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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, Jason M. Lemkin 🦄, 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.
Looking for Leverage
We launched a newsletter written for the private equity operator. I’m talking about the C-Suite who’s scaling a healthy company in a PE environment, navigating constraints and searching for margins.
Looking for Leverage is FREE and drops 1x a week on Wednesdays.
Topics in Looking for Leverage that you’ll dig:
Run the Numbers
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
