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10 Signals You're Playing the Wrong Game
It's easy to get caught up doing something that only sort of works
Michael Houck
June 22, 2024
Hey y’all — I talk a lot about the importance of moving fast and listening to users as the main input while iterating your product towards PMF.
But how do you know if you’ll ever get there or not?
How do you know if you’re playing the right game in the first place vs building a zombie?
I saw this post on X from Product Hunt’s founder, Ryan Hoover:
Founders often fall into a trap when they build something that sort of works.
It's easy to keep going, sometimes for years, chasing PMF but it never comes without killing what's "working".
— Ryan Hoover (@rrhoover)
4:01 PM • Jun 20, 2024
This week’s post is about identifying the 10 signals you’re building towards a local maxima rather than a global one.
10 Signals You’re Playing the Wrong Game
Competitors Dying Doesn’t Boost Growth
If your competitors go out of business or change their strategy, or get acquihired but then shut down, that means there are a ton of customers in your niche looking for a new product to use.
If a good chunk of them don’t organically start using your product in this situation it’s a really bad sign.
They are desperate and actively looking for a new solution. They’re reading blogs and asking friends. Would blogs and friends recommend you? If not, you’ve got a problem.
A great example of this going right is Copilot.money who had a huge spike in growth after Intuit announced it was shutting down Mint.com.
Consistent Feedback You Can’t Change
Good founders talk to users. Great founders listen to them. The best founders listen to what they’re saying, and then decide what to do.
If you’re consistently getting feedback about some part of your business model or product that for whatever reason you cannot change, then you likely aren’t approaching the market from the right angle.
Regulatory & Legal Challenges
Some markets are victims of regulatory capture.
You have no way in without spending a lot of time and money getting the right person to vouch for you or, worse, having to lobby for regulation yourself.
In some cases, this cannot be overcome. Even if you play the game, bigger existing players will outspend you until you fail
This is what happened to one of Bill Gurley’s first investments as a VC.
I highly recommend watching the first ~20 minutes of this talk by Bill Gurley if you haven’t before. It’s a great primer on just how real regulatory capture is and why it harms startups. It’s funny, concerning, and so true it hurts:
Unable to Bend the Cost Curve
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