The ONLY guaranteed way to find Product Market Fit

Even if founders do everything right, they may still fail to find PMF. That's why even repeat founders have only 1.5% chance of building a unicorn.

We talk about product-market fit constantly in this podcast. Hopefully, we learn from what others did and improve our chances of finding PMF. But there is only one way to guarantee that one day you will find product market fit. We explore that in this episode.

**Got sick this week so re-releasing one of the most downloaded short episodes from last season that was originally published exactly a year ago today.**

Chapters

• 1:13 What Drives Founders
• 5:36 There is no magic formula
• 9:43 The ONLY guarantee to PMF
• 11:26 Before Startup Mode There's Research Mode...Or is There?

Transcript

Speaker 1: 0:00

So I started watching , uh, there's this documentary on Netflix called Quarterback and not a big football fan, frankly, but figured to be a solid one. So I started watching it and in the first few episodes there's, there's this one scene where one of the quarterbacks, Patrick Mahomes, he's in the middle of a game and he gets like super off. I dunno , somebody says something to him or whatever on the other team, he gets super off he goes, and he's like, obviously this is recorded way after the game. So he is like talking to the camera and he's like, when I get that mad, I go like blackout. Like this guy was really in the documentary. Like they show once , he like kinda gets off the field as he's still like super and is like blackout state. He talks to , uh, to his coach and his coach doesn't like really calm him down, which this is the interesting part. Like his coach actually tells him, you know, he's like, be smart, don't do anything stupid, but keep that fire. That was the exact words. Keep that fire. It was interesting to me because, I mean, first of all, I kind of figure like being angry is never, you know, a useful emotion. But I think broader than that for me was like, this just got me thinking about a few things, which is what drives founders, right? Like what actually makes founders do what they want do. And I always kind of figured, you know, drive should come from like a positive place, right? It should come from a place of like, I don't know , big like Steve Jobs. Like you wanna put a dent in the world, like you wanna make a difference, right? You wanna have impact , um, where you feel like you have a lot of potential and you need like self-actualization, like these, all these positive ideas. But if you look at that, like if you look at Patrick Mahomes at that exact moment, what the coach is basically saying is like, it doesn't matter where your drive comes from, right? Like in his case, it came from being so angry that he was literally like, blackout Matt <laugh> and it didn't matter because dad's gonna help you win a football game. So, you know what, use it. When I'm listening to , uh, to the last episode with Marty from Block Through , one of the things that I really wanted to understand was what kept him going. Because here's a guy that's been in startups for literally over a decade. I think it was 12 years from startup to exit, right? It's like failure after failure after failure. It's been such a grind. He's never even been on a startup that, you know, like my first startup, the first few years we thought we were like the next Zuckerberg because we're raising all this money. Everything was going really well, it totally crashed and burned , but he hadn't even had that, right? Like he had that inflection point and it'd been over a decade. So that was one of the big things I wanna understand is like, Marty, what actually keeps you going? Why do you keep doing this? Why don't you just at one point think to yourself, okay, like maybe this is just not worth it. It's not gonna work for me. I'll go and get a job, right? Like especially because you know, after 10 years you just gotta understand your friends. Like when you start and you're like 20 or 22, none . Your friends are doing anything interesting. So you look around and you're like, well I'm gonna start this startup. What do I have to lose? By the time you're like in your thirties, your friends are like successful. I mean , they're like lawyers, they're doctors, they're making real money, they're doing like real things with their lives. If your startup hasn't been working the delta between you and like your comparison, and I think it's, you know, as much as you don't want to think this way, it's hard not to becomes pretty big and it's really like in your face. So anyways, that was my thinking was Marty, what keeps you going? And here's exactly what he said to me. He said, by this time I was on startup number three, I was approaching my mid thirties. Shame was my biggest motivator. I wanted people to feel like they made a good bet by investing in Marty and in block through , if we had failed, if we shut the doors in mid 2017, mid 2018, that wouldn't have been the case. It would've been a pretty embarrassing way for me to go out. So like literally what drove Marty to stay in the game was fear of shame. That was it. Fear of shame. It wasn't, you know, changing the world. It wasn't making an impact. It wasn't like some belief that, you know, ad tech had to change and he was the right person to change it. It was just he didn't wanna fail again. He was literally scared of failing again and that kept him going. And so I put that together with, with the coach. This is a professional coach of like an N F L team. I mean, this person knows way more than I do about motivation and how to win and what I thought to myself, I think the big observation here is if you wanna