The founder-market fit can be defined as the match between the founder of a business with the business idea, sector and customer knowledge. In other words, it is the fit that a founder has with that business idea for which he or she should match as closely as possible.
This meeting between the founder and the business idea occurs when the former feels a special and personal motivation to take it from idea to reality, has a high knowledge about it since it is a sector that interests him and may even try to cover a need that he or she has had in the past and that they have not been able to cover due to the market supply.
There are usually 4 main signs of a particularly strong founder-market fit:
- Personal history
The motivation that the founder feels for this business idea is so great that he simply needs to carry it out. They don't wonder whether this is truly "it" and whether they want to dedicate the time to it because it is something that has such a priority in their lives that they spend all their time thinking about it and getting hands on into action. There is nothing that the person prefers to be doing instead; they spend all their free time thinking about that business idea, they dream about it and feel that they really know what that business must be like for them to be successful. They need to see it happen.
When a founder feels such an obsession she does go deep into the business idea because she wants to start a business or because she wants to run her own company; she makes it simply because she feels a deep inner urge to do just that and nothing else.
This obsession is usually accompanied by deep knowledge of the sector. The founder knows who are the players in the sector, the current competitors, the needs of the consumer and the potential players. This is why they are so sure their idea will work out: they really know what they're doing!
Consumers like to be able to truly identify with the founders of a company. When they are told that the one who founded a brand is someone who has seen a market opportunity, they do not feel anything for that person and do not have a special connection with the brand.
On the contrary, when the founder has a story to tell, why they need to build that business, there is a match not only between the founder and the market, but also the market with the founder. Clients feel it too and they feel the company is much closer to them!
A third trait is that the founder feels such chemistry with what she is trying to build that she is practically doing it for herself. This characteristic occurs because, in a strong founder-market fit, the founder is usually part of the goal of the business that she is developing: they are trying to satisfy a need that they also have and feel deeply connected to.
The founder therefore knows his target perfectly because she is another client (in a way) of her own business: her shares, her language, her traits, her interests and thus transmits a great positive liking for the people she resembles and who make up her clientele.
With experience we do not mean having previously undertaken or having already worked in the sector. In reality, in terms of experience, the founder is usually a person who knows the sector well and has been in contact with it a lot, but who also has room for innovation and disruption. The best founder-market fit is not when a founder has dozens of years of experience in a sector, but at least enough to be able to know it and, at the same time, be aware of its product and service supply shortages.
This trait, however, varies depending on the type of business you are talking about. In a B2C business the founder only needs to have the necessary experience to understand the sector; However, in B2B businesses and businesses in the biotech, healthtech and similar sectors, they do need founders with formal and long experience in the sector given all the technical knowledge that is required. If you have 0 experience in a biotech business and you want to start one, it's probably not a good fit at all.
You can see now how the founder-market fit forms a strong potential for the success of the business in question given the compatibility of the founder with the business idea. That is why the founder-market fit also greatly enhances the trust and credibility of potential investors, which is why they always look for businesses with a clear fit. This is the first, or one of the first questions that you will probably be asked as well if you are a founder willing to get investment for your business.
While there are inherent traits that can be detected by speaking passionately and exposing knowledge, there are a number of questions that investors often ask to test for a founder-market founder. They are questions like:
- Why is your team the right one to carry out this project?
- What distinguishes you and sets you apart from your competitors?
- Where do you see yourself in 1, 5 and 10 years?
- What would you do if the board wanted to replace you as a CEO?
- Why would you stop building this company?
In addition, the founder-market fit is usually very present in all those startups that succeed and, on the contrary, he is not usually in those that fail. It is absolutely crucial to have a strong founder-market fit. Do you have what it takes?