Unlocking the Secrets of Product Market Fit for Your Startup with Aram Melkoumov

How's it going? My name is Ayan Isaacs, I'm the head of global growth for the Founder Institute. Hope everyone's having a great Monday. I already see a lot of people dropping into the chat where they're coming in from, but yeah, please do drop into chat your location. I'm calling in from Dubai, UAE. It's nighttime here, but I know everyone else is joining in the morning or could be in the afternoon as well. Today we have another awesome session, it's our first global event for the year. We're going to be talking about everything related around product market fit, fit. We have Aram from Crowdlinker. He's come on, I think this is his second or third time he's come on to do an event. He's an active mentor and participant with the Founders U Toronto and I believe GCC in Barcelona programs. So really glad to have him here. In terms of housekeeping, we'll kind of get started here in a minute. You can see Aram there in the bottom right. Aram will give the presentation. I think it will be about 20-25 minutes or so. After that, we'll kind of flip over to Q&A. Please use the chat icon on the right, the chat bar on the right to feed us your questions or just like, just to give any comments. There's also a Q&A button. If you click that, it's underneath the chat icon. Use that to feed us your questions because then we can bring it up on stage. Questions specific to Aram, please use the Q&A button. If it's just questions about Airmeet or the platform or about F5, feel free to use the regular chat. And then at the bottom of your screen, you should also see some emojis. Feel free to use that to react and showcase any positive reinforcement so Ram knows that, yeah, exactly what's going on. But yeah, I think with that being said, I'm really excited to get things started. We had about, I want to say, close to 600 people sign up. We have 242 people live and really looking forward to today's content. I think that's all we need to kind of COVID Aram, do you want to unmute yourself, tell everyone a little bit about who you are, and then we'll go from there? Oh, sorry, last thing, we'll send the presentation and everything out 48 hours, and the recording of today's event within 48 hours. So everyone should have it within the, yeah, on their inbox. But yeah, Aram, let's get things started.

