Pre-product/market fit
Marc Andreessen: “product/market fit means being in a good market with a product that can satisfy that market.”
A friend and I are at similar stages with our respective businesses. Many others are too. The stage is pre-product/market fit but post-serious commitment to the venture. It’s an uncertain time. (Funnily enough, he just messaged me saying, ‘I just can’t fucking wait for PMF’. Vulgar language, I know, but the point is well made.)
Our stage is straight after you jump from the diving board but before hitting the water of product/market fit. The in-between-y place, where your eggs are in one basket (and your chickens are yet to hatch), where at Christmas you’ve told your extended family ‘this will change the world’, and where you have—all things considered—unreasonably high expectations. The tricky thing about this in-between-y stage is how long it drags on (for some, it never ends). In our case, the swimming pool analogy is apt. Hitting the water of product/market fit is a sure thing. Yet, we can’t be certain of when.
Product/market fit is not black or white, one or zero. You’re not in it or out of it, like you are with a pool or like having a Soho House membership. It’s a gradual process of startup self-discovery. Re-framing a value proposition, building a feature and changing the contract term moves the needle closer to the promised land. For some, fit comes in a moment, at the point of napkin-conceptualisation; for others, it takes years.
As with therapy, searching for product/market fit encourages self-reflection (and honesty) that isn’t required when things are booming. When things are booming, you’ve done a lot right, and the reward is the ability to scale (fun times, but another list of problems to be solved). At that (later) stage, the most critical hypotheses (such as: will someone pay for this thing I’ve made) are proven beyond doubt, and the aim of the game becomes growth.
We, with Yokeru, are not yet there. With us, the context is pre-product market fit: It’s question-asking rather than person-hiring time. It’s in this Neverland of uncertainty that most startups fail: They appear to run out of money. However, what they run out of is energy. When confronted with failed experiments, a founder can lose faith in the grand plan. Returning to a role at a big corporate becomes quite appealing (Apparently. I’ve brainwashed myself to believe it’s the least attractive thing in the world). The grand plan doesn’t have to be tied to the particular business. After all, the company didn’t exist before the founder founded it, so how silly to link any self-worth to the venture (however, as I mention in the second paragraph, it’s hard not to).
Many of my friends have gone through the startup washing machine (and having gone through three startups myself, with varying degrees of success). The founders that stick with it through the trough of pre-product/market fit are the ones that don’t wed themselves to the success of that particular venture. It is the ones that talk such a (disconcertingly) big game that keep at it (so no one could be in doubt that she has the confidence to pivot her way through).
Because there are only two things to do on the journey to product/market fit:
(a) The first is to get niche. By getting niche, we have been able (for the first time) to get some answers. My uni-pals often comment I’m a bit niche for them. I’m a sober bed-by-ten ultra-running nomad—what isn’t niche? Yet, until very recently, and in deaf-ignorance of our mentors, I’ve failed ‘get niche’ with Yokeru. We’ve maintained a broad-church approach to customer acquisition, product development, and talent acquisition strategy (based on no strategy at all). The result has been action without the prospect of answers; the outcome is stagnation. In recent months this changed. We now recognise the need to get niche (so niche that the market seems unpalatably tiny). Early on, it’s more critical than ever to service one specific customer well with a particular product. If a startup (in the trough) fails to do this, they cannot ever get to the truth of anything! Not a good place to be.
(b) The second is we’re trusting in the process. Trust indicates a relaxed growth mindset, which enables compounding to kick in: Everywhere I look in startup-land, I see compounding (Not only in financial instruments, but also our team’s skills, domain expertise, and even the tech solutions–it even exists with friendships. Coinbase was once small-fry, but compounding and iterating a bit has created a substantial business. Compounding is both omnipresent and invisible. It’s everywhere, but just out of view. Joseph Tussman has a quote on the power of trusting the process: “What the pupil must learn, if he learns anything at all, is that the world will do most of the work for you, provided you cooperate with it by identifying how it really works and aligning with those realities. If we do not let the world teach us, it teaches us a lesson.” This quote resonates, and committing long-term to the process is simple but powerful.
If a startup gets niche, and trusts the process, it will eventually learn enough to hit the water of product/market fit. This whole process is uncomfortable. But, like a clunky ascent of the fairground ride, it’s worth it. As de Mello says in his book Awareness: “People who want a cure, provided they can have it without pain, are like those who favour progress, provided they can have it without change.”