I've probably read that sentence at least 1000 times in a number of different books and articles. Having gone through a lean startup accelerator a few years ago when they were en vogue we focused on this aspect more than anything else.
The thing I never hear is how people actually figured that out. Cold calling, cold emailing, going to meetups, getting intros, pitching ideas and gathering feedback is never discussed. I want to hear _how_ you found a product market fit. It's obvious that you need to do this.
As an example. A startup that I co-founded my sophomore year in college was accepted into a school run summer business accelerator. They emphasized talking with customers/users more than anything else. The problem was we didn't really know any of our potential customers or users (grade school teachers/public schools). So we had to essentially cold call schools, find teachers/admins emails online, and fish around our personal network for intros. To say it didn't go well is an understatement. Our success rate, of even a phone call, was nearly 1% (roughly one answer per 100 or so emails/calls). We eventually locked down a core group of users simply by contacting so many people. Aside from other bureaucratic factors in the public schooling system we failed simply because we couldn't establish a growing user base.
So, if anyone wants to tell their story with nitty gitty details of not only how they found and retained their users but how they found what they wanted would be greatly appreciated.
1) Get someone to give you money. Hearing, "oh, I'd buy that!" is not the same as, "here's my credit card number."
2) Get them to give you money even though your product is not totally ready for prime time. Basically, even though your product is not done, not refined, difficult to use, etc., having your product is still so much better than not having it that someone is still willing to pay.
3) Short of getting someone to pay you, get them to get past some level of friction. If someone will invest their time to cross the chasm of not-user to user, it means they really want what is on the other side.
4) Get someone to use your product again. There's a reason online apps look at Active Daily/Monthly Users. If someone uses it, then uses it again... it must be something they want.
5) Don't have a product yet, just an idea... pre-orders (see point 1).
6) Can't even take pre-orders... You're just guessing. Build an MVP (or minimum sellable product if you're in enterprise). Don't try to take on the world. Find the minimum that can offer. Then go back to point 1.
What gets ignored in the now-popular "talk to potential customers" mantra is that simply talking to potential customers is rarely enough. It's a very valuable tactic when applied to a good strategy; it's not a strategy in and of itself.
Do you truly know who your potential customers are and what pains them the most? Do you know how much money they have, how they spend it and when they spend it? Have you ever worked in their industry? If you don't have domain knowledge, if not expertise, talking to potential customers can be just as much a waste of time as premature coding in my opinion.
As an example, I once worked on a consulting engagement for a company that sells hundreds of millions of dollars a year worth of product into the K-12 market. While there are certainly some viable edtech startups, based on what I learned working with this company, I would never consider trying to build an edtech business that has to sell at the school or classroom level.
Bottom line: the famous Peter Lynch principle, "invest in what you know", should be applied to entrepreneurship.
I've found that walking into the school gets much better results. I work in test prep.
There's no magic bullet for learning about clients, and it depends on the niche. In my case (LSAT prep) I learned about LSAT students because I had been an LSAT tutor. In fact, I still do a bit of tutoring just to stay in touch with what students are going through.
Other niches would require completely different approaches. Steps:
1. Identify target client
2. Find out where they congregate, how they communicate
3. Use *that* approach.
4. Once you find some, ask for referrals.
The way you get that reaction is by knowing the needs of the prospect, putting yourself into their shoes.
0.) Identify market The short version is that one of our co-founders had very deep domain expertise in education and I had been developing a series of education apps for my daughter. We used this domain expertise to formulate our general understanding of the market. Then we spoke with customer after customer about our ideas, their current initiatives, budgets, problems, what excited them, and so on.
1.) Before trying to get P/M fit we created a way to measure P/M fit for our business. As we're a B2B company, we used the following as our top-line P/M fit metrics (a,b are quant, while c is a qual measure):
a. Length of sales cycle (shorter = closer to P/M fit)
b. Number of objections (fewer = closer to P/M fit)
c. Intensity of objections (weaker = closer to P/M fit)
2.) Building on #0, we eventually found an idea that resonated with the majority of customers. So, we built a first MVP. Bluntly, it was a complete piece of shit...and I'm the one who developed it.
