Friday, November 2, 2012

Product Market Fit Poker

Earlier this week, I was fortunate enough to be able to give a talk on Product/Market Fit (& Poker) at 500Startups. My (sparse) slides are embedded here.

When you are running a startup, each week, sprint, month or quarter you make an assessment about what cards you are holding and then choose how much to invest in either top-line growth and scaling, or 'figuring-it-out'. I like to think about each assessment and investment period as a hand of poker. The only problem is that it's generally not clear what cards you are holding.

The answer is measuring product/market fit. If the market is really ready for your product, then you should be pushing all of your chips into the middle of the table and scaling like crazy. If the market isn't quite that ready, you'd be a fool to do that. The trick is that measuring product/market fit is no easy task. Marc Andreessen, who coined the term, not only said that 'nothing else matters', but also that 'you know it when you see it'.

This difficulty has not stopped a number of smart and accomplished entrepreneurs, investors and marketers from developing a series of useful metrics and rules of thumb that get at the notion of product/market fit and can help entrepreneurs know what cards they are holding at each round of decisions and resource investments.

Thanks again to 500 for hosting me!

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