It is a perennial question for early-stage startups: how do you find product-market fit (PMF)? What do you do to ensure that your idea takes shape in such a way that it meets a certain demand in your target market? How do you make your idea resonate in the world?
At TechCrunch’s Early Stage event in Boston a few weeks ago, David Thacker, a general partner at Greylock, advised startups to keep it simple: focus, adjust, and adapt.
The definition of PMF is largely subjective, but Thacker is looking 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 an appearance that what you’ve built resonates with a range of customers.”
This metric can vary by stage, but from Series A and above it becomes critical for a company to have PMF. At that stage, Thacker said, investors want to see a moderate scale of consumer use, and since a company looks forward to a Series B round, it’s best to think about total addressable market size (TAM) and where your product is located in relation to It.
“You may have found a product-market fit with an audience segment, but how big is that audience? How lucrative will that be if expanded? Those are the things we’re starting to think about,” he said, urging founders to define their company’s PMF with a measure that aligns with the company’s values.