A lot of people read that article and said they wished they'd read it before they wasted two years of their life building a failed start up. By the way, this is so cool that it's like a guy who built a unicorn telling you how he validated the idea. This is another episode focusing on product market fit because it's important to me at the moment, and I found some interesting resources. And I wanted to dig into one of these in particular, and that is an article written by Jason Cohen, who is the founder of WP Engine and SmartBear. And both of these are billion dollar plus startups.
Jack:WP Engine is like a WordPress hosting platform, and SmartBear is a whole set of tools for API testing and their own swagger. And I think that in dev tools for product market fit, Jason is probably the most, a, accomplished person, b, accomplished person who has been writing about product market fit for DevTools. Okay. So let's start. If you're on video, then you can see it alongside it.
Jack:Otherwise, you know, I'm gonna make it clear anyway. This a step process brought WP Engine from an idea to a unicorn. While there are other roads to product market fit, consider copying some of these ideas. What is the formula for going from an initial product idea to product market fit? A company that is growing and sustainable with customers that want to pay and want to stay.
Jack:There isn't a fail safe road map, of course, but there is a progression that describes how WP Engine became a unicorn, supported by eighteen years of articles in this book. Here's what the progression looks like. Then we'll explore the other truth that it often doesn't work like this after all. So number one, personal fit. Passion is useful, but winning requires a personal edge.
Jack:Number two, and these are the steps that he says that you kind of work through. Number two, market fit. Most good ideas aren't good businesses. Number three, customer fit. Talk to customers before you waste months building the wrong thing.
Jack:Number four, build and ship the SLC quickly. It's where the real learning happens. So you could replace this with MVP, but Jason uses the term SLC instead of MVP. Simple, lovable, complete. Number five, marketing and sales.
Jack:More than writing code and tweaking designs. Number six, retention driven product development. Attend to your existing customers first. Number seven, prioritize systematically, ruthlessly, strategically. Number eight, manage your psychology on a journey of self discovery and constant rejection.
Jack:And by the way, I think that a lot of this expands on what Marc Andreessen wrote about because Jason has kind of formulated it into like a step by step that's hopefully a bit more complete. Whereas I think that the article Marc Andreessen wrote was really amazing at like lighting a fire under under your ass, but like it it leaves a lot for you to go figure out, which even this will also do. But I think it gets you further along to like having a opinionated road map of how to do these things. So number one, personal fit. The inner fire, leveraging a personal edge to do what you were meant to do.
Jack:A great idea or a great strategy that you can't execute well isn't a good strategy for you. You start with nothing. No product, no customers, no brand, no distribution, and compared to competitors, no money and no time. To succeed, you need something. Something special.
Jack:Something that gives you an edge despite being woefully inadequate in every dimension. Is passion that something? This is false as evidenced by most artists, philosophy majors, and the 80% of startups that fail despite founders' genuine love and passion. Passion is required. It's just not enough.
Jack:Passion is the motivator, especially in the dark times when your savings are depleted, competitors are beating you as you suffer a constant bombardment of rejection from potential customers, potential employees, potential investors, as you question your self worth and wonder whether the cause of your impostor syndrome is that you're actually an impostor. You need to articulate exactly what your passion is so that you can use it as a filter for business concepts. This is difficult. Some people spend their whole life trying to figure it out. Jerry Colonna says, the purpose of life is to discover who you are and then live fully into that.
Jack:It is not an exaggeration to say that a start up is who you are. That's why they call it your baby. And then he's also got a Steve Jobs quote here. You have to be burning with an idea or a problem or a wrong that you want to write. If you're not passionate enough from the start, you'll never stick it out.
Jack:And Jason actually has an article on pivot points for a specific list of questions that help you suss out what your purpose and passions are. Your goal is to find the work you are meant to do. You're calling the work that you would do for free, but more what you are compelled to do. Still, the existence of passion doesn't imply the existence of a business model. We'll solve that in the next step.
Jack:Passion doesn't give you a competitive edge because all the other founders have passion. And larger companies have mountains of advantages that make passion look like a slingshot attacking an aircraft carrier. You need an edge. I would maybe I'd I'd love to push this to Jason and say like, I agree that everyone has some degree of passion about the ideas. But I do think there's I've seen huge differences between founders as to how much they care about their problem space.
