Stay ConnectedEvery founder has 1 goal: find product-market fit. We interview the world’s most successful startup founders on the 0 to 1 part of their journeys. We’ve had the founders of Reddit, Gusto, Rappi, Glean, Cohere, Huntress, ID.me and many more.
We go deep with entrepreneurs & VCs to provide detailed examples you can steal. Our goal is to understand product-market fit better than anyone on the planet.
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Copyright: © 2024 A Product Market Fit Show | Startups & Founders
Rob founded Outpoint in 2020 to help marketers optimize their ad spend. He was a growth marketer and his founder a data scientist. He had team-market fit, a solid thesis, and paying customers. But when the recession hit and ad spend dropped, growth ground to a halt. Nothing he did could revitalize growth. Ultimately, he decreased expenses and exited. He was able to return some cash to investors, find a home for his team and keep the product going.
You tend to hear about what happens to the best 1% of startups. Here’s what tends to happen to the other 99%.
Keywords
Outpoint, product market fit, startup journey, acquisition, growth marketing, venture capital, business strategy, lessons learned, entrepreneurship, market dynamics
Why you should listen
Timestamps:
(00:00:00) Intro
(00:01:13) The origin of Outpoint
(00:14:49) Outpoint's Runway in 2022
(00:19:21) Trying to sell your company
(00:26:07) Lessons Learned
(00:28:53) Almost Finding Product Market Fit
(00:30:23) Planning a Startup vs starting one organically
(00:34:30) Closing Thoughts
Cameo is one of the best-known recent consumer startups. You've either used it or know someone who's used it to get famous people to create personalized videos. And, for a while, they were a total rocket ship.
Year 1: $300K GMV
Year 2: $4M
Year 3: $20M
Year 4: $100M
They were backed by Jeremy Liew, the VC who seeded Snapchat in 2012. Cameo became a unicorn in 2021. But as the markets turned, revenue decreased, investor interest waned, and their valuation dropped from $1B to $100M. After the restructuring and the layoffs, Steven found a way to turn things around.
Now the company is profitable again. And growing.
Here's how he did it.
Why you should listen:
Keywords
Cameo, startup, entrepreneurship, product-market fit, celebrity endorsements, marketplace growth, business strategy, VC funding, early-stage startups, innovation, Cameo, gifting, unicorn status, Chicago startup, engagement, COVID-19 impact, business diversification, down rounds, product-market fit
Timestamps:
(00:00:00) Intro
(00:02:46) Where The Idea for Cameo Came From
(00:11:54) The Client Interface of Cameo in the Early Days
(00:14:12) The Failed launch that Could've Ended it All
(00:21:23) Gaining Momentum
(00:25:37) The Math Behind Cameo
(00:31:27) Becoming a Unicorn
(00:34:34) Meeting Jeremy Liew (the VC who backed Snapchat)
(00:40:47) Engagement on the Platform
(00:43:00) The Impact of Covid
(00:56:06) Finding Product Market Fit
(00:56:30) One Piece of Advice
Q3 startup data just dropped. We chat with Peter Walker, Head of Insights at Carta about valuations at pre-seed, seed and Series A. Why the current fundraising environment is the new normal and not about to get much better. We also talk about trends in founder vesting, and why some founders are choosing to vest for longer.
Finally, we go through what to do if you’re stuck with some product-market fit but mediocre growth, and why more exits are happening now than anytime in the fast couple of years.
Why you should listen
Keywords
State of private markets, early stage funding, SAFEs, startup trends, liquidity, valuations, venture capital, market analysis, fundraising, AI, AI startups, vesting schedules, funding models, startup ecosystems, venture capital
Timestamps
(00:00:00) Intro
(00:01:33) Top Highlights from Q3 Report
(00:04:45) The market won't get any easier
(00:06:13) Two Reasons why the SAFE Boom Could Change Things
(00:12:34) Professionalization of the Industry is a Double Edged Sword
(00:17:44) Rounds that are Leading the Market are as Competitive as Ever
(00:22:36) Vesting Schedules
(00:30:05) Best Location to Raise & the One and Done Method
Lior is the Elon Musk of VC. In just 8 years, his venture fund went from 0 to $4B under management. And while doing that, he founded Bright Machines, which to date has raised over $400M. He's both the CEO of Bright Machines and the Managing Director of Eclipse Ventures.
And he's not building "easy" software startups either. Bright Machines is looking to automate the entire manufacturing process with robots. He launched it with a $179M round and a 100-person team.
Lior is not normal. His story isn't either. You won't want to miss this one.
Keywords
venture capital, startup journey, Bright Machines, manufacturing innovation, fundraising challenges, robotics, automation, customer relationships, product market fit, entrepreneurship, Eclipse Ventures
Timestamps:
(00:00:00) Intro
(00:08:31) Starting Eclipse & Becoming a VC
(00:13:58) How he started Bright Machines
(00:18:43) The First enterprise deal with Flextonics
(00:24:49) The Process of Automation and Assembly
(00:30:25) Making a Machine as Reliable as a Human
(00:34:44) Bright Machine's Struggles
(00:36:56) The Business Model of Robotics
(00:39:49) Finding Product Market Fit
(00:40:37) One Piece of Advice
Parker quit his job as VP Finance at a late-stage startup in mid 2021. He raised $4M out of the gate because, well, it was 2021. But he didn't ramp up sales, he didn't hire 15 developers. He kept the team to 5 people for the first year.
He worked with a dozen design partners until the value prop was perfect. He even refused to let customers pay upfront in annual contracts. He wanted monthly payments to light a fire for him and his team.
This month, just 3 years after quitting his job, he closed a $28M Series A.
