- David Risenko, founder of Weebly, discusses how Weebly found product market fit.
- Weebly is an easy way for entrepreneurs to build a website or online store.
- Weebly grew to 50 million users and sold to Square for $365 million.
- Risenko shares the journey of Weebly's early days, including the struggle to find product market fit.
- It took Weebly 18 months to find product market fit and start gaining traction.
- Risenko defines product market fit as making something that a lot of people want.

- The phases of a company include idea, prototype, launch, traction, monetization, and growth.
- Finding product-market fit and building a world-class team are the two hardest things for a startup.
- Making money is a distant third in difficulty.
- To scale a company, an organization must repeatedly launch great products.
- The best companies create their own market.
- Finding a hidden need and serving it better than existing substitutes is key.
- Customers should pull the company towards solutions, not the other way around.
- Building a remarkable product involves talking to customers, rapid prototyping, and user testing.
- Iteration and listening to customer problems are important.
- Building a functional prototype quickly is better than investing in a fully functional product.
- Scaling and monetization should be focused on after the product experience is right.

- Charging for a product is important, but ensure it is working for people first
- Expect that it will take 10 times more iterations than initially thought
- Keep burn low and build a team that can iterate quickly
- Test solutions with target customers and be flexible in changing target customers if necessary
- Avoid overthinking and rely on data and market research
- Use customer interviews, UX testing sessions, and metrics to gather feedback
- Launch when your product is better than what is already available
- Prioritize tasks that get you to the next stage and optimize for learning
- Track returning usage, NPS, and paying customer renewal rates to determine product-market fit.

- Tracking return usage, NPS, and paying customer renewal rates are important metrics to measure product market fit.
- NPS is calculated by asking if customers would recommend the product or service to a friend, with a ranking from 0 to 10. A high NPS indicates product market fit.
- Signups and conversion rates are not reliable metrics for measuring product market fit.
- A successful startup needs a product that is better than alternatives, a differentiated way to acquire customers, and a business model that aligns with the product and market.
- Scaling the team should not happen until product market fit is achieved, and then aggressive scaling is recommended.
- Building a brand should be based on a fundamental consumer insight that aligns with the product.

- The founders of an airline realized that the main factors people consider when choosing an airline are schedule, price, destination, and frequent flyer programs.
- They decided that they couldn't win based on these factors, so they decided to create an airline with a focus on providing an amazing flying experience.
- They built their brand and product around this flying experience, investing in things like cool lighting and well-trained staff.
- They created a new reason for people to buy their tickets and were successful in doing so.
- The key qualities of entrepreneurs are optimism and determination.
- Weebly, a website builder, went against the common advice of targeting a niche audience and instead focused on building a horizontal platform with a wide range of functionality.
- The first few years of Weebly's history were spent convincing people that they could build a website without coding.
- Creating a market involves convincing people of a new need and then scaling and refining the product once people realize its value.
- Weebly did not monitor key KPIs during the 18-month period of finding product-market fit, but eventually found success through iteration.
- In the early days, Weebly followed the prevailing thinking in Silicon Valley of not charging money, but eventually introduced a paid version of their product and became cashflow positive.

- The speaker discusses the issue of calculating active usage for users who stop using a product after a few weeks.
- They believe that active usage is still a valuable metric, even if users eventually stop using the product.
- The concept of "discontinuous improvement" is explained as making big leaps in product development rather than small incremental improvements.
- The speaker emphasizes the importance of optimizing for learning and addressing hidden needs in product development.
- The question of how to handle the different needs and preferences of purchasers and users in a hardware startup is raised.
- The speaker suggests that education or further discussion may be necessary to address this issue.
- The timing of fundraising in relation to product-market fit is discussed, with the speaker advising that most companies cannot raise money until they have reached the early traction phase.
- The speaker explains that getting to early traction without raising money often involves relying on sweat equity and keeping costs low.
- The speaker advises against comparing products based on a feature checklist and instead encourages focusing on customer needs and differentiation.
- The session concludes with a mention of future topics and speakers.

