It’s a perennial question for early-stage startups: how does one find product-market fit (PMF)? What do you do to ensure that your idea takes such a form that it meets some sort of demand in your target market? How do you get your idea to resonate in the world?
At TechCrunch’s Early Stage event a few weeks ago in Boston, David Thacker, a general partner at Greylock, advised startups to keep it simple: focus, adjust and adapt.
The definition of PMF is, for the most part, subjective, but Thacker looks for something more tangible.
“It doesn’t mean you’ve launched a product and scaled it to millions of customers and users,” he said. “What I’m looking for is some semblance that what you’ve built is resonating with a set of customers.”
This metric may vary by stage, but Series A and onwards is when it becomes critical for a company to have PMF. At that stage, Thacker said, investors want to see a moderate scale of consumer usage, and as a company looks toward a Series B round, it’s best to start thinking about total addressable market size (TAM) and where your product sits in relation to it.
“You may have found product-market fit with an audience segment, but how big is that audience? How lucrative is that going to be when expanded out? Those are the things we start to think about,” he said, urging founders to determine their company’s PMF with a metric that aligns with the company’s values.