EP6: When the Market Says ‘Nice Try, Buddy:’ Finding Product Market Fit

Note: there were technical issues and portions of this transcript are missing.

​[00:00:00] 

Lee: I’m

Schumacher. 

Zach: I’m Zach. I’m the resident army guy and now I’m a guy who’s deeply passionate about building homes for the underserved.

Sarah: Sarah Schumacher and I troubleshoot and fix websites all day every day.

Lee: And I build apps for people and, try to keep it ethical and give people great advice on going to market.

Alright, so just to get started, breaking down TAM SAM and SOM 

Zach: It’s what everyone always starts out with and fails to simmer down to what is possible. So if you have a product and you’re making let’s say car batteries.

 You have a product and you say car batteries are what you’re making your TAM. Some people would say [00:01:00] anybody who has a car. Anywhere in the world is a customer. That’s not necessarily always the case.

Okay. Maybe. The SAM of that might be maybe you’re only making them for vehicles with four by four functionality. So then you’re looking at, like, pickup trucks and SUVs, and then even further would be you’re looking at vehicles that are manufactured in North America because there’s going to be certain key components that are going to be identical across the vehicle base. You have to really distill down from this.

Anybody who drives is a customer to, okay. We’re looking at SUVs and pickup trucks to okay. Maybe vehicles manufactured in North America.

TAM, SAM, SOM

Sarah: Okay, I’m going to really [00:02:00] quick, TAM is Total Addressable Market,

SAM is Servicable Available Market, and SOM is Serviceable Obtainable Market.

When we say TAM, SAM, SOM, that’s what we’re talking about.

Lee: Yeah, exactly. Serviceable obtainable doesn’t really roll off the tongue, that’s the one that you need to be thinking about when you’re figuring out. Is this business a good idea? Like from day one, you need to really know these terms because it can help you write off an idea that doesn’t work.

Like I want to build car batteries that are the highest quality possible with these futuristic, abilities. and what’s the market for that? I want to build car batteries out of natural materials that are biodegradable. 

Sarah: Okay.

Lee: build right away [00:03:00] when it’s not that really sexy vision you have in your head, it’s actually they’re really crappy proof of concept. So getting a little deeper into this whole, should I go to market yet?

Or when is it time to spend money on marketing? I think starting with what are some common mistakes like overestimating your total addressable market and underestimating your cost of acquisition. Zach, I think you had a story about that.

Zach: Say, now that I’ve gone through recovery, I’ve gone through mourning and all that, that

Sarah: Thank you. [00:04:00] Okay.

Zach: there’s certain segments of the population. So you can’t just go around saying anyone who hires as a customer.

And then on the same token, I would say underestimating the cost of customer acquisition. That was something else that, unless you go through it, it becomes intuitive truth. But I think I thought, anybody hiring. So we’re looking at employers, particularly midsize to large.

So there’s going to be some enterprise

Silence. Silence. Silence. Silence. Silence. Silence. Silence.

You have to go to a picnic and then you might get some paperwork in the mail. Like it’s such a long and [00:05:00] annoying process, but you’re also expecting a pretty large sum of money.

At the end of it, if you’re looking at a contract basis, our product is a hundred thousand a year or something like that, you have to get some checks and balances to be able to go through that process, but you’ll end up, you know, meeting one person, two person, three people, four people, five people, and by that point you’re devoting hours to being able to be there, to be able to take the call.

To recraft, to tailor that marketing material, that copy to each individual person, that’s a time sink in its own. So I think I, in that process understood that, okay I have to really focus on who’s the niche. It’s not everybody hiring. There’s a certain type of company that wants to employ these people that I’m trying to help get jobs.

And also if I’m going to be going through a sales process with a fortune 500 company, I have to know initial contact to getting paid could be nine, 10 months, or even a year plus. So don’t expect Oh, I’m going to close them on Tuesday. I’ll be in the Bahamas by next Wednesday.

No, it’s going to

Okay. You

long process. You’re going to be caught in it and you have to be [00:06:00] cognizant of that, depending on the type of product that you’re selling.

Lee: Absolutely. There’s all kinds of things to consider when you’re going upstream to those bigger markets. I’ve experienced that myself. I could shake hands with a founder over drinks and have a check in the bank just to get a project started two days later.

and I’ve been in procurement with bigger systems for over a year in some cases. 

