Transcript for A framework for finding product-market fit | Todd Jackson (First Round Capital)

Finding product market fit is the single most important thing that your startup does in the first three years. And it's just under-explored and it's just under-explained as a topic.

We've published dozens of articles on the first round review and we have found a very consistent set of patterns, demand, satisfaction, and efficiency. But the interesting thing is that you don't go for all three of them from the very beginning.

You've got the persona, the problem, the promise, and the product. Latest kept the first one but changed the others. Vantage change all four.

Yeah, you got it. So I am a VC. I'm a partnered first round capital now and I've been at first round for four years, but I was not a VC before first round. So I started a company in 2013 called Cover and that was actually funded by first round 11 years ago. That's how I got to know first round. Yeah, and before that I had worked on Gmail as the product lead kind of in the early days, you know, early 2000s and at Facebook. And then I started cover and we ended up selling cover to Twitter in 2014 and I worked on a bunch of different products at Twitter. And then I was the VP of product and design at Dropbox. That was 2015 to 2018. So I have always loved product and that's actually the reason now that I love being a seed stage of E.C. because I love investing kind of at the earliest stage founders who are pre-product market fit and then helping them get there and I just kind of love doing that over and over again.

The thing about product market fit is that I find it's mysterious to a lot of people. And people tend to think about it purely as an art rather than a science. And, you know, all the advice that you find out there on the internet is like very general when it comes to product market failure. You'll know it when you see it. You'll know when you have it, right? It's not specific. And there's so many other startup topics where there is good content on the internet. You know, like hiring your first salesperson, running board meetings, stuff that is specific and tactical, but there isn't that much content around product market fit that is that specific. And so I think that's actually why, you know, like Rahul from Superhuman is kind of well known for his approach to finding product market fit. That was published on the first round review in 2018 and it was like immediately popular and interesting to people. And I think the reason is because it was specific and because it was tactical and it brought a little bit of the science to something that people thought was just an art. And I think it's why your content is really popular too, Lenny. You know, like you and I worked on this product validation article together a little while back. And the seven part series that you did on B2B SaaS companies, and like the PMF benchmarking data that you had, like I think it was how long it took to get to a product and a customer and to product market fit that was super well read. And there just isn't that much good specific content about this. But like you said, the product market fit is the single most important thing that your startup does in the first three years. And it's just under explored, and it's just under explained as a topic. So we felt this was a very important thing to do, something worth focusing on. And I've personally talked to hundreds of founders about this topic. We've published dozens of articles on the first round review. We call this our paths to product market fit series where we interview founders about the early days. And I'm just like always interested in like, what are the patterns? You know, if you talk to enough successful founders, and in this case, it can be enterprise founders, and you ask them, what did you do? in the first six to nine months of running your company, of starting your company. What patterns emerge from that? And we have found a very consistent set of patterns, and that's what we decided to base our framework around.

I think as a founder, there are so many things you have to do. You know, you have to pick a market. You have to find a co-founder. You have to hire a team. You have to raise funding. You have to build a product. You have to sell a product. And so sometimes it kind of gets lost that like actually the only thing that matters in the first couple years is finding product market fit and actually what we define as extreme product market fit and I'll go into that because if you find extreme product market fit, the momentum just carries you. and the market pulls you along and it's easy to know it to build because you're building the thing that your customers want and it's motivating as a team, it's easy to hire people, it's all everything becomes easier. If you find product market fit, it is the thing that propels the company. And so we work, you know, we are a seed stage venture friend. We tend to work with very early founders who are pre-product market fit. And the truth, kind of the hard truth about it is that most of them don't get past the first couple levels of it. Like the majority of startups do not get past what we call level one product market fit or level two product market fit. Now go through and define all that stuff. They get stuck at one of those first couple levels. And if they can unlock kind of the right product and the right way to explain it to a customer and make a customer deeply satisfied. And there's enough customers out there like that. It just pulls the whole thing along.

This is for early B2B founders. And specifically founders who are doing something that is more sales led than bottom up. I think bottom up is its own kind of world. It's closer to consumer product development in my mind. And I have done consumer products. Consumer product, I think there is a little bit more alchemy involved. It's about having great taste and finding the right thing at the right time and it just sort of it's like catching lightning in a bottle. I think the good thing about enterprise and specifically kind of sales led B2B is that there is more science to it. And so it is for sales led B2B founders who are in let's call it the first six to nine months of starting their company and want to set the foundation for product market fit like right from the beginning.

You know, we can't guarantee success here. Like, I just want to contextualize that finding extreme product market fit is very, very hard. And what we are trying to do is increase your odds, right? Increase the odds, reduce the roll of luck, give you sort of a framework and way of thinking about the things that you need to do. And I think that that can increase the odds. Like I said earlier, the majority of startups are sort of getting stuck at these first couple levels. I think if you know what the path looks like. And you know what the levers are at your disposal and you know sort of what you need to aim for. I think we can get more of these companies to kind of like level three and level four product market fit, which is where you really want to be and where you have a very valuable company.

Yeah, so we launched a new program and we call it product market fit method. It is designed like I said to help early B2B founders increase the odds of finding product market fit. It's totally free. It's a very intensive program. You can see all the details at PMF.firstround.com and the application deadline is May 7th. The program starts on May 29th. And we actually ran a beta version, like a test version of this last year, late last year, with 11 founders. I think probably some you know, Lenny from Stripe and Plad and Airbnb and Twitter. And the feedback was really, it was great. It made me feel very good. One of the founders was like, I feel like these 14 weeks saved me two years of time in what would have been kind of wandering through the desert. And so there's eight sessions in the full program. And the first one is the one we're going to do today. So the first session is on what we call the levels of product market fit. The second one is on customer discovery. And we actually refer to it as dollar driven discovery. We get very specific about not just kind of like the normal way of doing customer conversations and customer discovery, but how do you find that a customer is willing to pay money for this thing and a lot of money? We talk about market validation, product positioning. We do a section on design partners because I think a lot of founders have questions about that. How do I find the right design partners? What's the right way to structure and agreement with them? How do I convert them to paying customers kind of all that stuff? We talked about product iteration and pivots and I sort of refer to this stage as like the grind right the grind of kind of product iteration and then we spent a ton of time on founder led sales and the reason that we do that is we we really like working with very technical founders You know, builders, people that are either engineering background, product design, data science, like people who are builders. So that's kind of the program in a nutshell. And like I said, you know, any founder working on a new B2B SaaS company, welcome to apply. And then bonus points if you are technical, like I said, is you have a clear kind of product idea or hypothesis, but you're less than, you know, six to 12 months into building the company.

