Good question and suggestion, Sina.
I guess we could look at it that way, because in the Facebook example, the market was certainly “pulling the product out of the startup”, which is considered one proof of Product/Market Fit. It would be hard for anyone to argue that Facebook had not achieved escape velocity by that point.
However, the other view, (which would apply to most other startups that are not Facebook), would be that the Product/Market Fit occurs when unit economics make sense at the intended scale for the business. So if an investor’s money is needed to prop up the startup until it reaches a certain scale and finally becomes unit-profitable, then one could argue it has not hit Product/Market Fit yet.
In the days when Facebook was a startup, VC funding could come way earlier than Product/Market Fit. More recently, Series A investment more likely comes when Product/Market Fit can be proven. Although there are exceptions to this.
I think we also need to keep in the mind the difference between unit and macro profitability. If a startup spends $10 to earn a customer but then makes $2o of revenue from it, then it is unit profitable and has the makings of a good business on it’s hands. However if that same startup invests all those profits and more into R&D or marketing in order to grow the business, then it could still end up in the red at the end of the year and need the VC money to make ends meet. This is the norm for a lot of high-growth, VC backed businesses, even well after Product/Market Fit.
Pleasure chatting with you.
