1.Product Market Fit
Jeff Bussgang, Flybridge Capital
Angel Boot Camp
June 14, 2011

2. Breakout Objectives
Explain what people mean when they use the phrase, Product Market Fit (PMF), plus:
Customer Development Process
Lean Start-Up Theory
Help you devise your approach to achieving PMF
Making sure you dont waste a lot of money before you find PMF
3. Leading Thinkers
Geoffrey Moore:Crossing the Chasm
Steve Blank: Customer Development Process
Eric Ries: Lean Startups
Mark Leslie: Sales Learning Curve
Sean Ellis: Lean Startup Marketing
Tom Eisenmann:Launching Tech Ventures (HBS)
4. Where Are You?
After-Product Market Fit
Before-Product Market Fit
Building a robust, feature-rich product
Crossing the chasm
Metrics, analytics, funnels
Designing for virality & scalability
Scaling a sales force
Challenges with corporate partnerships
Building a brand
Scaling the exec team
Minimum viable product (MVP)
Customer development process
Selling to early adopters
Pivoting
Bootstrapping
Small, founding team
Product-centric culture
Source:HBS Prof. Tom Eisenmann, J.Bussgang
5. Crossing The Chasm
6. Lean Startup Principles
Nail it then scale it
Rapid hypothesis testing about market, pricing, customers (customers & markets unknown)
MVP (Minimum viable product)
Low burn by design (no scaling until revenue)
Metrics, iteration, agile development
Learn fast (fail fast)
Source:Eric Ries, Sean Ellis
7. Customer Developmentvs. Product Development
Concept/Bus. Plan
Product Dev.
Alpha/Beta Test
Launch/
1st Ship
Product Development
Customer Development
CustomerDiscovery
Company
Building
CustomerValidation
Customer Creation
Source:Steve Blank
8. Lessons Learned Drives Funding
Test
Hypotheses
Concept
Business Plan
Lessons
Learned
Series A
Do this first instead of fund raising
Source:Steve Blank
9. foursquare Case Study
From inception, best practices in PMF:
MVP
Product-centric culture and founding team
$1.35m Series A
Responded to every email, tweet
Hunch-driven, not metrics-driven
The founders were the target customer
Contextual factors
Tech trends enabled success:iPhone/apps, LBS/GPS, social media
Impact of geography (NYC), launch (SXSW) and VC (Fred Wilson)
Game mechanic, playful, entertaining
Source:Pikorski, Eisenmann, Bussgang, HBS Case Study:foursquare
10. foursquare Case Study (2)
Post PMF Challenges:
Tech founder as scalable CEO
$20m Series B - expectations
Pressure to be more analytical
Competitive response to Facebook, Yelp
The founders no longer can do it all
Monetization pressures when to run experiments? How scale?
Questions:
Who is foursquares customer the consumer or the business?
What social failure is foursquare solving?
When should foursquare focus on monetization vs. consumer scale?
Has foursquare crossed the chasm?
Source:Pikorski, Eisenmann, Bussgang, HBS Case Study:FourSquare
11. Product Market Fit
Jeff Bussgang, Flybridge Capital
Angel Boot Camp
June 14, 2011