The way that we think about it is that the program roughly takes about 10 hours a week for each founder and it's 10 hours of work that you were going to be doing anyway. Right, it is literally you're talking to customers. You're improving your positioning. You're sort of doing critical thinking about your market and what you should be building. And so what I think the way I think about it and the way I've heard from the 11 founders went through it is it just added structure to the what I was doing anyway and it actually made me more efficient.

Yeah, so it's 100% free and it literally costs you $0, we give you $0, we own zero percent of your company. And that's pretty different than I think a lot of other programs out there. And this is just something we do over the years. We've run first round angel track, which I know you were in Lennie. We've run the first round review for 10 years. We make these things free and our belief is that you have to create value in the ecosystem. You have to put stuff out in the world that is useful. And if you can create that value, create an value with the audience, then you'll be able to capture that value at some point. And so we think there's a win-win here. We get an inside look at some of tomorrow's great companies, and they get an inside look at first row.

Yeah, so the framework starts with a very simple idea that is product market fit is not a one size fits all thing and it doesn't just happen overnight. And for B to B company specifically, it does tend to follow a repeatable pattern. And so we start with defining the ultimate goal. The ultimate goal is to get to extreme product market fit. And we have a like a precise definition for this. Let me read it to you. So extreme product market fit is a state of widespread demand for a product that satisfies a critical need and crucially can be delivered repeatedly and efficiently to each customer. And so there's sort of like three key ideas in there demand satisfaction and efficiency. And I think efficiencies worth highlighting because that's what most people would leave out of their definition. You talk about like, oh, it's product people like it. That's good. That's product market fit. But if you look, there's products out there. Like, I was a big fan of we work at like as a as a customer of we work, right? And I'm a fan of Casper and these other products, like those products managed to achieve customer satisfaction and demand, but they never got the efficiency, right? And so sort of the whole business just never works, right at scale. And my partner Brett Burstson at first round, he gives this example of the $100 vending machine, and I really like this example, which is, imagine I built a vending machine, and I stuck it like in the middle of San Francisco. And you walk up to this vending machine, and you put a dollar in, and a $100 bill comes out. And that's the product. Like that would have insane sort of like demand. Like there would be a line at that vending machine. I think people would be extremely satisfied, right? Like they'd be like, this is awesome. The retention would be very good. I'm sure they would come back tomorrow. But like the whole thing is ridiculous, right? Like the whole metaphor is ridiculous because it's just not viable to do something like that. And yet you see a lot of startups like kind of do this, right? They're basically with their products giving away $2 for $1 and it gets them pretty far, but that's not real product market fit, right? And so, you know, that's one of the reasons that we think efficiency and how you think about the economic model of what you're doing is very important. And then another aspect that I like, which is we have this concept that we call the marginal customer. And like the next incremental customer you're going to get for your company for your product. And if you have product market fit and as you are progressing along this journey, the marginal customer should be getting easier and easier to get. Like easier to acquire them, easier to give them good service with a good product. And that means your efficiency is sort of increasing along the way and your product market fit is strengthening. So you've got to have all three of those things, right, demand satisfaction efficiency, but the interesting thing is that you don't go for all three of them at once from the very beginning. And so product market fit, it happens like in the sequence of levels. It happens over multiple years. And for the best enterprise companies, I would say they tend to reach extreme product market fit in roughly four to six years, right? There's some variants, but roughly four to six years. And so we label these four levels. We say level one product market fit is nascent product market fit. Level two is developing, level three is strong, and level four is extreme. And that's where you want to get. And along the way, you're sort of trading off these three dimensions, satisfaction demand and efficiency, because they're intertwined. You could spend a bunch of money on marketing, and that's going to increase your demand, but you're decreasing your efficiency if you do that. You can invest a bunch in efficiency and automating a whole bunch of stuff, but that actually might harm the customer experience and you're reducing satisfaction. That's one an interesting thing. I think is you're actually making trade offs at each level and what you should optimize for at each level is different. And so we talk about all these signs, you know, whether you're getting stuck at a given level, how do you get unstuck and sort of how do you progress along this path?

Yeah, so okay, level one nascent. So at this point, you're probably like a pre-seater-sease-dage company. You've got less than 10 people on your team. And at level one, your job is to find three to five customers that have a particular problem that is worth solving and to deliver them a satisfying solution. And you got to pick a problem that is both important and urgent to them. And the solution that you deliver needs to satisfy some kind of promise that they care deeply about. Okay, so of the three dimensions that you just recap, Lenny, it's satisfaction first, demand second, efficiency last when you're at level one. Like it's actually okay to be inefficient. If it helps you uncover something that delivers an insanely good customer satisfaction. And so I think that one of the best examples I can think of that is this company called Vanta.

What a good example. So Vantel, you know, was founded in 2016 by Christina Casio Boe and she had come from Dropbox and we got to work at Dropbox together, which was awesome. She was the PM of Dropbox paper at that time. And so Vantel, you know, it's a company that does compliance automation, continuous monitoring. Most startups think of like Vantel as how you get a sock to. But they didn't do that at first, right? And I remember in 2018, like Christina and I went on a walk around South Park neighborhood in San Francisco. And she, this is what the first time I heard the idea of Vanta. And she had actually in 2016, 2017, like, tried a few other ideas. You know, she had this like, spark speaker that would record meetings. And it would send meeting summaries over Slack.

and she had this other idea, something about drop shipping, but she didn't know anything about drop shipping. And she has just sort of been in this mode of like, you know, we're building stuff and then we're seeing if anybody wants it. And then she realized that wasn't working and she changed what she was doing. And she started talking to potential customers and she was very interested in the idea of security. And why a lot of startups didn't like, you know, use any security products. And she was talking to like security engineers and, you know, CSOs and just CTOs at startups, And she would ask them, like, what is the thing you hate most about your job as it relates to security? And over and over and over, they would say, I hate filling out the security questionnaires. I hate doing the compliance audits. It's like so much grungy manual work. I'm in there filling out spreadsheets and taking screenshots of my AWS account. And the whole thing like just kind of doesn't make sense. And she had actually felt this herself, right, when she was on Dropbox paper and the experience of getting a sock to was ownerist, right? And the reason that she needed to get is because we wanted to sell, you know, start selling Dropbox paper into enterprise. And so she said to me, you know, there's this pain out there, I think I can solve it. And I think there might be a revenue unlock. And I was like, what do you mean by that? And she was like, well, I've got these first few customers, you know, or like sort of design partner pseudo customers. It's segment and front and Figma. And this is 20, 17, 18. So these companies were like smaller at the time, right? Not like the sort of the big companies they are now. And she was like, yeah, they're trying to sell into like, you know, Fortune 500 companies. One of them is actually trying to land like a Fortune 10 right now. And they said the thing that's holding them back is they don't have compliance certification. They don't have a sock too. And I told them, hey, what if I do that for you? And they were like, oh, you can just do that. And she was like, yeah. And she did it. And they landed the deal. And it was like one of the clearest examples to me of a product that satisfies a promise. But this product is going to unlock revenue for you. You're going to be able to land this enterprise deal. And so I think they just did a phenomenal job of that. And that's the kind of thing that you have to, that's what you're looking for when you're at level one, a problem that really matters to like three to five customers.

