Vikas Kaushal

I disagree, one such example that comes to my mind after reading this is Byju's where they built distribution and never focused on product. While on the other hand PW had an amazing product and distribution got solved over a period of time. As a founder I am not deeply in love with the product but with the problem we are solving and to solve we need to focus on just one metric - Customer Delight. #product #startups

7

🚀 Unlocking the nuances of Product Market Fit (PMF) is key to building successful ventures. It's not just about creating value; it's about capturing it effectively. In the world of startups and innovation, the VC2 framework offers a lens to understand this dynamic interplay. At its core, PMF is about delivering a product that resonates deeply with customers while addressing a specific market need. But let's dive deeper. PMF extends beyond mere satisfaction, but also validate revenue models, ensuring your offering can be monetized successfully. Here's where the distinction between creating and capturing value becomes pivotal. To capture value, you must first create it. In the realm of macroeconomics, value creation translates to enhancing customer experiences in B2C scenarios or boosting profitability for B2B entities. Pricing models play a crucial role here, as they must strike a balance between delivering value and capturing it. Ultimately, the success of any product hinges on its ability to generate sustainable revenue. If a product or service fails to do so, its long-term viability comes into question. In essence, PMF isn't just about creating buzz; it's about building a solid foundation for sustainable growth. By understanding the intricate dance between value creation and capture, entrepreneurs can steer their ventures towards lasting success. Courtesy : Harvard Kennedy School and The Lean Product Playbook. #ProductMarketFit #BusinessStrategy #Entrepreneurship #VC2

5

Startup decks vs Business plans. It's accepted that a startup needs a deck. Dax Dasilva of Lightspeed Commerce made an important point on 20VC. Writing a business plan - including financial projections - is an important step. It requires discipline. It provides a rigorous framework for thinking deeply about the problem you're trying to solve. Harry Stebbings countered that he doesn't even want to see a deck since it's all dreams. We spent a lot of time and energy on our business plan with the expectation that we would show it to no one ever. The business plan was part of our roadmap for the company. We researched customers - including having 50+ conversations. We wanted to understand them: their background, their interests, their presence on social media. We also wanted to understand how they were evaluated by leadership and how integrated they were with the business of the company they were protecting. We researched pricing both with potential customers and other products in our industry to find out if OpEx or CapEx was a better fit. How did they buy today? How would they like to buy? We did market research to understand the verticals and map the right entry point - we were wrong but that doesn't reduce the value of the research. We looked at competitors in depth to understand what they were seeing that we weren't. Dax is right. This is an invaluable document that should be updated every year - the company is changing, the market is changing, there's more feedback about price and ICP. It's not for sharing with the outside world. It's a map for driving forward. Decks won't get you investment - VCs invest in people. We make decks but we know they don't tell our story. The deck is a calling card. Dax and Harry are both right. https://lnkd.in/e25M82xY

