Focus ... the early days
There is a lot that goes into building and growing a startup. Founders often struggle with what to focus on - especially in the early days. There are so many moving parts and you have to wear multiple hats; looking for investors, hiring, product, customers, cash flow, and more. This can feel overwhelming. And it’s hard to be good at doing many things at once.
Obsess about product market fit from day one
Product/market fit should be your primary focus in the early days. As founders, it is both the hefty hurdle we need to overcome and the never-ending fear that keeps us up at night. While we know the importance of product/market fit, there really isn't a clear definition of what it is and how to know when you’ve achieved it.
What is product market fit?
I tend to gravitate towards a few classic definitions. Paul Graham - Y combinator co-founder - describes product/market fit as when you’ve made something that people want, while Sam Altman sees it as when users spontaneously tell other people to use your product.
One of my favorite, and probably the most cited, description comes from Marc Andreessen:
“You can always feel when product/market fit is not happening. The customers aren't quite getting value out of the product, word of mouth isn't spreading, usage isn't growing that fast, press reviews are kind of ‘blah,’ the sales cycle takes too long, and lots of deals never close.
And you can always feel product/market fit when it is happening. 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. Reporters are calling because they've heard about your hot new thing and they want to talk to you about it. You start getting entrepreneur of the year awards from Harvard Business School. Investment bankers are staking out your house.”
- Marc Andreessen, 2007 blog post
How can your startup achieve product/market fit?
Product is the core of your startup. Whatever you offer - whether it is software / digital, hardware, or a service. It’s the reason your startup exists.
Market is your customers, the people who purchase or use your product.
The hard part is the “fit” between your product and your customers (market).
Do you know the problem you’re solving?
Most great products start with a problem you are trying to solve and a vision of what the future would look like with your product. The most important thing about building great products is designing the product around the user. Everything from how the product is priced, to how it is delivered, and how the user will interact with it. Great product ideas come from understanding the user’s journey and problems from their perspective. Finding the gaps in the current solutions and innovating useful alternatives that customers will purchase / use.
Be “customer-centric”
One of the more unscalable things founders have to do in the early days is to recruit potential users to provide feedback on their ideas. You can't wait for users to come to you. You have to go out and find them. It’s something we did and still do at Lapis. You have to meet your users/customers where there are - cold calls, events, Facebook groups. Steve Blank’s famous saying on the key to startup success is “get out of the building”.
A few examples of this are Stripe and Airbnb. Stripe co-founders spent time interviewing developers and business owners (i.e their target market) . They would talk about their product and if the person expressed interest, they would sign them up on the spot.
Airbnb founders did something similar. They found that New York City was the market most receptive to their ideas, so they spent time traveling from San Francisco to New York and talking to potential hosts and guests. All of this helped build the initial momentum for the products as they developed a really good understanding of their users and were able to implement any feedback quickly.
Delight is another trait of a great product
You should take extraordinary measures not just to acquire users, but also to make them happy. A lot of e-commerce companies tend to be really good at this. In one of my first e-commerce companies I worked at, Alora, we would send handwritten notes to our first customers. While this sounds like a small gesture - our customers truly appreciated and felt a personal connection to the company. Your first users should feel that signing up with you was one of the best choices they ever made. And you in turn should be racking your brains to think of new ways to delight them
Paul Graham summarizes this quite eloquently
“You don’t have to provide users with a perfect product, but you can and should give users an insanely great experience with an early, incomplete, buggy product, if you make up the difference with attentiveness.”
It doesn’t matter if there aren’t many users at first. As long as you can find just one user who really needs something, and can act on that need, you've got a toehold towards making something other people want, and that's often what a startup needs in the early days
How do you measure if you are achieving product/fit?
Rahul Vohra, co-founder of Superhuman (one of the fastest growing startups in Silicon Valley), has four great questions that I have found to be incredibly helpful:
How would you feel if you could no longer use my startup product?
Very disappointed
Somewhat disappointed
Not disappointed
What type of people do you think would most benefit from my startup?
What is the main benefit you receive from my startup?
How can we improve startup for you?
I will dive further into each of these questions and how we use them at Lapis in a later blog post.
Let me know your thoughts on product/market fit in the comments.
Talk soon!
Peter Njongwe
Co-Founder, Lapis Health