- David Risenko, founder of Weebly, shares the journey of how Weebly found product market fit and grew to 50 million users before being sold to Square for $365 million.
- It took Weebly 18 months to find product market fit and start gaining traction.
- Risenko defines product market fit as making something that a lot of people want.
- The phases of a company include idea, prototype, launch, traction, monetization, and growth.
- Finding product-market fit and building a world-class team are the two hardest things for a startup.
- To scale a company, an organization must repeatedly launch great products and create their own market.
- Building a remarkable product involves talking to customers, rapid prototyping, and user testing.
- Scaling and monetization should be focused on after the product experience is right.
- Charging for a product is important, but ensure it is working for people first.
- Expect that it will take 10 times more iterations than initially thought.
- Keep burn low and build a team that can iterate quickly.
- Test solutions with target customers and be flexible in changing target customers if necessary.
- Avoid overthinking and rely on data and market research.
- Launch when your product is better than what is already available.
- Prioritize tasks that get you to the next stage and optimize for learning.
- Tracking return usage, NPS, and paying customer renewal rates are important metrics to measure product market fit.
- A successful startup needs a product that is better than alternatives, a differentiated way to acquire customers, and a business model that aligns with the product and market.
- Scaling the team should not happen until product market fit is achieved, and then aggressive scaling is recommended.
- Building a brand should be based on a fundamental consumer insight that aligns with the product.
- The key qualities of entrepreneurs are optimism and determination.
- Weebly went against the common advice of targeting a niche audience and instead focused on building a horizontal platform with a wide range of functionality.
- Creating a market involves convincing people of a new need and then scaling and refining the product once people realize its value.
- Weebly eventually introduced a paid version of their product and became cashflow positive.
- The speaker emphasizes the importance of optimizing for learning and addressing hidden needs in product development.
- The timing of fundraising in relation to product-market fit is discussed, with the speaker advising that most companies cannot raise money until they have reached the early traction phase.
- The speaker advises against comparing products based on a feature checklist and instead encourages focusing on customer needs and differentiation.

David Rusenko details the story of how Weebly developed one of the most popular website creation and hosting sites on the web today.  Startup School is YC's free online program for founders. Sign up to access the full curriculum and over $100k in deals! https://www.startupschool.org/

So our next speaker and I have something in common.

We both started businesses to allow people to create websites.

The difference is that David's business was massively successful.

David Risenko is the founder of Weebly, which early this year sold to Square.

And he's going to give us a talk about how Weebly found product market fit.

I'm actually very impressed with how full the room is given it's right after Burning Man.

So just by a quick way, introduction a little bit by myself.

If you haven't heard of Weebly, Weebly is an easy way for entrepreneurs to build a website or an online store.

Before Weebly got started, the only way to do that was to learn to code yourself.

And now there are plenty of tools and services to allow you to drag and drop and build a site.

I wrote the first line of code in February 2016, so a little over 12 years ago now.

Grew the company to 50 million users and around 350 employees.

Sold the Square in May of this year for $365 million.

And probably 1 of my favorite stats is that half of the US population visits a Weebly site every single month.

The reason it's my favorite is because it's reflective of the success of the entrepreneurs, people building the websites themselves and actually having success and seeing those results.

So I'm here to talk to you today about how to find product market fit.

It's a, you know, the top problem that anyone deals with.

I'm going to try to keep it fairly practical, not theoretical, because I think finding product market fit is really about the practical nitty gritty, the hustle.

So I want to just preview real quick, talk to you a little bit about our journey.

Like I said, I wrote the first line of code a little over 12 years ago, which sounds really weird that it's been that long.

This is a photo I took from February 2006.

This is where I was at Beaver Stadium at Penn State when I wrote the first line of code.

But in college, In August of 2006, so this has been 6 months, I should introduce this graph.

So this is a graph of the new users per day signing up for Weebly.

So non-cumulative, just whenever someone signs up, you know, you get a 1.

Dan, Chris and I were all doing internships that summer.

You can see here our massive record signup day was 12 users.

