10 Habits of the Top Startups Who Find Product Market Fit

Finding product market fit seems to be an unattainable goal when a founder is just starting out. Although most founders dream of their product having a warm and well received response from the market, most times that isn’t the case. Whether it’s the wrong solution to the right problem or a product that’s ahead of its time, there’s many reasons why a startup doesn’t reach its full potential.

Although starting a company may have a gloomy forecast, there’s a bright side. Many founders have cracked the code on making sure their startups reach product market fit. In the past two years at Albaloo we’ve helped startups grow, some more successfully than others. When we look at the 20+ companies we’ve worked with we’ve noticed a few characteristics of companies that have succeeded in reaching the next stage of growth. This blog post will outline the characteristics we’ve noticed.

The best founders wait to find customers to build with before creating a product. That way the product will actually serve a need for the customers. A lot of time these types of companies make joint ventures with their first customers or even them up as design partners. This way, they are always building a solution that applies to real world problems.

Other founders know they want to start a company and don’t know where to start. A lot of these founders start with consulting in a subject as an expert and use the insights from consulting to help build a product. They can then use their product as a tool in their consulting business until it’s a full solution that’s able to be sold on its own.

These types of founders don’t focus on building a product or scalability just yet. By starting slow and small they have time to continuously test their hypotheses in a real life setting and make sure each feature positively impacts their customers. And if it doesn’t then they can quickly pivot before it becomes a large undertaking that can sink the whole company.

2. They Have Full Control of Their Finances

The number one way startups stay in business is by not running out of money. The best founders understand this fact and carefully build up sales as they grow. Whether they got their first round of funding through family and friends, customers through consulting or another revenue source, these founders are acutely aware of how much money they need to survive. With this handle of finances they know they need to scale revenue and expenses at the same time and take calculated risks. These founders don’t give out free rides – everyone in the company contributes and keeps the startup running until it’s ready to scale.

3. Their Startups Run Efficiently

Before scaling their company to the next level, the best founders know to make sure the current operation makes sense financially and economically. There’s no point trying to grow a company that has exponential costs as it grows. The best founders know that if they take time to fix their problems in the beginning, those problems won’t grow and bog down efficiency in the future. Even though the company will naturally cut down costs as it scales, having the ability to scale an efficient operation makes growth exponentially easier.

4. They’re Honest with Their Shortcomings

The hardest part of building a startup is the company needs different skills from its founders at different times. The best founders know their strengths and weaknesses. When they fall short on a project or skill, they figure out how to be good enough at that skill until they can replace themselves out.  Whether it’s finding a coach, hiring freelancers or virtual assistants to help out, these founders can quickly assess the balance between cost and benefits, and make a decision on what will give them the best impact. These founders also take feedback from everyone and can filter out the critical from the superfluous. When their startups or businesses falter, they work to find the root cause of what happened.

5. They Replace Themselves Out at the Right Time

The role of a startup founder changes with the company. In the early stages, the founder or founding team has done every role at least once. This changes as the company grows and scales, and the founders need to know when it’s the right time to replace themselves and hire a dedicated resource. The best founders can anticipate this moment, and spend a good amount of time before recruiting the perfect candidate to take over as they solidly sales or investment. When recruiting and investment align, these founders can move fast and get the right person in place.

6. They Fit the Product to the Market

Since the best founders start small and continuously iterate, they can make thousands of small changes to their product over time based on feedback from actual customers. This way they can almost retrofit the product to the market with customer feedback. As long as the customers advising the product build can account for most use cases in the market, founders can almost guarantee success finding product market fit.

7. They Focus on What Matters

The best startup founders focus their time on what will move the business forward. They can switch modes when necessary and make sure they hold themselves and their teams accountable for hitting their goals. If a part of the business doesn’t perform, they’ll have to pivot their time to fix it before handling more strategic initiatives. When they don’t have pressing issues, they make sure they’re spending time in the right place to bring in dividends for the future.

8. They Master Sales

Not every founder starts their career as a natural sales person, but every successful founder does cultivate that skill. Since revenue is the lifeblood of any business, the businesses with the founders who can sell will be the ones that survive. Missteps will happen with wrong investments being made, paying a certain role too much or running an ad campaign that couldn’t support itself. The companies that survive are the ones where the founder can easily close more business or put relationships back on track.

9. They Pivot When Necessary

The best founders can see the writing on the wall when their product isn’t taking off as anticipated. If these founders see a trend where they have trouble having users adopt the product or selling deals, they need to quickly pivot and either find a new market or change the product to match what users envision. Sometimes they’ve mistimed the market and the users don’t have the necessary knowledge to use it as intended. Other times the competition has already taken too much of the market and it’s too difficult to find new customers.

10. They Network and Know the Industry

Good founders start by solving a problem close to their hearts. Great founders then learn the industry and find key mentors, partners and employees within that industry to go even deeper. Although the problem an entrepreneur is solving can be the guiding light for success, having a pulse on the industry and its movement will ensure the startup doesn’t miss an important trend and lose its competitive edge. In addition to moving with the industry, having contacts deeply embedded in the industry can create strategic alliances, creative partnerships and positioning that stands out. Groups of tangential founders and startups can grow together and even co-sell if they have synergistic offerings.

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