Cool. Awesome. Thanks, Ian. Really happy to be here. This is actually my fourth, I think, appearance with the Founder Institute doing one of these webinars. So glad to be back. You guys are an awesome crowd, so that's why I'm here. This presentation is definitely going to be more than 25 minutes, as I said. So there is a lot of information to cover, so I'm going to try my best to get get through it, uh, you know, within the time that we have and make sure that we have enough time for Q&A after. Okay, so you guys all know why you're here. Uh, you're here to learn about how to, how to get to product market fit. So that's what I'm gonna be talking with you all about today. Uh, there is quite a lot of process and steps that I'll be going through. Uh, so, you know, brace, brace yourselves. So I'll go through a quick introduction. I'll talk about, you know, what is product market fit. I'm sure you guys all know this, but towards the end I will go into a lot more detailed metrics you should look for. I'll go through some example case studies. You probably all know some of the companies I'm gonna talk about. Then I'm gonna go into determining problem market fit. Then I'm gonna talk about developing your solution, gaining early adopters and validating fit. Monetizing your solution, scaling and growth, and knowing when you've solved the problem. And it's just some recap slide, and then we'll open it up for Q&A. So as Ian said, this recording and this deck will be available to everybody who's, who's, who's here today. Okay, so don't worry, you'll get a copy of this. All right, so quick introduction about myself. I've been in the entrepreneurship tech space for about 15 years. I've co-founded a few different companies. I currently run one of the leading digital product studios in Canada called Crowlinkr. We've built over 100 digital products that we launched to market. We have lots of experience working with founders, taking something from a concept all the way to product market fit. So the reason why I'm here today is to talk about some of our learnings, findings, experiences, et cetera, just so that everybody has some better knowledge after the end of this webinar. All right, so this first section is understanding product market fit. In the simplest, you know, example, product market fit or what you're trying to really do is you're trying to prove that there is a certain type of people, you know, the persona that you're going after, who use your product that you've built to solve a need. That's the simplest definition of like, you know, proving out product-market fit. Now the reality is, everybody, is achieving product-market fit is really, really hard. Okay. It's the holy grail, basically, for startups. It's the moment when your product resonates so deeply with your target audience across so many factors that it solves the problems in a way that no other solution can. And you know when you achieve product-market fit, because that's when you know you're, you're on a sustainable path to growth and success. Now, to my knowledge and to my understanding, I don't think anybody's ever achieved product market fit from day one. You know, I like saying that because it, I think, can put a bit of peace of mind to a lot of founders. What I always like to tell people is like, first figure out how to make thousands before you make millions per month. You know, it's, it's a step, you know, in the right direction, but it takes time to get there. Get there. There are a few good reasons why product-market fit is actually really hard to achieve. One, it's actually very difficult to sometimes understand your target market. Even really experienced founders that we worked with often struggle to understand the needs and wants of the target market. They make assumptions that they, they go off of, which is not what the customers want. Uh, it's also really easy in today's time to build features that fundamentally nobody wants. And founders, you know, often are tempted to build these features because they think that they're cool or innovative. They have innovator's dilemma, which is a really big problem. It's hard to iterate quickly sometimes. Startups often operate on tight budgets and timelines, which can make it difficult for them to iterate on their products quickly. And the market landscape can change really quickly. Especially with AI and what we have access to today, it's, it's tough to always stay at the forefront. And then lastly, I would say it's very easy to get distracted. Startups are often under a lot of pressure to find product market fit quickly. And this could make them lead a course and make impulsive decisions. There's hundreds of factors I want to say it takes to get to product market fit. I think it takes a lot of founder perseverance, tons of iteration, tons of testing, really knowing your customer better than they know themselves. Having customers pay you cold hard cash in order to solve the problem that they're looking for. Also, I would say when work doesn't feel like work, like obviously if you're here on today's call, you're an entrepreneur, you wanna build out a a company, and so this shouldn't feel like work. All right. So the next slide I have here, and I'll talk a lot more into this towards the end, but product market fit should be looked at as like a spectrum. Okay. So there's weak product market fit and then there's strong product market fit. So I kind of like did a very high level overview of like what for me, weak Product market fit is one is like you're able to sell something to a customer. It's like, yes, that's step one, right? I think you've achieved something there. Step two, in my opinion, is when you're able to sell your product to multiple similar types of customers. Uh, you know, somebody that you've defined that is, uh, similar as a persona type. The third one is when you're, you're able to have non-founders, cuz typically the problem is founders are the ones that typically sell the products and people who buy their products are really convinced about the founder and what their, you know, mission, vision is. But when you're able to have non-founders, non-founder salespeople sell your product, that's also a very good indicator of product-market fit. And the last one, which I think is the key one, is when you achieve more of a pull versus a push effect. And I'll talk about that a bit more, but that's basically you've achieved a point when your customers are more pulling the product from you than you're trying to push it onto them. And that, and if you're able to efficiently meet that demand, I think that's like this one of the strongest indicators of product-market fit. Very quickly, I'll give you an example. I was at SaaStock in Dublin late last year, and I was at an event where the founder or the co-founder of Intercom, which is a very popular tool platform, was talking about his experience with building his company. And he said he realized when he reached product market fit, when they basically didn't have to do any more advertising promotion, it just went viral. Basically, he said he went to sleep one morning, one night, the next morning he woke up and he had thousands of new signups that came in overnight. It's basically just constantly coming in. And you're not really doing anything about it. A strong litmus test to see if you've achieved product market fit is if you were to survey a subset of your customers on a certain frequency basis and you were to ask them a question, which is, how would you feel if you could no longer use X product? And you ask them very disappointing, somewhat disappointed, not disappointed. If 40% of the user base reports that they would be very disappointed, then you've reached kind of product market fit in a way. Some case studies, just wanna kind of go through. I'm sure there's only 3, but you'll probably know all 3. So the first one is Slack. A lot of people don't know this, but Slack actually started off as a game development company. Kind of approach called Glitch. And then they realized that, you know, they weren't down the right path. And so, and they realized that the tool, the communication solution that they had was actually a better option for them to continue moving forward of. And so what they did was that they pivoted because they identified a gap in the market for a more efficient and user-friendly communication tool. They focused on having a great interface, easy ways to sign up, uh, and onboard your team, great integrations, and really focused on integrating, uh, user feedback. Uh, the next one is Airbnb. Uh, they achieved product-market fit by tapping into, uh, a growing demand for alternative accommodations. They leveraged different types of marketing strategies from social media, user reviews to build trust among hosts and guests, and continuously adopted the platform to match the evolving needs of travelers. And last one is Netflix. A lot of people don't know this, but Netflix actually started off as a DVD rental service company, and then they realized that there was a better opportunity towards moving to more of a convenient and personalized streaming experience. And then they focused on on-demand content and algorithms that recommended relevant shows and movies to each user. All right, so this next section is gonna be talking about determining problem market fit. So there's many different ways to kind of approach this. So I kind of just took this from the perspective of like, You're a founder, right? One of the people in the audience, you're thinking about a problem. Okay. So start off by coming up with like a list of problems that are relatable to you, you know, that you've experienced ideally, um, based on personal experiences. Make sure you don't try to prescribe a solution to a problem just yet that doesn't exist. The other thing I like to always point out is like, Are you the right founder for this problem? And I know maybe this is jumping a bit too far, but like, I've seen the most success in founders who are typically an industry expert and know them and know the market, and they're addressing the problem that they face themselves. What I would try to avoid is, say you're, um, a lawyer and you want to go and build, um, a company like, um, Airbnb, okay, you don't really have a lot of experience in content and media distribution, all that, I would say maybe try to do something within your realm. Okay. Now when you're going through this list of relatable problems, you know, reflect objectively and try to ask yourself some of the following questions, like, is this a problem worth solving? Why does the problem exist? What will the customer's life be like once the problem is solved? Is the customer going to crave a potential solution to this problem? Now, if through this kind of self-reflecting journey, the questions, the answers to your questions aren't promising, then your problem is probably not promising. So what you should do is go rinse and repeat this process until you have defined something of a problem that you think is worthwhile to pursue. The next thing you should do is then rank your problems based on the significant inconvenience, the frustration, or the hindrance of progression to a specific group of users. So that's around trying to figure out how desirable or needed is this product really. The next thing is try to evaluate the size and impact of the problem. Considering the number of people affected by it and the severity of their struggles. Analyze whether there are existing solutions that adequately address the problem, or if there's a gap in the market for a better solution. And just keep in mind, this could be something small. It doesn't have to be like a, a huge solution you're wanting to build. It could be maybe something starting off where it's like a, a small solution to a problem that you've identified. Then choose a problem that genuinely excites you. It's like passion is super key here and ignites your entrepreneurial spirit. Uh, ensure that the problem is then technically feasible to do. So like, if you don't know whether— if you're not a technical person, try to find somebody to go and do some of this analysis for you. If you can't, try to, try to do this yourself. Try to do your own research. Try to figure out, okay, are there solutions that you know, can achieve what I'm trying to do. The next one is business viability. Obviously, you want to build, build a business that you could focus on long term. So make sure that there is a large enough market size, do some market analysis, look at different revenue opportunities, and make sure that that's a sustainable solution to the identified problems. Then I want you to rank your problems, okay, against this. Then try to focus on one specific problem. So pick a very defined problem, create a hypothesis around, you know, around this. Then you're gonna go and try to validate your assumptions in the market. So the next step is really then to go and figure out how do I go and find my target market and how do I test this concept? So identifying your target market. So you gotta figure out who is your target market. Who are they? Where are they? Where can I find them? You're trying to then figure out, you know, the needs and pain points of these users. So the number one thing to do is obviously to go and speak, speak to these customers, right? That's, that's your number one path. If they