After launching over 30 SaaS companies, we know a crucial component of a startup’s success is achieving product-market fit (PMF). But how do companies find it? In the fall of 2022, startup veteran and repeat founder R.J. Talyor joined High Alpha to answer that exact question.
To find answers, R.J. and his team went directly to the source. They asked CEOs across the High Alpha Portfolio, and beyond, whether they believe their company has PMF and, if so, what KPI(s) they use to make that determination. The team found that only 56% of startup CEOs across all stages believe they have product-market fit, and only 33% of startups in their first year of existence think they have PMF. Most companies five years or older believe the most important metric in determining product-market fit is churn/renewal/NRR. On the other hand, most startups that are less than a year old think repeatable sales are the most important metric.
Based on these results, it became clear to R.J. that he would not be able to provide one benchmark–that could apply to all startups–that proves a company has achieved PMF. However, his mission did not stop there. Introducing: Project Horizon.
As R.J. and his team continued their product-market fit research, they were determined to identify patterns of common mistakes that, if avoided, could increase the chances of companies achieving PMF. Project Horizon is a breakdown of their key learnings thus far, but it is not the end.
High Alpha is still in the early days of PMF research. The Product-Market Fit team will continue to collect data and share insights with startup CEOs to help them on the right track toward PMF.
As we continue this effort, we’d love to keep you in the loop. If you’re a CEO or product leader at a SaaS company, stay up to date on the latest with High Alpha, our portfolio companies, and the future of PMF.