Completely manual, like she was the one behind the email address, you know, like sort of posting as the AI, but doing it herself. And that's, I think that's revealing of like, it's okay to be inefficient at level one, as long as you're delivering incredible satisfaction.

Yes, they're paying you money and you're delivering a product that solves a problem for them.

Yeah. So like I said, you're kind of preceded less than 10 people. Probably your demand source at this stage is mostly people you know. It's like friends and family. It's your network. Maybe it's VCs. You haven't probably done a lot of likes, you know, cold out reach at this point. And It's hard to find customers, right? Like you're trying to get to three to five. It probably takes you 20 warm intros to get one, right? Something along those lines. So maybe to get to three to five. It's like at least 50 conversations. That's very normal at this stage because you're just trying to find the right problem and find customers who have it. You probably in the like $0 to $500K ARR, like somewhere in that zone, I would say that you're at level one. And then there are metrics to track efficiency, right? Things like burn multiple gross margin, and are all of these, they're all of them are just like not applicable at this stage. It's too early and you shouldn't be worrying about that stuff. And so, You want to be feeling this sense of progress, right, that there are customers who need what you are building and the thing you are building works. And so, conversely, the signs that we see a lot of founders get stuck. And this is a very common level to get stuck, right? And so, if you're sort of hanging out here for six months, nine months, 12 months, and there's yellow flags that are appearing, you're starting to feel stuck. And so, the yellow flags are something like, you know, let's say you're product disappeared overnight. Your customers wouldn't be super disappointed. Let's say you have a handful of happy customers. Let's say you've got four or four or five customers, but the most important feature is actually different for each one of them. That starts to look a little bit more like a consulting business than a product business. Or it just feels incredibly hard to find kind of the marginal customer the next new customer. Or you're just, you know, your usage is low, like the project is in their hands, but the usage is low, it's not growing that much, it lasts for six months. And this, I think, like there's a really good example, Jack Altman, who's the founder of Latis. He founded Latis in 2015. We've talked to him a bunch, you know, on the first round past the product market fit, and other things. So for those who don't know, Latis is a people management platform. But it didn't start that way. And most people don't know about this. Latest actually started as an OKR tool right back in 2015, didn't I? Yeah. And so it jacket just sort of seen this at other companies. He's like, OK companies are doing OKRs, but they're not very good at it. And it causes a lot of arguments among the executive team and the employees are like non-compliant. They think the whole thing's kind of dumb. So I can fix that with software. And so the original version of lattice was for managing OKRs. And he was able to sell it. And so his buyer was the head of HR, right? And they said, OK, yeah, we'll give this a shot. And he had a couple companies using it. And they would use it for like one quarter. And then the next quarter would come around. And they were like, I didn't go that well last time. I don't know. The place doesn't seem to like it. I don't know. And then the quarter after that, they were like, no, we're not buying this. We're not using this, right? And so Jack pulled off the pivot, right, to people management. And the way that he did it was he actually pepped the persona, right? And so this gets into the ideas of the four piece. And I'll talk about this a little bit more. The four piece is our version of the four piece. You've got the persona, the problem, the promise and the product. And all four of these things kind of have to line up, right? Your product has to deliver a promise that solves the problem of your persona. And so Jack actually kept the persona. He was like, I've gotten to know these heads of HR really well over the last six to nine months. I like text with them. I go out to coffee with them. I'm like friends with them. And I know them really well. The so-care thing just doesn't seem to be a big deal for them. But they've got other problems that I could look at solving. And the interesting thing was that timing, it was kind of like mid-2010's performance management had like start to come back in favor. It was like this pendulum. Like there was a period of time where performance management was like really important. And then all these companies were like, we're not doing this anymore. And then the pendulum kind of swung back and around 2015-2016 was that time. And so Jack literally showed them figma mockups, like there was no product, right? But he's like, what if I could solve performance management for you in a way that is much more modern and much more employee-friendly and manager-friendly and the whole thing's just going to work better? And the response was like off the charts. And people wanted this thing. And I believe he sold his first five or ten customers like with Figma mockups, right? Like before he had built anything really. And so that I think is an interesting example, right? Of like he was sort of stuck in this zone of like people didn't love what he was doing. He kept the persona but he changed the problem that he was solving and the promise he was delivering through the product. And you see that this is like we do a whole section on pivots and like when to pivot and how to pivot. And I think this is actually the best framework for this is the four P's. Like, you know, lattice changed, kept the first one but changed the others. Banta changed all four, right? There are other products like plaid that actually sort of kept elements of the product they were doing. So this I don't know if you know the story of plaid, but You know, Zach Parrot was building, plaid started out not as like a API for bank accounts. It started out as a consumer budgeting app. Like it was a consumer app. And it just, you know, was supposed to like help you save money and budget and stuff. And like it just wasn't that popular. And the founders kind of frustrated, but they had built this part of the product that enabled the app to like connect to your bank accounts, right? And had solved kind of like all the nitty gritty issues with that. And then they found that their friends wanted to license it from them. So like there was that kind of friend at Venmo who wanted to license this and they got, you know, they got Robinhood at some point. They got Coinbase at some point. So that's like another example of like they actually kept a lot of the code that they had written. They kept the product, but they completely changed the other three piece. Right, like instead of solving for consumers who have a problem with budgeting, we are going to solve for our developers at FinTech companies who have a problem connecting to bank accounts. And it was like a total flip of the four P's, but that's like why I really like this framework, because I think it really helps founders think in a structured way about this.

I think different founders approach this differently. And I've seen a lot of founders who are build first and then sell and I've seen a lot of founders who are self first and then build and they can both work, right? I tend to gravitate towards the, like, I want to sell it before I build it, because I really want the signal from customers. And I want that to sort of be the guide and the oxygen that drives what I'm building. I find that very motivating. I also find it kind of like easier, honestly, rather than guessing like, oh, you know, I'm gonna write 50,000 lines of code and then see if somebody wants this thing. I think it's better to sort of like talk to a bunch of customers, know that like, hey, if I had this thing, if I could build this thing, I know it would sell. Well, like I know these people want this day. So I tend to approach it from from that point of view and therefore I focus on the persona and the problem and the promise, right? What is the promise that is really going to click for that for that buyer for that persona? And then it's the product. The product's job is to satisfy those first three p's really.

