How to Find Product-Market-Sales Fit - a16z Podcast  ## Metadata - Author: **a16z Podcast** - Full Title: How to Find Product-Market-Sales Fit - Category: #podcasts - URL: https://share.snipd.com/episode/52bd8580-7143-4e12-9c9d-737a1f5eebca ## Highlights - Selling After Product Market Fit Summary: A lot of engineers, even including myself, we get obsessed with the technology. I'm not so much about the user. If if the user at option is not there, it's no good. And i would argue in today's day and age, if you're going after small businesses versus large enterprises, that can be a problem. Transcript: Speaker 3 Engineers, even including myself, we get obsessed with the technology. I'm not so much about the user. At the end of the day, if the user adoption is not there, it's no good. I mean, there's no market with that. Exactly. You got the product side with the market. Exactly. I'm not a lot of engineers to be honest struggling about understanding that customer and user adoption and the engagement metrics without that good UI UX and really beat the open source Strategy or the closed source strategy doesn't matter. But user adoption is what should be driving the pre-product market fit. Speaker 1 Now the challenge is completely changed after you have your initial product market fit. They become all about sales and learning sales and scaling sales and, you know, it's almost like the companies go through their journey right here on the pre-product market fit. The challenge is different. Speaker 3 Then the after pre-product market fit, the challenge become about selling and scaling sales organizations. You're saying on one hand that you have to sell after product market fit. Speaker 4 But on the other hand, I've heard that for a lot of enterprise businesses, part of the act of selling is finding those users in the first place. It's a bit of a chicken egg thing. Speaker 2 Well, a lot of us start our careers as engineers. And a lot of our construction of a business is around the features and around what the product does. It's all technically oriented, right? Because what we often say is, okay, well, if we have these features and people will come and buy it. And I find that some of the go-to market is an afterthought once you've built something. And I would argue in today's day and age, if you're going after small businesses versus large enterprises ([Time 0:03:20](https://share.snipd.com/snip/8c5d66c2-0c9e-4d9b-a5ad-b315e812e8d6)) - Product Market Fit Summary: It's very important that you marry the go to market model in your product thinking, says Elmo Firt. The features of the product almost have to inherit parto the go to arket within the product itself,. Ind a lot of product design, i think, reflect the go to Market attributes that need to be considered. It's like havy foundert. Youno, thattttis e right market. And yo, the right product and we have the right sales or go market strategy that works. Transcript: Speaker 1 Go and broaden it. Let me go and find people in larger enterprises to talk to. Let me go and find people in startups to talk to. Let me go and find people in mid-sized companies to talk to and see where it sticks the most or where the most pain is. And what I found was, okay, the most pain is where there are these kind of medium to large companies which are building these complex distributed Java applications. So let me now focus more on that. So I started broad and then we started narrowing down a bit of the focus. And but after that, once you identify it, then you, it's very important that you marry the go-to-market model in your product thinking. Because it's, it's, it's, these days it's all very tightly coupled together. You don't have like, you know, sales is different, and marketing is different, and product is different, and all of it's all together in many ways, right? Speaker 2 So if you, if you have an open source model or you have a freemium model, or if you have a, you know, as a SaaS, is it on premise, is it hybrid of it, is it going to be land and expand and you have To engineer your product with that in mind. Right. The features of the product, you almost have to inherit part of the go-to-market within the product itself, right? And a lot of product design, I think, reflect the go-to-market attributes that need to be considered. Speaker 1 So in the abdynamics, I used to say like it's a little bit misleading to just call it product market fit, which I call it product market sales fit. Oh, I love that. You know, which is like, it's like, have you found the right, you know, that there's a right market and you have the right product and we have the right sales go-to-market strategy that Speaker 4 Works for it. ([Time 0:06:18](https://share.snipd.com/snip/87dd3a35-c165-4b1d-80a3-418c8fb758c4)) - Engineers and Product Managers - It Really Helps Summary: Elso: Even for the product managers or the founders, it always helps to do a sales kind of play. We had that strong belief is just that we have to break the barriers between engineers and customers. Elso: That's how engineers always got to understand that sales motion. Transcript: Speaker 2 You need to think about that, like, okay, I'm creating this new market, but perhaps the buying motion and what the customer is used to actually doing from a buying behavior is so complicated, Speaker 3 It's never going to happen. Yeah, even for the product managers or the founders, it always helps to do a sales kind of play, wherein how exactly you're going to sell and who's the actual buyer and who's the actual User. What are you going to say to the user, what pain points you're going to solve, and what exactly, how exactly the user is going to use your product. I think working with the salespeople who are actually on the front lines to go and sell for the engineers and the product managers, it really helps. And in fact, at your company, you made a lot of engineers to go on those calls to literally understand who exactly is buying that product, how much is he going to pay, and for that, what Exactly you need to build. So that connection for the engineers to go on those sales calls really helped them to understand that sales motion and how to incorporate into that product. That's one of the best practices I loved. So that's how engineers always got to understand that sales motion. Speaker 1 We had that strong belief is just that we have to break the barriers between engineers and customers. In the startups I worked at before AppDynamics as an engineer, people will say engineers don't know how to talk to customers, so let's keep them away from customers. Also, ([Time 0:11:36](https://share.snipd.com/snip/d86c7726-dd81-470b-8715-8ea7e2321171)) - The Product Road Map Summary: We want to hear from you, our listeners. It only takes three minutes and it will really help us improve the show. If you complete the survey, you'll be entered to win some a 16 z swag which will be giving way to a hundred listeners at random. Transcript: Speaker 3 And the product services isn't necessary. It goes ahead and now. Speaker 5 As we gear up to bring this podcast back from hiatus, we want to hear from you, our listeners, who you are, your interests and what you like about the show with our new listener survey. It only takes three minutes and it will really help us improve the show. Plus, if