However, there were customers who paid for this pile. So we started to try to sell more, but our P/M fit metrics were not good. Cycles were too long, objections were intense and numerous.
3.) Based on #2, we discussed what we thought would be the solution to finding P/M fit. There were two core directions, but we did not know which one would work.
So, we built a 2nd MVP that addressed the problems in our 1st MVP by adding the two groups of features we thought customers would want. We developed both ideas in the same MVP b/c it was a hell of a lot faster than doing two MVPs back to back.
One of the two ideas yielded substantial improvement in our revenue and P/M fit metrics. So, we pushed on this idea by emphasizing and selling only the features that looked promising.
However, we hit a point where our P/M fit metrics were better, but were not improving and were not good enough.
4.) We did not build a new MVP at this point. What we did was modify our sales collateral, our pitch, our emphasis to highlight the features and value prop that most resonated with our customers, while eliminating the areas that caused the most friction in the sales cycle. We kept tweaking the sales pitch until we found one that improved our metrics. Literally, we knew we were ready for our 3rd iteration of the product when customers were pushing us to deliver the product that we had sold them on, but that was not yet developed.
5.) Develop first release of product that a segment of the market clearly wants and is willing to pay for without wasting time or objecting too much.
6.) We continue to do all of the above, but in tighter/faster iterations. We are also using usage metrics to increasingly guide some decision making, but ultimately our P/M fit metrics are still working for us, so we continue to hone/improve them.
Good for you. I have found similar experiences , you know you have a hit product when people are complaining that you arent taking their money fast enough.
If you make something that you like, but other people (similar to you) don't like - don't pursue that.
If you make something that you like, and others like you also like it and want to give you money for it, then go go go.
I made http://traxda.com because I wanted a 3" lift kit and not a 6" lift kit. 10 years later, so have 120,000 other people. (found people at auto related places) I made http://sascase.com because I wanted to protect my Ipad from my kids. 3 years later, so have 3000 other people. (everyone has a phone, did nothing but have the case on mine)
I once bought 27 truck loads (48 foot trailers) of old man truck accessories. $2,000,000 worth of product for $150,000. The only problem is that it was product that I would never, ever, ever, buy. So while the values were correct, and I sold a lot of it ($1M before I gave up, net loss of money -150K), it was a market that I didn't understand, I didn't like and I did not know enough to even ask the right questions. It was a huge disaster, one that lasted 5 years before I gave up. Lost time was worse than the lost money. Stupid stupid stupid of me. I got the basic business equation right, but I did not get the subtle details and this is what caused the loss. If the product had been something I cared about, I would have known these little details.
I had a friend talking about making an app for elderly people who need to take meds. He is 25, and nobody he knows fits this description. He was convinced it would be great, there are all these news stories about people getting older, blah blah blah. I asked him if he would still be interested in his app in 10 years, because you end up doing these things WAY longer than you think you will. He told me he was going to growth hack it and flip it to Google in 2 years (he has no contacts at that, nor experience). It took a while, but I convinced him to drop the idea and focus on something he would pay money for. So he did, and he tells me hi is much happier.
If you are talking to potential customers, and they verbally tell you that they would buy - why not ask for a deposit? or a pre-pay?. It is the old school, personal version of crowdfunding. How things were done before Kickstarter. I used that trick to get $5000 together for a buy in to a hardware wholesaler in 2000 (and then learned I hated selling nuts and bolts despite the 50% profit margin. Boring). Don't be fooled by people who SAY that they will buy, but won't get out their wallet. Read Predictably Irrational by Dan Ariely http://danariely.com/2009/08/10/the-nuances-of-the-free-expe...
My next project is some software I need for running a small manufacturing business. Nothing I have looked at in the last 10 years has been appealing (too complex) so I am making my own. I don't know how to program , but I do know I would write a check for thousands of dollars today if someone walked in the front door with the solution I have in my head. I know the problem well, since I have been dealing with it for 10 years.