The last thing that I'd add at Level 1 is there's this founder from a company called Persona. His name is Rick Song. He's like super awesome. Persona is a first round company. They do identity verification. And Rick's analogy, I just love it for Level 1, is you don't want to get frenzoned by your customers. Like, you're like, where your customers like you, but they don't love you and they don't need you, right? And he was super paranoid about this in the early days of persona. And his technique for doing this, which I really like super simple, was he was very close with his first five or ten customers. And he would go to them and sit them down one on one and say, I need your help. Like, it is very important to me that this company succeeds and does not fail. So I don't want you to be nice to me. I want you to tell me, is persona like a necessity for your company? If we went away, you know, how painful would that be? If a competitor came along that charged half as much as us, would you switch to them? And he's really trying to like get to the essence of like, is persona critical for you or am I in the friend zone? And I just think that's like a really great way of thinking about this.

Yeah. So level two is developing product market fit. And your job at level two is now you've got to go from five satisfied customers to 25 satisfied customers. And so now you've got to start thinking about demand in addition to satisfaction. Because it is very hard to just grind your way all the way to 25 customers with sheer willpower. But you can do that to like five, maybe 10. And we see some founders who just have phenomenal willpower and grit and grind their way to five or 10 customers to get to 25 and to get beyond 25. Like the product has to be doing a lot of the heavy lifting for you. And so that is kind of the essence of this level. You know, if you're at this level, you probably, okay, now you're like Cedar Series A, style company, maybe you've got up to 20 people at the company, and you're starting to work on this demand source, where you have the early signs of a scalable channel, and it's not just warm and chose like from your VCs or from your friends. You are, you're maybe investing in cold outreach and getting that to sort of tuned and humming. You might be investing in content. You might be doing community events, but the whole idea is you're trying to scale sort of the demand source. It's still not easy. Like, you know, like a benchmark we would say is that your sales conversion without a warm intro is still probably like 10%. Something that like first call to close one is like around 10%. If you get higher than that, that's great. But that sort of benchmark for this level. You're in kind of the like anywhere from like the 500k to 5 million ARR zone. That's sort of like a hallmark of level two. And you're actually starting to think about like efficiency metrics and sales metrics. Like you might start starting to be thinking about magic number, which is a new ARR that you take in an period divided by the cac. You spend in that period. So, you know, something in like the 0.5 to 0.75 range, you want to get higher eventually. But like that's like pretty reasonable for this level. You're just starting to think about retention, like you've been around for a year. So you've got renewals, right? And you want those renewals renewing. Maybe something like 10%, 20% regretted churn is okay. You don't want to be higher than that. And you want your NRR to be at least 100%. And then things like gross margin and burn multiple. They're still kind of like not the focus. Those are the classic efficiency metrics. They're not the focus right now. But we would say you want your gross margin to be like not worse than 50%. And you'd want your burn multiple to be not worse than 5x. your burn multiple, by the way, is just, you know, how much you burn in a current period versus how much new ARR comes in. So, you know, if you burn five million dollars and you take in one, you've got a burn multiple of five. And you don't want to be worse than that at this stage.

Yeah, exactly. There's kind of some wide bars around these metrics. It's just representative generally the stage of five to 25 customers.

Yeah, and the thing that's, you know, really, I think the hallmark of level two is you've got a product that like a handful of people like, right? It's satisfying a critical need for them. Now you've got to open the demand floodgates, right? So that we can get to 25 customers and beyond. And different companies do this in very different ways, right? And it's much easier said than done. Looker is an example. So looker is a first round company founded in 2012 by Lloyd Tab, you know, they do business intelligence. And looker actually Looker is interesting because they spent actually kind of a long time at level one, but then like flew through level two. And the reason is because they Lloyd the founder, the first five customers of looker, he was basically going in and doing consulting for them. And the reason is because of the nature of the product. Like, look, people don't get looker until they see their own data in it, right? And their data is modeled and they see the dashboards and they're like, oh my god, wow, I didn't realize these insights, right? So Lloyd kind of understood, like, this is looker is not a product you could sell with Figma mockups, right? And so what happened was Lloyd would go into these customers. It's been 20, 30, 40 hours before they were even a customer, modeling their data, teaching them how to use it, showing in more people within the organization like the power of the data and the dashboards. And later they called this their forward deploy process. This is how they figured out sales. And so it actually took them kind of a long time and level one to get this right. But then they were able to do this repeatedly. And so they went from 5 to 25 like fairly quickly. And it like a lot of amazing like 75% close rate because they were only selling customers who are already using it. There was like zero churn. And Lloyd explains, like, once he got to 20 customers, he's like, I know, I know I want to something. And I think I figured out a model in the model, stayed the same until they ended up selling to Google. And so they did these other things too. They started focusing on demand channels. They got a couple SDRs who were prospecting. I think they did some partner marketing with AWS Redshift. They did these like look and tell customer events in San Francisco where they got looker customers together to talk about sort of like how what they were doing and looker and how they built the product. But really it was like the ground the groundwork was set at level one and then they sort of like move really quickly through level two.

Let me do another example. Okay, a really different example is a company called Ironclad. Ironclad, you know, it's a legal, it's a legal tech company. They founded it in 2015, Jason Baymeg is the founder, AI powered contract management software. So this was interesting, because Jason started out, he started out calling this an AI legal assistant. And this is like, do that. You know, in 2024, people were like, oh, yeah, I legal assistant. Yeah, that's awesome. But in 2014, like, people were like, what? And he found it really hard to sell. Like, no one was looking for an AI legal assistant. And so he told us this story, you know, there was an email address on the ironclad homepage, hello at ironclad.com is in 2015. And like he doesn't give very much email, but like Jason's checking the email. And one day he gets this like one line email and he almost archives it because he doesn't know who it's from, it's one line. But he sees that it's from like a person at a publicly traded company and so he's like, oh, maybe there's something here. And the one line email is just, are you a CLM? And he was like, what is a CLM? And he's like, he like Googles for it. A CLM is a contract life cycle management platform. And he's reading up about CLMs. And he's like, oh, you know, we do that. And we do, yeah, we, yeah. And so he replies to the email, yes, we are a CLM. And the customer gets him on the phone. And the customer says, oh, you know, I'm in the market for a CLM. I'm looking at like 10 or 12 different renders, but you guys look pretty cool because there's, you know, some automations and AI stuff going on, like, you know, can I check this out? And Jason's like, of course. So he, he has co-founder take the train from San Francisco down to San Jose. And on the train, Jason is telling his governor, Kai, hey, like, I need you to code this up right now to make it look like what this customer is expecting. And they get to the meeting and they do the demo. And the customer has no idea that they just made this demo on the train and they're a very small company. And they win the contract against these like 10 or 12 other established spaces. Because ironclubs, it's more modern. It's automated. It's got to say, I still think it's just a better product, right? Or the demo looks like it's going to be a better product. And so Jason reflects on this, and he's like, yeah, the thing for us is we had been trying to create this new category of AI legal assistant, and it was just like a slog, right? And instead, when we changed our positioning to play in an existing category of CLM, but a much better CLM, but customers are already looking for a CLM. They're already looking to spend money on a CLM, and just expand the definition of what that category is, things just start to click. And that's how they got sort of through that zone of like 10, 20, 30 customers. And even if you look at the ironclad website today, it says AI powered contract management software, right? Like that really is the key idea still.

