Product-Market Fit in Different Capital Environments

Tomasz Tunguz

A founder recently told me he would have built his company differently in another fundraising market. In 2008, tightfistedness dominated the market. The 11 year bull market transformed that dynamic. Invest -> Grow -> IPO/M&A -> Re-invest.

When You Fall Out of Product-Market Fit

SaaStr

I’ve been investing just long enough now to see start-ups fall out of product-market fit. But I didn’t get that apps with happy customers, and some real traction, could fall out of product-market fit. One reason is low NPS and a poor product.

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Casey’s Guide to Finding Product/Market Fit

Casey Accidental

As a product leader with a background in growth, it’s surprising how much what I actually end up working on is product/market fit. So it’s important to have a strong understanding of what product/market fit looks like before investing in growth.

Quantitative Indicators of Product-Market Fit

OPEXEngine

What 14 startup investors & advisors taught us about chasing (and finding) product-market fit. It’s been a long-held notion in startup circles that lack of product-market fit will doom even the scrappiest of founders to fail. Customers start to demand your product.

From Build to Buy: The Path to Better Analytics for Your Application

Speaker: Ardeshir Ghanbarzadeh, Senior Product Marketing Manager, Logi Analytics

Making the transition from building your analytics in-house to investing in a third-party embedded solution can be complicated.Watch this webinar with Ardeshir Ghanbarzadeh, Senior Product Marketing Manager at Logi Analytics, for tips on making the transition as smooth as possible, and getting on the right path to better analytics for your app!

Can product-market fit be measured?

OPEXEngine

What 14 startup investors & advisors taught us about chasing (and finding) product-market fit. It’s been a long-held notion in startup circles that lack of product-market fit will doom even the scrappiest of founders to fail. Customers start to demand your product.

From Product-Market Fit to Product-Market-Price Fit

OpenView Labs

The researchers blame “premature scaling” as the root cause, pointing out that 70% of startups in the study scaled before they were ready and that startup founders substantially underestimate how long it takes to validate their market. It’s no wonder that the startup community obsesses over finding product-market fit. After all, product-market fit is a critical prerequisite to being able to scale in a manner that creates long-term value for shareholders.

Why Product Market Fit Isn't Enough

Brian Balfour

I’ve been lucky to have been part of building, advising, or investing in 40+ tech companies in the past 10 years. It’s Not Just Great Product The “go-to” answer for almost every question in startups, is “build a great product.” Building a great product is a piece of the puzzle, but it’s far from the full picture. There are great products that never reach $100M+. There are also terrible products by many people's definition that reach far greater than $100M+.

The importance of an effective product marketing strategy

Inside Intercom

Despite the mountain of evidence contradicting the mantra of “if you build it, they will come”, it’s still extremely prevalent among product-first companies. First, most founders don’t have a background in either sales or marketing, and even though they’re told to “ start marketing the day you start coding ”, they just don’t know where to begin, or they’re incredibly overconfident. Do they know where to go to promote their product, and how to do it once they get there?

From Product Market Fit to Scale – Perspectives from Founder & Investor (Video + Transcript)

SaaStr

Join Rene Yang Stewart, Co-Head and Principal, Vista Equity Partners, and Monica Enand, Founder and CEO, Zapproved, as they discuss growing a company from product market fit to scale. Vista Equity Partners invested in Zapproved in 2017. Most people know us for some of our largest deals, like the Markettos and the Mindbodys of the world, but we actually invest all the way down to the growth stage. Instead, every one of our investments needs to be successful.

5 Major Product Marketing Trends to Watch In 2021

OpenView Labs

The report’s authors already laid out how to get back to hyper-growth , and their article inspired me to share my predictions for 2021’s most important product marketing trends: 1. More SaaS companies will adopt product-led growth. Content marketing will drive user acquisition.

How to Justify “Non-Sexy” Product Investments

Casey Accidental

A common issue leaders in product management, design, or engineering face is justifying investment in the “non-sexy” stuff. What is not sexy can differ by company, but usually the sexy things are new products and few features. That is not the target for product/market fit.

Our Investment In Emotive

Mucker Capital

Mucker’s first meeting with Emotive happened in November of 2018, though our initial investment wouldn’t happen until 18 months later in May 2020 when we would lead their Series A.

