Nuts and bolts #4: six more delightful things about product market fit

PainkillerWe are having more delightful thoughts about product market fit once again!

We thought to revisit this topic because we really harbour the hope that young founding teams can cut out some unnecessary mistakes (or “pains”) by having a reasonable understanding from Day 1 of what it is to build an enterprise (“B2B” or “B2B2C”) business, where finding PMF is more complicated mainly because the “selling” process is more a “process” than a “sale” and requires relationship building which in turn requires understanding how large companies work, how they make decisions, how they buy, and so on.

I also have had quite a number of founders tell me they have found PMF when they haven’t; there is a misunderstanding of what is needed for PMF and so we are probably due a few more “delights” on the topic.

  1. As a young start-up, your first goal is not to deliver the product, your first goal is to search for and reach product market fit or PMF. (This is a reiteration of points #1 and #3 of the previous “delightful” piece, that PMF is a necessary condition for your startup to survive and grow and succeed, even if not a sufficient one). Delivering the P is more an internal journey, searching and discovering is more a “get out there and engage and discover” exercise that also needs to be followed by “filtering, integrating, iterating / repeating” exercise.
  2. The product won’t sell itself. In this day and age, you really shouldn’t just focus on telling me about the product. It is more than naïve thinking, it’s lazy thinking.  Don’t fall in love with the product, rather, stay focused on the problem, or indeed, on building your products to serve “customers who have their hair on fire” (or as we sometimes say, you want to find a customer need where you can offer a “painkiller” rather than a “vitamin” pill).  What is the pain point you are trying to solve, and how well are you solving it?
  3. A further point from this: you’ll need to have “graduated” or at least graduating from the innovation or incubator arm of the “customer” by the time you tell me you have found PMF.  In fact, this is likely to have happened if you have taken point #5 (about pricing) seriously.
  4. A second further point from 2 and this is one about the importance of independence, diversity and the value of people who have built companies before: if your team and your advisory board is too filled with product people or large corporates happy to keep you as part of their product innovation ecosystem (often for free), you are more likely to miss this (or lose time).
  5. You need to have developed some thinking about the pricing model and tested this thinking at least somewhat by the time you tell me you have reached PMF. If you give me a free membership of a movie goers’ club and I go and see a movieas a result, I am not sure you have found PMF. You will also have needed to do some further work to see if a potential customer would be happy to become a “member” of your movie goers’ club on an annual subscription of $Y or if they will be more than willing to shelve out $X per movie if they have been “invited” to join this exclusive club.  (The  “metrics can mislead” point #6 in my earlier “delights” is related to this point.)
  6. You therefore cannot get away from doing enterprise sales but it is a particular kind of selling.  One of the most important jobs that you the (co-)founder-CEO has is being the chief sales officer, as one of my Operating Partners is known to say often.  But the type of “selling” is different from what a VP of Sales do.  When a customer says no to your first version but tell you something else, you the founder-CEO will need to know that this is data to engage with and not to ignore.  As the veteran CEO coach Steve Blank puts it, your sales isn’t going to tell you that, as their job is to sell.  You, on the other hand, is on a search for PMF and that feedback (whether in the form of “thoughts” or even questions or even “maybe”) is the most important clue to that fitness and how to get there.   Or, more accurately put, you are the chief search-and-sales officer.

We wish you lots of learnings from that wonderfully iterative search process that is called finding PMF which is a journey!

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