I think it's hard to create a category. It certainly works. In some cases, but if you actually have like a really interesting spin on an existing category, like there's people are, there's already buyers spending money on that thing. They're already looking for something to buy, right? Which is, you know, so if you can do it, I do actually think that way is easier.

Yeah, so the whole idea of level two is this thing that the marginal customers getting easier. Right. And so you've got to be focusing on demand and the repeatability of demand while you maintain satisfaction. So the yellow flags are like things that are the opposite of that. Right. Like your current customers are like pretty happy, but you're just having trouble opening the floodgates. Like as you're getting to the top end of level two, you should start to hear some startups kind of know who you are. You know, like Oh, you need to soft to. You're start up like, oh, Vanta, right? Like, oh, you know, you need AI powered contract management software. Oh, I'm glad, right? You sort of start to get known for a thing. And so if you're having trouble opening those floodgates and you're sitting there for, I don't know, 12 months, 18 months, that's kind of a problem. Or you have things like your regretted churn is greater than 20%. I see that as a satisfaction warning sign. And again, you have to maintain this satisfaction as you work on these other things. It's like every level just gets like more things you have to do. Or you know, you could be finding that the sales cycles taking too long, you're losing deals late in the funnel, you're losing competitors. You're just not feeling kind of the urgency from customers. Or your struggling to hit the price point that you want. And the way that customers will say this to you, because customers are nice, right? They'll say, we don't have the budget. Or like, oh, it's just not the right time for us. We'd love to talk again next year. That means no, right, when you're hearing that from customers. Like, you want customers who are like, of course, like, yeah, this is kind of expensive, but I'm going to make this work because I need this, right? And so if you're seeing any of those signs, those are the signs that that you may be our stock or plateauing at this level. And I really think it's important to think about the four P's and think about how am I going to sort of pivot my way out of this. Jack Altman, who I mentioned earlier from lattice, he's got like a great quote on this. It's up on in a video on the website, which is like, you know, what did he say? He said, oh, the most founders do like a 10% pivot. And what they need to be doing is a 200% pivot. And I think the Jackson says, but I think part of my interpretation of this is like, it's psychologically hard as a founder. You've gotten to this many customers. You're starting to plateau, but you're like, I don't want to throw this whole thing away, right? But you sort of have to be willing to let go and really focus on nailing the four piece at this point.

I think sometimes it's nice when it's the ironclad thing, right? Or it's nice is when it's the looker thing of like you don't have to change anything, right? It just starts working and basically the whole thing works the whole time. That's not common. It's nice when it's the ironclad thing when you just sort of change one of them or maybe two of them. Starting over with all four of these is hard at level two, right? But oftentimes it's what's required. You know, as mentioned earlier, like level two is the second most common level to get stuck. Most, you know, big chunk of companies are going to get stuck at level one. And the second biggest is that level two. So sometimes it's hard. I think the trap is not doing enough to realize that you're actually like not progressing to product market fit in the way that you need to. And just starting to burn money and not make progress. And, you know, you've seen many startups kind of struggle with this. I think it's the hardest part of it.

Well, some sales cycles are slow. Like if you're selling to companies that are big, you're selling to government, to that type of thing. You know, I don't know, rough rule of thumb is like, you know, there's different ACVs also, like if you're the kind of product that is 20K 30K annual contracts, that was looker, right? But they were able to do the sales cycle very repeatedly because they closed so often, right? There are some contracts that are 100k, 200k, you know, six-figure contracts. Those can take a long time. Those can take three to six months. You can't basically be in the worst of both worlds where you've got a slow sales cycle and a low ACV. Like that is the quadrant of death, basically. Awesome.

It's both. So like sales becomes easier, but I like I think if you are starting to get to level three, which is where we're getting to next, you've probably got 10%, 20% of your inbound coming, or completely organically.

Yeah, and probably just look for something that is a lot more of a burning pain. It's usually that the problem is not significant enough, important enough to people. or the promise is not valuable enough. It's usually kind of one of those mill to assuming you have a reasonable persona.

