What’s the best way to know if you have product market fit?

Sean Ellis (CEO at GrowthHackers)
Using Survey.io

Here’s an objective metric that removes emotion from the scaling decision while also giving you other important qualitative information. The key question on the survey is: How would you feel if you could no longer use [product]? Very disappointed, Somewhat disappointed, Not disappointed (it isn’t really that useful), N/A – I no longer use [product]. If you find that over 40% of your users are saying that they would be “very disappointed” without … (read more)

What’s the best way to find product market fit?

Sean Ellis (CEO at GrowthHackers)
Figuring Out Your Way to Startup Success

With each new startup, I immediately started working to uncover the “must have” experience before I formed preconceptions about how and why a product would be useful. This involved a rigorous process for identifying the most passionate users and then getting their unstructured feedback about how they were getting value.

What’s the best way to raise money?

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The Role Of Personal Chemistry In Investment Selection – AVC

There are four phases to this process. The first impression, Subsequent meetings, Reference checking, The negotiation

Paul Graham (Co-Founder & Partner at Y Combinator)
The Hacker’s Guide to Investors

Investors always say what they really care about is the team. Actually what they care most about is your traffic, then what other investors think, then the team. If you don’t yet have any traffic, they fall back on number 2, what other investors think.

Paul Graham (Co-Founder & Partner at Y Combinator)
Default Alive or Default Dead?

If you have steep revenue growth, say over 6x a year, you can start to count on investors being interested even if you’re not profitable

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
College and Entrepreneurship – AVC

I believe 21 founders out of a total of 72 that we have backed in the history of USV did not graduate from college. That’s about 30%.
However, I believe 17 founders have advanced degrees, including a few PhDs. So roughly a quarter of the founders we’ve backed have invested heavily in their higher education.
There are no specific credentials required to get funded by USV or most other VC firms. You need to be credible as an entrepreneur. That me… (read more)

Bruce Gibney (Former Partner @ Founders Fund)
Peter Thiel’s CS183: Startup – Class 8 Notes Essay

There’s a romantic notion that the only thing that matters is product and that you can devote yourself to that entirely. That is false. In fact, fully half of your job is selling the company because the CEO is the only one who can actually pitch effectively (no VC wants to be pitched by the VP of Sales).

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
What Seed Financing Is For – AVC

The first step you need to climb is building a product, getting it into the market, and finding product market fit. I think that’s what seed financing should be used for. The second step you need to climb is to hire a small team that can help you operate and grow the business you have now birthed by virtue of finding product market fit. That is what Series A money is for.
The third step you need to climb is to scale that team and ramp revenues a… (read more)

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
In Between: The Tough Place To Be – AVC

Entrepreneurs need to understand this. There are a ton of options out there for early stage funding. And if you get to the stage where you need a growth round from a big fund, there are plenty of options for that too. But if you are looking for a Series B round to help you grow from early revenue status to true growth status, you are going to find that challenging.
To put it another way, there are plenty of us who fund hopes and dreams. And plen… (read more)

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Revenue Based Financing – AVC

A revenue-based finance (RBF) investment provides capital to a business by “selling” an ongoing percentage of a company’s future revenues to the investor. For simplicity, you can think of it as a revenue share type of arrangement. Investor gives capital to company in exchange for a small percentage of gross revenues. RBF lives as a hybrid of bank debt and venture capital. This kind of financing has been around for a while in non-tech industries … (read more)

Paul Graham (Co-Founder & Partner at Y Combinator)
How to Raise Money

If you have multiple founders, pick one to handle fundraising so the other(s) can keep working on the company. And since the danger of fundraising is not the time taken up by the actual meetings but that it becomes the top idea in your mind, the founder who handles fundraising should make a conscious effort to insulate the other founder(s) from the details of the process. The founder who handles fundraising should be the CEO, who should in turn b… (read more)

Paul Graham (Co-Founder & Partner at Y Combinator)
How to Raise Money

Most companies in a position to grow rapidly find that (a) taking outside money helps them grow faster, and (b) their growth potential makes it easy to attract such money. It’s so common for both (a) and (b) to be true of a successful startup that practically all do raise outside money. But there may be cases where a startup either wouldn’t want to grow faster, or outside money wouldn’t help them to, and if you’re one of them, don’t raise money.