Jack:And I wonder if, like, you're truly, truly passionate, not just like, oh, yeah. I am passionate. Scaling DevTools is sponsored by WorkOS. WorkOS helps you get enterprise ready. That means they give you all the things that you need to start working with enterprises.
Jack:Things like audit trails, skin provisioning, role based access control, and single sign on. Let's hear from Utpal from digger.dev,
Utpal:a dev tool using WorkOS. We haven't had to think about OAuth at all. I think support is great. We have a Slack connect channel with them. Issues, if any, there haven't been many.
Utpal:But anytime there have been issues, it's been addressed super quickly. So Odd Trail, SSO, stuff like that, we don't think about that anymore. Genuinely, we don't think about that anymore. And you don't necessarily think about these enterprise features, but they still lead revenue. And it kinda is a no brainer in that sense.
Jack:WorkOS helps your dev tools start selling to enterprises much faster, and they're trusted by dev tools like Cursor, Fowl, and Vercel. If you use their user management auth, you can get your first million monthly active users completely free. Leverage. Leverage means yielding a huge output from a given input, accomplishing an inordinate amount of quantity or quality with relatively little time and money. You generate leverage from the mixture of talents, taste, and experiences that you possess.
Jack:Leverage is good, but unique leverage is far better because that's your source of differentiation from competitors and alternatives. Often, this appears at the intersection of your peculiar above average talents and experiences, which taken together are unique. This uniqueness must then be coupled with a particular way that you are approaching this problem and solution, such that the combination of your leverage against your path is uniquely excellent. This leverage and path combination also forms the kernel of your strategy as your competitive positioning. You need something that competitors lack because your customers are going to compare you to competitors whether you like it or not.
Jack:And you have to have an answer besides, we have this one minor feature that they don't have or we're $10 cheaper. The key question that summarizes this intersection of you and path is why are you the perfect person to build this company? And I think this is interesting because I feel like a lot of the stuff that you read doesn't take into account the personal factor. And I think if you don't have if you're not genuinely different in bringing something, it falls quite hard to actually be to do something that other people can't also just do, unless you're, like, really bold. I don't know.
Jack:This is interesting. He does have some elaborations here. So it's important to be different, not better. Yes, you will be better according to some set of people. But definitionally, that means you're worse for others, another set.
Jack:The latter might even be orders of magnitude more numerous than the former. That's okay. And that's why I don't like using the word better. You should be distinctive, aligned with your calling and your strengths so that the set of people who do find your brand of different to be better will flock to you, buy from you, and even love paying you for it. Number two, the quintessential exponent of this idea is Scott Adams, writer of the Dilbert cartoon, who points out that he is a decent illustrator, but not a great one.
Jack:A decent humorist, but worse than any comedian on Netflix, and has held jobs in the tech sector unlike almost any artist or comedian. It is in the intersection of being in the top 25% in each of these three circles of competence that he is unique, not because he is top 1% or best in the world at any one thing. I I think that is interesting as well because often we think of, like, we have to be, like, unbelievably amazing at something. But we could just be, the combo. Okay.
Jack:So now number two, market fit. A working theory of why they will buy. Once you inventory the inner world, the shapes of spaces where you were meant to play, you turn your gaze externally to figure out whether your idea works out in the market. In the world of customers, competitors, trends, problems to solve, jobs to be done, and products. These things you do not control and fuss, must understand, conform to, but also exploit.
Jack:It's right there in the name. Product market fit means fitting into the market, not just building something that would be fun, interesting, edifying, curious, exciting, ego enhancing. These are all good reasons to have a side project, but none is a reason why that side project will become a profitable business even at a scale that feeds a single person. That's why most indie hacker startups and AI is cool startups fail. The genesis was fun project, not plausible business.
Jack:I had the problem myself, so I built a product to solve it. This might be the most common origin story, tacitly concluding that this must be a business because I would have been a customer. Indeed, my startups all started this way, but your understanding of the problem as it pertains to you alone is much less likely to be a real business than you think. You are, in fact, not like your customers. For a start, your customer isn't quitting their day job to create a business.
Jack:Sometimes a passion project turns into a business anyway. That's what happened to me at SmartBear, but that's luck. The point of a framework like this one is to reduce your reliance on luck. And he's got a quote from Paul Graham. The way to get startup ideas is not to think of startup ideas, it's to look for problems, preferably problems you have yourself.