are on the street, you know, go and find them, go and speak to them. Research, do your primary research. That could be through surveys, through interviews, focus groups, online research. Try to gather as much information as you can about your target audience. You're then gonna wanna try to create some user buyer personas, you know, detailed information around who your ideal customer is, including information about their demographics, psychographics, needs, and pain points. You really need to think about at this stage, okay, what is the riskiest assumption that you're gonna need to try to go and validate? And what is the smallest experiment that you could do to test these assumptions? So as I mentioned, the number one thing to do is obviously to go and talk to your customers. Talking to customers is hard. You know, a lot of people don't know how to do it. There's a lot of great content out there, but here's 5 great questions for you to start off. Ask: What is the hardest part about doing the thing? Tell me more about the last time you encountered this problem. The goal here is to extract the information, the content. Why was this problem hard for you? Try to figure out the specific things. The more you ask why, why, why, why, the better answers you're going to get. What, if anything, have you done to try to solve this problem? This helps you really understand what have they tried to do to solve this problem. You might learn about your competitors this way. And then what don't you love about the solutions you've currently tried? This is a great way to identify gaps that you could potentially go and try to figure out. You know, during this process, you're really like getting into the mindset of the customer. You're learning about their life, talk specifics about the problems. Don't talk about hypotheticals. Don't ask questions like, if we build this feature, would you be interested in paying for it? Talk about specifics that have already occurred in the user's life. You know, lastly, just don't ask users what features they want, and don't try to sell them on your product. Early on. Really important to just don't talk and listen, you know, ask these questions and just try to capture as much as you can from all these user interviews. There's a lot more that comes in after this, but I'm not gonna use this time of the webinar to talk about things like UVPs, USPs, positioning, jobs to be done frameworks and stuff like that. There's a lot of content already out there, but basically what you wanna do from the stage is do your sensemaking. You wanna try to rank all these learnings that you've had from all these conversations. You want to rank all the pain points and all the things that you've identified based on intensity and scoring, which I'll talk about later. And then you want to try to think about, okay, from these pains, what are the gains that I could help try to figure out? Look at the functional, emotional, social, financial considerations of each kind of aspect of this. Next section I'm going to jump to is developing your solution. So this is, you know, building out that proof of concept, building out that MVP. So there's many different definitions of an MVP. Product people, even founders, really sometimes struggle to identify what is the minimal viable product. There's different names for it: minimal viable job, minimal marketable product. We can call it whatever you want, but what is that one job that your product needs to deliver? Or what is the one thing that will make your product marketable to your target market? It's basically the first thing you could give to the very first set of users you want to target to see if they can deliver any value to them. MVP 101. Obviously I keep talking about speaking to your customers before building anything. This is super important because if you get down the path of building something and then showing it, you might be, you know, going down the wrong path. Now it's really important to launch quickly. It's okay to launch something bad, you know, don't be afraid to ship something maybe that doesn't look pretty. For example, we worked with a customer on, within our studio, where they refused to share what they were building with their customers until it was perfect. They spent more than half a million dollars, you know, building something out, and they launched it and nobody cared. Because it didn't solve any of their, any of the issues that they thought they were trying to solve for. Really important that you got to be flexible with your solution, you know, hold the problem that you're solving and the customer tightly, but the whole solution you're building for very loosely, because things are probably going to change. And then iterate, you know, continuously improve on the solution until it solves the right problem. This slide really shows you all the different kind of MVP types. And MVP is defined in many different ways. So I'll try to talk about some of the examples here. And you can start with something minimal to, you know, no coding experience. Low fidelity MVPs are kind of like fake door techniques. You know, the goal of a fake door MVP is validation without implementation. A good example is what, you know, Dropbox did. They gauged market interest before risking time and effort creating any sort of functional MVP. They created a video demonstrating how the app idea works. In other words, presenting, you know, the idea itself as the MVP. Another option is to do a landing page MVP. This is what Buffer did, which is a very famous social media platform. Very similar to a fake door MVP in that there's no actual MVP yet, but it explains the app's main features. It asks users to join a waiting or mailing list. And then there's more. There's email campaigns, marketing campaigns. Some good examples are things like, you know, sell before you build, you know, crowdfunding, concierge services where you're doing things manually in the backend for every client to generate ideas and see readiness to buy. There's the Wizard of Oz idea approach, um, where you fake the supposed to be automatic features of your product by, you know, doing them manually to test the product hypothesis. And then, you know, there's more high-fidelity MVPs where like single feature ones, like what Uber is, Uber was early on. So these are the different MVP types that you could do. MVP validation assessment. So testing your MVP will help you understand, is the MVP solving the problem that I wanted it to solve? Is it easy to use, easy, easy to understand? Does it meet the needs and expectations of the target customer? What features or functionality are missing from the MVP? And most importantly, are the users willing to pay for the MVP? And you want to try to get your MVP in front of as many of those targeted, you know, users as you can. Don't skip desirability, you know, make sure that what you're building is what brings delight to your customers. When you're going about building your MVPs and you're speaking to your customers, it could get very, you know, difficult to prioritize what are the features to build. My top 3 prioritization frameworks are the RICE method, Lean Canvas, and the Moscow method. The RICE method is the one I highly recommend. You prioritize the features that you need to build based on reach, impact, confidence, and ease of implementation. Features that have a high reach, high impact, high confidence, and high ease of implementation are the ones that should be prioritized. The Moscow Method is a very other famous, well-known one. It stands for must-have, should-have, could-have, and would-like-to-have. Features that are basically classified as must-have are essential for the MVP to function, and then you go from there. Prioritize your MVP features based on what your customers will be willing to pay for right away. Everything else should go into the roadmap. Focus on those first. Now, how to go building your MVP. So the first step is obviously building out your development plan. Include what features you will include, what technologies you will use, and what resources you will need. Now, there's different approaches to do this. You could do the buy, rent a ready-made off-the-shelf solution, obviously lowest cost. But not as flexible. It's very quick to get up and running and you could customize it, but there are limitations. The next one is open source ones. Like you could use open source libraries, frameworks, and software to build MVPs. There's many, many no-code, low-code examples. I did a whole webinar around this. If you guys— I'll share this later towards the end, but anybody who wants to take a look at it, I, I give you tons of, you know, examples and platforms you could use. Custom development is the most expensive and time-consuming. I try to tell the founders I work with, let's try to resort to this as much as possible unless there is no way to use existing technologies to get to an MVP stage. And then there's a hybrid approach, you know, combining custom development with pre-built solutions or open-source solutions. You know, if you're not a technical co-founder, if you're not a technical person, try to find a technical co-founder. If you don't want to go down the path, then try to find a freelancer or hire like a, you know, a team like us in order to help you kind of build what you're looking for. It's really important that we're doing any type of budgeting. Say the cost for the MVP is $100K, you should at least have a 1 to 2x budget on marketing. A lot of founders typically forget about that, but you need to figure out what are the right marketing channels for distribution. Can you, you know, find ways to market to your team, to your, sorry, client cost-effectively? So just make sure you plan for that. The next section is going to be talking about early adopters, gaining early adopters, and validating fit. So there are kind of 3 main best times to speak to your customers. One is at the idea stage when you're finding the users with a problem. The next one is at the building prototype stage, and then when you're about to launch. Find people first that ideally, you know, are easily accessible. You know, you can start with yourself, try to find friends, coworkers, find these customers in person and try to speak to them. It's sometimes the fastest way to learn very quickly. Now, when you're getting towards like the stage, you want to make sure you select the right customer based on the following 3, 3 things. How much does this problem cost them? How frequent is the problem? And how large is their budget to solve for this problem? When it comes to validating, make sure you have very clear and objective success metrics that you want to validate against. So I previously talked about the different types of techniques. You know, there's like landing page prototypes, you know, sending customers to something like that. You could see the amount of people who interact with it, gather feedback and measure interest. You could send paid traffic to a landing page to test things like your value proposition and messaging. What I like to always tell is like, make sure you have good metrics. So like you want to see, okay, number of people who signed up, number of people who pre-ordered something, what's my average revenue per user, number of active users on, you know, on something. Make sure you have very clear identifiable, you know, metrics that you could track. And, and track along the way. Some things you should do when validating. So obviously the main objective here is you're gathering feedback, you're measuring interest in your product before investing any further time and money. Now this is an ongoing iterative process until you get to product market fit. Don't try to reach everyone at once. You know, start with a small group of users who represent your target market and get feedback from them early on. And often. Engage with early adopters who are passionate about your product and your, who are your early evangelists and are the ones who are willing to provide that valuable feedback. So if you have like a cohort or, you know, a small focus group of people that you're constantly going to showing things, that would be ideal. Ways that you could incentivize people: offer limited time early access or beta testing programs to provide early adopters with exclusive access, to provide you feedback. Showcase positive reviews and testimonials from early adopters to build cred and attract others. Show appreciation for early adopters' contributions by offering them exclusive perks, discounts, and recognition. The next one is community. Like in today's time, if you're building a SaaS company, community is super, super key around your product where they can connect, share ideas, and provide feedback. Next is putting your customers always first and making their needs the driving force behind any product development decision. Now, it takes time and effort to find product-market fit, so don't give up and keep iterating until you get it right. And above all else, make sure you're always getting people to pay you for your product. Try to get to this point where you're trying to monetize as early and as fast as possible. So just a quick recap of this, like, make sure you're releasing to a small group of people that you could get feedback from consistently and often. Make sure you're gathering feedback along the