There are four essential “fits” that matter most when you’re scaling a company. Nail these four fits, and you’re on track for rapid growth. Miss just one, and it can feel like an uphill battle.
The four fits are Market, Product, Channel, and Model.
Market Fit
Market fit focuses on your ideal customers, their biggest problem(s), their motivations to solve these issues, and how many potential customers exist. Choosing the right problem is essential: without a widespread and painful problem to solve, even a perfect product won’t gain traction because not enough people care.
Pro Tip: Start with Market Fit, then work through the other fits.
Product Fit
Product fit is about how well your product solves the problem, its unique selling proposition (USP), and why it’s different from other solutions. Market-Product fit means your product meets real needs, retains users, and proves demand over time. This is the foundational validation of your business.
Pro Tip: Product fit should be achieved one market-segment at a time. SMBs have different needs then Mid-Market customers. This is where pricing tiers come in to play to fit the needs of different market segments on the model side.
Channel Fit
Channel fit is often the hardest to master. It’s about finding a scalable way to access your target market, ensuring your product and channel are aligned for growth. Your market and model will usually dictate your channel.
For example, if you’re targeting mid-market customers with a $30,000 annual contract value, account-based marketing (ABM) might be ideal. Channels like SEO, paid search, or TikTok ads won’t be as effective in reaching high-value, mid-market customers. In essence, your market and model lead you to the right channel.
Pro Tip: Finding your target CAC is easy when you know your average annual revenue per account. Take your ARPA and times it by your gross margin. Divide that by 3 and you have your target CAC. Why? You want your CAC payback to be within 12 months for cashflow reasons so ARPA is better than LTV. LTV to CAC should be 3:1 so that's why you divide by 3. Optimize your channel until it meets this bar.
Model Fit
Model fit means aligning your pricing model with the value your customers extract from your product. A critical piece here is getting the value metric right, so your revenue grows as customers see more value.
Pro Tip: Your value-metric needs to be a proxy for the value in your product. It also needs to be something users can easily predict and understand. Ex. Shopify uses a combined value metric of staff accounts and gross merchandise value (revenue). Customers get value out of just creating their store (staff accounts), those who are succesful pay Shopify with a portion of their revenue (% of transactions). Staff accounts are predictable for ecommerce companies and % of transactions is defensible because they know they are making money before they have to pay it.
Apollo.io Four Fits
Let’s see an example of this in action with Apollo.io, a popular B2B product that helps marketers reach their target audience through a database of leads and marketing tools. Keep in mind that your four fits can vary depending on the segment you’re targeting:
1. SMB Segment (1-100 Employees)
2. Mid-Market Segment (100-1000 Employees)
3. Enterprise Segment (1000+ Employees)
What Are Your Four Fits?
Knowing your four fits can transform your approach and give you a clear path to scale. Tailor each fit to the customer level you’re targeting, and keep iterating as you grow!
Big thank you to Brian Balfour who created the Four Fits framework, I just aim to help add to it so I can make it even more useful.