Sequoia's Arc program frames product-market fit as three archetypes based on how the customer relates to the problem. In "Hair on Fire," demand is obvious and competition is fierce, so winning requires real differentiation delivered fast, shown through Wiz's agentless cloud security approach beating incumbents like Palo Alto Networks and Orca, and Rippling's unified employee database versus rivals' stitched-together tools. In "Hard Fact," customers have resigned themselves to a painful status quo, shown through Square giving away hardware to convert cash-only merchants and HubSpot coining "inbound marketing" to shift small business behavior. In "Future Vision," customers do not yet believe the paradigm is possible, illustrated by Nvidia's 30-year path from graphics chips to AI infrastructure and OpenAI's shift from nonprofit AGI research to ChatGPT. Companies (Apple is a repeated example) often move between archetypes as products mature.

Gives founders and investors shared vocabulary for diagnosing why a product is or isn't gaining traction and for setting the right operating priorities, rather than defaulting to generic "listen to your customer" advice. Useful in fundraising and strategy conversations since it helps founders explain market dynamics in concrete terms and helps investors calibrate what traction, timeline, and burn profile is normal for a given archetype.