What's needed to build to $100M+
More than product/market fit
There is no one thing you need to build a great SaaS company, but the best I've seen it broken down is into four separate buckets by Brian Balfour:
The difference between the $100M+ companies, and those that struggle are the ones that are able to make four pieces in a puzzle fit:
There are four essential fits: Market Product Fit, Product Channel Fit, Channel Model Fit, Model Market Fit.
We're all familiar with product/market fit (that our product must match what the market wants and expects), but that isn't enough. He goes on to give examples in another article, but the basic idea is that you can't just look at your product and market in isolation.
Instead, you must also consider your Model (how and how much you charge) and your Channel (how your product gets to your users)
One thing to do today
Write a list of all four of the following "fits" and where you would rank your product in each category:
- Market <> Product fit: What is your core value prop, and how sticky are customers once they get hooked?
- Product <> Channel fit: What are your best and worst channels for your product, and how can you find more of the best, and drop the worst?
- Channel <> Model fit: Are you focused on channels that can support a SaaS with your average revenue per user, or are you trying to force a fit?
- Model <> Market fit: At your current price point, how many customers do you need to reach your revenue goals, and does that fit with your long term goals as a company?
There is a LOT to think about there and you don't need to have all the answers right now. Instead, bookmark the article series and revisit it periodically to remind yourself about the four fits.
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