What's nailed down?
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One afternoon in October 2021, I set aside an hour to articulate the assumptions 🐙 behind my belief that Summit would establish itself as a productivity tool for finance professionals.
At the time, the product was a canvas-based modeling platform. One part whiteboard, one part spreadsheet (in the UI, quite literally so). This hybrid nature made it peculiar but powerful. Better, I thought, than spreadsheets.
The invalidation of these assumptions came slow, then quickly.
#1. Professionals are eager and willing to learn how to use a new tool for building plans and models. Some, a few, the innovators are. But these innovators are few and far between 🐙 and don't have a lot of influence. ❌
#2. Users will return frequently to adapt and update their plans and models. This was a little vague (what is frequently, anyway), but this also failed, because most people only need to create a plan or model once per quarter, once per year — sometimes, and this is most people, once an investor asks them to? ❌
#3. People with average spreadsheet skills will switch to Summit for building their plans and models. Most people would rather struggle along with average skills using their familiar tools than switch to learning something new. There are better keyboard layouts than QWERTY. Very few people want to learn them. ❌
#4. Summit can win over heavy/power users of spreadsheets for some types of complex analysis. We did win a few. Which lit our lighthouse and kept us believing this was an avenue. But power users are a tiny market by definition. So unless they are working on extremely valuable problems, their willingness to pay won't offset their diminutive scale. And like most power users, ours were using our tools because they loved the problem, not because the problem was intrinsically valuable. ❌
#5. Collaboration is a critical component of planning across teams. No, it isn't. Which isn't to say it shouldn't be. But in practice, most planning is weak, done in silos, and collaboration is meager. Yes, it's true: most teams and therefore organizations are dysfunctional. Selling to only the healthy ones is therefore a fantasy. ❌
The Upside Down
After going 0 for 5 on our core assumptions, but with runway remaining, we decided to convene at the nearby Taco Flats over a pen, a notebook, and a healthy provision of margaritas. Again and again, we agreed (heartily!) that product was powerful, but — equal and opposite: with our target market we were pushing a string uphill. They just didn't need it; there was no pull.
So we flipped the world upside down: "Let's pretend for a second that someone did need it, and was pulling it out of us — why would that be?" We quickly wrote out the conditions under which our product would be a no-brainer:
- It's hard for them to do the math in a spreadsheet.
- They can't turn to coding it in a traditional language.
- They want to share the end result with a larger audience.
The last bullet felt especially promising: for all their strengths, spreadsheets were invented pre-web, pre-Internet, pre-API's. Yes, can share a GSheet, but it's a far cry from an app-like experience.
We didn't leave victorious, but we also weren't defeated. Could there be a use-case and segment out there that met these winning conditions?
The Exit is Behind You
It would be months before we knew that sales, marketing, and growth teams were the answer, let alone which roles 🐙 within those segments were our ideal buyers. But we had emerged with a litmus test that made it easy to detect fit among prospective segments.
When we're seeking P/M-fit and arrive at what feels like a dead end, we need to ask ourselves what assumptions we've bolted down out of view. What assumptions precede these assumptions that have failed?
In our case, it was assuming that our target segment was financial operations — an assumption that was deeply rooted in the genesis of my idea for the business (I was frustrated while trying to create financial models). This one false premise meant we weren't even getting partial credit 🐙.
To make progress, we have to be willing to take two steps back. What beliefs have we failed to question?