Andreesen Horowitz on Product Market Fit

Andreesen Horowitz recently syndicated an article written by Tren Griffin of 25iq.com. The topic was Product Market Fit, and Griffin does an outstanding job of detailing 12 important points, drawing quotes from some of Silicon Valley’s biggest names.

You should read the whole article here or here, but I’ve put together a quick 30 second synopsis. I highlighted some of the points that resonated with my personal experiences over years of marketing B2B and B2C products. I think it’s easy for many of us to forget some of these high-level concepts when we’re grinding it out in the weeds.

(Note: Bold headlines are my personal takeaways, and the quotes are straight from Griffin’s article.)

  1. site de rencontre gratuit badoo belgique The Market always wins. “When a great team meets a lousy market, market wins. When a lousy team meets a great market, market wins. When a great team meets a great market, something special happens.”
  2. go All the marketing tactics in the world – pricing, branding, lead nurturing, content, etc – are useless if no one needs the product. “If you address a market that really wants your product — if the dogs are eating the dog food — then you can screw up almost everything in the company and you will succeed. Conversely, if you’re really good at execution but the dogs don’t want to eat the dog food, you have no chance of winning.”
  3. conocer mujer concepcion If you take your blinders off, you can usually know if you have a fit without looking at the numbers.“You can always feel when product/market fit isn’t happening. The customers aren’t quite getting value out of the product, word of mouth isn’t spreading, usage isn’t growing that fast, press reviews are kind of ‘blah’, the sales cycle takes too long, and lots of deals never close.”
  4. source url You have a product market fit if you don’t actually need to market the product. “You know you have fit if your product grows exponentially with no marketing. That is only possible if you have huge word of mouth. Word of mouth is only possible if you have delighted your customer.”
  5. http://www.thinkmaya.com/?tyioer=r%C3%A9pliques-quand-harry-rencontre-sally&448=3a The market will tell you when you have a product they want, not the other way around. “In a great market — a market with lots of real potential customers — the market pulls product out of the startup.”
  6. The “Idea” is 5% of the battle. You win when the idea you want to build evolves into the product the market wants to buy.“First to market seldom matters. Rather, first to product/market fit is almost always the long-term winner.”
  7. follow You never win at launch. You win when launch turns into scale.  “Getting product right means finding product/market fit. It does not mean launching the product. It means getting to the point where the market accepts your product and wants more of it.”

I’m sure everyone will takeaway something different from Griffin’s article. Give it a read and let me know what you think.

Calling All Startups

It’s that time of the year again – almost the beginning of school.

Once again, I’ll be teaching the Entrepreneurial Marketing Class, MKTG 555, at the UW Foster School of Business. While I’m switching up the curriculum a good deal, I’m still incorporating hands on work for students.

If you work with a start-up and have an interesting problem for an MBA student to solve, or just want to have your company profiled, let me know. I’d love to have your company involved.

A Visit to MakerBot

Everyone has different ways to enjoy time visiting a foreign city. Some people love trying restaurants. Some like museums and sightseeing. I like going to cool companies I have heard about and talking with the people who work there.

I think 3D Printing is one of the next big things and will eventually have a huge effect on the global supply chain and how we produce and purchase everyday materials. Sure, it’s still in its infancy today, but the potential opportunities are limitless.

Makerbot Screenshot

So when I was in New York and found out an old colleague of mine worked at Makerbot, a leader in 3D printing, it was like someone else hearing they could get a private tour of the Louvre.

Makerbot Prototype

I was under NDA when I was there, but I think I’m allowed to say that there are now more than 600 Makerbot employees (and they’re hiring a ton more.)

Makerbot 3D Printer

I think I’m also allowed to say that people are doing more than just printing little toys. People are designing and printing their own iPhone cases at home, theatre companies are printing custom masks, architects are printing full scale models and industries across the board are coming up with their own ideas.

Makerbot Spool

So if you are a doubter in the technology, I’d ask you think about 3D printing the way people looked at cell phones in 1980. Back then it may have been big, slow and only apply to a few people. But look at how the world has changed now that everyone in the world can have a mobile broadcasting and computing device in their pocket.

Makerbot Large Machine

Thanks for the tour of the office. Lots of cool stuff is coming from them soon.

My Crazy Idea For the Month

So it’s been a while, but here’s a new and ridiculous idea that might not be so ridiculous.

1) The problems with trying to build a profitable business delivering food or items with same day service (such as Eat 24), are the extreme set up costs to buy a fleet of vehicles, the complexity of hiring drivers who know the area, and the ability to launch branches in every key neighborhood.

