Author: Jason Rosenthal, a16z
Compiled by: Yuliya, PANews
Editor's Note: Product-Market Fit (PMF) determines the life or death of crypto startups. In the current market environment, blind capital expansion and unstrategic airdrops can no longer mask the lack of PMF. This article summarizes the three most effective PMF models in the crypto space. The original article is below:
Product-market fit (PMF) is one of the most important factors determining a company's survival. If you find the right fit, you have a chance to succeed; if you find the wrong fit, nothing can save you.
In the current market environment, more capital investment does not guarantee success; on the contrary, it may lead companies further down the wrong path. Many companies rely on growth hacking and constant airdrops, strategies disconnected from genuine market strategy and an escape from the lack of product-market fit (PMF). In fact, some of the elements that make cryptocurrencies so powerful, such as tokens and network effects, may also mislead companies in their search for product-market fit.
The good news is that with the emergence of killer applications like stablecoins and wider adoption in traditional finance (TradFi) and other consumer sectors, strong teams in the crypto industry are finding Product-Market Fit (PMF) more quickly. This trend provides important insights for teams in the early stages of PMF or undergoing transformation. Currently, three effective models are at work and worth watching.
Model 1: Partner with high-end clients to create products they need.
In your field, identify the most knowledgeable and capable potential clients, and work with them to refine your product. Make your product exactly what they want.
While this approach is slower than developing in isolation and launching a product directly to the public, if your first customer handles trillions of dollars daily and is willing to use your product, that's far more valuable than making headlines, generating massive TVL (Total Value Link), or attracting countless retail viewers. The precise definition of product-market fit is when your product resonates with a broad customer base, and these flagship customers are the best indicator of product acceptance.
The frequent collaborations between crypto startups and traditional financial giants to launch new products indicate what? It suggests that these large institutions are now making the decisions on product development. Blockchain is quietly taking over the global financial infrastructure.
Model Two: Finding an exponential growth curve and seizing the initiative
Sometimes Product-Market Fit (PMF) comes from better serving the existing market. Other times, it comes from seeing the market's development direction before it is fully understood and positioning oneself early to gain a significant position.
AI agents are rapidly transforming into autonomous economic participants, capable of invoking APIs, deploying capital, and executing transactions at machine speed. The assumption of human intervention is crumbling faster than anticipated, meaning that AI's role in finance and business is constantly expanding, gradually replacing traditional human decision-making models.
Take agency commerce as an example. Merit Systems CEO Sam Ragsdale and founder Ryan Sproule recognized this early on and are building AgentCash on top of x402. AgentCash allows AI agents to pay API access fees using cryptocurrency, providing the infrastructure for a programmatic trading world where billing is not handled by humans.
Payment is key for agents to become actors rather than mere assistants. Whoever builds this infrastructure will own the fundamental components of the future agent economy.
Model 3: First, become your most loyal first customer.
Infrastructure companies that truly survive in the long run never wait for external developers to validate their technology. They first develop applications on their own platforms, demonstrating through concrete actions that their infrastructure is worth using.
Amazon pioneered this model and applied it to Amazon Web Services (AWS). Instead of initially marketing AWS to startups, they built the necessary infrastructure for their own e-commerce business, validated it on a large scale, and then gradually opened it up to other companies.
Currently, Alex, founder of ZKsync and CEO of Matter Labs, is employing a similar strategy. Instead of selling Prividium as an abstract enterprise product, he anchored it to a specific application: tokenized deposits. The resulting Cari Network enabled regional U.S. banks, including Huntington Bancshares, First Horizon, M&T Bank, KeyCorp, and Old National Bancorp, to instantly transfer customer deposits between institutions via blockchain technology, with these funds never leaving the regulated banking system. ZKsync not only built the blockchain infrastructure but also personally developed a killer app.
Three modes, one fundamental truth: the fastest path to PMF (Productivity, Favorability, and Compatibility) is not groping in the dark through iterations, but rather choosing the right game and playing it with unwavering conviction before others join in.
Build relationships with clients whose validation yields a compounding effect. Seize the early advantage before consensus is reached. Become your own first and best client.
Choose the one that suits your product, and then take action.
