Accelerating Growth: Grow Faster Without Working
Three Key Points
- You need product/market fit
- Strong Word of Mouth is a good signal that you have a good fit
- Create tweets and a blog post before you write code to understand the future state of your customer (or company)
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Self-Funding vs Raising money
- Raising Money— When you raise money, you can spend the money ahead of your revenue
- Self Funding — When you self-fund, you can spend the money as you make it from your customers.
- Like Valve — shape your own company in your own way (valve handbook)
What’s In It For Me (WIIFM)
- How to determine if you have product/market fit and analyze it
- An early stage product hack to get closer to product/market fit
- How to build something people want by working backwards
Long, Slow SaaS Ramp of Death
- You have limited resources.
- You have limited time.
- You have to focus.
Top 20 reasons startups fail
- No market need (#1)
- Ran out of cash
- Not the right team
- Got outcompeted
- Ignoring customers
- Really, it’s all about a poor product.
Thesis: You Need Product/Market Fit Before You Can Grow Your Business
“Product/market fit means being in a good market with a product that can satisfy that market” — Marc Anderson
- Customers are a great product/market fit
- Word of Mouth — Strong Word of Mouth is a good signal that you have a good fit
- Customer Addiction — How passionate are your customers?
Finding Product/Market Fit
- Step 1: Find out why an important part of an existing product or category stinks.
- Step 2: Make it 10x better
- Started by asking “What sucks about Google Analytics overlay”
- Tested on CrazyEgg, learned you wanted to track every click
- They figured out the pain point — and that resonated with the customers
- Doubled down on what they knew. Continued to dig deeper into the pain and solving that pain.
- Built in one month
- Used EC2, S3, SQLite, etc
- Horribly slow and ugly code with bugs
- Took 7 servers for just 30 customers
- Started with a single question: What’s wrong with Google Analytics funnels?
If it’s good for customers, it’ll become the norm…
Or, everyone fucking copies you
“If it’s good for customers, it’ll become the norm. Or everyone will copy you” (@hnshah) Tweet This
How to Analyze Product Market Fit
- Product/market fit survey
NPS Retention Engagement Churn
I ask existing users of a product how they would feel if they could no longer use the product — Sean Ellis
How would you feel if you could no longer use Google Analytics?
- One of the product/market fit responses you get is people afraid that your product will go away
- If enough people are very disappointed, you’ll see product/market fit
- Using these questions gives you a signal on if you have product/market fit
- Aiming for ~40%+ of people saying ‘somewhat disappointed’ — that shows that some folks are experiencing a need
- “I can go and try and improve my product / value prop to move them up to another category
- When the majority of people can’t live without it, prepare for growth
- Ask people what they would use if they couldn’t use your product
- Ask what the primary benefit that people receive from using….
Have you recommended….
- Asking to learn what language they use to describe the product and how they pitched it to a friend
Minimal Viable Product
- Focus on building a ‘skateboard’ — it can be ghetto.
- Every part of the process right, but just worry about getting people from Part A to Part B
Do Research Up-Front
- Take the time to do the research up front
We try to work backwards from the customer, rather than starting with an idea for a product and trying to bolt customers onto it. — Amazon (Quora Post)
- Create tweets and a blog post before you write code
- Get a discipline around writing the blog post first before you write the product
- …what do you need to know about the customer to write the blog post?
- Amazon takes their goal and then backward plans / works backwards (Amy Hoy on Backwards Planning)
- “If I have to provide this specific product experience to win, this is how I can get started”
You Are Not Your Customer
- You can start with the problem you have, but you need the customer
- You need their input
- You need their feedback
- You need the product/market fit feedback faster before you start building