Is Product Market Fit Getting Harder to KEEP?
How has AI changed our definitions of escape velocity?
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There are a ton of pieces written about finding product-market fit—what it feels like both quantitatively (customer retention) and qualitatively (people yanking the product out of your hands before it’s truly ready).
But what I want to talk about is keeping product-market fit.
And I don’t think I’m out of line in saying it’s gotten a hell of a lot harder.
Harry Stebbings had a great episode of 20 Minute VC, where he,
, and Rory O’Driscoll discussed companies falling in and out of PMF.Jason said that once upon a time, if you hit PMF and had a decent team, you were golden for about five years.
Around year three, you’d start incubating a new product to jump the S-curve and extend your growth runway. Add a new product. Expand to a new geo. You know the playbook.
What we’re seeing now is AI companies obliterating classic timelines—hitting $50M, $100M, even $200M in revenue within a couple of calendar years.
It looks kinda like this:
BUT… we’re also seeing companies lose PMF just as fast.
Rory noted he’s seeing companies fall in and out of PMF three times in two years. What used to be a five-year moat can vanish in five weeks.
And what really breaks my brain? A lot of these companies haven’t even been around long enough to test the physics of enterprise renewal cycles. The curve might actually look more like this:
This all got me thinking about “escape velocity.” That old triple-triple-double-double path to $100M? It used to earn you the right to become the incumbent.
But these days, it’s harder to know if someone’s really hit escape velocity—or if they just caught a tailwind.
touches on this in an excellent Clouded Judgement Piece.One thing I’ve been thinking a lot about recently (and having conversations with other investors about frequently) is the juxtaposition of:
AI companies growing faster than companies from prior cycles
AI companies will have more “false starts” than companies from prior cycles
I run a lot of road races in my spare time. And it kinda reminds me of a “false peak.”
Here’s an elevation map from one I did last year. Around mile 6.5, when you’re already gassed, you push hard to get over a massive hill… only to discover there’s another hill from mile 7 to 7.5.
You thought you were done.
You were not done.
That’s what it feels like to chase PMF in 2025. You think you’ve made it—only to discover another climb, or worse, a valley in between.
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Employment Hero is one of Australia’s top tech breakouts. We spoke to their CFO Rob Patterson. Things we covered:
Why not all revenue is “good” revenue
Going international from day one
The state of the Australian startup ecosystem
The CFO as the “Chief Reality Officer”
Vertical vs Horizontal P&L’s
I think this might be a direct consequence of financing models. Companies do not build for long term product market fit, they build to ensure the next financing round. And sometimes, in between rounds, they get various influences from advisors, VCs, etc instead of listening to/responding to the market and the target segment.
It's a subjective point of view i am writing here, but empirically it might be argued looking at the (few) successful startups coming from Europe versus the ones growing out of US. 🤔
Great article. I'm pretty sure it was Jake Saper @ Emergence Capital that introduced me to the language Phantom PMF. I agree that it's far too soon to have reliable trend lines to predict how this all sorts out but what is very clear is that we need a much tighter customer/user feedback loop to have any hope of managing the definitionally volatile innovation cycle that we have today.