(If you can’t see the embedded slides above, you can also download the PDF here)
A few months ago, I spoke to a group of entrepreneurs at Stanford whose seed stage companies were still struggling to get product/market fit. I wrote down a few thoughts on the topic and turned it into slides. It’s really an extended version of this essay from 2011, but incorporates some newer thinking based on stuff I’ve learned in the meantime.
Here’s some notes on the slides, to add some color:
- Traction is everything, but it’s a reflection of getting product/market fit
- You can’t get growth and traction without nailing fit first
- P/M fit is when people who know they want your product are happy with what you’re offering
- Then you’re ready to shift your focus from product to distribution and win the market
- (Woz/Steve photo) This is why 20-something year olds often build awesome new companies in Silicon Valley- they make lots of stuff, hit product/market fit, and the capital/talent comes to help them scale
- P/M fit metrics for SaaS and consumer- but it’s good to look at other comparable products and see if you’re close
- Consumer (non-commerce) P/M fit based on DAU/MAU, organic growth rates, D1 and D30 retention rates, etc.
- SaaS based on conversion rates, CPA/LTV ratio, churn rates
- And if you have P/M fit, you should email me :) I can connect you with capital/people to help scale
- These days, most startups fail because of lack of P/M fit, not technology risk
- Product/market fit is actually easy to get
- Everyone knows how to get P/M fit on a coffee cup
- There’s not too many variables in designing a cup
- However, digital products are complex and people take too much market and product risk
- Some heuristics on making P/M fit easier
- Pre-existing product category
- Large # of customers “pulling” for that product category
- Successful competition
- Clear axis of competition
- Build for yourself
- One way to P/M fit. Just clone something
- Lots of problems though- it’s uninspiring
- Playing for #2
- More balanced approach is to innovate on 20%, ideally a core thing
- What happens after hitting P/M fit?
- Summon the power of Silicon Valley!
- Throw capital and people at the problem
- Scaling distribution is about feedback loops- either with paid ads or viral loop or SEO loop
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