I have one tool to share with you. If you remember one thing from this video, it's this, you have a finite number of tries. But if you timebox your tries, you'll get to try a lot more things. And that will maximize your chance of success. Remember to timebox. Let's get into it.
Founders fail when they don't try enough things. And, usually they don't try enough things because they get stuck doing the same thing, over and over again. They don't give up the hypothesis when something has been proven false by time.
Let's define this as a product-market hypothesis. They're really two things.
- A set of people that you can reach, and
- a problem to solve, for those specific people.
And that is a possible try- a hypothesis.
Insanity is doing the same thing over and over again, and expecting different results. —Alcoholics Anonymous
There's a hustle point aspect of never giving up, and this is wrong.
"If at first you don't succeed, try, try again. Then quit. It's no use being a damn fool about it." W. C. Fields said that, I think he was a pretty smart guy.
New insights are actually the hardest to come by because ideas are a multiplier in execution, and good ideas are incredibly rare. Bad ideas are actually zeroes that nullify perfect execution, and we see lots of very talented founders that get stuck on this. They have it all, great engineering, great product, great marketing. But it just doesn't work. They can't sell it. The numbers don't go up. There's no growth.
We've talked about failure a bunch, but there are two common failure cases.
- A, it's a real problem, but you can't get people to know about it and use it, or,
- B, it's not a real problem.
In that order! That suggests a very specific system for how to approach start-up need finding.
The first stage of the problem: Get users
When working with very early stage start-ups, most of the focus in our office hours is usually the first part. How do you get it in front of people? As Ben Horowitz reminds us, there are no silver bullets, only lead ones.
When you're trying to figure out customer acquisition, you have to try lots of things:
- content marketing
- SEM
- SEO
- events
- webinars
- partnerships
- even hiring street teams
- Craigslist
- stealing users from other platforms
The most common failure point when working on customer acquisition is getting stuck on one or two things, and trying those, over and over and over again, doing more of what doesn't work. Again, there are only lead bullets.
What does success look like here? Well, you'll try one thing and it works. And you'll double-down your efforts, and it'll work again. You keep on doing that, until you establish a new normal, a steady state, that is much bigger than where you were before. That's scalable growth, that's product market fit. And that's what we're playing for here, that's what it looks like.
It is possible, but only through lead bullets.
The next stage of the struggle after you get users: Keeping them
Once you have an initial go-to market, then the real struggle begins. How do you actually keep them? We've funded great companies that have incredible early traction, but then, massive churn. That still doesn't work.
Another failure mode here, is if you can get pilots, but the pilots don't expand. This is a real danger zone. That means that you haven't made something that really sticks. This is a well-known issue in digital health and biotech. We call it the pile of pilots problem. You can a pile of pilots, but they're not going to expand.
When that happens, you have a seed company that cannot raise at Series A.
You need expansion. You need net retention. And if you can't, this isn't something people want.
There are things you can do in this case.
- You can improve your product. You can go directly to the people who are using it, and ask them, "Why aren't you using it?" Solve those problems, and you have another shot. That's a whole try.
- Sometimes you have to go back to the product-market hypothesis, and change who you're solving this problem for.
- You can change the price point and
- Sometimes really what you're doing there is picking a different problem to solve because that other set of people will have different needs. Needs that you might be able to fill with better software.
How to maximize your tries: Explicitly timebox the amount of time you will spend on any given hypothesis
And here's where timeboxing comes into play. You need enough time to know either way.
- Too short, and you may have given up on something that could have worked.
- Too long, and you've wasted your time. You'll never get that time back. You've burned critical runway, in ways that have hurt you fundamentally.
When you timebox, you set aside a specific amount of time to spend on this market and problem, and then, you quit. It's no use being a damned fool about it! That lets you go on to the next lead bullet.
If you're a great team, if you're doing the right things, and you have this process, you're timeboxing, you're trying new things, you're firing new lead bullets, you can and will find product market fit.
If it's not something people want, you have to do something else.
Timeboxing is your way to be very conscious of how long you should spend on any given problem.
My friend David Hua (founder of the #1 California cannabis software co Meadow) sent me an amazing quote today, that I think basically sums up where we're at, in our crazy lockdown world, just trying to make sense of it all.
"Now, more than ever, we must abandon the performative and embrace the authentic. Our essential mental shifts require humility and patience. Let's focus on real internal change. These human transformations will be honest, raw, ugly, hopeful, frustrated, beautiful, and divine. Be slow. Let this distract you. Let it change how you think and how you see the world, because the world is our work, and so may this tragedy tear down all our faulty assumptions, and give us the courage of bold new ideas."
— Dr. Aisha S. Ahmad
Let's go find product market fit. Don't forget to timebox, I'll see you next time. Thanks for watching.
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