What VCs Really Want Regarding Founder Market Fit

🌈 Abstract

The article discusses what VCs (venture capitalists) really want in terms of founder-market fit, and the different types of edges a founder can have in a market.

🙋 Q&A

[01] What VCs Really Want Regarding Founder Market Fit

1. What did the author realize about why VCs invested in their original idea?

• The VCs invested in the author not because they liked the original idea, but because the author was the right founder to explore that market segment.
• The author realized that the real reason the VCs invested was because the author was a young person with a lot of time who had some interest/expertise in entering a blue ocean market that requires a lot of experimentation.

2. What did the author try to do after winding down their first product?

• The author decided to enter some huge red ocean markets (e.g. ERPs, Marketplaces) thinking they had a "building product" edge from their experience at BigTech.
• However, the author was unable to find a product edge in these mature markets, as they had to negotiate data shares with clients and big customers selected software based on brand and integration costs rather than new features.

3. What did the author realize about the different edges a founder can have in a market?

• The author identified three types of edges a founder can have:
  • Time edge - great for blue ocean markets where young founders have fewer responsibilities
  • Distribution edge - great for mature red ocean markets if you have a famous brand
  • Product edge - unique take on a common product or problem, needed for both blue and red ocean markets

4. What did the author decide to do going forward?

• The author plans to lean into their time edge and explore markets that are moving fast and that they are irrationally interested in, as a way to potentially discover a product or distribution edge.

[02] Conclusion

The article concludes that founder-market fit is about whether the founder has the right type of edge (time, distribution, or product) for the specific market they are entering. The author realized their initial "building product" edge was actually just a time edge, and plans to focus on markets where that time edge can be leveraged.