win in a football game, if you wanna win in startup land , it doesn't really matter what drives you. You've gotta find the fuel somehow and whatever the thing is, it could be ego. Like sometimes it's ego. Some , some of these founders, I think they just wanna prove to the world that they're a big deal. They wanna maybe prove to their parents they're a big deal to themselves, they're a big deal, whatever, it doesn't matter. It really doesn't matter why, but you , 'cause the thing is, it's gonna be so hard, right? There's just no such thing as a true rollercoaster that's easy. Every single startup is extremely hard. And so you need someone something to fuel you. Maybe the thing is like a positive motivator, maybe it comes from some negative motivator, like fear of whatever. And you know what I realized it doesn't matter. Both can help you win and whatever it is that motivates you, keep that fire, keep that fire. The other one came to me like , uh, so I think a lot, like I think, you know, people like, they like take a shower and they think in the shower, whatever. For me, my my thinking time is driving. If I'm driving, I'm thinking, in fact, like if I'm driving, frankly most of the time I don't even really know. Like, I mean, I know where I am, but uh, but not really. Like I can, I don't black out like it's not dangerous, but I , I literally forget that I'm driving. Like I'm not paying attention to where I am or the roads are or whatever, just going my destination. I'm just full thought mode. So I'm driving and I'm thinking about , uh, startups and product market fit and specifically thinking about this presentation that I've like, you know, I've taken kind of all these episodes that we've done in , in, in the show and everything I know about product market fit and pulled it down to a presentation and it's called like the five steps to product Market Fit, right? And it goes through , um, you know, before, before startup mode, there's research mode and how you gotta , you gotta do research and then how you gotta put up , you know, product, you gotta get aligned . Like the idea of like only being seen , focused , survive . And then we go through, you know, a bunch of different steps anyways. Like from A to Z it doesn't really matter the steps, we don't go into that. But, you know, five steps to product market fit and it's real. Like they all are, you know, based on case studies and, and things that I've heard founders tell me in , in great detail across all these episodes, patterns that I've noticed and this and that. But like while I'm driving and I'm thinking through these steps and we all want a playbook, right? Like we all wanna know like , okay, you gotta do this, this and that, and you get product market fit mean that's ideal. Like we want a formula and I want a formula. As I'm driving, I'm thinking to myself, this, this doesn't guarantee product market fit. Like I could easily see how somebody could do all these five steps. You can go and do research, you can get super focused , you can put a product in market, you can focus on like your true north star , k p i, you can pivot and it could be many years later and you still don't have true product market fit. And that's like, it has to be that way because getting to product market fit is really hard. It's more art than science. And if it was easy to get the product market fit, then we'd all have like hyper successful startups and there's just not enough like value in the world or like, I don't know what it's, it's just like, I don't think that's possible. Some ideas just aren't gonna work and some even through a bunch of pivots, it's just, you're not gonna get there. And and that's one of the things again I observed like that , that I think clicked for me when I was listening to , uh, to Marty's story, right? Because I thought back, like as I'm driving and I'm thinking about this and I had just kind of finished the episode with Marty. I'm thinking back through Marty's story, right? So we met, Marty and I met in 20 12, 20 13. At that point I was just starting my, my last startup gym track . And he was just starting , uh, his second startup called Micrometric. And we worked like we actually were having like the same accelerator. So we worked pretty closely for a while and then, you know, he went off and did his thing. We started doing our thing. Couple years in it was when Marty had his kind of misalignment with his founder and he actually came, he started, we, we had an office at that point, moved out of the accelerator. Marty actually came and like worked out of our office for a while as he started like new startup ideas. So I saw him through that and then I I , I remember him telling me about some of the other ideas he was gonna work on, which frankly were like from bad to worse sort of thing. I mean, one idea that he had was this thing called Tab that. And it was like, you're gonna, when you, this is Marty and like whatever, 2014, he's like, when you go to this trip club, you , you want to , you can only use cash. Um , would it , wouldn't it be cool if you could tap your credit card like that? That was literally an idea that he had. I mean, anyways, it got discarded pretty quickly, but just to give you a sense of the sort of stuff he was thinking about. But the point is like Marty was never gonna give up. I mean Marty was, as soon as he got outta Micrometric, he was already just in idea creation mode and many of them were terrible. There was no part of him that was thinking about, okay, I'm gonna go get a job. So anyways, finally like, and as I , as I talked about in the last episode, like he finds this other co-founder, he builds his hat tech startup and even that was

