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
Even if founders do everything right, they may still fail to find PMF. That's why even repeat founders have only 1.5% chance of building a unicorn.
We talk about product-market fit constantly in this podcast. Hopefully, we learn from what others did and improve our chances of finding PMF. But there is only one way to guarantee that one day you will find product market fit. We explore that in this episode.
**Got sick this week so re-releasing one of the most downloaded short episodes from last season that was originally published exactly a year ago today.**
Don co-founded Vena & was CEO for 8 years. Last month, Vena became a Centaur crossing $100M in ARR.
Don & his team launched Vena in a crowded market, where everyone else was trying to replace excel. So they built a budgeting and planning (FP&A) solution that instead leveraged excel. As Don says, they "disrupted the disruptors".
Don knew the problem, he knew the space, he knew the customers— that’s why he grew from 0 to $1M in ARR in 18 months.
Here's exactly how he did it.
Why you should listen
Keywords
startup, scaling, Vena Solutions, network, crowded markets, budgeting and planning, differentiation, pain points, revenue intelligence, SaaS, founders, startups, entrepreneurship, entrepreneur, venture capital
Timestamps:
(00:00:00) Intro
(00:02:36) The Beginning of Vena Solutions
(00:06:06) Step 1 of Vena
(00:09:35) First Conversations
(00:11:09)The Market in Planning
(00:17:50) The Market in Workflow
(00:20:02) Wealth Fargo
(00:22:23) Getting to a Million
(00:26:05) The Biggest ROI
(00:29:03) Una
(00:34:33) Not Retiring
(00:35:55) Finding Product Market Fit
(00:38:29)One Piece of Advice
It's the first time I see a candidate BS his way through interviews with multiple people, impress each one of them, and ultimately end up being a complete fraud. But the biggest learning wasn't that you should watch out for fraud-- it was that you shouldn't trust interviews nearly as much as you'd think.
While fake candidates are rare, candidates who are 10x better at interviewing than they are at the job are quite common. In fact, the only thing you know about candidates with great logos is that they know how to interview. Otherwise, they wouldn't have worked at Google in the first place.
What you don't know is if they're truly great. Here's how to find out.
Takeaways
Keywords
founder, hiring, fraud, interview skills, backdoor reference checks, referrals, former founders
Ashutosh is one of those rare founders who founded not just one, but two unicorns. He worked at Google for 4 years, left and started Bloomreach, which was last valued at $2.2B.
Halfway through that journey, he left to do it all over again. He started Eightfold AI which is the one we're talking about today. In 2021, he raised $220M from Softbank at a $2.1B valuation.
When he left Bloomreach, he didn't even have a clear idea of what he was going to build. He just knew he wanted to have more impact and go from 0 to 1 again.
It took him about 2 years to figure it out— then he grew from $1M ARR to $3M ARR in a year & to $12M ARR the year after that.
Why you should listen
Keywords
unicorn founder, Bloomreach, Eightfold, product-market fit, pivot, HR space, digital marketers, talent, hiring, market need, scaling
Timestamps:
(00:00:00) Intro
(00:01:41) His first unicorn - Bloomreach
(00:05:22) Starting Eightfold AI
(00:08:50) Not Marrying Yourself to One Idea
(00:11:55) Finding real customer problems
(00:14:46) Solving Today's Problems vs Future Problems
(00:16:47) Hiring From Already Rejected Candidates
(00:22:50) Fundraising
(00:24:40) Building a V1
(00:27:00) Pivoting and then Reverting Back
(00:30:43) First Customers
(00:32:59) Finding Product Market Fit
(00:35:04) One Piece of Advice
Carta is the backbone of most venture-backed startups. They have access to specific information about every single round, not just what's reported in TechCrunch.
Today, Peter Walker, Carta's Head of Insights joins us to share the findings from Carta's Q2 reports. We go deep into data from pre-seed, seed and Series A rounds. We cover median valuations, time between rounds, graduation rates between rounds, the AI and repeat-founder premiums, and much more.
VCs know most of this data. Founders need to be equally well-informed. You won't want to miss this episode.
Why you should listen:
Keywords
startup ecosystem, fundraising trends, total fundraising, down rounds, bridge rounds, company shutdowns, pre-seed funding, seed funding, series A funding, valuations, round sizes, dilution, founder equity, early employees, equity compensation, seed round size, series A
Timestamps:
(00:00:00) Intro
(00:01:35)Findings from the Q2 Report
(00:06:12)Typical Pre-Seed Round
(00:07:29) Post Money Safe vs Pre-Money Safe
(00:11:54) AI and Repeat Founder Premiums
(00:15:03) Typical Seed Round
(00:17:07) Time & Graduation Rates Between Rounds
(00:22:08) Typical Series A
(00:28:14) Equity Splits
(00:35:02) Founder Ownership
Last quarter, Sanish raised a $50M Series D. His company has raised over $130M. They have enterprise customers across 14 countries including Dollar General, Aldo, and CircleK.
It all started because Sanish was working out of coffee shops. He wasn't looking for a startup idea. But after a few casual conversations with employees, he noticed several problems retail workers and managers faced. He decided to build Legion to solve them.
