At this year’s TechCrunch Disrupt, we assembled an all-star panel of venture capitalists working across the entire range of startup growth and got their insights on assessing product-market fit — a perennial and evergreen challenge for entrepreneurs at all levels of experience.
Human Ventures’ Heather Hartnett, Greylock’s David Thacker, and Felicis’ Victoria Treyger all shared their perspectives on what makes for good product-market fit, how to spot it and how to use it to your best advantage for both your business’ growth and for raising capital.
What to look for before there are even any metrics
Product-market fit gets easier to assess the further along in the company development process you are; it’s a lot simpler to figure out if what you’re offering is what your users want once you actually have users. But what about before that?
Especially for first-time founders, assessing product-market fit at a stage where it’s mostly anticipation can be as much art as science, but our panelists provided some advice about how to set yourself up for success.
Our view of product-market fit is at the earliest, earliest stages, really at that point, you’re looking for metrics that are not even there yet, right? You’re looking for the earliest indicators that customers even want what your messaging and value prop is, and then you have a strong hypothesis about what that value is, and you have a strong hypothesis about how you can grow that value over time. And then it’s just a lot of experiments to figure out if you can even see some of those early indicators. You know, my father used to say, “You don’t have to tell a thirsty man that he needs water.” So we always just think about “What is that thing that you’re not trying to double sell?” But it’s the single sell that people really do want.
Thacker added that while it may seem counterintuitive, it actually behooves entrepreneurs to raise as much money as possible on a concept in order to have the right resources from which to find and maximize product-market fit.