Jack:The very best startup ideas tend to have three things in common. There's something the founders want themselves that they themselves can build and that few others realize are worth doing. Microsoft, Apple, Yahoo, Google, and Facebook all began this way. I think this actually helps solve something that I was struggling with, which was to understand like, why not just build for yourself? Why go and talk to customers when you can just build for yourself?
Jack:But seems like the building for yourself is like, that's necessary but not sufficient to like you know, you still have to go and talk to other people because they are different. But it gets you closer and probably shows your passion and shows that you can build it uniquely you're uniquely positioned to care about it and build for it. I'd like to again get Jason's reaction. I'd I obviously wanna get Jason on the podcast. A theory of why they will buy.
Jack:You need a plausible theory of the customer, market, and business model. Plausible because many ideas fall apart under honest scrutiny. Theory because, of course, it won't be entirely correct, but it will be a working understanding of the world, which you modify as you learn. And Jason actually has a whole article on developing a specific theory of the market, customer, and your positioning. So you've got stuff like you analyze these market characteristics.
Jack:Number one, is it plausible? Do 10,000,000 people or a 100,000 companies have the problem? Self aware, do they know and care that they have the problem? I'm afraid lucrative. Do they have substantial budget to solve the problem?
Jack:Are they willing and able to buy right now? Do they want to buy from you specifically? Will they still be paying a year from now? A lot of people read that article and said they wish they'd read it before they wasted two years of their life building a failed start up. So he's saying don't be one of those people.
Jack:You might think it is infeasible to answer these questions because the research is impossible or the idea is so new that existing data and trends are irrelevant. However, as you'll see in the article, you can do it using Fermi estimation, a technique useful not only in the market analysis, but for ROI probabilities and decisions. Early strategy. So again, we're still on market fit, not the second point in the road map. But I think these first two really are the most important.
Jack:So then we've got early strategy. Even better than having a great business model is to have a great strategy. Not a 20 page document, but a one pager that conforms to the guidelines in that article explaining how we will win. It's never too early to be asking yourself how to leverage your strengths to build products that are great and differentiated despite your weaknesses. It's never too early to write down your assumptions and decisions to ensure they are at least self consistent, if not self reinforcing.
Jack:So that when contrary evidence appears, you can notice that and react methodically. To generate tangible strategic ideas for your business model or strategy explaining how we will win. Consider creating a theory of where your products will fit in the customer's need stack. Pick a few of these tactics for navigating the fact that future is unpredictable, and decide how you will generate love and utility types of willingness to pay. Okay.
Jack:So this is getting into specifics that aren't gonna make sense without reading Jason's other articles, so I'm gonna kinda gloss over that. But I think, you know, he's saying you should have a strategy, essentially. Because I I feel like it's really easy to just not worry about that and just, like, focus on just looking for the pull. And I'm thinking about it from my own perspective, and I think that a lot of the time, I've just thrown it out there and then just see how big of a pull there is. But and then you just go and you you go work on it rather than thinking strategically.
Jack:But often, the first idea is wrong. So why do I need a specific idea with a specific business model? Because walking in a random direction is not progress, and because the main way to discover the right direction is to have a clear theory of the world and notice when the world contradicts it. So you can pivot into a better theory and fast iterate into genuinely great strategy and market understanding. That's what actually happened with SmartBear and Slack and WhatsApp and Flickr as described and analyzed here.
Jack:Only by having a specific, strong, clear idea was it possible to notice what customers really wanted instead, which led each of these companies to pivot from the idea that became successful. In all those cases, the idea was very personal to the founders, the personal fit of passion for the solution and leveraging an edge to create something that resonated with early users. But it was only with a specific theory of business model and strategy, which was then negated by reality, and then an intentional pivot to achieve product market fit. So he's saying that people talk about pivots with Slack and WhatsApp and stuff, but, like, he's saying it's very intentional. And it wasn't just like, oh, they they were failing and they just tried something else.
Jack:It was a hail Mary and it worked and now they're hugely successful. Number three, customer fit. Find the ideal customers first. There's only one source of truth for what customers will buy. Customers.
Jack:Not advisers, not experts, not analysts, not Twitter polls, not research, not past data, not even competitors' behavior. By the way, everyone does that. You have to talk to customers. Just the other day, we were like, that must be a big market because there's all these competitors raising money. But then we had to stop ourselves and be like, well, no.
