The concept of Product-Market Fit, and the process by which startups find it, has been discussed so extensively within the startup ecosystem that it has its own acronym, PMF.
Derived from it has been the similar concept of Founder-Market fit – is there a “match between the founder and the problem they are going after”? My partner Rob has blogged about how we think about founder-market fit at NextView addressing “how authentic is this idea to the founder’s experience” and if the founder “exhibits specific superpowers that are uniquely well suited to the biggest immediate challenges of the business.” The notion of founder-market fit has become so embedded into our investment decision-making process that we baked into the NextView investment decision tree flowchart.
But a third related concept has emerged in our firm’s internal dialog over the past year: Founder-Go-To-Market Fit. How much is there a match between the team’s go-to-market DNA and the startup’s approach? Often new ventures can operate in the same domain as previous experience (i.e. founder-market fit), but the way customers are acquired is different. For example, elephant-hunting enterprise software sales leaders aren’t really a good fit as self-service hosted software founders, even if the core business software vertical is right in their wheelhouse. A killer paid online acquisition guru isn’t a good fit for a venture which requires fostering an open source community for adoption. And sometimes domain expertise can’t be relied on at all when markets are entirely new – it’s much more challenging to have founder-market fit for a VR startup when the category didn’t meaningfully exist a few years ago. However, you can still have founder-go-to-market fit in an emerging or entirely new market because the methodology for customer engagement can “rhyme” with what founders have done in the past.
The evolution in our own firm’s thinking here at NextView is that go-to-market fit is a key component of founder-market fit… the knowledge and background in how customers are acquired often takes forefront in a new venture’s potential for success. A team with core experiences embedding a product within the open source community to proliferate organically is different; versus a team with killer paid marketing acquisition skills; versus a team with content marketing inbound chops; versus a team of product experts who can engineer viral loops. Different startups go to market differently. It’s ideal if the founder experience-set matches that approach, thus exhibiting founder-go-to-market fit.
One challenge here is that as startups pivot, their go-to-market can change even if the core insight of the company remains constant. James Reinhart of NextView portfolio company thredUP recently shared a useful insight on the NextView Traction podcast: one of the keys to success as an entrepreneur is to be flexible in that, “You have to be in love with the problem, not the solution, because the solution can change.” But when the solution changes, so often does the go-to-market.
When that shift occurs, it’s incumbent to recognize if the go-to-market DNA of the core team still matches solution. And if not, it’s beneficial, even perhaps critical, to add or change the makeup of the core team/founder set. And that can be difficult to do. Very difficult. It’s not just about a hire, but rather about incorporate the new go-to-market frame into the base-level thinking of the company.
Whether it’s Product-Market, Founder-Market, or Founder-Go-To-Market fit is being evaluated by entrepreneurs or VCs, the idea is to critically think about addressing the risks at the earliest stages of a company and proactively construct the business and the team to match them. Better fit translates into a company aligned towards successful traction.