LisaDziuba / Startup-Library

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Startup-Library

Product Market Fit

Product Market Fit is when people love your product, they want to use it and tell about it everyone they know. You need to look on urgency in using or buying your product, how much money or time users are ready to give. And how loud users ready to talk about the product.

Achieving product market fit is about tracking: Return usage: vital (Days: 1, 3, 30), NPS ( >50 is probably Product Market Fit), Payment Renewal Rate (Not Churn. Churn can be deceptive). Less important metrics: Signups is not as important as Active Users; Conversion Rates aren't super important

80% of all founders failed to find product market fit. It's very important to save as much cash as possible before finding product market fit to extend your runway. Step 1 of this approach you build, launch and iterate on several ideas until something magical happens…and that is product market fit. After that everything gets easier, customer shows up and you can feel momentum.

It's easy to find the idea, and it is more difficult killing the wrong ones fast and you will probably find something.

It's live discussion on how Product Market Fit looks in different startups. Found on Reddit.

  • Marc Andreessen explanation:

"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 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. You could eat free for a year at Buck's."

M & A for startups

There is a hierarchy in the value of a startup to an acquirer. As you move up the hierarchy, potential acquirers will value you on different metrics that increase the multiple that your company is worth. The hierarchy is: Team Hire ("acqua-hire"), Team Buy, Technology Buy, Business Asset, and Strategic Asset.

Checklist for any founder considering an acquisition offer: 1) Figure out if the person or team reaching out has decision-making power; 2) Look into the terms and people involved with past acquisitions that the company has done; 3) Map out the competitive landscape to get a sense of how valuable your company would be for the acquirer.

Founders Stories

Books

  • The Startup Owner's Manual: The Step-By-Step Guide for Building a Great Company by Bob Dorf and Steve Blank.

I'm reading it now. This is a 600+ page "how-to" guide, which requires attention and time. Most of info is covered in blogs or talks, but I'm curious to read this famous book.

  • The Lean Startup Book by Eric Ries.

The Lean Startup methodology is based on Build – Measure – Learn cycle. Build MVP, measure your customers’ reactions, and learn if the hypothesis has been validated or you need to pivot. Repeat the cycle until you find Product Market Fit. I love the explanation of different pivot [types] and [growth strategies]. We did zoom-out pivot for Flawless App in 2017, when one feature of an old product became the new Flawless. Written in 2011, it has some outdated examples and a bit overwhelmed with repetitiveness.

  • The Mom Test: How to Talk to Customers and Learn If Your Business is a Good Idea by Rob Fitzpatrick

Blogs I'm reading:

My podcasts:

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License:MIT License