Yeah, so level three is strong product market fit. This is where I think it starts to get fun. This is where like all the product market fit adages come in like. the fish are jumping into the boat, you know, the rock is rolling down the hill and I'm trying to chase it instead of pushing it up the hill. And keep in mind for most enterprise founders, this we're now three, four, five years into the company, right? So it's not like easy to get here. And to get to L3 here, you are looking for repeatability, right? The marginal customer has become much easier. And so you mentioned Lenny this quote from David Sue from retail, which I love, too. And you know, I'll read it again. He said, you know, we talked to someone who said that finding product market fit was so visceral, you immediately felt it like a geyser. And we honestly never felt that in the first couple years. At retail, every customer we got, whether that was number four and number 14, felt like the last customer we were ever going to find. It felt like rolling the stone up hill. And if you stop pushing, it's going to roll back on you and crush you. And that's how it felt until we had a few million an ARR. That's when the bolder went down the other side and we had to chase it and chase it to keep up. And this is, you mentioned earlier, like founders were like, I don't, I'm not sure I ever felt product market. This is like when you start to feel it. Right. And Jack Altman, you know, again, from Lata said, this is just the biggest shift was in the ease of getting leads. Like, I remember thinking, I don't even know where these leads are coming from. Just more and more of them are showing up each month. But that is like a great feeling. That is a great feeling. Philip calls on from Verkata. He's in some of the videos on our website too. His quote, I'll read it was, after our first year of sales in 2018, those next two years were crazy. We were barely keeping up with production. We had to scale all the systems. Like a lot of things had to happen in the span of 12 to 18 months in order to deliver on everything that customers were hoping the solution was going to do for them. And that in itself was a very formative and tricky part of the journey. So the benchmarks when you are at level three are now you're probably like 32, 100 people inside your company. You're probably at like series B-ish kind of territory in terms of venture like maybe late series A maybe early series C but like probably around series B. you've really cracked, you know, a demand channel. Like you've cracked marketing and sales, you've got at least one channel that is very scalable. And probably 10% or more of your inbound is coming from just like referrals and word of mouth and you're like, you're getting known like we talked about. ACV ranges are very high, you know, very wide, I should say. I'd say like if you're in this like, you know, on your way to, you know, 100 customers, where you want to get to with level three is like 100 customers. And so if you're approaching 100 customers and maybe you have like 75K, kind of average ACV, that would be strong, right? You're sort of in this wide zone of 5 million all the way up to 25 million ARR, that is very like level three. And you're actually starting now to think about some of these efficiency metrics. Remember we've been sort of like punting efficiency. We were saying it shouldn't be worse than like a certain number. But it's not a focus. Now it's like got to come into focus. Because the way that we get to level four is we keep ripping on this satisfaction in the demand and we tune this thing to get very efficient. So like, you know, we're talking about our gross margin needs to be above 60%. Hopefully above 70%. Our burn multiple is now below three. Ideally, we're close to one. Burn multiple in the one to three zone is where we want to be at level three. We're going to turn less than 10% and RR is greater than 110%. These are good benchmarks for this level.

He's a critical person, a critical of himself, but a very high expectations person, let's say.

I think if you told many, many pre-seed founders that they'd get like a two hundred million and not know whether they had proud of our fifth, they'd probably take that.

I think that's what makes a lot of the best founders the best.

Yeah, so level three problems. And again, it's hard to get to level three. So like, you know, awesome work for getting here, but the problems that might start to emerge are, you know, you've got a leaky bucket, like your NRRs below 90% or your regret, regretted turns greater than 10%. Maybe growth is just slowing down, like you grew three X each of the prior two years, but you're kind of struggling to do a two X this year. And that in part that can become, you know, level three, you know, or five years into the company or so, there's probably a lot of competition. Like if you've gotten here, you've got something that's working, right? And people are starting to notice and there's going to be competitors. And they could be the big, the big competitors, they could be the new startups, but you're going to have to figure out how to navigate probably a tougher market than you entered five years ago. And so, You know, maybe you found your first scalable channel, but it's getting saturated. You've got to find a new channel. These are kind of like the level three problems. Or like you're growing, but like I said with efficiency, like you're spending too much money to grow. So you feel like, okay, yeah, we can grow at 3x, 0, or 2x, or 0, or 0, but it's like, that's going to push our burn multiple above 3 again. And you're standing that's a little bit of a pickle to be in, right? When you sort of have to trade off, uh, grows and spend like that.

No, I agree. It's like you're spinning plates and the higher levels you get, this is more plates. You have to keep spinning. And so at level three and getting the level four, we've got to maintain satisfaction in demand. We cannot let them regress in a market that's getting harder, right? And we have to really start focusing on efficiency. And the companies that can maintain satisfaction and demand and continue to grow and become really efficient, now we're at level four.

Yeah. So, first of all, congrats. I mean, if you get to level four, you have a valuable company, right? Like, you, you are probably already a unicorn, and you're starting to think about, can I become a deck of corn? And so you've reached like the very highest levels of satisfaction, demand, and efficiency. And so the benchmarks at level four are like, okay, now your team is probably bigger than 100 people. You're like series C series D or beyond. You've got more than a hundred customers and you're starting to figure out how do I get to 200, 300, 100, 1000 customers. You're beyond 25 million an ARR. So like 25 million an up, I think an ARR, it qualifies the level four. And your other metrics are looking really good too, right? Like your sales conversion first call the close one is probably better than 15%, your imagine numbers greater than one, your CAC paybacks less than 12 months, all these things are like super awesome. And finally now you've got your gross margin above 80%, your burn-mulk will ideally less than one at this point. You've got less than 10% turn, you've got greater than 120% in our R. And so now the whole thing is like, Well, how do I keep growing? I mean, this thing's gotten pretty big. And this is generally, you know, when we get to 100 million, especially in beyond, the stage that founders are thinking about, how do I keep growing by expanding Tam, by expanding total addressable market? And to expand Tam, I can usually take my product and bring it into new markets, or I start to think about multiple products, right, as a way to expand Tam. And so this is where you see like all the truly great companies, like the legendary companies are all able to do that. Like Vanta has begun to do this. Right, they have like the Vanta trust management platform. They've got security questionnaires. They've got vendor risk management. So they're starting to do this. You know, you think of Vercada, who I mentioned before, like they started with security camp cloud security cameras. Now they do alarms. Now they do smoke detectors. Now they do bad readers. You know, stripe has sort of classic stripe, but they've got stripe radar stripe outlets. Square has the square stand, cash apps, square checking square loans. Like all the companies that are You know, tens of billions of dollars of value have figured out a way to do this. And it's kind of like the never-ending journey that you said before, Lenny. You know, the congrats you got to level four, but there's just like this endless thirst for continued growth. And the interesting thing about that is that it requires finding product market fit over and over again, like just because you got to level four on your on your main product doesn't mean product market fit is free on all these new products, right? And you've been inside Airbnb and I've been inside, you know, Dropbox and Twitter, like getting new products to be successful is hard. And it requires this mindset of like, yeah, we've got a little bit of advantage because people know who we are. And we have a customer set that hopefully we can layer on new products too, but it's not easy. You have to get into this mindset of like product market fit is never easy. And if we want to continue to grow, we got to find it again and again and kind of maintain that mindset.

The majority of companies, so greater than 50%, probably closer to 60 or 70%, are going to get stuck at L1 or L2. And so that leaves roughly, let's say 30%, make it to L3 or L4, just in our experience looking broadly. And that's our entire goal, right? It's like, if that can be, again, like, once you get to L3, you've got a real shot. You've got a real shot of building an awesome company. And so if we get that number, help founders get that number above 30%. Imagine if that was 50, 50, right? And half the companies that, you know, we were working with its seed were able to get to level three strong product market fit. I think that would be epic. And I think our founders, you know, would, you know, there'd be incredible benefits that you go system from that.

