This post is the fourth in a series of ten posts about the 10 key reasons your consumer startup will succeed.

I speak with hundreds of aspiring consumer entrepreneurs and review thousands of executive summaries and pitches each year. From all this activity, certain patterns emerge that remain consistent with successful consumer startups. In this series of 10 blog posts, I will list the top 10 reasons consumer startups succeed. Note that all seem necessary, but none on their own are sufficient.

#4 Product/Market Fit

You’ve started a company, launched a product, and are trying to find that magical product/market fit. To start, you should read Marc Andreessen’s article: “the only thing that matters is getting to product/market fit.” In our last few posts, we talked about the importance of your startup’s vision, team, and culture. Once those are locked in place, the team should be laser-focused on building a great product that delights their customers. The biggest recurring obstacles to product/market fit are that the product doesn’t solve a real need, that it’s not hitting the right audience, or that it’s just not ready for prime time. In this post, we’ll help you identify the challenges and learn how to address them.

One of the first steps is setting the right metrics. Early metrics for the consumer startups we tend to invest in generally fall into two broad categories: growth and engagement. You should be continually checking your metrics to see if you have found a solid group of people (that’s growth) who are using your core features (that’s engagement). We care about both. A great consumer product drives high viral adoption and deep daily usage (Facebook, Snapchat, and many more). You know you’re on to something special when you’ve created a new daily habit for consumers, which is very hard to do.

We’re often asked what the right metrics are to show product/market fit. It really depends on your specific product. If we were to generalize, you should be striving for thousands of initial customers with 25-35% coming back daily (or at least weekly). There’s a time to employ viral marketing techniques to achieve hyper growth, and that time is after you’ve achieved product/market fit. If used too soon, you’ll see massive churn from the high number of initial downloads or registrations.

If you’re struggling with product/market fit or seeing massive churn, here are a few top reasons to consider:

Number 1: Not solving a real need: this is one of the most common reasons. There are already solutions in the market that solve the problem you are trying to solve. Solution: back to the drawing board. Revisit our post on “a vision worth fighting for” for more on this topic.

Number 2: Not targeting the right audience: perhaps there was an outside factor such as press, a celebrity mention, an App Store promotion, or even an unexpected ProductHunt post that shared your product with the world. Lots of people saw it, and that initial user bump feels great, but those early adopters didn’t have an ongoing need for it so they stopped using the product quickly. Solution: closely examine the early adopters that did stick around, even if it’s small. What do those people have in common? Learn as much as possible, and then find creative ways to target more people like them.

Number 3: Product wasn’t ready for prime-time: this is the most frequent reason we hear startup founders articulate to explain failed growth and engagement, but it is often a thinly-veiled cover for one of the other reasons above. Solution: using MVP strategies, beta test early and aggressively. If you identify bugs and improvements to your onboarding or invite process, prioritize and fix those issues immediately. There are a lot of great resources on launching a minimum viable product and quick iteration, like Eric Ries’ The Lean Startup and The Lean Product Playbook.

It all comes back to setting the right metrics, and paying close attention. If you’re tracking your growth and usage metrics, you will have a strong sense of when you’ve hit product/market fit with your core audience. You’ll know it when you see it. Implement these strategies, hit that product/market fit, and you’re ready for some serious growth hacking. Stay tuned, because we’ll cover that on our next blog.

This post is the third in a series of ten posts about the 10 key reasons your consumer startup will succeed.

I speak with hundreds of aspiring consumer entrepreneurs and review thousands of executive summaries and pitches each year. From all this activity, certain patterns emerge that remain consistent with successful consumer startups. In this series of 10 blog posts, I will list the top 10 reasons consumer startups succeed. Note that all seem necessary, but none on their own are sufficient.

#3 Culture

Company culture and values are closely related to the founding team concept, but so underrated in Silicon Valley, we want to call attention to this critical factor by naming it #3.

The reality is that even with a small founding team of 2 or 3 people, a company culture already exists. So, we work with all of our Maven startups to actually articulate and write down their company culture. It can be painful to take the few hours or half day to do this exercise, but once it’s done, it’s really a magical experience. We went through the culture experience with our small Maven team, and it’s been refreshing to make sure we’re all on the same page about what we’re doing at Maven and what our priorities are. Dave Kashen, one of our Maven mentors, is one of the best at helping startups go through a company culture and values exercise. I’m so grateful we took the time to do this at Maven.  Here’s what we came up with:

Vision:

To meaningfully improve consumers’ lives at scale by building valuable enterprises that achieve top 10% Micro VC returns

Values:

Here are the values we live which drive our reputation and success:

1. Collaborative: We are not political.  We are willing to share praise, and be honest and transparent with each other. We put the team and company first.
2. No jerks: We are happy, positive, and fun to work with.
3. Accountable: We are high-performing, get stuff done, and value attention to detail.
4. Curious: We are always willing to learn. We are knowledgeable and strive to be experts in our field.
5. Self-starters: We take initiative, work autonomously, and are resourceful.

There are many great examples of company culture documents like Zappos and Netflix. Your company culture will define the tone for the rest of your startup’s existence. Define it early and re-examine it every year. Startups are made up of people and are living organizations, so as you grow and mature, you will need to revisit your company values and culture.

Here’s one of the secrets of why you need to do this early — it will help you hire the right people for your startup. Many startups mistakenly hire first for talent then later realize that, while the second engineer is a really talented coder, he’s a jerk and doesn’t fit in the company culture. And, now the founders are going to spend more time trying to get rid of this employee than they did to hire him. When interviewing, we encourage all of our portfolio companies to first look for culture fit before focusing on a talent and skills fit. Save yourself the headache and define your company culture early.

Are you ready to document your company culture?  You’ll be grateful you did.