A framework for finding product-market fit | Todd Jackson (First Round Capital)

0:00 Finding product market fit is the single most important thing that your startup does in the first three years. And it's just underexplored and it's just underexplained as a topic. You've been working on a product market fit framework. We've published dozens of articles on the first round review, and we have found a very consistent set of patterns, demand, satisfaction, and efficiency. But the interesting thing Is that you don't go for all three of them from the very beginning. There's essentially four levels of product market fit. Nascent, developing, strong, extreme. Roughly 60% are never gonna get past L2. These four P is essentially what you should try to change if you're stuck. You've got the persona. The problem, the promise, and the product. Lattice kept the first one but changed the others. Vanta changed all four. This is where it starts to get fun. Today my guest is Todd Jackson. Todd is a partner at the legendary VC firm First Round Capital.

0:59 I rarely have VCs on this podcast. But as Todd shares at the top of this episode, Todd is a very special VC. Prior to moving into Venture, he has product lead for Gmail for four years. He's product manager of Facebook's newsfeed, photos and groups. Including leading a major redesign of the newsfeed. He's also director of product management at Twitter.

1:17 and VP of product and design at Dropbox. He's also a founder and sold his company to Twitter. This episode is a very different and special kind of episode. Todd and the team at FirstRound have spent the last year looking at all of their data and the journeys of the hundreds of startups that they've worked with over the years. And through that, have put together a very practical and very actionable framework to help founders find product market fit.

1:43 They're turning this framework into a three month program for founders. And in this conversation, Todd shares an exclusive peek into the program, in particular the stages of Product market fit. We talk about how to know which stage you're in. What to do if you're stuck in that stage.

1:59 And also what you can change in order to get unstuck. If you're a founder or building a new product within a company and feeling like you're not making as much progress as you'd hope, You will find tremendous value in this conversation. With that, I bring you Todd Jackson. After a short word from our sponsors. And if you enjoy this podcast, don't forget to subscribe and follow it in your favorite podcasting app or YouTube. It's the best way to avoid missing future episodes, and it helps the podcast tremendously.

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4:43 And ten X your experiment velocity. Let's get EPPO. dot com slash Lenny. Todd, thank you so much for being here, and welcome to the podcast.

4:56 Lenny, I'm excited to be here. Thank you for having me. So first of all, just to mention, you're a V C Which is very rare for this podcast. But You're very special. We see you have a deep background in product.

5:08 And I thought it might be helpful just to give a little bit of context on your product background, kinda your product bona fides. So people get a real sense of just how legit you are as a product thinker. Yeah, you got it. So I am a VC, I'm a partner at First Round Capital now. And I've been at first round for four years, but I was not a V C before first round. Uh so I started a company in twenty thirteen called Cover.

5:28 And that was actually funded by First Round eleven years ago. That's how I got to know First Round. Yeah, and before that I had worked on Gmail as the product lead kind of in the early days, you know, early two thousands. And at Facebook? And then I started cover. And we ended up selling cover to Twitter in twenty fourteen and I worked on a bunch of different products at Twitter.

5:45 Uh, and then I was the VP of product and design at Dropbox. That was twenty fifteen to twenty So I have always loved Product. And that's actually the reason now that I love being a seed stage V C,'cause I I love

5:58 investing kind of at the earliest stage. Found who are pre product market fit. And then helping them get there. And I just kinda love doing that over and over again. I feel like we could have a whole other podcast episode on why you decided to move into venture versus staying product, but we're gonna stay

6:13 We're gonna stay focused. So the reason we're here is that for over a year you've been working on a product market fit framework, essentially a framework to help founders And product teams find product market fit, which We should talk about this, but just like this is the most important thing you gotta get right as a founder in a product team is finding product market fit.

6:31 I got a peek at this framework. I love it. I love the way you've structured it, the way you're thinking about it. So we're gonna do today is walk through this framework in depth. First, I just want to spend a few minutes on setting a little context just so people understand who this is for and how to think about this. So maybe a first question is just Why do you believe

6:49 people need a framework for finding product market fit and just also if you want to touch on why is product market fit So important. Why is that something people should even be thinking about? You know, the thing about product market fit. Is that I find it's mysterious to a lot of people. And people tend to think about it purely as an art.

7:06 Rather than a science. And You know, all the advice that you find out there on the internet is like very general when it comes to product market fill. Like you you'll know it when you see it. You'll know it when you have it. Right. It's not specific.

7:18 And there's so many other startup topics. Where there is good content. on the internet, you know, like Hiring your first salesperson. Running board meetings.

7:26 Uh stuff that is specific and tactical, but there isn't that much content around product market fit that is that specific. And so I think that's actually why, you know Like Rahul from Superhuman. is kind of well known for his approach to finding product market fit.

7:41 That was published on the first round review in twenty eighteen and it was like immediately popular and interesting to people. And I think the reason is because it was specific and because it was tactical. And it brought a little bit of the science to something that people thought was just an art. And I think it's why your content is really popular too, Lenny. You know, like you you and I worked on this uh product validation article together a little while back.

8:02 And the seven part series that you did on uh B to B SaaS companies. And like the the PMF benchmarking data that you had? Like I think it was how long it took to get to a product and a customer. and to product market fit. That was super well read. And there just isn't that much good specific content about this. But like you said, it y product market fit is the

8:21 single most important thing that your startup does in the first three years. And it's just underexplored and it's just under explained as a topic. So We felt this was a very important thing to do, something worth focusing on. And I've personally talked to hundreds of founders about this topic.

8:37 We've published dozens of articles on the first round review. We call this the our paths to product market fit series, where we interview founders about the early days. And I'm just like always interested in like what what are the patterns. You know, if you talk to enough successful founders, and in this case it's gonna be enterprise founders And you ask them what did what did you do? In the first six to nine months.

8:57 of running your company. Of starting your company. What patterns emerge from that? And we have found a very consistent set of patterns and that's what we decided to base our framework around. Amazing. And I think you're such a interesting

9:09 Venn diagram of Uh Exposure to develop something like this. One, you have a deep product background. You started a company

9:18 You see tons of startups going through the journey, many succeeding, many not. So I I get why when he wanted to do this and why I think this is gonna be so valuable to a lot of people. You talked briefly about why product market fit. is so important and maybe maybe helpful just to share a little bit more, just like

9:34 Why is this something people should be so obsessed with and why is there Why did you spend so much time Developing this. I think As a founder, there are so many things you have to do.

9:44 You know, you have to pick a market, you have to find a co founder, you have to hire a team, you have to raise funding, you have to build a product, you have to sell a product. And so sometimes it kinda gets lost that like Actually the only thing that matters. in in the first couple of years is finding product market fit. And actually what we define as extreme product market fit, and I'll go into that.

10:05 Because if if you find extreme product market fit, the the momentum just carries you. And the market pulls you along and it's easy to know it to build because you're building the thing that your customers want and it's motivating. as a team. It's easy to hire people. It's eas all everything becomes easier. If you find product market fit. Is it it is the thing that propels the company. And so we work, you know, we we are a seed stage venture firm. We t we tend to work with very

10:30 Early founders. Who are pre product market fit. And the truth, kind of the hard truth about it is that most of them don't get past the first couple levels of it. Like the majority Of startups.

10:42 Do not get past what we call level one product market fit or level two product market fit. And I'll go through and define all that stuff. They get stuck at one of those first couple of levels. And if they can unlock kind of the right product and the right way to explain it to a customer. And and make a customer.

10:57 deeply satisfied and there's enough customers out there like that, it just pulls the whole thing along. Who's this framework for specifically for people that are listening? How do they know if this is for them or or not? This is for early B2B founders. And specifically founders who are doing something that is uh more sales led. Then bottom up.

11:15 I think b I think bottom up Is its own. kind of world. It's closer to consumer product development in my mind. And I I yeah I have done you know consumer products. Consumer product I think there is a little bit more.

11:27 Alchemy involved? It's about, you know having great taste and sort of finding the right thing at the right time and it just sort of it's like catching lightning in a bottle. I think the good thing about enterprise And specifically kind of sales led B2B.

11:41 Is that there is more science to it. And so it is for sales led B2B founders who are in, let's call it the first six to nine months of starting their company. And wanna set the foundation for product market fit, like right from the beginning. Awesome. Okay. So BW founders. uh sales led in the first six to nine months of their journey.

11:58 Awesome. That's right. Yes. You talked about the science. I imagine You don't wanna overpromise. This is gonna help you Fine product market fit. Step one, two, three, profit.

12:08 How do you think about just the what the benefits of this are and how people should think about the chance that they will find product market at the end of this journey following the framework. You know, we can't guarantee success here. Like fine, I just want to contextualize that finding extreme product market fit is very, very hard. And what we are trying to do is increase your odds. Right. Increase the odds, reduce the roll of luck.

12:29 give you sort of a framework and way of thinking about the things that you need to do. And I think that that can increase the odds. Like I said earlier, the majority of startups are sort of getting stuck at these first couple levels. I think you if you know what the path looks like. And you know what the levers are. uh at your disposal and you know sort of what you need to aim for

12:47 I think we can get more of these companies to kind of like level three and level four product market fit, which is where you really want to be and where you have a very valuable company. Perfect. Okay. Final question. You launched uh a whole program for founders to go through and learn all of this in depth, many week kind of program. We're gonna be covering a lot of it here. For folks that want to go a lot deeper and actually go through this program.

13:07 Talk about how they find this and how this program works. Yeah, so we launched a new program and we call it Product Market Fit Method. It is designed, like I said, to help early B to B founders increase the odds of finding product market fit. It's totally free. Uh, it's a very intensive program. You can see all the details at pmf.firstround.com and the application deadline is May seventh.

