SaaStr Podcast #343 with Point Nine Capital Managing Partner Christoph Janz


This post is by Amelia Ibarra from SaaStr

Ep. 343: On today’s episode, Christoph shares his five tips for fundraising during a pandemic.  Christoph has invested in more than 20 SaaS startups and lives and breathes SaaS, everything from “A as in AI-enhanced B2B software” to “Z as in Zendesk”. Christoph co-founded Point Nine Capital in 2011. Before that, he co-founded two Internet startups (DealPilot.com in 1997 and Pageflakes in 2005). In 2008 he became an angel investor and discovered Zendesk, Clio, FreeAgent – and his love for SaaS.

 

This podcast is sponsored by Guru.

 

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Jason Lemkin
SaaStr
Christoph Janz

SaaStr’s Founder’s Favorites Series features one of SaaStr’s best of the best sessions that you might have missed.

This podcast is an excerpt from Christoph’s session at SaaStr Summit: The New New in Venture. You can see the full video here.

Below, we’ve shared the transcript of the episode.

Announcer: This is SaaStr’s Founder’s Favorite Series, where you can hear some of the best of the best from SaaStr speakers. This is where the cloud meets. Guru is the knowledge management solution that delivers the information you need when and where you need it. Guru lets your team capture information instantly, wherever it surfaces, Slack, Gmail, Salesforce, Microsoft Outlook and Teams, and more, without ever leaving their workflow. Visit getguru.com/SaaStr to get guru for free. Up today, Christoph Janz, managing partner at Point Nine Capital.

Christoph Janz: I’m Christoph Janz. I’m a partner at Point Nine Capital. I’ll talk about the topic of fundraising during a pandemic. And if you don’t know about Point Nine yet, just a short introduction. We’re an early stage venture capital firm focused primarily on B2B SaaS and B2B marketplaces. We’re based in Europe, but we invest, well, first of all, all over Europe and also in the U.S. and Canada and occasionally in other places. And we’ve been lucky enough to have been an early stage investor, amongst the first investors in company like Algolia, Contentful, Typeform, Loom, Zendesk and many others. You can see some of them here on the screen.

Christoph Janz: So what does it take to raise capital in SaaS? That’s a question that we’ve looked at in the past many times, actually you might have come across one of our SaaS funding napkins. There was a blog post that I wrote a couple of years ago where I try to answer that question, what it takes to raise capital in SaaS on the literal back of a napkin, and it kind of developed a life of its own. And so we produced some real, physical napkins, and we did that again in the next year and in the year thereafter. However, we have not yet created the pandemic version of that napkin. So like SaaS funding in a global pandemic is truly unprecedented, so we don’t have that napkin yet. But let’s try to approach that question.

Christoph Janz: But now let’s come to the actual topic that we wanted to focus on, which is fundraising. It’s not a great time to be fundraising. Let’s make no mistake about that. If you are not in this category of COVID-19 beneficiary, like video conferencing, telehealth, tele-education. For them, it’s easy to raise because they see such strong growth. But if you’re not in one of these categories, then it’s most likely going to be harder. And if you can increase your runway, decrease your burn, maybe do an internal round, that is certainly something to consider.

Christoph Janz: But on the other hand, nobody really knows how long this crisis will take, how long the recession will take, if it’s going to get worse before it gets better. And I think there are a lot of companies that have no choice but have to raise sometime within the next weeks or months or six to 12 months. And it’s primarily for them, where it’s primarily those companies that I had in mind when I tried to put a couple of tips together.

Christoph Janz: My first tip is that you should have a very clear COVID-19 assessment. And I think it’s something that you should address proactively as part of your pitch. There are a lot of questions that you need to answer. Have you seen, or did you expect an increase churn, both with respect to a logo churn and ARR churn? Are there changes to your conversion rates, is your lead generation impacted? What about pipeline development, sales cycles, pricing, payment terms, other changes in customer behavior or user behavior? So lots and lots of questions there, burn rates, your targets in 2020, how is your team doing? Has the work from home situation changed where you’re going to hire in the future and how you’re going to hire?

Christoph Janz: So there are a lot of questions. And now that we’re about two or three months into the crisis, people expect you to have some answers. Obviously there are still a lot of questions and it’s okay to admit that uncertainty, it’s okay to have multiple scenarios. I think nobody expects you to have all the answers and really nobody knows how the next 12 or 24 months are going to look like. But you should have done your homework by now. And you should be able to talk about the impact of the crisis on your company and what you’ve done to mitigate the negative impact, as well as to seize opportunities, if there are opportunities that have come out of this.