Paul Graham (Co-Founder & Partner at Y Combinator)
How to Raise Money

Because fundraising is so distracting, a startup should either be in fundraising mode or not. And when you do decide to raise money, you should focus your whole attention on it so you can get it done quickly and get back to work.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The Other Benefit Of Fundraising – AVC

Treat your fundraising process as two things. First and foremost, it is about getting the capital you need to operate and grow your business. But it is also a fact finding mission about the things you need to address to make your business better. Don’t forget to do the second thing because it is a fantastic opportunity to improve your business for the long haul.

Henry Ward (Founder & CEO at eShares)
eShares Series A — Medium

And below is five lessons learned (especially for fin-tech startups). Fundraising is a filtering exercise, not a popularity contest. If you are a fintech startup, go East! Ask for feedback other than “the market size isn’t big enough.” Avoid VCs who ask for unit economics. Success is harder than failure.

Paul Graham (Co-Founder & Partner at Y Combinator)
Before the Startup

There are tricks in startups, as there are in any domain, but they are an order of magnitude less important than solving the real problem. A founder who knows nothing about fundraising but has made something users love will have an easier time raising money than one who knows every trick in the book but has a flat usage graph. And more importantly, the founder who has made something users love is the one who will go on to succeed after raising th… (read more)

Paul Graham (Co-Founder & Partner at Y Combinator)
The Hacker’s Guide to Investors

This is how most venture investors operate. They don’t try to look at something and predict whether it will take off. They win by noticing that something is taking off a little sooner than everyone else. That generates almost as good returns as actually being able to pick winners. They may have to pay a little more than they would if they got in at the very beginning, but only a little.

Paul Graham (Co-Founder & Partner at Y Combinator)
Before the Startup

The best way to convince investors [to invest] is to make a startup that’s actually doing well, meaning growing fast, and then simply tell investors so. [Founders] want to know what the tricks are for growing fast. And we have to tell them the best way to do that is simply to make something people want

Reid Hoffman (Partner & Co-Founder at Greylock Partners)
LinkedIn’s Series B Pitch to Greylock: Pitch Advice for Entrepreneurs

Investors see a lot of pitches. In a single year, the classic general partner in a venture firm is exposed to around 5,000 pitches; decides to look more closely at 600 to 800 of them; and ends up doing between 0 and 2 deals. The goal of an entrepreneur is to be one of those deals.

Boris Wertz (Founder of version one ventures)
Nine common things that start-up founders tend to underestimate or overestimate – Version One

No amount of money in the world is going to get you to product-market fit. And raising too much money before you find product-market fit will usually kill your start-up.

Sam Altman (President at Y Combinator)
Startup Playbook

The secret to successfully raising money is to have a good company. Always explain why you could be a huge success. It is a bad idea to try to raise money when your company isn’t in good enough shape to attract capital. You will burn reputation and waste time.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Getting The Deal Done – AVC

Sometimes you just need to get the deal done. When you are burning through cash and need to finance your company, the terms might suck, but the cash doesn’t. So you do the deal and live to fight another day. Marc and Ben did the right thing at LoudCloud and Jack Dorsey did the right thing at Square. If you believe in your business and yourself, take the money and get back to work. A financing is not an exit. The price matters less than the cash m… (read more)

Amir Elaguizy (CEO Cratejoy, YC Alumni)
58 things I learned at YC – Giftshop Scientist

Angels are a LOT easier to get checks from than VCs

Paul Graham (Co-Founder & Partner at Y Combinator)
How to Raise Money

The number one thing you want from [early] fundraising is to get the money you need, so you can get back to focusing on the real test, the success of your company. Number two is good investors. Valuation is at best third.

Paul Graham (Co-Founder & Partner at Y Combinator)
How to Raise Money

Over the past several years, the investment community has evolved from a strategy of anointing a small number of winners early and then supporting them for years to a strategy of spraying money at early stage startups and then ruthlessly culling them at the next stage. This is probably the optimal strategy for investors.

Paul Graham (Co-Founder & Partner at Y Combinator)
Startup Investing Trends

There’s a rule of thumb in the VC business that there are about 15 companies a year that will be really successful. Although a lot of investors unconsciously treat this number as if it were some sort of cosmological constant, I’m certain it isn’t.