13:29 Uh the program starts on May twenty ninth. And we actually ran a beta version, like a test version of this last year, late last year. with eleven founders, I think probably some you know, Lenny, from Stripe and Platt and Airbnb and Twitter. And the feedback was really it was great. Um it made me feel very good. Um, like what you know, one of the founders was like, I you know, I feel like these fourteen weeks saved me two years of time.

13:52 in what would have been kind of wandering through the desert. And so there's kinda there's eight sessions in the full program. And the first one is the one we're gonna do today. So the first session is on What we call the levels of product market fit. The second one is on customer discovery.

14:07 And we actually refer to it as dollar driven discovery. We get very specific about Not just kinda like the normal way of doing customer conversations and customer discovery. But how do you find like that a customer is willing to pay money for this thing and a lot of money. Um, we talk about market validation, product positioning.

14:25 Uh we do a section on design partners because I think a lot of founders have questions about that. How do I find the right design partners? What's the right way to structure an agreement with them? Uh, how do I convert them to paying customers, kind of all that stuff. Uh, we talk about product iteration and pivots. And I sort of refer to this stage as like the grind. Right, the grind of kind of product iteration.

14:44 And then we spend a ton of time on founder led sales. And the reason that we do that is we we really like working with very technical founders. you know builders, people that are either engineering background, product design, data science, like people who are builders. Um so that's kind of uh

15:01 The program in a nutshell. And like I said, it you know, any any founder working on a new B2B SaaS company, welcome to apply. And then bonus points if you are technical like I said. I you have a clear kind of product idea or a hypothesis, but the you're less than, you know, six to twelve months into into building. Uh the company.

15:19 I love how incentives are so line here. You help companies find product market fit. Every round does great, everyone does great. It makes so much sense to build something like this. Uh, one thing I can't help but mention or ask about is you said it's an intensive program. How do you find founders have time?

15:33 to do something like this and also be building their company. I know it's like this helps them build, but I guess how do you just think about They have so much to do. They have time to do a program like this. The way that we think about it is that the program roughly takes about ten hours a week. For each founder.

15:47 And it's ten hours of work that you were going to be doing anyway. Right. It is literally you're talking to customers. You're improving your positioning. You're sort of doing critical thinking about your market and what you should be building. And so I j what I think the way I think about it and the way I've heard from the eleven founders that went through it is it

16:05 It just added structure to the what I was doing anyway. And it actually made me more efficient. Last question. You mentioned that it's free. Uh how does that work? How does that work for everyone? Yeah, so it's a hundred percent free. And it literally it costs you zero dollars. We give you zero dollars, we own zero percent of your company. And that that's pretty different than I think a lot of other programs out there.

16:23 And this is just something we do. Over the years, we've run first run Angel Track, which I know you were in Lenny. We've run the first round review for ten years. We make these things free, and our belief is that you have to create value. in the ecosystem. You have to put stuff out in the world that is useful. And if you can create that value, create enough value with the audience, then you'll be able to capture that value.

16:43 At some point. And so we think there's a win win here. We get an inside look at some of tomorrow's great companies and they get an inside look at first round. Got it. So companies don't have to take money from you guys to be a part of this program. That's right. Okay, let's get into it. Let's talk about this framework.

16:56 Maybe just as a broad strokes overview. How does the framework work? How do companies find product market fit? Yeah, so uh the framework starts with a very simple idea. That is Product market fit.

17:07 is not a one size fits all thing and it doesn't just happen overnight. And for B2B companies specifically, it does tend to follow a repeatable pattern. And so we start with defining the ultimate goal. The ultimate goal is to get to extreme product market fit. And we have a like a precise definition for this. Let me let me read it to you. So extreme product market fit.

17:28 is a state of widespread demand. For a product that satisfies a critical need. And crucially. Can be delivered repeatedly and efficiently. To each customer.

17:40 And so there's sort of like three key ideas in there. Demand? Satisfaction. And efficiency. And I think efficiency is worth highlighting because

17:48 That's what most people would leave out. Of their definition. Right. You talk about like oh it's a product, people like it, you know, that's good. That's product market fit. But if you look uh there's products out there like I was a big fan of We Work. Like as a as a customer of We Work, right?

18:03 And I'm a fan of Casper and these other products. Products managed to achieve Customer satisfaction and demand. But they never got the efficiency right. And so sort of the whole business just never worked, right, at scale.

18:18 And my partner Brett Burson at first round. He gives this example of the hundred dollar vending machine, and I really like this example. Which is Imagine I built a vending machine. And I stuck it like in the middle of uh San Francisco.

18:33 And you walk up to this vending machine and you you put a a dollar in. and a hundred dollar bill comes out. And that's the product. Like that would have insane sort of like demand. Like there would be a line at that bending machine. I think people would be extremely satisfied, right? Like they'd be like, this is awesome. The retention would be very good. I'm sure they would come back tomorrow.

18:52 But like the whole thing is like it's ridiculous, right? Like the the whole metaphor is ridiculous because it it's just not viable to do something like that. And yet you see a lot of startups like kind of do this, right? They're basically with their products giving away two dollars for one dollar. And it gets them pretty far, but that's not real product market fit, right? And so You know, that's one of the reasons that we think efficiency and and how you think about the economic model of what you're doing is very important.

19:18 And then then this other aspect that I like. Which is we have this concept that we call the marginal customer. And you know, like then the next incremental customer you're going to get for your company, for your product. And If you have product market fit and as you are progressing along this journey,

19:33 The marginal customers should be getting easier and easier and easier to get. Like easier to acquire them, easier to s to give them good service with a good product. And that's means your efficiency is sort of increasing along the way and your product market fit is strengthening. So you've got to have all three of those things. Right, demand satisfaction, efficiency.

19:52 But the interesting thing is that you don't go for all three of them at once from the very beginning. And so product market fit, it happens like in the sequence of levels. It happens over multiple years. And for the best enterprise companies. I like I would say they tend to reach extreme product market fit in like roughly four to six years. Right. There's some variance.

20:11 Uh, but roughly four to six years. And so we s we label these four levels. We say level one product market fit is nascent product market fit. Level two is developing. Level three is strong and level four is extreme. And that's where you want to get.

20:26 And along the way, you're sort of trading off these three dimensions, satisfaction, demand, and efficiency, because they're intertwined. Right. Like you could do a bunch of s you could spend a bunch of money on marketing. And that's gonna increase your demand, but you're decreasing your efficiency if you do that. You can invest a bunch in efficiency and like automating a whole bunch of stuff. But that actually might harm the customer experience and you're reducing satisfaction. So

20:46 Th that's one an interesting thing, I think, is you're actually making trade offs at each level. And what you should optimize for at each level is different. And so we talk about all these signs, you know, w like whether you're getting stuck at a given level, how do you get unstuck. And sort of how do you progress along this path? Amazing. And we're gonna go through each of these. And the idea as a listener, what I'm thinking is

21:05 You're probably in one of these buckets. What we're trying to do is help you out of that bucket and help you move further up. the the latter to the next level. So just to summarize it, my notes here of

21:16 There's essentially four levels of product market fit, basically like this The strength of product market fit that you have. Right. Nascent, developing, strong, extreme. Yes. Okay. And then you have three dimensions within each of these levels.

21:29 satisfaction, demand, inefficiency. I'm we're gonna talk about what all these mean and how you use these. Let's talk about level one nascent product market fit. What does that look like? What do you do when you're there if you're stuck and What are some examples of companies that felt nascent product market fit? Yeah, so okay, level one nascent. So at this point, you're probably like a pre seed or seed stage company. You've got less than ten people on your team.

21:51 And at level one Your job is to find three to five customers. That have a particular problem that is worth solving. And to deliver them a satisfying solution. And you gotta pick a problem that is both important and urgent.

22:07 To them. And the solution that you deliver promise that they care deeply about. Okay, so of the three dimensions that you just recapped, Lenny, it's it's satisfaction first.

22:19 Demand second, efficiency last when you're when you're at level one. Like it's it's actually okay to be inefficient. at this stage it if it helps you uncover something that delivers an insanely good Customer satisfaction. And so I think that one of the best examples I can think of of that

22:35 Is this company called Vanta? Love Panta. Also a happy sponsor and I'm an investor. What a great example. What a good example. So Vanta was you know, it was founded in twenty sixteen by Christina Cassiopo.

22:47 And she had come from Dropbox and we we got to work at Dropbox together, which was awesome. She was the PM of Dropbox Paper at that time. And so Vanta, you know, it's a it's a company that does compliance automation, continuous monitoring. Most startups think of like Vanta as how you get a stock too. But they didn't do that at first. Right. And I remember in twenty eighteen

23:06 Like Christina. And I went on a walk around South the South Park neighborhood in San Francisco. And she fur this was the first time I heard the idea of Anta. And she had actually in twenty sixteen, twenty seventeen, like tried a few other ideas. You know, she had this like smart speaker that would record meetings and it would send meeting summaries over Slack. B to B Alexa is what she called it, I remember. B to be Alexa. And she had this other idea, some you know, something about drop shipping, but she didn't know anything about drop shipping.

23:31 And she has just sort of been in this mode of like, you know, we're building stuff and then we're seeing if anybody wants it. And then she she realized that wasn't working and she she changed what she was doing. And she started talking to potential customers and she was very interested in the idea of security. And why s lot of startups didn't like You know, use any security products.

23:48 And she was talking to like security engineers and, you know, CISOs and and just CTOs at startups. And she would ask them, like, what is the about your job as it relates to security. And over and over and over they would say, I hate filling out the security questionnaires.

