#34 — The 4 fits you need to build a $100M+ revenue product

Why it matters: Building a $100M product isn't just about having a great idea. It requires aligning four critical components that most founders overlook.§

The big picture: Successful startups aren't just "Tugboats" pushing boulders uphill with great effort. They're "Smooth Sailers" that grow despite organizational chaos because they've aligned these four essential fits:§

1. Market Product Fit (not Product Market Fit)
2. Product Channel Fit
3. Channel Model Fit
4. Model Market Fit

Market Product Fit: Start with the problem, not the solution

Reality check: Many founders make the critical mistake of creating a solution first, then searching for a problem.§

• Define your market using: Category, Target Audience, Problems, and Motivations
• Problems and motivations are far more important than category and audience
• Market Product Fit isn't binary—it exists on a spectrum from weak to strong

How to measure it: Combine qualitative signals (NPS scores), quantitative metrics (flat retention curves, direct traffic), and intuition.§

Product Channel Fit: Your product must fit the channel

Key insight: Products are built to fit channels, not the other way around.§

• Distribution follows the power law: 70%+ of growth comes from one channel
• Each channel requires specific product attributes (quick time-to-value for virality, UGC for SEO)
• When new channels emerge, established companies often fail by trying to copy/paste their product

Channel Model Fit: Avoid the ARPU-CAC danger zone

By the numbers: Your pricing model determines which acquisition channels are viable.§

• Low ARPU products ($0-100/year) need low-CAC channels like virality or SEO
• High ARPU products ($10K+/year) can use high-CAC channels like sales teams
• The middle is the "danger zone" where most startups struggle with unit economics

Warning sign: If you're in the danger zone, you'll cobble together bits from multiple channels rather than dominating one, resulting in slower growth.§

Model Market Fit: Your market size must support your model

The equation: ARPU × Total Customers In Market × % You Can Capture ≥ $100M§

• Start with a niche market, then expand outward
• Be realistic about capture rate (10% is a good rule of thumb for SaaS)
• The more times you need to expand markets to reach $100M, the riskier your hypothesis

The bottom line: These four frameworks aren't independent—they influence each other. When one breaks, you must revisit all of them. Companies that align all four grow like "Smooth Sailers" rather than struggling "Tugboats".§