Chapter 3 Measuring Product/Market Fit By Sean Jacobsohn Sean started his career in enterprise software as a service (SaaS) in 1999 and held positions in business development, sales, and alliances before joining the venture community in 2012. Sean is now a partner at Norwest Venture Partners and has been a frequent speaker at Dreamforce and other industry events. In the Founders Forum track at Dreamforce ’14, Sean interviewed Godard Abel, CEO of Big Machines at the time, on the topic of product/market fit. In that talk, as in this chapter, Sean postulates that there are five key measures to determining your product/market fit. As you read along, be sure to score your product to see where you rank in market readiness. Most of us can probably recall a time when we haven’t been prepared for a test, interview, or meeting. What we learn from these unpleasant experiences is that being unprepared comes with consequences. The same is true for your startup. Before you launch, you must be prepared. You must be sure that you’re serving a real market need, not tackling a problem only because it’s interesting to solve. In the world of cloud startups today, there is a tremendous amount of confusion about how to define product/market fit. Many entrepreneurs think they understand it, so they forge ahead only to discover that they’ve been wrong. Time is wasted, money is wasted. I know one company that raised $10 million at a $100 million valuation and thought it had achieved a strong product/market fit. After spending all of that money on sales and marketing over the course of a year, the company discovered it had not achieved strong product/market fit and promptly went out of business. 3939