24:08 I hate doing the compliance audits. It's like so much grungy manual work. I'm in there filling out spreadsheets and taking screenshots of my AWS account and the whole thing like just kinda doesn't make sense. And she had actually felt this herself, right, when she was on Dropbox Paper and the the experience of getting a sock too. was onerous, right? And the reason that she needed to get it is cause she we wanted to sell, you know, start selling Dropbox paper into enterprise. And So she said to me.

24:34 You know, I there's this pain out there. I think I can solve it. And I think there might be a revenue unlock. And I was like, what do you mean by that? And she was like, Well, I've got these first few customers, you know, or like sort of design partner pseudo customers. Uh it's segment and front and figma. And this is this tw twenty seventeen, eighteen. So these companies were like smaller at the time, right? Not like the sort of the big companies they are now.

24:56 And she was like, Yeah, they're trying to sell into like, you know Fortune five hundred companies. One of them is actually trying to land like a Fortune 10. Right now. And they said the thing that's holding them back is they don't have compliance certification, they don't have a SOC two. And I told them.

25:10 Hey, like what if I do that for you? And they were like Oh, you you can just do that? And she was like, Yeah. And she did it and they landed the deal.

25:21 And it was like one of the clearest examples to me of a product that satisfies a promise. But this product is gonna unlock revenue for you. You're gonna be able to land this enterprise deal. And so I think they just did a phenomenal job of that. And that's the kind of thing that you have to that's what you're looking for. when you're at level one, a pr a problem that really matters to like three to five customers. that specific example, I think she delivered like a dot like a spreadsheet.

25:45 There was no product. She just manually filled out a spreadsheet and give it to them. Completely manual. Like she was the one behind the email address, you know, like sort of posing as the AI, but doing it herself. And that's I think that's uh revealing of like it's okay to be inefficient at level one. As long as you're delivering incredible satisfaction. Yeah, I think I was just gonna say that this is a ultimate example of efficiency is not important, which I love. Is what you're pointing out at the step.

26:10 Uh I know you're gonna share another example, but just to summarize What this stage feels like. from earlier when you talked about essentially of less than ten people You're trying to find three to five customers. I think that's so important. Like you're not trying to find

26:22 Tens or hundreds, you're just like three to five people in that Customer element, I imagine, is you're implying they're paying you money. Yes. They're paying you money and you're delivering a product that solves a problem for them. And the product could be potentially a spreadsheet or like super wizard of oz at this point even.

26:37 Yeah, that's okay at this level. Like I know Ramp actually had barely a product when they started selling initially. They had like Someone just updating things behind the scenes on these dashboards. And then you talked about the problem needs to be important and urgent, which connects to People pay attention to a startup that they don't trust or know anything about. Because the problem is that important and urgent.

26:55 And You also mentioned it has to satisfy a promise you're giving them we're all solve socks talk two for you and then you actually Completely. That's right. Is there anything else as uh maybe as a benchmark that tells you you're at this step of product market fit?

27:10 Yeah, so like I said, you're kinda pre seed less than ten people. Probably your demand source at this stage is mostly people you know. It's like friends and family, it's your network, maybe it's VCs. You haven't probably done a lot of like s you know, cold outreach at this point. And It's hard to find customers, right? Like you're trying to get to three to five.

27:29 It probably takes you twenty warm intros to get one, right? Something along those lines. So maybe to get to three to five, it's like at least fifty conversations. That's very normal. at this stage'cause you're just trying to find the right problem and and find customers who have it. You're probably in the like zero dollars to five hundred K AR, like somewhere in that zone. I would say that you're at level one. And then the uh we there are metrics to track efficiency, right? Things like burn multiple, gross margin. NRR, all of these th they're the all of them are just like not applicable at this stage. It's it's too early and you shouldn't be worry about that stuff.

28:00 And so You wanna be feeling this this sense of progress, right? That there are customers who need what you are building and the thing you are building Works. And so Conversely, the signs that we see a lot of founders get stuck.

28:14 And this is a very common level to get stuck, right? And so if you're sort of hanging out here for six months, nine months, twelve months And there's yellow flags. you're starting to feel stuck. And so the yellow flags are something like You know, let's say your product disappeared overnight.

28:28 your customers wouldn't be super disappointed. Let's say you have a handful of happy customers. You like let's say you've got four or four or five customers, but the most important feature is actually different for each one of them. Right. That starts to look a little bit more like a consulting business than a product business. Or it just feels incredibly hard to find kind of the marginal customer, the next new customer. Or you're just you know, your usage is low. Like the the product is in their hands, but the usage is low. It's not growing that much, it lasts for six months.

28:54 And this, I think, like there's a really good example. Uh, Jack Altman, who's the founder of Lattice. He founded Lattice in twenty fifteen. Uh we've talked to him a bunch, uh, you know, on the first round past the product market fit and other other other things. So for those who don't know, you know, Lattice is a people management platform. But it didn't start that way. And most people don't know about this. Lattice actually started as an OKR tool. Right back in twenty fifteen.

29:16 Yeah, and so Yeah, Jack had just sort of seen this at other companies. He's like, Okay, companies are doing OKRs, but they're not very good at it. And it causes a lot of arguments among the executive team and the employees like are like noncompliant. They think the whole thing's kinda dumb. So I can I can fix that, right, with with software. And so the original version of Lattice was for managing OKRs.

29:38 And he was able to to sell it and and so his his buyer was the head of HR. Right. And they said, Okay, yeah, we'll give this a shot. And he had a couple of companies using it and they would use it for like one quarter. And then the next quarter would come around and they were like, Uh, didn't go that well last time. I don't know, the employees don't seem to like it. I don't I don't know.

29:59 And then the quarter after that, they were like no, we're not buying this. We're not using this. Right. And so Jack pulled off the pivot. Right, to people management.

30:09 And the way that he did it was He actually kept the persona. Right. And so this gets in the ide into the ideas of the four P's, and and I'll talk about this a little bit more. The four Ps is our version of the four Ps. You've got the persona.

30:24 The problem, the promise, and the product. And all four of these things kind of have to line up, right? Your your product has to deliver a promise. That solves the problem of your persona. And so Jack actually kept the persona. He was like, I've gotten to know these heads of HR really well. over the last six to nine months I like

30:42 text with them, I go out to coffee with them. I'm like friends with them. And I know them really well. They did the this OKR thing just doesn't seem to be a big deal for them. But they've got other problems. That I could look at solving. And the interesting thing was that timing, it was kind of like mid twenty tens. Performance management had like started to come back in favor. There was it, it was like this pendulum. Like there was a period of time where performance management was like really important.

31:04 And then all these companies were like, We're not doing this anymore. And then the pendulum kind of swung back and around twenty fifteen, twenty sixteen was that time. And so Jack literally showed them Figma mockups like there was no product. Right, but he's like, What if I could solve performance management for you?

31:19 in a way that is much more modern and much more employee friendly and manager friendly and the whole thing's just gonna work better. And the response was like off the charts. And people wanted this thing. And I believe he sold his first five or ten customers like with Figma mock ups, right? Like before he had built anything, really. And so that I think is an interesting example, right? Of like He was sort of stuck in the zone of like people didn't love what he was doing. He kept the persona, but he changed the problem that he was solving and the promise he was delivering through the product.

31:49 And you see that this so this is like we do a whole section on pivots. And like when to pivot. And how to pivot? And I think this is actually the the best framework for this is the four Ps. Like You know, Lattice.

32:01 Changed uh kept the first one, but changed the others. Banta changed all four. Right. There are other products like Plaid. That

32:10 Actually Sort of kept elements of the product they were doing. So this I don't know if you know the story of Plaid, but um You know, Zach Parrot was building uh uh Platt started out not as as like a API for bank accounts, it started out as a consumer budgeting app. Like it was a consumer app.

32:27 And it just, you know, supposed to like help you save money and budget and stuff. And like it just wasn't that popular. And the founders are kind of frustrated. But they had built this part of the product that enable the app to like connect to your bank accounts, right? And had solved kind of like all the nitty-gritty issues with that. And then they found that like their friends wanted to license it from them. So like there was Zach had a friend at Venmo who wanted to license this.

32:50 And they got you know, they got Robin Hood at some point. They got Coinbase at some point. So like that's like another example of like they actually kept a lot of the code that they had written. They kept the product. But they completely change the other three Ps. Right. Like instead of solving for consumers who have a problem with budgeting. we are gonna solve for developers at FinTech companies who have a problem connecting to bank accounts.

33:08 And it was like a total flip of the four P's, but that that's like why I really like this framework, because I think it really helps founders think in a structured way about this. Todd, this is amazing. I'm so happy we're doing this. I think this is gonna help a lot of people. I'm gonna I wanna move on to level two, but uh first let me try to summarize some of these key elements. So these four P is essentially What you

33:27 should try to change if you're stuck. In this level or any level. And just to summarize, there's you can change who you're targeting the persona, you can change the problem you're solving. You could change the way you're Pitching it, which is the promise is how you describe it, basically positioning.

33:41 And then you could also just change your product. Uh you mentioned Banta changed all four. Some companies change just one. Any advice for how to know which of these to change? Like where what points you to change this? Versus change that.

33:53 Is there anything that you've seen? I think different founders approach this differently. And I seen a lot of founders who are build first. And then sell?

34:02 And I've seen a lot of founders who are sell first and then build. And they can both work. Right. I tend to gravitate towards the like I want to sell it before I build it. Because I really want the signal from customers.