I think we just created accounts for friends and family.

So 6 months in, we still hadn't launched, right?

Just to give you an idea of how long it takes.

We worked for 6 months and hadn't launched.

In October of 2006, this is 8 months later, still hadn't launched, We were hustling for buzz on forums.

We had 30 some users that signed up on our record day.

But 8 months in and still hadn't launched.

In October of 2006, I read about Y Combinator on Slashdot.

The deadline for application was midnight Pacific, so I had about 2 hours to go to create a YC application.

I didn't have time to call up Dan and Chris, my co-founders, and asked them if they wanted to drop out of school with me and move to San Francisco.

My guess was that Chris was going to drop out of school and Dan wasn't going to.

I called Chris up first the next morning and said, hey, Chris, you want to drop out of school with me and move to San Francisco?

And just on the spot, he's like, hell yeah, let's do it.

I called up Dan I said Dan you want to drop out of school with me and move to San Francisco and he said you know what this sounds like a really promising idea let me call my parents I'll call you back in 2 hours.

It was a much more responsible approach but but But I applied with less than an hour to go.

We drove up, interviewed, and got accepted.

Actually funny story, we got finally were able to get on TechCrunch the day of our YC interview.

So I'm sure that that didn't hurt at all.

This isn't actually what a normal press spike looks like.

But in this particular case, we only had 2 servers, and we were really worried about our servers burning down, and AWS didn't exist back then.

So we basically decided to allow you to sign up and then say, hey, you're on the wait list, we'll contact you once you're able to access your account, which is why it spread over a few days.

But the first tech crunching, now this is much more normal of what it looks like after a press spike.

It's kind of hovering around the same level.

If you're observant, you'll notice here, 1 day we had 0 users.

That presumably means that we were, the whole site was down, which is great.

But in January 2007, 11 months in, we dropped out of school, packed up all of our servers in my car, I drove cross country to San Francisco, would not recommend driving 80 in January, got stuck in Wyoming for 3 days, but finally made it out here, and this is 11 months in, So 11 months after writing the first line of code, we're working on it full-time in San Francisco as part of the YC program.

It's still shocking to me that at 1 point, this TV was current technology, because it just looks so old now.

Sorry, two-bedroom apartment in the Yscraper.

We pushed 3 desks together, and we pretty much just worked all the time.

Our only rule is we'd take Saturdays off.

But other than that, we'd work until we were tired.

We'd sleep until we weren't and just kind of repeated that process.

Here is a second TechCrunch press spike that we got in January.

This is exactly what you should expect if you get on TechCrunch or any press.

It goes straight up and it's really exciting that day, and then it goes straight back down the next day.

But at least settles a little bit higher.

Now you notice we had a couple other press mentions.

What you'll notice here, these are going in the wrong direction.

You know, the number of new users per day is actually declining, declining, declining.

Both of these are heading in the wrong direction.

It means we didn't have product market fit yet.

We're 14 months in, it's over a year, and we still don't have product market fit.

This was kind of an interesting moment in our history because we found ourselves with less than $100 in our bank account.

And YC Demo Day was coming up soon and we were, you know, kind of had some excitement and thought, you know, talking to investors, maybe we'll be able to raise money.

We had just gone to Costco, so we had lots of food for a couple weeks.

But rent was coming up, and as everyone knows, rent in San Francisco isn't cheap.

So about a week after this, I came to this very room, pitched a whole bunch of investors at Demo Day, and we were successful in raising a $650K at the time that was called a Series A.

Today it would probably be called a Pre-Seed.

Round of funding, 14 months in, this is what a price for on Series A paperwork looks like.

Just to give you a perspective too on a little bit how crazy things have gotten out here.

We raised 650K on a $2 million pre-money valuation, so 2.65 post.

That was considered above average, slightly above average.

We were all very jealous of Dropbox, who had raised it a 5000000 dollar post-money valuation.

And today I think that number would probably be 15, maybe 20.

So it just gives you a little bit of perspective on how you can still be very successful, even if those valuation numbers today might seem low or you might be angling for a higher 1.

