Few words touch the very core of the entrepreneurial challenge as much as product market fit and market traction.
They are obviously connected, often used together, yet uniquely different.
Entrepreneurs live for product market fit.
They are in the business of adding something new and special to our world. When it gels, it’s the market’s vote of approval, telling them that hell yes—what you built is real and has a shot at becoming something that can grow and stand the test of time.
As a marketer, I think of product market fit in terms of market push and pull. You have touched a market nerve when the inflection point changes, when you stop pushing out to the market and it starts pulling towards you. When gravity has put your brand in the center of customer focus.
It’s a true startup metric that you can both feel in your gut and provide proof points to support.
Product market fit is a marketing dynamic. We build toward it.
Market traction is invariably a sales metric. It speaks to a business model and market share. It’s about taking what works at the recognition of fit and building an infrastructure to take it wide. It’s the true litmus test of success.
These two ideas work together. One before the other, both at the intersection of what you do and the market’s response.
They bifurcate by how more than what in many ways.
We build products with less to get product fit. Often with a little seed money to prove the idea. Then we raise capital to take it broad. That’s the process.
Early stage entrepreneurs run into a trap between these ideas when fundraising.
They take their vision, their team and their market proof out as their credentials to raise capital to build out a plan to go after market traction.
In that dance between risk and reward, in finding the right capital partner to tackle the true market, invariably you are never quite there. Miles or inches apart doesn’t matter in the end.
You have market fit, you never have enough market traction. You have the seeds of what it takes, investors are looking for a few more steps towards the door to feel more comfortable.
It’s as it should be as everyone needs to feel right about the decision. With you. With the product. With possibilities of the market size.
We’ve all been here. We’ve all been told that we have something special but need more market proof.
It’s important to take this as a no. Straight and simple.
Phrase makers mouth the words that there are no NOs in sales. They are wrong.
Sales is about finding the right customer at the right time for a close. Networking is a process. Sales is about closing.
I know this smacks of semantics but it’s more.
Product market fit and market traction are real ideas. Coherent stepping stones to market penetration and success.
You can build the former on your credit card at times. You will fail at the latter without capital and the right partner.
With some exceptions, traction as a sales metric or even hockey stick engagement metrics in a Fremium model is exactly what we raise funds to go after.
Few things are as important, as frustrating and suck more time that raising capital. Whether you are funding a food truck or mobile dating app, you will be caught in that nether world between product market fit and raising funds to demonstrate market traction.
My advice to entrepreneurs when they ping me nonplussed on the capital raise trail is to face facts and take it for what it is.
A funder may come back later and invest. But a no is a not interested now and move on.
Go find someone for whom this is the right opportunity.
Go find someone who grasps that you are at a tipping point and will partner with you to go after the bigger win. The real market traction and proof.
Go find someone who can say yes.
When I was working in Silicon Valley, I went to hear Marc Andreessen speak.
I remember his words some 20 years later, and I paraphrase from memory.
The only things that matter are product market fit and funds in the bank to go after market traction. All the meetings, the term sheets and the pitches are just work, till you turn them into a yes and close the deal.
True words to build companies by.
The art of marketing is about knowing what not to say.
It’s not about what is said but about what is heard.
It’s about the spaces between words that lets others find not you, but themselves.
Less is more is not about editing, it’s about clarity of thought.
Less about pitching and more about touching a common nerve.
More about opinions that inspire and less about facts that purely inform.
Less is more is not about the craft of writing.
It’s about the discipline of thought and communications.
It’s about unlocking a behavioral response and inspiring engagement.
It’s about knowing what not to say.
Brand is nothing less than who we are in the markets eye.
The customers view of themselves in your product to how they work, play or live.
It’s what they hold in their hand if you have a consumer product. It’s what drives them to put your app on the front screen of your phone and keep it there.
It is also where I like to start, even before understanding your product or how you plan to get it to market.
And invariably it’s the most problematic part for most companies to get right.
Marketing is a catch all umbrella term for countless tactics with a smattering of behavioral science tying them together.
But at its core—at least how I practice it—it is about that simple brand connection between you and the customer. The place where what you sell intersects with what they think they are buying.
Tactics aside, I find a core discrepancy in most entrepreneurs around understanding brand as a defining value.
When you pitch your company you are transporting the listener to the top of your private hill and laying out a landscape of a changed world. Where what you believe and what you build is core to the how people live. Or how companies go about their business.
This is the fire that drives.
Most entrepreneurs know what they are about. At a gut level they know why the market should care.
Connecting that vision to product value is the kicker. Invariably this is where companies falter.
Many early companies build something clean and shiny to a very crisp spec, then flounder at a cold stop in front of the market.
Think about it this way.
When you pitch your vision you are sharing a sense of wonder. A sense of personal possibility.
It’s your job to do the same thing for the market when you are launching your product.
Where what you believe becomes a large part of what the market adopts. Where your sense of inspiration around an idea becomes the customers sense of wonderment around how it works for them.
Step back a moment and think about how your company functions at this juncture.
How with focused intent you took your vision and materialized it into a product. How you have labored insanely hard to build something simple, intuitive and ready for public consumption.
Right here is where ideas like Lean Startup clash with market reality and brand awareness.
We iterate our way to market fit. No question.