Christoph Janz: If COVID-19 has accelerated your growth, which it has in a couple of companies, And I mentioned some of the relevant categories here already, then that’s awesome. But not every SaaS company is in a position to benefit from this. Not everybody can, or must, be one of the companies that benefits from corona. So don’t try to make this up, just provide an honest and transparent assessment of how you are affected and what your actions are to address that.

Christoph Janz: My tip number two is that when you go out fundraising, you should start with an extra long long list, longer than usual. And there are primarily two reasons for that. Number one, or reason A, is you might have to. Many investors are cautious and busy with their portfolio, as I’m sure you’ve heard or read, or maybe found out in discussions. So the bar is just higher than it has been in normal times. And it’s also possible that firms will drop out of the process because they struggle to build conviction without meeting you in person, and that’s something I’ll try to address in some more detail in a minute. But you just have to expect that you will get more nos or more people that go silent or are just not excited for various reasons. And that is a good reason to start with a longer list and from the get go.

Christoph Janz: The good news is that you can. There is no thing, no coffee meetings, no dinners. The process is a lot more efficient which means you can start with a much bigger long list and run a process while you talk to a much larger number of investors in parallel. And I have a nice this quote here from Nimrod Priell, the founder and CEO of a company called Radical, which has very recently raised a round of financing, and Nimrod wrote a blog post in which he said, “The one advantage you have right now is that there are no face to face meetings, so there is no commute, wait at the lobby, order coffee overhead. I fit seven to eight pitches a day whilst spending seven hours with our two-year-old,” and so on. I thought this was really nice.

Christoph Janz: And we’ve also seen this in our own portfolio. Here’s a quote from a company, from a founder and of a company in our portfolio that has just closed a series A. It’s in German here, but I can give you the takeaway in English. And what he said was that the long list should be larger than normal as many investors drop out. Just because of the special circumstances currently, it took us two weeks less than planned to get to a term sheet. And without traveling, it’s much easier to talk to many investors in parallel. So he actually kind of enjoyed the process more than the normal process with a lot of meetings, travels, coffees, dinners. So there is a positive side to that as well.

Christoph Janz: Now, if you have a long, very long long list, then it’s very important that you disqualify ruthlessly. And that’s my point number three here. It’s usually either love at first sight or never love when you meet investors. Obviously there can be exceptions, but I think in most cases, either people get excited pretty quickly and then they do their work to confirm their assumptions, or they will just never get excited. I think if the initial excitement isn’t there, then you can probably spend your time on other leads. So make sure that you focus your really scarce time on the best leads.

Christoph Janz: And in that sense, it’s not that different from an enterprise sales process where you also want to create a large top of the funnel because that gives you then the opportunity to cherry pick the best leads rather than spending time with wrong leads that are unlikely to convert. And you’ll probably also, you probably don’t want to be the one who teaches an investor to do his or her first remote investment, just like you probably don’t want to be the SaaS company that teaches somebody in another company to buy software for the first time or to buy SaaS for the first time. So you’ll probably want to focus your resources on, in this case, investors where you think they, they won’t struggle with the process just because they cannot meet you in person.

Christoph Janz: And I have another very nice quote on that topic from another awesome Point Nine family founder, who a couple of weeks ago sent me a narrowed down list of what he said the prospects that he thought were still realistic to write a term sheet. And then he said, “My criteria for realistic is that they followed up with the right buyer questions a few days after sending data room and then scheduled a follow up call.” And I think this was really awesome. It’s very rare that I’ve seen kind of qualification of investors with that clarity.

Christoph Janz: I think the more natural and also understandable behavior for founders is to be optimistic, maybe overly optimistic, and to assume that everything went great because that’s also the signals that investors tend to send because they want to keep the options open. But I think it’s really smart to try to really read the interest from investors realistically, and then just not waste time with the wrong ones and focus on the right ones, or maybe even change your plans if you come to the conclusion that this round is just not happening right now.

Christoph Janz: Tip number four is that you should have a killer deck and killer due diligence materials. And this is actually something I’ve been talking about for a long time. But I think now that a larger part of the process is asynchronous, it’s even more important that all of the materials that you share are in perfect shape. So you should have a data room with all the important KPIs, and that should be ready before you have the first pitch because once you do, there won’t be time to put all of this together. And everything should be either obvious or self-explanatory, or there should be notes to minimize the backend false clarifications.

