Product‑market fit—when a startup’s offering consistently sells—has become tougher to achieve in the current AI‑driven landscape. Even as many new companies post record‑fast growth, customer stickiness is not guaranteed and products can be duplicated more readily than ever before. At a TechCrunch Disrupt panel last week, Iconiq partner Anu Bharadwaj, Sapphire Ventures partner Rajeev Dham, and Superhuman Mail founder Rahul Vohra explored the emerging criteria for confirming product‑market fit.
Bharadwaj told the audience that securing pilot programs is now easier than ever because “lots of companies across the board are open to trying new things.” However, she warned that converting those pilots into full‑scale deployments is the real challenge. She observed that many founders now present revenue figures to investors without clarifying what those numbers represent. “Is it true ARR or is it run rate?” she asked, noting that the lack of definition can obscure the true health of a business.
Recent discussions on X have highlighted a trend among AI‑focused founders to inflate annualized run‑rate (ARR) numbers, sometimes by counting short‑term pilot customers as if their revenue will continue for an entire year. Bharadwaj emphasized that honesty about the quality of revenue is in a company’s long‑term interest. She said that red flags include a revenue concentration in a handful of customers or a situation where those customers could easily switch to a cheaper alternative. “Churn rate and retention are really dependent on that,” she added.
Vohra suggested that startups, especially those with consumer‑facing products, should monitor both customer engagement and dollar retention. He recommended establishing benchmarks for what constitutes good, great, and excellent performance in a given market. At Superhuman, the team tracked traditional ARR but also created an internal metric called “delighted ARR,” which measured ARR generated only by highly engaged users. According to Vohra, this metric revealed how sticky the user base was and how long customers were likely to remain. “Those users are now still users, those companies are now still customers,” he said, noting that the company focused intensely on serving that specific segment.
The panel also identified positive signals that a startup has truly found product‑market fit. Vohra advised founders to ask customers how valuable the product is and how they would feel if it disappeared, then be brutally honest when interpreting the answers. “If you’re 15 percent, 14 percent, 13 percent or below, consider a complete pivot. Take the codebase, take the team, build something entirely new. But if you’re 20 percent, you can totally optimize your way from 20 percent to 40 percent,” he explained.
Dham cautioned against conflating a bold vision with a viable business, especially at the seed stage. Bharadwaj echoed that early‑stage founders need not have product‑market fit yet; instead, investors look for a plausible thesis and the ability to adapt as circumstances shift. Dham added that he now values founders who have already pivoted multiple times, because those experiences demonstrate the willingness to make hard decisions in a rapidly changing environment.
Overall, the consensus was that product‑market fit is an ongoing target that founders must continually redefine and re‑earn. “Even at a billion in revenue, these companies are re‑earning their product‑market fit,” Dham said. “You constantly have to be innovating on products.”
This article was updated.
Dominic‑Madori Davis, senior venture reporter at TechCrunch, contributed. She can be reached at the email address listed in the byline or via encrypted Signal message at +1 646 831‑7565.