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 👇

A great breakdown for founders who want to understand how investors are evaluating you and your startup by Meka Asonye. The call-out on deep customer discovery work is on point. I was coaching a team yesterday on this. Builders are guilty of this - they want to get a product out the door and fast! However, the time spent on understanding the customer and the problem is critical for founders to ideate with a deep, 360 view of the problem. Customer discovery helps unveil blindspots in how you are building the solution (or viewing the problem), clarifies the scope of your MVP, and guides initial messaging to align with the target customer. For builders, there is less resistance to staring at your computer and writing code; I get that. It can feel daunting to spend time doing interviews, customer observation, and research, but it is the work of being a founder. Founders, yes, you have a vision, but fuel it with the voice of the customer!

Founder-led sales with Emery Rosansky (PMF Method Session #6 at First Round Capital). Emery is the GTM 🐐 !

Bold ambition. Strong founding team solving a personal pain point. Compelling why now. Painkiller not a vitamin. Deep diligence work to validate the problem. Early momentum. Out of all of these traits that investors look for, it’s rare to find an early-stage startup that ticks each box. Didero does — this team is the real deal. ✅ Super pumped to be leading their $7M seed round here at First Round Capital. I thought I’d mark their launch day news (TechCrunch article in next post) by digging more into the details of a few of these, in case it’s interesting for founders who are fundraising: 𝗩𝗶𝘀𝗶𝗼𝗻: Didero is an AI procurement agent that automates the most common supply chain workflows for mid-market manufacturers. Their vision? 𝘔𝘢𝘬𝘦 𝘵𝘳𝘢𝘥𝘪𝘯𝘨 𝘸𝘪𝘵𝘩 𝘤𝘰𝘮𝘱𝘢𝘯𝘪𝘦𝘴 𝘢𝘤𝘳𝘰𝘴𝘴 𝘵𝘩𝘦 𝘸𝘰𝘳𝘭𝘥 𝘢𝘴 𝘦𝘢𝘴𝘺 𝘢𝘴 𝘵𝘳𝘢𝘥𝘪𝘯𝘨 𝘢𝘤𝘳𝘰𝘴𝘴 𝘵𝘩𝘦 𝘴𝘵𝘳𝘦𝘦𝘵. Boom. The world of supply chain logistics may be a “dusty industry” as my partner Bill Trenchard likes to say, but this framing of the impact they hope to make on the world doesn't have to be. 𝗖𝗼𝗺𝗽𝗲𝗹𝗹𝗶𝗻𝗴 𝘄𝗵𝘆 𝗻𝗼𝘄: The “why now” piece is one that too many founding teams rush over IMO. Here’s Didero’s: Supply chains are only getting more complex. China used to be a one-stop shop, but now companies are looking to diversify their supply chain — good for the overall resilience of the system, but leads to significant additional work. Before advances in generative AI, this was tricky to solve — communicating in natural language is important here. It’s a smart application of AI to a legacy industry that’s running on 1990s software (at best). 𝗗𝗲𝗲𝗽 𝗰𝘂𝘀𝘁𝗼𝗺𝗲𝗿 𝗱𝗶𝘀𝗰𝗼𝘃𝗲𝗿𝘆 𝘄𝗼𝗿𝗸: Tom Petit, Lorenz Pallhuber, and Tim Spencer are truly students of the space. They’ve gone what we at First Round like to call “unreasonably deep” in their pursuit of understanding the problem from every angle. When they pitched us earlier this year, they’d already done calls with 200+ supply chain/procurement professionals and industry experts to validate the problem, and were already working with more than a dozen design partners. I don’t see too many pitches where founders walk in having done that amount of homework. 𝗣𝗮𝗶𝗻𝗸𝗶𝗹𝗹𝗲𝗿, 𝗻𝗼𝘁 𝗮 𝘃𝗶𝘁𝗮𝗺𝗶𝗻: This framework is a cliche for a reason — it’s definitely something that will be on investors’ minds as you tee up the problem you’re solving. Didero’s discovery work (and our own diligence) revealed a ton of pain and manual work, specifically in the mid-market segment. Right now, most procurement folks are drowning in manual tasks. By helping people focus less on that and more on the higher order work these employees want to be doing, like building supply chain resilience and deeper relationships, Didero is solving a real pain point (and saving teams real $$$). Confident that there will be even more to share in the months and years ahead — watch this space. 👀