15

Learn from a comprehensive playbook on achieving product-market fit through distinct paths that cater to immediate problems, industry pains, or transformative visions 👇 Actionable insights from: ➡ Team Sequoia, Venture Capital Firm ✏ “The Arc Product-Market Fit Framework” ⭐ 𝗨𝗻𝗱𝗲𝗿𝘀𝘁𝗮𝗻𝗱𝗶𝗻𝗴 𝘁𝗵𝗲 𝗧𝗵𝗿𝗲𝗲 𝗔𝗿𝗰𝗵𝗲𝘁𝘆𝗽𝗲𝘀 𝗼𝗳 𝗣𝗿𝗼𝗱𝘂𝗰𝘁-𝗠𝗮𝗿𝗸𝗲𝘁 𝗙𝗶𝘁 1️⃣ 𝙃𝙖𝙞𝙧 𝙤𝙣 𝙁𝙞𝙧𝙚: "Deliver a best-in-class, differentiated solution and combine it with aggressive go-to-market efforts to overcome competition […] You solve a problem that's a clear, urgent need for customers. The demand is obvious." 2️⃣ 𝙃𝙖𝙧𝙙 𝙁𝙖𝙘𝙩: "Educate the market about your novel approach and capture the opportunity by encouraging customers to change their current behaviours […] You take a pain point universally accepted as a hard fact of life, and see that it's merely a hard problem that your product solves for the customer." 3️⃣ 𝙁𝙪𝙩𝙪𝙧𝙚 𝙑𝙞𝙨𝙞𝙤𝙣: "Attract and retain top talent for the long haul, find commercial opportunities along the way, and embrace unexpected turns in technology and market [...] You enable a new reality through visionary innovation. It sounds like science fiction to customers, either because the concept is familiar but sounds impossible (like abundant cheap energy from nuclear fusion) or because no one ever imagined it (like the iPhone)." ⭐ 𝗔𝗱𝗮𝗽𝘁𝗶𝗻𝗴 𝘁𝗼 𝗙𝗹𝘂𝗶𝗱 𝗣𝗿𝗼𝗱𝘂𝗰𝘁-𝗠𝗮𝗿𝗸𝗲𝘁 𝗥𝗲𝗹𝗮𝘁𝗶𝗼𝗻𝘀𝗵𝗶𝗽 𝗗𝘆𝗻𝗮𝗺𝗶𝗰𝘀 💬 "Product-market relationship dynamics are fluid. Over time, many companies end up moving from one path to another as they introduce new products or as customer attitudes change about an existing product and underlying problem. Some companies straddle two paths at once. The point of this framework is not to irrevocably set your path in stone; it would be a mistake to identify yourself too narrowly with any one of them." ⭐ 𝗦𝘁𝗿𝗶𝘃𝗶𝗻𝗴 𝗳𝗼𝗿 𝗖𝗼𝗻𝘁𝗶𝗻𝘂𝗼𝘂𝘀 𝗣𝗿𝗼𝗱𝘂𝗰𝘁-𝗠𝗮𝗿𝗸𝗲𝘁 𝗙𝗶𝘁 💬 "Legendary companies string together multiple product lines that evolve through one path of product-market fit to another. While one product may plateau, the next product starts rising. Product-market fit may seem like a destination you're trying to reach—but keeping and expanding on it once you arrive is an ongoing quest that will last as long as your company does." ───── 👉 Follow me, Alexander Small, for tactics and strategies for building startups from industry-leading Founders, Operators and Investors

2

This hard reset is required for all AI founders from India building global B2B products: Product Innovation > GTM muscle Product innovation is happening at a rapid pace in each of your categories, valley competitors are building thought through features that can help them win customers mid-long term, GTM muscle alone without product differentiation wont help you win in the first half of this AI decade. We are doing this hard reset within BoldCap on what we are looking for in AI founders. Ping us if you are tinkering in global AI B2B products. Shiv Tayal Pratham Chadha Aditi Gera

131

10 Comments

Truly inspiring to listen to Dax Dasilva tell the story of Lightspeed Commerce on 20VC. With $900M in ARR I was thrilled to learn that Dax bootstrapped the company for 7 years to get to $10M in ARR. I hope it doesn't take us 7 years to get Liquid360 there but it makes me feel better about the 3.5 years we've put in to date. For me these stories are deeply encouraging. When you're building something very big it can take time to get to launch. A couple of weeks ago we met with a global player in the VC world. They were looking to invest $5M - $10M and we said we weren't there yet. We'll get there but it wouldn't be the right move today. They then jumped to another conclusion. The wrong one. I get it. They have a multi-billion dollar fund and capital to deploy. We have a company to grow and too much cash will not help us do it right. We've made good decisions being lean. Our customers are starting at $500K. This is an enterprise/gov't product. We have to satisfy a very discerning customer. No bugs, no glitches. A dependable and reliable product. We are excited by the feedback. We are making the world safer. Harry Stebbings suggested that Lightspeed is one of the most misunderstood companies. It's market cap is $2.6B which seems really low relative to the ARR. Very interesting episode.

4

2 Comments

Crunchbase "state of the union" article on YTD funding for 2024. Per crunchbase, "First-quarter startup investment globally had its second-worst quarter since 2018." There is some good news though for AI and Healthcare as they emerge as the front-runners in the funding race- Security related software, however, was just a third of what it was circa 2021. While the article paints a bleak picture of the tech sector I have heard speculation from a myriad of PC and consulting companies that the second half of 2024 is poised for tremendous growth as PE and VC will look to take their money off the sidelines and put it back to work. I, along with many of you (I imagine), are hoping they are right this time. https://lnkd.in/empVt7-w

3

2 Comments

Understand Pre-Seed VC Thinking: Use code TRY1MBY1MAPR2024PRE for a discount. #venturecapital #startup https://lnkd.in/gHGf3as2

3

1 Comment

OpenAI's Sam Altman interviews serial founder and legendary VC investor Vinod Khosla. Sam asks "What percent of investors are good company builders?" Vinod responds with 3 powerful statements: 1️⃣ 90% of VCs add no value 2️⃣ 70% of VCs add negative value 3️⃣ If you haven't built a company before, you haven't earned the right to advise an entrepreneur #VentureCapital #Fundraising #Founders

