Product Market Fit Will Kill You

I have a better way than this mess:

In 2012 Exec, a Y Combinator-backed staffing company, raised $3.3 million. To do what?

They weren’t sure exactly. It didn’t matter. They had millions in the bank to help them find “the right product” and “the right market” to fit together.

So they started by doing everything. A TechCrunch reporter said he paid Exec’s staff to move his car.

The writer’s friends hired Exec staff to walk their dogs, bartend their events, and be their “urban sherpas,” whatever that meant.

You see, that’s what finding product market fit looks like. You tweak the product.

You keep tweaking. You keep searching for the elusive product market fit. You keep burning cash.

A year after launching – and burning cash – Exec shut down.

Silicon Valley LOVES to glorify this approach. They tell stories of founders spending 5 years doing it until they finally become billionaires.

What they don’t tell you is this: 1) 99% of the time this process leads to failure. And more importantly 2) it is an absolutely emotionally brutal process.

I launched a staffing company, just like the Exec’s team did.

But I used a different approach…

Not because I’m a genius. Maybe it’s the opposite: I don’t like risk. I don’t like throwing shit against the wall and seeing what sticks.

I launched GrowthAssistant (GA) 3 years ago and today it’s doing $12M+ in ARR and growing 50%+ per year and is profitable. It’s high-quality, low-cost global marketing talent for startups, brands, and agencies.

I spent ZERO time finding product market fit for GA.

Here’s my process. You should steal it.

In a previous email, I talked about how to build meaningful relationships with employees, even if you have to fire them.

For over 10 years at Ampush, my tech-enabled marketing agency, I built relationships with hundreds of former employees.

I helped them get jobs, stayed in touch, and always took their calls (not because I had any expectations, but because that’s how I roll).

Well, guess what, those same employees would CALL ME on the regular and tell me how much they missed Ampush. I’d ask them what they missed the most.

The first two answers were obvious: The people and the “scrappy” culture.

The 3rd was unexpected, but consistent: “I miss our global support team, Jesse. They made life so much easier. Do you know any companies that offer that as a service?”

Building relationships allowed me to HEAR a CLEAR problem from a CLEAR customer. No need to jump around and offer staffing capabilities to 10 different company/customer types to find PMF.

The Market was right there asking ME for the product.

You may not have run a company for 10 years, but you might have past customers, or current customers, social media followers, industry connections, etc.

I’ve even heard of employees who quit companies (graciously) and pitch their bosses on being their first customers.

I understood the problem because I solved it at Ampush. When employees complained about their workload, I dove into how they spent their time and immediately realized: that tons of what taxed them could be done cheaper overseas.

I hired remote workers directly and we trained scores of talent on digital marketing-related tasks. Our employees LOVED it and were way more productive.

In fact, we had to institute a rule that you couldn’t use the global team until your 1st anniversary because some young people got so good at using that talent, they outsourced their whole jobs!

They deal with a problem so often that they accept it as a part of life. Graham talks about the countless number of entrepreneurs who struggled with credit card processing and assumed that’s just the way things need to be.

Then two founders, Patric and John Collison, paid attention to the credit card processing problem they previously experienced and dealt with.

Stripe is worth billions because they found a problem they understood.

Selling lets you skip a step that I find annoying: “Customer validation.”

This is when you’re supposed to go around talking with POTENTIAL customers about POTENTIALLY buying your product or service.

Everybody likes your idea until you ask them to pay. That’s when you hear real objections and earn real excitement.

Don’t get me wrong, Customer validation can have some value in shaping things early on.

But I usually see entrepreneurs use it as a way to pump themselves up while procrastinating and avoiding real risk.

Instead: I say VALIDATE BY SELLING.

For all my best businesses, I’ve made decks, gone out to pitch them, and ASKED FOR MONEY. It can be scary, but man do you learn quickly if your offering is interesting and what needs to be tweaked or changed.

But you learn it “in motion” towards a sale. That makes a huge difference both for your learning and your cash flow.

My “unfair” advantage is relationships. Of our first 20 customers, 50% of them were FORMER AMPUSH EMPLOYEES.

Imagine your old boss, who hired you out of college, taught you a bunch of stuff, and then helped you secure a job at DoorDash calls you and says: I have a new business, will you be a customer? The conversion rate was >50%.

I also pre-sold to previous Ampush clients. Even the company that acquired Ampush is now a GrowthAssistant customer!

If you have an “unfair” advantage, use it. Have sales conversations with old bosses, clients, and colleagues. If you don’t, my point still stands: validate your idea by selling it.

Find a customer you know. Take a problem you understand. And START SELLING.

Of course, you will iterate and adjust as you go. But customers, revenue, and cash flow make it SO much easier.

-Jesse