So how do you balance iterating your product with selling the value of your brand and the sharing of your core brand belief—even at an early stage?
Sell your vision is what you must do. Asking the market what they think of you, you certainly can’t in those terms.
That’s why brand first even at the earliest stage is something to hold onto. Something to lead with.
The market will guide you but it will not tell you who you are without a sense of what you bring to them. It is not their job to help you. It is your job to share the wonder that drove you to this place and inspire them to respond.
It is your job to create the environment that both sells hard and listens patiently. That speaks your customer’s language but tests your core brand beliefs in a fluid way.
Brand first is a workable methodology for choice for early stage companies. Your language to have a conversation with a yet unaware market.
It begins with you, it ends with the customer.
But always, it’s about how you share wonder and create the possibility for that to grow and change.
It’s marketing at its core.
I’m on the opposite side of common knowledge on this topic.
The argument for raising the least amount of capital needed is the gist of the lean funding paradigm.
It keeps the entrepreneur focused, instills creativity and grass roots street smarts. It forces iteration as the backbone of both market discovery and product development. Less is more is the net of it.
It also let’s the funder stay close to their investment, managing it by objectives in a sense, creating a perpetual funding cycle. You fund what the entrepreneur needs to get to the next stage of product or market proof.
It also means that the entrepreneur is always raising funds, always on a tight leash from the sources of capital, always on the stressful watch of cash flow.
The upside of this is the lean startup concept in a nutshell.
A brilliant mashup of ideas that the best startups use to harness the market itself as a catapult not as a chasm to cross.
It works well as an operational principal, but jumps the shark as a funding paradigm in most all instances.
My counter argument to why raising more, not less is often the smart move:
1. There has never been a plan or a budget that didn’t prove absolutely essential and invariably incorrect.
If you raise to a plan you will come up short. Plan for a smoother runway into what neither neither you nor anyone can imagine in detail.
2. Being cash poor drives poor decisions, keeps you in blinders to objectives and invariably stifles openness to market opportunities.
Focus is essential but having the creative freedom to consider change and opportunities is where great things happen.
3. Lean funding by definition puts the directional control in the hands of the funders not the entrepreneur.
It is equally incorrect to assume that the funder is always the source of wisdom and guidance and that entrepreneurs are children who will put their hands in the cookie jar and glut out if left to their own devices.
I believe that the best chances for success come from raising capital in a partnership paradigm. From people who are in it for the long haul and where a small group of them can provide guidance and operational expertise.
I also believe that winning happens because the entrepreneur just nails it.
When a leap into the void, often counter intuitive happens. When you push everything off the table, and rethink market connections in bold new strokes.
To do that you need a runway. You can’t be backed into the disrupting cycle of always raising funds and always heads down to a plan.
If you have to give away a bit more of the company to create that security, so be it.
You need guidance and oversight but as much, you need the freedom to move and follow you gut.
Cashflow is king. Make sure you have it.
Few things are as mentally clarifying and personally satisfying as closing the deal that matters.
I’m a marketer by nature and understand that what you don’t say is what makes what you do, memorable.
I’m an expert at this.
Selling though at it’s best is like professional sports to me.
I stand in awe of the best.
It’s a unique activity where strategy and training are the long tail of preparation to be perfectly poised to recognize and capture that nanosecond of opportunity that drives the close. Truly a game of skill and inches.
Truly an expertise where manipulating time and urgency are the core elements of success.
I’m pretty good at this and you can send me in to make the play, but more a seasoned practitioner than a natural Olympiad.
Case in point.
At the end of last month, I woke up painfully early, the last day of an important month for a project.
Aching over coffee to find a reason to connect with key customers. Wanting an excuse to post, a rationale to make a call. An action that didn’t smack of Crazy Eddie.
The motivation was wanting the close. The gap, as it always is, was the reason to connect. And knowing when to fold for now.
That to me is the Zen of selling.
Sales on one side is driven by pure need and want.
Whether you’re company is running on fumes. Whether you are running 2x quota, is of no consequence.
Your need, your want is irrelevant. It clouds actually, not motivates, and the market can somehow smell it.
The truth is that in sales there is a direct relationship between energy in and dollars out. And sales more than any other activity is only about the outcome.
There are better customers. There is the long game of repeat sales. There are deals that close and those that shouldn’t.
But at the end of the month, it is about dollars in. And the very best month’s close makes the next month’s growth more possible.
I do believe that metaphorically at least, sales starts where marketing ends.
In that blurred space between surfacing a market and making someone feel good buying. It is no mystery why sales and marketing costs invariably are on the same expense line in the budget.
I also believe that the patter that you are always networking and always raising funds on the entrepreneurial front is somewhat misguided. If not pacifying.
Those who get the raise closed know that networking is indeed marketing and that those who win, who do the raise, do it with specific and timely sales intent.
When you are sitting with the person with the pen, usually two people at the end of a long conference table, this is the salesperson in the seat and the closer is certainly in the room.
What did I do, end of the month to channel my needs?
I decided that it was not the time for sales at all.
I sat down and sent thank you emails to top contacts and customers. Just checking in, thanking them for their support, and in some cases, for their friendship.
Not a hint of a passive aggressive sales nudge in any way.
Not a deal came of it. This will pay dividends over time big time.
The marketer was in the room.