Speaker 2: 8:55

Total grind. Like he's working with this founder that he met , uh, it's like two or three years into that project into like the block , block through project. He's barely raised any money. He's had no true traction. He actually had to fire his co-founder that brought him in in the first place. 'cause that co-founder was the technical one. And, and he just wasn't able to really deliver on building the true product. Anyways, he went through so much and finally like as the story goes, he launches like the third version of his product in 2018. At this point, it'd been like, I think a decade or so that he'd been in, in the, in the startup world with literally no success. And he hits it, he finally hits product market fit in his, his own words. Like it was 12 years from first startup to exit. So anyways, I'm kind of like, again, I'm driving, I'm thinking through all this stuff and that's when it clicked that there actually is a guarantee for product market fit. You're not gonna like it, I don't like it , but , but it's actually reality, which is you have to stay in the game. That's the only way. And that actually is basically, it's certainly as good of a guarantee as you can get towards product market fit. And I don't mean like never give up in the sense of, you know, whatever startup you have, just don't give up on it. Whatever product you have, don't give up on it. Like, like Marty did three different startups and even in the last startup, he did a bunch of different iterations. So I don't mean don't give up in the narrow sense, but I mean stay the game. Like I didn't by the way, like I left, I'm now VC five years ago I decided that I wanna try that out and honestly I haven't looked back and unless I decide to go back into a startup land , which is in like plan A for me, I'm not gonna get product market fit . I'm not gonna get it. The guarantee to get product market fit is to stay in the game, is to just have way more at bats. 'cause there is no guarantee that even if you do everything right, that's why by the way, like if you look at the success rates of repeat founders, you look at the success rate of even super founders, which are like repeat founders with material success, they're more likely to build a unicorn, but their odds of success are like 4%. Like it's not like 50%. The reason is this stuff is more art than science. And so even if you know, like even if you've learned all the lessons, right? Even if you know all the stuff, you know, you've read all the books, you know what to do and what not to do, there's no guarantee that you're gonna hit product market fit on the whatever thing , on whatever product you're working on or even on whatever like broader idea or startup you're working on. No guarantee. But there is a guarantee that one day you get the product market fit and that's if you stay in the game. The last thing I'll touch on, it's a bit I think shorter than the other ones, but you know, we, we talk about this a lot on the show, which is before startup mode. There's research mode. And the idea being that before you go in and you start like building stuff, you start doing stuff, you need to spend a serious amount of time doing research, more thinking like a scientist than, than a founder, than a builder. Because you've gotta understand the lay of the land. You've gotta , you've gotta understand what your customers are like, what real problems they have. Because if you don't do that, you won't find a real problem. That's the whole point. So you do research to find real problems and then you can go and start building and iterating and so on and lean startup stuff , right? Marty didn't do that. Like Marty by the way got to a hundred million dollars exit and he never did. Like true research finds this person, this other co-founder who's like, oh, I'm building this thing for ad tech where we're gonna help , um, publishers go around ad blockers so they can still serve ads to people that are using ad blockers. And Marty's like, oh, that's a great idea, let's do it <laugh> . Like, and , and I'm, you know, some like shortening it, but it was kind of like that. And so I asked Marty, I'm like, did you, you know, did you do any real research? And he's like, yeah, you know, well I I did like these discovery calls I guess with prospective buyers, but it wasn't really research. I mean he even said it like he was, you know, half like asking questions, half just trying to sell and it worked. And the reason it worked, it's actually similar if I think about like my gym track day is the , the thing about gym track that was different than most startups and the thing about block through that's different to most startups is it's tackling an obvious problem. Because if I tell you, wouldn't it be cool if you could track your workouts, which is what Jim tracks hauled . Like everybody's gonna be like, yeah, if you could automatically track my workouts, that'd be cool. If I tell a publisher you're not making any money on, I dunno , 30 or 40% of your users 'cause they have ad blockers, wouldn't you like to make money on those users? Of course they would. I mean, it's crazy <laugh> to think otherwise. Like of course they would. There's some problems out there that are very obvious problems. Now, of course, if the problems are obvious, either they're like small problems or if they're big, like in blocker's cases a big problem they're really, really, really hard to solve and that's why they haven't been solved yet. Otherwise they'd be solved. Like obvious problems that are easy to solve and big have been solved. So my point is, in those cases, kind of this idea of, you know, before startup mode, this research mode I think still applies, but the research is not so much about the problem as it is about the solution. Like that's the part that you're gonna all of a sudden spend a lot of time on. It wouldn't take that many discovery calls. Even if Marty went through like true research, he would talk to like a few publishers, be like, Hey, if I could monetize all your ad block users, would you buy, they would all say yes. And so like research done, right? The hard part is gonna be figuring out how to build the thing. That was the same thing in Gym Track case , by the way. Like gym owners would totally, you know, I mean certainly gym users would totally want to use a solution that track their work gets automatically the problem. Where we failed was actually building the thing like that, that was the hard part was building the solution. So I think there's just a nuance there that, that I observed, like in terms of before startup mode, there's research mode I think is true, but if you're tackling, and most, I think most startups don't tackle obvious problems, they tackle more nuanced problems. But if you're in the world of tackling an obvious problem, the sort of problem that everybody in your industry recognizes is a problem and agrees , uh, is worth solving, then the research, the hard part of the equation's gonna be figuring out the solution. And if you look at Marty's story, that's exactly what happened. Like from the time that Marty decides he wants to do this till they launched their first product that works was like a three year period during which they lost, they , they launched two other versions that totally didn't work and during which yet to fire his, his co-founder because , uh, he wasn't able to build the , the right product. So like, it was clearly extremely hard. And by the way, few people in the industry thought that this could be built. So it was something that was really, really hard to build and that's where he had to do incredible amounts to research in his case, to actually figure out that the solution wasn't a technical one, but more of a business one by creating this partnership that you can, you know, if you listen to the full episode, you'll understand the , the nuance piece here. But that's research. Like that's him figuring out who the industry players are, how the industry works, where the value chains are, and inserting himself in the right place with the right player to be able to deliver the, the solution that he wanted to deliver.