horsepigcow

It’s a simple statement, but not a simple thing to do. Product/market fit is truly the ONLY thing that matters and achieving it before you run out of money is the key to winning. It’s why companies raise a whole bunch of money:

MORE MONEY = MORE TIME = MORE LIKELY TO WIN

…or not. Sometimes more money equals more waste, too. And we are seeing this a great deal right now. Sometimes more time is not the best thing to give an entrepreneur. Finding that balance of time and money will help us be hungry and creative enough to find the best product/market fit.

Finding that Product/Market Fit

There is no silver bullet here and I’ve found it incredibly enlightening to be on the product side of this one (not the pundit or consultant side). However, I’ve come across some really great resources that will help streamline the process of finding product/market fit:

1. SOLVE THE RIGHT PROBLEM – If this seems obvious, you are fooling yourself. One of my favourite stories of all time, retold by Aza Raskin, is that of Henry Kremer’s search for a human-powered flying machine. Read it. Turns out the problem wasn’t that they needed to solve human-powered flight. The problem was that the prototypes took to long to test. Fail fast and iterate often.
2. LIMIT YOUR MARKET – finding product/market fit for EVERYONE is like finding a pair of pants that fits everyone. It doesn’t exist. Seriously. Narrow your market. And not to 18-35 year old males. Figure out who that ONE person is. Not a profile or a fictional person, either. If you can’t find a single living being that is that person, you don’t have a market. Hell, solve it for yourself if you have to, but be careful because you are seriously biased.
3. EAT YOUR OWN DOGFOOD AND REALLY TASTE IT – do you really think what you’ve built is amazing? Seriously? I’m the first to admit that though Buyosphere is coming along nicely, it’s quite a ways away from being useful to anyone but someone who likes to keep track of the stuff they buy…and even then it is clunky as all heck. I can admit that. And I’ll continue to be my biggest critic and breaking my own product until I can honestly say, “This is freakin rad”. I won’t be happy until that day.
4. RESEARCH RESEARCH RESEARCH – Talk to your customers and potential customers. This one is hard because you have to know what information to filter and what to use. But I love the story of AirBnB’s early days of flying to New York every weekend and knocking on doors. Not only did they use their own service, figuring out what sucked and what worked, but they talked to potential customers, hosts and travelers to find out more information. This is where limiting your market can also come in very handy!
5. LOOK TO OTHER MARKETS FOR CLUES – I love reading outside of my field. Innovation can be found in other markets and examples unrelated to yours. Connect the dots. Hell, much of the innovation of the media industry has come from the porn industry. They solved the distribution of media to viewers before the rest of the industry realized there would be a demand. Who is capturing an audience that you can beg, borrow and steal ideas from?
6. UPDATE OLD IDEAS WITH NEW TWISTS – Groupon is just a new way to present coupons. That’s it. There is nothing seriously innovative about it. Except that it IS innovative in that it gives HUGE discounts and not just a $0.05 here and there. Oh…and the way it’s described as sexy instead of cheap to use a Groupon.
7. UNDERSTAND AND USE INTRINSIC MOTIVATORS – a company hitting the market with lots of buzz and activity does not necessarily mean there is a product/market fit. In fact, initial buzz and growth may be coming from extrinsic motivators (the ever-popular ‘gamification’ of today – as Kathy Sierra calls it “the high fructose corn syrup of engagement”). Motivators like badges and coupons and deals are temporary solutions and actually lead to demotivating your customer base as they diminish in value. Instead, think INTRINSIC motivations such as Challenge, Curiosity, Control and Competition. Motivation has loads of research on it now (I’m currently reading Dan Pink’s DRIVE, which summarizes much of the research). The key here is to match the RIGHT intrinsic motivators to your market.

Doing all of the above will not guarantee product/market fit. You still have to experiment and be agile…and be willing to persevere through until you nail it. The issue may be as simple as timing…or technology…or messaging…or being in the right place at the right time. But you increase your chances of hitting the sweet spot by being out there and agile.

The only guarantee of ‘winning’ is to find that product/market fit before you run out of money…or even after you run out of money to find a way to keep tweaking it. We’re still working on it ourselves and I’ll let you know the moment we nail it.

Welcome to one of my regularly scheduled attacks of futility. It happens about once a month if I’m lucky and once per week if it’s a really hard month. It starts with something small that triggers it. A comment from someone. A post. An announcement. The post or announcement usually surrounds some frothy statement like, “Look at all of the money being thrown around! Wa-hoo!” or something not quite as hyperbole, but points to the same thing. I read the headline and then look at my own experience and think:

“Geez. I must be doing something incredibly wrong if it is this easy to raise money and I’m not. I suck.”

