VCs, Superhuman Mail founder share red flags about product-market fit

The Product-Market Fit Mirage

In the crypto and AI space, we are addicted to vanity metrics. We love talking about total value locked, daily active addresses, or the number of API calls our new LLM wrapper is handling. But if you talk to people who have actually built sustainable companies—people like Rahul Vohra or the partners at Iconiq and Sapphire—they will tell you that most of those numbers are noise. They are the primary symptoms of a founder who is hallucinating product-market fit (PMF) rather than achieving it.

We have entered an era where building is easier than ever, but finding a reason for your product to exist is getting harder. If you are a builder, you need to stop looking at your dashboard for a second and look at the hard truth: most products are just features looking for a home, and most founders are ignoring the red flags that say their business is about to stall.

The First Red Flag: The 'Nice to Have' Trap

Vohra, who turned email—a forty-year-old technology—into a premium subscription service with Superhuman, often talks about the 'very disappointed' metric. If you ask your users how they would feel if they could no longer use your product, and less than 40% say they would be 'very disappointed,' you don't have PMF. You have a hobby.

In AI specifically, we see this everywhere. Founders build tools that save five minutes of work but require ten minutes of setup. The VCs from Iconiq point out that if your customers aren't screaming when the service goes down, you haven't solved a real problem. Real PMF feels like a pull from the market. If you are pushing your product uphill every single day just to keep your churn from spiking, the market is telling you something you don't want to hear.

The Founder's Ego and the Feedback Loop

One of the biggest red flags discussed by Sapphire Ventures is the 'echo chamber' effect. Founders often surround themselves with early adopters who are tech-enthusiasts, not problem-solvers. These early users will give you great feedback because they love new toys, but they won't pay for them long-term. They are 'false positives.'

For those of us in the builder community, the ego is our greatest enemy. We want to believe the vision is right and the users are just 'too early' to get it. But Vohra’s approach is different. He suggests segmenting your users. If you have a group that loves you, find out exactly who they are and double down on them. If the rest of the market doesn't care, stop trying to convince them. A common mistake is trying to build more features to win over the people who don't like your product, instead of perfecting the product for the people who already do.

Metrics That Actually Matter

Forget the hype cycles. If you want to know if you're actually building something that matters, look at these three things:

• Retention Curves: Does the line eventually go flat? If your retention curve keeps dropping toward zero, your product is a leaky bucket. No amount of VC money or AI hype will fix a bucket with no bottom.
• Organic Growth: Are people telling their friends? In the crypto world, we use 'airdrop' incentives to fake growth. If you have to pay people to use your protocol, you haven't found PMF; you've found a way to distribute subsidies.
• The Replacement Cost: How much effort would it take for your customer to switch back to their old way of doing things? If the answer is 'not much,' your moat is nonexistent.

The Danger of Scaling Too Early

The VCs are clear on this: the biggest killer of startups is scaling before you have PMF. It's the 'red flag' of burning cash to solve a product problem. When you raise a big round, the pressure to hire and spend on marketing is immense. But if your core product hasn't hit that 40% disappointment threshold, hiring a sales team just accelerates your failure.

For builders, this means staying lean longer than you think you should. It means being honest about why people are leaving. If you are building in AI, don't get distracted by the next model release. Focus on the workflow. PMF is found in the boring parts of a user’s day, not in the flashy demos.

A Founder’s Hard Truth

We need to stop treating PMF like a destination you reach and then stay at forever. The market moves. Competitors arrive. Your users’ needs evolve. Superhuman didn't just 'find' fit and stop; they constantly measure it. If your metrics start to dip, it’s not always a marketing problem. Often, it's a signal that the market has shifted and your product is no longer the best solution for the current problem.

Finding product-market fit isn't about the beauty of your code or the complexity of your stack. It is about the visceral reaction of a user who finally found a solution to a pain they’ve had for years.

If you don't feel that pull, stop building features and start talking to your users. The red flags are usually right in front of us; we just choose to call them 'growth opportunities' instead of admitting the product isn't working yet.

The Takeaway for Builders

The lesson from Vohra and the VC community is simple: be ruthless with your own data. Don't fall in love with your solution; fall in love with the problem. If the 'very disappointed' number is low, pivot or narrow your focus until that number climbs. Building something nobody wants is the most expensive mistake you can make, no matter how much AI or blockchain you sprinkle on top of it.

Read the original at TechCrunch Startups →