Paul Graham (Co-Founder & Partner at Y Combinator)
The Future of Startup Funding

A startup will probably get more attention from investors in a Series A round than an angel round. So if a startup is choosing between an angel round and an A round from a good VC fund, I usually advise them to take the A round.

Rob Go (Co-Founder and Partner at NextView Ventures)
Using Capital as a Weapon – ROBGO.ORG

As seed stage investors, we find that we tend to prefer modest sized rounds early on to focus a team and establish discipline around being excellent at one thing and proving things out efficiently. But beyond the seed stage, capital is primarily about winning and winning big. We look to invest in [high potential] companies with capital efficient beginnings, and usually, those types of companies do take in a fair bit of capital and use that capita… (read more)

Sam Altman (President at Y Combinator)
Fundraising Advice for YC Companies – Y Combinator Posthaven

You should care more about good investors than good valuations. Talk to the founders of the companies that investor has funded (especially in cases when the companies haven’t worked out). You should insist on clean terms (in practice, offering messy terms is a sign of being a bad investor).

Sam Altman (President at Y Combinator)
Fundraising Advice for YC Companies – Y Combinator Posthaven

The best investors know that the most important thing to figure out at [the early] stage is how much your users love you. Great engagement and word of mouth growth are magic for fundraising. Growth is obviously still really helpful.

Sam Altman (President at Y Combinator)
Fundraising Advice for YC Companies – Y Combinator Posthaven

It’s important to articulate why the company will eventually be in a strategically valuable position (i. e. a monopoly). It’s important to articulate your mission. Don’t be arrogant–this is a tactic that somehow does manage to work for fundraising some of the time for some founders, but most of the time it doesn’t.

Sam Altman (President at Y Combinator)
Party rounds – Sam Altman

I think the rising popularity of party rounds is bad for companies. Having at least one investor very focused on your company is valuable. A closely involved investor will help coordinate your next round…

Sam Altman (President at Y Combinator)
Fundraising Mistakes Founders Make – Sam Altman

The process is simple: Get intro’s to investors you want to talk to and reach out to them, in parallel [to set up a competitive environment]. Explain to them why your company is likely to make them a lot of money.

Sean Ellis (CEO at GrowthHackers)
Figuring Out Your Way to Startup Success

It is obvious that the effort required to raise VC funds can be a major distraction from executing the business, but few realize that the repetitive discussions about financial outcomes can also shut down your ability to figure stuff out.

Slava Akhmechet (Founder at RethinkDB)
57 startup lessons

Don’t fall in love with the fundraising process. Get it done and move on.

Mark Suster (Managing Partner at Upfront Ventures)
So What is The Right Level of Burn Rate for a Startup These Days? | Bothsides of the Table

The earlier the round, the less capital you need and the more reasonable your valuation the less time that is needed generally to raise capital. In other words, raising $2 million at a $6 million pre-money valuation has always been easier & quicker than raising $20 million at any valuation.

Mark Suster (Managing Partner at Upfront Ventures)
So What is The Right Level of Burn Rate for a Startup These Days? | Bothsides of the Table

When you raise larger rounds there is more “due diligence,” which includes: calling customers, looking at financial metrics, doing cohort analysis (looking for trends like changes in churn rates), evaluating competitor positioning and understanding more of the competency of your executive team.

Mark Suster (Managing Partner at Upfront Ventures)
So What is The Right Level of Burn Rate for a Startup These Days? | Bothsides of the Table

My advice: be cautious, start early, get to know investors before you need capital, do your research on who is a likely good fit and understand that fund-raising is always part of your job – not something you do in “fund-raising season” for 2-3 months every other year

Mark Suster (Managing Partner at Upfront Ventures)
So What is The Right Level of Burn Rate for a Startup These Days? | Bothsides of the Table

People who think of fund raising as a “distraction away from the core business” fundamentally don’t understand that running a business comprises of: Shipping products, selling to & servicing customers, marketing, HR, recruiting, financial reporting AND making sure you have enough money to support operations.

Ben Horowitz (Co-Founder & Partner @ Andreessen Horowitz)
Angels vs. Venture Capitalists – Ben’s Blog

If you are a small team building a product with the hope of “seeing if it takes” (with the implication being that you’ll try something else if it doesn’t), then you don’t need a board or a lot of money and an angel round is likely the best option. On the other hand, if you’ve developed a strong belief in your product or your product idea and you are in a race against time to take the market, then a venture round is more appropriate.

