1. The document discusses the importance of product-market fit and validation for startups. It emphasizes that most startup failures are determined before development begins due to lack of proper validation. 2. Founders often make mistakes like focusing on solutions before validating problems, believing their ideas are correct without customer input, and seeing themselves as customers rather than conducting extensive interviews. 3. The presentation provides tips for validation including defining problems before solutions, conducting many in-depth customer interviews, and hiring an experienced product manager to balance enthusiasm with honest assessment of market fit.

1. Validation and Product-Market Fit
(How Product Management
Increases Your Startup’s
Odds of Survival)
Rich Mironov
Callaghan Innovation
Auckland, 28 Aug 2018

2. 1. We all resist doing market validation
2. Selling isn’t learning
3. Get (or try to be) a product manager
Agenda
www.Mironov.com

3. Goal: scalable business that
addresses real (recognized)
needs of large audience in a
novel way. Profitably.
www.Mironov.com

4. 1. I’ve discovered a new need.
2. My idea is unique/correct/valuable.
3. I’m the expert. I know the answer.
4. Solution focus (before problem validation)
5. “Talking to customers” means telling and selling
Five Fundamental Mistakes
Almost All Founders Make
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5. • Business accounting… Sumeria, 7500 BC
• Mobile computing… specs: Alan Kay, 1968. Touch
screen: GridPad, 1989. MP3: MPMan, 1998.
• Real-time multiplayer online game… Habitat, 1985
• Online grocery ordering/delivery… Webvan, 1996
• Business accounting… Sumeria, 7500 BC
• Mobile computing… specs: Alan Kay, 1968. Touch
screen: GridPad, 1989. MP3: MPMan, 1998.
• Real-time multiplayer online game… Habitat, 1985
• Online grocery ordering/delivery… Webvan, 1996
Brand New Ideas?
www.Mironov.com

6. Venture Capital (Funded Ideas)
$37B
$47B
€17B
$NZ1B
www.Mironov.com

7. • Local expert within single company or group
• Generalize from unique combination of systems,
processes, organizations, goals, roles
• “That’s how we do it at my company”
• Easy to ignore opinions/situations of others
• Imagine themselves as “the customer”
Experts Bring Deep Unconscious Bias
www.Mironov.com

8. Most of the success /
failure of a product is
determined before we
assign our first developer
or fill out our first story
card.
www.Mironov.com

9. • For a narrow audience (qualifications)
• Who say they have this problem (their words)
• And will pay for a solution (value)
• That delivers better results than
alternatives (metric)
• Within their context (processes,
systems, assumptions)
Validation: Define Problem First
www.Mironov.com

10. Customers are experts
in what they want to
achieve, not how to
achieve it.
- Alex Osterwalder

11. • Markets are complex and surprising
• Your initial theory is always (partly) wrong
• You learn from customers and prospects
• What’s the pattern? Who are the outliers?
• Rule of thumb: you need 20+ in-depth
interviews to start seeing patterns
Theory vs. Discovery
www.Mironov.com

12. • You are selling when you…
• Do most of the talking
• Anticipate objections, plan your arguments
• Understand the material
• Want to “close” in the meeting
• You are listening when you…
• Ask open-ended questions, be quiet
• Take notes
• Repeat for clarification
• Expect to be surprised, hope to hear “NO”
Are You Selling or Listening?

13. • Confirmation bias
• Troll for “yes,” explain away “no,” misremember, overgeneralize
• Availability bias
• Overweight/remember most recent instances
• Authority/bandwagon bias
• Executives say this is true
• Chooser/user bias
• CAB attendee overstates minimal user feedback
Stay humble, anticipate your own biases
Validation Biases
www.Mironov.com

14. • Get inside their heads
• 30+ minute in-person interviews
• Open-ended questions
• Record session or take good notes
• Ask about…
• How their business* works
• What they name things
• What keeps them awake at night (pain)
• Current solutions, alternatives, shortcomings, competitors
• How they justify spending (ROI)
Extended Interviews
14www.Mironov.com

15. How did 15-30 prospects…
• Describe their pain points? Urgency?
• Say they would score/measure success?
• Get purchase approval?
• Identify existing systems,
environment, processes?
Listening/Learning Enables Selling
www.Mironov.com

16. • Founders “sell” all day: investors, staff, customers
• Salespeople answer objections to get to “yes”
• Someone must be segment-focused instead of
account-focused, objective, realistic/pessimistic,
sweating details and practicalities. Internally, who
tells the absolute ugly truth?
This Is Really Hard
www.Mironov.com

17. There’s nothing more
wasteful than brilliantly
engineering a product
that doesn’t sell.
www.Mironov.com

18. At your startup, someone
“plays” Product Manager

19. Balance exec enthusiasm with honesty
• Market fit, whole product, real value
• Scalable revenue vs. individual deals
• Long-term customer relationships
Why Do We Need
Product Managers?
www.Mironov.com

20. • Need
• 3+ years experience as actual product manager,
with product manager title, on revenue products.
Experience pushing back on execs.
• Not substitutes
• SME or deep technical expert
• Eager volunteer from another role
• Scrum master/project manager
• “I did something just like that”
Choosing Your First Product Manager
www.Mironov.com

21. 1. Product-market fit is life-or-death for
your company
2. Rigorous, honest validation (now)
enables scalable selling (later)
3. Customers always propose (wrong)
solutions to their problems
4. Product management validation balances
founder enthusiasm
Takeaways
www.Mironov.com

22. Rich Mironov
Mironov Consulting
San Francisco, CA, USA
www.mironov.com
+1-650-315-7394
rich@mironov.com
@richmironov