StartupTalk#41

2. What is Butter?

4. Butter is a video conferencing tool that allows facilitators to prepare, run,
and debrief their collaborative sessions in one highly interactive platform,
instead of using 8-15 different tools.

5. We want to become the go-to platform for synchronous collaborative
sessions

6. Sync
Async
Collaborative
Not collaborative
Status meetings
1-1s
Webinars
Status videos
Documentation
Document write-ups
Design collab
Dev collab
Workshops
Trainings
Coaching
Brainstorms

7. What is PMF?

8. PMF is a famed creature

9. Product/market fit is the degree to which a
product satisfies a strong market demand.
- Wikipedia

10. PMF: Are you pushing or chasing the boulder?

11. People PULL it out of you
The customers are buying the product just as
fast as you can make it -- or usage is growing
just as fast as you can add more servers.
- Marc Andreessen

12. People use it even when it’s broken
When the customers want your products so
badly that you can screw everything up and
still succeed.
- Don Valentine

13. We’ve found three main takeaways from from the Butter
journey towards PMF
1. Measure from day 1
2. Segment, Segment, Segment
3. Pricing is the ultimate test of PMF

14. 1. Measure

15. We use three key ways to measure PMF
1. Retention
2. PMF Score
3. Organic growth

16. Retention rates: People stick around

17. PMF Score: People would be very disappointed if they could
no longer use it
Survey your users and ask them ‘How would
you feel if you could no longer use the
product?’ and measure the percent who
answer ‘very disappointed.’ If that
percentage is over 40%, you have PMF.
- Sean Ellis / Rahul Vohra

18. PMF Score: People would be very disappointed if they could
no longer use it

19. Organic Growth: People tell other people about it
I think the right initial metric is ‘do any users
love our product so much they spontaneously
tell other people to use it?’
- Sam Altman

20. At Butter this has translated into three core metrics being
tracked
1. W4/W8/W20 retention rates → People that have a meeting on Butter and
come back to do it again
2. PMF Score → % of survey respondents that answer “Very disappointed”
3. Organic growth → % of users coming from

21. 2. Segment

22. You don’t have or need PMF with all users
It’s better to have 100 people that love you
than a million people that just sort of like you.
Find 100 people that love you.
- Paul Graham

23. We segment users upon signup

24. We also create behavioural user cohorts to identify
similarities

25. We also survey users t

26. This allows us to identify the users that truly love us

27. 3. Price

28. So if you have great metrics with a specific
group of users, you have PMF - right?

29. In 2021, Butter was growing fast with educators
- Great retention rates
- Great PMF scores
- Fully organic (fast) acquisition
- Very high engagement (+10
hours/week/user)

30. In September we announced pricing - and
introduced it in October

31. Education users began churning as soon as they knew we
weren’t free anymore

32. After introducing pricing, we’ve even seen activity go up for
paying users in other segments

33. Pricing is the ultimate litmus test for PMF

34. How to find PMF…

36. We’ve developed Butter a lot from Feb ‘21 to Feb ‘22

37. We’ve developed Butter a lot from Feb ‘21 to Feb ‘22

38. We’ve developed Butter a lot from Feb ‘21 to Feb ‘22

39. We’ve developed Butter a lot from Feb ‘21 to Feb ‘22

40. Nothing matters if you don’t have PMF

41. Three plus one takeaway
1. Measure from day 1
2. Segment, Segment, Segment
3. Pricing is the ultimate test of PMF
+ Ship,ship, ship

42. Product/market fit isn’t a one-time, discrete
point in time that announces itself with
trumpet fanfares.
— Ben Horowitz