Jack:Like, we need to talk to customers. We can't make this kind of an assumption. Customers are fickle. You ask whether they'll pay $100 if your product does x, and they say yes. Then you build it, and they don't buy it.
Jack:So why talk to them at all? Don't you need to put the actual product in front of them and see what they actually do? Customers can tell you what their lives are like, which is how you validate your business model and strategy from the previous section. Customers can tell you what they won't buy, which has happened to me repeatedly. You can discover that the average customer doesn't know the problem exists or doesn't have a budget for it or isn't prioritizing it.
Jack:When they say yes, it's a maybe. Yes is maybe. No is no. Yes is maybe. But when they say no, it's a no.
Jack:And then you just save yourself months or years of wasted time. So if they say they're not interested, they don't have that problem, then you can take away the fact that it's not a real problem. If they say they do have that problem, then you can say, well, maybe. It's worth exploring, but we need evidence. They might say they're gonna pay, but will they actually pay when it comes to it?
Jack:You can find out where they go to find products like this so that you can advertise in the right place. You can find out what language they use to talk about the problem or solution so you can copy that language in your advertising and social media homepage and capture their attention. You can find out how their budgets work so you can price and package and position accordingly. You can find out how they're addressing the problem today so you know what you're selling against. Whether that's a competitor, an alternative, or something they're doing by hat.
Jack:You can find out what causes them to break out of their daily life and say, as Bob Mestra puts it, today is the day I'm going to buy x so that you can try to be there when that event happens or possibly even cause it. I think this is interesting. It kind of aligns with what Adam Frankel says on tab about just getting all this information from the users. It is easy to find examples of successful companies who never ask customers what they wanted. That happened to me at SmartBear.
Jack:But again, that relies on luck. Most of the time, you don't get lucky. This is not a good way to gamble the next few years of your life. But you don't want to do this work. You want to build the product because that's the fun part.
Jack:Potential customers are hard to find and they don't want to talk to you. It's going to be like that when you have a product too. So if you can't do it now, you won't be able to do it later. Building the product first won't make it easier to find or talk to customers. Building the product first will, however, ensure that you haven't actually built what people want because you never found out what people want.
Jack:This is just insanely important, I think. We don't want you want to just build the product. Potential customers are hard to find and they don't want to talk to you. But it's also gonna be the same problem when you do have a product and then you will have built a product then all at once. Okay.
Jack:So how to interview customers? So again, this is probably gonna be similar to tab stuff. Once you get someone on the phone, how do you interview them in a way that maximizes learning and leads to a specific theory that you can execute on from your unique winning advantages to pricing? The customer validation system I've developed is the iterative hypothesis customer development method. This provides you with goals that you achieve using interviews, how to create the hypothesis that will drive your business model, and how to write questions to maximize learning.
Jack:Sixteen years ago, it invalidated a startup idea that I thought was good and then validated the startup idea that came became WP Engine, now a unicorn. How to get customers to talk to you? By the way, this is so cool that it's like a guy who built Unicorn telling you how he validated the idea. The way I got interviews for WP Engine is by using LinkedIn to find people who had the title and industry I was targeting, web developers in WordPress, and asked them for an hour of their time to chat about a new startup concept for whom they are the ideal customer. Furthermore, I offered to pay any amount they wished for the hour because I value their expertise and their time.
Jack:I'm not asking for a donation. I'm genuinely interested in their expertise. Out of 50 requests, 40 agreed and only one asked to be paid. 30 eventually became customers. This might not work for you.
Jack:That was a long time ago, and he's got another article on how to different techniques for finding potential customers by going where they are, where they're already talking, and what they might be willing to talk to you about. Find your ICP. Your goal is not only to validate your fear of the market, but to discover your ICP. That is your perfect customer, your ideal customer profile. A segment almost comically over specific to be so perfect for your product that you are truly the best choice in the market, and they will be crazy not to buy.
Jack:You will then aim all of your marketing messaging at this person, website advertisement, terminology, writing style, pricing. When the ICP lands on the homepage, it should be obvious in three seconds that this is perfect for them, that you get you get them, and they will be pulled through the process until they're a customer. You are scared that targeting only the ICP limits your potential market, but this is not what happens. For every ICP, there are 10 times more people who make similar buying decisions and 100 x more p more who take more convincing but ultimately also agree. And therefore, you end up selling to a far wider market than you feared, yet earning attention and loyalty from having a clear unique message.
