How to navigate product-market fit stages with Devin Soule

Devin Soule

A startup's growth trajectory is frequently (and unfortunately) at the mercy of investors. So how can founders find advisors who look out for their startup’s interests? 

We sat down with Devin Soule, co-founder of Further Faster, to hear what he’s learned from advising more than 60 founding teams. Further Faster is a Chicago-based venture studio helping pre-seed through Series A companies prototype, test, grow, and repeat until they’ve nailed the product and revenue model to secure their next round. 

In this article, we dive into: 

“Building a tech startup is extremely hard — and there’s a high probability of failure. You need the motivation to build something different and experiment with things you thought you knew the answers to.” - Devin Soule, co-founder of Further Faster

Further Faster’s Playbook for Lean Startup Design

Further Faster exists to help founders make the right decisions. This was directly inspired by all of the ways Devin and his co-founders have seen startups go wrong. 

He finds that common founder mistakes fall into one of a few categories: 

  1. Building tech
  2. Investing in growth
  3. Hiring before proof of scalable product-market fit

There's plenty of info out there about the lean startup methodology. It's easy to understand but could be applied better, which is reflected in the early-stage startup world's high failure rates. 

The frequency of startup burnout is baked into VC infrastructure. They can afford that failure rate in their portfolio construction, but it's not good for founders. 

So, Devin and his co-founders built Further Faster to help founders transcend the failure-enabling, VC-first model. 

Their step-by-step process to develop both winning products and revenue models is as follows: 

  1. Build around a set of clearly understood assumptions. 
  2. Identify and prioritize the assumptions which are the highest risk and highest reward. 
  3. Create rapid, capital-efficient methods to growth test these assumptions. 

Those growth tests can inform revenue models, pricing, ease of customer acquisition, and time to customer loyalty. In other words, Further Faster gathers vital data to ensure they're successfully reducing client pain points. 

Once they do so, the studio takes on a more tactical role, helping the startup: 

  • Design features & build products
  • Locate technical talent
  • Beta-test the product

After building product revenue and usage metrics, Further Faster also helps install exec talent, who’ll help them run gross sprints, fundraise, and operationalize hires as needed to scale. 

"Having been on the founder’s side of things, it does not feel good to do everything a VC instructs you to do. That's why we want to be there for startups." - Devin Soule, co-founder of Further Faster

Four Easy Steps to Scale Your Pre-PMF Startup

Attaining product-market fit is a classic roadblock in the startup journey. 

Here, Devin has an array of advice for founders who want to continue scaling their companies — but haven’t found PMF yet. 

1. Assess Yourself as a Founder

The first step is making two critical decisions: 

  1. Do you have the passion? — You must build around something you’re passionate about because you’ll need bottomless motivation and energy to push through failures. 
  2. Are you building a venture-scale business? — Consistent market research can tell you whether or not you should be structuring your business to attract VCs. Not all startups with the potential for life-altering wealth events are appropriate for VC funding. 

2. Examine Potential ICPs & Their Pain Points

After establishing those parameters, founders should examine their startup’s ecosystem. 

That means iteratively identifying target customers and measuring their most pressing pain points. Consider questions like: 

  • How much time, money, and energy is the user spending to solve this problem? 
  • What current software programs are they using? 
  • What are the workarounds of the problem? 

Benchmark where people are with those pain points. Founders should be looking for the sort of data points that help formulate the statement: 

“People are currently spending X amount of time, money, or energy on this problem. Through my research, I could reduce that by Y amount.” 

This kind of hypothesis is crucial since founders often fall into the trap of wanting to sell without examining their market from every angle. 

3. Take Stock of the Competition

Next, they need to zoom out to understand two factors: 

  1. What the competition is doing — No lucrative market is undiscovered or uncompetitive. 
  2. Whether the target market is large enough — Too small of a market means you won't make enough money. 

To take stock of the competition, look specifically at large, incumbent competitors and ask: 

  • Could they easily pour money into a solution like mine and knock me out? 
  • What’s their niche or position in the market relative to mine? 

4. Create a Testable Hypothesis

Once you've mapped out your user pain points, your hypothetical solution, and your position in the ecosystem, you’ll have a value prop to take to market and begin testing. 

At a high level, this whole process may take a single founder about a month to accomplish. 

To form a testable hypothesis, try the following steps: 

  1. Create an ad with a landing page
  2. Put a few hundred dollars behind the ad
  3. See who converts to the landing page

From there, you’ll have several potential customer discovery interviews. 

For B2B, you can gauge how far this takes you in terms of sending LinkedIn connection invites and creating warm intros. 

“You really need to understand your current competition. Who could pour money into a similar product and just knock you out three years into the process?” - Devin Soule, co-founder of Further Faster

Manage Equity to Protect Founder Interests

Excessive equity dilution is another common but potentially disastrous pitfall for founders. 

Building a company is lengthy; having an overly diluted cap table can stunt that growth. Even if things are perfect on every other front — if your cap table isn’t right, it could ruin your chances with investors. 

As such, every founding team should hold tight to two goals: 

  1. Give away as little equity as possible
  2. Use as little money as possible to achieve goals ASAP

Devin also notes that while these rules should be at the forefront of every decision, founders should also consider how each choice could affect ROI. 

There's a simple rule of thumb to figure out how to portion equity: 

Any investor, advisor, or founder should bring in more revenue than their equity is worth. 

That premise expands to the broader goal of maintaining relationships with co-founders, advisors, hires, and investors who actually bring in paying customers and revenue. 

As such, founders should guard as much equity as possible until people are willing to sign letters of intent (LOIs). 

"Prioritize revenue in your company’s relationships. For example, if your co-founder isn't bringing in revenue, that's a sign you should pay attention to." - Devin Soule, co-founder of Further Faster

Key Red Flags to Avoid When Navigating PMF

Another common mistake by founders is pushing an underdeveloped MVP. 

This usually means they’ve tested and benchmarked an MVP composed of one core feature plus several supporting features. 

Customers may say they’ll pay for the product with the supporting elements, but it’s still unclear what parts of the product are paid or not. 

There are two smart ways to avoid this confusion: 

  1. ROI analysis at the feature level — Test feature by feature early on. Be clear about non-essential components. Do price testing and revenue modeling to determine what users are willing to pay for. This’ll reduce bloat around the product and design process. 
  2. Calculate past costs — This includes costs of user acquisition and customer loyalty. 

Deep Dive: Understanding PMF for B2B Startups

Founders often do well when benchmarking initial user acquisition. But, with B2B, understanding how long widespread adoption will take requires some extra work. 

Making baseline estimates and modeling operational costs give founders a sense of how to invest in the design side. Devin recommends the Ryan Singer framework for dev teams trying to shape feature ROI and understand returns. 

He also advises working with designers and developers with prior startup experience — rather than standard service providers and agency runners — for two reasons: 

  1. Lack of empathetic advising — They typically don't understand what founders are going through if they haven't created a startup themselves. 
  2. Misalignment of incentives — No agency owner will guide you to build fewer features (even if it makes sense) because it contradicts their purpose as a business. 
“Try to build minimally until people are paying for your product. If people are desperate for a solution and willing to pay for a shitty product because their pain point is so bad — that’s a sign of product-market fit.” - Devin Soule, co-founder of Further Faster

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