The Ledger
Every statement that passed quotation and attribution checks. Mix any filter with any other: certainty 1/5, debate potential 5/5, or both at once.
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Jackson: 60% to 70% of startups stall before achieving strong PMF
“The majority of companies, so greater than 50%, probably closer to 60 or 70% are gonna get stuck at L one or L two. And so that leaves, you know, roughly, let's say, 30%, make it to L three or L four, just in our experience looking broadly.”
Jackson: Founders should sell before building to get customer signal
“I tend to gravitate towards the, like, I want to sell it before I build it because I really want the signal from customers. And I want that to sort of be the guide and the oxygen that drives what I'm building.”
Jackson: Best early customers have already failed to build internal solutions
“If a customer has a problem and like, I really think they have a problem and they know they have the problem and they're looking for a solution for the problem, or they've even tried to build their own solution to it and failed. That's like the best customer, …”
Jackson: Strong PMF requires >60% gross margin, <10% churn, and >110% NRR
“So like, you know, we're talking about our gross margin needs to be above 60%, hopefully above 70%. Our burn multiple is now below three, right? Like ideally we're in like the, ideally we're like close to one, right? Burn multiple, like in the one to three zon…”
Jackson: Cold sales conversion benchmark is around 10% at Level 2 PMF
“A benchmark we would say is that your sales conversion without a warm intro is still probably like 10%, something like that. Like first call to close one is like around 10%.”
Jackson: As PMF strengthens, marginal customer acquisition should get progressively easier
“And if you have product market fit, and as you are progressing along this journey, the marginal customer should be getting easier and easier and easier to get, like easier to acquire them, easier to give them good service with a good product. And that's means …”
Jackson: Founders should view markets as people, not abstract categories
“I think it's like much more tangible for a founder to think of the market as like a collection of people. Right? Like Jack Altman was thinking about his market as all of the HR leaders out there. And he was thinking about how many of them are there and what ar…”
Jackson: A prospect calling an idea 'interesting' means 'no'
“If you had reacted like, yeah, that sounds kind of interesting. That's a no, right? That is a no. That is a polite way of saying the word interesting is a polite way of saying no.”
Jackson: Startups seeking nascent PMF must prioritize satisfaction over efficiency
“Of the three dimensions that you just recapped, Lenny, it's satisfaction first, demand second, efficiency last, when you're at level one. Like, it's actually okay to be inefficient at this stage, if it helps you uncover something that delivers an insanely good…”
Jackson: Enterprise startups take four to six years to reach extreme PMF
“And for the best enterprise companies, I like, I would say they tend to reach extreme product market fit in like roughly four to six years, right? There's some variance but roughly four to six years.”
Duke: First Round uses structured forms for independent investment opinions
“We do this, like, for example, at first round, we do this for, we have a structured forum for evaluating a company in terms of whether you should invest in it. Because, you know, there are facts and then there are the way that you model those facts. And so it'…”
Looker's founder did 40 hours of hands-on consulting to close early prospects
“Looker is interesting because they spent actually kind of a long time at level one, but then like flew through level two. And the reason is because they, Lloyd, the founder, the first five customers of Looker, he was basically going in and doing consulting for…”