But it really puts it all in perspective.

So we got featured in Newsweek magazine, which I don't even think is in print anymore.

But you can see here, the spike goes up, it comes back down, it settles at a higher level, which is great.

But look, it's going in the wrong direction again.

So this is now 15 months in, still no product market fit.

In August of 2007, here's 18 months in, we got featured in Time magazine this time.

And again, it goes up, but now it's coming back down.

Now, it's suddenly in a higher level, which is good, but again, this is 18 months in.

We're 18 months into the journey and we still have no product market fit.

So just to give you an idea of how long it can take before having something even as basic as just having users that enjoy using your product and are coming back, 18 months later, we still didn't have it.

Now to skip through a little bit of the rest of the story here, here is October 2007, so now 20 months in, you kind of see we had this moment, and then boom, it turns around.

It turns around and it starts picking up.

And now all of a sudden you can see every single day we're getting almost 1,000 people coming to our front door, which is more than we were getting featured in Newsweek magazine or on TechCrunch.

First real traction that we got, fast forward again, February 2010, 4 years in, and now you can see we're off to the races.

So I wanted to give you a little bit of snapshot of what it looked like for us to get product market fit in the early days before diving into some of the basics.

So Let's start with a definition on what is product market fit.

So you've probably all heard Y Combinator's mantra, which is, there we go, make something people want.

I actually, if I was to modify this, I would say make something a lot of people want, because that incorporates a little bit about the market but we'll talk about that.

So first we'll go over the stages of a company.

So obviously you start off with I have an idea and everything is really exciting and you're telling all your friends about the idea.

So, this is roughly all of the phases of a company.

It starts with idea, you get to prototype phase, you then get to launch, traction, monetization, and growth.

I put monetization after traction because oftentimes that's the way it goes.

And actually going from launch and getting to traction is product market fit.

Monetization is actually a much easier problem than product market fit.

This is sort of the initial product market fit search.

Initial product market fit search is between idea and traction.

So getting from idea to traction is probably the hardest thing and the thing that kills the most companies.

1 thing not to forget is that when you're in this phase too, you're still refining product market fit.

They get so focused on scaling and so focused on, you know, continue to grow the business and they completely forget that you're still refining and still building product market fit at this stage.

All right, so what are the hardest things at a startup?

And I'm convinced that there's basically only 2 hard things.

Most companies will not be able to find product market fit.

Number 2 is hiring and building a world-class team.

And it's very, very difficult to sort of grow through that rapid growth phase and to emerge on the other side with sort of an enduring, long-lasting company and culture.

Making money, I put as a very distant third.

It is usually a lot harder to build a product that a lot of people really, really want than it is to figure out how to make money from that product.

So I would say that's usually a distant third.

You could have lots of ideas how to make money.

I would say definitely try to make money.

But it's a lot easier to figure out how to make money if you've already got people hooked.

And then the fourth 1, and we won't cover this too much, but to scale to a really big, long-enduring company, you need to build an organization that scalably and repeatedly launches great products.

And that's really, really hard, because it's not just going to be about the founders anymore.

It's about the organization doing so scalably and repeatably.

1 other sidebar is that the best companies will create a market.

So if you look at what Weebly's done, if you look at what Airbnb's done, if you look at what Airbnb's done, if you look at what Dropbox has done, all companies have created their own market.

I say this because by definition here, market research is not going to help.

Market research is research on existing markets, right?

So first of all, you need to find a hidden need.

So there is a need out in the market that a lot of companies or a lot of people don't realize exists.

And if people realize it existed, if it was obvious, then everyone would be doing it.

And so the hardest part is finding this hidden need, and everyone is gonna tell you that the idea is dumb.

I remember in the summer of 2006, after writing that first line of code, I went and pitched Weebly at the New York Tech Meetup, and it was 1,000 people.

It was, we were kind of alpha stage at that point, and it was in front of 1,000 people, and I gave a demo, a five-minute demo, and then Scott, the founder of meetup.com, came on stage and just said he thought it was the stupidest idea he had ever heard and no 1 needed to make websites and people who need to make websites already could or people had to learn to code.