34:16 And I want that to sort of be the guide and the oxygen that drives what I'm building. I find that very motivating. I also find it kinda like easier, honestly, rather than guessing like, oh, you know, I'm gonna write I'm gonna write You know, fifty thousand lines of code and then see if somebody wants this thing. I think it's better to sort of like talk to a bunch of customers, know that like, hey, if I had this thing, if I could build this thing, I know it would sell. Like I know these people want this thing.

34:40 So I tend to approach it from from that point of view and therefore I focus on the persona and the problem and the promise. Right, what is the promise that is really gonna Click. For that for that buyer, for that persona. And then it's the product the product's job is to satisfy those first three Ps, really.

34:55 And obviously those are much easier to change and play with versus rebuilding your product. So if nothing else you should probably start there. I actually have a post with a bunch of awesome examples of Changing the positioning, changing the persona. Uh and so we'll link to that in the show notes if people want more examples. Okay, finally, let me try to summarize kind of the stage. So

35:12 I think it's important to note at this nascent stage, you're not like It's not roaring product market fit. It's as you described very nascent. You're like getting customers, but it's hard. You're you said it's like twenty Introductions to one sale.

35:23 But you're like getting them. I know Retool has a great quote. David has this quote about like every customer he got. Early on he thought it was the last customer he's ever gonna get. No more people want this thing and it's always a struggle. So I think that's very normal is what you're describing. The beginnings are rarely

35:38 Off and to the right. And it's okay if this takes a while. You said that if it's something like If you spend like twelve months at this Stage you're probably

35:47 Stuck in the stage. and signs that you're stuck in this nascent stage versus this is actually normal. signs you mentioned are If you'd ask people if this went away. Um

35:57 They wouldn't be disappointed. They'd be like, Nah, all right, it's cool. You have many customers, but they're using different features of the product. So to you the way you described it, essentially they're just you're like professional services for them. You're not actually building a product. You consult a lot of people. And then they're actually not using it often. Like they're buying they're paying for it.

36:13 Like the Latest example. But they're not necessarily using it and they're gonna turn pretty quickly. That's right. Anything else you wanted to touch on there before we get to level two?

36:22 The last thing that that I'd add at level one is um There's this founder uh from a company called Persona. His name is Rick Song. He's like super awesome. you know, persona's a first round company. Uh they do identity fe identity verification. And Rick's analogy, I just love it for level one, is you don't want to get friend zoned.

36:41 By your customers. Like Like where your customers like you but they don't love you and they don't need you. Right. And he was super paranoid about this in the early days of Persona.

36:52 And his technique for doing this, which I really like, is super simple. was he would just he was very close with like his first five or ten customers. And he would go to them and sit them down one on one and say I need your help. Like it it is very important.

37:07 To me that this company succeeds and does not fail. So I don't want you to be nice to me. I want you to tell me. Is persona like a necessity for your company. If we went away

37:19 you know, how painful would that be if a competitor came along that charged half as much as us. Would you switch to them? And he's really trying to like get to the essence of like Is persona critical for you or am I in the friend zone? And I just think that's like a really great way of thinking about this.

37:34 I love that story. It's like uh it's like in a relationship, it's like the talk. Are we? Are we a thing? I love that. That's so good. Like the sooner you know the truth, the better. And it's hard to hear bad news, but I love that just advice and just Sit them down one on one.

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38:36 And they do pop-ups too, but their nudges are based on in-product behaviors, like confusion or intent classification, which makes them much less annoying and much more impactful. This works for web apps, mobile apps, and websites. And they work with industry leading companies like Gusto, FreshWorks, HashiCorp, and LaunchDarkly. Over 15 million end users have interacted with Command Bar. To try out Command Bar, you can sign up at commandbar.com slash Lenny, and you can unlock an extra 1000 AI responses per month for any plan. That's commandbar.com slash Lenny. Let's talk about level two. So what is level two?

39:15 look like and what should founders be focusing on when they're in level two? Yeah, so level two is developing product market fit. And your job at level two is now you've got to go from five satisfied customers to twenty five. Satisfy customers. And so now you've got to start thinking about demand.

39:33 In addition to satisfaction. Because it it is very hard to just grind your way all the way to twenty five customers with sheer willpower. But you can do that to like five, maybe ten. And we see some founders who just have phenomenal willpower and grit. And grind their way to five or ten customers. To get to twenty five and to get beyond twenty five, like the product has to be doing a lot of the heavy lifting for you. And so that is kind of the essence of this level. So

39:59 You know, if you're at this level, you probably okay, now you're like a Cedar Series A style company. Uh, maybe you've got up to twenty people at the company. And you're starting to work on this demand source. Where you have the early signs of a scalable channel and it's not just warm intro's like from your VCs or from your friends. You are

40:17 you're maybe investing in cold outreach and getting that to sort of Tuned and and humming. You might be investing in content. You might be doing community events, but the whole idea is you're trying to scale sort of the demand source. It's still not easy.

40:31 Like You know, like a benchmark we would say is that your sales conversion without a warm intro is still probably like 10%. Something like that. Like first call to close one is like around ten percent. If you get higher than that, that's great. But that's sort of benchmark for this level. You're in kind of the like anywhere from like the five hundred K to five million ARR zone. That's sort of like a hallmark of level two.

40:51 And you're actually starting to think about like efficiency metrics and sales metrics. Like you might start starting to be thinking about magic number. which is uh new AR that you take in in a period divided by the CAC you spend in that period. So Yeah, something in like the point five to point seven five range. You want to get higher. Eventually.

41:07 But like that's like pretty reasonable for this level. You're just starting to think about retention. Like you've been around for a year. So you you've got renewals, right? And you want those renewals renewing. Maybe something like ten percent, twenty percent regretted churn is okay. You don't want to be higher than that. And you want your NR to be at least a hundred percent. And then things like gross margin and burn multiple, they're still kind of like not the focus. Those are like the classic efficiency metrics. They're not the focus right now.

41:30 We would say you want your gross market to be like not worse than fifty percent. And you'd want your burn multiple to be not worse than five X. Your burn multiple, by the way. is just um, you know, how much you how much you burn in a current period. uh versus how much new ARR comes in. So You know, if you burn five million dollars and you take in one and you got a burn multiple of five. And you don't want to be worse than that at this stage.

41:51 Amazing. I n there's a lot of these benchmarks which I love. I imagine not everyone's gonna hit each of them exactly. I guess how these are just like rough guidelines of like you're probably in the stage if you're in this This level, right? Yeah, exactly. There's kind of some wide, you know, bars around these metrics. It's it's just representative of generally the stage of five to twenty five customers. I love it. And

42:11 It's so interesting that People think of product market fit, as you said, as this binary, like I have it or I don't. And the way you're talking about this is In this level to developing product market fit. Like a company is

42:23 Twenty five satisfied customers. They're over five million in AR a lot of cases. They're not going to be able to do it. Between five hundred and five million. Five hundred ten, five million. Yeah. Five hundred K and five million. Yeah. They have twenty employees. They're like like in theory, you would think this is like a roaring success. They're killing it. They have all these customers growing. But it's still just like level two of product market fit. So I think this is a really interesting insight that like

42:45 And it reminds me of when I did a bunch of research on product market fits, so many founders are like I never felt a product market fit. It was like never I didn't have it. It was always like, I don't know, maybe when we get to a hundred million our error I'll really feel like We got this.

42:59 So I think this is a really good reminder that A lot of times you're not actually gonna feel so confident this will last. And you're gonna get to like lasting durable product market fit. So I think that's a really great insight here. Yeah, and the thing that's uh you know, really I think the hallmark of level two.

43:15 Is you've got a product that like a handful of people like, right? It's it's it it's satisfying a critical need for them. Now you've got to open the demand floodgates, right? So that we can get to twenty five customers and beyond. And different companies do this in very different ways, right? And it's much easier said than done. Looker is an example. So Looker is a is a first round company, um

43:35 Found Two thousand twelve by Lloyd Tab. You know, they do business uh intelligence. And Looker actually. Looker is interesting because they spent actually kind of a long time at level one.

43:47 But then like flew through level two. And the reason is because They Lloyd, the founder The first five customers of Looker He was basically going in and doing consulting for them.

43:59 And the reason is because of the nature of the product. Like Looker, people don't get Looker until they see their own data in it. Right. And their data is modeled and they see the dashboards and they're like, Oh my God, like wow, I didn't realize these insights, right? So Lloyd kinda understood like this is looker is not a product you could sell with Figma mock ups. Right.

44:16 And so what happened was Lloyd would go into these customers. He spent twenty, thirty, forty hours, right, like before they were even a customer. modeling their data. Teaching them how to use it. showing in more people within the organization, like the power of the data and the dashboards.

44:32 And Later they they called this their forward deploy process, right? Like this is how they figured out sales. And so it actually took them Kind of a long time in level one, to get this right. But then they were able to do this repeatably.

44:46 And so they went from five to twenty five, like fairly quickly. And it's like a lot of amazing like seventy five percent close rate. Because they were only selling customers who are already using it. There was like zero churn. And Lloyd explains like once he got to twenty customers, he's like, I know, I know I'm on to something. And and I've I I think I've figured out a model. And the model stayed the same until they ended up selling to Google.

45:07 And so they did these other things too. They started focusing on demand channels. They got a couple of SDRs who are prospecting. I think they did some partner marketing with AWS Redshift. They did these like look and tell customer events in San Francisco where they got Looker customers together to talk about sort of like how what they were doing in Looker and how they built the product. But really it was like the the ground the groundwork was set at level one and then they sort of like moved really quickly through level two. So kind of again the the

45:34 way to think about this phase is this when you're starting to scale a way to drive demand. You're not just grinding sales gold outreach. There's a way you're starting to bring in customers that are more efficient. And In Looker's case, they kinda just started coming because I imagine there's word of mouth. Yes. And people started to talk about it. Yeah.

