Product-market fit

Ben Gilbert (0:00)

I'm glad we weren't recording before, because me talking about how I can't hear you through my AirPods and Skype makes for really good radio. Yeah, podcasting, it's easy and mainstream now, so naturally, there's gotta be great tools for that, right?

Limited partners, we'll come back to episode two, although we're not gonna number these, we decided, because then it gets confusing, where you have seasons with regular numbers and LP episodes with numbers. So welcome to another LP episode that happens to be recorded on the day of Halloween, so October 31st. We'll release this next Monday. Hope everyone had a great Halloween. If you hear doorbells, that means I have trick or treaters.

David Rosenthal (0:51)

Does that mean you're gonna get tricked and not treated?

Ben Gilbert (0:56)

Could very well.

David Rosenthal (0:57)

Ben's townhouse is gonna get TP'd. If you're driving through Seattle and you see a TP'd townhouse, that would be Ben.

Ben Gilbert (1:05)

Yeah, that's true. David, how are you tonight?

David Rosenthal (1:09)

Doing good. I am here in the suburbs in Marin, where Jenny and I are briefly staying with her parents while we're in between moves here, always fun.

But I guess that means that-

Ben Gilbert (1:24)

Are you in a closet?

David Rosenthal (1:27)

It does sort of look like I'm in a closet. No, I'm in a bedroom, but built-in bookshelves.

Ben Gilbert (1:34)

Nice. Listeners, so David and I, when we started doing episodes remotely, we started doing video on the Skype as well, just so that we can see each other a little bit more and hand signal and make it feel a little bit more natural.

And we do sort of have this flaky artifact if you can always get a little bit of wherever we're recording from, because we don't do this in the studio or anything.

David Rosenthal (1:55)

Although soon, well, we have a room that will soon be a studio in the new Wave office, which I am super excited about. Going to get super professional.

Ben Gilbert (2:07)

I got to come and do an episode there at some point.

All right. So David, I have, I think, mentioned this a little bit, but have an idea for what I want to do on the show tonight. I was talking with a CEO of one of PSL's companies the other day, and he brought up this blog post that Fred Wilson wrote that's totally legendary. That's the three jobs of a CEO.

David Rosenthal (2:37)

Classic Fred Wilson blog post, of which there are many.

Ben Gilbert (2:41)

Yes.

David Rosenthal (2:41)

But this is one that always sticks in my mind.

Ben Gilbert (2:45)

Yes.

And that blog post talks about how there's three jobs of a CEO. There's the, there's, oops, sorry, I didn't just knock the table there.

There's keeping cash in the bank, there's setting and maintaining vision, and there's recruiting and retaining great talent. And it's a pretty hard line. There's a lot of these startup aphorisms that are very easy to sort of say and say, you know, if you're doing anything else, you shouldn't be and you should only do those three things. And of course, those three things are kind of blurry. And it got me thinking a lot about the sort of jobs of a CEO pre-product market fit and post product market fit. And then it really got me thinking about like, wow, what are all the things that are different pre-product market fit and post-product market fit about a company? And I thought it'd be useful to do an episode one, because I'm just interested in exploring and sort of debating various definitions of that, and then different things that I think and you think a company should do and shouldn't do pre and post-product market fit. And then also, I just think it's an important topic to talk about early in these LP bonus shows, because it is really, there are many other sort of dividing lines between phases of companies, but this one is pretty important and pretty binary. Like if you had to define startups by the two most massively important phases that you could define them by, it really is which side of this line it falls on.

David Rosenthal (4:16)

Yeah, totally. Well, and it's both of us now being in the seed portion of the venture ecosystem, or I guess you, Ben, always have been.

But me now, going from being more series A focused at Madrona to being 100% seed focused at Wave, this is kind of the most important question, right? That when we invest well before that, when companies are just getting started well before product market fit, but then that we're asking ourselves at Wave about our portfolio companies that we're talking about with them in board meetings, and honestly that we're finding that CEOs are asking us, how do we know when we have product market fit? So this is a great episode.