How to Find Product/Market Fit: A Practical Guide

The Marketing & Growth Hacking Publication

One thing above all makes a successful startup: people who purchase and love the product. If you have that, it means you’ve managed to offer the market exactly what it needs or, in other words, achieved a product/market fit (PMF). What are the steps you need to take to identify your product/market fit? In this guide, we’ll answer these questions and give you a step-by-step guide on how to achieve, measure and test product/market fit.

Does your SaaS startup have product/market fit?

The Angel VC

Product/market fit is a topic that I've touched on a few times on this blog. It's that extremely crucial but somewhat hard to define (and even harder to measure) step which every startup needs to cross as it goes from an idea to a product to a real, scalable business. It's also a very important concept for us at Point Nine Capital since we tend to look for some level of proof of product/market fit when we evaluate potential investments.

Passive Investing in Venture Capital and the Parallels to Public Equities

Tomasz Tunguz

Passive venture capital investing is a relatively new idea. If the public equities market is any indication, passive investing is here to stay. In public equities, passive investment funds constitute 54% of total dollars in the market, according to Bloomberg Reseearch.

A sneak peek into Point Nine's investment thesis

The Angel VC

Over the last couple of weeks and months we spent some time putting our investment thesis on paper. The purpose of this exercise was to challenge and discuss our implicit assumptions and to get everyone on our team aligned on what kind of investments we seek. One of the things that being very clear about our investment focus helps with is getting to “no” faster. What’s important is the right founder/market fit. frontier tech investing marketplaces saas vc

Seed Investing Today: What’s Changed, What Hasn’t with Aileen Lee and Jason Lemkin (Video + Transcript)

SaaStr

What Nobody Tells You About Seed Investing with SaaStr CEO Jason Lemkin and Cowboy Ventures Founder and Partner Aileen Lee. I think it gives us a perspective that maybe we don’t get in some other places, in addition to many great investments over the years.

Ideas we'd like to invest in: Industry-specific SaaS solutions

The Angel VC

Following my post about electronic signing I'd like to describe another area that we'd like to invest in. Focusing on a specific vertical simply allows you to build a better product for the industry that you're after. Whereas a generic product needs to be the lowest common denominator for different types of customers, a vertical solution can be tailored exclusively to the needs of your specific target audience.

8 Customer Discovery Questions to Validate Product Market Fit for Your Startup

Tomasz Tunguz

Customer knowledge, both qualitative and quantitative, informed product development, and that research became a key part of AdSense’s success. During a typical diligence process, we will interview customers and might ask them questions like these: How did you hear about the product? What process did you use to pick this product over the competition? Why did you choose this product? Which teams in the company use the product, and how has that changed over time?

How Much Should A SaaS Startup Invest in Sales & Marketing?

Tomasz Tunguz

How much should a SaaS startup invest in sales and marketing at different stages of the business? Sales and marketing investment depends on many different factors including establishing product market fit, the business’s sales model (inside, field, freemium), and not least, cash balance and fundraising capacity. The chart above shows the sales and marketing investment of publicly traded software companies at different revenue levels.

Why Your Startup Doesn't Invest Sufficiently in its Differentiators

Tomasz Tunguz

There are three types of product features, a seasoned head of product told me recently. MMRs are minimum market requirements; basic features that every customer expects and demands. As a product manager, I’d never thought about this type of roadmap segmentation before. When a startup has established product market fit, the differentiator is clear. It is the reason customers prefer the product to alternatives.

WTF is PMF? (part 2 of 2)

The Angel VC

In the first part of this post , I looked at what some of the most knowledgeable people in the industry said about Product/Market Fit (PMF) and how they try to define and measure it. Here’s my favorite definition of PMF, inspired by many of the people mentioned in the first part of the post: Product/Market Fit means having a product that solves a problem for a significant number of independent customers. pmf product/market fit saas

What do growth investors look for?

SaaStock

Jos White, General Partner at Notion Capital , moderates the panel featuring Nicola McClafferty, Investment Director at Draper Esprit, Michael Brown, General Partner at Battery Ventures, and Tom Mendoza, Venture Investor at EQT Ventures. How they make decisions and what they see as the key drivers of a high-quality growth round tends to be different at this stage where they expect millions in ARR, a solid product-market fit and an international outlook.

How to nail your product market fit and sales pitch with a value proposition diagram

Tomasz Tunguz

Products aren’t sold in isolation - they exist within ecosystems. Great product market fit and sales pitches hinge on understanding and serving all the members of an ecosystem. Should a product fail to meet the needs of any one member, company success and sales velocity will falter. I’ll walk through three examples of the VPD: Google AdSense, Expensify and Axial Market. Grey arrows represent product pull and green arrows signify revenue flows.

