Anand Kulkarni - Product - Market Fit

1. 3 SECRETS TO STARTUP
SUCCESS
PRODUCT
MARKET
FIT
ANAND KULKARNI - CHIEF MENTOR - FOUNDER, CEO CROWDBOTICS - TW:@POLYBOT

2. WHO WANTS TO BUILD A
MILLION DOLLAR
BUSINESS?

4. WHO WANTS TO BUILD A
BILLION DOLLAR BUSINESS?

5. What if I told you that, in advance,
we could predict if we had a chance
to build a billion-dollar business?

6. I’m going to
tell you the
secret.

7. Not just one: three
SECRETS to
STARTUP SUCCESS

8. I did it!
Twice!
As a student!

9. I did it!
Twice!
As a student!

10. I did it!
Twice!
As a student!!!

13. STORY TIME…
RECAP:
WHAT’S PROBLEM-SOLUTION FIT?

14. ORIGINAL PROBLEM

15. ORIGINAL SOLUTION
Let’s build a company that takes the
easiest jobs from Amazon Mechanical
Turk and makes them available to the
poorest people in the
world through their cell phones!

16. ONLINE RESEARCH SHOWED:
WE HAD PROBLEM-SOLUTION FIT!
🎉 🎉 🎉

17. OPINION: DID IT WORK?

18. EVERY PART OF
THIS IDEA WAS
HORRIBLY WRONG

19. ORIGINAL SOLUTION WAS
UNUSABLE BY OUR USERS

20. AMAZON MECHANICAL TURK
WAS EMPTY

21. AFTER PIVOTING REPEATEDLY…

22. WHAT WE BUILT
people
businesses
products
services
sales teams
marketing teams
business data people who need
this data
crowd of 750 work-at-home staffers
living in towns, urban slums & villages worldwide
crawlers

23. WHAT WE BUILT
people
businesses
products
services
sales teams
marketing teams
business data people who need
this data

24. WHAT WE BUILT
people
businesses
products
services
sales teams
marketing teams
business data people who need
this data
crowd of 1000 work-at-home staffers
living in towns, urban slums & villages worldwide
crawlers

25. YOU THINK YOUR PIVOTS WERE BAD?

26. YOU THINK YOUR PIVOTS WERE BAD?

27. ORIGINAL PROBLEM: COMPANY 2
coding is way too
hard and expensive!

28. ORIGINAL SOLUTION: COMPANY 2
let’s use deep learning
to write code!

29. OPINION: DID IT WORK?

30. THIS IDEA WAS
ONLY A LITTLE
WRONG

31. NO PROBLEM-SOLUTION FIT

32. …PIVOT 1: DEVS ON DEMAND

33. …USE DEVELOPER DATA TO BUILD A
DATASET…

34. AT LAST!

35. AT LAST!

36. Did we learn
anything?

37. Not just one: three
SECRETS to
STARTUP SUCCESS

38. SECRET 1:
WHY DO SO MANY STARTUPS DIE?

39. SECRET 1:
WHY DO SO MANY STARTUPS DIE?
SECRET 2:
HOW DO WE CONVINCE PEOPLE THAT WE
HAVE A CHANCE TO BE HUGE?

40. SECRET 1:
WHY DO SO MANY STARTUPS DIE?
SECRET 2:
HOW DO WE CONVINCE PEOPLE THAT WE
HAVE A CHANCE TO BE HUGE?
SECRET 3:
HOW DO WE PICK THE BEST MARKETS?

41. SECRET 1:
WHY DO STARTUPS DIE?

42. SECRET 1:
WHY DO STARTUPS DIE?
YOU TELL ME!

43. WHY STARTUPS DIE
gave up – too hard!

44. WHY STARTUPS DIE
gave up – too hard!

45. WHY STARTUPS DIE
went broke

46. WHY STARTUPS DIE
went broke
😢

47. WHY STARTUPS DIE
couldn’t build the product?

48. WHY STARTUPS DIE
couldn’t build the product?

49. WHY STARTUPS DIE

50. WHY STARTUPS DIE
not enough customers

51. SECRET 1:
WHAT’S THE #1 REASON
STARTUPS DIE?

52. THEY DON’T GET CUSTOMERS
THE NUMBER ONE KILLER OF
STARTUPS

53. “THE #1 COMPANY-
KILLER IS LACK OF
A MARKET.”
-BEN HOROWITZ,

54. “THE #1 COMPANY-
KILLER IS LACK OF
A MARKET.”
-BEN HOROWITZ, There’s just one
mistake that kills
startups – not making
something users
want.
-Paul Graham, YC

55. THEY DON’T ACHIEVE
PRODUCT-MARKET FIT
THE NUMBER ONE KILLER OF
STARTUPS

56. GET TO
PRODUCT-MARKET FIT
HOW DO YOU PREVENT YOUR
STARTUP FROM DYING?

57. WHAT IS PRODUCT MARKET FIT?

58. WHAT IS PRODUCT MARKET FIT?

59. “Being in a good market
with a product that can
satisfy that market.“
(obsessed with market)->
WHAT IS PRODUCT MARKET FIT?

