Here’s a scenario for you:
Early Stage Company: We NEED to find more customers.
Me: Yes, absolutely. I want you to find more customers too! First a few questions for you. Do you know who your most attractive customer is? Or at least have an opinion who that customer might be? What about them is attractive? What unique advantages do you believe your solution provides to those customers?
Early Stage Company: Um….We just need more customers.
This is a real-life conversation I have had with so many early stage companies. Many entrepreneurs are wandering blindly through the most critical stage of their company’s development, wasting their most valuable resource - time.
We’ve talked before about the priorities of an early stage company. And as most founders know, the most critical component to any early stage company is finding product/market fit (PMF). It is paramount to your early success, but not easy to do. Nailing this stage before your competitors do boosts your chances of success of getting that next round of funding so you can scale and get to market. With a defined PMF strategy, execution, and a great deal of hard work - you can give yourself the best shot possible to truly create a great company.
I’ve mentored hundreds of companies and helped set them on the right track to find PMF. Throughout all my experience, I’ve been able to crystalize patterns, mistakes and frameworks that I’ve seen over and over again throughout all of these early-stage companies.
Top 3 Lessons Learned
1. You must find and iterate customer value as efficiently as possible.
The pace of innovation today moves at light-speed. If you are not finding your value advantages and ideal customer profile as quickly and efficiently as possible, you will inevitably fall behind or worse, miss your PMF altogether.
2. You can’t find and iterate on customer value without a framework!
Founding teams waste unbelievable amounts of energy and time running from customer to customer without any framework to either prove or disprove assumptions or iterate on value. A framework gives you a set of tangibles that you can use to measure and track your value assumptions and removes the guesswork out of whether your PMF is genuinely working or whether you are being deceived by luck or even worse, wishful thinking. Plus, it keeps your team on the same page about what makes an attractive customer and why.
3. You must have market expertise on your team early to truly accelerate product/market fit.
Most founding teams are spread thin. They bring the needed product, development and technical expertise to table, but to truly accelerate product/market fit, marketing expertise is needed. Many founders will try to wear the marketing hat too, when in reality it’s almost impossible to lead the path to product/market fit. Many times, investors connect early stage founders with mentors and advisors, but in most cases, that’s not enough. They need a marketing expert that will dive into the trenches with them and help identify the market, discover their customer’s unmet needs, determine their target customer, define value propositions and ways to best engage these early customers. And all the while the product team is focused on building the minimal viable product, the marketing expert is focused on testing growth and distribution channels.
Not all PMF is created equal. How you get to PMF for B2B companies differs significantly than B2C companies. B2B product/market fit requires conversations with real customers and not simply clicks on paid search ads.
The moment you decide to start a new venture, the clock starts ticking. And as your company’s early development stopwatch dwindles closer and closer to 0 - so does your cash. Failing to find PMF sooner rather than later is a sure fire way to eat away at that valuable time budget.
How many fantastic companies have wasted their potential because they misfired on this crucial stage?
I’ve seen it happen. But I’ve seen the other side too. I’ve seen amazing companies establish frameworks and processes that help them get to their PMF. Now they can execute it with precision and sweep into the market like a storm.
And that’s why I’m sharing these lessons. Because I know how treacherous a journey starting a new company can be.
But you do not have to succumb to the pitfalls. Be careful, be wise and move quickly. Because if you do, you will give yourself the best shot possible at truly creating something amazing.