Dan Hockenmaier wrote a fantastic essay titled “When to join a startup”, that I highly recommend, and it got me thinking:

When should a Marketer join a startup?

While the risks Dan talks about apply, there’s a deeper level that a Marketer must think about. “What is the job to be done?” and “Am I good at doing that job?”.

Note: The first part of this essay will be paraphrasing Dan’s essay and then I’ll share my perspective.

YC’s famous motto is “make something people want”.

That’s true when you’re first trying to find product-market fit. There will be a small niche that companies must focus on, but it’s a lot more complex when they want to grow past that and survive in the long term. The YC motto becomes, as Dan eloquently writes, “Make something people want and sell it profitably to many of them in perpetuity”

Every successful business faces (and ideally overcomes) 5 key risks:

These risks are not always linear and especially in Series B - Pre IPO, companies oscillate between business model risk and scaling risk.

“Can we get the product to work?”

A company might have a brilliant idea, but the first hurdle is whether the solution is technologically feasible. In SaaS and consumer tech, this risk is easily mitigated because the technology is available, but that’s not always the case in Deep Tech and Hardware.

Vertical Take Off and Landing (or VTOL) is a good example of where the biggest risk is the technology.

“Can we build something people love?”

Solving market risk is often called finding product-market fit (PMF), and it is the holy grail that early stage founders are searching for. There needs to be concrete evidence that customers love the product, are willing to tell others, and want to use the product for a long time.

“Can we acquire lots of customers?”

When finding PMF, the main growth drivers are word of mouth and referrals. That’s a great sign of having PMF but that’s not scaleable. Companies have to figure out how to get their product in front of more customers and for most B2Cs that’s through viral growth loops, paid marketing, and/or SEO.

“Can we serve customers profitably?”

VCs expect initially unprofitable businesses. That’s why they’re providing funding, but the promise is that eventually companies will have a profitable business. Certain business models are notoriously difficult to crack (e-comm) and some are easier (B2B SaaS), but the long term solution must be that the business model itself is profitable. Layoffs and cost cutting measures are short term and long term unscalable.

“Can we maintain market share?”

Companies that get to this point (Post IPO) have survived longer than 99.99% of businesses, but they can’t step off the gas. More competition. More scrutiny. More expectations. This is why companies must think about defensibility risk and how they’re going to survive the next 100 years after surviving the first 10.