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You Are Not a Business, Yet

Until you find Product/Market Fit you aren’t a business, you are an experiment.

Sean Byrnes
Sep 25, 2022
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You Are Not a Business, Yet

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On a regular basis I meet teams working on extremely interesting ideas. They might have a product, maybe early customers and might even have raised some financing. The problem is that they are acting like they have a business, setting goals like “$1M in ARR” or “100k users”. At such an early stage, this is a massive waste of your time. 

Until you reach Product/Market Fit you are not a business, you are an experiment. 

Businesses focus on sales, revenue, profit and growth. If you are running a business you want to know how to increase your conversion rates, accelerate your growth rate and beat the competition. However, all of that assumes you have a strong foundation to build upon! If you haven’t found Product/Market Fit (PMF) you are building sandcastles on the beach.

Instead of acting like a business and focusing on revenue or growth, early companies need to focus on the rate of experimentation and learning. You want to find your business, so the most important measurement is how fast and how far you are searching. The faster you run experiments, learn and iterate the more likely you are to find your business and find Product/Market Fit. 

If you are an early stage company that is searching for Product/Market Fit here is a list of Do’s and Don’ts:

DO set goals based on the rate of experiments you run and how fast you learn. Try to run more experiments than you did last week, every week. Record your learnings and watch them grow.

DON’T focus on revenue or customers, since you don’t even know who your target customers will be in the future! 

DO focus on the problem you are solving instead of the solution. If you fall in love with a solution, you have a hammer and will try to make everything a nail. You should be willing to throw out your solution/product if you learn that there is a better approach.

DON’T feel like you need to support customers forever. If someone starts to use your service but your learnings take you in another direction you should fire that customer. You cannot be agile if you are bearing the cost of maintaining and supporting customers that no longer fit your business. 

DO focus on your strengths and creativity! When searching for PMF you have infinite flexibility and that is where innovation comes from. Be innovative

DON’T compare yourself to other companies, the path to PMF is twisting and different for everyone. Some companies find PMF in a few months, but for all of my companies it’s taken 2-3 years. 

It is a hard road to experiment constantly, as it often doesn’t feel like you’re making forward progress. This is especially true if you have friends or peers whose companies found PMF and are growing fast. There are no shortcuts even if some people have an easier road, so you need to stay committed to testing and learning until you find your business. 

How do you know when you’ve achieved PMF and transformed from an experiment into a business? That’s a good question, read “Do You Have Product/Market Fit?” for answers. 

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You Are Not a Business, Yet

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You Are Not a Business, Yet

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Chris Davis
Sep 26, 2022Liked by Sean Byrnes

I think this is a great way of thinking about the early days, with one caveat.

When bootstrapping, it’s helpful (mandatory, even) to use revenue as the proxy measure for experimentation success.

There’s no better way to know if the problem you’re attacking — and how you’re communicating it — resonates than to ask for the sell. It’s hard to discern who is a target customer without putting a usable product in front of various groups of prospects.

The feedback received during that process should then dictate how you iterate on the product until something catches.

The constraint of customer-funded cash flow necessitates a high velocity and tight focus in seeking PMF. To your point, the thing making money in this case may be more feature or product than company, but that’s ok! With enough revenue coming in to fund operations, you get to live to see another day along the journey.

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Adam Singer
Writes Hot Takes
Sep 25, 2022Liked by Sean Byrnes

Great thinking here Sean esp at this point in the cycle. Stay focused on what your co stage dictates

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