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. 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. 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. 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. 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. 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. 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.

What is Performance Psychology?

Russel Wilson has one on staff. Most college and pro teams have several. But what does a Performance Psychologist actually do?

Elizabeth Boyer, PhD, describes it this way:

  • Develop strategies to build consistency and satisfaction in sport and life
  • Identify solutions for challenges and concerns.
  • Get support to successfully navigate set backs, injuries, and transitions.

You can learn more about this field by checking out her site, Northwest Performance Psychology.

 

6 Business Lessons To Learn From Bruce Springsteen

3 hours and 45 minutes. That was the amount of time Bruce Springsteen and the E Street Band played at Key Arena on Thursday night. What can a musician teach a business person in 4 hours? Here are some simple lessons of which I was reminded.

1) Treat your customer right
How do you get you most ardent fans, all who have seen you play multiple times, to spend hundreds of dollars to see you again? Deliver them something so over the top, that they can’t say no to you. Do something unheard of – like playing “The River” from front to back for 2 hours, and then delivering another hour and 45 minutes of your hits. No intermissions, no fake encores, just turn on the lights and start playing.

2) Deliver consistent product
Once Springsteen hit his groove, he continued to deliver what his audience wanted. Sure, he dabbled here and there with some things like Tunnel of Love, but for the most part he has kept driving updated versions of what his customers were clamoring for. And when he wasn’t producing new material, he was on the road reminding his customers why they loved him.

3) Work with a strong team
Look at the folks he works with, and those who have passed. Solid musicians who do things better than he can. You don’t see him doing a vanity song on the piano or sax to show us he can play any instrument. He has the E Street Band, who are a key part of his storyline, and critical to the customer’s overall experience. Oh – and don’t be afraid to bring on someone like Eddie Vedder for a freelance consultant role.
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4) Let your team discover their own creative outlets
I bet there are fans of Silvio Dante who has no idea he was the lead guitarist for Bruce Springsteen (while even fewer Lilyhammer fans had a clue.) And plenty of Conan O’Brien lovers didn’t know who Max Weinberg was hanging out with on weekends. These were creative outlets where the guys in the shadows could get some spotlight and be known for being more than, “That guy who plays in Bruce’s band.”

5) Work harder than everyone else
Did I mention 3 HOURS AND 45 MINUTES. Without a break. With stage diving. At 66 years old. You don’t just do that. You train for it. You eat right, train better, and have the will to get it done. You practice so that you know exactly how to be the most efficient with your effort. You plan so that you know how to give everyone a couple of minutes here and there to get some water (or whatever they need) to stay on top of their game. This isn’t stumbling onto a stage at Bumbershoot and goofing around for 45 minutes. Any half-ass band or company can fake it for a little while. But that’s why he’s been selling out stadiums for 30 years.
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6) And of course, it’s good to be The Boss.

How Tidal Goes Against All Current Product Development Theories

I’m not an expert in the music industry. I have no idea what the future olds for Pandora, Spotify, iTunes and now Tidal, Jay-Z’s new streaming service that describes itself as, “Introducing the first music streaming service that combines the best High Fidelity sound quality, High Definition music videos and expertly Curated Editorial.”

However, I have spent some time in the last 4 years teaching some classes on marketing new products. I lean heavily on the insight of Steve Blank, because, well he seems like a really smart guy. And Mr. Blank espouses a product development process that leans heavily on the following:
1) Finding a problem that customers have.
2) Developing hypotheses on how the customer wants that problem solved.
3) Testing that solution with as many customers as possible.

You’ll notice that all 3 principles of the process include the term, “customer.”

Tidal seems to use a completely different theory. Summarizing bullets from the Washington Post, Tidal’s offering is based on the following:
1) Consumers will develop a sense of ethics, i.e. a willingness to see musicians actually make some respectable royalties from music streaming, which they currently do not.
2) People will want exclusive content and hear directly from artists.
3) Those who subscribe to the premium service will receive higher sound quality.