Christoph Janz: It’s also a good idea to create an FAQ or a similar document to preempt some of the due diligence questions which you will probably get from investors. And what we’ve also seen founders do, which I think is a great idea, is to provide a narrated version, like a Loom of your deck, in addition to sending over your deck. So just think about the fact that a much larger part of the process is now asynchronous, which means there are fewer opportunities for you to convince people in a meeting, to just wing it. The materials that you provide, kind of like the product, is even more important than it previously was.

Christoph Janz: And the last point I want to talk about is that you need to build trust and maybe learn to build trust remotely. It’s not a no brainer for investors to invest over the distance, they still have to adjust to that, and transparency builds trust. So consider inviting VCs that you’re in a process with to your chart module, to internal dashboards, share KPIs with them early on, be super responsive. That’s probably a no brainer. What we like a lot at Point Nine, and I’m assuming it might work with other investors as well, is to do working sessions. And that can be a remote white boarding session, but it can also be that you collaborate asynchronously over a couple of days, or maybe a week, in a document or in a presentation to figure out something like a go to market strategy or a hiring plan. And I think that actually gives both parties, both sides, a chance to get to know each other better and to kind of do a bit of a mutual try before you buy.

Christoph Janz: Then I’ve heard walk and talk meetings with this six feet apart or beers over Zoom to kind of socialize. I don’t know yet, I don’t know if that’s going to be a thing, but maybe if the lockdown continues, then maybe those are some of the things that people will do.

Christoph Janz: To conclude here, I have pasted a post from Martin Mignot, a partner at Index Ventures, which I thought was interesting. So what he asked here was, “How can you get a sense for a company’s culture without visiting their office and hanging out at the coffee machine?” And then he suggests to do a couple of things, like check their interview process, ask for their internal newsletter, ask for their employee engagement survey, join one of their team meetings as an observer. I think what this goes to show is that there is such a strong need from on the investors side to really get to know you, get to know some of your colleagues and build trust before you make this big decision to invest millions, or maybe tens of millions of dollars or euros into a company, and dedicate, commit a large, significant part of your time to it for many years. So try to put yourself also into the investor’s shoes and think about everything you can do to build trust.

Christoph Janz: If you’re currently not raising, but you’re planning to raise capital sometime within the next six to 12 months, it might be a good idea to start building some relationships now, or to warm up some existing relationships and maybe invite investors to follow you, to subscribe to your internal investor newsletter. I’m usually not a big fan of this. I think in normal times, it’s usually a waste of time to spend too much time with investors when you’re not fundraising because in normal times you can just focus on your business, and by the time you want to fundraise, you set up all the meetings and you do your pitch and you compress everything in a tight process. And I think that’s usually the best. That’s usually the advice that I like to give. But I think in the current times, this might be a bit different because the trust, developing trust, is so important and it’s different and more difficult right now. So now might be the time to invest some more of your time into building these relationships ahead of when you need them.

Christoph Janz: So just to wrap things up, again, there are five pieces of advice that I’d like to leave you with. Number one, have a clear COVID-19 assessment. Start with an extra long long list, disqualify it ruthlessly, have a killer deck and killer due diligence materials and build trust remotely.

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The Three Rules of Freemium

At the SaaStr Europa conference in Paris a couple of weeks ago I sat down with Joaquim Lecha, the CEO of our portfolio company Typeform, to talk about “Freemium at Scale”. Founded and headquartered in Barcelona, the company launched a free version of its service seven years ago. During our conversation Joaquim revealed that this free service helps drive 180,000 monthly signups, and about 3% of those signups convert into paying users who are billed anywhere from €25 to €70 per month, depending on the plan they choose. In other words, Typeform is effectively leveraging a free version of its product to drive paid subscriptions at scale.

I have a bit of a love/hate relationship with the freemium model. Done right, freemium can lead to amazing success. One of the best examples is Dropbox, which Tomasz Tunguz called the “King of Freemium”. What makes the company unique, he argues, Continue reading “The Three Rules of Freemium”

Five years later: Five ways to build a $100 million SaaS business

Back in 2014, I wrote a post titled “Five ways to build a $100 million business”. If you haven’t seen it yet, the central idea of the article was to look at how many customers you need, for a given ARPA, to get to $100 million in annual revenue and what this might mean for your sales and marketing strategy. That post went kind of viral, which led us to create a follow-up piece, an infographic, a poster (which you can order here), and a PlayPlay video.