What’s the best way to know if you have product market fit?

Sam Altman (President at Y Combinator)
Before Growth – Sam Altman

A startup that prematurely targets a growth goal often ends up making a nebulous product that some users sort of like and papering over this with growth hacking. That sort of works at least, it will fool investors for awhile until they start digging into retention numbers but eventually the music stops.

Sam Altman (President at Y Combinator)
Before Growth – Sam Altman

I think the right initial metric is do any users love our product so much they spontaneously tell other people to use it? Until that’s a yes, founders are generally better off focusing on this instead of a growth target.

David Jackson (Founder, Seeking Alpha)
Why startups shouldn’t scale prematurely | A Founder’s Notebook

Don’t scale before you have product-market fit. You’ll burn money, delay true success, and be miserable. What’s so bad about scaling prematurely? Low ROI, high burn rate: Sales and marketing for a product without product-market fit will suffer from low conversions and low renewals. Frustration: When you don’t have product-market fit, everything seems too hard, and everyone is frustrated. Not building permanent value: When you eventually fix your … (read more)

Charlie O’Donnell (Partner Brooklyn Bridge Ventures)
Growth is a Commodity — This is going to be BIG…

If there’s one thing we’ve basically figured out in the digital world, it’s marketing. It’s table stakes. You spend some dollars to get more dollars out. It’s not complicated. That’s why I care much more about engagement–do people like what you built, versus whether or not more people used it today than they did yesterday. Plus, the startup world is littered with companies that grew exponentially without becoming successful–Fab, Turntable, Dailyb… (read more)

Sean Ellis (CEO at GrowthHackers)
Using Survey.io

Here’s an objective metric that removes emotion from the scaling decision while also giving you other important qualitative information. The key question on the survey is: How would you feel if you could no longer use [product]? Very disappointed, Somewhat disappointed, Not disappointed (it isn’t really that useful), N/A – I no longer use [product]. If you find that over 40% of your users are saying that they would be “very disappointed” without … (read more)

Albert Wenger (Partner at Union Square Ventures, Former President of del.icio.us)
Startup Management » Product/Market Fit is a Continuum

You know you’ve achieved product-market fit when the customers intuitively understand what need the product fills for them, and they have no trouble using it, in fact they enjoy using it… in fact they start telling their friends about it, maybe even telling the world about it on Twitter or other places. That’s how you know if you’ve got product-market fit.

Andy Johns (Current VP of Growth at Wealthfront. Formerly growth at Facebook, Twitter, Quora. Ex-EIR Greylock)
Real Engines Of Growth Have Nothing To Do With Growth Hacking | TechCrunch

When you’ve nailed your product, you’ll know it. Your retention will be great and people will happily engage with your emails or push notifications.

Ben Horowitz (Co-Founder & Partner @ Andreessen Horowitz)
The Revenge of the Fat Guy | Marc Andreessen

Myth #1: Product market fit is always a discrete, big bang event. Myth #2: It’s patently obvious when you have product market fit. Myth #3: Once you achieve product market fit, you can’t lose it. Myth #4: Once you have product-market fit, you don’t have to sweat the competition

David Jackson (Founder, Seeking Alpha)
Product-market fit can be hard to spot | A Founder’s Notebook

Product-market fit is a continuum, not a single point. But if you’re not in “the zone”, you know it. Everything feels too hard.

David Jackson (Founder, Seeking Alpha)
Four myths about product-market fit | A Founder’s Notebook

My personal view is that product-market fit is a continuum; there are degrees of product-market fit. You should only scale when it’s clear that you’re fairly far along the continuum of product-market fit.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Burn Rate – AVC

It is dangerous to ramp up headcount and burn until you are certain that you have the right product and the right people and processes in the organization to support the product. And early revenue traction, often driven by a passionate founder, can be a nasty head fake.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Product > Strategy > Business Model – AVC

Getting product right means finding product market fit. It does not mean launching the product. It means getting to the point where the market accepts your product and wants more of it.