Jack:Your company brand and products will actually mean something. Find and talk to the customers. They're the only ones with the answers. So then we've got build and ship the SRC. Number four on the on the big road map of of points.
Jack:So again, we had number one was personal fit. Number two was market fit. Number three was customer fit, which we just covered. Now we're talking about build and ship the SLC. The simple, lovable, complete solution, aka MVP.
Jack:Interviews give you a better model of the world, but the real learning doesn't start until people are using or more often not using a product. Simple because complex things can't be built quickly and you must ship quickly so that you can learn quickly, so you can create the right products before you run out of money and willpower. Lovable because crappy products are insulting and you didn't start this company to make crappy products. The love overpowers the fact that the product is buggy and feature poor. There are many wonderful, powerful, competitively defensible forms of love.
Jack:Pick some. Complete because products are supposed to accomplish a job. Customers want to use a v one of something simple, not v 0.1 of something broken. Build something small but also lovable and complete and ship it to customers because that's when real progress begins. That's how you learn the truth.
Jack:If you're building for six months and a customer hasn't used it, you're not on the road to product market fit. Indeed, you're not making progress on the business at all. What you've done is proved what you already knew that you can build software. The learning starts only when customers are trying to use it. And then we have number five, focus more on marketing and sales less on product.
Jack:Your natural inclination is to do what you enjoy and understand. So you need to press yourself to do so much marketing and sales that it feels like too much. Ask yourself, what can you do today that will a, get more people from the target market to come to the website, or, b, convert more of those people to try the product, or, c, convert more of those to buy the product? The answer might be found in writing more code. Improving the new user experience, for example, could increase the conversion rate from try to buy.
Jack:But more often, the answer isn't inside the product. Indeed, several of these steps happen before the person has used the product at all. The code is actually your enemy. You'll advance the product anyway. I know that, and you should.
Jack:But you don't need to be told to do that. After all, it's all you ever wanted to do even at step one. That's why you need to set an intention every day to make progress on one of those questions. That's how you're going to generate growth. Number six, prioritize retention based product work.
Jack:What does it mean that one person out of billions cared enough about your problem space to notice your advertisement or social media post, then felt compelled to follow the link, then was so intrigued by the website that they joined the one out of 100 that tried the product, then liked what you saw enough to take out their wallet and pay, then started to use it, and then canceled. After all, that clear signal of desire, need, willingness to pay, and apparent fit, they decided, nope. This is not what I want. What it means is you made the right promise but didn't keep it. Marketing is where you discover the promise the customer wants you to make, and retention is where you discover whether you're fulfilling that promise.
Jack:Some people believe that low retention is fine because you can make up for it with growth. That's not true for two reasons. Number one, growth will start out good, but then will slow and halt sooner than you realize. Number two, if customers don't want to use their products, your growth is fake news. It's not product market fit if the market decides not a fit after actually using a product.
Jack:Therefore, when you do work on product features, build things that increase retention. This starts by understanding why people cancel. Gaining this understanding is difficult because once they leave, they don't want to talk to you anymore. You might coerce them by paying for interviews with Amazon gift cards or charitable donations. Some people will respond to an email.
Jack:Better is to look for signs that the customer isn't being successful, e g activity of the product, and reach out before it's too late while they're still in the middle of their struggle and therefore might be willing and able to articulate it. Remember that your goal is not to discover what unsuccessful customers have in common because successful customers often have those things in common as well. Rather, it is to find patterns in unsuccessful customers that are not shared by successful customers. Those are the attributes that lead to action. For example, if using feature x means people are successful, maybe unsuccessful customers don't know about it, so you promote its usage.
Jack:Or maybe they can't use it because it's incompatible with their workflow, so add integrations or options. Sometimes, however, it's about the customers themselves where tuning the ICP means you find more customers who are already a fit. Perhaps targeting different industries or geographies, different stages or sizes of companies, the title or attitude of the buyer, or the specific use cases they're trying to solve for. Probably as usual, you just need to talk to customers. Number seven, ruthlessly, methodically, systematically prioritize.