The In Depth podcast by First Round Capital is perhaps one of the top three product strategy podcasts, along with Lenny Rachitsky's podcast and Unsolicited Feedback by Reforge. I recently read the episode featuring Adam Nash co-founder and CEO at Daffy, in conversation with Brett Berson of First Round Capital. Adam shared refreshing takes on product management/development, drawing from his experience at companies like LinkedIn, eBay, and his current venture. Here are 3 of my favorite snippets and the link to the episode 👇

There are probably 20 good pieces written on product management for every 1 written on analytics. I'm not sure why that is, because there is incredible leverage in getting your analytics org right at every stage of growth. Jessica Lachs wrote the best new thing on analytics in a long time: 𝐒𝐭𝐚𝐫𝐭𝐢𝐧𝐠 𝐚𝐧 𝐀𝐧𝐚𝐥𝐲𝐭𝐢𝐜𝐬 𝐎𝐫𝐠 𝐅𝐫𝐨𝐦 𝐒𝐜𝐫𝐚𝐭𝐜𝐡 — 𝐋𝐞𝐬𝐬𝐨𝐧𝐬 𝐅𝐫𝐨𝐦 𝐚 𝐃𝐞𝐜𝐚𝐝𝐞 𝐚𝐭 𝐃𝐨𝐨𝐫𝐃𝐚𝐬𝐡. Full essay is below - it is well worth the read.

If you’ve only got a handful of early customers, analytics might feel like a future problem. But before you know it, you’ve got thousands of users and reams of data, and you’re in desperate need of some dedicated analytics help to make sense of it all. In this guide, long-time DoorDash VP of Analytics and startup adviser Jessica Lachs explains how to build a data org from the ground up — just like she did at DoorDash. She offers a detailed framework for how to structure the team at each stage of a startup’s lifecycle with examples from her years at DoorDash, from making the first few hires herself to leading a 300-person global org. Link to the full article in the comments.

“There’s a tendency when you’re early to be like, 'We’re just missing this one thing…' That actually masks the signs of PMF. When the need is large enough, people will buy your product and wait for you to build the rest of the features. That’s actually the main indicator that you have a product that’s worthwhile.” - Kareem Amin, co-founder of Clay. In the latest installment of our Paths to PMF series, Amin walks us through the past seven years of building Clay, unspooling every lesson he’s learned in maintaining focus, the different challenges of building a horizontal product with a specific customer in mind, and the importance of founder psychology in startups. Read here: https://lnkd.in/gZMjqApz

I read this post by First Round Capital yesterday and shared it with a client, but I read it again and realized there are some amazing stories and nuggets in here and wanted to share here. Definitely one of the best up and coming, finding PMF stories I've read in a while. I don't know the team at Clay, but they've been getting a lot of hype from the sales world. I used their product in a trial and you quickly started to understand the hype. My key takeaways: - Persistence, persistence, persistence. As the title suggests, it took them a long time to get to where they are. I remember Spenser, CEO/cofounder at Amplitude telling me that his number one goal when starting his company was to work at it for at least two years, if not longer, since that was a key indicator of success for a lot of startups - Mental health tips. I can't stress this one enough. As someone who has experienced his own fair share of mental health issues and witnessed them around me, these are all amazing tips and some that I actively practice today. - How to focus on the right problem when you have such big ambitions for your product AND get it right. Definitely worth the read!! https://lnkd.in/gKzTNVeE

Malleability is a startup’s greatest weapon — but like all strengths, it’s a double-edged sword. I like this framing from Clay co-founder Kareem Amin, that there's a time and a place for it: "You can be malleable when you're defining what the product is, but once you’ve taken a pass at that, you need to harden it when you try to go out to market. You can’t be changing the value prop or even the product itself from meeting to meeting." This is a mistake I see a lot of early-stage founders making, and it's a pitfall that Clay ran into early on, too. The team has been on 🔥 for the past 18 months, but it’s no overnight success story. They’ve been quietly plugging away to land on the right messaging and product — for almost 6 years before breaking out. "We were being too malleable when we were trying to sell Clay early on, which made it even harder to separate the signal from the noise. A prospect can say, 'Oh, could you guys do that?', or 'Are you guys this?' And then you can become that, quite easily. What I’ve learned is that you have to know when to be malleable. When you narrow the scope, it feels claustrophobic. Why are we doing something that’s smaller when we could be doing something bigger? Eventually, we realized that by narrowing down our scope, we were actually increasing our value." More positioning and ICP wisdom from Kareem on The Review today (link to the story in the comments)