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Home Forums VC Quotes “Adding more money to a situation of lack of product market fit rarely works.” Justin Kan

  • “Adding more money to a situation of lack of product market fit rarely works.” Justin Kan

     tytchme updated 2 months, 2 weeks ago 1 Member · 1 Post
  • tytchme

    Administrator
    February 19, 2021 at 11:19 am

    Well-known Founders in Silicon Valley have recently taken to publicly talking about the failure of their last venture.

    Justin Kan, whose love of transparency extended to broadcasting his life 24/7 for 8 months in 2007 (the “lifecasting” platform justin.tv eventually became Twitch and was acquired for close to $1 billion by Amazon in 2014), is no exception.

    In a recent Tweetstorm (see the link below), Kan reflected on the Atrium fiasco. The legal tech startup’s operations were stopped in March 2020 after raising $75 million from elite VC firms General Catalyst and Andreessen Horowitz.

    The 15-tweet series contains a lot of entrepreneurial wisdom. The common thread seems to be “don’t try to skip the iteration process”: you need to spend time on R&D to make a differentiated product, but also talk to potential clients to make sure the disruptive solution fits with their needs. And iterate ruthlessly to get to the right solution for the right market. In other terms, find product/market fit.

    As we’re discussed at length in one of our blog posts, product/market fit is a prelude to a large funding round. Throwing money at the issue won’t help because you can’t escape the feedback loop.

    If you’re still not convinced of it, ask Quibi’s Founders.

     

    🗣Which piece of advice from Kan stuck most with you? Do you know other spectacular failures of well-funded startups due to lack of product/market fit?

    💬 Become a member to comment or post a new quote, apply here

    🔗 Kan’s tweets can be found here

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