In Search of Product Market Fit: Education for the First 100 Days
In working on Quickapply, I’ve stumbled across many reads on product market fit and idea validation. A few are gold, while the rest are just rocks.
Here’s five nuggets of gold:
1. How to Get Startup Ideas by Paul Graham
I’m putting this here to get it out of the way—you’ve probably read this, it’s famous. But reread it. I’ve just gone through the ideation process again, and I’m rereading with a fresh pair of eyes. Even more now, every sentence uncovers some truth the phenomena that are startup ideas.
One of many takeaways:
You can either build something a large number of people want a small amount, or something a small number of people want a large amount. Choose the latter. Not all ideas of that type are good startup ideas, but nearly all good startup ideas are of that type.
I’ll stop here, as to avoid quoting the whole article :)
2. How to Come Up with a Business Idea by Courtland Allen
I dislike this point in Paul Graham's essay:
You have a lot of control over the rate at which you turn yours into a prepared mind, but you have less control over the stimuli that spark ideas when they hit it.
If Bill Gates and Paul Allen had constrained themselves to come up with a startup idea in one month, what if they’d chosen a month before the Altair appeared? They probably would have worked on a less promising idea.
I believed this, and waited, waited, waited for the perfect startup idea. But for me, that was just a sneaky form of procrastination. There’s no such thing as “the one”, in startup ideas or anything else.
In contrast, Courtland Allen shares how he ran a deliberate ideation process to come up with Indie Hackers:
After two days and probably 8-12 hours of research, I’d added roughly 20 ideas to my list and refined a bunch of my old ideas, too. That really struck me as meaningful — my list had grown by 100% in roughly 2% of the time it’s existed. Not only that, but my new ideas and refinements were much better than the old ones. My takeaway was that short but intense, focused, and purposeful brainstorming beats years of passively hoping for good ideas to materialize.
This supports taking time to run a deliberate brainstorming/evaluation process, instead of waiting for “the one”.
I also like his criteria in picking between ideas a lot:
1. Do people need this?
2. Can I personally do a good job marketing and distributing it?
3. How hard will it be to avoid churn and keep retention high?
4. Is it meaningful and beneficial to the world? 5. How long will it take me to build an MVP?
6. What kind of effort will it take to keep it running long-term?
7. Can this idea actually generate revenue?
3. Guide to Startups, Part 4 by Marc Andreessen
This is where Andreessen coins product market fit. Read this for the precise definition, so you don’t delude yourself if you don’t have product market fit.
Andreessen drives home that when you have PMF, you feel it:
And you can always feel product/market fit when it is happening. The customers are buying the product just as fast as you can make it — or usage is growing just as fast as you can add more servers. Money from customers is piling up in your company checking account. You’re hiring sales and customer support staff as fast as you can. Reporters are calling because they’ve heard about your hot new thing and they want to talk to you about it. You start getting entrepreneur of the year awards from Harvard Business School. Investment bankers are staking out your house.
If you have to ask, you don’t have it!
4. How Superhuman Built an Engine to Find Product/Market Fit by Rahul Vohra
This piece is by Rahul Vohra, the founder of Superhuman. One big takeaway: all the things Andreessen describes are lagging indicators of PMF, and you want a leading indicator.
A leading indicator? Does a leading indicator even exist?!?
Just ask users “how would you feel if you could no longer use the product?” and measure the percent who answer “very disappointed.”
Then, the Superhuman founder runs a disciplined process to drive this number past 40%, which is the magic number, says some Sean Ellis.
The details of the process are fascinating. What most struck me was that to improve product market fit, it doesn’t just mean improving the product. It means improving the market—qualifying the customers and segmenting the market.
Goes back to PG’s point:
Build something a small number of people want a large amount.
You have to compromise on one dimension.
5. Lean Customer Development by Cindy Alvarez
You can skip the book Lean Startup. While it was a big deal in its time, it’s mostly fluff. Read Lean Customer Development instead. You know how YC keeps saying, talk to users? And how IH keeps saying, build an MVP quick? This book shows you exactly how to go about user interviews and MVPs, so you can test your assumptions robustly.
I was stumbling blind until I read this. Thanks Justin for the rec!
This book unlocks interviewing users as a resource, which is the fastest way to learn about your users.
Validate hypotheses through interviews, before building:
A validated hypothesis typically has four components, expressed enthusiastically:
• The customer confirms that there is definitely a problem or pain point
• The customer believes the problem can and should be resolved
• The customer has actively invested (effort, time, money, learning curve) in trying to solve this problem
• The customer doesn’t have circumstances beyond his control that prevent him from trying to fix the problem or pain point
Do your reading 🙂 then go conquer the world!!