way all the time, whether that's through surveys, Typeforms, whatever it is, make sure you're collecting that. Make sure you're analyzing that feedback and you're tracking it against something. You're prioritizing that feedback around any sort of decisions that need to be made on the MVP or on the product. Again, going back to that whole RICE technique. Yeah. Start monetizing, making money as early as possible. You're trying to make a business, right? You're trying to make money from this. Don't try to do something for free. You want to constantly iterate on your MVP and you want to test and measure along the way. So make sure you define, you have very clear defined KPIs. That you're measuring on whether it's a weekly, monthly, whatever frequency basis around user engagement, conversion rates, retention rates, and measure the change of impact, anything that you do around your product. Sorry guys. And so basically this is a repeat and rinse process. You're consistently doing this until you're incrementally getting to the point where you're getting better insight, better visibility into exactly what is changing with every decision or any improvement you're making in your product. The next section is monetizing your solution. So this is obviously the most important part, I think, of any kind of business. So what to ask and when to ask, right? So try to figure out everything you can about what your customers value in your product. So as I talked about before, you are always trying to find out, you know, is this feature useful? What feature is not necessary? What feature is still missing? What should be improved or revised? How much would you pay for this? How often do— would you buy this product? And that's also dependent on what kind of monetization strategy you have. It could be based on usage-based, it could be subscription, which we'll talk about in a second. But this is like a very important stage in order for you to figure out, okay, what's my monetization strategy, right? Because you want to get to that point as fast as possible. Ways to monetize. So I don't know how familiar you are with these different kinds of strategies, but you want to make sure that you align your monetization strategy to whatever your product's value is and what resonates with your target audience. So there's a freemium model, think think Slack. They offer a very basic version of their product for free, and they use the product-led growth technique, which we have a webinar around that you could check out. And then they charge for premium services and features. There's a subscription model approach, think Netflix, think Shopify, where you're charging users a recurring fee monthly, annually. There's the free trial with paid conversion. A good example is Grammarly. Another one is Canva. Basically, you're offering your customers a free trial of your product for a limited time, and you're encouraging users to convert to a paid subscription after the trial ends. There's value-based pricing where you're pricing your product based on the value it provides to your users. So for example, with Webflow and Zapier, it's based on a certain amount of interactions. So with Zapier, you're limited to the number of zaps that occur. With Webflow, it's based on number of visits to your site. And then there's usage-based pricing. So like Twilio, Amazon AWS, Stripe is basically charging based on the volume of usage of your transactions. So with this type of modeling, you know, when you're building at your, your company, your product, your startup, you want to see what's going to resonate best with your target audience. You want to experiment as much as you can with the different pricing models and pricing points. This is really important to see what works. So this is sometimes hard for a lot of people to, to do, but try to keep increasing the price of your product until people start freaking out. And that's, that's very difficult for a lot of founders to do because you might scare off people. but you don't know what the limits are of how much you could charge until you actually try it. And that's when you know that you've hit the threshold. Now that could be the threshold that you've hit when your existing features and functionality have reached that price threshold. So then you need to start thinking about, okay, if I need to generate more revenue, then what is that next feature I need to add so I could charge more than what the current threshold is that I reached? So there's different types of ways that you could experiment with pricing. Airbnb experiments, has multiple pricing tiers. Amazon has dynamic pricing, which means that the prices of products can change based on factors such as demand and competitor pricing. So that's also something to think about. The next one is scaling and growth. So, you know, this is the point where you have, you have some customers and now you're starting to scale. And try to, you know, get to the point where, which I'll talk about in a few minutes about some of those metrics to hit. The most important thing I would say is just really stay focused. Do not lose sight of your core product market fit. So continue to always gather that feedback from your users, use it to inform any decisions that you make. Be willing to pivot your product or business strategy if necessary to maintain that product market fit. Make sure you're focusing on building the most exceptional product you can by having quality and high customer service standards during that period of growth. Really, really focus on marketing during this time because you need to figure out, you know, if you have one specific marketing channel, you need to try to really, you know, tune that up so that you're, aware of what your competitors are doing. If there's any kind of evolving market needs, you need to be aware of them. It's maybe at this point you should start looking at hiring a good talented team who are passionate about your product and your company's vision. And always stay true to being a customer-centric culture. Some of the best companies in the world, you know, have that always one of their core values. Prioritizing the needs and feedback of your users above all else. Some growth considerations. So really be mindful where you're spending your time and energy while getting to product market fit. Make sure you're doing something called continuous discovery, which is continuous user feedback and making very informed data-driven decisions. It really depends, but like I would say, try to focus as much as you can on, you know, penetrating as much of market share and your customer base within a certain, you know, geographic area. But if you feel that there's a way that you could expand into other geographic markets with this, with like very limited changes to your product, you know, try to do that because that could help open up more revenue. Exploring opportunities to expand your product line with new features, that's something you should really take into consideration when, as I said, you've reached that kind of pricing or revenue threshold that people are willing to pay for. So it's about figuring out what is that next thing that you could put into your product that people can maybe get upgraded to. Under product-led growth, there's ways for you to have clear upgrade paths to more premium offerings or premium plans. Investing in targeted marketing campaigns and partnerships can really help increase your brand awareness and visibility among your target audience. So that could be around influencer marketing, PR efforts to reach that broader audience. Implementing automation at this point is a good way to try to streamline some of your processes and enhancing the efficiency. So just to kind of recap some of these things, scaling growth are really, really crucial aspects when you're trying to get to product-market fit. Make sure you're maintaining a, you know, laser focus on your customer. Focus, if anything, more than building the best product you can while retaining that reliability. Base your decisions on data and embrace that agile mindset. Now, the last section here is knowing when you've solved the problem. So Here are some typical product market fit slides. So when you're, when you're, when you're getting to product market fit, you know, I talked about this at the beginning, but the next 2 slides are gonna talk about more specific ones. Some common ones are like month over month user growth is more than 20%, month over month revenue growth is more than 10%, churn is less than 10%. You have at least one solid marketing channel and marketing or sales channel to acquire customers. Um, your customers are your number one raving fans. So that's like the strong NPS scores. That's what I talked about at the beginning. What would happen if your product disappeared today? From a revenue standpoint, I've spoken to enough investors that they've said if you've achieved $500K in annual revenue, you have product market fit, but it's a bit weak. Uh, if you've reached the $4 million product market fit, Sorry, $4 million in ARR. That's when you've reached a really strong product market fit is what, is what, you know, I've learned through working with investors. Some advanced product market fit metrics, and these are, I think, pretty interesting. It's to know when you're ready to scale. So these are the things you should, you know, be mindful of when you're, when you're going to go to that next level. So say when you're raising your Series A. So the first metric is customer acquisition cost payback. So this is expressed in months. Basically, it measures how long it takes for product margins to cover the sales costs and begin generating cash flow. So free cash flow. Um, net dollar retention rate. So this is calculated by dividing the revenue from your existing customers over a period, uh, by revenue from the same customers in a previous period. So this should exceed 100%. So for example, customers who are demonstrating increasing financial commitment to your products. So say they're buying more licenses, opting for higher-priced product variants, and acquiring additional products. The last one is company efficiency. So for SaaS companies specifically, it's measured as your annual recurring revenue, your ARR, divided by the number of full-time employees. So this reflects the company's overall revenue generating efficiency. So the target you want to try to achieve here is between $100K to $150K ARR per full-time employee. So in conclusion, you know, there's a lot of information here. I mean, I, I tried to cover as much of the whole encompassing product market fit journey as I could, but this is a journey. This is not a destination. So You know, there's tons of other info content I could go deeper in, and I have some resources that I'll show you in a second in my other slide. But don't build anything until you validate, like really spend as much time talking to customers. Try not to build anything until you have a really clear idea. Listen to your customers. A lot of founders don't do this. It's crazy how this is still a problem. Don't lose sight of your target, target market. Stay true to focusing on that core target audience. Be very data-driven in every decision that you make. Make sure you have very clear KPIs that you're tracking and that you're sharing with your team and your investors. Be willing to experiment, iterate, and learn from your mistakes. This is, as I said, this is a journey. You're going to learn a ton. You know, if you need to pivot to something that you find out through your data, pivot. Putting your customers first and create a product they love. Like, this is super key. If you create a really great product that your customers love, they'll do the job for you when it comes to marketing and, and getting awareness around it. Here's some useful resources. This is all content, webinars that we've done with the Founder Institute, things that we've done on our own. It covers everything from how to Turn Your Startup Idea into an Actual MVP. This is where I go into a lot more detail around building an MVP. This is around how to do a product discovery, branding discovery. You know, this is like, I think something you should look at later. Branding discovery isn't going to help you get to product market fit. Like a lot of people, you get really worked up about that, but like, that's not important to get into product market fit. That's something you could do later. Talk about some examples of building successful MPs, product-led growth discovery, and then how to do continuous discovery. So we'll share this all out, but these are all separate 1-hour-long kind of webinars with their own kind of content. So I'll open it up to the Q&A portion of, of this webinar. I know we're at the 50-minute mark, so I told you it was going to be a lot of content. So thank you for for sticking through with me. I do have office hours that I have available if anybody wants to book a time with me to go through anything around your company, your product, whatever. You could click on the link here, which you can't obviously, but you could scan the QR code. So if anybody wants to take a picture of this, you know, feel free to go ahead now and do it. And we'll make this available, as I said, later in the deck. So thank you everybody for listening. I really enjoyed this webinar today. Over to you, Ian.

