The Journey to Product-Market Fit and the Birth of Not Boring Capital

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Sep 26, 2023
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The Journey to Product-Market Fit and the Birth of Not Boring Capital
Introduction:
Finding product-market fit (PMF) is crucial for the success of any company. While some businesses experience an immediate pull from the market, others spend months or even years iterating to achieve PMF. In this article, we will explore the journey to PMF, highlighting the stories of successful companies like Netflix, Airbnb, and GitHub. Additionally, we will introduce Not Boring Capital, an $8 million venture fund that invests in companies with compelling narratives.
The Path to Product-Market Fit:
To attain true PMF, three key factors must align: creating a desirable product, delivering it profitably at scale, and sustainable customer acquisition and retention. While the original idea may not always work, continuous experimentation and perseverance are essential. This was evident in the case of Netflix, where the unlikely combination of no due dates, no late fees, and a subscription model proved to be the winning formula. Similarly, GitHub's breakthrough came when users expressed a desire to pay for their services, signaling the company's success.
The Role of Timing and Recognition:
Timing plays a crucial role in identifying PMF. Sometimes, it takes longer than expected for companies to realize they have found PMF. Examples include Netflix, which took 18 months, and Airbnb, which required two years of iteration. However, there are instances where recognition comes unexpectedly. For Airbnb, it was when the founder's mother successfully booked her first stay. These stories emphasize the importance of patience, perseverance, and the ability to recognize the signs of PMF.
Introducing Not Boring Capital:
Not Boring Capital is an $8 million venture fund that focuses on investing in companies with compelling stories. The fund primarily invests in Seed through Series B companies, with occasional pre-seed and growth-stage investments. Its founder, Packy McCormick, leverages his skills as both an investor and a writer to create a unique flywheel effect. The fund's leading vertical is fintech, with investments in investing technology companies.
Investment Strategy:
Not Boring Capital follows a diversified investment strategy, categorizing investments into three tiers: Core, Explore, and Growth. Core investments have the potential to significantly contribute to the fund's success, representing about 75% of total investments. Explore investments are smaller and aim to secure a seat in the next funding round or increase deal flow. Growth investments focus on later-stage or safer opportunities with a lower ceiling but higher floor.
The Power of Community:
Not Boring Capital understands the value of community and leverages its readership to support portfolio companies. With a loyal following of 60,000 people, the fund benefits from the synergy between its portfolio companies and engaged readers. This collaborative approach fosters knowledge sharing, highlighting the potential of platforms like Glasp to enhance the reading and writing experience.
Conclusion:
The journey to product-market fit is not always straightforward, and it requires persistence, adaptability, and the ability to recognize opportunities. Companies like Netflix, Airbnb, and GitHub serve as inspiring examples of how PMF can be achieved through experimentation and customer feedback. Not Boring Capital, with its focus on investing in companies with compelling narratives, demonstrates the power of combining investing, writing, and community engagement. As aspiring entrepreneurs and investors, we can learn valuable lessons from these stories and apply actionable advice to our own endeavors.
Actionable Advice:
- 1. Embrace experimentation: Be open to testing different ideas and combinations to find the winning formula for your product or service.
- 2. Listen to your customers: Pay attention to customer feedback and adapt your offering based on their needs and preferences.
- 3. Build a supportive community: Foster a strong community around your business to leverage the power of collective knowledge and support.
(Note: The content has been modified and combined to form a coherent long-form article without mentioning the original sources.)
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