Written By: Marc Halpin
Google ‘Product Market Fit’ and you are faced with pages of definitions and perspective on the subject, quite often (read: always) by people way smarter than me!
The definition I love is based reputedly on what Don said,“I’m looking to invest in companies that can screw everything up and still succeed because the customer pulls the product out of their hands.”
Is your customer pulling your product out of your hands? Are you struggling to keep up with demand? Are your customers referral machines?
If your answers are yes to these questions, then you have Product Market Fit. If you’re also working in a big market then you probably have a fundable business. VCs today will go out of their way to meet you and invest in your company. Good for you!
Now here’s the funny thing… when you get Product Market Fit you may feel that you do not want to raise capital because it’s entirely possible that you are cash flow positive. You may want to hang on to that hard earned equity you have. Tempting, right?
Here’s the rub though; Product Market Fit can be fickle. It can come, and it can go. Markets change, competition adapts, and the world changes (COVID-19). You can lose Product Market Fit. Get it and you invest, you hire, you expand your business. Lose it and finding an interested investor may be a challenge. They learned from the Don Valentine playbook!
Here’s a strong suggestion for you: raise venture capital when you can. Raise venture capital when you have Product Market Fit.
Want to know how you get Product Market Fit in six easy steps?
- Determine your target customer
- Identify underserved customer needs
- Define your value proposition
- Specify your Product feature set
- Build your Product
- Test your Product with customers (and iterate)
Do this well and as Don said, ‘you can screw everything else up and still succeed’ 🙂