Nicolas Bustamante argues that before achieving product-market fit, AI startups must reach Model-Market Fit (MMF). This concept updates Marc Andreessen's famous framework, stating that a model's capabilities must first satisfy market demands before a product can be pulled by the market. Without MMF, even brilliant engineering fails.

Legal AI and coding assistants demonstrate this pattern. GPT-4's arrival in March 2023 unlocked the legal market, causing an explosion in startups and acquisitions. Similarly, Claude 3.5 Sonnet in June 2024 made tools like Cursor indispensable. In both cases, the market existed, but the model capability threshold was the missing prerequisite.

Conversely, fields like mathematical proof generation and high-stakes finance lack MMF. Benchmarks show a stark gap: top models achieve 87% accuracy on legal tasks but only 56% on core financial analysis. The race goes to those who achieve product-market fit once the model capability threshold is crossed.