Yeah, so again this whole thing probably takes four to six years. And so let's just pick five years as the number to get to level four. I think the way this works ideally is you probably take 12 to 18 months to do level one. Because that is the most important level. Honestly in my mind, because that's where you're really choosing the right persona and the right problem to focus on. And I think it's like just that choice is one of the most important choices that founders make. And the interesting thing, you know, my partner Josh Koppelman talks about this all the time is that Founders spend 99% of their time building because that's what they've done, right? And they spend like 1% of their time picking and picking the market, picking the problem, picking the customer. And in reality, it's that pick that determines the constraints and the boundaries of where you're going to be working for the next, hopefully like 10 years of your life. So there's a real imbalance there. And I actually think that like, that pick is the most important thing. So I would actually like to spend, let's say somewhere 12 to 18 months in level, one just really figuring that out and figuring out my four P's. And then hopefully I move very quickly, you know, it takes me a while to get to my first five customers, first five satisfied customers, but they love it. And then I go quickly from 3L2, maybe that takes about here. This is kind of like the looker, the looker path, right? The happy path. And then L3 is kind of long, just because we're going all the way from, you know, 5 million in revenue up to 25. And that might take, you know, a year or two, probably two years, even in a good case. And then getting from 25 to 100 million is hard, obviously very hard. And then that probably takes a couple of years. And then you're figuring out all of these things. Like you're growing your team and your company's got a lot more moving parts and functions and there's like a demand generation side of the house and sales and there's engineering and the whole thing just gets more complicated with a lot more people. But I think that if you set the foundation really nicely kind of at level one and level two, that hopefully the whole thing, you know, the boulder is kind of rolling down the hill and it's carrying you forward and you don't just feel like you're pushing this rock uphill for five years. I don't think that's like a, that's not a fun place to be.

Yeah, if I see a company, go from five customers to 25 any year. That is almost always a strong that there's like a sign that there's some pretty strong product market fit there.

Well, that's a personal decision for founders. I do think if you've been going at it for four to five years and you haven't started to find anything that you're really feeling pull from the market on. Ah, I don't know. You've done it for four to five years. It's like, what are the chances that you're going to magically find something? I think there are probably a handful of startups that do it that figured out and get back on them like an amazing growth curve. But that's the exception rather than the role. So if a founder wants to return the money to investors, if a founder wants to look for a soft landing, there's no shame in that. Like product market fit is very, very hard. That's why we're doing this. That's why we're trying to increase the odds. And we're also trying to like, um, Yeah, sort of make it clear what it looks like and what it doesn't look like. And everybody knows when they do a startup that the odds are that you will not get there, right? And so there's no shame in that and I would completely be supportive of any founder who wants to take that path.

Okay. So level one, nascent product market fit. You're just trying to get three to five customers and you're focused on satisfaction first and foremost. Level two is developing. This is where you're going from five to 25 customers and you're really starting to focus on demand. Level three is strong product market fit. You're going from 25 customers up to 100 or more and you've got to start thinking about efficiency at that scale and then level four is extreme. You're more than 100 customers. Your company's awesome. You got to keep doing all three of those things well and you have to start looking for ways to expand your total dressable market.

Yeah, so the 4Ps, again, are persona problem, promise, and product. The persona is interesting because in some ways it's synonymous with the market. A lot of people are like, a lot of people think of the market in this macro economic way where it's like, oh, it's this category of ERP software, whatever. I think it's much more tangible for a founder to think of the market as a collection of people. Right? Like Jack Altman was thinking about his market as all of the HR leaders out there and he was thinking about how many of them are there and what are the problems they have and how much money are they willing to spend on solving those problems? Like it's a collection of people who have money to pay for a product or pay for a service. And so that's really the first piece, like find the persona and really try to get into the mind of the persona. That's another thing I was amazed about. You know, spending time with Zach from plaid and Lloyd from looker and jacks and lattice. They had all of these people like they were text messaging with all of their customers, right? And they're meeting them like on the weekends and stuff like they really, really knew their customer well, their friends with their customers. And so you've got to get so deep into the mind of the persona. And like, you know, what are their challenges? What are their goals? How do you help them sort of succeed at their job? That's the stuff that really gets you, you know, kind of earns you the right to get the rest of the piece right. And so the problem obviously comes next. And I think about this. And I can actually get into, let me a little bit if you want to do, um, get into some of the customer discovery stuff because that's, that's the second session. Perfect segue. Yeah, and I was talking a little bit about, we think of it as dollar driven customer discovery. And I think a lot of founders are familiar with customer discovery. I think many, like, are they at least talk to customers, which is good? I don't think most of them do it in the highest signal way. Because, again, like, customers are, they're people, they're nice. They're going to be polite, right? They're also not good at predicting things that they will use or buy or want, right? They're very good at talking about their problems, but they're not necessarily good at predicting their own behavior. So we think about it in terms of dollar-driven discovery. which is, how do you test the dollar potential of a hypothesis? And this is like a whole two hour session, but I'll try to do briefly here just to give you how it is.

So you've got to identify extreme value, right? This is like independent of what I'm building, Lenny. Like I want to hear about your problems and your challenges and what is most important to you. And so I need to do it in kind of this like non-leading way. And I need to avoid the trap that we call happy ears with founder, you know, because like I found a lot of founders like I want to build this thing. I want you to like my thing. And so I like look for the things that you say that sort of like support what I'm doing. That's the trap, right? And so I could just try it on you, Lenny. Like, oh, yeah, I might say, let's do it. Okay, Lenny. So you are, you're doing Lenny's newsletter. And you're building Lenny's podcasts. What? Like, when you think about we're sitting here in April, when over the next three months, let's say, what are your top three goals for Lenny's newsletter in Lenny's podcast?

Is there a top of mind? Okay, awesome. And so what's hard about those three things? Like you said you want to scale the newsletter, you want to increase quality, you want to make the community awesome. Like what's hard about those things? What's standing in your way of doing those?

