ED ZIMMERMAN: The statistics indicate that European startups have an easier time attracting early-stage capital than they do accessing capital for a second or third round of venture funding. Europe also has fewer middle-stage venture funds. These dynamics contrast the founder-friendly environment in California that has created upward pressure on valuations. Europe’s limited access to middle-stage venture money makes it important for European funds to collaborate with American funds, even if only to help European portfolio companies access the U.S. venture markets. As data from Ernst & Young reveals, in 2013 the U.S. soaked up 68% of the world’s venture dollars in tech, while Europe grabbed a far more modest 15%. The best funds in Europe already expend meaningful energy to build relationships with U.S. venture funds. A small number of European funds have opened offices in the States, realizing that doing so will add value to and enhance the success rate of their European portfolio companies. I believe that the most successful early-stage European venture investors will be those that enable their portfolio companies to raise subsequent capital in the States. … Read More »

Evan Nisselson, investor at LDV Capital: I’ve been tracking the visual technology ecosystem for the last two decades and have been investing in it for the past three years through LDV Capital — I’ll even be hosting a summit on visual technology next week in New York. I believe new advancements will impact a wide range of sectors, including finance, medicine, advertising, fashion, security, manufacturing, agriculture, logistics and entertainment. This creates a huge opportunity for startups, and the ones that come out ahead in this race stand to reap huge rewards. … Read More »

Elizabeth Cutler, co-founder and co-CEO of SoulCycle: My co-founder Julie and I thought people would pay a premium price for a premium product. Why? Because WE were willing to pay that premium. We were the target audience, we knew what we liked and what we didn’t, and we designed SoulCycle precisely to our own specifications. We assumed that if it worked for us, it would work for a lot of people like us. But the more people asked, the more the $27 question kept us up at night. We knew we had to take the guesswork out, so we focused on creating a one-of-a-kind experience and providing unparalleled customer service. Our marketing highlighted the fact that SoulCycle was more than a workout – it was fitness and fun and community and therapy rolled together. Ultimately, delivering on that brand promise is how we won the value argument with our riders. … Read More »

Christy Wyatt, Chairman and CEO of Good Technology: Satisfying market demand means fundamentally understanding your customers’ needs – in other words, you must first walk a mile in their shoes. It’s more than simply asking for their wish list of new features. You need to truly understand their business problems. This isn’t a one-time exercise, since business needs and opportunities change over time. If you’re not in lock-step with the challenges your customers are facing, you will easily miss the mark. When your customers tell you what they need to do, believe them. Not every leader will have direct access to their customers’ businesses, but there are many ways to establish a connection. … Read More »

CHRISTINA BECHHOLD: People often confuse product/market fit with traction and use the terms interchangeably, but they are separate steps in a linear progression. The former means you’ve identified your target market and shown that it needs your product (ideally demonstrated by paying for it). The latter means you’re ready to grow and possibly take on outside capital. One comes before the other; they aren’t done simultaneously. I heard a sound piece of advice from a founder who suggested that if you can get 100 people to continuously use whatever you’re offering, you at least have a good idea. I like to tack on a variation of Sean Ellis’s fit metric as a second step. When at least 40 of those 100 say they would be “very disappointed” without your product or service, you’ve achieved initial product/market fit. Keep going. Tweak and adjust. You aren’t there yet, but you’ve found a toehold. … Read More »

Tomer London, co-founder of ZenPayroll: Type “product/market fit” into Google, and you get millions of results with the top ones defining it as “a product that satisfies a strong market demand.” As an engineer as well as an entrepreneur, that doesn’t satisfy me. My definition of product/market fit is when more than half of your customers truly love your product, advocate for it and constantly evangelize it organically. It is something that you can also measure by its impact: a Net Promoter Score of 70 or greater, and month-over-month revenue growth at greater than 25% for 12 consecutive months. That’s what I call Customer Love. … Read More »

JOHN GREATHOUSE: Like most mental shortcuts, our tendency to seek out and believe data consistent with our beliefs fulfills an important role in our psychological makeup. If you questioned your core beliefs every time you came across a countervailing fact, your life would be rather dismal and anxiety ridden. While this aspect of human nature can lead to mildly amusing behaviors from our friends (and ourselves), such close-minded prejudices can result in fatal mistakes when assessing decisions at your startup. The next time you hear an entrepreneur say “I knew it,” a cold shudder of doubt should quickly follow. Successful entrepreneurs are not in the business of being right. They focus on getting it right — there is a difference between the two. … Read More »

Shahrzad Rafati, founder and CEO of BroadbandTV: The problem you’re solving may already exist, but is it noticeable enough for potential users to care? Is your target consumer base large enough yet? Regardless of how intelligent your solution is, timing is a big factor in how relevant it will be. Finding the sweet spot is really a matter of whether the consumer base, the problem and the industry are far enough along to warrant a solution. It can take some trial and error, but with the right amount of research, perseverance and a little bit of luck, these elements can align well enough for a product to really take off. … Read More »

David Ciccarelli, founder and CEO of Voices.com: Very few companies get the product/market fit right off the bat. Most startups have to tweak their ideas slightly or refocus on a different market. This is known as the “pivot,” a strategic move into another direction. Sometimes you can leave the product alone but refresh your communications for a different market. Alternatively, you may find yourself revamping the product to meet the needs of the market you’re desperately trying to serve. If there’s anything I’ve learned in being around startups and writing about our own experience, it’s that every entrepreneur charts their own course. There is no “right way” to develop an idea, nor is there a single best way to validate your idea. … Read More »

Jay Samit, serial entrepreneur: Find a dozen consumers who are in your target demographic and start bouncing ideas off them early in your iterative process. Avoid friends and family who only want to encourage you with false praise. Focus all your energy on engaging those who would benefit most from your new product. This first step will help keep you and your team focused on the most salient features and develop a base of evangelists who will help you market and spread the word when the time comes. The more testing you do with this user base, the better your reviews will be in the App store or with bloggers down the road. There is no more powerful marketing tool than a user who feels personally invested in a product’s success. … Read More »