We were on top of the world. Or so I thought.
I remember the exact moment. We were in our tiny, cramped office in San Francisco, the kind where you can smell what your deskmate had for lunch. We had just crossed 10,000 users for our new AI-powered project management tool. The energy was electric. High-fives were flying. I remember thinking, "This is it. This is product-market fit."
I was wrong. Dangerously wrong.
That number, 10,000 users, was a vanity metric. It looked great on a slide deck, but it didn't tell the real story. It didn't tell me that most of those users were churning out after a week. It didn't tell me that the users who stayed weren't actually using the core features we had spent months building. And it certainly didn't tell me that we were about to hit a wall—hard.
I’ve been fortunate enough to have a couple of successful exits with my companies, RemoteTeam and MovieLaLa. I’ve also invested in over 200 startups, including some of the biggest names in AI like Anthropic, OpenAI, and Scale AI. I’ve seen this story play out more times than I can count. And I’ve lived it myself.
Building an AI startup is a beast. It’s not like building a simple SaaS app. The stakes are higher, the tech is more complex, and the path to true product-market fit is a minefield. I want to share the unfiltered story of how I learned this lesson the hard way.
The Seductive Illusion of Early Traction
When we first launched, we got a ton of buzz. We were featured in a few tech blogs, and the sign-ups started pouring in. We were a team of five, working 18-hour days, fueled by cheap pizza and the belief that we were building the future.
We had a "wall of love" on our website, filled with glowing testimonials from our first users. We had a hockey-stick growth chart that I would stare at for hours. We had all the external validation that told us we were on the right track.
But here’s the thing about early traction: it can be a mirage. It can be a reflection of good marketing, not a good product. It can be a sign that you’ve found a small niche of early adopters, not a scalable market.
We were so focused on the top-of-funnel numbers: the sign-ups, the press mentions, the Twitter buzz, that we ignored the more important metrics. The metrics that tell you if you have a sustainable business.
The Cracks Begin to Show
After the initial hype died down, our growth started to flatten. We were still acquiring new users, but we were losing them just as fast. Our churn rate was abysmal. We were a leaky bucket.
I remember a particularly brutal board meeting. Our investors, who had been our biggest cheerleaders, were starting to ask tough questions. "Why is your churn so high?" "Why aren't users engaging with the core features?" "What's your plan to fix this?"
I had answers, of course. I had excuses. "We just need to improve the onboarding." "We need to add more features." "We need to spend more on marketing."
But deep down, I knew there was a bigger problem. We had built a product that people were willing to try, but not one they were willing to pay for or rely on. We had built a vitamin, not a painkiller.
The "Oh Shit" Moment
The real turning point came during a customer interview. I was talking to a user who I thought was one of our biggest fans. He had been with us since the beginning, and he was always active in our community forum.
I asked him, "What's the one feature you can't live without?"
He paused for a moment, and then he said something that hit me like a punch to the gut.
"Honestly? I mostly just use it to export the data to a spreadsheet."
He was using our complex, AI-powered platform as a glorified CSV generator. He wasn’t using any of the features we had spent months building. He had found a workaround to solve his own problem, and it had nothing to do with our core value proposition.
That was my "oh shit" moment. The moment I realized we didn't have product-market fit. We had something that looked like it from a distance, but up close, it was a facade.
Redefining Product-Market Fit
That experience forced me to completely rethink what product-market fit means. It's not about vanity metrics. It's not about buzz. It's not about a "wall of love" from a handful of early adopters.
Here’s my new definition: Product-market fit is when your customers would be genuinely disappointed if your product disappeared.
It’s when they’re not just using your product, but they’re relying on it. It’s when they’re telling their friends about it, not because you’re paying them to, but because they genuinely want to help their friends.
It’s when you have a clear, undeniable pull from the market. You’re not pushing your product on people; they’re pulling it from you.
How to Know if You Really Have Product-Market Fit
So how do you know if you have it? Here are a few of the things I look for now, both in my own companies and in the startups I invest in:
- Low churn: This is the most obvious one. If people are sticking around, you’re doing something right. Anything under 5% monthly churn is a good sign.
- High engagement: Are people using your core features? Are they logging in every day? Are they spending a significant amount of time in your product?
- Organic growth: Are you getting new customers from word-of-mouth? Are people recommending your product without any incentive?
- Willingness to pay: This is the ultimate test. Are people willing to open their wallets for your product? If you’re not charging yet, would they be willing to pay if you did?
- The "disappointment" test: Ask your users, "How would you feel if you could no longer use our product?" If a significant percentage say they would be "very disappointed," you’re on the right track.
Don't Be Afraid to Start Over
After my "oh shit" moment, we had a tough decision to make. We could keep trying to patch the holes in our leaky bucket, or we could go back to the drawing board.