Jack:More than just focus, more than just a generic admonition to prioritize, use a system that ensures you're leveraging your most valuable, most limited asset, time to maximize progress. Do this by combining fairytale planning with the rocks, pebbles, sand, work prioritization system. So identify the next milestone. At all times, be crystal clear about the single most important thing to achieve. Example, finding a good business model, public launch, 20 paying customers, getting trial conversion rates from 1% to 5%, getting cancellation from 7% a month to 4% a month, getting to 10 k MRR so you can quit your day job.
Jack:You have to be executing against the next milestone every day. Write it down and look at it every morning. Everything else is a distraction to be ignored or a necessary evil that you should dispatch as quickly as possible, including delegation or accepting that it's fine if it's executed poorly or late. By the way, this is exactly what we realized. We were, like, planning sort of, like, revenue stuff, and we're like, well, actually, no.
Jack:We need to hit product market fit. That's the only thing that matters. Everything else is distraction. Identify the current obstacle to achieving the milestone. At all times, be crystal clear why it is difficult or slow or expensive to achieve that milestone.
Jack:You must face the difficult truth. Do not pick the obstacle that feels comfortable. Pick the existential crisis that is uncomfortable exactly because it is critical and scary and true. You have to be attacking or sidestepping the obstacle every day. Write it down and look at it every morning.
Jack:Split works in split work into rocks, pebbles, sand. I think probably you guys know this one, that whole like if you put this if you have like a jar and you put sand in first and then pebbles and then rocks, you can't fill that much in. But if you put the rocks in first, then the pebbles, then the sand, it all goes in. And it's like, the rocks are the really important things. And you should just do those first, prioritize those first.
Jack:Select the rocks that attack the obstacle and milestone together. It's got lots of frameworks here. So I I think you should read this article and and read the links off to it if you're interested. So he's got prioritize one rock that address the most important milestone and attacks the obstacle. You don't have time for more than one.
Jack:If you can't think of one that's good enough, don't just proceed with a mediocre plan that will occupy the next three months. Grab some friends or better yet customers and brainstorm a better one. Schedule pebbles sparingly Because you have to focus on the rocks and you have little time for anything else, use this ROI framework to prioritize just a few other activities that are valuable enough to justify spending your remaining time. And almost everything else should only be good enough. You have taste, you have craft, and part of the reason you're doing all of this is to express yourself.
Jack:But almost everything you do will not determine whether the company is successful. Repeat the last sentence until you fully internalize it. Almost everything you do will not determine whether the company is successful, which means most things should only be good enough. Let it go. Most metrics should be satisfied, not maximized.
Jack:Pick KPIs accordingly. Design matters less than you think. Having said all that, sometimes the very best aspects of a design are the little things, the obsessive things, the things that you are compelled to make just so. Whether web design or UX design are a perfect feature, which is only perfect because of the myriad corner cases that took a surprising amount of code and care to cover, but which means new customer has an amazing experience. Pick your battles.
Jack:Don't stray away from the system. You don't have the time. So now we have the final one. Number eight, manage your psychology. Throughout this step by step road map, you face demanding psychological challenges.
Jack:Facing the truth, not allowing what you wish were true to get in the way of finding out what is true about your abilities, customers' wishes, the shape of the market, why people leave, recognizing that there's always someone who is better than you at any given thing, and it becomes your job to find and hire them. Finding yourself, coming face to face with who you are and who you are not, figuring out what is actually important versus what is necessary or temporary, enjoying the journey, especially when even a successful end result is often not what you hope to be, making clear decisions, deciding what you're not good at and not trying to do it anyway. Deciding your place in the market and not trying to be all things to all people. Deciding your ICP and having the fortitude to go all in. Deciding the current milestone, the current challenge.
Jack:Deciding the current milestone, the main challenge, the one thing you have to do and sticking to it without getting distracted. Constant rejection. Your ideas won't be good enough. Your customer interviews will negate key assumptions. 99% of web site visitors won't take an action.
Jack:Long sales calls will result in nothing. Customers will buy but then leave. Employees won't join you. Investors won't invest. Fluid change.
