
Finding Product Market Fit - gwintrob
http://rein.pk/finding-product-market-fit
======
nostrademons
I had a startup about a year ago whose "product" was collecting the career
wisdom of alums 5-10 years out and sharing it with undergrads so that they
didn't have to make the same mistakes that everyone else did. All of the
alums, professors, and mentors we talked to about loved the idea, and were
more than willing to share their wisdom. We built it, we collected stories, we
launched...and students derived basically zero value from it. The problem was
that without actually being in the situation that lead to those mistakes, they
were unable to contextualize the advice: it was all just random words, good in
theory but not interesting or actionable. Some things can only be learned by
experience.

Ironically, though this meant the death of the startup, it actually served its
intended purpose _for me and my cofounder_ \- the experience of actually doing
the market research, building it, responding to feedback, and launching taught
us a lot about what we wanted out of our careers, what we were good at, and
what would be a blind alley.

I suspect that finding product/market fit is similar. I know about 8-10 people
who have successfully built a startup. In all cases but one, they spent at
least a year, usually 18-24 months floundering around without any idea what
they were doing. These were not uninformed people - they had all read Hacker
News, Lean Startup, every blog post and Paul Graham article they could get
their hands on, etc, and in most cases had worked for or even founded startups
before. In my case, we actually did the 100+ or so customer interviews, we got
great initial feedback, we put mocks of our preliminary product designs in
front of prospective users and got "Oh yeah, we'd definitely use that, let us
know as soon as it's done!", and still got no users once we built it.

It just takes 18-24 months to develop the kind of deep knowledge necessary to
build something innovative. That's working full-time and assuming you take all
the shortcuts available to you. And that's time to the point where you have a
viable _idea_ \- on top of that, it's usually 3-6 months to build out a
prototype, and unless you've gotten very lucky with social connections, that's
the _beginning_ point of where you might viably get seed funded. Profitability
is usually 2-3 years beyond that.

Budget accordingly, and don't get discouraged when you're a year in and don't
have a clue what you're doing.

~~~
alexashka
Hey, great write-up. Do you have the collection of stories posted somewhere?
It'd be interesting to have a look.

~~~
nostrademons
I want to start a blog with them sometime, but I've been pretty focused on my
next venture, so it's taken a back seat. Maybe once I'm not in the "building a
product is so much damn work and I'm not sure I've got all the details ironed
out" phase.

I did do a blog for my first startup, which is a little dated now (2007-2008),
but may still be of interest, and better yet, has already been written down:

[http://diffle-history.blogspot.com/](http://diffle-history.blogspot.com/)

~~~
alexashka
That was interesting and mirrors my own feelings/thoughts, thanks for sharing.

------
Alex3917
The problem with this is that had they made the exact same post on Hacker News
an hour earlier or later there's a good chance it would have gotten no more
than two or three upvotes and never even made the front page. If that had
happened, which in fact is probably the most likely outcome given repeated
experiments, does that mean that it was a bad business idea? (For example,
this is a great blog post but it's getting no upvotes, and so most likely no
one is ever going to see this comment.)

I think the first idea was probably just a bad idea and they could have
figured that out on their own or by asking someone.

The second idea, if they had gone and asked professors, they probably would
have gotten mostly folks telling them it was a great idea. But in fact that
was still a bad idea also.

And the third idea was a legitimately good idea, but I think the validation
they got was as much due to luck as anything else.

So I like the idea in theory, but it's trickier than it sounds. A lot of
people make the mistake of not doing any market valuation. But even if you put
in the work to do this, there is still a very high value to building something
that has a lot of optionality going forward.

~~~
rdudekul
I disagree with the statement that it was pure luck that they got so many
upvotes/stars based on timing. Many other posts of startups got more upvotes
and failed. Segment is providing a very useful service of translating and
routing analytics data to other services. There is a lot of value in the
service (in terms of time/resources it saves). High value services, sooner or
later get discovered and more importantly, people/companies start paying for
such services.

Great article though, some thing that each technical founder should read.

------
politician
We love Segment, but what I'd like to know is how you guys managed to get a
year's worth of funding for four people to mess around on obviously difficult
to monetize ideas. What sorts of initial funding did you have? How does that
work?

~~~
pkrein
We raised $600k coming out of YC S11 demo day for the classroom lecture tool.
We kept costs low, and paid ourselves just enough to live on for ~2 years
(plus servers, shared apartment doubled as office, etc.) We burned down to
about $80k in cash (~3-4 months runway, not recommended) about 6 months after
the launch of analytics.js, and then raised $2m (June 2013).

~~~
politician
That sounds like a pretty difficult time; I'm glad you guys made it through.