This thought has a tendency to spiral into, “What business do *I* have being a CEO? I’m terrible at this!” Eventually, though, I kick myself out of my pity party and get creative and work harder. To date, I’ve pulled through each and every attack with new ideas and a renewed sense of purpose.

I just gave a talk on being a startup entrepreneur in the midst of looking for funding at NXNE Interactive called, “So you wanna do a startup, eh?” The gist of it is that all of this frothiness isn’t so good for startups that want to build something that means a damn. The advice is awful. The frenzy makes for poor short-term thinking. And the urgency caused by all of it means that everyone is making bad decisions based on no evidence. VCs/Angels are following the herd when most of them are smart men and women who didn’t get to where they are because of herd mentality. Entrepreneurs are pivoting away from the ideas that put them on their path in the first place and following trends that don’t really mean a damn (gamification or daily deals anyone?)

If we ARE in a bubble, and many people think we are, then the cash grab myopic activities will merely accelerate the bursting of that bubble. And sure, there are people who make money during these frenzies, but it’s a small number and you probably aren’t one of them. You’d need lower scruples.

But I think the biggest travesty of this time period is ideas. As Mark Suster said in his awesome presentation (which was misinterpreted by TechCrunch as a cash-grab statement), “Some good companies simply don’t get funded.” Those companies are usually the trailblazers. Think Pandora. Think AirBnB. Think Zappos (who struggled with funding during the first bubble). Think just about every startup who didn’t follow the pack.

Ideas are crazy hard to bank on. They are crystal clear for the idea-thinker, but are incredibly difficult to gr0k for the idea-listener. An idea doesn’t come out of a single eureka moment. It comes out of years of thinking about a problem and having small bursts of inspiration here and there pummel your brain until you are able to piece them together one day into a cogent thought. Without taking the listener on that long journey, he/she won’t be able to understand how x solves y.

Take AirBnB for instance. The founders had a need: paying their rent. There was a conference coming up that created an opportunity: people looking for cheap places to stay. They pulled ideas from their own experiences: sleeping on an air mattress is a good, inexpensive way to travel and couchsurfing has made it safer to open up one’s home to strangers. They added a sparkle of business acumen to solve their original problem and address the opportunity: what if we charged a nominal fee for conference goers to sleep in our apartment on air mattresses? And then, when the experiment was a success, they had their big idea: let’s create a tool to match people like us with travelers? Brilliant, right? Well, we know that now, but not many people thought so. In fact, they were practically laughed out of VC and Angel offices when they pitched the idea. They understood the brilliance of the idea because they lived it and experienced it unfolding. But it was a radical way to approach things and not so easy to wrap a brain around by someone who had never been there.

So instead of wacky new ideas like this getting funded, ideas that look like other ideas get funded quickly. Of course, once the model is demonstrated/proven, it makes it much easier to gr0k. That’s why the ‘high level pitch’ is so popular. “We are Mint.com for Products.” “We are Foursquare for relationships.” Etc. It’s essentially:

“We are -insert company that is wildly popular here so there is no question as to the business model- for -insert slight variation of market/product/vertical-.”

But the issue here is that we start to see a market glut of products that are x for y instead of thinking about creating products and services that actually mean a damn. Not saying that x for y doesn’t ever mean a damn, but by and large it becomes a bit of a cash grab. Just add the frothy money slinging market we are seeing right now and it gets even worse.

Bring on the feelings of futility.

Why would anyone want to enter a frothy market that has an idea that comes from a real place of “let’s make stuff work better for people AND make money?” It’s heartbreaking. And no, I don’t want to pivot and grab onto cash cows. It’s distracting and dishonest and will lead to another crash. And that isn’t good for anyone.

That’s why I find it necessary to keep talking frankly about reality. It’s probably not popular or doing me any favors in my journey to raise money to fund Buyosphere‘s ability to build something that helps make stuff (in this case, commerce) better for people (and make money). But I’d really like to open up the conversation on how we can take a step back from the frothy frenziness of today’s startups and talk about real solutions for real entrepreneurs with real passion for their ideas who want to serve real people’s needs.

I’ve embedded my deck below. I’d love your feedback and your own stories. I’d like fewer journeys into the pits of futility and more into conversations about solutions.

Photo taken by Carlos Pacheco (aka. the very patient man who keeps me strong through this) while we were out looking for a good coffee at NXNE Interactive.

I am in love with Sheryl Sandberg.

