take a shot or sip of your beverage every time you hear a VC investor say “product-market fit”.

I recently was interviewing with a large, well-funded startup as I do from time to time, just to keep a pulse on the market. The hiring manager was boasting about their startup, and how they had great product-market fit.

Out of curiosity I pressed him on what product market fit meant exactly for their company.

“Oh well, you know we are getting a bunch of really tons of inbound leads every day and people love the product!”

He pulled up their CRM and scrolled through all of the “amazing” leads they were getting from the marketing team. To be fair, there were some really good logos.

But I argue lead flow is not enough.

Having joined a SaaS startup when it had just raised its Series A, I’ve painfully learned not all lead flow is created equally.

Leads alone and people “loving” the free version of your product are not strict enough criteria to claim product market fit.

This may be an obvious statement for anyone who is from the VC or startup world, but it’s worth breaking down.

I have seen the progression of lead flow quality from when our startup first started lead capturing from website forms, to now where there exist many more lead sources, but more importantly the lead quality is improving.

So here are some observations I’ve seen through this transition on the journey to product market fit, which my now-Series B company still hasn’t quite achieved, according to our investors and CEO, but we seem to be trending closer towards.

Product market fit is a bit of a misnomer.

Perhaps this should be changed to product vertical fit. This is the reality of how we started seeing traction. It was in certain segments where our team had repeatability in terms of the pitch to a specific industry or a certain company type.

However, try not to confuse signals too early with not enough data points.

Sales people have to be able to sell into the vertical, not just the founder, otherwise you haven’t really cracked the vertical yet. It has to be repeatable.

Leads come in many flavors.

Leads can come from sales outbound, marketing (events, website forms), investor intros, and product users.

And not all should be treated similarly.

When I started as one of the first salespeople after our Series A, it took mere weeks for me to figure out our lead flow wasn’t great. We were talking to so many tiny startups who had no intention of buying, or who weren’t ready for the price point of our product.

Now, there is a deeper qualification process so not many of these come through, but sometimes there are those sneaky leads that make it to a first meeting with the account executive.

It can be a huge waste of time if you don’t set the expectation quickly with sales development reps (SDRs) to not book meetings with just anyone who comes inbound.

Tracking your lead sources and putting qualification criteria or lead scoring in place to see where the best leads come from, is a good way to start seeing the trends where marketing can put more dollars and where SDRs should spend time booking meetings.

Some technologies are just early.

Virtual reality, AI and machine learning, quantum computing all have the potential to be game changing additions to our everyday lives.

Unfortunately, it takes time for the different end markets for these technologies to mature, and get to a point where R&D investments become more common.

Product market fit will probably just take longer because your company is part of the buyer education process, and even with throwing lots of marketing dollars at the lead generation, this can take time.

Skewing more for product vertical vs market fit may also help here, because to make a sale likely requires a more consultative approach rather than transactional.

Aim for product market fit and keep iterating

Product market fit is definitely a goal, but it should really be defined specific to your company.

Rather than just throwing the word out casually, validate and explain to your investors and prospective employees what that means for your company.

It’s not necessarily a bad thing to not have product market fit, but be honest and figure out how to start running experiments to get there as an executive team (alongside your sales team please)!