45:51 Let me do another example. Okay, a really different example. Uh is a company called Ironclad. Ironclad, you know, it's a it's a um it's illegal. It's a legal tech company. They found it in twenty fifteen.

46:03 Uh, Jason Baymick is the founder. AI powered contract management software. So this was interesting'cause Jason started out Uh He started out calling this an AI legal assistant.

46:15 And this is like in like in tw twenty twenty four, people are like, Oh, AI legal assistant. Yeah, that's awesome. But in two thousand fourteen, like people were like what? And he found it really hard to sell. Like no one was looking for an AI legal assistant. And so he told us the story, you know, there was an email address on the Ironclad homepage, hello at ironcloud dot com. This is in twenty fifteen. And like he doesn't get very much email, but like Jason's checking the the email.

46:38 And one day he gets this like one line email and he almost archives it because he doesn't know who it's from, and it's one line. But he sees that it's from like a person at a publicly traded company and so he's like oh maybe there's something here. And the one line email is just Are you a CLM? And he was like, What is a CLM? And he's like he like Googles for it. A CLM is a contract life cycle management platform.

47:02 And he's reading up about CLMs. And he's like, Oh, you know, we we do that and we do yeah, we yeah. And so he replies to the email, Yes, we are a CLM. Um The customer gets him on the phone.

47:14 And the customer says, Oh, you know, I'm in the market for a CLM. I'm looking at like ten or twelve different vendors. But you guys look pretty cool'cause there's, you know, some automation, some AI stuff going on. Like, you know, can I check this out? And Jason's like of course. So he He and his co founder take the train. From San Francisco down to San Jose.

47:33 And on the train. Jason is is telling Steven Kai, hey I like I need you to code this up right now to make it look like what he what this customer is expecting. And they get to the meeting and they do the demo and the customer has like no idea that they just made this demo on the train and like they're a very small company. And they win the contract against these like ten or twelve other

47:54 established bases because iron clouds it's more modern, it's automated, it's got this AI stuff, like it's just a better product, right? Uh or the demo looks like it's gonna be a better product. And so Jason reflects on this and he's like Yeah, the thing for us is like we had been trying to create this new category of AI legal assistant and it was just like a slog. Right.

48:12 And instead it when we changed our positioning to play in an existing category Of CLM, but a much better CLM. But customers are already looking for a C L M, they're already looking to spend money on a CLM. And just expand the definition of what that category is. Things just started to click. And that's how they got sort of through that zone of like 10, 20, 30 customers. And even if you look at the Ironclad website today, it says,

48:34 AI powered contract management software, right? Like that really is the key idea still. Awesome. So this is an awesome example of Positioning slash Promise is the is the lever they pulled here. Uh

48:45 I love the point about category design. That's one of the ongoing Debates on this podcast whether you should hot topic. Sounds like your uh in the vote of probably better not to create your own category. I think it's hard to create a category. Like it it certainly works in some cases, but if you actually have like a really interesting spin on an existing category.

49:04 Like there's people are there's already buyers spending money on that thing. They're already looking for something to buy, right? Which is uh you know, so if you can do it, I I do actually think that way's easier. Before we get to level three. What are signs that you're maybe stuck at level two and what should one do about that? Yeah, so the the whole idea of level two is this thing that the marginal customer is getting easier. Right. And so you've got to be focusing on demand and the repeatability of demand.

49:31 While you maintain satisfaction. So The yellow flags are like things that are the opposite of that, right? Like Your current customers are like pretty happy, but you're just having trouble opening the floodgates. Like as you're getting to the top end of level two. You should start to hear some startups kind of know who you are.

49:48 You know, like Oh, you need a sock two? You're a startup, like oh Vanta, right? Like oh, you know, you need AI powered contract management software. Oh, Ironclad, right? You sort of start to get known for a thing. And so if you're having trouble opening those floodgates and and you you're sitting there for I don't know, twelve months, eighteen months, that's kind of a problem. Or you have things like your regretted churn is greater than twenty percent. I see that as a you know, that's a satisfaction warning sign.

50:12 And you again you have to maintain the satisfaction as you work on these other things. It's like Every level just gets like more things you have to do. Or you you know you could be finding that the sales cycle's taking too long, you're losing deals late in the funnel, you're losing to competitors. You're just not feeling kind of the urgency from customers. Or you're struggling to hit the price point that you want.

50:33 And the way that customers will say this to you, because customers are nice, right? They'll say Oh, we don't have the budget. Or like, Oh, it's just it's just not the right time for us. Like we'll we'd love to talk again. You know, next next year. That those that means no.

50:47 Right, when you're hearing that from customers. Like you want customers who are like, Oh, of course, like Yeah, this is kind of expensive, but I'm gonna make this work'cause I need this, right? And so if you're seeing any of those signs, those are the signs that that you maybe are stuck or plateauing at this level. And I really think It's it's important to think about the four Ps.

51:05 And think about how am I gonna sort of pivot my way out of this. Jack Altman, who I mentioned earlier from Lattice. He's got like a great quote on this. Uh, it's up on uh in a video on the website. Uh, which is like

51:18 You know what did he say? He said oh the the Most founders do like a ten percent pivot. And what they need to be doing is a two hundred percent pivot. And I think Jack didn't say this, but I think part of my interpretation of this is like it's psychologically hard as a founder.

51:34 You've gotten to this many customers, you're starting to plateau, but you're like, Oh, I don't want to throw this whole thing away. Right. But you sorta have to be willing to let go and really focus on nailing the four P's at this point. And in your experience do you find Essentially pivoting is the answer if you're stuck.

51:52 I think sometimes it it's it's nice when it's the ironclad thing. Right. It's or I mean it's it's nicest when it's the looker thing of like you don't have to change anything, right? You just it just starts working and basically the whole thing works the whole time. That's not common. It's nice when it's the ironclad thing when you just sort of change one of'em or maybe two of them. Starting over with all four of these is hard at the at level two, right? But oftentimes it's what's required. Like I

52:15 You know, as mentioning earlier, like level two is the second most common level to get stuck. Most you know, l big chunk of companies are gonna s get stu stuck at level one. And the second biggest is at level two. So uh sometimes it's hard. I think the trap is not doing enough to realize that you're actually like not progressing to product market fit in the way that you need to.

52:35 And just starting to burn money and not make progress and you know. You've you've seen many startups kinda struggle with this. I think it's the hardest part of it. Yeah, especially once they're at like a million, two million, three million AR. They're like, Look, we're making all this money. And they don't necessarily realize that they've been stuck at this stage for so long. So just to kind of summarize flags that something is wrong.

52:55 And you should probably think about Changing your persona, your problem, your promise, or your product. Is It's been twelve to eighteen months. at this stage of pro of product market fit.

53:05 You're turning about twenty percent Oh. Customers. And these are logo logo churn, I imagine, just like businesses stock. Using you.

53:14 Yep. Your sales cycles are really slow. Is there a sense of what slow means? Just like a rough heuristic, what what should it Well, some sales cycles are slow. Like if you're selling to companies that are big, you're selling to government, that type of thing.

53:26 Um You know, I I don't know, rough rule of thumb is like Yeah, there's different A C Vs also. Like if you're the kind of product that is twenty K, thirty K annual contracts, that was Looker, right? But they were able to do the sales cycle very repeatably'cause they closed so often. Right.

53:42 There are some contracts that are hundred K, two hundred K, you know, six figure contracts. Those can take a long time. Those can take three to six months. You you can't basically be in the worst of both worlds where you've got a slow sales cycle and a low A C V. Like that is the quadrant of death, basically. Awesome. Okay. And then the other sign is just You're not finding demand starting to come.

54:02 to you. You're not finding a channel to drive Demand. And is a big part of this inbound. Do you start you're supposed to start seeing more inbound coming at you, or is it more just sales becomes easier? Well it's both. So like sales becomes easier, but I like I think if you are starting to get to level three, which is where we're getting to next. You've probably got ten percent, twenty percent of your inbound coming. Uh or completely organically. Organic inbound.

54:25 Awesome. Okay. So again, if you're stuck at this stage and these are signs that are like, Oh man, this uh sounds familiar. Your advice is Find one of these things to shift. The person you're going after The problem you're solving.

54:38 the way you position it and or your product if you have to. Yeah. And probably just look for something that is a lot more of a burning pain. It's usually that the problem is not significant enough, important enough to people. Or the promise is not um valuable enough. It's it's usually kind of one of those middle two, assuming you have a reasonable persona. Awesome. And the reason I I'm spending so much time here is y as you said, most companies

55:00 get stuck here. The B to B SAS company. So I think it's really important to Make sure people have something to go with. And in the course and in the post you put out, there's more examples of companies going through this than what they did. Let's talk about level three. What does level three look like? What should you be focusing on there? Yeah, so level three is strong product market fit. Uh this is where it I think it starts to get fun. Um, this is where like all the product market fit adages come in. Like

55:25 The fish are jumping into the boat, you know. The the rock is rolling down the hill and I'm trying to chase it instead of pushing it up the hill. And and keep in mind for most enterprise founders, this we're now three, four, five years into the company, right? So it's it's not like easy to get here. And to get to L three here. you are looking for repeatability, right? The marginal customer has become much easier.

55:47 And so you mentioned Lenny this this quote from David Sue from R which I love too. And and you know, I I'll read it again. He said, You know, we talked to someone who said that finding product market fit was so visceral you immediately felt it like a geyser. And we honestly never felt that in the first couple of years. at retool every customer we got, whether that was number four, number fourteen. felt like the last customer we were ever gonna find. It felt like rolling the stone uphill.