Let’s compare the Tidal plan to the Steve Blank plan.
1) Is my problem that I think musicians are underpaid? Do I really care what musicians make on each song I listen to? Probably about as much as I worry that the 1st Associate Director on House of Cards can afford her rent. Or that the Copywriter on AT&T’s Barles Charkley commercial is being paid fairly by his agency.
2) And honestly, there are somewhere in the neighborhood of 3.2 billion bands in the world. if Taylor Swift or Jay-Z stick their music someplace I can’t get it, will I even notice? What problem is being solved by taking music away from my channels of choice?
3) I’d love to see the research that says, “When Andy is at work listening to music on his headphones, what he really wants is higher fidelity music for $250 a year.” Even if this is true for some people, how many? How good can music sound? And won’t I need a pair of $800 headphones to even notice?

This isn’t a bash on Tidal. It’s simply an observation. They are taking avery non-technology product management approach, and that puzzles me because I live in my own little Seattle technology bubble. Obviously with the star power they’ve assembled, the deck is stacked in their favor, so they can skip some of “Lean Startup” type principles. They’ll have great marketing, get lots of exposure and be able to test the product in real time.

More choices for music is better than less, so I hope they do well. It will be interesting to see how their product development plan works out.

Quirky Has Become My Favorite Product Site

I was talking about Quirky.com to a few people this week and was shocked – shocked I say – to hear they hadn’t heard about it.

How to describe Quirky… Imagine every crazy idea you ever had for a product was suddenly being built and you could order it for a pretty good price. Doesn’t that sound like a good deal?

You should visit Quirky. You should buy stuff from Quirky. You should sign up for their newsletters and vote on what products they are going to build next. And then you should take your latest, greatest idea and submit it to them.

Quirky

Does Pronto Have Their Pricing Wrong

Since I work downtown a lot, and I am always rooting for startups, I’ve been keeping an eye on the bike-renting service “Pronto.” I think it’s a cool idea, and with enough manipulation, you can kind of shove this square peg into the circle hole of The Collaborative Economy. So that intrigues me as well.

Via DowntownSeattle.com

So this week I wanted to use the service to get about 9-10 blocks across downtown. And here is where I found out that I think they may have a simple to fix problem – pricing.

Pronto will let you rent a bike for 24 hours for $8. It seems like a paltry amount to spend. But I don’t need a bike for 24 hours. I need a bike Car2Go style – for 5 minutes to get to my meeting across downtown, and then an hour later I need it for 5 minutes to get back.

For $8, I can hop in an Uber. For $8 I can buy a sandwich and eat it as I enjoy a 15 minute walk. Sure 8$ is only $.33 an hour. But I only need the bike for 4% of the time in which I can have it. I’d rather pay 5-10x that $.33 per hour rate, and get closer to 70-100% efficiency.

That’s my use case. Maybe I’m unique. But I really want this company to succeed, so I’m curious why the pay by the hour model isn’t a viable alternative. Regardless, there seems to be more and more Pronto stands popping up all over town, so they must be doing something right.

The Best Company You Don’t Know You Need

I don’t shill for companies very often. And I am getting no benefit for this.

But I love RePC. (Google Map)

Now maybe you are one of those super careful people who never do anything dumb like accidentally back over your laptop bag after scraping the snow off your car, or accidentally have your laptop bag fall out of the back of an SUV. Maybe you never have a need to get your laptop screen replaced.

But maybe you do. And if you do, you want to take it to RePC. If they have the screen in stock (which they often do), the whole thing is less than $100. If they have to buy it from somewhere else, maybe $150. If you can find the right screen yourself somewhere, then they’ll do the install for like $40.

Of course, they do all kinds of other things for people have different kinds of laptop issues. So next time you have some computer calamity, give these guys a shot. They are just down by Safeco Field. Super nice, really helpful and really fair.

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.

Looking for Some Teachers to Give Insight on a Website to Help Teachers

There’s a little company based in New Jersey called PortfolioGen. Started by a teacher and a Vice-Principal, its mission is simple – To make it easier for teachers looking for jobs to find employment with schools who need their skills and expertise.

Traditionally, teachers have had to lug around an offline portfolio when they go interview. Teachers don’t always have the web expertise of a marketer, so they don’t all know how to build a blog or social presence. Plus, they may not want to be easily found by students and parents. PortfolioGen is a safe and secure place for teachers to create an online presence, upload their portfolio and lesson plans, and one day, communicate with schools who are hiring.

PortfolioGen Screenshot

The site is still in in infancy, but does have more than 14,000 teachers on board. If you’re a teacher or administrator, we’d love to get your feedback and insight. You can help the founders shape the site into something that is tailor made for teachers. Just email me for info.  Thanks.