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As a follow up to yesterday’s post 5 Things for Every SaaS Founder, the comment about “90% marketing, 10% product” has elicited a good deal of feedback. I do believe the 90/10 ratio is directionally correct, if a bit exaggerated. Marketing in this author’s example really means sales and marketing (in her case a self-service SaaS product that’s all marketing driven vs other SaaS products that require marketing and sales people to sell it).

Here are a few thoughts on the idea of sales and marketing significantly outweighing product:

• Product is 100x more important than marketing when seeking product/market fit
• 3:1 is a common ratio for customer acquisition spend to engineering
• Product-driven entrepreneurs tend to underspend on sales and marketing (see Product or Sales Startup CEO)
• Marketing is often tougher than product because results take longer to achieve and are more hit or miss

The number one reason startups fail is that they run out of cash. The number two reason startups fail is that they don’t aquire enough customers — entrepreneurs need to understand the importance of sales and marketing. 

What else? What are some more thoughts on sales and marketing being significantly more costly and time intensive compared to product development?

Joe Gebbia, co-founder of Airbnb, gave a talk at the Atlanta Tech Village a couple years ago and did a great job sharing their founding story. For our video of the week, hear Joe’s TED Talk titled How Airbnb Designs for Trust. Enjoy!

Joe Gebbia, the co-founder of Airbnb, bet his whole company on the belief that people can trust each other enough to stay in one another’s homes. How did he overcome the stranger-danger bias? Through good design. Now, 123 million hosted nights (and counting) later, Gebbia sets out his dream for a culture of sharing in which design helps foster community and connection instead of isolation and separation.

The topic of product/market fit has come up several times recently. More and more entrepreneurs are beginning to understand that in the early stages of getting a startup off the ground, the most important thing is building something that people want. It seems so simple but in reality it’s incredibly difficult. If you haven’t already, go read The Pmarca Guide to Startups and learn more about product/market fit (incredibly good content!).

Here are a few thoughts on product/market fit:

• 5 Ways to Identify Product/Market Fit
• Initial Product/Market Fit
• Assessing Product/Market Fit
• Pricing Doesn’t Matter Pre Product/Market Fit
• Losing Product/Market Fit
• Product/Market Fit Before Raising VC Money
• Forcing Sales Without Product/Market Fit

One of the most important concepts first-time entrepreneurs need to learn is product/market fit. Read The Pmarca Guide to Startups and the additional thoughts outlined above.

What else? What are some more good resources on product/market fit?

Yesterday I was giving a talk to a group of entrepreneurs and one asked the question “what’s an entrepreneurial trait you look for that isn’t talked about as much?” Of course, traits like resourceful, persistent, and dreamer are common in entrepreneurs. One trait that I’m especially fond of is the continuous learner. This is someone who constantly seeks out new ideas, best practices, and ways to get better.

Here are a few ways to gauge a potential continuous learner:

• Are they consistently recommending books, blogs, or apps that they like?
• Do they regularly ask what lessons were learned from different experiences?
• Do they attend industry conferences and events for networking and content?
• Do they share relevant ideas and best practices without being asked?
• Are they collaborative and eager to learn, in general?

The next time you’re meeting with an entrepreneur, ask yourself if they’re a continuous learner. Some of the most successful entrepreneurs I’ve met truly love learning and seek to learn something new everyday.

What else? What are some more thoughts on this idea of being a continuous learner as a top entrepreneurial trait?

Earlier this afternoon I attended the board meeting of a fast growing tech startup. Board meetings are a great time to step back and look at a business from a high-level perspective while working through what is, and isn’t, going well. After reflecting on today’s meeting, I had five takeaways:

• Forward Looking – It’s easy to talk about what just happened last quarter because it’s fresh on the mind. While it’s important to review, most of the time should be spent forward looking.
• Strategy, not Tactics – Similar to reviewing what happened, it’s critical to spend the majority of the meeting on the strategic aspects of the business and not tactical, day-to-day elements (whenever possible).
• People, People, People – As much as we technologists like to think it’s all about the latest releases, the reality is that 95%+ of what makes a startup successful is the people element. Board meetings are no different in that a significant amount of time is related to the people component.
• Mission, Vision, and Values – Just like mission, vision, and values need to be reviewed constantly with team members, so too do they need to be reviewed at every board meeting. Everyone needs to buy in to them and know them by heart.
• Plan It, Do It, and Review It – One important aspect of a board is to review the plan, follow the progress, and review the results. Put another way, the board needs to provide accountability. The management team needs to lay out what they’re going to accomplish and then provide updates on their progress against that plan. Finally, the board needs to ask the hard questions.

Board meetings are an important part of the entrepreneurial journey and should help entrepreneurs achieve their goals.

What else? What are some other takeaways from board meetings?

For our video of the week, watch the Harvard i-lab | Startup Secrets: Turning Products into Companies. Enjoy!

From YouTube: You’ve figured out your value prop, you’ve got a great product under development. Now what? How can you develop a roadmap to build a company? VCs often qualify deals as being a “feature” a “product” or a “company.” Which do you have and how will you get where you want to go? During this session we’ll discuss how to think about designing your product as a foundational element of your business. Think beyond UX and Architecture to Whole Product, Ecosystems, and Strategic partners. Formulate how to design your go to market strategy and business model into your product with a modular architecture, distinctive packaging and a frictionless approach.