Good morning 👋
Just a quarterly reminder that the links above this welcome section are up there for a reason - check them out if you haven’t already.
We hear a lot of people talk about product-market fit, but we haven’t found many useful frameworks to think more clearly about all of the obstacles you need to overcome to find PMF.
A friend recommended we read Sequoia’s Arc framework, that’s what we did, and it’s now our go-to resource on the subject.
We’re breaking it down in today’s piece.
Today’s highlights
Sequoia’s PMF framework
Inside OpenAI’s upcoming round
What Forerunner looks for
What happens if carried interest tax treatment changes
TOP
The Arc PMF framework 📈
This framework comes from Sequoia, and their deep dive on it is worth reading.
Here are the high-level takeaways for each of the paths shown above:
Hair on fire
Customers are in comparison shopping mode
Huge amounts of competition = low pricing power = massive market required
How can you create a differentiated customer experience?
Noise is your biggest sales obstacle
Being outcompeted is your biggest risk
Hard fact
Latent demand exists, but you have to find it
Less crowded market
You need to overcome habits and attitudes of the accepted status quo
How can you create an epiphany in your customer’s mind to unlock your value prop?
Future vision
Customer either has no context on the problem or they assume it’s beyond the realm of reality
Little-to-no competition
Winning market share is less important than gaining initial adoption
Maintaining market share if / when you grow creates real pricing power
GP / LP Mastermind
The “anti-conference” for fund managers 🌴
We don’t like conferences, so we created our own version that we would actually look forward to going to.
Small group of 6-10 LPs, GPs, and partners
Golf and padel
Boat charter
Private dinners
No outside sponsors
We only have space for 6-10, and applications close next month.
If you’re interested, we’d recommend letting us know sooner rather than later …
LINKS
✍️ Rewriting Your Personal Narrative for Growth: Steve Magness, author of Win the Inside Game, suggests finding a hobby, something outside of work, will create a more complex self and a diversified sense of meaning
👻 How to Trick Investors & VCs: The purpose of this article isn’t to teach you how to commit fraud, but to help understand and recognize some of the accounting/finance nuances that might deceive investors
👤 Your Complete Guide to Board Rooms: A guest post from Mostly Metrics on Growth Unhinged that explains who are the participants, their roles and responsibilities and how the meeting should flow
🏋️ Leadership Minute—Finding Your Strengths: Leaders maximize their strength and minimize their weaknesses, and help others do the same
TWEET
HEADLINES
Carried interest repeal could stifle investments in startups, NVCA says (TechCrunch)
$1B per day: OpenAI’s upcoming round underscores unparalleled valuation growth (Pitchbook)
Former Hollywood exec and startup banker team up for new seed fund (Pitchbook)
What Forerunner Ventures Looks for in Consumer Startups: Vision, Magnetism, and Unfair Advantages (Inc.)
New Hamilton Lane fund “democratizes” access to VC (VCJ)
MEME
POLL
Which of the PMF paths shown above is most interesting to you from an investment perspective?
Thanks for reading this far and giving us a little bit of your attention this week.
Feel free to unsubscribe whenever this stops becoming valuable to you.
- Clay
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