6 ms·

I think really good advice to late stage companies, before any of this stuff, is, "Have you actually found product/market fit?" If so, what is the product, what

by hacknat 10y ago

I think really good advice to late stage companies, before any of this stuff, is, "Have you actually found product/market fit?" If so, what is the product, what is the market? I have spent a lot of time with startups (as an employee), and I have never seen this question answered properly, at least up close. Very often product/market fit becomes "We've solved all these peoples' problems and they pay us money." The problem? The problems and the people are all different. I've witnessed so many companies turn themselves into specialized consulting companies thinking they've built the product that's going to take them to the finish line, when all they've really done is networked their way into solving a bunch of separate business problems for their network. A product should be so good that your users are almost embarrassed to file support tickets. IMO, sama is wrong to suggest founders take their eye off the product ball at all (even just a little) until they are 1000% sure they've built a machine that will scale, and now all they have to do is scale it.

cl42 10y ago
While I really appreciate the intent of what you're writing, "product/market" fit is also really difficult to concretely define and understand. I think this is particularly true in B2B and enterprise sales -- you can easily scale to 20-30 people without feeling like you've found product/market fit even if you have users, customers, and are profitable. Whenever I hear the focus on product/market fit I worry that people are seeking a romantic ideal that happens to very few companies (i.e., a product that sells itself, has no churn, and scales easily). There are many companies that grew well beyond 40 people without having the above. Happy to debate it though, as I'm not even sure I'm right, so would love to hear people's thoughts.
- hacknat 10y ago
  I completely agree, and it's my main concern. The outline that you present is completely acceptable, and even great, for a lifestyle business, it really isn't acceptable for a VC funded startup though. I honestly wish more founders had the guts to admit when they haven't succeeded, even when they've made a bit of money. I've seen so many founders go out on funding rounds pitching scale in their market that the employees know isn't possible (and often they know too). We all learn from failure, but a lot of people in this industry sort of half-succeed and don't have the guts to admit their idea didn't work. They plug along on the fumes of a bloated funding scene that is all to prepared to throw good money after "meh" money. I don't really have an answer either, but this all makes the founders who have high burn rates actually look smart, IMO, because at least they're failing faster than everyone else.
dasil003 10y ago
In theory I agree, but when are you ever 1000% sure of anything in business? Also, the thing which scales to 100k users does not necessarily scale to 1m let alone 10m. Given that the article is titled "Later Stage Advice" and it says things such as switch from not caring at all about marketing to caring about it a little bit once the product is working I think Sam's advice is properly qualified. But your point is well taken; I've seen it to, but I'm not sure what the solution is. In general I think the advice of staying focused and minimizing burn attempts to address this, but in practice these choices are rarely easy. Sometimes you need to try a bunch of different things, but then you can be saddled with maintenance costs or blowback from customers if you yank the rug out. Also, if something appears to be working and you start to hire to support growing the business in that direction you can get screwed if you hit some ceiling of market appeal. The cases where a company is so compelling and viral that there is a clear path to scaling are the exception. For every Instagram there are probably 1000 companies that are still considered successful by their founders but at a smaller scale or slower pace. Startups are hard.
- hacknat 10y ago
  It's true there aren't many good answers. It's human nature to think the answer is just around the corner.
- wtvanhest 10y ago
  > Given that the article is titled "Later Stage Advice" and it says things such as switch from not caring at all about marketing to caring about it a little bit once the product is working I think Sam's advice is properly qualified. There are probably less than 20 YC companies that have reached the point where this advice is valid. Zenefits, Airbnb, Dropbox, Stripe etc. The others never needed this advice. The nightmare scenario for employees is getting stuck at a company without true product/market fit that just sort of has it, then watching the founders justify following this advice because they have raised enough money to get to 30 employees without ever having true product/market fit. > The cases where a company is so compelling and viral that there is a clear path to scaling are the exception. IMO, this advice should only apply to the exceptional companies. > For every Instagram there are probably 1000 companies that are still considered successful by their founders but at a smaller scale or slower pace. Startups are hard. Those companies should stay small with no formal management structure and most should not follow the advice in the post, even if they have scaled. I think the OP's point is that product/market fit is overlooked so often by founders and teams. No matter what, it should always be the true focus of the business. The number of companies that need the advice in this post is so small that YC should just write it as a personal email to founders.
vonnik 10y ago
Most companies that survive to become late stage, raising several and increasingly large multi-million dollar rounds, have found product market fit. Not all, but most. In B2C, this is true almost by definition. So I think Sam's comments are appropriate. He is limiting the scope of his advice to growth-stage companies that found their fit. Obviously, that's a problem that one revisits. But on the rare occasion that you solve for product market fit, you need to tackle other problems like the ones he describes.
nostrademons 10y ago
The previous issue of The Macro had an article about this: http://themacro.com/articles/2016/06/the-real-product-market-fit/ http://themacro.com/articles/2016/06/the-real-product-market...
- hacknat 10y ago
  I Love this article. I'm slightly baffled that they didn't have a paragraph hammering this home and linking to this article in this latest article, it would make this current article much, much better, IMO. Founders don't need anymore management advice at all they need someone screaming, "product, customers, and employees" all day, everyday at them. Almost no founder will ever need advice beyond that mantra; so many of them deceive themselves into inking that they do though.
semerda 10y ago
A product is never done. Problems are never 100% solved. A product/market fit as I recall from school was about finding a repeatable business model that can be used as a multiplier to bring in revenue. But even that changes over time as human needs change.
logicallee 10y ago
sorry, I found your definition of product/market fit to be basically ridiculous. >Very often product/market fit becomes "We've solved all these peoples' problems and they pay us money." The problem? The problems and the people are all different. Sorry for the tone, but to continue - "We don't have product-market fit! All we have is a bunch of people who consider us the solution to their problems and pay us a bunch of money! But where's the market? What are we even doing?" I mean take an iconic, successful product. the iPhone. What's an iPhone? I mean, sure, Apple sold 50 million of them last quarter but really it's just "we've built this thing all these different people want and they all pay us money". But the reasons people want one are all different! Or take the app store - what a disaster. What problem does it solve? It's just this place for a bunch of developers to do a bunch of different things! To hear you tell it, Apple needs to kill the app store -- despite taking a $6B cut in 2015 -- yes, this means $6,000,000,000 in revenue, and actually find some product/market fit, not a hodge-podge of random stuff people buy and developers are happy to give a cut of. I mean why would anyone choose a $6 billion cut over actual PRODUCT-MARKET FIT? Would you rather wake up with $6 billion tomorrow or with a product that actually has "product-market fit". I know which one I'd wake up with tomorrow. Sorry that I'm not able to be more eloquent but I find it so hard to wrap my head around what you'er trying to say. What even is your idea of a product that has product-market fit? You don't give any examples. Try to express what you mean using some concrete examples, if you still maintain your (extreme) position. So far you don't seem to include any positive examples of what you have in mind.

