Most eCommerce Founders Pick the Wrong Game
Category economics + product-market fit matter more than Meta ads, CRO, and creative
Many ecommerce brands I met over the last decade were desperately trying to solve problems with their Meta Ads, website, CRO, and so on.
They completely overlooked the fact that they didn’t have a product/market fit.
In case you are struggling with your eCommerce brand right now, I highly recommend you take some time to assess product/market fit first.
The only thing that matters - Marc Andreessen
I love this article: https://pmarchive.com/guide_to_startups_part4.html
Highlights:
💡 Product/market fit means being in a good market with a product that can satisfy that market.
You can always feel when product/market fit isn’t happening.
The customers aren’t quite getting value out of the product,
word of mouth isn’t spreading,
usage isn’t growing that fast,
press reviews are kind of “blah”,
the sales cycle takes too long,
and lots of deals never close.
And you can always feel product/market fit when it’s happening.
The customers are buying the product just as fast as you can make it—or
usage is growing just as fast as you can add more servers.
Money from customers is piling up in your company checking account.
You’re hiring sales and customer support staff as fast as you can.
Reporters are calling because they’ve heard about your hot new thing and they want to talk to you about it.
You start getting entrepreneur of the year awards from Harvard Business School.
Investment bankers are staking out your house. You could eat free for a year at Buck’s.
“… market is the most important factor in a startup’s success or failure.
Why?
In a great market—a market with lots of real potential customers—the market pulls product out of the startup. The product doesn’t need to be great; it just has to basically work. And, the market doesn’t care how good the team is, as long as the team can produce that viable product.
…
And when you have a great market, the team is remarkably easy to upgrade on the fly.Conversely, in a terrible market, you can have the best product in the world and an absolutely killer team, and it doesn’t matter—you’re going to fail. You’ll break your pick for years trying to find customers who don’t exist for your marvelous product, and your wonderful team will eventually get demoralized and quit, and your startup will die.”
Andy Rachleff, (formerly of Benchmark Capital) ‘s Law of Startup Success:
The #1 company-killer is lack of market.
Andy puts it this way:
When a great team meets a lousy market, market wins.
When a lousy team meets a great market, market wins.
When a great team meets a great market, something special happens.
From Shopify Blog & YT Channel
As usual, Shopify has guidance on this.
But most new Shopify brands would skip this, chasing the lure of the ease of getting into e‑commerce.
“Achieving product-market fit means that you have a strong value proposition, people find out about your store by word of mouth, you have a steady stream of customers and sales, and that your product solves a problem within a larger, lucrative market.”
Product-market fit is the invisible ceiling on your entire business - Sam Mendelsohn (Workspace 6)
I love the
The Fire and Gasoline Metaphor
Think of your business as a fire:
The Kernel = What creates the fire
Timing: Is the market ready now?
TAM: Are there enough buyers?
Product quality: Does it actually solve the problem?
Positioning: Are you clear about who it’s for?
Problem-solution fit: Do people feel the pain urgently?
Price-value alignment: Does the price feel right?
The Aperture = How the fire spreads
Channel fit, unit economics, offers, conversion, retention, messaging, operations, availability, data loops, and operational limits.
Diagnose Your Kernel First
Use this checklist to assess whether you have the fire, or you’re just pouring gasoline on cold wood:
The kernel — what creates the fire
[ ] Market timing: Would a real buyer care about this today? If ads paused, would anyone still look for it?
[ ] Enough buyers: Can you point to a group big enough to hit this year’s and next year’s goals?
[ ] Product works: Do customers say it actually solves the problem? Low returns. Few “didn’t help” refunds.
[ ] Clear who it’s for: Describe your best buyer in one simple sentence a friend would instantly get.
[ ] Real problem, real pull: When someone “gets it,” do they buy without a long convincing dance?
[ ] Price feels right: Do buyers say “fair” or “worth it,” not “too much” when they see the offer?
[ ] Tailwinds: Are trends this quarter helping you, not fighting you?
The aperture — how the fire spreads
[ ] Reachable customers: You know where your best buyers are and can reach them efficiently there.
[ ] Healthy unit economics: Contribution margin and payback window allow scaling without cash stress.
[ ] Smart offers and AOV: Bundles, upsells, and thresholds lift order value to fund CAC.
[ ] Smooth buying: Fast, clear, trustworthy site. Mobile checkout feels effortless.
[ ] Come back again: Customers return without heavy discounts or constant bribery.
[ ] Messages that land: Ads and content explain the “why” so clearly they convert repeatedly, not once.
[ ] Ops can keep up: Supply and fulfillment can handle a 2–3x jump without breaking.
[ ] Easy to find and buy: People remember your name and can purchase in two taps when the need hits.
[ ] Learn fast: You collect feedback weekly and ship improvements, not guesses.
[ ] No hidden ceilings: Vendor capacity, 3PL errors, or cash cycles won’t choke growth right when it works.
Real-World Patterns:
Brands That Had the Kernel
These brands scaled fast because PMF did the heavy lifting, and tactics amplified it.
