Thanks so much to everyone who participated! The best advice I can give to any entrepreneur is not to hack your way to product-market fit. Finding product market fit is as old as business itself. You don't need to innovate or reinvent the wheel. There is a playbook, a method for getting there. I've teamed with GrowthHackers to share some of my best practices in our Product-Market Fit Playbook course here on Growth University. Check it out and and feel free to leave more questions here if I can be helpful.
Onwards and upwards!
Great question Vishnu! I had the pleasure of trying to solve this problem for the team at GrowthHackers way back when they were called ContentTools!
Marketers are notoriously difficult to sell to especially through cold outreach. That is because in general they have a learn-it-all mindset and they prefer to learn rather than be sold to. That said, there is a way to break through...
METRICS. Marketers are extremely metric driven. If you can lead with the performance metrics of others who have used your product or service, you stand a good chance to get their attention. This of course creates a chicken and the egg situation. You need metrics from customers in order to acquire customers. That's why its so important that you focus your efforts on acquiring customers from own network at first where you don't have to pay what I call the cost of admission.
Consider lowering the price significantly for these early customers and think of it as subsidizing the cost of future marketing. Demonstrating that you can really perform well in the right use case is the most valuable asset to going to market at scale with marketers.
Great question! Focus, focus and more focus. You may have a $6 trillion TAM but realistically you can only service a handful of customers at a time. Focus on acquiring the customers where you can get the most amount of revenue for the least amount of effort.
In particular, you should do your best to avoid cold outreach as a customer acquisition strategy for as long as possible. This is the slowest and lowest ROI path to market and tends to only work once you have market credibility. Leading up to that point you should try to leverage your network and as many unscalable customer acquisition strategies as possible to get in front of your market.
Thanks Gustavo!
1) Very simple, I'd take the advice that I've given startups for years. I'd focus my efforts on 50 individuals who already share my world view. I'd focus all of my time on learning from my network and the network of those people in my network so that I could accelerate the path to product market fit while reducing the burn on my runway. I'd create a data driven hypothesis, document it and test it every step of the way. Luckily for me this is an easy question because this is exactly the work that I've done at GrowthX for the past 6+ years!
2) There are so many but its hard to choose. If I had to I would say launching MXP Online. We've heard for years that the Market Acceleration Program was unique, special and needed in the market. But it wasn't until we actually launched it that we saw just how true that was. I cannot say enough about how grateful I am for the feedback we've received from the founder community regarding the MXP and how much it has helped businesses grow.
3) The biggest pitfall by far is not going deep enough on your ICP. Most founders create an ideal industry profile or an ideal company profile. But companies and industries don't buy products...HUMANS DO!! That's why it's an Ideal Customer Profile. In order to understand our customers and build a great ICP, you need to get into the shoes of their customers. Understand what metrics they are measured by, how do they go about doing their jobs and what are the keystrokes they use to do that job.
Just like Emilia's question, I could go on forever but the best way to understand our approach is to check out MXP Online or my course on Growth University where we go incredibly deep on ICP!
Thanks Emilia and great to hear from you!
Your ICP is the absolute most important tool in the entrepreneurial toolbox. Your ICP informs your pricing strategy, your customer acquisition strategy, your messaging strategy and so much more. Trying to go to market or launching a new product line without and ICP is like driving blind!
At GrowthX we've developed a three stage process to ICP development that is meant to do one thing extremely well: shorten the path to product market fit by identifying not who is Mr. Right but who is Mr. Right NOW. That is to say, who has a problem that my product or service can solve for today given my current team, resources and the next market milestone that you are trying to achieve.
Your ICP should always be revisited. It's always a work in progress and something that can be refined. Put another way, you should always be focused on getting to know your customers, their businesses and their problems better. Because at the end of the day, selling is helping and we cannot sell or help if we don't first seek to understand.
I could write an entire blog series about ICP development...oh wait...I DID! If you want to know exactly how we build ICPs at GrowthX check out MXP Online!
Hi Suchita, I addressed a little of this above but lets take a deeper dive shall we?
First of all, you need to avoid bringing feelings to a data fight. How do we know that Covid is the problem? The first thing I would do is verify that assumption and if that is the case, you may need to pivot target markets.
Second - as I mentioned to another one of the questions in the forum above, make sure that you're not mistaking No Response for No. Think about how busy your own email inbox is. How often do you respond to strangers asking you to do a favor? It takes time, effort, personalization and persistence to break through. No special sauce or subject lines here. If you believe that you have the right ICP identified, just keep knocking on that door until you get a Yes or a No.
Third - You should also consider whether or not it's your message and not your customers. All too often we place blame on the market for our failure to reach them when in reality the most common reason the market is not responding is not because of the market but because of our approach.
Take a look at your messaging and ask yourself: are you asking strangers to do work for you? And if so, why should they work for a stranger? Similarly, what does your messaging look like? Are you telling people what you do or are you helping them to understand what your product/service does FOR THEM? This is the key to market resonance and getting those interviews.
Fourth - The best advice I have for getting customers is to avoid the cost of admission entirely! You should drive as much pipeline and interview activity from your own network as possible before moving on to cold outreach.
Hey Tala - I'm definitely familiar with this challenge. At the end of the day, the M&A world is incredibly relationship driven. While I don't believe there is a great way to automate these kinds of relationships at scale, or at least do so quickly, I would give you the exact same advice I would give any founder.
Focus on the people who are in your ICP and already share your worldview. You will run into significantly less friction have much higher quality outcomes if you focus spending your time with people who work in markets and on deals similar to what you are working on. Focus is not the enemy but a tool to help you move faster.
Slow is smooth and smooth is fast.
Great question! I'm hearing a lot about how COVID and how it's impacting startups so there a couple of great points to bring up here.
1. In general, never mistake no response for not interested. I know as an entrepreneur myself, how easy it is to take every email that goes unresponded to personally but we need to avoid bringing feelings into a data fight. Persistence is the most important tool here. I can't tell you how many deals I've gotten through the door for myself and our portfolio companies over the years simply by continuing to reach out to people who did not respond to my emails. So keep pushing to get the feedback directly from them because that is the best market signal.
2. Depends greatly on the market. Startups that I work with are all too familiar with my belief that early stage founders should "focus on the 50". That is to say, instead of spending a lot of time on various channels and complex outreach campaigns, focus on the 50 individuals on planet earth who are the highest quality leads. Focus on the people where you have the best chances of acquiring the most amount of revenue for the least amount of effort. From there with just 50 leads, you can significantly increase your ability to personalize your outreach and see better results.
3. Quick note on COVID - The best practice I've seen and coached through COVID is to focus on companies that demonstrate the behaviors of "Early Adapters". Much like we talk about Early Adopters, Early Adapters are companies that have embraced the new economic reality and have already invested in making substantial changes to the way they do business.
A really cool case study! Looking forward to the next episodes.
Hi Andressa!
1 - Whether you're B2B, B2C or D2C a good product market fit indicator is that your buyer happily completes your buying and product experience exactly the way you intended it. Frustration is simply the distance between expectations and results. If you are able to predictably and repeatedly execute the same customer journey, that is a great early signal of early product market fit.
2 - Attracting investors really goes beyond vanity metrics such as growth rate. Let's briefly talk about what investors are looking to do? People are looking to invest into companies that have a problem that money can solve. You may have an attractive growth rate, but does your product or service really own the customer use case? Have you created a customer and buyer journey that is predictable and scalable? In the first 3 months of a startup, I would be much more focused on getting intimate with the process of how the growth rate and revenue are being made.