Out of 100 A VC firm considers about a quarter of the meeting and only one secures an investment. Getting through the door is a critical first step, given the market downturn that leads to a glut of startup funding.
But then what? How do you make sure you are one of the 100? Well, you have one oft-overlooked superpower: your data.
Many early stage startups don’t even have a data team or a data expert. They were told that the increase in cash flow and user numbers looked good. But investors are looking for superficial metrics that show your product is poised to grow for years to come. There’s no metric for that, which is why you need to know exactly which ones to focus on and what they say about your product’s growth prospects.
If possible, collect the most massive, user-level data you can: events and transactions. Having this data allows you to X-ray how people interact with your product.
Viewing and communicating this information can certainly complete the platform. If you’re the founder of a new SaaS, fintech, marketplace, or consumer subscription product, here’s what you need to show investors in the early stages of your journey.
Investors need to see that you’re not blinded by easy wins that can go up in smoke in weeks, but that you’re using solid data to build a sustainable company.
At all levels: focus on active usage, not useless metrics.
If you don’t think about product-market fit, you don’t have a voice.
Now that doesn’t mean you have to prove yourself. they have It’s product-market-friendly, but you absolutely have to show investors that you’ve been working for it. If investors can’t tell where they are in your life cycle, they have no way of telling how close you are to — and earning — their return.
Product-market fit is not a fixed point. It’s more about reading the right signs: you need to know which parameters to look for and how to measure their strength. The stronger the signals associated with user engagement and retention – all measured in different ways and all trending positively – the more evidence you’ve reached or are reaching product-market fit. Building all that information into data increases your chances of increasing efficiency and lowering investment.