hide

Read Next

Optimizing Product/Market Fit: First Be Proactive. Then Be Reactive.

I just read this post about how the startup Level Up has raised $41MM but may now be running out of cash, and according to the article is down to half its previous employee count.  It got me thinking about a big mistake I see startups make, which is over-extending before finding true product/market fit.

I was well aware of this danger at Socialize, and we still made that mistake.  At one point in early 2012, we were up to 16 employees.  When we sold to ShareThis, we were down to six.  It's not that six employees was too few -- it was exactly the right number and type of employees for the stage of our company -- it's that sixteen was way too many.  We didn't absolutely need that many people to build and sell our product, even though we felt at the time that we did.  The six employees that ended up forming the core of our company in the year before we sold it were all very key employees and are incredibly productive, and that's what we needed to find product/market fit.  

So if a CEO is acutely aware of the issue and still falls into the trap, I can't imagine what the siren call of rapid expansion does to CEOs who aren't watching out for it.  But it is possible to get around it:  On the opposite side of the spectrum you see companies like instagram that sold for $1 billion with just a dozen employees.

So I've come up with a mental framework to optimize the outcome of a new startup dealing with this issue.

Daniel's Framework For Optimizing Product/Market Fit:

Rewriting a Job Posting

On SEBASTIAN MARSHALL

Zachary Burt dropped me a line a few days ago and asked if I'd look at his posting for a cofounder. I said sure, and we worked on it a little bit.

This is normally the kind of thing I'd keep to private correspondence, but Zack told me to put to put it up if I'd like to. Maybe it's useful to learn from -

Here's the original, unedited version -

Headline: Badass technical business-savvy dude looking for fellow programmer and business partner to hack with all day.

Hola,

Rendering New Theme...