Johnson Cook

Atlanta tech investor. Entrepreneur.

Johnson Cook - Atlanta tech investor. Entrepreneur.

So Very Nuanced, that Product Market Fit

One of the most talked about concepts among startups is product-market fit (PMF).  It comes up in daily conversations, monthly updates, investor conversations, and is a regular topic of startup blogs (like this, this, this, and this). 

Because entrepreneurs are so goal oriented, we crave a definition. We crave a SMART goal where we can see how much farther we have to go to get there.   We want a deadline, a date, and a hard stop on the current phase.

Yet PMF continues to be difficult to define. Some of the definitions you will hear, just for SaaS companies. 

  • when you close X non-friendly customers in X time frame
  • when X non-friendly customers are talking about the product, and giving tons of feedback
  • when 2 account execs and 1 BDR can consistently and predictably close deals
  • getting to $1mm ARR
  • getting to $1.5mm ARR
  • getting to $10mm ARR
  • you are growing MRR by 10% per month

So how in the world do you know what your goal is? What are you pursuing?

The truth of the matter is that setting a hard numeric goal as the “PMF finish line” is difficult.   Remembering that PMF is a spectrum is important. As Feld says: 

Every time you work on something new, whether it’s a new feature, a new product, or a new product line, recognize that you are searching for incremental product/market fit. The search is a continuous and never ending quest. Don’t confuse illusion with reality.

Thoughts on Finding Your Hammer

When you’re building a product and talking to customers at the same time, hopefully you’re spending your time on the questions: How would you use this product?  How can this product affect your company?  What else can this product do for you? 

But when you get the answers, it’s easy to feel frustrated when they are all over the place without obvious commonalities. Especially when selling into large enterprises, individual departments have specific, unique problems to solve.

I like to think when having these conversations that we are selling tools to contractors. When we talk to a roofer, his use case is: I need a roof installing tool.

The framer needs a stud installation device. 

The window guy needs a gentle leveling device. 

The carpet guy needs a device that can install carpet strips and edges. 

You may think that you’ll never find a solution, until you realize that they all need a hammer.  It’s not obvious that you’re selling a hammer when you spend all your time thinking about the roofer’s use case. That’s why it’s important to 

A) talk to as many different potential users as possible

B) peel back their layers asking why and how as many times as possible

C) present lots of options/ideas for how a roof installation could be helped

Once you start to discover the hammer, it’s important to realize that you aren’t going to come out with a Pneumatic Nail Gun on your first product. So it’s good to say “no” to some things when you can tell they are obviously out of reach for you.   But on the flip side of that, as Seth said in a great post on building softwareYou could, for example, make a hammer simpler by removing the nail puller on the other side. But that makes a useful tool less useful.

Discovering your hammer, how to describe it, and where the balance is between power and simplicity is not an easy task. But once you see it successfully sink that first nail, it’s exhilarating and rewarding. 

Your Energy is Best Spent on These Two Activities

I received a lot of notes about the Hard as Hell post on Monday. It seems I struck a chord with CEOs.  I thought a follow-up post on how I “lean in” would be helpful.

What specific tasks can you do during the day when you feel beat up? Where can you get energy?  For me, it comes from two places: 1) talking to prospects and customers and 2) working heads down on the product itself. 

Talking to Customers.  There is nothing more energizing than selling to someone who sees value in what you need.   Having good question after good question that pulls you through a demo of your product is awesome.   When you start to feel like you’re slowing down, go find some customers to spend time with. Ask them how they’re using your product. Or if they aren’t, just ask them how they do their jobs. Ask them what tools they are using.   Consider it a challenge to get as much information from your target customer as possible.  Information feeds ideas, feeds product.

Designing / Tinkering / Playing with Product.  For tech entrepreneurs and non-tech entrepreneurs, thinking about what value you deliver to the customer should be a great way to keep your head in the game.   Even though you can’t expect to “build it and they will come,” the inverse could also be true: “if it sucks, there’s no point in trying.”     For me, this isn’t as much expanding design and ideas on what our startup can do, rather it’s imagining new use cases, new ways to describe it, new examples and user stories. 

It’s important to keep moving when building a company. Just be sure you are moving on the right things.   Don’t let yourself fall back into low-impact activities.

Trust that any time you are spending with customers and in/on your product is high-impact, high-value time spent.

Why Products Succeed

I recently read Relationship Marketing by the famous Silicon Valley marketing guru Regis McKenna. While the examples and stories from the book were [extremely] dated, there was still a great amount of value in the stories of basic business common sense on how to design your company to be focused on your customers. One of my favorite parts included a list of what makes products successful.

Regis made this list based on companies he had either invested in, worked with, or served on the board for. So it’s a list written from an internal perspective on how companies decided to build products.

1. Appeal to new markets or an expansion of existing market to bring in thousands of new potential customers. In other words, you aren’t just fighting for market share. You are creating a larger pie.

2. Rather than being new inventions, they are assemblages of interrelated technologies. Creators take advantage of existing technology and combining them into a unique package. “Product innovators are students of the market and the technology.”

3. Dependent on other newly developed technologies and market infrastructure. Having partners, platforms, consultants, vendors, buyers in an existing, connected ecosystem gives products a greater chance of success.

4. Time it right. Having one eye on cutting edge technology and one eye on the market is the way to spot opportunity to capitalize with a new product.

5. Products are adapted to market requirements, and then keep moving. As the first version comes out, it is important to make changes rapidly and keep moving with the market demands.

6. Successful products are developed by small teams. This added sense of purpose is visible in the products they create.

7. Key customers play a role in the design of the products.

8. The first users will determine success or failure of a new product.

9. Truly revolutionary products will create new jargon, new language. Tweet me. Google it. Uber home.

10. Successful products are used in educational programs, seminars, user groups, meetups as examples of a way to do something better.

I enjoyed reading the perspective of a technology guy in the early 90’s and finding where there are lessons from the microprocessor and early PC market that can be applied to the awesome startup land we operate in today.