Jerry Neuman (Venture Capitalist at Neu Venture Capital)
How to kiss your elbow | Reaction Wheel

Marc Andreessen says “you can always feel product/market fit when it’s happening. ” Unfortunately, this is simply not true. In B-to-B startups you can have a lot of buzz and a few amazing clients banging your door down and still have a product that doesn’t really do much. Or you can have a product that is absolutely amazing that great clients are beta-testing but that no one is paying for.

William Mougayar (Chief Evangelist, Advocate Marketing at Influitive, formerly CEO/founder of Engagio)
Startup Management » Product/Market Fit is a Continuum

If there is no market, even a great product and a great team will not get you there. if you can’t realize the business model, there is no Product/Market Fit. If there is no retention and referrals, there is no Product/Market Fit. Instead of building new features, or rebuilding from scratch, try pointing your product at a new market.

Marc Andreesen (Co-Founder & General Partner at Andreessen Horowitz)
How you know when you’ve hit product-market fit | A Founder’s Notebook

You can always feel when product/market fit isn’t 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’s happening. The customers are buying the product just as fast as you can make it — or usage is growing just as fast a… (read more)

Paul Buchheit (Partner at Y Combinator)
Default Alive or Default Dead?

A related problem that I see a lot is premature scaling—founders take a small business that isn’t really working (bad unit economics, typically) and then scale it up because they want impressive growth numbers. This is similar to over-hiring in that it makes the business much harder to fix once it’s big, plus they are bleeding cash really fast.

Raju Rishi (General Partner @ RRE Ventures)
When Revenue Isn’t The Answer

Closed deals and sales velocity are not exclusive measures of product/ market fit. Maybe, among your first customers, there are wide variations in the core use cases for the product. Maybe your team is struggling with lengthy sales cycles. Maybe you find yourself significantly altering your pitch for different target customers and creating multiple marketing messages along the way

Eric Ries (Author, The Lean Startup)
The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses

Startups occasionally ask me to help them evaluate whether they have achieved product/market fit. It’s easy to answer: if you are asking, you’re not there yet. (p.219)

Naval Ravikant (Founder, CEO & Co – Maintainer at AngelList)
“The Anatomy of a Fundable Startup”, by Naval Ravikant (Founder, AngelList) on Vimeo

How much traction is enough? How much growth in enough? It depends a lot on the startup, but generally an investor will not be impressed if you say we’re growing at 10% a month. That means you’ll double in a year and believe it or not in the startup game that’s not enough for an early stage company.

Naval Ravikant (Founder, CEO & Co – Maintainer at AngelList)
“The Anatomy of a Fundable Startup”, by Naval Ravikant (Founder, AngelList) on Vimeo

Whatever your core metric is you want to grow that by 20% per month.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Growth – AVC

Things like gaming Facebook’s open graph can temporarily stimulate growth that is not sustainable long term. Investors can be faked out by things like that. Gaming Google’s search algorithms is another way that has been done in the past. When we look at growth, we look for authentic, organic, and sustainable growth that is not overly dependent on a single source, particularly a source the startup doesn’t control. That takes some experience to det… (read more)

Raju Rishi (General Partner @ RRE Ventures)
When Revenue Isn’t The Answer

Achieving product/ market fit is the transformative moment in the life of a startup. It is the moment of metamorphosis, where a company aligns messaging, marketing, target customers, sales methodology, product roadmap, and operating metrics. This moment cannot be bypassed, faked, overlooked, or ignored. So be disciplined. Don’t get caught up in the expectations of customers, investors, or yourselves. For in the absence of product market fit, more… (read more)

David Jackson (Founder, Seeking Alpha)
Startup strategy: Why you have to demand commitment | A Founder’s Notebook

In Seeking Alpha, we wanted to keep our content free, but wanted to ensure our users valued it. So we forced our users to register. Our thinking was “We’re not interested in a relationship where you don’t value our product enough to register for free”.