2) The U.S. Postal Service is losing tons of money every year. But they have a fleet of delivery vehicles that go unused every evening, drivers who know the area and an existing branch in every neighborhood.

It seems to me that a forward thinking postal service with a strong CTO could figure out a way to deliver mail during the morning, and same day local deliveries in the afternoon and evenings.

Would love to hear why this couldn’t work.

Geek Stars Shine Bright at Annual Geekwire Awards

There was more Polo than Prada. More Ralph than Lauren. And Levi’s outnumbered Louboutin’s about 5 to 1. But there was enough revelry, camaraderie and fun at Geekwire’s “Oscars of Seattle Startups” last night at EMP that you expected Ellen to organize a group selfie.

You can get the full results of the 13 Geek Awards over at Geekwire.com. But maybe more importantly than the awards themselves is the annual chance to catch up with what every startup in town is up to.

The startup world is a fluid one. Some people who were 100% confident in one project last year have a new passion this year. And some folks working out of their garage a year ago now have a staff of 26. But thanks to Geekwire, we get this annual opportunity to check in with one another.

It’s hard to know where this community would be without Geekwire’s involvement the last few years. Would the Seattle Times and Puget Sound Business Journal have been able to whip 800 entrepreneurial and tech enthusiasts into a kind of extended family who cooperate more than compete with each other? Would we all know the brand names of a few companies poised to be the next Zulily? I think not.

And in an industry still made up of more men than women, it was fantastic to see Julie Sandler and Jane Park given two of the top individual awards – for Geek of the Year and CEO of the Year respectively. In addition to her day job at Madrona, Julie has pushed tirelessly to encourage more young girls to pursue tech careers. And Jane is running one of the fastest growing non-tech businesses in the region.

I don’t think any more people could fit into EMP, and I don’t know how long you’d have to make the event in order to chat with everyone you know there. But it’s nice that in an environment that delivers more struggles than solutions, you know there’s a community rooting for each other. And that’s really what the Geekwire Awards are all about – a place to recognize the ones who made it, and be inspired to follow them on stage next year.

That’s Billion, With a B

Facebook just agreed to buy WhatsApp for $16 Billion. That’s one billion, this many times:

Billion Billion Billion Billion Billion Billion Billion Billion Billion Billion Billion Billion Billion Billion Billion Billion

When you add the other Billion Billion Billion for current What’s App employees, it comes to $19 Billion.

Just for fun, let’s look back at some previous tech acquisitions you may have remembered:

  • Amazon buys Zappos. Sale Price: $1.2 Billion. Year: 2009
  • AOL buys Netscape. Sale Price: $4.2 Billion. Year: 1998
  • eBay buys PayPal. Sale Price: $1.5 Billion. Year: 2002
  • eBay buys Skype. Sale Price: $2.6 Billion. Year: 2005
  • Yahoo buys Geo Cities. Sale Price: $3.6 Billion. Year: 1999
  • Yahoo buys Broadcast.com. Sale Price: $5.7 Billion. Year: 2001
  • Microsoft buys aQuantive. Sale Price: $6 Billion. Year: 2007
  • Oracle buys Peoplesoft. Sale Price: $10.3 Billion. Year: 2004
  • Facebook buys Instagram. Sale Price: $1 Billion. Year: 2013
  • Google buys YouTube. Sale Price: $1.65 Billion. Year: 2006
  • Google buys Double Click. Sale Price: $3.1 Billion. Year: 2008
  • Google buys Nest. Sale Price: $3.2 Billion. Year: 2014
  • Google buys Waze. Sale Price: $.96 Billion. Year: 2013
  • Google buys Wildfire. Sale Price: $.45 Billion. Year: 2013
  • Google buys Motorola Mobility. Sale Price: $12.5 Billion. Year: 2011

For one thing, it’s fun to look at what deals happened right before bubbles. It’s also fun to see that some of these deals look like bargains now, while some were just busts.

So give or take a billion or so, Google ended up with Nest, Waze, Wildfire and Motorola Mobility for the same price Facebook got Instagram and WhatsApp. Time will tell where the money was better spent.

Another way to analyze the deal is on a cost per user basis. From what I have read, WhatsApp has 450 Million Monthly Active Users (MAU). So at $19 Billion, that’s roughly $42 per user. Obviously Facebook thinks the lifetime value of each user is more than $42, which certainly seems reasonable. So from that angle, disregarding all other benefits of the deal (synergies, defensive play, talent, etc…) it could make sense.

