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TJ

Todd Jackson

04/11/24

@ Lenny's Podcast

About 60-70% of companies get stuck at level one or two, leaving only about 30% that reach level three or four.

Video

LP

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

@ Lenny's Podcast

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

04/11/24

Related Takeaways

TJ

Todd Jackson

04/11/24

@ Lenny's Podcast

Most startups never get past level two of product-market fit, which is a common challenge for early-stage companies.

LP

Lenny's Podcast Cast

04/11/24

@ Lenny's Podcast

Founders should be aware of the signs indicating they might be stuck at level two, such as slow sales cycles, high churn rates, and difficulty in generating demand.

DH

Drew Houston

02/24/17

@ Y Combinator

Running a company often feels like aiming for a 22 out of 100, which is humbling for those accustomed to high grades in school.

TJ

Todd Jackson

04/11/24

@ Lenny's Podcast

At level three, signs of struggle include a net revenue retention below 90% or regretted turns greater than 10%.

PS

Peter Singlehurst

03/19/25

@ 20VC with Harry Stebbings

The probability of any given company going up five times if picked randomly is about 5%, so we look for companies with a 30-40% chance of achieving that.

TJ

Todd Jackson

04/11/24

@ Lenny's Podcast

Signs of being stuck at level one include having customers who wouldn't be disappointed if your product disappeared or if the most important feature varies for each customer.

TJ

Todd Jackson

04/11/24

@ Lenny's Podcast

If you have a handful of happy customers but struggle to find new ones, it may indicate you're stuck at level one of product-market fit.

TJ

Todd Jackson

04/11/24

@ Lenny's Podcast

At level four, you should have a team larger than 100 people and be generating over 25 million in annual recurring revenue (ARR).

TJ

Todd Jackson

04/11/24

@ Lenny's Podcast

Even at level four, finding product-market fit for new products is challenging and requires continuous effort.