56:12 And if you stop pushing, it's gonna roll back on you and crush you. And that's how it felt until We had a few million in ARR. Right, that's when the boulder went down the other side and we had to chase it and and and chase it to keep up. And this is, you know, you mentioned earlier, like founders are like, I don't I'm not sure I ever felt product market. This is like when you start to feel it.

56:30 Right. And and Jack Altman, you know, again from Lattice said The just the biggest shi was in the ease of getting leads. Like I remember thinking I don't even know where these leads are coming from. Just more and more of them are showing up each month. But that is like a great feeling.

56:44 That is a great feeling. Philip Collison from Vercotta. He's in you know, some of the videos on our website too. His quote, I'll read it, was After our first year of sales in twenty eighteen, those next two years were crazy. We were barely keeping up with production. We had to scale all the systems.

57:00 Like a lot of things had to happen in the span of twelve to eighteen months in order to deliver on everything that customers were hoping the solution was going to do for them. And that in itself was a very formative and tricky part of the journey. So The benchmarks when you are at level three Are now you're probably like thirty to a hundred people inside your company. You're probably at like series B ish.

57:21 kind of territory in terms of venture. Like maybe maybe late series series A, maybe early series C, but like probably around series B. You've really cracked, you know, a demand channel. Like you've you've cracked marketing and sales. You've got at least one channel that is very scalable. And probably ten percent or more. of your inbound is coming from just like referrals and word of word of mouth and you're like you're getting known, like we talked about. A C V ranges are very high, you know, very wide, I should say.

57:48 I'd say like if you're in this like, you know, on your way to, you know, a hundred customers, the where you want to get to with level three is like a hundred customers. And so if you're sort of sh you know, approaching a hundred customers and maybe you have like seventy five K kind of average A C V, that would be strong. Right. You're sort of in this wide zone of five million all the way up to twenty five million ARR that is very like level three. And you're actually starting now to think about some of these efficiency metrics. Remember, we've been sort of like punting efficiency. We were s we were saying it's it's it shouldn't be worse than like a certain number, but it's like not a focus.

58:18 Now it's like gotta come into focus because the way that we get to level four. Is We keep ripping on the satisfaction and the demand and we Tune this thing to get very efficient. So like

58:29 You know, we're talking about our gross margin needs to be above sixty percent, hopefully above seventy percent. Our burn multiple is now below three. Right. Like ideally we're in like the ideally we're like close to one. Right, burn multiple like in the one to three zone is where we want to be at level three. Regretted churn is less than ten percent, NRR is greater than a hundred ten percent. These are like good

58:48 kind of benchmarks for this level. Curing level three again. Tells me level two. Is where You need to

58:55 It's basically your pivot from I'm just grinding Customers selling, pitching. Constantly trying to find new people. To level three where it's coming at you and life's

59:04 Basically it's the way you always hear about it, as you described. It's rolling downhill. Fish are jumping in the boat. I haven't heard that one before. But I love this. So essentially You found a demand channel.

59:14 You found a way to get people to come to you. A lot of them are just hearing about you from other people. You don't even know where they're coming from. Ten percent you said are coming from referrals and you're getting to like a hundred customers. I have actually have a date another quote from David Sue at Retool and He actually said even at a hundred customers, he still felt like every customer he was getting was the last one. He's like Oh wow.

59:33 He's like I can't believe we got DoorDash. That's incredible. That's okay. I think but there's no more. That's it. He's a critical person, critical of himself, but a very high expectations person, let's say. Yeah, actually another quote from uh Ali Go Goatsey from Databricks actually said even at a hundred million he wasn't sure they have product market. I don't know.

59:53 I don't know. That's what he felt like this is it. Okay, we're done. We're gonna cap out here. And I and I get that. I think if you told many, many pre seed founders that they'd be able to get two a hundred million and not know whether they had product market fit, they'd probably take that. But I think that's maybe an interesting insight. Like it's often good to be really paranoid and not feel like Okay, we're on our way. Let's start pouring in money. Let's do it. I think that's what uh makes a lot of the the best founders the best.

1:00:16 Indeed. Okay. So level three Anything else that would be useful here? Maybe what are signs that You're struggling at level three, you're stuck. Yeah, so level three problems and again, it's hard to get to level three, so like you know

1:00:30 Awesome work for getting here, but the problems that might start to emerge Or you know, you've got a leaky bucket. Like your NRR is below ninety percent or your gr regretted churn is greater than ten percent. Maybe growth is just slowing down. Like you grew three X each of the prior two years, but you're kind of struggling to do a two X this year. And that in part that can become, you know, at level three, you know, or five years into the company or so.

1:00:52 There's probably a lot of competition. Like if you if you've gotten here You've got something that's working. Right. And people are starting to notice and there's gonna be competitors. And they they could be the big the big competitors, they could be the new startups, but you're gonna have to figure out how to navigate probably a tougher market than you entered.

1:01:08 Five years ago. And so You know, maybe maybe you found your first scalable channel, but it's getting saturated. You gotta you gotta find a new channel. These are kind of like the level three problems. Or Like you're growing. But uh like I said, with efficiency like it

1:01:21 You're spending too much money to grow. So you feel like, okay, yeah, we can grow at three X year over year or two X year over year, but it's like that's gonna push our burn multiple above three again. And you're that's a little bit of a pickle to be in, right? When you sort of have to trade off uh growth and spend like that. You kinda make it sound like oh life's great level three people are coming at us. I think it's important to note like never is it easy. Never is it like okay, we're good. Let's just

1:01:46 Right this way. Life's gonna get so much easier from now on. It's never easy. As you said, there's all these things you're always still juggling. You still aren't sure. It's gonna keep going. No, I agree. It's like you're spinning plates and the higher levels you get, there's more plates, you know, you have to keep spinning. And so at level three and getting to level four

1:02:04 We've got to maintain satisfaction and demand. We cannot let them regress. Uh, in a market that's getting harder, right? And and and we have to really start focusing on efficiency. And the companies that can maintain satisfaction and demand and continue to grow. And become really efficient. Now we're at level four.

1:02:21 Let's talk about level four. What does that look like? What are some problems people run into there? Yeah. So first of all, congrats. I mean if you get to level four You have a valuable company. Right. Like

1:02:31 You you are probably already a unicorn. And you're starting to think about can I become a decorn? And so you've reached like the very high the highest levels of satisfaction, demand, and efficiency. And so the benchmarks at level four are like, okay, now your team is probably bigger than a hundred people.

1:02:47 Uh you're like series C, series D. Or beyond. You've got more than a hundred customers and you're starting to figure out how do I get to two hundred, three hundred, eventually a thousand customers. You're beyond twenty five million in AR. So like twenty five million and up, I think in ARR it qualifies as level four. And your your your other metrics are looking really good too, right? Like your your sales conversion first call to close one is a is probably better than fifteen percent.

1:03:10 Your magic number's greater than one, your tack payback's less than twelve months, all these things are like super awesome. And and finally now you've got your gross margin above eighty percent, your burn multiple is ideally less than one at this point. Um, you've got less than ten percent churn, you've got greater than hundred twenty percent NRR. And so now the whole thing is like Well, how do I keep growing? Like I mean, like this you know, this thing's gotten pretty big.

1:03:33 And this is generally, you know, you know, when we get to a hundred million, especially and beyond. the stage that uh founders are thinking about How do I keep growing by expanding? Tam by expending total addressable market. And

1:03:46 To expand TAM I can usually take my product and bring it into new markets. Or or I start to think about multiple products. Right, as a way to to expand TAM. And so this is where you see like all the truly great companies, like the legendary companies are all able to do that. Like Vanta has has begun to do this. Right. They have like the Vanta Trust Management platform. They've got security questionnaires. They've got vendor risk management. So they're starting to do this. You know, you think of Vercata, who I mentioned before, like they started with security can cloud security cameras.

1:04:13 Now they do alarms, now they do smoke detectors, now they do badge readers. You know, Stripe has sort of classic Stripe, but they've got Stripe radar, Stripe Atlas. Square has the SquareSand, Cash App, Square Checking, Square Loans. Like all the all the companies that are You know. Tens of billions of dollars of value.

1:04:30 figure out a way to do this. And it's kinda like the never ending journey that you said before, Lenny. Like You know. Congrats, you got to level four. But there's just like this endless

1:04:41 thirst for continued growth. And and the interesting thing about that. is that it requires finding mod product market fit over and over again. Like just because you got to level four on your on your main product. Doesn't mean product market fit is free. On all these new products.

1:04:56 Right. And you've been inside Airbnb and I've been inside, you know, Dropbox and Twitter. Like getting new products to be successful is hard. Right. And and it requires this mindset of like, yeah, we've got a little bit of an advantage because people know who we are. And we have a customer set that hopefully we can layer on new products to, but it's not easy You know you have to get into this mindset of like Product market fit is never easy.

1:05:17 And if we wanna continue to grow, we gotta find it again and again and kinda maintain that mindset. Casey Winners has this great point also that expectations of customers ever increase. And so you have product market fit today, but they're gonna There's gonna be better products coming out. There Changing the world changes and so not only do you have to worry about

1:05:36 competitors. There's just expectations continue to rise. So it's a never ending battle. Uh a broader sense here. What percentage of companies do you find kind of make it through each of these stages in your experience? What are kind of rough numbers you may have?

1:05:51 In your head. The majority of companies, so greater than fifty percent. Probably closer to sixty or seventy percent. Are gonna get stuck at L one or L two. And so that leaves, you know, roughly let's say thirty percent make it to L three or L four, just in our our experience looking broadly.

