Product Market fit(PMF)

1. The 24-month journey to product/market fit
How long does it usually take to go through all four phases and what type of investment fits every stage?
After introducing our Startup Progress Barometer, we got quite a few responses about the time it takes to go through
the differentphases.Someone even called it crazy talk that it takes 3 to 6 months to define the problem and solution.
So, let’s dive a bit further into the journey to product/market fit, the time it takes to get there and what type of
investment is most suitable for the phase you are in.
As you can see in our NEXT Progress Canvas above, there are roughly four phases every startup goes through to get to
product/marketfit.Atfirst you have to prove there is a problem, then prove your solution solves that problem, prove
your customers will pay and finally prove you can scale your business model.
Prove there is a problem
Most startup founders start with an idea. An idea for a product or a solution. But to start, it is important to figure out
whichproblemyouare actuallysolvingforwhich customer. You have to take a step back and look what your product is
actually doing, what does it solve? And for who are you solving it?
It is easy to define the problem and the ideal early customer segment in a brainstorm session, but to prove that it is
actuallya problemandthe problemisbigenoughtopay for,takestime.There are weekends like Startup Weekend and
Evolve thathelpyourun throughthe explorationphase,butyouhave torealize that the validation you get from talking
to people onthe streetispurelyaninitial validationandyouhave toreallyfindyourfirstearlycustomersand make sure

2. you validate with them instead. The first phase sounds like an easy one you can do quickly, but it is the foundation of
your whole businessmodel.Itisverylikelythatwhenyoureachthe revenue model validation phase, you have to go all
the way back and re-evaluate the choices you have made here.
The good thing about the problem validation phase is that you can easily do it next to your work and with just the
foundingteam.Youdon’tneed designers, developers, you just need yourself. If you want to raise some capital at this
stage, it will be from friends, family and fools.
Expect to spend up to 3 months. There will be some iterating back and forth to the solution validation phase, figuring
out what you are exactly solving and how you can do it.
Prove your solution
Nowcomesthe funpart. Proving your solution solves the problem for the ideal early customer. We’ve written before
about why we stopped building MVPs. The term is too ambiguous and means something different for everybody. We
like to talk about solution experiments, prototypes and first versions instead.
When you begin your solution validation phase, you do several iterations with simple solution experiments. Ranging
from explaining your solution, to landing pages, solutions made out of paper and clickable demos. That way you can
iterate fast and learn as much as possible, without spending time developing an actual solution.
Whenyousee that youhave initial validationforacertainsolution,buildaprototype.A prototype shouldnottake more
than twoto three weekstodevelop. Keep it simple and see if the prototype can solve the problem when given to the
customer.
Onlyafteryouhave mostlyprovenyoursolution,gooutandbuilda firstversion.Eventhen, we like to build 80% in 20%
of the time andnot build100% of the solutioninmind,because thatusuallytakes200%.Discusswhat youcan le ave out,
to getit out as fastas possible.Iteratingafterlaunchismucheasierthantocreate the perfectfirstversion. That proce ss
isendless.Rememberthatthe firstiPhone didn’teven had copy/paste! You can leave out much more than you expect,
since you are still building to learn, not to scale.
The solutionvalidation phase easily takes up to 6 months. So together with the problem validation phase (you will do
some iterating back and forth) expect to spend a total of 9 months before problem/solution fit. Pre-seed investment
funds and angels are ideal to help you through this phase. But if you can do without any funding, go for it!
Prove people will pay
Nowthe real hard part starts. Prove yourcustomerwill actuallypayforyoursolutionandpayenoughto make it a viable
business. We do a lot of thought exercises with our startups where we ask how much revenue they need to make to
consider the company to have found product/market fit. Now divide that by the price of a monthly subscription, the
initial price forthe productor the moneyyoucan earn fromadvertisingperuserandyourealize thatitis muchharderto

3. create a viable revenue model than you think. 200.000 euro yearly revenue sounds like it should be doable, but if that
meansyouhave to sell a monthlysubscriptionto20.000 people,yousuddenly realize it is much harder to achieve that.
It isalso verylikely you have to go back to your customer segment and do some tweaks or pivots, your problem might
not be bigenoughto payenoughmoneyforand yoursolutionmightnotfitcompletelynow yourcustomershave topay.
It is easy to sell to the network of the founders, but you need to seriously expand your customer base before even
considering product/market fit.
We have seen it can easily take up to another 15 months before you find product/market fit. Totaling the amount of
time at 24 monthsalready.Anditisnot uncommonor a shame whenittakeslonger.One or multiple seed investments
fits best with this phase.
Prove you can scale
We sometimesjoke toearlystage startups that finding the right channels and growth engine are luxury problems, but
theyare real problemsnonetheless.Youhave foundyourproduct/marketfitandare sellingtoa range of customers,but
nowit istime to expand yourcustomersegmentslowlyandprove thatyoucan bothreach them and that your problem,
solutionandrevenue model alsoappliestothem.Once again you make iterations through all of the 3 previous phases.
Since you have found your product/market fit, are making revenue and are ready to start scaling a serious Series
A investmentmakessense. On the other hand, if your revenue is solid, you can make the decision to invest from your
own balance sheet and build a ‘normal’ non-VC-backed company.
How long this phase takes? You want to keep expanding your customer segment until you reach world domination.
To summarize
Prove yourproblem:3 months — moneyfromfriends,familyandfools
Prove yoursolution:6months — pre-seedandangels
Prove theywill pay:15 months — seedandextendedseedinvestments
Prove youcan scale:forever! — seriesA,B,C
Please note: The journey is different for each and every startup. What works for you, will not work for someone else.
The journeywe describe inthisarticle isageneralizationfrommentoring over one hundred startups in the last 6 years.