True Classic (Apparel)
The Kernel: Clear daily pain point in a huge basics market.
The Spark: Strong paid-social execution and creative iteration.
Result: Widely reported hypergrowth during peak DTC years.
Lesson: Channel skill scales only when the problem-solution fit is obvious.
BREZ (Cannabis Beverages)
The Kernel: “Social buzz without alcohol” plus normalization tailwinds, inside a massive beverage TAM.
The Spark: Early channel access advantage (figuring out compliant advertising) plus operator DNA.
Result: Breakout growth and strong online buzz, scaling with a lean team.
Lesson: Timing plus unique channel access can beat perfect execution.
Feastables (Snacks)
The Kernel: Massive category TAM plus simple, mainstream positioning.
The Spark: Pre-built distribution through a creator audience.
Result: Rapid scale with strong mainstream retail traction.
Lesson: Pre-solved distribution turns a good product into a rocket ship.
Grüns (US)
The Kernel: Gummy format solves the adoption problem in supplements: people actually take it consistently.
The Spark: Operator-led growth, significant funding support, and fast expansion into major retail.
Result: Reported $500M valuation within roughly two two years and rapid placement in large retailers (Target, Walmart, Sprouts, Sam’s Club).
Lesson: When the format is trending and retail widens distribution, the aperture works because the kernel is already pulling.
IM8 (Co-founded by David Beckham + Prenetics)
The Kernel: Simplify “supplement stacking” into a single daily routine, positioned inside the longevity wave.
The Spark: Built-in distribution and trust from Beckham plus biotech credibility from Prenetics.
Result: Launched in late 2024 with multiple reports of roughly $100M-plus first-year revenue.
Lesson: Credibility plus simplification plus instant attention can create pull fast, even in a crowded category.
Huel (UK)
The Kernel: Convenience nutrition is a repeatable habit, which supports retention and subscription.
The Spark: Strong community and omnichannel execution (DTC plus retail).
Result: Reported crossing £200M revenue and expanding retail presence to 25,000-plus stores worldwide (FY ending July 2024).
Lesson: Repeat-purchase categories give you more room to compound.
Healf (UK)
The Kernel: Decision fatigue in wellness is the pain. Curation and trust are the product.
The Spark: Merchandising plus content plus personalization at scale.
Result: Reported to be on track for $100M revenue by end of 2025.
Lesson: In noisy markets, being the trusted shelf can be the kernel.
Skims (US)
The Kernel: Huge basics market with daily fit and feel pain points.
The Spark: Built-in distribution plus brand momentum turning into retail expansion.
Result: Reported $5B valuation and about $750M 2023 sales, with $1B-plus expected in 2025.
Lesson: When attention is pre-solved, execution compounds faster.
Hims & Hers (US)
The Kernel: Recurring, high-intent problems plus convenience plus subscription economics.
The Spark: Integrated platform and strong funnel economics.
Result: Reported $1.48B revenue in 2024.
Lesson: Recurring demand plus simplified access creates durable pull.
Numan (UK)
The Kernel: Preventive health model with recurring need and strong LTV dynamics.
The Spark: Funding plus scale execution and product expansion.
Result: Reported roughly $90M 2024 revenue.
Lesson: When retention is real and the platform is trusted, growth compounds.
AG1 (Athletic Greens) (US)
The Kernel: Reduces decision fatigue by turning “daily health” into one simple habit.
The Spark: Subscription-first model plus elite distribution through podcasts and creators.
Result: Reported to be expanding beyond its original single-product focus as it scales.
Lesson: Habits + subscription economics compound when the value story is simple.
Rhode (US)
The Kernel: Tight product line with high cultural pull in a massive beauty TAM.
The Spark: Founder-led distribution plus rapid retail expansion.
Result: Acquired in a reported $1B deal in 2025.
Lesson: When attention is built-in, the job is to turn it into repeatable demand.
Loop Earplugs (EU/US)
The Kernel: Clear functional product with broad daily use cases.
The Spark: Strong DTC engine, then retail expansion.
Result: Reported rapid revenue growth into nine figures, with expansion into major US retail.
Lesson: Utility products can scale fast when positioning creates a new category.
Ritual (US)
The Kernel: Trust and transparency in a skeptical supplement category.
The Spark: Brand-led differentiation plus omnichannel distribution.
Result: Reported $250M milestone and nationwide rollout into Ulta stores.
Lesson: In supplements, trust is a growth lever, not a “nice to have.”
Refy (UK)
The Kernel: Simple, repeatable daily makeup routines with a tight aesthetic.
The Spark: Creator-led distribution plus retail scale.
Result: Reported sales around £100M (forecast) heading into 2025.
Lesson: A clear visual identity makes the product easier to sell in-feed.
HexClad (US)
The Kernel: Differentiated cookware that demos well and justifies premium pricing.
The Spark: Celebrity/content engine plus heavy creative production.
Result: Continued mainstream scale with major brand collaborations and large-format campaigns.
Lesson: When the product is inherently demonstrable, content becomes the distribution moat.
