Product-market fit describes the degree to which a product satisfies the needs of a target audience. Companies with a strong product-market fit (and little competition) often have high margins because they do not need to spend time or financial resources educating or convincing the target audience that they actually need their product or service. Product market fit is less about hypothetical numbers, and more about an in-depth and tangible understanding of your customers, where they congregate and how they feel about your product or service. Achieving product market fit is crucial to escape the valley of death.