I wonder if there are any counterexamples, where we can say that there is strong product-market fit without an immediate tsunami of demand.
What about the case where purchases tend to be large but infrequent or consist of long-term contracts? In that case, wouldn't you be able to say that you've identified product-market fit at some point earlier than when the actual purchases are made?
The other end of the spectrum is enterprise software. In between you have self-service SaaS, premium consumer, and freemium consumer products. Each of these has very different requirements for what traction look like, all of it significantly less a pure ad-driven monetization like Twitch.
The other dimension is how big you need to be to be considered successful. VCs need massive scale, and the bigger you grow the harder it is to maintain momentum, so it's gotta look really juicy at early stage to justify the growth. YC is not a VC, but as the premier incubator that feeds into the SV VC ecosystem they definitely have that lens.
That does not mean a successful business requires product-market fit. Weak market demand can still provide a great business and strong market demand is not a guarantee of business success.
One can always play the game of semantics, of course.
On the flip side, as a farmer, I have found what is essentially perfect market fit. Nearly every person on earth wants what I produce. The problem for my business is that the supply is also huge, so I can't charge much. Often I lose money. It's a living for me, but not the greatest business or something investors are going to be throwing money at.
Farmers have great product market fit. They sell a commodity and have little/no pricing power and thus earn pretty low returns on capital.
Product market fit is one thing. Market size is another. Frequency of purchase is another. Competitive advantage is another. Building a big successful business requires getting many things right, not just getting product market fit. The reason folks at YC (and others) harp on about product market fit is that they seem to see a lot of companies trying to grow before they have it - which is crazy. It doesn't mean product market fit is the only thing.
Not by the formal definition of having strong demand. The demand for Ferraris is weak, but the equally restricted supply allows Ferrari profitability anyway.
The demand for food is exceptionally strong, but the vast supply makes profitability very difficult.
> Product market fit is one thing. Market size is another. Frequency of purchase is another. Competitive advantage is another.
They are separate things, but all come together to make up what we call demand. Product market fit hinges on demand, not those variables alone.
The microeconomics definition would state that the "quantity demanded" at price X is Y. Again, "weak" doesn't mean anything in that field.
Nope, they don't all come together to make up "demand", and there is no "we" because your definition isn't what's used by the business or economics community. Those things come together to decide the size and profitability of a business. Demand is just one part. Competitive positioning is almost strictly a supply side issue. For example, there is more demand for corn than there is for coca cola, yet Coke makes a fortune and corn farmers do not. Coke has built a brand and large distribution channels - both which have large fixed cost components and hence require enormous scale. The result is a small number of soda suppliers and only 2 cola suppliers in most markets. Supply side issue.
Me neither since I didn't.
> In microeconomics...
I can find no evidence that product-market fit came out of microeconomics, so I am not entirely clear on the relevance of that. Context is relevant. This seems like us having a conversation about how a pointer on a computer (you know, the arrow thing) interacts with a UI with someone chiming in to say, "In computer science a pointer stores a location in memory."
> Again, "weak" doesn't mean anything in that field.
I'm inclined to agree within the new context you have provided, but that does not mean "weak demand" is without meaning. In fact, it is a term used relatively frequently, including in respected publications.
"Not by the formal definition of having strong demand" - didn't you say that? I see it there, under your name.
I am not sure how that relates to a formal definition of demand?
I thought you were saying there is a formal definition of strong demand. Ie, there is a formal definition of demand, and a definition of "strong" in that context and thus a formal definition of strong demand. What you were saying is the definition of product market fit is having strong demand.