Mariya Yao (Founder at Xanadu)
Lessons Learned: Rapid Iteration for Mobile App Design

the question Sean Ellis popularized, where you ask your users, “How disappointed would you be if you could no longer use our product?” and have them answer with either, “Very Disappointed,” “Somewhat Disappointed,” “Not Disappointed,” or “I no longer use the product. ” Sean did research across hundreds of startups and discovered that companies that had fewer than 40% of their users answer “Very Disappointed” tended to struggle with building a suc… (read more)

Mariya Yao (Founder at Xanadu)
Lessons Learned: Rapid Iteration for Mobile App Design

On a scale from 0-10, how likely are you to recommend us to your friends?” You mark those who answer 0-6 as Detractors, 9-10 as Promoters, and 7-8 as Neutral. Your Net Promoter score is the percent of Promoters minus your percentage of Detractors, which should be a number between -100 and +100. The world’s most successful companies typically score around +50, and top performing tech companies like Apple, Google, and Amazon regularly score over +7… (read more)

Slava Akhmechet (Founder at RethinkDB)
57 startup lessons

Product comes first. If people love your product, the tiniest announcements will get attention. If people don’t love your product, no amount of marketing effort will help.

Kissmetrics (Built to optimize marketing. Track, analyze and optimize your digital marketing.)
13 Critically Important Lessons from Over 50 Growth Hackers

Leaky buckets don’t need more water, they need their holes fixed.

What’s the best way to find product market fit?

Seth Godin (Founder at Yoyodyne Entertainment)
Seth’s Blog: Hypergrowth

Fast growth comes from overwhelming the smallest possible audience with a product or service that so delights that they insist that their friends and colleagues use it.

Paul Graham (Co-Founder & Partner at Y Combinator)
Default Alive or Default Dead?

Here’s a common way startups die. They make something moderately appealing and have decent initial growth. They raise their first round fairly easily because the founders seem smart and the idea sounds plausible. But because the product is only moderately appealing, growth is ok but not great. The founders convince themselves that hiring a bunch of people is the way to boost growth. Their investors agree. But (because the product is only moderate… (read more)

David Skok (General Partner at Matrix Partners)
Managing Customer Success to Reduce Churn | For Entrepreneurs

Customers bought your product to get a clear business benefit. To make them happy, I believe that you need to make sure they are getting the business benefits they hoped for.

Eric Ries (Author, The Lean Startup)
The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses

Marc Andreessen, the legendary entrepreneur and investor and one of the fathers of the World Wide Web, coined the term product/market fit to describe the moment when a startup finally finds a widespread set of customers that resonate with its product (p.219)

Raju Rishi (General Partner @ RRE Ventures)
When Revenue Isn’t The Answer

Product/ market fit is ultimately about repeatability. If you understand who your customers are, what causes them to buy your product, and how to make your solution their number one priority, then you’ve found product/ market fit. But if you haven’t, you need to make some hard choices and keep searching.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The Grind vs The Pivot – AVC

Everyone knows what a pivot is. You launch something, it fails to get product market fit, so you change direction and launch something different. But there is another approach to finding product market fit and I call it the “Grind.” The Grind is when you launch something, it fails to get product market fit, and you grind on it, week after week, month after month, year after year, until it does. Usually the entrepreneur who chooses The Grind is ob… (read more)

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Revenue Traction Doesn’t Mean Product Market Fit – AVC

Not only does the organization need to learn how customers will acquire and use the product, it is also true that the product itself may not be exactly what the market wants. In other words, launching a product is not the same thing as acheiving product market fit. The organization may need another six months, a year, or even longer to get to product market fit.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Revenue Traction Doesn’t Mean Product Market Fit – AVC

I am thinking of a company, which will remain nameless, that ended up selling itself in a fire sale. The company had strong revenue traction early on, and with that traction raised a big round of financing, which then led to a big increase in headcount, for both sales force and product/engineering, and then faced a lot of churn in its customer base. That led to a very difficult period where the company worked hard to iterate on the product while … (read more)

Eric Ries (Author, The Lean Startup)
The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses

The value hypothesis tests whether a product or service really delivers value to customers once they are using it.

Eric Ries (Author, The Lean Startup)
The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses

“…the growth hypothesis…tests how new customers will discover a product or service…from initial early adopters to mass adoption…A likely way this program could expand is through viral growth. If that is true, the most important thing to measure is behavior: would the early participants actively spread the word …?”