35

4 Comments

Blended CAC is a vanity metric ❗ A few days ago, I spoke with the founder of a #startup with a PMF to die for and poised for the aggressive #growth. They were proud about their CAC and the payback seemed solid 👌. The catch? The reported CAC was blended - combining both paid and organic acquisitions. From the look of it, their paid acquisition performance was far from stellar 🤷‍♀️ Why does this matter? As Andrew Chen highlighted back in 2018: Blended CAC and per-channel CAC can often be off by 2-5X. As you scale your Paid, your Organic won’t follow 1:1. So as you grow, your Blended will approach your dominant channel’s CAC. Here’s the problem: ⚠️ Once their organic growth - the engine behind their impressive PMF -plateaus, their paid acquisition will need to pick up the slack. But if the paid isn’t already dialed in, they’ll face a tough road ahead. At that point, scrambling to fix paid marketing or pivoting could be too little, too late.

13

Unlock access to a curated list of 850 #B2B #Enterprise venture capital firms. Check out the leading #B2B #Enterprise VC firms now! https://lnkd.in/da3VRDrE #startups #privateequity #globalvc #digitaltransformation #fundingopportunities

1

1 Comment

the *mirage* of the india software ipo for global b2b companies over the last few quarters there has been increasing chatter in the indian ecosystem that indian software companies building for and selling to the US/global markets will be better off registered/flipping back to being an indian registered HQ and going IPO in india than (struggle to) meet the high bar that is required for an ipo in the US. the key points are these: (1) if indian companies can get to say $100M ARR with decent 15-20% EBITDA they will be considered heroes by the indian retail investors (2) however, with these numbers it is not possible to go ipo in the US (3) indian market is hungry for tech and will continue to award much higher valuation to these companies. i don't know what the right answer is in the long run. it is also possible that there are different right answers for different people. and by no means am i an expert so take this view as just one view, but based on seeing all of this very closely while working with the top 1% talent in India. here's why i personally believe this is unlikely to work and/or may be long term harmful for indian software product ecosystem that is looking to build globally relevant companies. 1 - top tier founders who I checked with said “hell no” to this option. for them it is like accepting defeat before even getting started. the ecosystem is finally closer-than-ever to figuring out how to build US-native companies to be globally relevant/respected brands in their categories and this entire thought process of "aiming for an low bar indian ipo" is opposite of what is going on in their minds and what is driving them today. 2 - once you set the $100M ARR, $20M EBITDA as the *goal*, it is likely to immediately lower the bar mentally for everyone in the company and it can be a negative spiral when you set a local maxima as a *great outcome* - the entire ecosystem then aims for this and overall we will soon start to build small companies instead of large outlier companies that are globally respected. 3- the outcome of this strategy *on average* will create #7 #8 #9 companies in their respective categories at best and that too *when things work out* and that is a hard position to be in as we all know. even if they go public in india i am not sure how long they can hold their valuations if their position, brand and standing in their categories is mediocre at best. CONTINUED IN THE FIRST COMMENT -->

55

11 Comments

Ultimate List of Funded Startups - Featuring more than 21,000 startups, 21,000+ Founders/CEOs, and 17,000+ email addresses of Founders/CEOs. Get it now https://payhip.com/b/sbdwi #startup #startups #vc #venturecapital #investmentbanking #privateequity #managementconsulting #b2b #founders #entrepreneurs

1

Over the weekend, Paul Graham's latest article struck a chord in startup circles, particularly with first-time founders grappling with the tension between Founder Mode and the conventional wisdom of managerial leadership. PG highlighted a recurring theme: as companies grow, founders are often pressured to adopt "best practices" that, rather than helping, can undermine their unique vision. This dilemma was vividly captured in a talk by Brian Chesky, where he described how following the well-meaning advice of "hiring good people and giving them room to do their jobs" nearly derailed Airbnb. For first-time entrepreneurs, this challenge is even more acute. When you’re venturing into uncharted territory, the natural instinct is to second-guess yourself. The idea that you need someone more "experienced," someone who’s "done it before," starts to creep in, feeding your insecurities. It’s easy to fall into the trap of thinking that seasoned professionals can navigate growth better than the person who brought the company to life in the first place. Graham's article reminds us that this outside conjecture is often misguided and can be damaging. Historically, many VCs echoed this sentiment, frequently replacing founders with more experienced CEOs once a company reached a certain scale. The belief was that professional managers were better equipped to handle the complexities of a growing business. Then a16z entered the scene, championing the notion that founder-led companies are not just viable but preferable. They turned the tide, advocating that the founder's unique insight and passion are irreplaceable assets, even as the company scales. The takeaway for first-time founders? Listen to feedback, but don’t let the inevitable self-doubt take root. Your instincts, which have guided you this far, are more powerful than you realize. You will need to adapt and change, but that’s part of the game. As Albert Camus wrote, "In the midst of winter, I found there was, within me, an invincible summer." Trust in that inner strength. The road might be uncertain, but you have the resilience to navigate it, no matter how daunting it seems.