60. “There are ten people
outside your network
paying for your product.“
WHAT IS PRODUCT MARKET FIT?

61. It’s simple:
customers are buying what
you’re selling, as fast as you
can sell it.
WHAT IS PRODUCT MARKET FIT?

62. It’s simple:
customers are buying what
you’re selling.
WHAT IS PRODUCT MARKET FIT?

63. NOT
JUST
YOUR
MOM

65. CUSTOMERS VS
MARKETS

66. CUSTOMERS VS
MARKETS
WHAT’S THE DIFF?

67. CUSTOMER = SOMEONE WHO
PAYS YOU FOR THE PRODUCT

68. CUSTOMER = SOMEONE WHO
PAYS YOU FOR THE PRODUCT
MARKET = THE BIG UNIVERSE OF
CUSTOMERS THAT YOU PLAN TO
SERVE

69. QUIZ TIME
I’LL GIVE YOU A COMPANY.
YOU TELL ME WHO IS THE MARKET
AND WHO IS THE CUSTOMER.

70. EXAMPLE: TINDER (B2C)

71. EXAMPLE: TINDER (B2C)
OUR CUSTOMER IS A SINGLE PERSON
WHO WANTS TO GO ON DATES
OUR MARKET IS EVERY SINGLE
PERSON ON THE PLANET.

72. EXAMPLE: TINDER (B2C)
OUR CUSTOMER IS A SINGLE PERSON
WHO WANTS TO GO ON DATES
OUR MARKET IS EVERY SINGLE
PERSON ON THE PLANET.

73. EXAMPLE: CROWDBOTICS (B2B)

74. EXAMPLE: CROWDBOTICS (B2B)
OUR CUSTOMER IS A PRODUCT MANAGER
TRYING TO BUILD A PRODUCT OR FEATURE
IN A FEW WEEKS.
OUR MARKET IS FORTUNE 5000 COMPANIES
SPENDING MONEY ON OUTBOUND SALES.

75. EXAMPLE: CROWDBOTICS (B2B)
OUR CUSTOMER IS A PRODUCT MANAGER
TRYING TO BUILD A PRODUCT OR FEATURE
IN A FEW WEEKS.
OUR MARKET IS US-BASED TECHNOLOGY
COMPANIES WITH AT LEAST 10 ENGINEERS.

76. EXAMPLE: YOU!

77. SECRET 2:
HOW DO WE CONVINCE PEOPLE
WE HAVE A CHANCE TO BE
HUGE?

78. ENTREPRENEURS SPEAK “PROBLEM”
VENTURE CAPITALISTS
SPEAK MONEY!

79. THREE FAMOUS PEOPLE IN
SV:

80. THREE FAMOUS PEOPLE IN
SV:
TAM

81. THREE FAMOUS PEOPLE IN
SV:
TAM SAM

82. THREE FAMOUS PEOPLE IN
SV:
TAM SAM SOM

83. WHO ARE TAM/SAM/SOM?

84. WHO ARE TAM/SAM/SOM?
“We speak VC!”

85. WHO ARE TAM/SAM/SOM?
These are
different ways to
predict or
explain how
much money a
startup could
make!

86. TAM: TOTAL ADDRESSABLE MARKET

87. TAM: TOTAL ADDRESSABLE MARKET
How much money would we make in
one year, if absolutely
every possible customer in the world
used this product?

88. TAM: TOTAL ADDRESSABLE MARKET
“How much money is being spent on this
problem in the entire world each year?”

89. TAM: TOTAL ADDRESSABLE MARKET
“How much money is being spent on this
problem in the entire world each year?”
US: $2.5B
China: $1.5B
Other: $2B
TAM: $6B

90. TAM: TOTAL ADDRESSABLE MARKET
“How much money is being spent on this
problem in the entire world each year?”

91. TAM: TOTAL ADDRESSABLE MARKET
“How much money is being spent on this
problem in the entire world each year?”
$34B!!!!!
Fancy, store,
mail-order, electric

92. TAM: TOTAL ADDRESSABLE MARKET
“How much money is being spent on this
problem in the entire world each year?”
YOU TRY!

93. SAM: SERVICEABLE
ADDRESSABLE MARKET
“How much of the total market can we
sell to with our specific product?”

94. SAM: SERVICEABLE
ADDRESSABLE MARKET
“How much of the total market can we
sell to with our specific product?”
CHEAP RAZORS
– $10B MARKET

95. SAM: SERVICEABLE
ADDRESSABLE MARKET

96. SOM: SERVICEABLE OBTAINABLE
MARKET
“How much money will we make in
the short term from our market,
realistically?”

97. SOM: SERVICEABLE
OBTAINABLE MARKET
“How much money will we make in the
short term from our market?”

98. SOM: SERVICEABLE
OBTAINABLE MARKET
1 million views x
10% conversion x
$40/yr/customer =
$4M sales
“How much money will we make in the
short term from our market?”

