Mastering the VC Game - Quebec City Conference Presentation
Product market fit - Angel Boot Camp 2011
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 don’t 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
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 foursquare’s 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