Brands Grinding Without the Kernel
These are real examples where brands had strong execution, strong hype, or strong early traction - but the kernel was missing or weakened (market timing, category structure, or true differentiation).
Pattern 1: Small TAM + No Urgent Problem (the quiet killer)
What it looks like: Micro-niche positioning that serves preference more than pain.
The Grind: You can get to a few hundred thousand to low seven figures, but scaling requires ads that outgrow the market and cost structure.
Why it fails: If the category is too small or the problem is not urgent, you cannot scale profitably no matter how good your Meta, CRO, or retention is.
Reality check: These often die quietly (no big press), which is why founders underestimate how common this failure mode is.
Pattern 2: Commoditized Market + Margin Compression (execution can’t outrun structure)
Allbirds (Footwear)
Weak Kernel (in practice): Crowded category, hard-to-defend differentiation over time, and limited inherent repeatability.
The Grind: Revenue fell materially post-peak; the brand has been forced into restructuring behavior and store closures.
Why it fails: When substitutes are everywhere and margins are tight, the business becomes fragile and marketing can’t fix the unit economics.
Casper (Mattresses)
Weak Kernel (in practice): Mattress became a crowded, promo-heavy market; customer acquisition costs rose while differentiation became less durable.
The Grind: Big brand, big awareness, but profitability was persistently hard, and expectations were “tech-like” for a very non-tech category.
Why it fails: In a commodity-ish category with high CAC and heavy competition, growth stalls and economics break.
Pattern 3: Market Timing Flips (the pull disappears)
Peloton (Home fitness)
Had a Kernel, then lost the tailwind: Demand was pulled forward by a unique moment; when the world changed, the market pull weakened.
The Grind: The business faced a steep post-peak decline and a much harder competitive environment.
Why it fails: If the timing tailwind reverses, operational excellence can reduce losses, but it cannot recreate the original pull. (how it pivoted & bounced back is also a very interesting lesson!)
“But, what do I do with this assessment?”
Be honest about which scenario you’re actually in. Not which one you hope you’re in. Which one the data tells you you’re in.
Scenario 1: The kernel isn’t there.
Stop running ads. Stop optimizing your checkout. Stop A/B testing your hero image.
None of it matters yet.
You don’t have a marketing problem. You have a product-market fit problem you’re trying to solve with a media budget. The market has been telling you this. Every month where CAC climbs and organic word-of-mouth stays flat is the market speaking clearly. You’ve just been refusing to hear it.
Go back to customers. Not surveys. Real conversations.
Ask them what they were trying to solve when they bought. Ask the ones who churned why they left. Ask the ones who stayed what would make them tell a friend. That’s your research budget. It costs nothing except the willingness to hear something uncomfortable.
Scenario 2: The kernel is there, but the aperture is broken.
Now we can talk ads. Now CRO is worth your time. Now retention strategy actually compounds.
You have something the market wants. The problem is operational, not existential. That’s a solvable problem. Fix the buying experience. Sharpen the offer. Tighten the unit economics so paid traffic can scale without cash stress. The fire is real. You just need to build the right infrastructure around it.
Scenario 3: Both are working.
Move. Fast. Aggressively. With conviction.
Most founders who reach this stage hesitate because they got burned before, usually in Scenario 1 or 2 while pretending they were already here. Don’t bring that scar tissue into this moment. This is the rare window where the math works. Gasoline on burning wood doesn’t just sustain the fire. It accelerates it exponentially.
The harder truth nobody wants to say out loud
The reason founders stay in Scenario 1 longer than they should isn’t ignorance. It’s identity.
Admitting you don’t have product-market fit means admitting the thing you’ve been building might be the problem. Not the ads. Not the agency. Not the website. The thing you’ve told your family about. The thing you’ve been posting about. The thing you’ve poured real money and real months into. That thing.
That’s a psychologically brutal conclusion to reach. So instead of reaching it, founders pour more gasoline. They hire a new media buyer. They redesign the site. They test a new angle. They tell themselves they’re “still figuring out the creative.”
But the market doesn’t care about your sunk cost. It doesn’t care how good your team is. It doesn’t care how much you believe in the product. It responds to one thing: a product that solves a real problem, for people who feel that problem urgently, at a price that feels worth it.
Everything else is execution.
And execution without a kernel is just a very expensive way to learn a lesson the market was ready to teach you on day one.
The number you should calculate right now
Take everything you’ve spent on paid media, CRO, email flows, agency fees, and conversion optimization in the last 12 months.
If your organic word-of-mouth, retention, and unprompted repeat purchase rates are weak, a significant portion of that number is your PMF tax. Money spent optimizing the aperture before confirming the kernel.
For most brands I’ve worked with, that number sits somewhere between $50K and $250K.
That’s not a reason to feel bad. It’s a reason to stop paying it.
The gasoline was never your problem.
The wood was.
If you run an eCommerce brand and this landed uncomfortably close to home, that’s the signal. Start with the kernel checklist above. Do it before you authorize the next media budget.