Sarah: I’m allergic to bureaucracy, so. That’s why

Lee: right? Yeah. Mm 

Sarah: I’m allergic to that. I can’t deal with it. I want to talk directly to the decision maker and if I can’t talk to the decision maker, I had a big project, I did a couple of years ago for an organization. I really love, like love what they’re doing.

It was a nightmare, six months to get started. I’m like, Nope. So I think

Lee: Yeah. 

Sarah: understanding where you as an individual want to work, do you want to deal with that? Are you prepared to deal with that? Exactly.

Lee: wait that long? Yeah. 

Sarah: Can you afford to wait that long even just for the payments?

Yeah, in my case, it’s less about the payments and it’s more [00:07:00] I can’t affect actual change on the stuff that I’m telling you that needs to happen if I can’t talk with the decision maker. So I just don’t. That’s why I work with the clients that I do. 

Lee: Yeah. And that leads me to the next question that I wanted to make sure we discussed. What happens when a founder misidentifies their market? Sarah, I don’t know if you have experienced this, but for me, I got started with my agency that builds apps Adva digital solutions, not because I wanted to start a business, but because a pretty large client that I had had years before came and found me and said, I really need your help. I need you to take on this app that’s been built elsewhere and it’s been mishandled. And can your team pick it up and dust it off and fix it and make it better. I had already been doing some small projects. This was a pretty big deal. I knew that it would, take my individual consulting to another level and make me a real agency owner. And I wasn’t sure I wanted to do that. But I decided to do it. [00:08:00] That client alone pretty much bankrolled a lot of the work that I did over the next year whenever a smaller business Would come to me or an individual and say hey, I need an app or I need a website. I could say sure thing I’ll give you a discount I’ll make it easy on you because I know you can’t afford as much as these enterprise level people That are coming to me and that was really comfortable for a while.

But as we scaled I couldn’t continue to subsidize small business owners, even though that’s where my passion lies, and that’s what made me decide to 

Sarah: Hello, [00:09:00] everyone.

Lee: costs a lot of money in this industry. And so I have to have a pipeline of a certain demographic that can afford that.

So for me, I misidentified my personal market. The people I wanted to serve the most, they can’t afford me. And I had to learn if I want to stay in business and I’ve seen this at other agencies too, and I hated it, but I had to do the same thing.

I have to go after these bigger customers that have longer payment timelines, totally different sales process.

there’s a scaling problem there, you know? Can you really hire great people to do great work? As you attract those big projects, it’s extremely difficult, which is why agencies, the quality’s all over the place, and the price is all over the place in this industry that I’m in. So, I don’t know if either one of you also has a story about that? What happens when a founder misidentifies their market?
 

Sarah: Everything I’ve done is just sort of organic and intuitive and listening to my clients. I always joke, I work with people who by definition have no money because I’m working with startups.[00:10:00] 

Lee: Yeah 

Sarah: approach to that, because I recognize that’s a problem. I have minimum amounts. So when I talk to people, it is, this is the starting point. If you can’t afford the starting point, I can’t help you. However, I have a startup package I’ve developed that is, Anyone can afford this.

If you can’t afford this, you have no money in the bank. I mean, it is the most affordable thing I could put together, and it’s just very regimented . So I have something I can offer these people that are very, very early on. And that’s how I handle that. I still want to be able to serve this group of people, but I understand they can’t be the bulk of who I’m working with because they just don’t have the finances for yet. So I just split them I guess is the way that i’ve approached that i’m a little more selective around If you’re not a fit for this and you’re a fit for this Here’s how we start and then I just know where my sweet spot is and we just have to have early Conversations about that but I mean initially for me it was more about having too many different types of clients. When I started out, I was freelancing.

 I did a ton of work for a school, a ton of law firms, and then a lot of small businesses and then a [00:11:00] ton of weddings. And so for me, it was less about like the type of client, more about the type of project, I guess. There was no plan is what I’m saying.

