Introducing the Startup Progress Barometer, How we define the progress of startups towards product/market fit...

1. Introducing the Startup ProgressBarometer
How we define the progressof startupstowardsproduct/marketfit
Ever since we introducedourNEXTProgressCanvas,we have beenthinkinghow we candefine atwhichstage a startup
ison its pathtowards product/marketfit.A fewweeksago,we readaboutSteve Blank’s InvestorReadinessIndex andit
reallyhelpedusturnourideasintoa model thatworksfor us.
If you lookat the NEXT ProgressCanvasthere are roughlyfourphases.Foundersstartwithanexplorationphase tofind
the problemtheyare solvingandthe earlycustomerstheyare solvingitfor.Afterthattheywill testsome solution
experimentsanddiscovertheirmainvalue propositions.Thisisthe momenttheyhopefullyreachproblem/solution fit
and isit time tostart validatingarevenue model.Tofindaworkingrevenue model,itisimportantthatthe keymetrics
for the startupalso have solidvalues.We usuallyadvice tostartoptimizingthe retention,since happycustomersare
more likely topay.If there isa workingrevenuemodelandthe metricsare solidas well,we speakof product/marketfit
and the startupcan start to workon theirscale phase byfindingtheirgrowthengine andthe correspondingchannels.
As youjustread,it isquite a longexplanationonthe stage of a startup.Wouldn’titbe nice if we couldput a numberof 1
to say 7 on it? That wayit isalsoeasierforus and our co-investorstodeterminewhetheritisthe righttime toinvest.
So,withoutfurtherdue,
we’dlike tointroduce our
StartupProgress
Barometer:
Startup Progress
Barometer
1. Found problem
and early
customer
2. Ended exploration
phase
3. Validated first
solution
experiment
4. Found
problem/solution
fit
5. Solid key metrics
(KPIs)
6. Validated revenue
model
7. Found product/marketfit
In our experience,itusuallytakesthreemonthstogetto step2 (endof explorationphase)andanothersix monthsto
getto step4 (problem/solutionfit).Thenthe real hardpartstarts: Findingproduct/marketfit.Itusuallytakesseveral
iterationsandupto 15 monthsto getthere,totalingtoamountof time to24 monthstill step7. In an almostideal

2. situation,because oftenittakesfarlongerthanthat.We have writtenmore aboutitin The 24 monthjourneyto
product/marketfit.