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. You fall out of product-market fit. Without a VP of Product, it’s hard to keep up with customer demands. You didn’t add new marketing channels.

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.

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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.

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!

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+.

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.

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. On either a scale of 1 to 10 or a percentage basis, where is seed investment? I think that’s going to be an awesome time to invest, but I don’t think we’re quite there yet.

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.

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.

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.

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.

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.

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.

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 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).

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.

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?

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.

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.

Convert your ad traffic with personalized landing pages

Inside Intercom

From targeted search keywords to relevant ads to supporting landing pages, marketers can create tailored funnels based on what’s most important to their audiences in order to help connect the dots for future customers – and help them easily understand the value of your products. This post explains how we drove paid search traffic to these Direct Response Landing Pages pages instead of our homepage or product pages, forcing users to hunt for relevant information.

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. 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. enterprise entrepreneurship saas startup investmentReady to buy?—?do

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. pilots that can turn into a company-wide rollout in a few weeks after our investment or endless year-long pilots. Also, it helps if you add other relevant figures for the product you are selling, e.g. the number of factories, marketing spent, or the number of goods shipped per week.

How to Scale a SaaS business: 5 Growth Tips with Jason Lemkin + Algolia

SaaStr

Check out the session here: Algolia also summarized their Top 5 take-aways here , and below: Most SaaS founders start out the same way— armed with ample expertise of the technical details that go into a product and with limited experience of other aspects of scaling, such as sales.

5 Things that Kill Startups with Y Combinator

SaaStr

1 Fake product-market fit. You’re company building before product building. So why do founders believe they have market fit, even if they don’t? Raising a series of pre-product market fit. There is a common misconception that product-market fit means you’ve conceptually built what buyers want. Learn about your investors previous bad investments (this could determine your fate!). #2 5 Slow product development.

5 Pieces of Advice Entrepreneurs Never Hear. That They Need to Hear.

SaaStr

Watch it here: And only then … product-market fit. A bad VC will tell others not to invest. My top list of advice founders never hear: Slow it down if you don’t have a great co-founder. We all get excited to “get going” with a start-up.

Focus Your Board on Your MVC: Most Valuable Customer

InsightSquared

Yes, it’s important to keep renewal rates up and CAC down, but in the early stages of a new company or a new product, when you’re still working for product-market fit, these views can be myopic. Looking at lifetime value by segments, such as industry or average contract value (ACV), you get a view into where product-market fit is really generating the most value for your company. . Product Entanglement.

The Midas List Live (Video + Transcript)

SaaStr

We got started in 2008 when we first spotted this sort of new place in investing, which we called seed. We like to say we invest early, way too early or questionably legal early, and we take that plunge with the founder, very early on, and we do participate in follow on financing.

Behind the Round with SaaStr: Klue Raises $15 Million from Craft Ventures for Competitive Analysis

SaaStr

Klue , which operates an AI-based competitive analysis platform, announced a $15 million Series A investment this week. The round also saw investments from angels like Frederic Kerrest, who is the co-founder of Okta. . Tom Taulli.

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10 Learnings From Mark Suster’s “Funding In the Time of Coronavirus”

SaaStr

It’s easier just to go find a brand new investment with less overhang and fewer issues. What we do know is that overall, Q2 will be a much rougher quarter in the public markets overall than Q1. In Bear Markets, Folks Are Paid to Consolidate and Cut Costs. Can you change your positioning to the market so it reduces other costs? Mark recommends changing product marketing ASAP. He says “productivity gains are so last year.”

Growing Product and Engineering Orgs from Zero to IPO with Twitter and Redpoint Ventures

SaaStr

Nick has vast experience when it comes to B2B and B2C, which is why we asked them to share their best tips for growing product and engineering orgs from 0 to IPO. When founders are starting companies, it’s crucial to have product-market fit.

Raising Funding During COVID with Homebrew Partner Satya Patel (Video + Transcript)

SaaStr

As much as VCs spend time evaluating the markets, evaluating businesses, trying to predict the future, we don’t know any more than any of you in relation to what’s going to happen here over the next 12, 18, 24 months. It’s definitely an active market at the seed stage.

William Hsu on TenOneTen’s LA Venture Podcast

Mucker Capital

During this podcast, Will shares: Why investing in non-primary startup markets enables us to think outside of the box. As a product person, why he believes the go-to-market strategy is more important than the product, and why every great product and engineering person needs to leverage their expertise to solve for go-to-market. Is the entrepreneur listening to the market, or not?

SaaStr Podcast #355 with Homebrew Partner Satya Patel: “The PPP You Really Need for Raising Capital During a Pandemic”

SaaStr

355: Despite the global pandemic, seed investing remains hyperactive amongst VCs. Satya Patel: The other thing that VCs are doing is one very important part of their jobs, and that’s meeting companies and studying markets to figure out where they might want to invest eventually.

Marketing in a PLG Company: Insights from Plaid’s former Head of Marketing [Podcast]

OpenView Labs

When businesses are building out their product-led strategy, when and how does marketing come into play? OV Partner, Devon McDonald, sat down with Helen Min, former Head of Marketing at Plaid, live at INBOUND to discuss this question and the importance of investing in marketing (particularly product marketing) early on in a business’ journey. While Season 7 has come to a close, we’re back with a special bonus episode!

Why Product Innovation Slows After the Series A

Tomasz Tunguz

You’ve found product market fit. And then, right then, product innovation decelerates to zero. Suddenly, the product and engineering teams are bogged down. It’s time to shore up the initial infrastructure with production ready code. Second, the founder/CEO’s once singular focus on product is no longer possible. Instead of focusing 90% on product, they may have 15% or 20%. You’ve hired a team, including some managers.