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Why Most Startups Shouldn’t Focus on Product-Market Fit First

Why Most Startups Shouldn’t Focus on Product-Market Fit First

8 min read

|

15th April 2025

8 min read

|

15th April 2025

And what to do instead if you want to build something that lasts

When you walk into a bookstore, you don’t ask, “What’s the best product here?” You ask, “Where’s the section I’m looking for?”

You start with the category. Then you pick the product.

But when startups launch, many founders do the opposite. They focus only on building a great product. They chase what investors love to call “product-market fit.” And while that sounds smart, and it is important, it’s not the full picture.

Trying to find product-market fit without first defining your category is like trying to build a house with no foundation. You might frame the walls, pick the flooring, even decorate the living room, but without a strong base, the whole thing can collapse.

Let’s talk about why.

The Myth of Product-Market Fit

Product-market fit is the idea that your product solves a real need for a clear group of people. That they love it enough to use it, pay for it, and tell others about it.

Sounds like the dream, right?

But here’s the problem: if you don’t first define what market you’re in and what problem you’re solving in a fresh way, you risk fitting your product into someone else’s category — where someone else already leads.

You become the second-best solution to a problem people already think is solved.

And second place doesn’t get remembered.

Airbnb Didn’t Fit. It Created.

When Airbnb launched, people didn’t even know they needed it. No one was walking around saying, “I wish I could sleep in a stranger’s spare bedroom this weekend.”

If the founders had focused only on product-market fit, they would have failed. Because at the time, the “market” didn’t exist.

Instead, they created a new category: home-sharing. They reframed the travel experience as “live like a local,” not just “book a hotel.” Over time, that new way of thinking built trust, changed habits, and grew into a $90+ billion business.

They didn’t just fit into the market. They designed the market.

Being First to Frame, Not Just First to Build

The first ride-hailing app wasn’t Uber. The first smartphone wasn’t the iPhone. The first online bookstore wasn’t Amazon.

But these companies won because they weren’t just focused on features or user feedback. They were focused on teaching the world a new way to think.

Uber didn’t sell faster cars. It sold freedom from the frustration of taxis.

Apple didn’t sell a phone. It sold a new way to live: internet, camera, apps, all in your pocket.

Amazon didn’t sell books. It sold convenience and infinite choice.

This is what it means to build category-market fit first. Define the problem in a way only you can solve. Shape the way people think. Then deliver a product that fits that new world.

The Stats Are Clear: Category Kings Win Big

In a study of thousands of tech startups, companies that created and led their own categories took home over 70 percent of the total value in their markets.

Think of Google in search, Salesforce in cloud-based CRM, or Shopify in e-commerce infrastructure.

These companies didn’t just build great products. They educated the market. They created the mental space before they sold the solution.

That mental space, the category, is what creates loyalty, pricing power, and long-term growth.

What Happens When You Skip the Foundation

Let’s say you launch an app for meal planning. You build it based on user feedback. It’s beautiful. It’s functional.

But if you haven’t defined a new problem or framed the category, people will compare you to every other food app. They’ll say “this one’s cheaper” or “this one has more recipes.”

Now you’re competing on features or price, and that’s a race no startup can win.

Without a defined category, your product gets judged by someone else’s rules.

What To Do Instead

If you’re building something new, don’t just ask, “Is there a market for this?”

Ask these instead:

  • What problem do people have that they accept as normal?

  • Can I give this problem a name?

  • How can I change the way people talk about this problem?

  • What would make people say, “Oh, this is different”?

Then, and only then, build your product. Build it to serve the story you’ve started telling.

Because when the story is strong, the product has something to stand on.

Final Thoughts

Product-market fit is important. But it’s not the beginning. If you don’t define the market, and more importantly, your place in it, you risk becoming just another product fighting for space on the shelf. So don’t just build a solution. Build the foundation first.

Create the category. Shape the conversation. Then launch the product.
That’s how startups don’t just survive. They lead.

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Join us for a chat and let's talk about your category

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Join us for a chat and let's talk about your category