Here's exactly how he did it.
Why you should listen:
Keywords
Numeric, startup, product-market fit, funding, accounting, customer engagement, sales strategy, ROI, growth, Series A
Timestamps
(00:00:00) Intro
(00:01:07) Coming Up with the Idea
(00:06:13) Research, Taking the Leap & Pre-Seed Funding
(00:11:48) Keeping the Team Small
(00:16:55) Why Annual Payments Don't Work Early On
(00:22:10) The Challenges in Going into Market
(00:26:53) Measuring ROI
(00:33:26) Series A
(00:35:05) Finding Product Market Fit
(00:36:11) One Piece of Advice
Mike started selling SaaS before SaaS was a thing. PointClickCare is the Salesforce of healthcare. For the first 7 years, they raised just $600K from friends and family. With that funding, they grew to $50M in ARR.
Through that time, they went through the 2000 Dotcom crash and nearly went bankrupt in 2004 as they chased too many markets too soon.
Since then, the company has continued to grow at over 20% compounded rate and hit $500M in ARR in 2024 and a $5B valuation.
Mike shares how they started the company, the go-to-market strategy they used to go from 0 to $10M ARR and some of the most common mistakes he sees in the founders he works with today.
Why you should listen:
Keywords
product market fit, startup growth, healthcare technology, customer delight, market entry, capital efficiency, company culture, founder advice
Timestamps:
(00:00:00) Intro
(00:01:43) Target Market is as Important as PMF
(00:06:42) The Origin of PointClickCare
(00:10:23) Being a Pioneer in SaaS
(00:20:18) Measuring Customer Delight
(00:28:40) Common Mistakes when Trying to Find PMF
(00:34:32) Entering the US Market
(00:37:57) Surviving Payroll to Payroll
(00:40:13) Losing the Original Ethos of your Company
(00:52:08) Finding Product Market Fit
(00:53:48) One Piece of Advice
Apple sold only 370,000 VisionPro headsets-- much fewer than it expected. Meanwhile, Meta Ray-Bans are the top-selling product in 60% of Ray-Ban stores. The outcome of their AR/VR products couldn't be more different, even though they both have as much awareness as you could possible buy.
There are 3 reasons:
1. Price.
2. Killer feature vs cool product.
3. Destination vs always-on.
Check this episode out if you want to understand the where mixed reality is going and what you need to do to make sure your product takes off.
Piotr met his co-founders at a party in Coachella. He built them an app for influencers to post online. That simple idea evolved into one of the world's first influencer marketplaces.
While so many other tried and failed, Piotr and his team targeted marketing agencies with big budgets. They grew to $150M in revenue over a 10 year period. This summer, they were acquired by Publicis Groupe for $500M.
This is the story of how it all started, where the idea came from and how partnering with IBM of all companies drastically changed Influential's trajectory. Piotr also goes through in depth what it feels like to actually sell your company, and to go from living like a salaried employee to having tens of millions of dollars.
Why you should listen:
Keywords
Influencer marketing, startup journey, product-market fit, technology, partnerships, exit strategy, ad agencies, growth strategies, entrepreneurship, venture capital
Timestamps:
(00:00:00) Intro
(00:01:27) The Start of Influential
(00:11:49) Raising the Seed Round
(00:14:41) How to leverage a partnership with a large incumbent
(00:21:26) Series A and Superbowl Campaign
(00:30:02) Winning because of go-to-market
(00:35:43) The Acquisition
(00:38:56) One Piece of Advice
New Carta data shows that 30% of seed-stage startups used to raise a Series A within 2 years of their seed. Now, only 15% do. The bar for Series As is as high as it's ever been. And the number of seed extensions that I see is going up as a result.
But for founders, this is NOT a bad thing. I remember as a seed-stage founder I was obsessed with raising a Series A. But now I've seen startup after startup that raised $8-12M Series A when they didn't truly have product-market fit. Most of those startups ended up hiring too many people, burning too much money, and not growing any faster. They are now money-losing startups with no growth.
The VCs aren't happy, but they're okay. But the founders aren't. They are at the bottom of the stack. They can't sell their business and can't grow it either. They're stuck between a rock and a hard place.
The solution? If you're not performing at top quartile levels, if you don't have clear undeniable product-market fit, then raise a smaller round.
Seed extensions might not be what you wanted—but in many cases, it's what you need.
Liran quit a cozy job at IBM to launch Fusic, a TikTok-like app back in 2011. He raised over $10M, acquired tens of thousands of users, and failed.
So he went back to what he knew: deep tech and enterprise. He launched WEKA in 2013 to improve the efficiency of GPUs. He was operating on hard mode: building deep tech and selling to large enterprise customers. It took him 5 years to build a commercially-ready product. In that time, he raised over $35M from strategic investors, since VCs didn't get it.
Once they launched, they more than doubled every year. And this year, they crossed $100M in ARR.
Here's how Liran built WEKA and got it off the ground.
Why you should listen:
Keywords
Weka, deep tech, large enterprises, GPUs, OS, product-market fit, funding, strategic investors, POCs, POVs, AI, GPU use case, performance, cost reduction, rapid growth
Timestamps:
(00:00:00) Intro
(00:02:12) Why my first startup failed
(00:08:35) Starting WEKA
(00:15:04) WEKA's First Customer
(00:17:43) The Operating System of CPUs
(00:21:19) The Issues with Deep Tech Companies
(00:26:19) Competing with a Free Product
(00:32:57) Reaching a Couple Million in ARR
(00:36:26) Fundraising
(00:43:19) Finding Product Market Fit
(00:44:08) One Piece of Advice
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