you complete the survey, you'll be entered to win some A16Z swag, which we'll be giving away to 100 listeners at random. So go to future.com slash survey. It's just three minutes and a chance to win some swag. That's future.com slash survey. And as always, thank you for listening. Speaker 4 That's right. I'm really glad you brought that up because I want to segue to talking about the company building side of this. So you're describing the sales motion to customers and the product market fit, product market, pre-part market sales fit and post. Now, let's spend the rest of the time connecting it back to what happens inside the company. So you're describing the product. How does this affect the product roadmap? Like when you get all this feedback from customers and you have the sales motion in place, how does this then drive back inside your company to further developing more features on the Product, making those balancing decisions for what goes into the core, to what goes into the custom, to what goes into the next iteration. Kind of tell us about those trade-offs. Speaker 1 It depends on a different stage of the company. When you're in the very, very early stage of building the V1 product, you really want to use the customer feedback to figure out what you want to build that will sell. That will get your first 10 customers, first 20 customers or so. And you have to listen to customers. That's the product market fit exercise, the customer validation exercise and all that, right? ([Time 0:20:22](https://share.snipd.com/snip/dfd7f054-2a6b-44ab-b9ed-3d4982515e27)) - Productivity and Productivity Summary: The negative side of this is company's released too many products. So it's very important to make sure you're focused on a few things that are really going to work well, and don't let it, from a leadership standpoint, get out a control. I'm hearing the broader context of the trade offs of both approaches. How do they compare? Share your thoughts in the comments below or tweet us @dailymailonline. Transcript: Speaker 2 I want to get on to the train. Yeah. One of the things that I have seen on the negative side of this is companies released too many products. So then every week, a new product manager is out there trying to promote their rally, the team around this. So it's very important to make sure you're focused on a few things that are really going to work well and don't let it from a leadership standpoint, get out of control. It's great for people to try experiments and all that, but don't let it get mainstream until you know it's going to be mainstream. Otherwise, there's 50 products on the price list and everyone's fighting for visibility and it becomes. It's distracting also because the sales force is expensive. Speaker 1 So if you take your sales force that's doing and you try to give them too many immature products to sell, you're reducing their productivity, your expense goes up. It's not good. So you do want to get to that level of maturity before you give it out to your broader sales force. Speaker 4 Right. So tell me though, as a leader of the company then, because you have these processes inside, I'm hearing the broader context of the trade-offs of both approaches, how did ([Time 0:31:51](https://share.snipd.com/snip/481b221a-2e10-4249-94e2-4a2bcd85a97d)) - Do You Know How to Define Value? Summary: "You can always discount back to make sure that you're not really leaving value on the table," he says. "To come in with the low cost, like if your value is or lower cost, or whatever, that tends to be as soft as not standing up for the value that you're actually producing" Transcript: Speaker 3 Know, it's because that's what you have to engineer your product around. Right. So you're saying the value is defined by the customers. Do you guys have any thoughts on how to define the value? Speaker 4 That sort of Lucy Gucci vague thing of you want to make sure you're selling value? Speaker 2 You know, there's a couple of things which I've used in companies that I've run as if you look at competitive products, what are they, what's the chart, you know, how much do those costs? There's an overall stack of technology. And if you're providing a certain solution, what is that stack in general? How do people, how have they budgeted for that? And then I always like this concept of charge more than you think in there and you can always discount back to make sure that you're not really leaving value on the table. I didn't say money. I said value on the table, which I think is very important. You know, the thing that is also I learned along the way is customers actually like to spend money for value. It's not a problem. We all do, right? Even as consumers, it's not a problem. And to come in with the low cost, like if your value is, you know, we're lower cost or whatever that tends to be as soft as not standing up for the value that you're actually producing. And if you have the proper go to market, you have the proper product and you have the proper positioning, ([Time 0:43:34](https://share.snipd.com/snip/ac6b7a68-8430-4051-9de4-7484b42707b7)) - Product Management - The Three Skill Sets Summary: The product management skilset also has different things to i rigt whatar, the qualities to look for. We typical look for three aspects during the initial phases, the empathy, to understand the customer, to define your product and. The second aspect is the business aspects of, ok, how is it going to work with the sales? And finally, the execution. Once you define it, product doesn't come out of thin air, right? So these are the three skill sets that i typically look for in a very strong proct manager,. Then trying to come up with creative solutions as the second part, and then scaling the oppression behind it - figuring out the right pricing, packaging Transcript: Speaker 1 The product management skill set also has different things to it, right? Speaker 3 What are the qualities to look for? We typically look for three aspects. During the initial phases, the empathy to understand the customer to define your product. And the second aspect is the business aspects of, okay, how is it going to work with the sales? So literally the product managers, they travel with the salespeople and understand how do you position that value? Okay, now how do I price it and so on and so forth. And the third most important thing is execution. Once you define it, product doesn't come out of thin air, right? You need to work with the engineers, literally attract your schedules and really execute it and deliver it to the customers, right? So these are the three aspects, the empathy and those business aspects and finally the execution. So these are the three skill sets that I typically look for in a very strong product manager. Speaker 1 They're very creative parts of product management, then trying to come up with creative solutions as the second part and then scaling the operation behind it, which is like, you know, A machine that can process the requirements on customers, some sales, figuring out the right pricing, packaging, all of that, right? So you want different skills. Seems like a bit of a unicorn to be honest to have all three. And many times it's not just one person, right? ([Time 0:49:24](https://share.snipd.com/snip/d7ef711a-eccb-4eae-83c4-b3f098c1249d))