The story goes like this: the founder of a startup gets a huge amount of VC money. The next step is to find a product-market fit. Simple, right? They should put all that money into promotion and sales, and things will go well. Not so quickly. Anyone can make the growth line go up and to the right if they spend enough money on ads. But you need to do growth the right way, which is much harder.
Matt Lerner was in charge of marketing at PayPal for 11 years and then at 500 startups for 4 years. He has seen businesses of all kinds try to find customers. His new book, “Growth Levers and How to Find Them,” is about how to sell your product in the best way.
PayPal found its first product-market fit on eBay, but it pretty much found that by accident: it watched how people used the product very closely.
“Someone saw one day that 54 of the sellers were writing ‘please pay me with PayPal’ in their eBay listings,” he told TechCrunch+. At the time, he told the senior team about this.
The first thing the management team did was get those people out of the system because that wasn’t what they were there for.
He said, “Thank goodness David Sacks came back the next day and said, ‘I think we found our market.'” “Let’s make tools for these power sellers instead of making them write “Pay me with PayPal” in their listing.” Maybe we should just give them an HTML button that they can use. That did work, though. Then he asked himself, “Why should we have them put it in every time?” Why don’t we just put it in for them automatically? Indeed, that was PayPal’s big break.
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What PayPal did that worked is a good example of how your company can start to find the best ways to get its message out there.
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