Yeah, thanks, Aram. A lot of great information there. I was taking a lot of notes. Appreciate you sharing all that information. As you can see, you're getting a lot of thumbs up, heart icons, clap icons. So I think the content was really much on par. All right, folks, what we're gonna do now is, I'm gonna stop sharing Aram's screen. We're gonna jump into Q&A. There's a lot in here. I don't know what we can cover, but I'm gonna try picking out some 3, 4 really good questions. And then after this we have a networking portion, you know, so I know Aram has to hop off. I'm also gonna have to hop off, but I would encourage everyone else to just stick around with some of the other F5 team members will be around. Speak to them, speak to each other, discuss with each other like what you've learned. Spend like 5 minutes talking about like the content itself. With that being said, let's kind of kick off the first set of questions. Kirandeep from Cologne, Germany is asking, are the indicators for PMF for enterprise products the same as B2C products? So you talked a little bit about this, but what are some of the KPIs? Would you change, would you switch between B2B and B2C and maybe dive a little bit deeper within B2B if it's SMB, mid-market, and enterprise?

Yeah, so a good, good, good question. Uh, be obviously B2B to be B2B versus B2C is very different. I would say with B2B, um, early in the journey, what I would get you to focus on is trying to go and speak to those businesses, you know, present the problem, um, make sure it's a related, relatable problem that they have. Try to get some sort of commitment. Sorry. Try to get some sort of like letters of intent, cuz like, you know, no business is gonna just jump on board. They, you need to get some sort of commitment from them. So a letter of intent is a good way to try to do that. Ideally it's binding towards you, you know, building out something so that they pay you money for it. So some sort of financial commitment is a good, a good way to do it. Now that's for you to kind of get some sort of like validation. Right now, for when you're building it out to get to product market fit, for an enterprise, for an enterprise software product, I would say it really depends on a few factors. One is, you know, how many, what's the return on investment for this enterprise to use your product? What are the key things that it's going to be solving that they just don't have or don't currently use within their company? So you want to look at how many users, how many licenses can you get on, you know, how— here, I'll give you a great example. Slack. Okay, sorry, I'm like having a bit of a Lack of a light bulb moment. Slack. Here's a great example. So it's a B2B solution, right? Uh, everybody knows Slack. The way that Slack, um, deploy the solution is that they have a free trial. So they get you to onboard as many of your employees as you can, and they know when you've reached that inflection point of using their product, when you've fully been onboarded, when you've reached 10,000 messages exchanged on Slack. Then for you to jump off of that platform is very difficult because you've already kind of spent that invested in, you know, time into it. So then you need to go from a free trial to a paid license. So you could kind of see how many of those users who were free have converted into paying user licenses. Now, obviously, depending on your product and all that kind of stuff, like, um, you want to try to get at least a sizable amount of people so that you have some good recurring revenue and try to obviously try to get as many other businesses, um, that are similar to that to be able to do the same thing. Sorry, that was a very long-winded answer.