We chose the latter. We spent the next six months talking to our users, understanding their real problems, and building a new product from the ground up. It was a painful process. We had to let go of our egos and admit that we had been wrong.
But it was the best decision we ever made. The new product was a hit. We found true product-market fit, and we went on to build a successful company.
My advice to founders is this: don't fall in love with your own solution. Fall in love with your customer's problem. Be relentlessly focused on finding and solving a real pain point. And don't be afraid to admit when you're wrong and start over. It might be the best thing you ever do.
I want to dig deeper into some of these areas, because the devil is truly in the details.
The Siren Song of Vanity Metrics
It's easy to get addicted to vanity metrics. They are the sugar high of the startup world. Every morning, I'd wake up, grab my phone, and the first thing I'd check was our daily sign-up number. A high number would give me a rush of dopamine that would carry me through the day. A low number would send me into a spiral of anxiety.
We were celebrating the wrong things. We threw a party when we hit 10,000 users, but we didn't even have a dashboard to track our churn rate. We were so focused on the front door that we didn't notice everyone was leaving out the back.
This is a classic founder trap. You want to believe you're succeeding, so you latch onto any metric that tells you you are. But vanity metrics are like a hall of mirrors; they distort reality. They make you feel bigger and more successful than you actually are.
The Brutal Honesty of a Board Meeting
I mentioned that board meeting. Let me paint a clearer picture for you. Imagine sitting in a glass-walled conference room, overlooking the city. You've got your beautifully designed slide deck, your carefully rehearsed talking points. You're feeling confident.
And then, one of your investors, someone who you deeply respect, leans forward and says, "Sahin, I'm going to be blunt. These numbers are not good." The air goes out of the room. Your carefully constructed narrative shatters.
That's what it felt like. It was a public undressing. They weren't being mean; they were being honest. They were seeing the reality that I had been trying to ignore. They were forcing me to confront the brutal facts.
I left that meeting feeling dejected, but also with a newfound sense of clarity. The illusion had been shattered. It was time to face the music.
The Power of a Single Customer Conversation
I can't overstate the importance of talking to your customers. Not through surveys, not through analytics, but through actual, one-on-one conversations. You will learn more in a 30-minute conversation with a customer than you will in a month of staring at dashboards.
The conversation I had with the user who was only using our product to export data was a turning point for me. It was a moment of profound empathy. I saw our product through his eyes for the first time. I understood his workflow, his pain points, his goals.
And I realized that we weren't solving his problem. We were a minor convenience, a small step in his much larger workflow. We weren't essential. We were disposable.
That's a hard pill to swallow. But it's a necessary one. You have to be willing to kill your darlings. You have to be willing to throw away months of work if it's not actually solving a real problem for your customers.
The Long Road to Real Product-Market Fit
So what did we do? We went back to basics. We created a simple, one-page survey that we sent to all of our users. It had one question: "How would you feel if you could no longer use our product?" with three possible answers: "Very disappointed," "Somewhat disappointed," or "Not disappointed."
The results were sobering. Only 10% of our users said they would be "very disappointed." That was our new benchmark. We set a goal to get that number to 40%.
We started by interviewing the 10% who said they would be very disappointed. We wanted to understand what they loved about our product. What was their core use case? What was the "job to be done" that they were hiring our product for?
Then we interviewed the users who said they would be "not disappointed." We wanted to understand why they didn't care. What were their alternatives? What were we doing wrong?
Armed with these insights, we went back to the drawing board. We stripped out all the features that weren't essential. We focused on the one core use case that our most passionate users loved. We rebuilt the product from the ground up, with a relentless focus on solving that one problem better than anyone else.
It took another six months, but we finally launched the new version. And this time, the response was different. Our churn rate dropped dramatically. Our engagement numbers went through the roof. And when we sent out the survey again, over 50% of our users said they would be "very disappointed" if our product disappeared.
That's when I knew we had finally found it. We had found true product-market fit.
It's a long, hard road to get there. It's a journey filled with self-doubt, brutal feedback, and moments where you want to give up. But it's also the most rewarding journey a founder can take. Because when you finally find it, when you build a product that people truly love, there's no better feeling in the world.
Frequently Asked Questions
How can I apply this thinking to my own situation?
Start by identifying the core principle behind the opinion, not the specific example. Then ask yourself: does this principle apply to my context? If yes, test it in a small, low-risk way before going all in.
What experience informs this perspective?
This perspective comes from over a decade of building companies in Silicon Valley, two successful exits (RemoteTeam to Gusto, MovieLaLa to Gfycat), and investing in 200+ startups including Anthropic, OpenAI, and Scale AI. I write about what I've lived.
How has this view evolved over time?
My thinking on most topics has changed significantly over the years. Early in my career, I held many conventional views that experience proved wrong. I try to update my beliefs when the evidence changes.