5 ‘product market fit’ tips to make your startup successful

published 20.05.2020 08:00

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Market segmentation allows companies to run multiple carefully designed experiments in parallel to test key hypotheses and optimize business models.

We have found that understanding the key elements of PMF and taking a systematic approach in validating the product, business, and unit economics at each stage can optimize company outcomes.

Optimizing product market fit Entrepreneurs and investors have a shared interest in optimizing company outcomes — or maximizing value for risk assumed and capital or time invested.

[Read: Here’s why ‘if you build it, they will come’ is shitty advice] Among our exited companies, those with Product Validation when we initially investment ultimately had a 25% success rate with success defined as a positive financial outcome for investors and founders.

Here is a schematic that my team uses to assess PMF prior to investment and among our portfolio companies: We think of PMF in three stages: Product Validation, Business Validation, and Financial Validation.