What did I learn from that experience? First, if you want to write a killer blog post, it helps if you take a difficult question and simplify it drastically, give it a catchy headline, and add pictures of cute animals. 😉 More importantly, though, using my five little animals as a simple framework has helped me challenge (and hopefully occasionally provide

Continue reading “Five years later: Five ways to build a $100 million SaaS business”

There are over 100 SaaS unicorns. How long did it take them to get to $100 million in ARR?

A few days ago I wrote that there’s more than one path to $100 million. I argued that while it’s awesome to see that some companies are able to get from 0 to $100 million in ARR in 7-8 years or even less, trying to grow that fast may not be the best choice for most companies.

That raises the question: What are your chances of growing a little slower and still achieving massive success? Considering that most investors are pretty obsessed focused on finding companies that follow the legendary T2D3 growth path (directionally confirmed by the responses to our SaaS napkin survey earlier this year), you might expect that your chances are low.

To answer the question, I took a look at the historic revenue development of ~70 of the largest SaaS companies. A couple of notes (and some caveats) on the data sources and methodology that I’ve used:

There’s more than one path to $100 million

A couple of years ago I wrote a post titled “How fast is fast enough?”. The subtext of the question was “How fast do you have to grow if your ambition is to get to $100M in ARR and build a very large company”. It’s an important question, as your target growth rate determines your hiring plan, budget, and fundraising strategy.

In that post, I looked at how long it took publicly traded SaaS companies to get to $100M in ARR and concluded that if your goal is to reach $100M in ARR, you should try to get there within 7-9 years after launch. The thinking was that if you grow significantly slower, your chances of ever getting to $100M will go down. Meanwhile, a few SaaS companies have shown even more spectacular growth. Slack reached $100M in ARR just two and a half years after launch and Dropbox Continue reading “There’s more than one path to $100 million”

Founders: Please don’t allow anyone to screw your early backers

Understanding the mechanics of founder re-ups in financing rounds

This post will likely not make me more popular and might offend some people. But if your core beliefs on how business should be done are at stake, you can’t try to win the popularity contest.

If you know me a little you’ll probably agree that like everyone at Point Nine, I’m a pretty nice guy. We’re trying hard to make venture capital a little more human, and we really mean it when we say that we aspire to be good VCs. I’m pretty sure that almost all if not all of the more than 200 founders we’ve worked with over the last ten years would confirm this. 
I’m not saying this to brag or to say that we’re perfect (which we are not, of course). What I’m hoping is that the reputation of being a nice, founder-friendly VC,

Continue reading “Founders: Please don’t allow anyone to screw your early backers”

10 Observations from Dropbox’s S1

In last week’s post I shared some thoughts about Dropbox and why, although Dropbox is unquestionably one of the most amazing SaaS companies ever built, I am a tad less confident in the company’s long-term future than I am in other SaaS leaders such as Salesforce.com, Zendesk, or Shopify.

As mentioned in the first part of the post, I took a closer look at Dropbox’s recent IPO filing and would like to share some tidbits, along with a few observations.

#1 – Dropbox on consumerization

“Individual users are changing the way software is adopted and purchased
Software purchasing decisions have traditionally been made by an organization’s IT department, which often deploys products that employees don’t like and many refuse to adopt. As individuals increasingly choose their own tools at work, purchasing power has become more decentralized.”

As mentioned in the first part, Dropbox was one of the early

Continue reading “10 Observations from Dropbox’s S1”

Dropbox, the ultimate Mouse Hunter

I’m late to the party here, I know. Dropbox went public a bit more than a month ago and I’ve finally had a chance to take a close look at the company’s S1. I’ll be sharing a few specific observations from the S1 review, but let’s start with some more general thoughts about the company.

The mighty king of Freemium

Like Zendesk, Yammer, and a few other SaaS companies that were all founded around 2007-2008, Dropbox was one of the early champions of the “consumerization of the enterprise” movement. In contrast to Zendesk (and I think, Yammer), which eventually moved upmarket and now generates an ever-increasing percentage of revenues from larger customers, Dropbox is still getting most of its revenues from individual users and small teams. The company hasn’t disclosed how much revenue it is generating from larger companies, but according to its S1 filing, a staggering 70% of Continue reading “Dropbox, the ultimate Mouse Hunter”

Quick thoughts about Blogger and Medium. Plus: The 2018 SaaS Funding Napkin!

