A repeatable strategy to get to product-market fit
An evolutionary approach to product-market fit
Hi friends,
Product market fit is the elusive golden snitch of starting a startup.
Its the thing that every successful startup has to achieve at some point.
Its hard to define, and even harder to get.
So today we’re going to discuss a repeatable and measurable strategy that you can use to get to product market fit.
Let’s get to it 🚀
What is product market fit (PMF)?
Here’s how Mark Andreessen defines product/market fit;
"The customers are buying the product just as fast as you can make it -- or usage is growing just as fast as you can add more servers. Money from customers is piling up in your company checking account. You're hiring sales and customer support staff as fast as you can." ~ Mark Andreessen
The most straightforward definition of PMF isn’t really something scientific or measurable. Its a feeling.
Yes your numbers are going to help inform this, but you have to be in tune with what is happening with your product.
When you have PMF, it should feel a little like when you are a kid and you are running downhill and you start to run a bit too fast. You know the feeling - when your legs go too fast and you aren’t sure you can stop.
When was the last time you ran like that?
Anyway, PMF feels a bit like that, because things are going almost too fast.
On the flip side, pre PMF feels like hiking uphill. Every step is a slog. And even when you might think things are going well, you might not have PMF.
A classic example of this is the story of Slack.
Slack life as a game called Glitch. After raising ~$17m from top VCs, early versions of the game had users, but not enough. Even though they had been working on the game for several years they decided to shut it down, as for them they felt it didn’t have product market fit.
When they decided to release the tool they had developed for internal communications as a product, more than 8000 people requested invitations on the first day.
Slack quickly grew to thousands of teams and a billion dollar valuation within 8 months, and without spending a penny on traditional advertising.
That’s product market fit.
A method to get to PMF
So although PMF is quite hard to define objectively, its one of those things that you know when you see it.
What we need then is a repeatable strategy to get to PMF.
I recently found a little known video from a guy called Esteban Castaño, Co-Founder & CEO at TRM Labs.
Esteban’s come up with a model based on evolution, which I think is super helpful.
Why evolution?
Evolution is the process by which organisms increase fitness - e.g. increase their likelihood of survival in their environment.
The reason this comparison is relevant is that organisms have to compete for scarce resources and have to adapt to survive. Much like a startup.
As a startup, you are in the jungle and you have to survive. You need to evolve your way to PMF.
Your first job is just to start somewhere on the map. Kind of like one of the strategy games where you start off with a dark map.
Your second job as an entrepreneur is to evolve to PMF.
Evolution has 3 ingredients:
Variation
Selection
Time
Variation means you have to try different things
Selection means that you see which ones are the best and kill the ones that aren’t working.
Time is what gives you a chance to do this cycle many times.
What we want to do is maximise each element to increase our chances of reaching PMF.
So how do we do that?
How can you increase variation?
Talk to customers - they will give you ideas for what to build.
Ship smaller MVPs - Smaller MVP allow you try more things.
Iterate on copy, not code. - Start off by writing a sales pitch. If people want what you are selling, then build it. Sell then build.
How can you increase selection?
Be humble - Have the intellectual honesty to know when nobody cares, and be prepared to kill your darlings.
Pick a metric - Choose a metric and stick with it. You need to know when you are on the right track. The right metric helps you to understand this.
Write obituaries - Every 6 months or so, try to write a couple of paragraphs on why the company died. This will help you to increase self awareness about what might kill us.
How can you increase time?
Be frugal - Keeping your burn as low as possible allows you to survive longer.
Hire slowly - “in general, hiring before you get product/market fit slows you down, and hiring after you get product market fit speeds you up.” ~ Sam Altman
Do things that don’t scale - Don’t try to over optimise from day one.
I personally found this evolutionary lens to product market fit a really helpful mental model.
If you want to watch the whole talk from Esteban, you can catch it here.
Until next time,
Jamie
Did you enjoy this edition of Exponentially?
Please take a second to help me improve!