He partnered with one local coffee chain, worked as a barista for a week, and developed the product with them for a year. He didn't sell to other customers, he stayed heads down until the local chain adopted the product across their entire organization. By the time they went to sell to other enterprises, they knew the product worked.
Why you should listen
Keywords
Legion, workforce management, enterprise software, problem validation, value proposition, scaling, pricing model, ROI
Timestamps:
(00:00:00) Intro
(00:01:35) The Origin Story of Legion
(00:04:53) The Mindset of Most Frontline Workers
(00:11:05) Gathering Data
(00:20:00) Building an MVP
(00:24:30) Insights from Customers Using V1 Products
(00:30:15) Series A
(00:32:13) Legions Core ROI
(00:36:15) Scaling Legion
(00:39:47) Finding Product Market Fit
(00:41:19) One Piece of Advice
Sean Ellis created THE test for PMF. He led growth teams at Dropbox, Eventbrite and LogMeIn, which sold for $4.3B. He coined the term Growth Hacking and wrote the best-selling book Hacking Growth.
Today we go deep and tactical with him. He takes us through how to use the Sean Ellis test to perfectly measure and understand product market fit.
He takes us to case studies of things that he did at LogMeIn and Dropbox to dramatically increase growth. And he shares exactly what you can do to drive more referrals for your startup.
Why you should listen:
Keywords
product-market fit, Sean Ellis test, growth hacking, referrals, first-time user experience, optimization
Timestamps:
(00:00:00) Intro
(00:1:55) The Origin of the Sean Ellis Test
(00:13:13) Finding Product Market Fit Using the Test
(00:18:21) Focus on "Must Have" Users
(00:21:38) Growth Vs Marketing
(00:25:38) Old School vs New School Marketing
(00:30:17) 4 steps to growth
(00:36:24) Improving Sign ups to Usage
(00:41:37) The impact of Referrals
(0045:31) One Piece of Advice
Daniel's been building robots for 20 years. He's sold 100s of AI robots-as-a-service to Walmart, FedEx, & DHL amongst others. Last month, he raised a $40M round.
6 years ago, he realized why robots weren't getting massively adopted. Builders like him were trying to build perfect robots that always worked. But every situation has edge cases. What if you designed robots to work only 80% of the time and use humans for the other 20%?
That one unique insight changed everything and was the reason he started Vecna. His robots can tell when they need help and ask humans to assist in real-time.
Like most capital-intensive startups, Daniel played on hard-mode. Here's how he built hardware, robotics and AI, sold enterprise contracts, and grew to $10s of millions in revenue.
Takeaways
Keywords
Vecna Robotics, robotics, warehouse industry, automated forklifts, reliability, safety, customer adoption
(00:00:00) Intro
(00:02:05) The Beginning of Early Robotics
(00:06:00) Edge Cases in Robotics
(00:08:15) Robots Shouldn't be Perfect and AI Isn't Intelligent
(00:14:05) Technology Empowers Humans
(00:18:19) When Robots Need Help
(00:21:29) The First Pilot and Customers
(00:29:49) Covid Slowed Everything
(00:33:52) Finding Product Market Fit
(00:34:45)One Piece of Advice
Advice is free—actioning bad advice isn't. Early-stage founders are bombarded with advice. A lot of it from investors who have never operated a business, never ran marketing, never led sales.
And yet, many founders take VCs' advice as sacrosanct. And many VCs feel like they can and should opine on everything. If many people treat you like an expert, you must be one... right?
VCs have a lot to offer founders. But, like everyone, they have circles of competence.
Be careful who you listen to.
Why you should listen
Keywords
customer needs, business problems, power dynamics, VCs, founders, advice
Alex got the co-founder of a public company to join him and raised $6M out of the gate—but it took him 3 years to make his first sale.
But after he shifted from selling to SMBs to selling to MSPs (Managed Service Providers i.e., outsourced IT), things took off:
April 2015 - $1K MRR
August 2015 - $10K MRR
June 2016 - $100K MRR
Nov 2018 - $1M MRR ($12M ARR)
And growth never stopped—soon, he'll cross $100M ARR.
Alex and his co-founder did many things differently. They came up with an idea by starting with markets, not customer problems. They raised a lot of money upfront and built a sophisticated product instead of an MVP. And they deliberated cultural values before making their first hire.
Clearly—it worked.
Why you should listen
Keywords
Auvik, software company, networking, SMBs, mid-market, decoupling, control plane, hardware, software solution, automate, configuration, user research, product design, team, company values, SaaS, IT management, product-market fit, pivot, managed service provider, MSP, boldness, discipline, advice
Timestamps
(00:00:00) Intro
(00:01:47) The Origin of Auvik
(00:07:20) Finding a co-founder
(00:12:35) It's People Who Build Companies
(00:14:10) Finding the Concept for Auvik
(00:20:07) Buikding the Product
(00:30:30) First Customer Experiences
(00:34:40) Feedback Loops
(00:39:08) Getting to a Million
(00:41:33) Finding Product Market Fit
(00:42:54) One Piece of Advice
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