Jack:Despite clear decisions, rejections often demand a change which is difficult to accept, difficult to enact, difficult to admit when things are wrong, and difficult to decide whether some rejection should be ignored as an anomaly or whether it is indicative of a learning that must result in a change. Difficult to tell the difference between chaos that results in PMF and the one that results in failure. Acting while uncertain, being all in even while knowing you must be wrong about some things, even while getting rejected and making changes, even while doing things you've never done while experts tell you what to do differently, even while feeling like an impostor who has no right to be here, even while knowing you have no idea what you're doing, while it appears everyone else knows exactly what they're doing. By the way, don't worry. They really don't, Jason says.
Jack:This might be the hardest thing you've ever done. It's a gauntlet of pain, even if it's also the most exciting thing you're doing in your professional life. Many people stop because it's so hard. You can't blame them. But you're not going to do this, are you?
Jack:You have a fun feature idea, so you're just building it. You always wanted to learn Rust, so you're just learning it. AI is astounding and it's the future, so you're building things with it. Even though it's a technology and not a customer's problem that needs solving. You started your own company in part because you don't want to be shackled by processes and frameworks, so you're just doing whatever you want.
Jack:Visual Studio is comfortable and Google Ad Manager is foreign and like Las Vegas. It's designed to separate you from your money to say nothing of the discomfort of asking for the sale or getting someone on a call to talk about their workflows or get an earful about how your precious software actually sucks. Uncomfortable, scary, and you've lost, unskilled at those things, not making progress, not even wanting to. So you flip back to Visual Studio where you know what to do and enjoy doing it and you're good at it. Then you post on Twitter about how you have $1,600 in MRR after eighteen months, but it's okay because perseverance is a virtue.
Jack:When in fact, you've fallen into the well known trap of doing what you're good at, what you love, but not what the business needs doing. Perseverance is a virtue if you're doing the right work with the right goals. It's a vice if it means you're moving diligently in the wrong direction. SmartBear, so Jason's company, the API testing well known swagger, it's a billion dollar company. SmartBear only halfway followed the road map.
Jack:But who am I to talk? The company I founded in 2002 sold in 2007, and that gave me the online handle that persists to this day on the site. SmartBear's first product, CodeHistorian, was a personal project built because I wanted to learn dot net, built because I thought there was value in the historical record encoded inversion control. I didn't talk to customers ahead of time. I did talk to them a lot after they started paying.
Jack:And I learned that many didn't really want CodeHistorian at all, but rather they were abusing it to accomplish something else. As a result, I created CodeReviewer, which sort of hit the need in question. But the architecture was all wrong and the features were all hacks. But all this customer feedback gave me the confidence to rewrite everything from scratch, resulting in a product called CodeCollaborator, which made millions of dollars. Would I have found the idea for CodeCollaborator by interviewing customers using the iterative hypothesis method?
Jack:No. Because I wouldn't have known what to ask them, and they wouldn't have known to tell me. I would have discovered that CodeHistorian wasn't a good business idea, and that's it. Maybe I would have had a completely different and better idea. Maybe.
Jack:But the fact is the actual path to success was to create something I liked, just interesting enough to attract initial customers even though it's not a great business, and then pivot to code reviewer, and then pivot to code collaborator. The interviews would have stopped everything cold. Does that make interviewing the wrong road to product market fit? I do think building and getting product into customers' hands is far more valuable than conversations. SmartBear was an example of one, having a specific idea matching my passions, which then because of number four, he built and shipped it fast, building and shipping.
Jack:And five, marketing and selling. And six, building for retention by talking to customers led to the right idea. So it was part of the path but not the full path. So while the path to success didn't honor every step in the road map, it still would have failed if I'd violated those other steps. Coding in isolation, coding instead of selling, coding instead of honestly figuring out what customers really wanted.
Jack:WP Engine did follow the road map and became a unicorn. With WP Engine, I traveled this road map exactly. WP Engine wasn't the initial idea. The first idea was for a marketing analytics tool with features that Google Analytics lacked. A real time event dashboard, a clever goal setting and measuring system that works retroactively, and the ability to capture web form data even when it was only partially filled in and never submitted, all with just one line of JavaScript.
Jack:But I ran that iterative hypothesis method, and after 20 interviews, I learned that the idea wasn't strong enough. I was on the road. I had a specific idea that was clearly a great market and vetted it with customers. Thanks to customer fit finding, I did not waste years on the project. I then had the idea of a managed WordPress platform because I needed it myself.