99. “Remember… we’re just estimates! We
don’t need to be perfect.”
“We’re trying to convince you and prove to
investors that you have a viable business.”

100. “Let’s see some examples of resources
to help talk about us.”

101. ESTIMATING MARKET SIZE +
GETTING MARKET DATA:
HOW DO YOU DO IT?

102. ESTIMATING MARKET SIZES

103. 6 million businesses in
the US with >1 employee
100,000 midsize
businesses in the US with
> $10M revenue
ESTIMATING MARKET SIZES

104. LINKEDIN (B2B)
-Ample business data
-Market sizing
information
-Good for SOM
estimates
ESTIMATING MARKET SIZES

105. FACEBOOK AUDIENCES (B2C)
ESTIMATING MARKET SIZES
Ample consumer data
Market sizing information
Good for SOM
Also… you can use it
when launching!

106. SECRET 2:
HOW DO WE CONVINCE PEOPLE
WE HAVE A CHANCE TO BE
HUGE?
ANSWER: A GIGANTIC TAM,
A REALLY BIG SAM, AND A
PRETTY GOOD SOM!

107. HOW BIG SHOULD YOUR MARKET BE?

108. VCs like businesses that can
scale up to $100M per year in
revenue.
HOW BIG SHOULD YOUR MARKET BE?

109. VCs like businesses that can
scale up to $100M per year in
revenue.
That means you should target
a TAM of $1 billion or more.
HOW BIG SHOULD YOUR MARKET BE?

110. VCs KNOW STARTUPS NEVER
GET THE ENTIRE MARKET.
That means you WANT A SAM
THAT IS >$100M (or >$1B).
RULE OF THUMB:
SOM in $MM
HOW BIG SHOULD YOUR MARKET BE?

111. SECRET 3:
HOW DO WE PICK THE BEST
INITIAL MARKETS?

112. SECRET 3:
HOW DO YOU EAT AN
ELEPHANT?

113. STARTUPS NEED TO LAUNCH
IN SMALL TARGET MARKETS.

114. STARTUPS NEED TO LAUNCH
IN SMALL TARGET MARKETS.
YOUR MARKET WILL GET
PROGRESSIVELY BIGGER OVER
THE COURSE OF YOUR COMPANY.

115. EXAMPLE: WHAT MARKET DID
FACEBOOK START IN?

116. HARVARD
EXAMPLE: WHAT MARKET DID
FACEBOOK START IN?

117. HARVARD ALL COLLEGES
EXAMPLE: WHAT MARKET DID
FACEBOOK START IN?

118. HARVARD ALL COLLEGES EVERYONE
EXAMPLE: WHAT MARKET DID
FACEBOOK START IN?

119. EXAMPLE: WHAT MARKET DID
AMAZON START IN?

120. EXAMPLE: WHAT MARKET DID
AMAZON START IN?
BOOKS

121. EXAMPLE: WHAT MARKET DID
AMAZON START IN?
BOOKS MERCHANDISE

122. EXAMPLE: WHAT MARKET DID
AMAZON START IN?
BOOKS MERCHANDISE CLOUD

123. SECRET 3:
HOW DO WE PICK THE
BEST INITIAL MARKETS?
A CUSTOMER THAT IS BEING
EATEN BY SHARKS (BIG PAIN)
A MARKET WHERE YOU CAN
RESCUE EVERYBODY (SMALL
MARKET!)

124. QUOTE
“When you have an idea for a startup, ask
yourself: who wants this right now?
Who wants this so much that they'll use it
even when it's a crappy version one
made by a two-person startup they've
never heard of?”
- PAUL GRAHAM, YC

125. 3 SECRETS TO STARTUP
SUCCESS
PRODUCT
MARKET
FIT

126. WHO IS THIS GUY?
- Forbes 30 under 30
entrepreneur
- Former operations research
PhD
- National Science
Foundation
fellow at UC Berkeley
- Raised $20M from
investors:
YC, A16Z, 500, Sierra, etc.

127. WHAT WE BUILT
- Sales technology startup
- Social enterprise
- Google, Box, hundreds of
customers (mid-market &
enterprise)
- ACV $50K, millions in
revenue
- 50 local employees,
500 global, 40 countries

129. raise a little capital
experiments
customer development
spending money slowly
raise a lot of capital
acquire customers fast
clear connection of spending
money to customer growth
spending money fast!!!!!
before
product market fit
after
product market fit

130. BEFORE PRODUCT-MARKET FIT
raised $900K
7 people
inconsistent revenue
lots of experiments

131. AFTER PRODUCT-MARKET F
raised $6M
30 people
watched revenue
grow rapidly