And from a thousand people told us we had the stupidest fucking idea he'd ever heard.

So the point I'm making is, if it's obvious, then everyone will be doing it.

Now, the hidden need in this particular case was that there was a lot of people who need to make a website themselves, and that was really hard, because a lot of the tools at the time were geared towards people who were hand coding the websites, basically, like FrontPage and Dreamweaver.

We were able to realize that people wanted to do that and build a service that enabled people to do that.

But figure out what are you a substitute for?

If you know the jobs to be done book and framework, that's really helpful to think about what are people trying to do?

People aren't trying to make a website, people are trying to launch and grow their business, right?

So understanding what's the job people are trying to do and then what substitutes are there for that job.

And so when you think from that mindset, you might think, well, there's a website, you could also create a Facebook page, you could also, so there's lots of different substitutes for that job.

I think a really important 1 is understanding where are you getting pulled?

You shouldn't be pushing your customers towards a solution.

When you, when things are working, your customers are beating a path to your front door and they're pulling you and saying, no, can you need to do this?

And you're saying, yeah, but that's not what our product does, they say, well, I'm going to kind of hack it to do that anyway.

When you find people hacking your product to do something it wasn't intended to do, pay attention to that and double down on that.

And then often what you initially create will seem to fit into an existing market, but with less functionality.

It doesn't have any of these things initially.

But what it does do is it enables a whole new market, a whole set of new entrants to come and use your product.

And so the success of the iPhone wasn't that it successfully competed against smartphones.

But it wasn't competing against any smartphones that were out there, because what happened is there was maybe at that point in time, I was a heavy palm trio user, there was maybe a couple million smartphone users in the United States.

What the iPhone did is it made everyone a smartphone user.

And so there was all of a sudden a whole bunch of new entrants and then over time it also cannibalized the existing smartphone market.

So a lot of times people may sort of mistake you for incumbents when you're creating an entirely new market.

So the next is on building a remarkable product.

And I'll try to break it down into very literal steps about exactly what you should be doing.

Everyone knows this, but what is step 3, right?

Because that's where everyone's plodding around in the desert, like trying to figure out what the hell to do, and nothing's working.

So step 3 is literally this list of things.

So you talk to customers and develop a market thesis.

Try to understand exactly what their pain point is.

What's that job they're trying to get done and how can you help them get it done faster or better.

Listen to their problems, not their solutions.

So customers will tell you the pain that they're facing, listen to that.

When they talk about the solutions, their proposed solutions, you could just completely ignore that.

Because they generally aren't that great.

Number 3, go through a rapid prototyping and user testing phase.

Number 4, you build a solution to their problems.

And then number 7, by the time you've sort of looped on points 1 to 6, you probably looped about 27 times, and that has some interesting implications.

But no 1 ever gets it right on the first shot.

Let's look at their problems, not their solutions.

I like what Michael touched on this earlier too about the real Steve Jobs and fake Steve Jobs.

There's this meme out there that Steve Jobs just didn't talk to customers and would just like produce the magical product that the world needed like in 1 shot just straight from his imagination.

Some people say give customers what they want.

I think Henry Ford once said, if I'd asked customers what they wanted, they would have told me a faster horse.

People don't know what they want until you show it to them.

That's why I never rely on market research.

Don't listen to people's proposed solutions.

Market research is probably not gonna show you the way.

But what he didn't say is that he never talks to customers.

He didn't say that he never listens to their problems.

He didn't say that he never iterates, because those are all things that Apple does a whole lot.

No solution was ever delivered perfectly in a vacuum.

Number 3, rapid prototyping and user testing.

So I think this is a really important point.

We made this mistake a whole lot early on.

Building a fully functional product just to figure out if it's going to work or not is a really, really expensive way to test the hypothesis.

So you could get caught up in this loop of like build the product, launch it, doesn't work.

Scrap, repeat, build the product, launch, doesn't work.

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David Rusenko - How To Find Product Market Fit