Losing Product Market Fit (PMF) with Octopus Ventures Edward Keelan, Partner - B2B Software @ Octopus Ventures

SaaStr Europa 2024

1. Losing Product Market Fit with
Octopus Ventures
Edward Keelan
Partner
Octopus Ventures

2. PMF
First you want it
Then you have it
Then you destroy it
Then it destroys you

3. Agenda
What is Product Market Fit (PMF)?
When do you know you have it?
What are the pressures on it?
What does losing PMF destroy?
Case study discussion

4. What is PMF and when do you know you have it?
Sexy Story Product-Market Fit!
Self –deception Revenue Centric
Vision
Customer Engagement
Source: Adam Fisher, Bessemer Source: Venture Partners, 2019 (https://www.bvp.com/atlas/the-product-market-fit-journey)

5. What are the pressures on it?
Level of PMF
ARR
<£1m
£1-3m £3-10m £10m+
Pressures
New customer
requirements
Poor sales
performance
Opportunities in
new markets

6. What does losing PMF destroy?
M.O.S.T.
-Mission
-Objectives
-Strategy
-Tactics
Gross Margin
-Bespoke
development
-Professional
Services
-Hosting
Communication
Tactics Eat The Mission
Sales
Product AM / CS
FinanceTech

7. Case Studies
•$3.5m ARR SaaS company
•Based in the US
•ACV $50k
•A large Swiss bank offers you
$500k
•$250k implementation day one
& $250k pa licence
•You need two bespoke
modules and an AWS instance
in Switzerland….
Do you take it?
•UK SaaS focused on safety in
the healthcare market
•Poor sales for the past two
quarters; reasons unknown
•There’s a lifeline to this year’s
targets which will be missed
•Large US engineering firm (a
friend of the new CRO) are
interested in buying a licence
•They’ll pay £100k upfront for it
to be adapted
Do you take it?

8. Three Key Takeaways
1. Finding PMF is hard; keeping
disciplined is as hard
3. If a customer changes your
4. Protect your PMF at all costs

9. Thank You!