Yeah, no worries. Appreciate you going into detail there. Obviously it's very late for you as well, so appreciate you staying, uh, extra late for us too and going into so much detail and answering these questions. Uh, let's do a couple more and then we can wrap up. Uh, I really like this question by Cedric. Uh, let me just put it on stage. Um, Cedric from Brussels is asking, you know, what's the time horizon between iterations from between testing, uh, market fit out of like of different experiments you run? So, right, like let's say if you're past, the way I explain it to a lot of people is like, hey, you have to validate first. Once you validate your product, then you kind of enter this weird, awkward product market fit validation and scalability type of stage. So like how do you kind of measure and look at iterations during that time period?

Yeah, I think this is, for me, this is a bit simple. You should look at iterations based on how much uptick you have in, in the users who are committing to, to it. It takes as many iterations as it does. Like there is no defined amount. Like it varies business by business, product by product. Sometimes companies after a couple of iterations hit it, but that all just comes down to how well do you understand the problem that you're trying to solve and does the solution solve it and give you that give the customers that value. I've seen people, it takes dozens of iterations until they get to the point where is that there's that, it's just natural flow of like people just using it and they get it and that aha moment has been realized and you don't really have to, as I said, push the product anymore. It's more of a pull approach. Like people just inherently just start adopting it.

