Model-Market Fit: Does the Math Reach $100M?

The fourth fit is arithmetic. Your business model has to fit the size and shape of your market. Balfour's threshold equation: ARPU times the total customers in your market times the percentage you can realistically capture must be at least $100M (or whatever your goal is).

This exposes quiet contradictions. A $10-per-month product aimed at a niche of 50,000 potential customers cannot become a big company no matter how good the product is. Either the ARPU must rise, the market must widen, or the ambition must shrink.

HubSpot again: mid-market companies numbered in the hundreds of thousands, and an ARPU in the high hundreds per month made the equation clear to $100M. The model matched the market. When they later wanted a second act, they launched a new fit system (freemium, low-touch products) rather than stretching the old one.