We survived our product/market fit journey. Here’s what we learned

Photo credit: Tim Gouw.

Every stage in a startup’s journey has its unique challenges. However, one of the earliest and hardest tests for any startup is finding the initial product/market fit. The number one reason why eight out of 10 startups do not survive is that they could not find a product/market fit—a good market for the product they were planning to sell.

There is a lot written about this concept. Here is the most standard definition from Wikipedia: “Product/market fit means being in a good market with a product that can satisfy that market.”

At my startup, AppDynamics, it took us 15 months and multiple pivots to find our product/market fit and ship a good version one product. But once we achieved that, it allowed us to grow rapidly.

I am not going to write about the theory of product/market fit but rather a few practical lessons I learned in my journey to find that fit. As a 20-something-year-old-engineer-turned-startup-founder, I wish I had known these lessons beforehand.

(These lessons are from my perspective as founder and CEO of a startup, but many of them are also applicable if you are a product manager or owner, leading a startup initiative inside a larger company.)

You cannot delegate product/market fit

For an early-stage company, everything rests on the ability to get a viable product to market before you run out of cash. Don’t let anyone else tell you they can do this for you. A founder must be on the front line with potential customers, gathering and synthesizing the feedback that is so critical to nailing product/market fit.

Relying on a marketing or sales person early on for this will not work. At most, they can help set meetings and find customers to talk to. But as a founder, you most likely started the company because you had deep domain expertise and a unique insight and idea to solve a problem you recognized. No one is better equipped than you to refine that unique insight into a successful product.

I initially tried to delegate customer conversations so I could focus on building the product. I soon realized that just didn’t work. I could not build the best product, pivot fast enough, and make the right choices if I was not personally involved in the conversations with customers. If you think that is something you do not want to do, make sure to have a co-founder who will do that, and find the right co-founder before you start.

The myth of the Rolodex

The best way to find the product/market fit is to talk to a lot of customers. However, the biggest practical challenge every startup faces is how to find those customers as a startup with only a handful of engineers and, in many cases, no product to show yet. At my startup, we talked to dozens of prospective customers, and our earliest paying customers were companies like Priceline, Netflix, and Electronic Arts. Many people asked me how we found them; did our investors introduce us to them? That is what I call the myth of the Rolodex.

The sooner you learn to find your future customers yourself, the better off you will be.

Your investors and other stakeholders will promise you access to their contacts—their Rolodexes. By all means, vet those and take advantage of relationships where they make sense. However, there are two issues with this. First, you will soon run out of them, and if you only rely on these, you are going to struggle. Second, just because you can get to someone through those contacts does not mean you should. You want to find customers to validate your product for the most ideal market, rather than for a less than ideal market just because it was easier to get access to customers there.

I have seen that simple but fatal mistake by some startups whose ideal target market was large enterprise businesses, but they ended up building a product better suited for small businesses because those customers were the only ones they could easily reach during the customer validation phase.

The sooner you learn to find your future customers yourself, the better off you will be. You can do this by reaching out to people on LinkedIn (worked the best for me and resulted in most of our earliest paying customers), hiring an early sales person, or releasing a free version of the product to attract early users.

Be wary of nice feedback

Include engineers early in the customer validation process

Product/market fit is more than product features