by hacknat 10y ago

cl42 10y ago

While I really appreciate the intent of what you're writing, "product/market" fit is also really difficult to concretely define and understand. I think this is particularly true in B2B and enterprise sales -- you can easily scale to 20-30 people without feeling like you've found product/market fit even if you have users, customers, and are profitable. Whenever I hear the focus on product/market fit I worry that people are seeking a romantic ideal that happens to very few companies (i.e., a product that sells itself, has no churn, and scales easily). There are many companies that grew well beyond 40 people without having the above. Happy to debate it though, as I'm not even sure I'm right, so would love to hear people's thoughts.

hacknat 10y ago
I completely agree, and it's my main concern. The outline that you present is completely acceptable, and even great, for a lifestyle business, it really isn't acceptable for a VC funded startup though. I honestly wish more founders had the guts to admit when they haven't succeeded, even when they've made a bit of money. I've seen so many founders go out on funding rounds pitching scale in their market that the employees know isn't possible (and often they know too). We all learn from failure, but a lot of people in this industry sort of half-succeed and don't have the guts to admit their idea didn't work. They plug along on the fumes of a bloated funding scene that is all to prepared to throw good money after "meh" money. I don't really have an answer either, but this all makes the founders who have high burn rates actually look smart, IMO, because at least they're failing faster than everyone else.