Thoughts on innovation

Inside Intercom

Like any company, we want to create new and better products that solve important customer problems – but how do our values of moving fast and starting small foster a culture of innovation? You can have an innovative go-to-market strategy. The importance of product-market fit.

5 strategies to drive your next wave of growth

Inside Intercom

It might be to launch a new product, to define a new category or to hit $1M in revenue. You hit your goal – you launched that new product, defined that new category, hit $1M in revenue. Over the years, I’ve learned a lot through both successes and failures, and these are my top 5 strategies in scaling SaaS businesses from $1M to $500M in revenue: Expand your market. Figure out how your product can solve the problem you originally solved, but for a broader set of customers.

The 8th DO for SaaS startups - Stay on top of your KPIs

The Angel VC

I’ve tried to illustrate this in the following diagram: (click image for larger version) As you can see, I segmented the company lifecycle into three major phases: pre product/market fit, post product/market fit but pre-scale, and post-scale (being fully aware that there is no distinct definition of “product/market fit” and “scale” and that the transition from one phase to the next one is a gradual one).

The Beginner’s Guide to Product Operations

SmartKarrot

Needless to say, in a market filled with cloud-based SaaS solutions, the demand for product operation becomes apparent. Product operation is a key aspect of product management. In today’s market, having a competitive product is key to success.

The 7th DO for SaaS startups – Build a repeatable, profitable sales process

The Angel VC

7th DO for SaaS startups Build a repeatable, profitable sales process Sales is a very different animal depending on the stage of your company, the market segment you're going after and on whether we're talking about inbound sales or outbound sales. If you need a field sales force to sell your product, assume that your ARPA needs to be at least $3000 per customer per month if not higher (enterprise sales).

Ready to buy?—?do your early customers have what it takes?

Point Nine Land

link] From working with and talking to many founders who are selling to large enterprises, I have the impression that it can be challenging to assess if their early customers are “invested” into their relationship and ready to buy. enterprise entrepreneurship saas startup investment

Ready to buy?—?do your early customers have what it takes?

Point Nine Land

My colleague Christoph summarized in this post already which criteria we’re looking at when we try to assess the degree of product-market-fit of an (Enterprise) SaaS company. Or the company is planning to stop production, so your project probably has low chances of success.

What we learned moving sales and product upmarket together

Inside Intercom

As Intercom’s customer base moved upmarket, it became increasingly obvious to us in Sales that what worked well in our product for early-stage startups didn’t for larger companies. To fix it, we had to change how we worked with our product team. We created our first sales function in 2014 and in the busyness of building out the team, we had little time to reflect on how our experiences on the frontline of sales could add value to our product roadmap.

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Startup marketing: strategies for year one

Inside Intercom

Looking back, I didn’t see these activities as marketing with a capital M, but they absolutely were. and the answer I give is always the same: the same place we found the time for writing code, designing our product, raising capital, etc. In the very early days of Intercom the marketing hat fell on my head, but I’d be doing marketing a disservice (and 2011 Des a disservice) if I said that’s what I thought I was doing. Choosing a tactic for your addressable market.

Four (more) things we look for in SaaS startups

The Angel VC

Since then we've looked at hundreds of SaaS startups and have gained additional insights through the work that we've been doing with the SaaS startups that we have invested in. In the original post I focused primarily on early metrics as an indicator of product/market fit and of a favorable CAC/CLTV ratio in the future. You may have a fantastic solution for a big problem, but if no one is looking for it, marketing it will be much harder.

HubSpot’s Kieran Flanagan on product-led growth

Inside Intercom

That doesn’t mean his team overlooks traditional approaches; rather, they’re deploying a blend of tactics to create products with true, measurable value so powerful that it wows users and drives growth. Though he’s now HubSpot’s VP of Marketing and Growth, Kieran has seen it all. From there, he created HubSpot’s freemium, go-to-market product, before moving into his current role. In a sales-led model, a salesperson needs to pitch the product.

The Minimum Size Seed Round to Maximize Series A Follow On Investment

Tomasz Tunguz

They may also require less dilution because of the smaller investment size. Using Crunchbase data from 2005 to 2012, I’ve plotted the follow-on rates by size of seed investment quintiles across 2906 companies in that period. First, founders with larger seed rounds benefit from more time to establish product market fit. How large of a seed round should founders raise to maximize their chances of raising a Series A?