You don't know how to do it. Okay. So what if I was able to, it's probably a service. In this case, not a product. What if I was able to give you a service that said Lenny, you're going to be able to scale this podcast, we are going to help you find the 500 best guests in the world that are really excellent. We're going to guarantee they show up. You're going to have endless content on your podcast in your newsletter. You know, what do you, what do you think about that? What do you think about that idea? I pay a lot of money for that. And so, okay, so that's like an example of like a wow statement, right? And you probably had in the back of your mind like, how are you going to do that? Like is that actually going to work? Right? In, in, in my experience, that's a good thing and an exciting thing. Like if I'm sort of pitching a product idea to somebody, And they are like, wow, does that really work? I mean, that thing works. I'd sign up for the wait list today. That to me is like, okay, now I gotta figure out how to build that thing. But like, I know if I'm able to build it and deliver on that promise, they are gonna want it, right? Or you would maybe say signs like, you would demonstrate behavior that shows that you're interested in. Like you'd be like, oh, Todd, can we meet again next week to talk about this? Or like, hey, Todd, I actually would love to show this to the people I work with. Can you send me the deck? Those are like the signs that I am looking for. If you had reacted like, yeah, that sounds kind of interesting. That's a no. Right? That is a no. That is a polite way of saying the word interesting is a polite way of saying no. Right? And so I'm either looking for wow statements or I'm looking for demonstrated behavior that shows interest. I then would probably, if I want to keep going with this, and this is all in the identifying extreme value, I'd ask you like, well, what stands out is as valuable here to you, right? And I want to hear you answer quickly, you know, you mention it's either gonna like, it's gonna make my product so much better, it's gonna drive, you know, success from my business, or it's gonna save me a bunch of money, or something, save me a bunch of risk, right? But something where you would very quickly be able to identify with why that's valuable to you. So that's kind of like part one is like extreme value. Then I got to sort of figure out ability to pay and willingness to pay. For you, this is kind of easy because you're not all like a 5,000 person company and you're the boss. This is probably pretty streamlined. There's no procurement function at Lenny's newsletter. Let's say I'm sort of going after a bear company. The questions I'd ask on confirming the ability to pay. are like, are you currently looking for a product like this or are you building something internally? Like this is kind of the ironclad thing. You know, where Jason was like, oh, you're looking for a CM or CR at a CLM already. Like if a customer like, you know, another way I think about it is like the customer has a problem and like I really think they have a problem and they know they have the problem and they're looking for a solution for the problem or they've even tried to build their own solution to it and failed. That's like the best customer, right? Because they know how hard they want this thing badly. They've demonstrated that and they've actually failed to build it because they underestimate how hard it was. So like are you currently looking for building a solution here?

That's the next question I was going to say. It's like, where would a budget for this come from? And the best answer is that there's an existing budget, right? Like either like we already spend money in some way, you know, for like a competing tool or something that can be displaced by you or responding, you know, we put five engineers together to like help build this thing, right? There's some source of budget that I can get. And then the question is, well, how does your team make decisions on third party tools to bring on? And you're never going to get like the cleanest answer here. I mean, in larger companies, you might get semi clean answers, but it's something like, okay, like this manager can approve it directly up to a certain dollar amount. If not, it goes to this sort of like next level up a manager. And, you know, if it's like if we're going to spend more than 50k on it, we actually have to compare three different alternatives. But like whatever, there's like some known process, right? That's what I'm looking for rather than just like a bunch of ambiguity. So that's kind of like ability to pay. And then I'm going into willingness to pay. I don't want to try to quantify that. And so that's where I go like, what's your budget for solving this? What are you paying for this other tool? I just let me show you mine. Is that, you know, would you pay? You think that you pay less for that? You paid more for that, right? Can you replace this other thing with the thing I have? And then I love this question. I know, I think you've had mod of on Ramanajam on the show, right? He has this question. He's from Simon Kutcher. I love his thing of like, Lenny, what is a fair price? You would pay for this thing that I just forgot to you. And then you say your thing. And then I go, okay, well, what would be an expensive price? And then you say it. And then I say, okay, what would be a prohibitively expensive price? And you sort of asked those three questions. And like, generally when people tell you the fair price, it's a little bit of like they're trying to get a deal. And the expensive price is the one, like if the price could, the expensive price is the one that they would actually pay. right that we're they're saying it feels expensive but you put in front of them you say cost as much if it's really good they want it right and the prohibitive expensive one is the one that's like too expensive and they'd have to just I just can't do that right so I I love these style of questions I think there's just a lot more specific than what I see most founders doing, which is just chatting with customers. You really want to try to sort of put them to some questions where you know they're going to answer honestly, because you're asking them questions. You're not asking them to speculate. You're asking them like fairly concrete stuff. Oh, and the thing I should say is like, in the, you know, there's a two hour session like I mentioned, we should like, it's like one thing to like explain this stuff, but it's another thing to see it. And so we show like tons of Zoom recordings. like from founders who have gone through the program, and we actually do this thing where all the founders who are going through the program, they record all their videos, their customers just got every videos, and then our team watches all of the videos and creates highlight reels. And so, you know, and we sit around in a room and watch them together. And we say, like, oh, look at these questions that Lenny asked, and did you see how the customer responded? Wow, that's like an eyeslight up moment or like, Todd asked these questions. It's kind of leading the witness a little bit and the customer didn't see that interested. So the thing that's interesting is like, as a founder, you never see anybody else's version of this, right? You only have your own experience. And so just like seeing how other founders do this, like in a real live setting, is like super, like people love it.

Any talk there a lot of this, but yeah, I think there's a couple of things. One is you have to know what to show people when you're actually showing them something. You know, lattice is the kind of product I mentioned that could be sold with Figma mockups. Looker couldn't be sold that way. Looker, you actually had to do a demo with their real data, so it required a lot more work to do that. Vanto was neither like a demo or a mockup, it was actually doing the work, right? And like pilot was like that. There's a bunch of companies like that. So you sort of have to figure out what is my product and sort of like, how does it solve the problem? And therefore, what's the delity does my kind of early product or early demo have to be at in order to land the sale? And then I think you have to know when you've talked to enough people. It takes time to talk to people and kind of the rule of thumb is like if you talk to enough people and you can like predict 70 to 80% of what the next person is going to say to you because you've just talked to so many people and you've heard the patterns so clearly that's when you've talked to enough people. But these are, you know, these are all like things you got to learn and that's why like doing it experientially in the way that we do the program we think is was best.

No, I just, you know, if you're listening, if you're a B2B founder, kind of in those early days of starting your company, or you know anyone who fits that description, and you have an appreciation for just how hard it is to find product market fit, and you don't want to go to loan. Then please apply to this program, or share the application. Like we promised, we will review every single application, and I'm just really looking forward to working with a group of 20 or so amazing founders and helping them navigate these early days of product market fit findings. What I love to do.

Something in that zone earlier. Yeah. You sort of have an idea of what your product is, you have a hypothesis about what it is and who it's for, but you probably haven't started writing any code yet.

I could try to help them one-on-one, but no, that's not a fit for this program.

Yes, so you go to PMF.firstground.com. Applications are open. They're going to go to May 7th. And then the program starts on May 29th. And if you want to reach out to me specifically, you can find me on Twitter. I'm at Tjac, TJACK. You can follow me DM me. And yeah, I'm looking forward to working with some amazing founders that I know are listening right now.