That’s what I mean by organic. It was just like, Hey, can you do this? Yes, I can. Okay, here you go. That’s all that it was. That’s all I was doing. And so over time it became, okay, who am I actually wanting to work with? And then that’s when I narrowed it down into the small businesses. But I mean, even in that example, so if I’m looking at like this TAM SAM SOM whole thing, the total addressable market could be

all small businesses. That’s, that’s not, that’s not how it works. Let’s bring it down to the serviceable market. And so for me that’s going to be specifically service based businesses. And I narrow that down farther into solopreneurs. I really enjoy working with individual founders. 

So breaking that down further, the serviceable attainable market that I would do is I specifically target consultants and coaches that have had full time careers or are doing this on the side because I need you to be able to fund this side project if you want to go full time it is not I am trying to build [00:12:00] something from nothing and I have no starting point like again, if those people need help, I have a thing for them.

But that’s how I’ve handled it is I’ve just sort of split into Here’s this little goodie bag for you guys and everybody else is like this This is how i’ve kind of funneled it down, but it’s taken me a while to get there.

Zach: Of the few little added points that I would have there is buyer versus user. And I think that’s a very important point that gets

Sarah: Okay. Okay. Okay.

Zach: is very important to be able to go through the sales process.

Lee: And Sarah the fact that you identified two different really [00:13:00] that you’re addressing I think speaks to Why understanding your market can help you manage your resources.

We’re talking to people, 

Sarah: Okay.

Lee: business are and how to focus their resources on right part of the funnel to get people to come in and, and spend money to cover their overhead. 

Sarah: Man, I feel like my advice is like the opposite of what we’re talking about. I hope he doesn’t just to do it. My last newsletter was just start like that was, that was what I wrote about because, because

Lee: Yeah, I love that. 

Sarah: You have to start somewhere so do not just wake up in the middle of the night with this flash of insight I’m gonna start a business doing this thing. I had a dream about. Go do some research. Okay, like at least [00:14:00] consider Yeah, consider these things, please like think about them But then at some point just start you have to just start. My gut is telling me that I should talk to more people in this category.

And so you do need a little more information. Like, okay, I have enough information that I’m going to test this thing out. Right. And you just need to start at that point because the market will tell you. I started out as a brand agency and my client started asking me, begging me for websites because that was a service that they needed.

And that is literally how I discovered the gap. I think I wrote about that in the newsletter. The only reason I am running a website agency today is because I said yes to a freelance request 18 years ago. You know, like you have to start somewhere and then you have to listen and see where it leads.

So I don’t personally get real hung up on all this. I think do enough to feel comfortable to go with something.

Lee: request. You said yes to that first request and then more requests followed. Those 

Sarah: yes 

Lee: defined for you what your market [00:15:00] was. In a lot of ways. I mean, I’m sure you’ve also,

Sarah: Yes.

Lee: down and say, I cannot help you when you have five dollars and a hundred questions.

Sarah: It keeps going. That’s the other thing, like you can do all this research, but your research never ends.

It just keeps going and I keep refining and I keep going and it gets skinnier and skinnier and skinnier until there’s this very tiny little niche and I’m small as I can go, I think at this point. And that doesn’t mean I won’t work with a service based business.

That’s like a dude in a truck that needs a website for his company. I’ll do that. But the target market I have is very small compared to where I started. And it’s because I was listening to the market. I was listening to what people needed. And I was also listening to myself and the type of work that I enjoy and excel at.

And with the coaching piece, that is the solopreneurs and that’s other coaches and consultants. So. It takes time to get there, and that’s why I say just start, do the research, and keep researching.

Lee: Yeah. So the market was giving you signals to help you understand what it needed. What are some common [00:16:00] signals that make founders think they’ve hit product market fit when they haven’t Zach? 

Zach: I would say some common false signals would be booking calls. 

Lot of that busy work. Just because you have a full calendar doesn’t mean you’re doing anything productive. You can run in a circle and end up nowhere. 

some of these are going to be more, false social cues. And I can get into some other ones potentially later, but the second one I would say was like interviews, like just cause people ask you to be on things or talk about what you’re

Sarah: Mm.

Zach: necessarily an indicator that you are conveying the right level of subject matter expertise.

It’s just, you’re getting an invitations. And that ties into the last one also, like accolades. For a lot of those accolades. And awards and the things that people get, pay, it’s pay for play. You pay to be in state’s most inspirational person alive. People pay to be on a lot of those lists. Cause I mean, yeah, yeah, [00:17:00] yeah. Just,

Lee: 5000 can be bought? 