I usually use this blog when I write new posts. Occasionally I re-publish selected posts on our Medium channel. Lately, however, I’ve observed myself publishing on Medium first, for the simple reason that the authoring experience is much better on Medium than on Blogger, especially when you’re including a lot of pictures. 

What can we learn from this?
  1. You can lure users away from an old product by offering a much better UX. A bit better isn’t enough to get over inertia and to offset switching costs. It has to be 10x better and cheaper, like Sarah Tavel said. (When I say “10x better” I don’t mean it literally but figuratively because in most cases I don’t know how the superiority of one user experience over another can be measured quantitatively.)
  2. If the incumbent benefits from network effects, it’s much more difficult. A complete migration from Blogger Continue reading “Quick thoughts about Blogger and Medium. Plus: The 2018 SaaS Funding Napkin!”

We’re looking for an Associate

I’m very excited to announce that we’re looking for a new Associate. In all modesty, I think that for a young, smart person who’s passionate about startups and technology, an Associate role at Point Nine is one of the fastest ways to learn, build your network, and advance your career. Case in point: Rodrigo, who started as an Associate four years ago, is now a Partner at Point Nine; Fabian is running his own fund; Nicolas became a “30 under 30” and is now VP at Insight; and Mathias is now GM Germany at Uniplaces.

As I wrote last time when we were adding an Associate to our team, I’m pretty sure that it took me more than 10 years to get the expertise and network which you’ll get during three years in this job.

If you’re interested, here are all the details. If you know somebody Continue reading “We’re looking for an Associate”

How public SaaS companies report churn, and what you can learn from them

While doing some research for another post I just stumbled on this excellent overview from Pacific Crest on the churn rates of publicly listed SaaS companies. I’ve seen posts with churn benchmarks of public SaaS companies before, but this one is by far the most comprehensive collection I’ve seen and I think it’s very useful.

What’s maybe even more interesting than taking a look at the numbers themselves is to see how different companies define churn (or the inverse, retention). Since there is no official US-GAAP definition of churn or retention, different companies use different ways to measure and report these metrics. And because public companies are under the scrutiny by the SEC, any non-GAAP metric they report must be accompanied by a razor-sharp definition.

Most public SaaS companies report churn in the form of their dollar-based net retention rate, i.e. the inverse of net MRR/ARR churn (as opposed Continue reading “How public SaaS companies report churn, and what you can learn from them”

Getting feedback from your Board

After a Clio Board Meeting last week I received the following email from Jack Newton, the company’s amazing co-founder & CEO.

Hi everyone,

I’d like to experiment with requesting some 1:1 feedback on our board meetings. Please take 5 minutes and provide feedback through this Typeform:

https://xxx.typeform.com/xxx…

Cheers,

Jack

I thought this was a really great idea and worth sharing here. I removed the URL from Jack’s Typeform but rebuilt it quickly so that you can check it out:

powered by Typeform

If you’re not getting feedback from your Board members you’re missing out on something. Preparing and holding Board meetings is a big time investment, and making them really effective isn’t easy. So you should Continue reading “Getting feedback from your Board”

Unsure how much you should pay yourself? Check out this Founder Salary Calculator.

Founder salaries are not a topic I’ve had to spend a lot of time with so far. I usually just “OK” them, since the founders we are working with are all super reasonable people who carefully weigh how much they need against the interests of the company – their company. But sometimes founders ask me for a suggestion or some guidance because they are uncertain as to what is fair, and so I thought it might be useful to create a simple model.

Here it is.

The model calculates the founder salary based on three drivers: stage, family situation, and location.

Stage

Unless you’re in the fortunate position to generate revenues almost from day 1 or to raise a sizable seed round right at the start you’ll probably not be able to pay yourself any salary at all, at least in the first few months, for the simple fact that Continue reading “Unsure how much you should pay yourself? Check out this Founder Salary Calculator.”

Unsure how much you should pay yourself? Check out this Founder Salary Calculator.

Founder salaries are not a topic I’ve had to spend a lot of time with so far. I usually just “OK” them, since the founders we are working with are all super reasonable people who carefully weigh how much they need against the interests of the company – their company. But sometimes founders ask me for a suggestion or some guidance because they are uncertain as to what is fair, and so I thought it might be useful to create a simple model.

Here it is.

The model calculates the founder salary based on three drivers: stage, family situation, and location.

Stage

Unless you’re in the fortunate position to generate revenues almost from day 1 or to raise a sizable seed round right at the start you’ll probably not be able to pay yourself any salary at all, at least in the first few months, for the simple fact that Continue reading “Unsure how much you should pay yourself? Check out this Founder Salary Calculator.”