So what about Snapchat? We all scoffed when Snapchat turned down $3 Billion from Facebook, wondering how they could think they were 3x as valuable as Instagram. Well, I can’t tell what this means for them. Certainly they are worth more than 16% of WhatsApp, aren’t they? Or is there enough overlap between WhatsApp and Snapchat users that they just saw their entire market value dry up? Again, only time will tell.

But $16 Billion is a lot of money no matter what. I think we are all on bubble watch now.

Why Life is Like Football

I was talking to one of my young entrepreneurial friends today. It had been a while since we caught up so the conversation predictably started around, “How’s everything going?”

The funny thing about entrepreneurs is that nothing is ever going poorly. Setbacks are learning experiences. Unexpected hurdles are blockers for future competition. Lack of clarity in a mission is pause for contemplation.

People with jobs have a bad day. Entrepreneurs have a new challenge.

We ruminated on this awhile and came up with the analogy that entrepreneurship is like football. You build the best team you can, develop a system you think will work, scout out the competition, and take your game to the field. During the game you run your plays, knowing 11 people are trying to stop you. When you get the ball, you run into the defense, driving as hard and as long as you can go on each play.

Eventually you have to make strategic decisions. When you see something working, you ride it as long as you can. If the situation is hopeless, you punt and regroup. Somedays you have a great game plan and the right team. Somedays you have a great team and the wrong plan. And somedays, you just get blown out of the water by people more talented than you.

Anyway, I thought it was a fun conversation. Keep those legs driving forward….

Talking Startups at Entrepreneur University

Between teaching Entrepreneurial Marketing at UW, and being on the Board of the Northwest Entrepreneur Network, I get a number of amazing opportunities to sit down and talk with people who are making things happen. Not just coming up with ideas, but actually executing on those dreams.

Last Friday at NWEN’s ntrepreneur University, I had the opportunity to moderate a panel with three of my favorites; Mariah Gentry of JoeyBra, Andrew Dumont of Moz and StrideApp and Kelly Smith of Curious Office. We talked about when is the right time for someone to jump into the entrepreneurial waters.

If you haven’t met Mariah before, if you run into her at an event I encourage you to grab as much of her time as you can.  She is easily one of the most impressive people under 30 that I’ve ever come across. And she’s only something like 22 or 23.  She started her first business at 14, owned at house by 20, and launched JoeyBra as a junior at the UW. When you talk to her, you just get a sense that she can distill any complex problem to its core, and come up with an obvious solution.

I met Andrew a few years ago when some people at my company told me they had a friend we should hire. In a ironic twist, our Office Manager at the time wouldn’t forward his resume because he didn’t have a college degree (he later went back and got it). I met with him anyway and realized we would never be able to hire him because he was way too impressive to take what we would be able to offer him.  He now works from 7:00 – 5:00 at Moz, then runs his side business StrideApp.com, which he disclosed has paying customers numbering in the hundreds.  But on top of that, he also spent a weekend building a Udemy course, which now has close to 500 paying customers at $100 a shot. That’s pretty impressive. The secret behind of Andrew’s success is pretty clear – a tireless work ethic and a commitment, almost obsession, to building stuff.

And then of course there was Kelly. Investor, founder, idea guy, executor, he does a little bit of it all. I loved his advice on harnessing the power of entrepreneurship. He said the key is, “Question everything. Whenever something sucks, figure out if there’s a better way to build it. Just solve the problem and figure out how many people have the same problem.”

There’s a difference between ideas and ideas with execution. People like this are inspiring because they don’t let any excuse get in their way. They see a project they want to attack, and then relentlessly pursue it. There’s no wishing on a star or dreamland scenarios with these guys, they are all about dedication and execution. It’s great that we have people like this in the city, people who can remind us that the hardest part of entrepreneurship is the commitment to doing the work.

Join Me at the TechCrunch Meetup Thursday

The next version of the Techcrunch Meetups + Pitch-Off is headed to Seattle this Thursday. Besides the fun and frivolity of your typical Seattle tech event, a few lucky entrepreneurs will be pitching their businesses to a group of TC judges. These entrepreneurs will have one minute to explain why “their start-up is awesome.” Since all the products will be in stealth or private beta, we may see some companies we haven’t heard of before.

Details:
Thursday, July 18
ShowBox at the Market
1426 1st Ave‎nue
Seattle, WA 98101
6 PM – 10 PM

See you there.

A Quick Recap of Startup Riot Seattle

I took an afternoon this week to check out Startup Riot at the Sodo Showbox.  This was the second year the event was held in Seattle, and I’ll say both years I’ve had a great experience.  The event has some unique touches; sprinkled between the 30 3-minute pitches, are 2 keynotes, several networking opportunities, and a long lunch in which you can walk around and meet new people.