194

10 Comments

I recently reviewed a term sheet with a portfolio founder for a priced seed round from a new investor. We’d led their pre-seed round and there was a specific provision in the seed term sheet that the founder was adamant about pushing back on - founder revesting. and my advice surprised him. I pointed out that not only was this term not harmful, in fact it was beneficial and meant to protect him in the long run. Often times, included in early stage term sheets is a provision requiring founders to revest their shares - typically another 4 years. The purpose of this is to mitigate the potential for "dead equity" on a cap table. When a departed founder owns a meaningful stake but is no longer actively working on the business it can be demotivating for the remaining founding team and also make raising additional capital very challenging. The initial reaction for most founders is to push back on this term - and logically it makes sense - they've already vested a fair amount of equity and don't see why they should start over. The longer you sit in a VC chair you tend to see every iteration of founder dynamics play out. Founder departures are fairly common- they happen for all different reasons/circumstances, but in nearly all cases founders should want the lions share of the equity to be in the hands of the individual founders that are still meaningfully contributing to the success of the business as it scales. Sheel Mohnot at Better Tomorrow Ventures recently wrote a great piece related to this topic, focused on initial founder vesting schedules. He recommend founders set an 8 year vesting schedule at inception, which I think is an interesting direction seasoned founders could head in.

154

58 Comments

Every founders dilemma, PLG Vs MLG, Which one should you build on 🤔 Understanding the nuances of Product-Led Growth (PLG) and Marketing-Led Growth (MLG) can significantly impact the success of a company's go-to-market (GTM) strategy. Product-Led Growth (PLG) PLG is a strategy where the product itself drives acquisition, conversion, and expansion. Key elements include: Product as the Primary Driver : The product offers a compelling user experience that encourages organic growth through word-of-mouth and network effects. Freemium Model : Offering a free tier or trial to attract users, who may later convert to paid plans. Viral Loops : Features that encourage users to invite others, like referral programs or collaborative tools. Focus on User Experience : Investing heavily in a seamless and valuable user experience to ensure satisfaction and retention. Data-Driven : Using data from product usage to inform decisions and optimize the user journey.. Examples : Slack, Dropbox, Zoom. Marketing-Led Growth (MLG) MLG relies heavily on marketing activities to drive customer acquisition and growth. Key elements include: Brand Awareness : Building a strong brand presence through various marketing channels (social media, content marketing, advertising). Lead Generation : Employing tactics like SEO, PPC, and content marketing to generate leads. Nurturing Campaigns : Using email marketing, webinars, and other content to nurture leads through the sales funnel. Sales and Marketing Alignment : Close collaboration between sales and marketing teams to convert leads into customers. Campaign-Based : Running specific marketing campaigns to drive interest and conversion. Examples: HubSpot, Salesforce, Oracle. Primary Driver : In PLG, the product drives growth, whereas in MLG, marketing efforts are the primary driver. User Experience vs. Brand Awareness : PLG focuses on delivering a stellar user experience that sells itself, while MLG focuses on building brand awareness and generating leads. Cost Structure : PLG often relies on lower customer acquisition costs due to organic growth, whereas MLG can involve significant marketing spend. Time to Market PLG might require longer initial development to ensure the product can drive growth independently, while MLG can often go to market faster through aggressive marketing campaigns. Many successful companies blend elements of both strategies, leveraging a strong product to drive organic growth while also investing in marketing to accelerate reach and scale. #McKinsey reports that companies blending PLG and MLG can achieve up to 25% faster revenue growth compared to those relying solely on one approach. A hybrid approach can often provide the best of both worlds, driving sustainable growth through both exceptional products and effective marketing. What's your take on building a winning GTM strategy 🤔 ? Pls share 👏 On a #mission to #disrupting global #commerce #GTM #PLG #MLG #SaaS #D2C #Retail

5

4 Comments