dasil003 10y ago

In theory I agree, but when are you ever 1000% sure of anything in business? Also, the thing which scales to 100k users does not necessarily scale to 1m let alone 10m. Given that the article is titled "Later Stage Advice" and it says things such as switch from not caring at all about marketing to caring about it a little bit once the product is working I think Sam's advice is properly qualified. But your point is well taken; I've seen it to, but I'm not sure what the solution is. In general I think the advice of staying focused and minimizing burn attempts to address this, but in practice these choices are rarely easy. Sometimes you need to try a bunch of different things, but then you can be saddled with maintenance costs or blowback from customers if you yank the rug out. Also, if something appears to be working and you start to hire to support growing the business in that direction you can get screwed if you hit some ceiling of market appeal. The cases where a company is so compelling and viral that there is a clear path to scaling are the exception. For every Instagram there are probably 1000 companies that are still considered successful by their founders but at a smaller scale or slower pace. Startups are hard.

hacknat 10y ago
It's true there aren't many good answers. It's human nature to think the answer is just around the corner.
wtvanhest 10y ago
> Given that the article is titled "Later Stage Advice" and it says things such as switch from not caring at all about marketing to caring about it a little bit once the product is working I think Sam's advice is properly qualified. There are probably less than 20 YC companies that have reached the point where this advice is valid. Zenefits, Airbnb, Dropbox, Stripe etc. The others never needed this advice. The nightmare scenario for employees is getting stuck at a company without true product/market fit that just sort of has it, then watching the founders justify following this advice because they have raised enough money to get to 30 employees without ever having true product/market fit. > The cases where a company is so compelling and viral that there is a clear path to scaling are the exception. IMO, this advice should only apply to the exceptional companies. > For every Instagram there are probably 1000 companies that are still considered successful by their founders but at a smaller scale or slower pace. Startups are hard. Those companies should stay small with no formal management structure and most should not follow the advice in the post, even if they have scaled. I think the OP's point is that product/market fit is overlooked so often by founders and teams. No matter what, it should always be the true focus of the business. The number of companies that need the advice in this post is so small that YC should just write it as a personal email to founders.

vonnik 10y ago

Most companies that survive to become late stage, raising several and increasingly large multi-million dollar rounds, have found product market fit. Not all, but most. In B2C, this is true almost by definition. So I think Sam's comments are appropriate. He is limiting the scope of his advice to growth-stage companies that found their fit. Obviously, that's a problem that one revisits. But on the rare occasion that you solve for product market fit, you need to tackle other problems like the ones he describes.

nostrademons 10y ago

The previous issue of The Macro had an article about this: http://themacro.com/articles/2016/06/the-real-product-market-fit/ http://themacro.com/articles/2016/06/the-real-product-market...

hacknat 10y ago
I Love this article. I'm slightly baffled that they didn't have a paragraph hammering this home and linking to this article in this latest article, it would make this current article much, much better, IMO. Founders don't need anymore management advice at all they need someone screaming, "product, customers, and employees" all day, everyday at them. Almost no founder will ever need advice beyond that mantra; so many of them deceive themselves into inking that they do though.

semerda 10y ago

A product is never done. Problems are never 100% solved. A product/market fit as I recall from school was about finding a repeatable business model that can be used as a multiplier to bring in revenue. But even that changes over time as human needs change.

logicallee 10y ago

sorry, I found your definition of product/market fit to be basically ridiculous. >Very often product/market fit becomes "We've solved all these peoples' problems and they pay us money." The problem? The problems and the people are all different. Sorry for the tone, but to continue - "We don't have product-market fit! All we have is a bunch of people who consider us the solution to their problems and pay us a bunch of money! But where's the market? What are we even doing?" I mean take an iconic, successful product. the iPhone. What's an iPhone? I mean, sure, Apple sold 50 million of them last quarter but really it's just "we've built this thing all these different people want and they all pay us money". But the reasons people want one are all different! Or take the app store - what a disaster. What problem does it solve? It's just this place for a bunch of developers to do a bunch of different things! To hear you tell it, Apple needs to kill the app store -- despite taking a $6B cut in 2015 -- yes, this means $6,000,000,000 in revenue, and actually find some product/market fit, not a hodge-podge of random stuff people buy and developers are happy to give a cut of. I mean why would anyone choose a $6 billion cut over actual PRODUCT-MARKET FIT? Would you rather wake up with $6 billion tomorrow or with a product that actually has "product-market fit". I know which one I'd wake up with tomorrow. Sorry that I'm not able to be more eloquent but I find it so hard to wrap my head around what you'er trying to say. What even is your idea of a product that has product-market fit? You don't give any examples. Try to express what you mean using some concrete examples, if you still maintain your (extreme) position. So far you don't seem to include any positive examples of what you have in mind.