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anti-patterns product-market fit saas sales Feb 28, 2022

The red-flags that challenge product-market fit

A note on Ukraine: my strongest value is that of freedom, and my second is that of community. Seeing the freedom and community of millions of Ukrainians get torn apart rips a hole in my heart. Not to mention the 18-year-old Russian conscripts sent to a war with their neighbours that they don’t agree with - many of whom will not return home. I can only imagine what my former colleagues at Maxymiser (our tech HQ was in Dnipro), and the families of my friends with strong Ukrainian ties are going through right now. For any of you in Ukraine right now or with loved ones affected by this, my heart goes out to you and your families and I wish you strength during these incredibly difficult times. I pray for peace and a resolution in the region as soon as possible. I’ve made a charitable donation, but I’m open to doing more. All suggestions welcome. 💙💛 🕊


Anti-Pattern, my definition:


Anti-patterns are signals that initially appear positive, but in fact, turn out to be negative signals.

Anti-patterns are telling signals to look out for. If founders justify their stage evolution by leaning heavily on anti-patterns it’s obviously a massive red flag.


Phase 1: Customer development - create value


This is the phase when founders are supposed to be speaking with the wider market to challenge and iterate their hypothesis. The intention is to determine whether their hypothesis will indeed create the value intended.


Watch out for founders who pursue a passion project, and fail to amass real evidence from the market. This can often be characterized by failing to understand the true pain point in the market, and by failing to have a grasp of existing solutions, and how their solution stacks up against them.

The “build it and they will come” mentality is a classic anti-pattern here.


Phase 2: Secure beta customers - test the value


This is the phase where founders are supposed to sell the idea of testing out the minimal viable product (MVP), with willing beta customers who agree to quantify the impact of the product on their KPIs.

This is also the first shot the founder gets at testing their CS/onboarding process.


There are a couple here, the first is signing up your friends to do the beta. It’s OK to have some friends in there but you’ll be surprised how many founders have friends make up the entirety of their beta group. The goal is to test your MVP with typical potential customers in the wild, that will offer a range of honest feedback.

The second is getting someone in sales to do this piece. Just when you’re about to get real feedback is not the time to step away from the frontline, it’s the time for the founder to lean into sales.

If you’re a technical founder and you struggle with sales, consider hiring a sales advisor to help you with this and the next few stages of go-to-market, but don’t step away from sales just yet, it’s premature.


Phase 3: Secure paying customers - realise the value


If your beta customers have proven successful, they will be able to illustrate how you have impacted their KPIs positively, and in return, you can expect some or all of them to pay for that value exchange in hard cash.


Further to phase 2, if you’ve overloaded your beta customers with friends then getting them to pay is not a reflection of real-world reality.

Something else to look out for is when founders don’t actually charge for the solution, but give it away for free, or at a heavy discount. That significantly devalues the signal and does not de-risk the startup.

And finally, the most criminal of all is that the founder fails to onboard the beta customers effectively, so the customers use the product but fail to realise the full value due to poor onboarding - talk about clutching defeat from the claws of victory!


To wrap up:


I love looking for anti-patterns because they are strong red flags and fairly straightforward to find. Normally founders are not looking to hide these anti-patterns, rather they know no better, so you can ask some simple questions to expose what makes them believe they have successfully exited phases 1, 2 and 3.

My bet is you’ll hear plenty of anti-patterns, but if you don’t.. 🥳

Thanks for reading folks.

Here’s to peace in Ukraine 💙💛 🕊