“If the customer doesn’t scream, you don’t have product-market fit.” — Andy Rachleff
Welcome to another episode of The Tim Ferriss Show. This time, we have a slightly different episode—a takeover by Mike Maples, Jr.
Mike Maples, Jr. (@m2jr) and his firm, Floodgate, have invested in and supported many of the startups you might recognize — including Twitter, Twitch, Lyft, Chegg, and Okta, among others — long before they were household names. He’s been on the Forbes Midas List eight times in the last decade, but he’s much more than a successful investor. Mike has also succeeded as both a founder and operating executive.
He’s also simply a great guy and the first person who really taught me how to angel invest. For more on that background, listen to my interview with Mike at tim.blog/mikemaples.
In this episode, however, Mike speaks with Andy Rachleff (@arachleff), co-founder of Wealthfront and Benchmark Capital, about two of the biggest questions that should be on every start-up founder’s mind: How do you reach “product-market fit” (a term that Andy coined), and how do they know when you’ve achieved it?
Andy has known many of the start-up world’s giants and synthesized their lessons, so you will also hear what Andy learned from Don Valentine of Sequoia, Scott Cook of Intuit, Reed Hastings of Netflix, Geoffrey Moore, Clay Christensen, Eric Ries, and Steve Blank.
The audio from this conversation is from the premiere episode of Mike’s brand-new podcast, Starting Greatness, which I encourage you check out. There are some incredible guests coming.
So, if you like this conversation between Mike and Andy, be sure to subscribe to Starting Greatness on Apple Podcasts, Spotify, Overcast, or wherever you get your podcasts. You can also check out the website at greatness.floodgate.com, and on Twitter you can follow Mike at @m2jr and Andy at @arachleff.
- Listen to it on Apple Podcasts.
- Stream by clicking here.
- Download as an MP3 by right-clicking here and choosing “save as.”
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Want to hear an interview with Mike’s business partner? — Check out my conversation with Floodgate co-founding partner Ann Miura-Ko in which we discuss what counts as “world class effort,” how an introvert becomes a debating competitor, and much more. (Stream below or right-click here to download.)
QUESTION(S) OF THE DAY: What was your favorite quote or lesson from this episode? Please let me know in the comments.
SCROLL BELOW FOR LINKS AND SHOW NOTES…
SELECTED LINKS FROM THE EPISODE
- Connect with Mike Maples, Jr.:
- Connect with Andy Rachleff:
- Benchmark Capital
- Stanford Business School
- Sequoia Capital
- Steve Blank On Making Lean Startups Out Of Scientists, Forbes
- The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses by Eric Ries
- Value Hypothesis and Growth Hypothesis, Constantly Learning
- Organic Growth, Investopedia
- Net Promoter Score, Medallia
- The Sales Learning Curve by Mark Leslie and Charles A. Holloway, Harvard Business Review
- Yield, Investopedia
- The Four Steps to the Epiphany by Steve Blank
- Crossing the Chasm: Marketing and Selling Technology Projects to Mainstream Customers by Geoffrey A. Moore
- What Is Catch-22? The Meaning behind the Famous Paradoxical Phrase at the Heart of Joseph Heller’s Novel, inews.co.uk
- A Brief History of Facebook, The Guardian
- The 5 Customer Segments of Technology Adoption, On Digital Marketing
- Google AdWords Turns 15: A Look Back At The Origins Of A $60 Billion Business, Search Engine Land
- The Fascinating History of Netflix, Interesting Engineering, Interesting Engineering
- Pure Software, Wikipedia
- Instagram — A Brief History, The Next Web
- Oaktree Capital
- Why Investors Must Be Contrarians to Outperform The Market, 25iq
- Unforced Error, Merriam-Webster
- The Ivy Lee Method: The Daily Routine for Peak Productivity by James Clear
- The Customer Development Manifesto: Reasons for the Revolution (Part 1) by Steve Blank
- Andreessen Horowitz
- Kleiner Perkins
- Secondary Stock, Investopedia
- Tax-Loss Harvesting, Investopedia
- Andy explains the meaning and origin story behind the term “product market fit.” [08:48]
- The four heuristics Andy uses to test if product market fit has been achieved. [10:24]
- Two counterintuitive lessons. [14:19]
- Andy outlines the second biggest mistake he sees entrepreneurs making. [15:08]
- Questions you’ll hear from potential customers, venture capitalists, and others who are in on your “secret” when you’ve got product market fit. [15:56]
- Why does Andy think more people should be reading Crossing the Chasm by Geoffrey A. Moore, and what makes it as current for today’s world as it was when first published in 1991? [16:41]
- How Facebook’s growth is a perfect example of Crossing the Chasm philosophy. [19:36]
- Why successful companies and entrepreneurs — from Facebook to Google to Netflix’s Reed Hastings — tend to revise their own history. [21:04]
- Andy and Mike share their thoughts on pivots and restarts. [26:57]
- Andy explains why it’s not imperative for everybody to like your product — in fact, it may even be better if some people don’t. [29:39]
- What does the term “savored surprises” mean to Scott Cook and the company culture of Intuit? Why should you be concerned if nothing surprises you about a project? [31:54]
- What does Andy consider his biggest “unforced error” at Wealthfront, and when did he have the epiphany to correct course? [35:04]
- How did Andy nail his niche early on? What worked — and didn’t work — in the effort to spread the word to potential clients? [39:43]
- What a recent insight yielded for Andy’s company, and how this appeals to a demographic its competition has been neglecting. [43:48]
- Mike reiterates Andy’s point about entrepreneurship succeeding by being non-consensus and right — defying common wisdom to create something people don’t even know they need until you’ve arrived to bring it to them. [45:45]
- The startup law of the jungle, insight development, and what we can expect from Mike and his guests in future episodes of Starting Greatness. [47:12]