Eric Ries (Author, The Lean Startup)
The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses

Pivots come in [10] different flavors. The word pivot sometimes is used incorrectly as a synonym for change. A pivot is a special kind of change designed to test a new fundamental hypothesis about the product, business model, and engine of growth. (i) Zoom-in Pivot, (ii) Zoom-out Pivot, (iii) Customer Segment Pivot, (iv) Customer Need Pivot, (v) Platform Pivot, (vi) Business Architecture Pivot, (vii) Value Capture Pivot, (viii) Engine of Growth P… (read more)

Sachin Rekhi (Group Product Manager at LinkedIn)
Video: The Hunt for Product/Market Fit | Sachin Rekhi

Your value proposition and this is not your feature list. This is not your product roadmap. This is simply the value promise that you’re giving to your customers. This again [is] really important to distinguish from your [idea or] solution. The question becomes “Is the problem you are solving important?”

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The Startup Curve – AVC

It turns out, like most success stories, the answer was simplifying the service. Taking features out. Reducing the value proposition to a clear and simple use case. This was not done in a vacuum. This was done by releasing a less than perfect product to the market, finding a few customers who wanted a less than perfect product, and then listening carefully to those customers to get to the ideal product.

David Jackson (Founder, Seeking Alpha)
The only startup goal worth your undivided attention | A Founder’s Notebook

Most startup founders know that success comes from figuring out a repeatable, scalable business model. And yet… so many of us get distracted by other issues along the way. An exercise: “What’s our repeatable, scalable business model? Which parts aren’t yet working well enough and therefore still need figuring out?”

Sean Ellis (CEO at GrowthHackers)
Figuring Out Your Way to Startup Success

With each new startup, I immediately started working to uncover the “must have” experience before I formed preconceptions about how and why a product would be useful. This involved a rigorous process for identifying the most passionate users and then getting their unstructured feedback about how they were getting value.

Eric Ries (Author, The Lean Startup)
The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses

The solution to this dilemma is a commitment to iteration. You have to commit to a locked-in agreement—ahead of time—that no matter what comes of testing the MVP, you will not give up hope. Successful entrepreneurs do not give up at the first sign of trouble, nor do they persevere the plane right into the ground. Instead, they possess a unique combination of perseverance and flexibility. The MVP is just the first step on a journey of learning. (p… (read more)

David Jackson (Founder, Seeking Alpha)
Is your product a “must-have” according to this definition? | A Founder’s Notebook

A must-have product enables you to (i) get a job done which you otherwise couldn’t get done at all, or (ii) get significantly more of the job done, or (iii) get the job done in a significantly less painful way.

Sam Altman (President at Y Combinator)
Startup advice, briefly – Sam Altman

Listen to what your users tell you, improve your product, and then listen again. Keep doing this until you’ve made something some users love (one of the many brilliant Paul Buchheit observations is that it’s better to build something a small number of users love than something a lot of users like).

Austen Allred (Growth at LendUp, Cofounder Glasswire)
The 4 characteristics of the most addictive products | A Founder’s Notebook

As I tried to drill down into why so many people, including myself, love and use certain sites/apps/services, I’ve found common threads that tie addictive Internet products together: Rapid Cadence. Signs of User Activity. One-Click Interaction. Notification of Interactions.

Eric Ries (Author, The Lean Startup)
The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to … – Eric Ries – Google Books

A startup’s job is to (1) rigorously measure where it is right now, confronting the hard truths that assessment reveals, and then (2) devise experiments to learn how to move the real numbers closer to the ideal reflected in the business plan. (p.114)

Alex Turnbull (CEO of Groove)
How We Got 2,000+ Customers by Doing Things That Didn’t Scale

[in an email Groove says…] My goal is to have a conversation – via Skype or phone – with every Groove customer. All 2,000+ of you.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The Truth About Gamification – AVC

Gamification can amplify things people already like to do. But it cannot get someone to do something they aren’t inclined to do in the first place.

Sachin Rekhi (Group Product Manager at LinkedIn)
Video: The Hunt for Product/Market Fit | Sachin Rekhi

You want to try and achieve synthesis across your user interviews. This means looking for commonalities across the conversations. You don’t have statistically signficant information yet. A good way to help find this synthesis is to create a common set of questions

Sachin Rekhi (Group Product Manager at LinkedIn)
Video: The Hunt for Product/Market Fit | Sachin Rekhi

Use a mix of aided (open ended) and aided questions to get feedback. “What’s your biggest issue” vs “rank these issues”. If your issue isn’t on their ranking or open-ended … you probably have a nice to have product.