Yeah, those are some great insights. Um, one of the things we advocate heavily at Foundry Suite when we're measuring product market fit, it's very like kind of qualitative. So you have to just, just look at how many customers or how many prospects are actually interested in your product, especially on the B2B side. And the B2C side, you can kind of see, okay, can I get 500, 600 customers or transactions. I think another really good way of measuring PMF, in my opinion, is just like looking at your competitors and seeing, okay, fine, like these people are able to get, you know, this amount of web traffic, or they're about to get this many Google reviews. Just identify something. It's not going to be super accurate, but it will kind of help you outline the framework or kind of the guidelines for your industry, what's the minimum criteria you need to hit, right? And then that way you can kind of work backwards from there. It's like, okay, fine, like I need to get to 10,000 paying customers, well what should the product look like, right? And the second thing is you're constantly gonna be iterating your product till you hit that standpoint, right? So like a lot of folks will think that they'll develop V1 and V1 they'll get to PMF. It's like, no, to your point, you'll get to PMF maybe on V12, V13, V14, V15. But the key thing is you're not making big changes per, iteration. You know, maybe you're changing a few buttons, you're doing a few things with design, maybe you're doing a few things with just imagery, maybe you're doing a few things on email campaigns, but you're really trying to structure everything together. And that is what the— where the real work comes in. And you have to take— do all these fast iterations to the point where you're like, okay, fine, now my product is finally in a good place where messaging makes sense, the user workflow makes sense, the actions make sense. And now, like, if I market it using these channels, the the person who actually completed that funnel. And that's not something that can happen overnight, over a few weeks, like it happens over a series of like months. So I think like that's an important thing to note. All right, let's do—

I just wanna add, like I think you'll know when you don't need to do more iterations, like—

Oh yeah, for sure.

It'll hit you in the face.

Awesome. Let's do this. Ormo from Tallinn is asking, what are some of the best tools and frameworks for competitors analysis? I thought that was very relevant since we just spoke about competition.

What are the best tools and frameworks for competitor analysis? There's everything from Semrush, Ahrefs for when you want to see how much, you know, traffic somebody's getting, where it's coming from, who are the potential, you know, who are the people going there. You should look at some of the review sites. So D2, I can't remember some of the other ones. There's many. What else can you do? Go in places on Quora, look at I mean, I don't think it's that hard. Like you just do a Google search and you say, you know, companies that do this, you know, look at the search results, see what comes up, go to each website, then go on search on Google, like alternatives to this product. And then you're going to see like dozens of website links showing other alternatives to the same product. And the reality is, guys, like whatever, you probably want to build probably exists. That's okay. It just comes down to whether or not you could find the piece within what currently exists that does it better.

