Topic
Product-Market Fit
How the best founders discovered and validated product-market fit.
What the experts say
“Significant pivots by portfolio companies (such as Discord, Nextdoor, and Uber's UberX) demonstrate why purely analytical approaches to early-stage investing cannot work.”
Acquired · 1:23:14
“Someone set up a warehouse in Vancouver, bought Trader Joe's products out of stores, and sold them internationally, discovering there is significant demand for Trader Joe's products in other countries.”
Acquired · 2:51:44
“The core question is whether the Trader Joe's concept can work to serve a larger audience beyond their current target market.”
Acquired · 2:51:44
“A key question for successful founders is how to scale from being incredibly successful to the next order of magnitude, as Facebook has repeatedly accomplished.”
Riding Unicorns · 42:35
“At Wise, the US market was launched five or six times because understanding a market requires being a person from that market.”
Riding Unicorns · 32:14
“When organic growth appears in a specific market or customer group, that signals where to concentrate all efforts and attention for the next phase of development.”
Riding Unicorns · 30:38
“Building AI products is important, but founders must focus on practical applications of those products, especially in B2B and enterprise markets which remain largely underserved.”
Riding Unicorns · 25:24
“For robotics and AI companies, it is important to focus on practical applications and ROI, especially in the B2B and enterprise sectors, rather than just building the product.”
Riding Unicorns · 24:40
“Building a working prototype with actual customers was the critical factor that convinced venture capitalists to fund their pre-seed round.”
Riding Unicorns · 18:31
“Beyond the core technology and insight, there are many other factors required to turn that technology into a valuable product and company, and venture capitalists can partner with founders on those factors.”
Acquired · 1:44:07
“A founder can extract valuable knowledge from more experienced CEOs during fundraising by asking questions about company building decisions, product-market fit discovery, and fundraising processes.”
Acquired · 1:12:43
“The Trader Joe's experience naturally lends itself to young professionals and retirees, not families with children.”
Acquired · 2:20:08
“Joe Coulter had an ability to predict the cultural future of where America was heading and then built Trader Joe's as the product for that future.”
Acquired · 1:19:12
“The rise of automobiles and refrigerators after World War II created perfect product-market fit for Seven-Eleven's convenience store model.”
Acquired · 11:59
“Enterprise readiness has become table stakes for software companies regardless of their stage.”
Acquired · 2:05:15
“Investors should consider lessons from gaming by working with demographic tailwinds and identifying real-world problems where people are motivated to pay for solutions.”
The Venture Capital Podcast · 42:37
Related episodes
Product-market fit
Product-market fit
Fit
What does that mean? Because founders chase is product market fit. Like, what should it be and how could it be changed? Product market fit is not enough to build a venture scale business, meaning, like, a 100,000,000 plus in revenue within some...
on that graph of, like, you cross over and it's like, it's strong enough with a big enough market where I'm the venture viable path. But there are companies that certainly live with very strong product market fit, but with a small market that just...
Company now is kind of growing 50% year over year at 9 figures just given product market fit. There was no margin. Sweat equity is priceless, but the amount of time and resources invested in delivering those boxes, like, was that economical? No....
If you were advising an early stage founder on that very difficult and lonely process from zero to one in search for product market fit, market fit, having done it twice so well. What would you say to them over a coffee or sitting by a fire? Well, I...
And then three, like you can start to match well, do I need a person dedicated to that pre or post journey? Right? Loom is the example where I would probably wait till post product market fit to start to carve out, like, a dedicated product growth...
what is the ideal use case to activate them on. Like, what is the thing that is, like, most relevant to them? But if you do activate on them and it's somewhat viral, like Loom, the fact that it can be used by so many people, it has such a spread...
Are the winners immediately obvious? No. But you can't affect it that much regardless. I've never worked with a company that got product market fit that wasn't wildly successful. And so that's kinda the only thing in the early days. I didn't get...
“Founder hits $100k in 3 months then does it again”
to about a 100 k in three months. Well and then we kinda did that again in, like, the next three months. That's product market fit. Product market fit. Product market fit. I called it the product...
my comparison points incorrectly where I'm, like, looking at something like cursor. That's BMF. Yeah. Tough bar. Product market fit is a spectrum. It's not a binary thing, and we do actually have very strong product market fit. I would say that the...
adopting the mindset of I kind of, like, failed one of the first tests, I would say, which is to build the product for the customer. Don't build the product and then find a customer for it. We really did just take this big massive ad platform and...
this is the metric that maps to this step. This is the metric that maps to this step. This is the metric that maps to step C. Right? And then saying, okay, where are we performing at on these metrics right now? And then you need to go through the...
No one should ever, like, say they're raising money, and so far, they've raised zero. Yes. It sounds obvious, but, like, I would advise, like, not to do that ever. No matter what, if you are raising, the round's pretty much already done. That's...
We kept a decent amount of the viral loops, but we added in more of a content motion. We layered in content and a little bit of inside sales, and then we had to change the pricing to match with that. So we raised prices in a couple areas, I think,...
of this is where the constraint is at in the system, and this is, like, where we need to focus. My last point on this is that the constraints actually tend to follow patterns depending on the type of product you're at. So very commonly with the...
You bet you touched on this product market fit point, and I wanna double down on this thread. You had a you've had a couple really interesting experiences of struggling to find product market fit with your own startup. You said you worked on it for...
grasp yet, which is that product market fit is no longer this like. We've done it. Product market fit, and we're up into the right. Now we just grow, grow, grow. Now we hire salespeople. It's gonna be great. You've written that just product market...
employees. And we had high conviction on that. But when we looked at the user base of this, we were like, oh shit, these two channels, these two growth mechanisms. Yeah. We're getting some of that mid market, but there's a huge amount of these like...
Perfect. Well, Jay, let me stop it there. I'll ask the last three quick questions that we always end on. The first one is, when did you feel like you'd found true product market fit? I think that moment where I mentioned where usage, customers were...
It's just that at a certain point that the mass market, whether it for us as enterprise or all of the prosumers in the world, you hit a top of funnel width. It needs to be wide enough where manually onboarding no longer makes sense. Awesome. Okay....
powers that you build at inception are cornered resource and the counter positioning. And so you can come indeed with some unique knowledge or perspective or with a counter position that is hard, that's like the innovator's dilemma, hard for the...
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