I want to share a quote with you that inspired me. It’s from Nathan Resnick, CEO of Sourcify.
Most second-time founders would agree: Don’t raise until you feel product-market fit.
The sad part is why he decided to mention it…
The most stressful two years of my life were right after we raised a $2.5m seed round at Sourcify in 2018. We had some early traction but, deep down, knew we weren’t at product market fit.Â
What followed was something you want to avoid at all costs:
- They spent $750k hiring…Â
- Launched a completely new product ten months later…and flopped
- Then burned $100k for months with no real software product…
- Were forced to cut the whole tech team…
- and re-start with a clean slate… (and a big headache)
The problem: A product-market fit illusion.Â
If the product-market fit is not there, it impacts everything…. negatively. Too long sales cycles. Low win-rates. Dreading implementation cycles. Customer success dramas. Slow adoption. High churn.
No company can survive in this mode. Not bootstrapped, let alone with external funding, with raised external expectations.
That’s why most second-time founders only raise once they firmly feel Product-market fit.
So how to avoid this from happening as a first-time SaaS founder?
Constantly ask the fundamental question: What’s the one thing customers want from our software?
That’s about three things:
- Something valuable
- Something critical on their agenda
- Something 10x better than the status quo
If any of the three factors above is unclear, ditch it from your roadmap. It’s either nice to have something they don’t need or don’t want to risk moving for. In other words: It drags predictable traction.
Question for you to reflect upon
What feelings strongly confirm your SaaS solution has product-market fit?Â
Be Remarkable
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