Yeah, I would just, I would just add that like probably the best bet right now in today's age is just like start with ChatGPT and be like, hey ChatGPT, I'm trying to do this, like, let me know what my, my competitors are and list out the first 10 and that should give you a good idea of what to do, right? Like don't over, I think a lot of people try to over-engineer competition. They try to go do like a business school SWOT analysis. It's like, hey, here's your 10 competitors. What are these people doing good? What are they doing bad? Okay, let's just take, let's learn from them, take what's good and let's 10x them on. And make sure whatever they're doing bad, we're gonna do amazing on, right? That's my typical approach.

Yeah, what I always just recommend doing is that once you know the competitors, go and look at the reviews of them. Like if it's a mobile app, go on Apple, go and read through all the 1, 2, 3-star reviews and understand what are the customers complaining about. Sometimes that's the easiest way to get some primary market research.

Yeah, that's a good one. Yeah, let's do one more and then we can wrap it up. Sorry folks, I know there's like a lot of questions there. I don't, don't go through it, but definitely do connect with Aram on LinkedIn or his office hours, whichever. Asli from Hamburg is asking, can you get a little bit more into pricing tests? How do you choose the right model? Which price point should you start with? How do you think about it between B2C versus B2B? I guess one thing to add to this is as you're going through this PMF, trying to figure out iteration, like where does pricing fit in that? Like where do you, from your experience around?

It really depends on the product you're trying to build. There was a slide around monetization strategies and I gave some examples of everything from usage-based to subscription-based to, you know, to other options. Look, I think with pricing it comes down to once, you know, I'll give you an example. We're building a product right now for a medtech company that wants to create an AI solution for doctors to be more efficient with administration when they see patients. So it automates a lot of things, you know, for the doctor to do during the actual visits with the patients, from taking notes to capturing sentiments, to capturing diagnosis, to creating referral letters, everything. And so when we were looking at pricing strategies for that, we looked at everything from usage-based, so like token-based, like you buy a certain amount of tokens that you use up, to using soft subscription-based models where there's like low tier, higher tiers, et cetera. Based on the number of requests you could have or, you know, things like that. I would say it really depends because what we did there is we went and we spoke to the customers and we said, hey, you know, what, how, how would you pay for this? Or what would you think would be a way for you, for us to charge you for using the service? Oftentimes you just kind of get it from the customer. It's not rocket science. Like, ask them what are they comfortable with paying? Like, do they want to go, you know, pay pay-per-play where it's usage-based? Are they comfortable maybe under some sort of a subscription model offering where it's fixed, right? That gives them a bit more comfort knowing that it's gonna be consistent, you know, from a monthly cost perspective. And then when it comes to how much you should charge, That is a work of art as like a, as like a, as a game plan. Like don't, don't sell yourself short, try to go with the higher price, you know, and then if they balk, okay, bring it down a little bit, you know, that might create an uptick of people who are willing to pay you, pay, pay for it over time. Once you have a more, you know, developed MVP or product, Try to go back to the customer and say, okay, the price is going up and increase the price. And if nobody comes back and says anything about it, then you know that that's not your new threshold for your price. If people balk at that price, then you know, okay, maybe this is the threshold, maybe this is just what people are willing to pay. If that's the case, maybe you need to think about what other features you need to add, maybe changing monetization or creating more of like upgrade paths to maybe more functionality. There's tons of ways that you could experiment on different ways to monetize. SaaS and subscription is obviously the most common, but there's more and more kind of hybrid ones that are coming along that is interesting that we're, that we're looking at. And obviously it depends B2B, B2C, right? B2B, it's more licenses, like, you know, how many users are gonna be buying a subscription. So yeah, just keep that in mind.

Perfect. Well, thanks everyone. I really appreciate, Aram, you first of all taking the time. Everyone do take advantage of Aram's office hours. Connect with him on LinkedIn. He's a very big advocate for FI and participates in a lot of the mentor, like office hours with FI, with the cross chapters. What we will do now is we'll start to wrap things up. We'll open up networking. If you're gonna stick around, feel free to jump on a table. You'll see a bunch of tables with across different topics. Feel free to jump on a topic and to chat more about it, or sorry, different like general networking table. Some of my team members will also be around, so feel free to chat with them as well. That being said, I'm gonna quickly share, be sure to check out this link from the Founder Institute. It's fndri.com/start. It has all the content you need to learn more about the Founder Institute, who we are, what we do, some of our alumni, a link to our YouTube page, our grads, like it has everything you possibly need to know about the Founder Institute. We're a pre-seed accelerator working with idea stage startups across 200 different cities, so feel free to check us out. With that being said, we're gonna wrap up. Aram, any last words for our audience?

Yeah, no, thank you everybody. I did want to— I was just looking at the Q&A and there was something from Camilo that I just wanted to address about something getting stolen. Just very quickly, my, my thought on this is like, don't be afraid about this. An idea is an idea, it's a dime a dozen. It's all about the execution. I, again, this is different industry to industry, product by product, but just like, don't— if that's your main fear, then that, that's, that's a shame because it's, it's really hard to build a good product. And if you're able to do it and you learn so much along the way, it's very hard for somebody else to just go and replicate it because you have that knowledge which they just don't have. To get to that step in the journey which you've reached.

Perfect. Well, thanks so much, folks. We will conclude and let's open up for networking. Well, Ram, thank you so much. Enjoy the rest of your evening.

Thanks, Ryan. Thank you, everybody.

I really enjoyed it. Awesome. Thanks once again. Bye.

All right. Bye.