So ask yourself - what areas do I know well? What do i ACTUALLY spend money on (instead of "I think people not like me would buy this"). What product if it existed would I reach for my wallet RIGHT NOW to buy?
You can cold email any YC founder, I think they would be just as likely to help you (work with you) than a fellow YC founder.
That being said, it does not mean that who can cold email anyone from YC and expect an answer. As always, you have to mind your manners :)
2) The Alumni network for successful YC companies is probably harder to tap into from the outside than you are thinking. You'd have a hard time getting a meeting with a founder of Stripe than, say, someone from the '14 summer class.
I just think if you have a good value proposition, and you are mindful of people's time, they will work with you regardless.
Of course not. Nobody here is suggesting that this would solve all of your problems, just that it would be helpful.
Usually websites that insist with these subscription popups have mediocre to poor content.
If your work is good enough, people will subscribe because they like it. Don't force it.
I use an email popup. It's greatly increased email list signups. No one's comaplained, time on page did not decline. Nothing bad happened.
You should always test a chance like this, but net-savvy hackers are a poor representation of most demographics.
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This seems contradictory. 300 signups over a couple of weeks does not imply "high visibility." Your TechCrunch article (http://techcrunch.com/2014/06/18/front-is-a-shared-inbox-app...) only received about 229 shares and 154 Tweets (with most of the comments being from existing users and not prospective users), which makes Front seem more of a counterexample of TechCrunch visibility instead.
Following our TC launch, we were featured in other channels, which gave us more signups. 300 might not seem like a lot, but these figures are very conservative and we only counted users that really tried the app.
...which are the only ones that matter, no? So if only 300 "really" tried the app and 2,201,302 signed up, you obviously only care about the 300 if that's the number you're mentioning.
Why try to sound mightier saying "these figures are very conservative" and "we only counted users that really tried the app"?
Keep in mind that this is a tool for businesses, and they are charging money for it. Their potential pool of users is several orders of magnitude smaller than that of a free consumer app (there are only tens of millions of businesses, compared to billions of people).
This isn't YC-specific, but I want to highlight this piece of advice because it's extremely important.
This is one of the most important things I've learned through my years of starting/running small businesses. I'm particularly susceptible to falling in this trap because I suffer from typical founder syndrome of "perpetual optimism". (Good for certain things, bad for others.)
It's also an easy trap to fall into as a new founder, because you just don't yet have the history to see both the ups and downs. But I can't emphasize it enough: People who are wonderful when things are wonderful can become bitterly awful when things turn around. Finding partners (both teammates and investors) who you can sail both the rough and calm waters with is absolutely essential to the survival of your business.
How to figure this out? There's no secret, but it's a mix of intuition and asking the right questions. Speak to references and ask specifically: "How was he/she when things were good? How about when things got tough?"
Can't agree with this statement enough (the teammates part, at least). From personal experience, I can say that the work environment becomes toxic when early team members start losing passion for the product, especially co-founders. People start questioning each other's commitment, work slows down, and bickering ensues.
As another piece of advice, it's really important to look for individuals who are great communicators. People who say it how it is, and share their feelings w/o hesitation. The last thing you want is a co-worker sharing some important piece of information (ex. they haven't been motivated for weeks) out of the blue.
This part is a bit ambiguous. Do the YC partners actually tell applicants who have made it to the interview stage why they were rejected?
1. But you still need to figure out things by yourself: YC will never tell you what people want
2. If there is one thing that is true about YC partners, it’s that you can’t expect them to do the work for you.
At the end of the day, the founders build the company, not anyone else. "Outsiders" (those who don't actually work in the company) should offer guidance and frameworks, but never a definitive solution to the problem you're having, that's for the founders to figure out and decide for themselves.
It's been hard to find a solution that allows me to manage my personal and work email, and the different types of both.
Seeing the demo made me think "I need this!". I had been looking around at helpdesk solutions, but all seemed to cumbersome for my use case.
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