Sarah: you mean New York’s times bestseller booklist is actually just the publishers buying tens of thousands of copies. What?

Zach: yeah, it’s crazy talk. And I didn’t want to be the one to pop the bubble, but that’s what’s going on, you know?
 

this doesn’t matter. And then you look at most of the lists, like most of the top five.

Sarah: Okay.

Zach: Not most, a lot of the top five turn out to be fraudulent.

Sarah: Criminals.

Zach: yeah, like you have the,

Lee: true.

Zach: is it? The, the FTX guy, the Theranos

Sarah: Bankman Fried, Elizabeth Holmes,

newman. Oh man, it’s like a who’s who of frauds, yeah.[00:18:00] 

Zach: just. And so it just proves that there’s not necessarily any merit or value attached to being in some type of a magazine or something like that.

But from a business perspective, just because you have a full calendar of booking calls, doesn’t necessarily mean that you’re moving in the right direction. You might be having a lot of those conversations and people get to the end of it and they either string you along or provide, no context for where they’re at. I’ve had meetings where I thought, I’m a guy trying to help vets get jobs.

People would love that. So I would have calls back to back. I have a full calendar. I’m ripping it. And then I would go into these meetings

Sarah: Yeah,

Zach: the right person.

Lee: [00:19:00] Absolutely. 

Sarah: I would frame that is an influx of low quality leads. And that also could be that there’s a mismatch between your positioning if you’re getting leads to your website and your website is not accurately conveying what you do or to the right group of people that can be part of it.

I have a client who the marketing company they had been with before they were like, Oh yeah, we’ll get you lots of leads. Well, none of the leads were qualified. They only did a specific segment of things and they were getting just everybody across the board, just everything. 

It doesn’t matter if you’re getting 10 emails a day, if none of those are actually the type of work that you want to do.

Lee: If only someone would build a marketplace that would help validate those leads and connect to you. 

Sarah: First question, minimum budget

Lee: I built that into Appsta as well for agency owners. Haven’t gone to market yet, so this is not an ad. but yeah, I believe that that there’s a gap in the market for that right now. If you’re a buyer and you’re Googling website, It’s so confusing. It’s so hard to know where to go. So the customers [00:20:00] 

Zach: Woops. So So Okay. So Don’t really have any time to talk right now. I just want say that I’m excited about this.

Lee: And part of that is what we call user research, which is a Rab, a whole week could probably talk about for an entire episode.

I want to just cover very high level, are some lean validation,

approaches versus what does deep look like when we’re talking about the quick and dirty go to market strategizing and how, how can people test the market easily and quickly? As a tech founder, I’ll 

Sarah: Silence. [00:21:00] Silence. Silence. Silence.

Lee: They really sold you on it. And then you see a screen that says we’ll let you know when we’re in beta and it could really 

Zach: I hate that.

Sarah: to push them a little bit You

Lee: but then they don’t know how to market it and they find out their market didn’t really want what they built. That’s a horror story we 

Sarah: Yep.

Lee: all the time, right? So what are some other ways 

that people can test product market fit. Have you guys seen the if I build it, they will come [00:22:00] mentality. 

Sarah: All the time. I have like good and bad examples. The proof of concept, you mentioned like the clickable prototype can be great, but also you can build an MVP a lot of times too, depending on what your budget is. We soft launched an MVP for a client right now.

There’s a dashboard component and there’s a creator component and there’s a user component, so once we got to the point where that was up, I was like, you just need to launch and you need real people to break this.

Because I had to do a lot of QA testing and any dashboard component type things require a ton of testing to do, but once the underlying system was in place, it was like, okay, that’s the next phase of research is now, is this good enough for the general public to use it?

Because when they do, they’re going to start breaking things in ways that you never expected.

Lee: Yeah. 

Sarah: that’s just something that her mind goes when I see that is , okay, what if what you made is too confusing for your target market to figure out? before you get too far into it, start with the bare minimum.

Somebody demoed an app that they’re working on with me. Just a few weeks ago and they were trying to figure out the bare minimum features that we need for people to actually want to use this . And it had like [00:23:00] AI components.

