First Round Capital

Most people describe finding PMF as an art, not a science. We're here to change that. Introducing PMF Method. After 20 years and 500+ investments in pre-product-market fit companies, we've drawn on our data and worked with some of the world's most iconic enterprise founders, distilling what they did in their first 6 months into a free 14-week intensive experience that helps sales-led B2B founders build epic companies. In tactical sessions, we help early founders discover what customers really want, build the right v1 product, and close your first sales — all while keeping 100% of your equity. You'll work alongside a tight group of other builders at your same stage, and get to learn from the hard-earned insights from founders of $1B+ B2B companies, like Vanta's Christina Cacioppo, Looker's lloyd tabb, Plaid's Zachary Perret, Ironclad's Jason Boehmig, Lattice's Jack Altman, and Verkada's Filip Kaliszan. The Summer 2024 session of PMF Method runs from 5/29 to 8/28. Any early founder working on a new B2B SaaS company is welcome to apply — just get your application in by 5/7 (or tag a founder friend below!) More details, FAQs, and application link in the comments below 👇

You don’t outgrow the need for design partners. This was my biggest takeaway from my conversation with Eilon Reshef on Gong's path to product-market fit. I was super surprised that even at Gong's current scale (Series E, $7B valuation), his team of 20+ PMs still use them, working with up to a dozen design partners at any given time. That tradition stretches back to building the initial product in 2015. The earliest signs of traction weren’t splashy — in fact Eilon didn’t even make much of them at the time. But in hindsight, he can trace an important milestone of product-market fit back to a quiet victory just after launching: 11 out of 12 of the first design partners converted to paying customers. Tons more learnings from Eilon on design partners, as well as the non-obvious signs of early PMF, and how to balance long-term product strategy with customer input in the First Round Capital Review article below.

When founders build a powerful product that could serve many use cases, it can be a curse. Because the product is attracting various type of users and serving different use cases, the metrics are up and to the north, and the founding team often find it hard to commit to one single ICP (Ideal Customer Profile) and one use case. Because, why? Things seem to be working... Initially, you could get more customers/users on paper by not committing; however, very quickly you found when you have 3 ICPs and 5 use cases, you can't effectively prioritize your product feature roadmap, decide how to best position your product on your website, or even develop a coherent killer sales pitch. Even worse, all of sudden, you find many of the users you attracted didn't get to enough usage and began to churn, messing up your retention curve. Do you save them or not? What is noise vs. signal? This is the opportunity cost of not commiting to a ICP customer early on and trying to build for too many use cases. This excellent First Round Capital article shares the struggles and lessons in-depth from Clay

“I’d probably lose an arm before I lose design partners,” says Eilon Reshef, CPO and co-founder of Gong. He’s not just talking about the early stages of company-building. To this day, at the thousand-person Series E startup, Gong PMs work with anywhere between half a dozen to a dozen design partners at any given time. These are the two profiles that Gong looks for in design partners:

It’s hard to believe now in the post-ChatGPT era, but back in 2015, businesses were still AI-shy. But that wasn’t a blocker for Eilon Reshef, who had a hunch that AI could help sales teams better understand their interactions with customers. So when he and his co-founder first launched the early version of Gong, they led with what the tool could do, not the tech itself — and customers were hooked. “It wasn't about AI at the time. We didn't even use the term ‘AI’ because people were scared of AI. So we framed it around sales efficiency,” says Reshef. Read our latest on The Review about how Gong found traction with an AI product long before it was cool.

Gong is a Series E category leader with over 4,000 customers and a $7B valuation. But the unsung heroes of that breakout success, according to CPO and co-founder Eilon Reshef? Their design partners. In the latest installment of our Paths to PMF series, Reshef walks us through how he’s worked with design partners at every stage of the company, from the earliest days of launching the beta to scaling its suite of products in the present day. Reshef is full of wisdom as a long-time product leader and second-time founder, but perhaps his most unique advice for founders is this: 𝐃𝐨𝐧’𝐭 𝐝𝐢𝐭𝐜𝐡 𝐲𝐨𝐮𝐫 𝐝𝐞𝐬𝐢𝐠𝐧 𝐩𝐚𝐫𝐭𝐧𝐞𝐫𝐬 𝐚𝐟𝐭𝐞𝐫 𝐲𝐨𝐮 𝐟𝐢𝐧𝐝 𝐩𝐫𝐨𝐝𝐮𝐜𝐭-𝐦𝐚𝐫𝐤𝐞𝐭 𝐟𝐢𝐭. To this day, Gong’s 20+ PMs each work with up to a dozen design partners, helping them refine new products and features. Read more about how Gong worked with design partners to find product-market fit and build a multi-billion-dollar business at the link in the comments.

So thankful to the First Round Capital team for including me in this past iteration of the PMF Method, which closed out last week. The quality of the programming that Todd Jackson, Emery Rosansky, Brett Berson, James C. Wu, and Jackie Ball put together was out-of-this-world -- but of course you'd expect nothing less from that team! There wasn't a week where I wasn't applying lessons/insight to my own process, and the community they put together is exceptional. If you're thinking about founding or early into founding a B2B company, I highly recommend the program (and the curriculum scales for a number of different phases across early company development). Feel free to reach out to learn more or just apply directly!

A founder's fundraising journey starts with 1:1 pitches, but stepping into a VC firm's partner meeting is a different ball game. To paint a clearer picture of how they differ, First Round partner Liz Wessel lays out exactly what founders can expect on The Review:

When pitching in front of a room full of investors, it can be tempting to try to read off each slide and hit every point that you think a founder should cover in a pitch. But ultimately, what resonates with investors is different for every company. Trying to figure that out and make it the centerpiece of your pitch is usually the better path. On the Review, Jake Stauch recounts learning this lesson as a second-time founder. “When I think about early partner meetings for my first startup, I made the mistake of treating a pitch like a school assignment, trying to ‘complete’ my deck with all the right parts. In retrospect, we focused too much on the founding team in our pitch when it ended up being the mission and TAM — helping kids with ADHD — that got investors excited and led us to close round,” he says. “When pitching my second company, Serval, more recently, it was very much about the experience of the team, so we leaned on that aspect more this time around.”

To all early-stage founders: First Round Capital is organizing a 4-day retreat in Sonoma for early B2B founders. IMO, they're one of the best at helping founders find PMF. Highly recommended. Apply here: https://lnkd.in/g7nz-8Yi Additional details below: - PMF Method Retreat runs 10/27 - 10/30. - Application deadline is 11:59 PDT Sept. 23rd. - Any early founder working on a B2B SaaS company is welcome to apply. Even if you're still at your day job and few months away from leaving to start your company. - PMF Method is 100% free. It costs you $0 and we own 0% of your company. James C. Wu