1:06:10 And that's our entire goal. Right. It's like if that can be'cause again, like once you get to L three, you've got a real shot. You've got a real shot of building an awesome company. And so if we get that number, help founders get that number above thirty percent. Like imagine if that was fifty fifty. Right. And ha half the companies that, you know, we were working with at seed were were able to get to level three pro strong product market fit. I think that would be epic. And I think our founders, you know.

1:06:32 would there'd be incredible benefits to the ecosystem from that. Okay, so essentially sixty percent ish of companies Don't make it past L two. And I love The way you're framing it of just like if we can just get a few more companies

1:06:46 Further, that makes a massive den. Both, you know, in the world. in the lives of founders. And people that want to use products. Another question I wanted to talk about briefly is just again the timelines.

1:06:58 Of each of these levels just in your rough. Experience like how long do each of these levels roughly take so people can get a sense of like oh shit, I've been I've taken it's taken a lot longer. Maybe there's a problem. Yeah, so again th this whole thing probably takes

1:07:12 Four to six years. And so let's just pick five years as the number to get to level four. I think The way this works ideally. Is you probably take twelve to eighteen months to to do level one.

1:07:27 Because that is the most important level, actually, honestly, in my mind, because that's where you're really choosing the right persona and the right problem to focus on. And I think it's like just that choice is one of the most important choices that founders make. And the the interesting thing, you know, my partner Josh Coppelman talks about this all the time. Is that Founders spend ninety nine percent of their time

1:07:49 Building. 'Cause that's what they've done. Right. And They spend like one percent of their time picking.

1:07:57 And picking the market, picking the problem, picking the customer. And in reality, it's that pick. that like determines the constraints and the boundaries of where you're gonna be working for the next hopefully like ten years of your life. So there's a real imbalance there. And I and I actually think that like That pick.

1:08:13 is the most important thing. So I would actually like to spend Let's say somewhere twelve to eighteen level one, just really figuring that out. And figuring out my four Ps. And then hopefully I move very quickly. You know, it takes me a while to get to my first five customers, first five satisfied customers, but they love it. And then I go quickly.

1:08:29 from through L two, maybe that takes about a year. This is kinda like the looker, the looker path, right? The happy path. And then L three is kinda long just'cause we're going all the way from, you know Five million in revenue up to twenty five. And that might take, you know, a year or two, probably two years, even in a good case. And then getting from twenty five to uh a hundred million is hard, obviously. Very hard.

1:08:50 And then that probably takes a couple years. And then you're figuring out all of these things, like you're you're growing your team. And your company's got a lot more moving parts and functions and there's like a demand generation side of the house and sales and there's engineering and the whole thing just gets more complicated with a lot more people. But I think that if you set the foundation really nicely, kind of at level one and level two. then hopefully the whole thing, you know, the boulder is kind of rolling down the hill and it's carrying you forward and you don't just feel like you're pushing this rock uphill for five years. I don't think that's like a That's not a fun place to be.

1:09:22 There's a lot of founders in that place, and I I know a few. So just this is really interesting. So You're roughly saying that maybe spend a year, year and a half on level one, which is you just grinding Cold emailing, reaching out, selling customers, maybe getting to five customers in the first year and a half. Would be a good Like that's like at the extreme, but that's a good outcome.

1:09:40 And then maybe another year trying to get to um what was it, twenty custom twenty five customers. Going from five to twenty five quickly. Yeah, if I if I if I see a company Go from five customers to twenty five in a year. That that is almost always a strong that there's like a sign that there's some pretty strong product market fit there. Awesome. So many companies don't go through that and they have the funding to kind of keep

1:10:01 Iterating, exploring, trying. Figure things out. I don't know if you have The answer here, but just What's your advice of like if it's been like four years?

1:10:10 And they're not Demand is not starting to come to them. They don't have twenty five customers. Is it wait until you run out of money, just give it a shot, or is it Let's just give the money back and move on to something else. Well, that's a personal decision for founders. I

1:10:24 I do think if you've been going at it for four to five years and you haven't started to find anything that you're really feeling pull from the market on. Uh I don't know. You've done it for four to five years. It's like What are the chances that you're gonna magically find something? I think there are probably a handful of startups that do it, that figure it out and get back on like an amazing growth curve. But that's the exception rather than the rule. So If a founder wants to return the money to investors, if a founder wants to look for a soft landing,

1:10:52 There's no shame in that. Like product market fit is very, very hard. That's why we're doing this. It's why we're trying to increase the odds. And we're also trying to like Um Yeah, sort of make it clear.

1:11:05 What it looks like and what it doesn't look like. And everybody knows when they do a startup that the odds are that you will not get there. Right. And so there's no shame in in that. And I I would completely be supportive of any founder who wants to take that path. I love that advice. I think that was a really important point to make. Let's quickly summarize the levels.

1:11:23 And then I want to also summarize the four Ps again,'cause I think that's the thing you can actually do. And so I think I just want to reinforce here's the four things you should play with. If things aren't going in the direction. So first of all Just

1:11:35 Let's summarize the levels, what it looks like, and what you should be focusing on there. Okay. So level one, nascent product market fit. You're just trying to get three to five customers and you're focused on satisfaction, first and foremost. Level two is developing. There, this is where you're going from five to twenty five customers and you're really starting to focus on demand. Level three is strong product market fit. You're going from twenty five customers up to a hundred or more.

1:11:59 And you've got to start thinking about efficiency at that scale. And then level four is extreme. You're more than a hundred customers. Your company's awesome. You gotta keep doing all three of those things well. And you have to start looking for ways to expand your total addressable market. Okay, perfect.

1:12:16 And then let's come back to the four P's. I have I have a draft I have your post up here so I have kind of the the detailed version of each of these things, but Could you just talk through these four things, just like what is it you should be Thinking about changing.

1:12:27 If things aren't working at the four piece, basically. Yeah, so the four P's again are persona, problem, promise, and product. And The persona is interesting'cause I I it's in that in some ways it's synonymous with the market. A lot of people are like a lot of people think of the market in like this macro economic way where it's like, oh it's this category of um, you know, ERP software, whatever, right?

1:12:52 I think it's like much more tangible for a founder to think of the market as like a collection of people. Right. Like Jack Altman was thinking about his market as all of the HR leaders out there. And he was thinking about how many of them are there and what are the problems they have.

1:13:09 And how much money are they willing to spend on solving those problems? Like it's a it's a collection of people who who have money to to pay for a product or pay for a service. And so that's really the first piece like Find the persona. And really try to get into the mind of the persona. I that's another thing I was amazed about, you know, spending time with Zach from Plaid and Lloyd from Looker and Jack from Lattice.

1:13:32 They had all of these people like they were text messaging. With all of the their customers, right? And they're meeting them like on the weekends and stuff. Like they really, really knew their customer well. They were friends with their customers. And so you've got to get so deep into the mind of the persona. And like You know, what are their challenges? What are their goals? How do you help them sort of succeed at their job?

1:13:55 That's the stuff that really gets you, you know, kind of earns you the right to to get the rest of the peas right. And so The problem obviously comes next. And I think about this, and I can actually get into Lenny a little bit if you want to do um get into some of the customer discovery stuff. Cause that's that's the second session. Perfect segue. Yeah, and I was talking a little bit about um

1:14:16 We think of it as dollar driven customer discovery. And You know, like I think a lot of founders are familiar with customer discovery. I think many like or they they at least talk to customers, which is good. I don't think most of them do it in like the highest signal way.

1:14:31 Because again, like the customers are they're people, they're nice. They're gonna be polite. Right. They're also not good at like predicting like things that they will use or buy or want. Right. They're very good at talking about their problems. But they're not necessarily good at predicting their own behavior.

1:14:46 So we think about it in terms of dollar driven discovery. Which is how do you test The dollar potential. of a hypothesis. And this is like a whole two hour session. Um, but I'll try to do briefly here just to give you a lot of it. I'm just checking.

1:15:02 Um, so you've gotta identify extreme value, right? This is like Independent of what I'm building, Lenny, like I wanna hear about your problems and your challenges and what is most important to you. And so I need to do it in kind of this like non leading way. And I need to avoid the trap that we call happy years. With founder, you know,'cause like I found a lot of founders like I wanna build this thing, I want you to like my thing. And so I like look for the things that you say that sort of like support what I'm doing.

1:15:28 Th that's the trap, right? And so I could just try it on you, Letty, like Mm. Yeah, I might say um Let's do it.

1:15:36 Okay, Lenny, so you are um you're doing Lenny's newsletter. And you're building Lenny's podcast. What like when you think about We're sitting here in April. When when you over the next three months, let's say. What are your top three goals for Lenny's newsletter and Lenny's podcast?

1:15:53 Oh wow, interesting. Uh I'm trying to find a more scalable way to do this newsletter. long term. It's basically something I have to do for the rest of my life in theory. I d I don't know if there's an exit path for this newsletter. career. So I'm trying to find ways to scale this over time. That's one. Two is just up leveling the quality of each podcast episode in terms of visuals and audio and

1:16:14 trailers and things like that. And then three is make the community more valuable to everyone that listens. That's in the newsletter. Community. Top of mine.

1:16:26 Okay, awesome. And so what's hard about those three things? Like you you said you wanna scale the newsletter, you wanna increase quality, you wanna make the community awesome. Like what's what's hard about those things or what's this what's standing in your way of doing those? I don't I don't have a I don't have the answer yet, I guess is the answer. I don't know exactly how to do this yet. You don't know how to do it. Okay.

1:16:45 So What if I was able to it's probably a service in this case, not a product. What if I was able to give you a service? That said Lenny. You're gonna be able to scale this podcast. We are gonna help you find the five hundred best guests in the world.