Knowing when to scale (and how to prove that you can do it)

When you’re talking to investors about a Series B, Series C or later round, one of the questions that will inevitably come up is “What are your CACs?”. It sounds like a simple question, but from the question of what costs to include and the right way to account for organic traffic to the pandora box of multi-touch attribution, there are lots of devils in the details.

What’s more, the real question is not “What are your CACs?” but “What will your CACs be if you invest $10-20 million in sales & marketing?”. It’s hard enough to calculate historic CACs for different acquisition channels with a high degree of accuracy. It’s much harder to predict future CACs at bigger scale.

And yet it shouldn’t come as a surprise that later-stage investors are so focused on this question. When you’re raising a Series B or later round, Continue reading “Knowing when to scale (and how to prove that you can do it)”

Knowing when to scale (and how to prove that you can do it)

When you’re talking to investors about a Series B, Series C or later round, one of the questions that will inevitably come up is “What are your CACs?”. It sounds like a simple question, but from the question of what costs to include and the right way to account for organic traffic to the pandora box of multi-touch attribution, there are lots of devils in the details.

What’s more, the real question is not “What are your CACs?” but “What will your CACs be if you invest $10-20 million in sales & marketing?”. It’s hard enough to calculate historic CACs for different acquisition channels with a high degree of accuracy. It’s much harder to predict future CACs at bigger scale.

And yet it shouldn’t come as a surprise that later-stage investors are so focused on this question. When you’re raising a Series B or later round, Continue reading “Knowing when to scale (and how to prove that you can do it)”

A sneak peek into Point Nine’s investment thesis

Over the last couple of weeks and months we spent some time putting our investment thesis on paper. The purpose of this exercise was to challenge and discuss our implicit assumptions and to get everyone on our team aligned on what kind of investments we seek.

One of the things that being very clear about our investment focus helps with is getting to “no” faster. If that sounds pessimistic, remember that we see thousands of potential investments every year but can only do 10-15 of them. Just like it’s crucial for sales teams to have clear qualification and disqualification criteria, it’s important for us to focus our time on “higher probability deals”. That means we’ll have to be able to quickly pass on a large number of deals that are likely not a good fit for us. Our “filter” is of course not perfect, so we’ll inevitably pass on lots Continue reading “A sneak peek into Point Nine’s investment thesis”

A sneak peek into Point Nine’s investment thesis

Over the last couple of weeks and months we spent some time putting our investment thesis on paper. The purpose of this exercise was to challenge and discuss our implicit assumptions and to get everyone on our team aligned on what kind of investments we seek.

One of the things that being very clear about our investment focus helps with is getting to “no” faster. If that sounds pessimistic, remember that we see thousands of potential investments every year but can only do 10-15 of them. Just like it’s crucial for sales teams to have clear qualification and disqualification criteria, it’s important for us to focus our time on “higher probability deals”. That means we’ll have to be able to quickly pass on a large number of deals that are likely not a good fit for us. Our “filter” is of course not perfect, so we’ll inevitably pass on lots Continue reading “A sneak peek into Point Nine’s investment thesis”

WTF is PMF? (part 2 of 2)

In the first part of this post, I looked at what some of the most knowledgeable people in the industry said about Product/Market Fit (PMF) and how they try to define and measure it. While everybody seems to agree on the broad concept of PMF there is (unsurprisingly) no consensus on how exactly it can be defined and measured, and some people set the bar much higher than others. For example, according to Brad Feld you find PMF somewhere between $100k and $1M in MRR, while others argue that you can have PMF with much lower revenues.

In this part I’d like to talk a bit about my view on PMF and how we try to detect it when we look at SaaS startups at Point Nine. Here’s my favorite definition of PMF, inspired by many of the people mentioned in the first part of the post:

WTF is PMF? (part 2 of 2)

In the first part of this post, I looked at what some of the most knowledgeable people in the industry said about Product/Market Fit (PMF) and how they try to define and measure it. While everybody seems to agree on the broad concept of PMF there is (unsurprisingly) no consensus on how exactly it can be defined and measured, and some people set the bar much higher than others. For example, according to Brad Feld you find PMF somewhere between $100k and $1M in MRR, while others argue that you can have PMF with much lower revenues.

In this part I’d like to talk a bit about my view on PMF and how we try to detect it when we look at SaaS startups at Point Nine. Here’s my favorite definition of PMF, inspired by many of the people mentioned in the first part of the post: