I have witnessed startups launch new products or launch existing products in new markets for the past 15 years. One thing I can say for sure is that success mostly depends on the Product-Market Fit. Or so we’ve been told.
According to leading VC fund Andreessen Horowitz, “Product/market fit means being in a good market with a product that can satisfy that market.” (Marc Andreessen himself). According to Fred Wilson, success means “getting to the point where the market accepts your product and wants more of it.” Or as Andy Rachleff states it, “First to market seldom matters. Rather, first to product/market fit is almost always the long-term winner.”
Funny enough “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’. Sales cycle takes too long. Lots of deals never close. And you can always feel product/market fit when it’s happening. The customers are buying the product just as fast as you can make it. Usage is growing just as fast as you can add more servers. Money from customers is piling up in your company checking account. You’re hiring sales and customer support staff as fast as you can. Reporters are calling because they’ve heard about your hot new thing and they want to talk to you about it. You start getting entrepreneur of the year awards from Harvard Business School. Investment bankers are staking out your house. You could eat free for a year at Buck’s.”
But then as all fads, Product-Market Fit got outdated and a new concept arose: go-to-market fit! More than the fit between a product and a market, success relies on the timeliness and acuteness of the Go-To-Market Fit. Meaning the Market but also the way you market for this market – or how you decline your marketing mix (product/packaging, pricing, distribution channels, promotion/communication) to address this specific market.
According to Bob Tinker, author of the book Survival to Thrival and founding CEO of MobileIron, “Product-Market Fit isn’t sufficient to unlock growth for enterprise startups. There’s a missing link between finding Product-Market Fit and unlocking growth. That missing link didn’t have a name, but it is an equally important milestone and eureka moment. We call the missing link Go-To-Market Fit.”
In a16z Podcast that since then became famous, Bob Tinker, a16z general partner Peter Levine, and Hanne Tidnam discuss how to find the right go-to-market fit for the enterprise startup, and specifically how founders can avoid that moment of reckoning between product-market fit and actual growth. They mention the “Goldilocks problem” (not too early, not too late!) which consists in picking the right sales team and go-to-market model for a product and its customers. As Bob Tinker sums it up, Go-To-Market Fit relies on three components: a clear sales model, a repeatable Go-To-Market playbook to identify customers and close deals, and a sense of urgency. Only when the three line up, can the company unlock growth!
Now Andreessen-Horowitz investment partner D’Arcy Coolican tells us, we’ve gone one step further and what matters on top of that is the fit with the spirit of the moment, Zeitgeist. Not sure this is really brand-new as investor decks provided by entrepreneurs looking for funding more and more frequently include a “Momentum” part, showing why the opportunity must be seized now, echoing the product-market fit climax. In simple words, if the product you build surfs on the “air du temps”, you get a competitive advantage.
D’Arcy Coolican has the merit to conceptualize the thing into a brand-new idea: Product-Zeitgeist Fit. And he illustrates it as such: “Whether it’s privacy products, frustration with the attention economy, the Marie Kondo-ification of everything including clothes, or the desire for a new social network (of which there have been many attempts lately) – The founders that are building on top of these ideas today all have a massive advantage today.” And similarly as Marc Andreessen’s Product-Market Fit reality check, D’Arcy Coolican has identified four signals:
- “Nerd Heat” (Chris Dixon): the most talented, hardest working, and most in-demand people (product managers, engineers, data scientists) are so intrigued by a product that they’re working on it, excited by it, and trying to make it a thing.
- The “Despite Test”: people are using a product despite the fact that it’s not the best thing out there, showing that the product has a line into something emotional, not solely functional.
- The “T-shirt Test”: people with no connection to the company are wearing their t-shirts or putting their stickers on their laptops or wearing their socks. This desire to associate with the idea indicates as much a movement as a product.
- The “Eyebrow Test”: in the early days, things that have product zeitgeist fit often feel misunderstood or controversial. “At first blush, the conceit may even raise a few eyebrows. But to the people who have been working on those products, they’re so clearly elegant, if temporarily imperfect, solutions to big and important problems that they seem almost obvious once they recognize it.”
Having designed go-to-market plans for years while being frustrated because of entrepreneurs’ narrow vision and focus on short-term profitability, I can only celebrate that investors now evangelize over product-zeitgeist fit. As D’Arcy Collican encourages, “If you’re just trying to figure out what the future looks like, not just build it, look for the things that are broken and terrible but that people still really care about.” I personally believe that we must reconnect go-to-market fit approaches with futures thinking. I have even changed my focus to dedicate myself to helping entrepreneurs think in the longer run with a strategic foresight focus. I could very well advocate for a Product-Futures Fit! Stay tuned for Andreessen Horowitz next conceptual updates.