1:17:01 That are really excellent. We're gonna guarantee they show up. You're gonna have endless content. on your podcast in your newsletter. You know.

1:17:12 W what do you what do you think about that? What do you think about that idea? I'd pay a lot of money for that. And so okay, so that's like an example. Of like a wow statement. Right.

1:17:22 And you probably had in the back of your mind like uh how are you gonna do that? Like is that actually gonna work? In in in in my experience That's a a good thing and an exciting thing. Like if I'm sort of Pitching a product idea to somebody. And

1:17:38 They are like Wow, does that really work? I mean if that thing works, I'd sign up for the wait list today. That to me is like, okay, now I now I got now I gotta figure out how to build that thing. But like I know if I am able to build it and deliver on that promise, they are gonna want it.

1:17:51 Right. Or you would maybe say signs like you would demonstrate uh uh behavior that that shows that you're interested in. Like you'd be like, Oh, Todd, can we meet again next week to talk about this? Or like Hey Todd, I actually would love to show this to the people I work with. Can you send me the deck? Those are like the signs that I am looking for.

1:18:10 If you had reacted like Yeah, that sounds kinda interesting. That's a no. Right. That is a no. That is a polite way of saying the word interesting is a polite way of saying no.

1:18:21 Right. And so I'm either looking for wow statements or I'm looking for demonstrated behavior that shows interest. I then would probably if I want to keep going with this, and this is all on the identifying extreme value, I'd ask you like, well, what stands out as as valuable here to you, right? And I want to hear you answer quickly. You know, you mentioned it's either gonna like it's gonna make my product so much better, it's gonna drive, you know, success for my business, or it's gonna save me a bunch of money or something, save me a bunch of risk. Right, but something where you like would very quickly be able to identify like why that's valuable to you. So that's kinda like

1:18:52 Part one is like extreme value. Then I gotta f uh sort of like figure out Ability to pay and willingness to pay. And this is for you, this is like kinda easy because you're you know, you're you're not out like a five thousand person company. And like you're the boss. So like this probably pretty like streamlined.

1:19:08 Right. There's no like procurement function at Lenny's newsletter? But so like let's say I'm sort of like going after a bigger company. the questions I'd ask on confirming the ability to pay. are like, you know, are you currently looking for uh a product like this, or are you building something internally? Like this is kind of the ironclad thing.

1:19:26 You know, where Jason was like, Oh, you're looking for a CMR CR a CLM already? Like if a if a customer like Uh you know, another way I think about it is like if a customer has a problem and like I really think they have a problem. And they know they have the problem. And they're looking for a solution for the problem, or they've even tried to build their own solution to it and failed.

1:19:46 That's like the best customer. Right,'cause they know how hard it they they want this thing badly. They've demonstrated that. And they've actually failed at building it because they underestimated how hard it was. So like are you currently looking for building a solution here? Essentially it's like there's a budget you're looking for is there money to go towards this problem. That's ex that's the next question I was gonna say. It's like where would a budget for this come from? And the best answer is that there's an existing budget.

1:20:08 Right. Like either like we already spend money in some way. you know, for like a competing tool or something that can be displaced by you. Or we're spending, you know, we put five engineers together to like help build this thing, right? There's some source of budget. that that I can get. And then the the question is, well, how d how does your team make decisions?

1:20:25 on third party tools to bring on. And you're never gonna get like the cleanest answer here. I mean, like in larger companies, you might get semi clean answers, but it it's something like, okay, like this manager. can approve it directly up to a certain dollar amount. If not, it goes to this sort of like next level up of manager. And um, you know, if it's like if we're gonna spend more than fifty K on it, we actually have to compare three different alternatives. Like whatever, there's like some known process.

1:20:50 Right. That's what I'm looking for, rather than just like a bunch of ambiguity. So that's kind of like ability to pay. And then I'm going into willingness to pay. I don't want to try to quantify that. And so that's where I go, like w you know, what's your budget? For solving this.

1:21:02 What are you paying for this other tool? I just let me show you mine. Is that, you know, would you pay, do you think that you pay less for that? You pay more for that, right? Can you replace this other thing with the thing I have? And then I love this question. I know I think you've had Madavan uh Ramanajam on the show, right? He has this question, he's from Simon Kutra. Like, I love his thing of like Lenny, what is a fair price you would pay for this thing that I just described to you? And then you say your thing. And then I go, Okay, well what would be an expensive price?

1:21:29 And then you say and then I say. Okay, what would be a prohibitively expensive price? And you sort of ask those three questions and like Generally when people tell you the fair price, it's a little bit of like they're trying to get a deal. And the expensive price is the one like if the price could, the expensive price is the one that they would actually pay.

1:21:47 Right. That where they're saying it feels expensive, but you put it in front of them, you say it costs this much. If it's really good, they want it, right? And the prohibitively expensive one is the one that's like too expensive and they'd have to just I just can't do that, right? So I I love these style of questions. I think they're just a lot more specific. than what I see most founders doing, which is just like chatting with customers. Um, you really wanna try to like sort of put them to some questions where you know they're going to answer honestly.

1:22:12 Because you're asking them questions. You're not asking them to speculate. You're asking them like fairly like concrete stuff. Oh, and the the thing I should say is like In the yeah, it's a two hour session, like I mentioned. We sh like it's like one thing to like explain this stuff.

1:22:25 But it's another thing to see it. And so we show like tons of Zoom recordings. And like from pound founders who have gone through the program. And we actually do this thing where All the founders who are going through the program.

1:22:37 We they all they record all their videos, their customer discovery videos. And then our team watches all of the videos and creates highlight reels. And so I you know, and we sit around in a room and watch them together. And we say, like, oh, look at these questions that Lenny asked, and did you see how the customer responded? Wow, that's like an eyes light up moment, or like Todd asked these questions, kind of leading the witness a little bit and the customer didn't seem that interested. So the the thing that's interesting is like as a founder, you you're sh you're you're you never see anybody else's version of this, right? You only see have your own experience.

1:23:07 And so just like seeing how other founders do this like in a real live setting is like super like people love it. And it's always easy to like hear these things. It's much harder to be the person asking these questions to a potential customer you're trying to sell and just asking like, How much would you pay for this? So I love that you kind of force people Through the actual Practice of it.

1:23:27 Uh, Todd, you're gonna get a lot of applicants for this program. It sounds amazing. And then you're giving a peek at the stuff that we haven't really talked about. On this point you just shared, which is essentially Trying to get real skin in the game. insight into how big of a problem this is. I love that you just basically shared a bunch of questions. Someone could just rewind right now and just write down all these questions that you shared and use them when you're talking to customers.

1:23:47 Obviously the classic problem is they tell you they're gonna buy, but they don't. And All the stuff you shared is Here's ways to get at will they actually buy it before they have The actual product.

1:23:57 Is there anything else you want to say on that, just like Tips for n not being tricked and people just saying, Oh yeah, I love this thing. I know you talk through a lot of this, but Yeah, I think there's a couple of things. Um

1:24:09 One is you have to know what to show people. When you're actually showing them something. You know, lattice is the kind of product I mentioned that could be sold with Figma mock ups. Looker couldn't be sold that way. Looker, you actually had to do a demo with their real data, so it required, you know, a lot more work to do that. Vanta was neither like a demo or a mock up, it was actually doing the work.

1:24:29 Right. And like pilot was like that. There's a bunch of companies like that. So you sort of have to figure out What is my product and and sort of like how does it solve the problem and therefore what What fidelity. uh does my kind of early product or early demo have to be at in order to land the sale?

1:24:44 And then I think you have to know when like when you've talked to enough people. It takes time to talk to people. And um If you talk to enough people

1:24:54 And you can like predict. Seventy to eighty percent of what the next person is gonna say to you because you've just talked to so many people and you've heard the patterns so clearly. That's when you've talked to enough to enough people. But these are you know, these are all like things you gotta learn and that's why like doing it experientially in in the way that we do the program we think is was best. Is there anything that we haven't covered that you wanted to touch on?

1:25:13 Before we Let you go. No, I just, you know, if if you're listening, if you're a B2B founder kind of in those early days of starting your company, or you know anyone who fits that description. And you have an appreciation for just how hard it is to find product market fit and you don't want to go it alone. then please apply to this program or share the application. Like we promise we will review every single application.

1:25:35 And I'm just really looking forward to working with a group of twenty or so amazing founders and helping them navigate These early days of product market fit finding is what I love to do. So just to make sure the right people apply, uh, remind people who is a great fits at B to B founders and you said they're they've been at it for Six to nine months something like that. Something in that zone or earlier. Yes. And you you you sort of have an idea. of what your product is. You have a hypothesis about what it is and who it's for, but you probably haven't started writing any code yet.

1:26:00 Okay. And if they've been at it for four years and haven't found Success. There this is not fit for them. This is not a fit. I could try to help them one on one, but no, that's not a fit for this program. Yeah. And then how do they apply and when when when their applications do. Yeah, so you go to pmf dot first round dot com. Uh applications are open. They're gonna go till May seventh.

1:26:19 Uh, and then the program starts on May twenty ninth. And if you want to reach out to me specifically, you can find me on Twitter. I'm at T Jack T J A C K. You can uh follow me, DM me. And um yeah, I'm looking forward to working with uh some amazing founders that I know are listening right now. Amazing. I'm so happy we did this. I feel like this conversation is gonna help. A ton of founders and they're gonna

1:26:39 Come back to it again and again. Todd. Thank you so much for being here. Lenny, it's been a pleasure. And my pleasure.

1:26:46 Bye, everyone. Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review, as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at Lenny's Podcast.com. See you in the next episode.

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