So I was like, can you at least change this AI component if you don’t like it? And they’re like, yeah. And I’m like, okay, cool. Then this is good enough. Now go see what people do with it. So you have to get close enough to do that. if you build it and they will come thing, I see this all the time with people. 

I think the best example, the saddest example I should say of this is. I had a past client who came to me with a business name, knew the market really well, was in the industry. Seemed like they’d really done their research on stuff and were like, okay, we’re going to build the site out.

Sarah: Their business name was the same as a common YouTube video. once they launched the site, when you Googled their business name, you got tutorial videos on YouTube. That’s really bad because you’re not even getting the business name. If you Google the business name, you should at least get your business.

Organic search is a whole nother thing that’s difficult, but you should at least get your business to come up. And it was like, okay, the site’s launched. Now people will just show up. First of all, you just sort of invented this thing that doesn’t really exist and you need to educate people about it.

And second of all, they’re not going to website exist without marketing. And third, your website name is not good. Like your [00:24:00] brand name. So that’s disappointing to see that happen. But I see that happen a lot. I had another guy who he launched his websites. He never looked at them. And he was like, Hey I’m not getting any leads from my site.

I’m like, yeah, it’s cause you’ve never marketed them. You’ve never even looked at them. And he’s like, well, I need leads. And I’m like, well, you could pay for marketing. And he’s like, well, I don’t have money. And I said, well, here’s some things you can do yourself. And he goes, well, I don’t have time. I don’t know what to tell you

Lee: Okay. And that, that really speaks to can you address your market the overhead cost of telling the story correctly and capturing their attention? Does it take hours to convince people that you’re the right solution for them? Because if it does, that’s not a good business model. are you a founder But you 

don’t have time to talk to your market.

You don’t know how to talk to them, 

Sarah: How do people find you? That’s another thing to think about here. Okay, you’ve identified your market. how does that market typically find new things? are they going to Google it? Do they [00:25:00] ask for referrals from people? They know, like you have to also think about that piece of it and like, well, how do I show up in front of them? Should I be on all the social media platforms?

I mean, not necessarily, you should be on the ones you’re going to use, but then certain ones, like if you’re a plastic surgeon, no, you don’t need to be on Twitter. No one on Twitter is going to be like, check out my new face. I don’t think so. You have to think about that kind of stuff.

 Put your energy like into where people will actually find you and you have to identify the market it’s this funnel thing. You got to start up here and narrow it down and then it informs everything else. Silence.

Lee: yeah, so understanding for instance that your actual serviceable addressable market that you can talk to right now Only wants to pay 30 a month for your service But it takes you, you maybe 1, 000 a month just to reach them because you don’t know how to do social media marketing or however, you’re planning to reach them.

Email marketing, SEO, investment, it all takes time, it takes money. and if you aren’t willing or able to invest that time or money, then even [00:26:00] if it’s something you could have sold in theory, That’s not a good business model. That’s not product market fit. So there’s a lot that goes into 

Sarah: Silence. Okay. Okay. Okay.

Lee: but don’t start paying for ads.

Don’t start burning leads across lots of people who are going to get a bad taste in their mouth because they went. [00:27:00] saw, your first attempt and said, Oh, that’s not for me. And now they’re not going to come check you out later. You just want a small pool of people that you’re doing this user research with to figure out, okay, can I bring this to the market?

Do they respond in a way that makes sense? They click on the ad and then they buy, they don’t click on the ad and then they wait and then I spam them with email and then I call them and then I go to their house and then they buy. That’s not scalable. and that kind of brings me to also, Whether or not this is a startup or a lifestyle business, you might actually enjoy going to people’s houses and selling them. And you find that once you do that and you build that relationship, I mean, that’s why I love consulting. I want to build relationships with people, get to know them, understand their pain points. And then we built 

Okay.

really cool together. And then I go on, I do that for someone else, but that’s not a startup because I can’t easily duplicate that. I can’t go hire 10 more me’s that love to go hang [00:28:00] out 
 

Zach: transition and get jobs on the surface. I think I was really trying to over advocate for it to be a startup so that I could go down this certain path.

