It’s a story as old as time: Startup founder raises giant sack of that sweet, sweet VC money. Next, they have to search for product-market fit. Easy, right? Just pour all of that money into sales and marketing, and they’re off to the races. Not so fast. If you throw enough money at advertising, anyone can get the growth chart to go up and to the right. But the thing is, you need to find the right way to do growth, and that’s a lot harder.
Matt Lerner spent 11 years running marketing at PayPal, followed by four years at 500 startups, so he’s seen companies of all sizes trying to find customers. In his new book, “Growth Levers and How to Find Them,” he makes a case for finding the right way to sell your product.
For PayPal, that first product-market fit turned out to be eBay, but it discovered that more or less by accident: by keeping a close eye on how people were using the product.
“One day, someone noticed that 54 of the sellers actually wrote into their eBay listings, ‘please pay me with Paypal,’” he told TechCrunch+. He brought this to the attention of the executive team at the time.
The executive team’s reaction at first was to get those people out of the system, as that wasn’t the focus.
“Fortunately, David Sacks came back the next day and said, ‘I think we found our market,’” Lerner said. “Let’s actually build tools for these power sellers instead of forcing them to write into their listing, pay me with PayPal. Why don’t we just have an HTML button that they can just insert? And that actually worked. Then he thought, why should we have them insert it each time? Why don’t we just automatically insert it for them? So that became the success for PayPal.”
What worked for PayPal is a good example of how your startup can start looking for its best routes to market, too.