Not a romantic love (though she is pretty attractive as well as inspirational), but the female equivalent of Man Crush (is there a name for this?). I gobble up any videos of her on the web. I read and highlight every second quote by her. I find myself dreaming about meeting her someday and giving her a big hug and gushing about how grateful I am that she is in the world and how incredibly brave she is for speaking up from her position.

She is a woman who has ‘made it’ who isn’t afraid to say that it was a struggle to get there. She’s honest enough to talk about the times when people tried damaging her reputation, targeting her in large because she is a woman:

Do I believe I was judged more harshly because of my double-Xs? Yes. Do I think this will happen to me again in my career? Sure. I told myself that next time I’m not going to let it bother me, I won’t cry. I’m not sure that’s true. But I know I’ll get through it. I know that the truth comes out in the end, and I know how to keep my head down and just keep working. READ MORE

The comments on the article are telling of the underlying biases and attitudes that hold back women. And the same arguments against Sheryl’s honest telling of her trail to success are railed against many other women who are telling the story as it happens: “You are imagining things.” “Stop blaming everyone else for your failures.”

In fact, I watched a kickass woman I admire (and ALSO have a girl-equivalent Man Crush on), Sarah Prevette, experience the same type of comments after being featured in the Globe & Mail by Amber MacArthur. One commenter called Sarah a woman “looking for excuses.” Is this the same Sarah Prevette I know who is the LAST person on the planet who looks for excuses?

I know the struggles. I feel them. I started a Google Group to discuss how we can combat the subtle sexism that Sarah talks about because I’ve had the same conversation with every kickass woman CEO, founder, executive and entrepreneur I know. It goes like, “They don’t say it, but I *know* they treat me differently. They aren’t taking me seriously because I don’t act like a man and when I act like a man, they call me difficult.”

How many VC meetings have I been in where the VC turns to me and says, “Yeah. I just don’t get it. Maybe I’ll show it to my wife.” BURN! Really? Would he say that to a man pitching him the same concept?

Hell, even the VCs (or angel Paige Craig in this case) are talking about how the subtle sexism works and getting shut down. And I look at the companies getting funded…UBER funded…versus those NOT getting funded (or those getting underfunded) and I see lots of women in the underfunding/non-funded category while the same damned ideas are getting money thrown at them when they are led by men.

I had a candid conversation with a prominent tech reporter who told me s/he pitched an undercover story on exposing the VC bias toward young male founders (planting the same idea with a different gendered CEO in front of the same VC firms) who was told it would never happen because it would be too scandalous and the media company would get blacklisted.

But I get the messages from people saying, “Stop talking about this stuff. You’ll only get blacklisted yourself.” and I think about Gaslight, the 1944 Classic Movie with Ingrid Bergman (one of my faves of all time). From the description:

Years after her aunt was murdered in her home, a young woman moves back into the house with her new husband. However, he has a secret which he will do anything to protect, even if that means driving his wife insane.

It’s an amazing metaphor for how many women in technology are feeling today. We are sure we see the signs that discrimination still exists, but then they are explained away or we are told “you are being crazy/blaming/whiny/etc.” and we start believing that we must be imagining it. It doesn’t stop us from moving forward, but it takes its toll emotionally and physically. It wreaks havoc on the personal lives that help re-vitalize us. It isolates us. It pits women against one another. Soon we believe our own insanity.

The problem is that it isn’t obvious. It’s, as Sarah pointed out, SUBTLE. There isn’t a glowing example to point at and say, “See? Look at that? I was right!” It happens in whispers. In comments. In unchecked biases. In rules that favor certain types. It displays itself in absence.

I don’t know how to name it, fight it, overcome it or even really expose it. But like Sheryl, the best I (or any other woman I know) can do is to keep our heads down and work hard and push through it so more of us get into power positions like Sheryl and even out the deck. On the way we are going to think we’re crazy and feel isolated and understand we need to work 5x harder to prove that we are worthy of our successes. We need to toot our own horns and ignore those who call us ‘self-promoters’ (I’ve heard this insult countless times). We need to seek out amazing men who get it and who will help us through their power to get there. We need to stop apologizing, using passive language (I do this too much) and just say, “I know what I’m doing. I’m awesome.” We need to come together and support one another – name it, but then change it.

Thank you, Sheryl. Thank you, Sarah. Thank you, Nilofer. Thank you, Cindy. Thank you every single woman who is on the Google Group, who has stood up, who continues to fight and who is paving the way. I’m in love with all of you.
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Cool! My post has been picked up by:

• Ben Rooney at WSJ – The Subtle Sexism in the Tech Industry
• Alyson Shontell at Business Insider – Hey VC’s! Stop Saying This to Female Entrepreneurs!
• Rachel Sklar at Change The Ratio