Startup PMF Archetypes

The PMF Quest

Sequoia Capital released The Arc Product-Market Fit (PMF) Framework this year. I’ve added my thoughts and some extra case studies, but the original article is worth a read.

While working on Direct Atomics, my co-founder and I used to joke, “All I want for Christmas is PMF”, after all, it's the central quest for every early-stage startup.

Sequoia’s framework introduces three distinct types of customer problems and relationships that guide early decisions toward PMF.

1: Hair on Fire

Are your customers actively comparing their options? Are they being marketed to by solution providers? Is demand obvious? Competition is fierce, and speed or price alone won’t win the day. To stand out, your product must offer something so compelling that customers will break current contracts and switch. Success lies in creating a uniquely valuable experience that rises above the noise . Move fast to consolidate your advantage before competitors catch up.

To win, customers must 1) instantly grasp your difference, 2) feel compelled by it, and 3) you must move faster than the competition.

Examples of Hair on Fire

Stripe: Any online business needs to process payments. Stripe streamlined the process, making it almost invisible so businesses could focus on growth, not transaction complexities.

Zoom: Reliable communication is indispensable in business, but most tools were clunky and unreliable. Zoom simplified this necessity with a single, high-quality video solution.

AWS: For businesses, computing power was always a requirement. AWS redefined IT infrastructure as a utility, eliminating the burden of hardware ownership.

2: Hard Fact

Customers often resign themselves to persistent problems, viewing them as unchangeable. Your job is to shift that mindset —show them that what seems like an unavoidable reality can be solved. Breaking old habits is tough—customer inertia runs deep. To overcome it, your solution must be compelling and valuable enough to make change worth the effort. Start by educating the market.

To win, your product has to 1) lead to a customer awakening 2) create a new habit 3) redefine a category.

Examples of Hard Facts

Slack: Teams depended on fragmented tools like email, which felt normal but slowed productivity. Slack's seamless integration awoke teams to how inefficient their communication was, creating a new habit for real-time, organized conversations.

Airbnb: Travel needed accessible accommodations. Airbnb turned idle space into income, revealing untapped housing potential and reshaped how people view lodging—similar to how Uber redefined transportation by leveraging existing, underutilized resources.

3: Future Vision

Customers often think your product is too far ahead of its time—either because it seems impossible, like fusion energy, or because it solves problems they never knew they had, like the iPhone. The biggest challenge is disbelief. To win, you must convince them your product creates a new paradigm, often with its own ecosystem. Just like the iPhone brought the App Store, and Tesla brought self-driving, your product must shift how customers think and act.

Success requires persistence, including: 1) capital and conviction, and 2) a technical and commercial roadmap that remains adaptable to new opportunities along the way.

Lottery Tickets and Lucky Pivots

When considering the future vision category of products and companies, some might picture Jensen Huang of Nvidia, whose GPUs became the essential ‘shovels’ of the AI gold rush, or Steve Jobs of Apple, who introduced the revolutionary iPhone. Together, these visionary moves propelled Nvidia and Apple to hold the highest market caps of the S&P.

But, both these companies evolved rather unpredictably.

Nvidia was founded in 1994 to deliver 3D graphic processing- the notion that these GPUs would eventually power neural networks was not even on Nvidia’s radar. The pivot into AI happened in the 2000s when researchers started using GPUs for their parallel computing capabilities. By the time the “Attention is All You Need” paper came in 2017, Nivida already adapted GPUs to support deep learning- but this was an evolution rather than a founding vision. Their AI dominance wasn’t pre-ordained but was a product of market shifts and experimentation.

When the iPhone launched in 2007, Apple was hardly a startup valued at $100+ billion. Apple engineers, particularly Tony Fadell, mostly pushed the concept of an all-in-one device. Steve’s initial response to the idea was a courteous: “[its] the dumbest fucking idea”. The iPhone seems more like a case study for organizational openness rather than a grand visionary plan.

Success in this space isn’t impossible, but hard. Really hard. If your product falls into this category, most likely, customers aren’t looking for it.

Warpping Up

Practice is messier than theory. Product market relationships are fluid, and one company might straddle multiple paths- it’s a mistake to too narrowly identify yourself in any one. The best companies learn to reinvent themselves again and again.

On a more personal note, Sequoia claims that "the paths are not better than each other". For them only I suspect.

The key difference is perspective. Sequoia, a venture firm, can decide between 1000s of companies and allocate a portion of their portfolio to 100s. They aim for broad success over an entire portfolio. They’re looking for any route that offers a statistically higher chance of big success.

But as an individual, you don’t have the luxury of hundreds of bets spread across dozens of markets- you only get a handful in your career. The stakes are different. Choosing the right path is a lot less about broad averages.

I’d say, carefully consider where to place your bets. As you move from addressing urgent "Hair on Fire" problems to tackling "Hard Facts" and striving for a "Future Vision," luck and timing play an increasingly significant role compared to execution. Getting PMF at the end of the day is like playing a lottery- you decide how many tickets you buy. The cost of playing is your time, energy, and opportunity costs. Success hinges on execution, iteration, and messaging- it's often persistent effort until something clicks. Ideas are abundant; it's the execution that counts. Nobody is entitled to success. Too many people cling to a single losing ticket, hoping it will eventually pay off.

Criticisms

• The framework seems to be constructed retrospectively which sus-es me out about the applicability to future products/markets.
• Tailored to VC-backed startups ignoring bootstrapped companies.
• Timing is a factor outside of your control that matters more than anything here.
• Startups mostly boils down to this: delight customers and iterate as fast as you can.