Rather than just recap the whole event, I took some notes on what start-up marketers could learn from some of the 30 presenters, both when pitching to customers, or investors.  Note, the majority of this post is also up at www.relaborate.com/blog.

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It’s gutsy to take the plunge into the entrepreneurial waters.  It’s even scarier to get up in front of 250 people, explain your entire company in 4 slides and 3 minutes, and take 3 more minutes of grilling from some judges.

But that’s what 30 brave entrepreneurs did Wednesday at Startup Riot in Seattle.  To reward their courage, Startup Riot judge and keynote speaker Andrew Hyde asked everyone in the audience to blog about at least one of the companies.  Blogging – well that’s something we can do. So here are a few things we learned about marketing your company, from both the judges and the start-up CEO’s who took the stage.

see 1) Show your excitement in everything you do: More than once, the judges asked the entrepreneur, “Are you excited about this project?  If yes, then show us.  Prove to us with your passion that this project will work.” This means in every powerpoint, blog post and meeting you attend, make sure that your excitement for your idea is contagious.

http://avpsolutions.com/blog/tag/merchant-account-companies/ 2) What is your 5 second 1-liner?  Can you explain what you do in 5 seconds?  Cindy Wu described her company, Microryza, as “Kickstarter for Science.”  That’s easier to remember than, “We built a platform where people can fund scientific research, in an online market and where scientists can go and present their projects to try to receive funding.” Can you describe what you do in 5 seconds?

l'éducation sentimentale rencontre avec mme arnoux analyse 3) Prove you are the team to do it: Parend Paresh may be tackling an unsexy problem with VendScreen.  But, it is so obvious that they know what they’re talking about, I would invest in a heartbeat.  VendScreen is a touchpad that will be attached to vending machines and enable customers to pay for sodas or snacks by phone or credit card.  Neat idea maybe, but why will it work?  Well Parend explains his domain expertise, illustrates his partners’ domain expertise, and then tells a fact that all vending machines are going to be required by Federal law to put nutritional information somewhere on the outside of the machine.  The fact that he knows this obscure legislation demonstrates that he knows the market for vending technology, and knows how to capitalize on emerging trends.

enter 4) Talk about your wins: iHearNetwork, led by Paul Simonds, is a startup with 3000 users.  Not only that, they have a 125 Daily Active Users and 250 Weekly Active Users.  Taskk, has 7000 users already in a totally different market, adding 2000 in the last month. When you are a startup, find a number that you can trumpet.  I don’t know if 3000 or 7000 users is a lot for the spaces these companies are in, but I wrote the numbers down. They sure sound good. And as one judge said to Placeling’s CEO, “If you aren’t bragging, you sound small.”

go here 5) Show your product: Personify makes it easy for people to find social good opportunities and volunteer events.  They already have 500 users.  And yet through their presentation, they never showed us the product – which is actually quite lovely. People want to see that the product is live and working.  Don’t make them imagine what it will be like.  It’s too much work.  Show your product everywhere you can.  Your product is your story.

http://asiabettors.com/?prestiee=site-pour-rencontre-d%27ado&be4=fd 6) Explain the problem: Tim Hermanson of Arch started his presentation with a shot of a traffic jam.  He asked that since we all have these digital devices in our pockets, why couldn’t anyone, anytime, see something that was happening in a different location so that we could avoid these traffic jams.  If I was stuck in that traffic jam, why couldn’t I anonymously upload a photo from my location so others could see my pain and take another route?  With the problem framed in a simple scenario, I can now understand the solution. The product becomes real when there’s something I can identify with.

7) Understand your competitors: Shawn Burke of Crowd Picsell wasn’t just asked to name some competitors, judges wanted to understand what he did better then them.  If you are a customer, you want to know exactly what the benefits are of one company over the other.  Don’t make the customer guess. Be the best at something, and explain exactly what it is that makes you the best over all others.  It’s hard to lose when you are the best.

8) Tell a good, humanizing story: Jon Poland created Crowdegy, joining an already crowded survey space. But, he explained why his product would succeed by telling a story about his 5 year old. In his story, he shows his 5 year old how to use his product, and then the next day his 5 year old asks, “Daddy, can I play the dot game again today?” Jon got the point across: His product brings visualization to surveys, is fun enough to do over and over, and is so easy a 5 year old can do it.

There were a number of other startups to keep an eye on.  Check out the whole list at StartupRiot.com.  And if you were there, did you see any companies that stood out?