Jack:My blog would crash when I got to the top of Hacker News, a link sharing site. I asked other bloggers what they used to keep WordPress fast and scalable. Many said, I don't know. But if you find it, tell me because I need that too. I ran the iterative hypothesis method again.
Jack:And this time, it was very clear that the need was what people would pay and how to find them. And the market was already huge. WordPress powered 11% of the largest 10,000,000 websites, yet it was growing fast. In 2023, it's 43%. I knew WordPress because I was a user, and for nearly twenty years, I've loved code optimization problems.
Jack:So this was a problem I understood and ideal to solve, where customers agree the problem exists, are already spending money on it, and the market is large and growing. That's steps one, two, and three. But this time, the concept was validated. I built just enough software to fulfill the promises of speed and scale, building the first version in thirty hours, good enough to not only stay alive and fast on a hacker news day, but with almost no load to the server, which meant I was still far away from a capacity limit. The first version didn't even have a customer dashboard.
Jack:I took credit cards with the default web form supplied by the online credit card service, and the rest was just WordPress. The first version of the website was spare, shall we say. He's got a picture of it. It's very basic. The second version of the website was so bad, there were database errors shooting out the bottom.
Jack:Database errors on the homepage of the company that you're supposed to trust with your precious website. So that's step four, the SLC product that fulfills the job completely with the absolute minimum of product. We reached 1,000,000 ARR after eighteen months. The reason besides having the right product with the right promise of the in the right market is focus on marketing and sales. I did marketing and sales before even having a product login screen.
Jack:I was able to launch with 30 paying customers. Sure. I worked on the product and worked support tickets, but what I focused on was how to get customers. When you do marketing and sales with a product that people actually need in a large and growing market, then you might have a very nice growth curve. We've always spent a lot of time on retention.
Jack:Sometimes years would pass where we wouldn't add a new feature because all of our engineering time was spent on the challenges of scale and continuing to improve on the price of speed and uptime. As a result, we've had best in industry customer retention for fifteen years. Higher attention due to happy customers folds back into growth through word-of-mouth, referrals, and a thousand top of class reviews. All that combined with the hard work, the craftsmanship, the large and growing market. Did I mention the large and growing market?
Jack:And, yes, also, the luck meant that in only 2012, we hit product market fit as further detailed here. This road map worked for WP Engine, and it worked for others. Consider this thread from Simon Heuberge explaining why this his second bootstrap company succeeded Feedhive where his first failed. The road map echoes within it, playing in a large growing market, finding and focusing on an ICP, building only an SLC to start, and treating marketing and sales as more important than features and innovation. So what Simon says, my first start up never made any money.
Jack:My second start up passed 10 k MRR in year one and is doing 1,000,000 ARR today three years later. What did I do differently? I talked to users and listened instead of telling myself that I knew better. I built in a very well established market and verified demand instead of trying to innovate. I consistently marketed my products slow but sustainably instead of trying to blow up using the latest growth hacks.
Jack:I kept my products slim but effective instead of trying to solve everything for everyone. No one likes a feature creature. I put UI UX on a pedestal and had a huge focus on how we solve a problem instead of just solving it somehow. I focused on users who truly appreciated the unique ways we're solving problems instead differently instead of trying to target everyone. Do you have to walk this road like Simon discovered with Feedhive and I discovered at WP Engine?
Jack:Or can you stumble onto it halfway through like SmartBear? Or can you take a completely different route and just emerge at the finish line? Or can you just cherry pick the things you like from this framework and ignore the rest? Yes to all the above. Everything is possible, but not all roads are equally likely to result in a success.
Jack:We enjoy stories about outliers because exceptions are interesting. But exceptions are not repeatable, and therefore, they may not be teaching you anything useful. I believe the road map above is repeatable. Not a guarantee of success, but a process that makes sense. It's your life.
Jack:You can take any road you please. What are you going to do? I thought this is just an absolutely brilliant article, and I hope you did too. You should go and check out Jason's blog, asmartbear.com. And this article in particular is called the road map to product market fit, Knaeby.
Jack:And you can also check the link in the description of the podcast. Thanks for listening. And if you enjoyed this, I would really appreciate it if you could tell your friends about scanning DevTools or maybe give us a rating. Yeah. I don't really ask for this very often, but it it would really help.
Jack:Thank you.