VIRAL Level 7: Reaching Product-Market Fit.
You’ve got strong positive unit economics and your inbound leads are now exceeding outbound leads.
You’re now looking to scale up.
What investors at this stage are likely to like about your business:
At this stage your C-suite is a force to be reckoned with, and you should highlight this to investors. At Phase 7 a company’s C-suite should be be as good or better than its founders, with strong management and other skillsets critical to taking your business from an early stage company to a mature company at scale.
- Unit Economics:
At this point it’s costing you less to acquire a new customer than the value you’re getting from that customer and you should highlight that. You’ve got strong inbound sales in your initial target market and you are building your brand.
- Exit potential:
At this point you’ve likely developed strong relationships with partners that could become potential acquirers, and this is an asset you should talk about.
What investors at this stage are likely to ask questions about:
You’re at the point where you’re ready to scale – how are you going to scale fast and make it difficult for your competition – which likely now includes large incumbents – to catch up?
In order to scale, you’re going to need to have unbeatable partnerships for sales and distribution – If you don’t already have these in place, why not, and how do you plan to get them in place?
- The “Level 7 fallacy:”
A common mistake is when companies think they’ve hit product market fit – where your cost of customer acquisition is truly low and your sales channel is productive without the involvement of the founder or C-Suite. In reality, companies often still have to close customers with involvement of a charismatic CEO, a strategy that isn’t scalable and actually reflects that a company hasn’t truly nailed their value proposition. What evidence can you provide to an investor that you truly are able to sell at scale with low acquisition costs?