Alex Turnbull (CEO of Groove)
How We Got 2,000+ Customers by Doing Things That Didn’t Scale

[In their welcome email Groove would send] “If you wouldn’t mind, I’d love it if you answered one quick question: Why did you sign up for Groove? I’m asking because knowing what made you sign up is really helpful for us in making sure that we’re delivering on what our users want. Just hit “reply” and let me know. “

Slava Akhmechet (Founder at RethinkDB)
57 startup lessons

Be relentless about working the game of numbers while the product is between the two extremes [product love or product hate]. Even if you don’t sell anything, you’ll learn invaluable lessons.

Sachin Rekhi (Group Product Manager at LinkedIn)
A Lean Alternative to a Business Plan: Documenting Your Product/Market Fit Hypotheses | Sachin Rekhi

The most efficient way to operate during the earliest phases of a startup lies in between a formal business plan and unstructured iteration. 1. Target Audience. Who is the target audience is for your product or service? Be as specific as possible. 2. Problem You’re Solving. What specific problem or pain point does your solution solve for? 3. Value Propositions. Value propositions shouldn’t be the features that you are building, but the “promise … (read more)

Bill Gurley (General Partner at Benchmark Capital)
All Markets Are Not Created Equal: 10 Factors To Consider When Evaluating Digital Marketplaces | Above the Crowd | By Bill Gurley

A true marketplace needs natural pull on both the consumer and supplier side of the market. Aggregating suppliers is a necessary, but insufficient step on its own. You must also organically aggregate demand. With each step, it should get easier to acquire the incremental consumer AS WELL AS the incremental supplier.

What’s the best way to avoid common mistakes in management?

Sam Altman (President at Y Combinator)
Financial Misstatements – Sam Altman

First-time startup CEOs make a lot of mistakes, mostly due to ignorance. One particularly bad one is misunderstanding or misusing basic financial terms.

Ben Horowitz (Co-Founder & Partner @ Andreessen Horowitz)
Second Startup Syndrome – Ben’s Blog

Serial entrepreneurs who suffer from Second Startup Syndrome want to skip through the narrow early steps and move quickly to more exciting topics such as long-term strategy, sales and marketing, company positioning, company culture, and more. Unfortunately, when you build a house, it’s usually a very bad idea to start with the roof.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
DIY vs Delegate – AVC

I like it when I see a founder team that is resourceful, has range, and can do a lot of this stuff themselves. I like to see them running lean and mean and spending money on the things that really matter (product!!!!!).
But at some point they need to start delegating this stuff. And first time founders often make the mistake of waiting too long to take things off their plates. For one, they like the control and insights they get from doing thing… (read more)

Sean Ellis (CEO at GrowthHackers)
Figuring Out Your Way to Startup Success

It is OK to apply pressure for better execution of things that have been figured out, but it should be applied very sparingly when trying to encourage the team to figure out the remaining unknowns.

Sam Altman (President at Y Combinator)
Startup Playbook

Most of the principles on being a good manager are well-covered, but the one that I never see discussed is don’t go into hero mode. Most first-time managers fall victim to this at some point and try to do everything themselves, and become unavailable to their staff. It usually ends in a meltdown. Resist all temptation to switch into this mode, and be willing to be late on projects to have a well-functioning team.

Ben Horowitz (Co-Founder & Partner @ Andreessen Horowitz)
Ones and Twos – Ben’s Blog

When founding CEOs fail, a significant reason why is they never invest the time to be competent enough in the [process design, goal setting, structured accountability, training, and performance management] tasks to direct those activities effectively. The resulting companies become too chaotic to reach their full potential and the CEO ends up being replaced.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Becoming A Boss – AVC

When we had our USV CEO summit last fall, we kicked it off by asking each founder/CEO to open with the one thing they had learned the hard way during the year. The recurring theme was that they had to let the people they hired do the work even though they wanted to jump in and do it themselves. And as they are all going around the room telling this story over and over, I am thinking “”and I want you to jump in and do the work too””. Because these a… (read more)

Sam Altman (President at Y Combinator)
Startup advice, briefly – Sam Altman

Learn to manage people. Make sure your employees are happy. Don’t ignore this.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Handing Over Your Company To Someone Else To Manage – AVC

The thing we always remind entrepreneurs is that bringing in a CEO does not mean losing control of the company. In fact, bringing in a CEO is often a great way to keep control of a company if you do it well.