But I think ultimately. There was a reality and a couple times when I was like, what do I need to build a platform for? I could just go be some super recruiter dude. And I could just be doing handshake deals. That doesn’t need to be a platform. I could just be the guy to make the connection and, very traditional recruiter role.

So a business would say, Hey, we need four[00:29:00] 

Sarah: Okay.

Zach: And that’s why I leaned into the startup idea.

Sarah: Yeah, that makes a lot of sense. I’ve always been very lifestyle business focused. I have grown things very slowly on purpose. And a lot of that is because of the type of clients that I want to work with. It is very much a one to one relationship. There’s a lot of Consulting and strategy conversations that happen.

A lot of my clients end up becoming friends. They’re great people. All of my clients are typically word of mouth referrals and that’s what I want because good people refer good [00:30:00] people. And so I focus more on referral partnerships, even potentially other agencies or people that are, in the space, but don’t do specifically what I do. I would rather have those people be referrals. I’ve never attempted to run ads or anything cause I’m not entirely sure how that would go. To get completely random people. I want it to be people that I want to work with who are open to coaching and learning because you don’t know what you don’t know and that is totally okay.

But I’m here to ask the questions that you don’t even know to ask and then help steer you the direction you want to go. I’ve had two different conversations this week, Monday. You guys need to have a strategy for the email newsletter.

They’re working on a lead magnet, that’s great. I recommend you do that. But once people sign up, you have to send them something. You can’t just sign them up and send them nothing. Right. And so you should ideally have some sort of a drip sequence for this, where you deliver some value, but then on top of that, they’ve just started sending their newsletter and it’s like

if you need these services, give us a call and that’s not how you write a newsletter. Okay, we need to have a deeper conversation around your strategy here because people don’t want that. They’re not going to sign up for [00:31:00] that. They’re not going to stay on your list.

Right? So those are really deep coaching type conversations where it’s like, let’s talk through how this works. The next day, Tuesday, in another conversation with a client who’s, they have an email list. They’re not really using it. They don’t know how. And I’m like, well, have you segmented your list?

Who are you sending? I want to take the time to have these conversations with people. And so I’m not out here being like, yeah, high volume, just like ads. And I’ll just crank through all these projects.

It’s not about that. It’s about a long term, are you getting better at being an entrepreneur? You should be a better entrepreneur as a result of working with us. So I am very intentional about like the way that I’m growing. This is very slow and sustainable and also meets my quality standards, which are very high.

Lee: And you can take vacations with your family when you want to, and you form your business around your family’s needs too, right? Like to me, that’s the.

Well, I don’t know. 

Sarah: sure.

Lee: In theory. In theory. 

Sarah: I mean, yes. Yes.

the seminar. 

Sort of I mean, yes, I [00:32:00] do that. Do I do that? Well, not necessarily. But yeah, I am intentional about it. I can be better about it. But things also ebb and flow.

Lee: Yeah. I used to have a habit of shutting down the business whenever it just didn’t work for My schedule or my habits anymore, I’ve gotten a little bit more diligent about sticking with things and forming my life around my business because I want to see scale and growth and hit bigger numbers and bigger targets now.

To me, that’s the quintessential lifestyle business is something that works for your lifestyle.

Silence.

can speak to the reality of product market fit, not just being about getting sales, but about the need for it to be a consistent demand without a consistent, constant marketing need, right? That idea of hockey [00:33:00] stick growth that’s so familiar to SAS founders 

Sarah: Silence.

Zach: a multiple

Sarah: Silence. Silence. Silence.

Zach: and it says pull and Oh, it’s way easier.

Product market fit is that in practice it’s,

Sarah: [00:34:00] Yeah. 

Zach: just like this to sell what

Sarah: Okay.

Zach: trying to do. If you’re

Sarah: Okay.

Zach: the right path or you’re not. If you’re like, man, I have to really go out and solicit and beg people to take my phone calls for this thing I’m trying to sell.

Well, then you might even be in a red ocean. And that’s a whole other thing you’re in market that is oversaturated. People have the pick of the litter of what they want to be able to get out of it. And they’re not necessarily feeling compelled to come and get it from you specifically. So I think those are definite considerations. 

The second leg of that, I would look at traction [00:35:00] verse actual product market fit. Cause you can look at traction as all the things that lead towards potentially getting product market fit. So your traction points the prime ones are going to be

pipeline and things like that.

