SmoothSpan Blog

For Executives, Entrepreneurs, and other Digerati who need to know about SaaS and Web 2.0.

Archive for March 9th, 2008

Startups Have One Job: Get to Their Product/Market Fit ASAP

Posted by Bob Warfield on March 9, 2008

Lots of folks are optimizing for a proxy, instead of for the real problem when it comes to startups.   It is very easy to think you’re optimizing for the right thing, but to find out later you optimized something peripheral, a proxy for the right thing.  The trouble with proxies is that they contain enough of a grain of truth to be distracting without really guaranteeing you’ll get what you want. 

What every startup needs to be doing with all it’s energy and resources is getting to a product/market fit as soon as possible.  Achieving product/market fit is having a great product, where “great” is defined by market uptake.  Let’s look at some of the conversations in the blogosphere about what startups need to do to be successful and analyze it in the light of achieving product/market fit.

There are two big areas that seem to be centers of controversy:

1.  A startup’s job is not to save money, it is to spend it in whatever manner gets it to a successful product/market fit as fast as possible.

Jason Calcanis, Michael Arrington, Fred Wilson, and others have said that startups have to save money.

Money is the ultimate fungible tool.  Save it only so that you can spend it on something more important to achieving a product/market fit.  I see a lot of folks getting wound up to save money for all the right reasons, but in the process they create work and friction that slows down the process of getting to a product/market fit.

Some of the big ideas for saving money make me wonder:

–  Outsourcing:  Great idea to outsource things that don’t matter to your distinctive competency (which is getting to a product/market fit!).   HR and accounting, sure.  BTW, it may cost you more to do this, but it keeps the distractions away.  OTOH, outsourcing to the midwest to get talent cheaper as Calcanis suggests makes me wonder.  Productive software development is all about good communication.  Any outsourcing, working too much from home, or remoting interferes with communication.  Are you moving close to product/market fit doing that?

–  Don’t buy a phone system, nobody will use it.  This really depends on the startup and business model, and I’m sure the folks recommending it have models that are commensurate.  A SaaS company will likely still still need a salesforce of some kind and they’ll need a phone system to talk to customers.  A social network will not.  There are no blanket suggestions–all are viewed int erms of what impact they have on achieving product/market fit.

–  Bring lunch and coffee in, don’t let people go out.  I could not disagree more.  My favorite setting for a startup is a downtown area.  My last company, Callidus, was in downtown San Jose.  There was a Starbucks and a Peets across the street and dozens of bistros for lunch.  Calcanis underestimates the value a good break can have in clearing the mind for renewed energy.  He also underestimates the value of unstructured communication and getting a little exercise with a short walk.  Trying to keep people bottled up interferes with creativity, clear thinking, and communication.  It is a false economy.

2.  A startup’s job is neither to fire people who are not workaholics nor to molly coddle diletantes who like the idea of being in a startup but who aren’t producing results.  It’s job is to bring together the people that are going to produce that product/market fit as fast as possible in an environment that facilitates their doing so.

This was a big source of the firestorm backlash against Calcanis.  Mike Arrington and Zoli Erdos are on Calcanis’ side in cracking the whip.  It’s a pretty common attitude, especially among the higher ups.  But it doesn’t always work. 

The problem is in equating activity with results.  I’m here to tell you that for creative pursuits, and software is one such, that is not necessarily the right thing.  It is a function of the people and the stage things are at.  It is a function that it is very hard to schedule inspiration.  There is often a stage at the beginning of a startup’s life that just requires a lot of brainstorming.  It isn’t about grinding out a product.  Zoli is closest in saying that passion counts, but passion may not express itself as cubic man hours in front of a computer or at one’s desk.

In the end, these 2 ideas of saving money and hiring workaholics are micromanagement, not epiphanys.  They are not the secrets to startup success.  I’m not even sure they’re highly correlated to startup success.  They’re worth thinking about, but think harder about how to drive faster to you product/market fit.

Posted in venture | 8 Comments »

%d bloggers like this: