Bansal: Product-market fit is misleading and should be called product-market sales fit
Jyoti Bansal · a16z Podcast | Product-Market SALES Fit (What Comes First?) · Feb 26, 2019 · at 6:35
Jyoti Bansal, founder of AppDynamics, discusses GTM strategy with a16z partner Peter Levine, arguing that sales motion alignment is as critical as product-market alignment.
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“It's a little bit misleading to just call it product market fit. We should call it product market sales fit.”
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More from Jyoti Bansal
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“Two-thirds of our engineering investment should go with our existing TAM. And the one-third of our engineering investment, we should keep putting on expanding our TAM always.”
Bansal: Startups reach product-market sales fit between $1M and $10M ARR
“I would roughly think getting to your zero to the first million ARR You are in the phase one of product market fit. Annual recurring revenue, which is like, you know, do you have a product someone will buy and it's solving some pain. Then you're like, you know…”
Bansal: Spending 10–15% on Services Optimizes Enterprise Software Adoption
“We found the right balance was about 10 to 15%. So like if we, if in our products, if like, you know, people are buying, let's say they're spending a million dollars with us on the software and they spend like, you know, a 100,000 dollars or 10 to 15% on it, o…”
Bansal: New enterprise products have three sales phases based on customer count milestones
“The sales learning covers three phases. One is the, my first 25 customers for the product. 25 to, that's like phase one, which is very, very, almost the founders are selling. Yes, there's the 25 to a hundred customers, and then there's a hundred, after a hundr…”
Bansal: AppDynamics used product managers to sell the first 25 customers of new products
“The first 25 customers for the new products, we actually got the product management team to really sell it the way your founders will sell in the, in a brand new startup, instead of hiring a new sales force for that.”
Bansal: AppDynamics needed 40% revenue from adjacent products for $1B target
“When we did that math and this is again a rough math, like you never know that if we want to get to a billion dollars of revenue from a hundred million in like seven years, let's say, or six years, our plan was, we need to have like at least 40% of our revenue…”