Those are good traction metrics by anyone’s kind of expectations.

going to come to you because they recognize that you can provide something that they need. That conversation shouldn’t be that difficult. Like you’re getting to the end of a sales call.

You talk to somebody for an hour about calendars and they’re like, well, that’s really neat. I’ll see you later. They should be like, how long will it take you to implement this? Can we get it for everybody?

Can you do integrations with Google spark. They should contextualize and see how it works in their existing system because they’re already trying to make it work for them. That’s a big part of it, at least in my limited experience, I would say.

Lee: I would say if 

Sarah: Yeah.

Lee: having those elevator conversations where people get [00:36:00] excited and go, tell me more, how can I get this going? So you say, Oh, check us out at startup. com or whatever, go find us. And then they find you.

if they start peppering you with questions, not buying, you haven’t achieved product market fit.

Once you’ve gotten to the point where you’re not even having the conversation anymore, they’re just finding you online because they googled you. then they see your call to action and they follow it to a sale.

and then hopefully don’t churn, which is a whole nother discussion, but hopefully 

Yeah. 

That’s that whole pipeline of product market fit, being proven out.
 

Biggest takeaway for me is just look for that upward curve, look for that ease of capturing your market. [00:37:00] And hopefully you’re starting to get excited once You’ve put whatever you’re selling out into the world a little bit and you’ve started to test the market you listen to them You made the changes they asked for and now you’re giving people what they want and you’re getting sales You didn’t even to close yourself. They’re coming to you. Like we talked about before it’s starting to get easier and easier There’s less and less friction. The friction is now transferring from sales to Well, they want more things than we can even build, at this pace, or we need to hire as fast as we can to meet the demand.

That’s the friction you’re looking for that tells you, okay, I think we’ve hit product market. But at that point, that’s when you pay for the money marketing consultant or agency or whatever, but not before. If people took nothing else away from this, that’s what I want to say is don’t hire those specialists yet. Just keep taking feedback from people on what they want until the demand starts to become a strain because they love what you’re bringing to market. [00:38:00] 

What? 

Sarah: I’m, I’m not following. Wait.

Lee: that. 

Zach: it’s

Sarah: cause you wanted to swim and you didn’t know it’s frozen. Oh yeah.

Zach: I was trying to, I guess, be more clever than I am. It’s just to say You don’t necessarily know if the lake is going to support you, if it’s frozen or not. So if it’s going to

Just go all out there on an idea. If it hasn’t been validated or tested. If it’s a landing page, people subscribe, or if people are messaging about it, there’s some form of people trying to validate or help you push through that concept.

So instead of saying all that don’t skate on the frozen lake.

Sarah: No, that makes perfect sense to me, for sure.

Lee: Now that I understand.
 

Sarah: You measure the depth of the ice first. So the product market fit is [00:39:00] measuring the ice. Yeah. I know. I think that’s great. I would say, coming from the industry that I’m in your positioning and how you talk about what you do matters for this as well.

It’s not just about the product market fits about communicating it accurately, because if you can’t communicate accurately, on your website, people have no idea what you’re selling, even if the product market fit is there. If you’re speaking in lingo and you’re confusing or you don’t have enough information, you’re still not going to see that flow that Lee’s talking about.
 

So make sure that when you do find that, that you are doing a good job to communicate it accurately to people. And you can ask your market, if it makes sense, not you, not your co founders, not people in the industry ask the people that you’re selling to and make sure that they understand what you’re saying.

Lee: So Sarah, I’m going to challenge you to do what Zach did and leave us with a one sentence takeaway. An aphorism, 

Sarah: positioning [00:40:00] matters,

Lee: that’s good. 

Sarah: positioning matters and strategy. That’s kind of what we’re talking about here. Strategy matters.

Lee: Absolutely. 

Sarah: money at ads. Awesome.

Lee: person because You can’t wait to see yourself in the news. There’s a little bit of ego in going to market and you have to kill the ego. Kill your darlings, Let people tell you what’s wrong with it for a while first. 

So, that’s been founder problems, hopefully saving you some money today and we’ll see you around. Let us know on social media, what you’re working on and ask us some questions. Maybe we can tell you if we feel like you’ve hit product market fit or not.