Case Study: This Founder Doesn't Believe In Product-Market Fit. Yet His Startup Is Growing Rapidly.

Learn why Invisible Technologies CEO Francis Pedraza is one of the most contrarian founders out there today and what drives his success as a founder.

Feb 15, 2021

Introduction:

Invisible Technologies helps companies outsource and automate their recurring business processes. Their proprietary platform, the Digital Assembly Line, is like a combination of the best automation tools (think Tray.io or RPA) and a futuristic BPO. Their global laborforce of process experts map their clients' core business operations, usually during a quick zoom call, and turn them into scalable repetitive processes that are executed using the optimal combination of automation tools and curated human intelligence. Invisible excels in running processes where automation is too brittle or too limited to get the job done, and when humans just aren't fast enough.

Executive Summary:

Problem: Adequately Supplying Customer Demand And Aligning Incentives

Francis Pedraza was fortunate enough to work on the outsourcing and automation problem that customers needed a solution for, but he and his team couldn’t meet the demand. At a deeper level, the incentives for all parties involved in crafting a solution for a customer’s outsourcing and automation needs did not have their incentives aligned.
Market: Avoiding The “Depth” Trap To Reach The Most Customers Possible
Conventional startup wisdom argues you should pick a vertical and grow within it to find PMF before expanding laterally. Pedraza, being the contrarian he is, avoided sticking to one vertical to build an agnostic, horizontal, and customizable solution for Invisible’s customers to great success.
Solution: You Have To Explore & Exploit Your Way To Build Something Someone Wants To Buy

Pedraza focused on exploring and exploiting what he learned in his customer discovery process to build the right solution with aligned incentives for his customers. When you find success with one type of customer, don’t stop looking for other kinds to serve, and replicate that level of success for each type of customer.
Team: Maneuverability Is Key Running A High-Impact Startup

As a founder, one has to be flexible in how one deals with his or her employees. Pedraza’s recognized that being versatile in how one motivates and encourages his team to accomplish more with less is critical to Invisible’s overall success.
Fundraising: Focus On Maintaining Control And Selecting The Right Capital Source To Scale

Although Pedraza was diluted to some degree early on, he still retains control of Invisible. That allows him to develop Invisible according to his vision and select capital sources that will help Invisible develop along his timeline.
Takeaway: Product-Market Fit Doesn’t Exist. The Fundamentals Do.

We can talk about what PMF is all day, but when the dust settles, it’s about concrete cash flow and profits, not abstract business terms. Pedraza stresses founders to focus on the fundamentals such as your solution and your customers, and the rest will follow.

Case Study: Invisible Technologies

Invisible Technologies founder and CEO Francis Pedraza.

Problem: Adequately Supplying Customer Demand And Aligning Incentives

Tell me about a problem or set of problems that you've had to solve on your journey to product-market fit.

When we started the company in October of 2015, we were selling a $10,000 a month Executive Support solution for CEOs. The idea was that they would delegate to their "Invisible Assistant," and behind the scenes, we'd coordinate a team of specialists to deliver results for them. It was an unlimited delegation model.

There was demand. We had five CEOs sign up immediately, and there was a waitlist. But we couldn't efficiently supply the demand. It cost us $20K a month to support each $10K client because they delegated so much work. We didn't have a platform to coordinate the execution of that work.

Fast forward to today. We've built a platform — The Digital Assembly Line — that breaks down custom and complex business processes into standard steps, like legos, that we can optimize, automate and re-use. For steps we haven't automated yet, we've got hundreds of agents with secure access, working remotely around the world, that our software coordinates to execute the remaining manual work as efficiently as possible.

We still do Executive Support, but it is only a small percentage of our overall revenue. The rest of our revenue comes from running business processes for teams and companies of various sizes: we have a mix of SMB (less than 100 employees), Commercial (more than 100 employees), and Enterprise (more than 1000 employees) clients. All three segments are growing, with Commercial and Enterprise growing fastest.

Over time, we've begun to sequence "The Enterprise Process Genome." For example, within the logistics industry, we've built enough custom processes for clients that we now have a very re-useable library of standard steps. Our logistics clients now benefit from decreasing unit costs as we automate inventory management, data transformations, and vendor onboarding. We're seeing similar "Wright's Law" deflationary curves as we scale in other industry and function verticals, from financial services and real estate to sales ops and finance ops.

Why were these problems so critical to solve? What was it like personally struggling to overcome these challenges to achieving PMF?

That first business model failed within six months. The company's mission, to "industrialize knowledge work," was still worth pursuing, so we kept going. In the four and a half years that followed, we had to solve the following set of problems to find "product-market fit":

First, how do we supply demand? There's a ton of knowledge work out there, and people want to delegate. But building technology and business operations to do that work better, faster, and cheaper than anyone else is that's the challenge. How do you turn these custom and complex workflows into processes with standard steps to automate over time? And then, how do you hire, train and coordinate labor to efficiently execute the steps that are still manual?

Second, how do we price and position the service so that it's a win-win-win for clients, for agents, and for the bottom line?

Here's how we answered the positioning question. The more we struggled on the supply side, the more difficult we realized it would be to scale an Executive Support service. Executive Support is low volume, extra sensitive, and highly variable: for example, if the executive is traveling, you just buy one flight, not one thousand flights, but every detail of the trip needs to be handled just right. Instead of "pivoting" away from Executive Support, we decided to use it as an R&D Lab and a Trojan Horse: it is a hard operational and tech challenge, so we can still learn from doing it, and it is something that not only executives, but EAs, Chiefs Of Staff, and even busy managers need, so we can still use it as a way to break into new accounts. So instead of "pivoting," you might say we "springboarded" from Executive Support into Business Process Outsourcing & Automation. Outsourcing & Automation have never been combined before into a single industrialized solution for Digital Operations, so that's our positioning strategy: we call it "Worksharing."

For pricing, we realized that a simple subscription model would not work because we weren't just selling software, where the marginal cost of an additional unit of usage is zero — we were selling services. We had labor as part of our cost of goods sold (COGS). So we unitized pricing: for example, if you're an insurance company and we're processing claims for you, there's a "price per claim." That unit price aligns incentives. If we get more efficient at doing the work, our margins improve. And if our margins improve, we can lower the unit price. This is a disruptive model. But we couldn't go "pure unitized" — we needed a minimum commitment to cover support and set up costs. So clients have a monthly or quarterly subscription, which acts as a minimum commitment and funds their "balance," each unit of work is priced based on efficiency and deducted from that, and if clients use their whole balance, they "top-up." If clients don't use their whole balance, we have a rollover policy.

This is simple for the client — the minimums are low, they delegate work, get done at a reasonable price, prices decline over time as we automate, and scale their usage up or down based on their needs. But it was not simple to discover this model or to make it a win-win-win. To build a deflationary pricing mechanism that aligns our incentives with the client into the product, we built a Quotes Calculator feature into our Process Builder. To build a results-based agent pay model, we had to build a proprietary Agent Pay software that links with our QA and time tracking systems.

What was this like personally? I felt like Theseus in the labyrinth for years!

Outsourcing & Automation have never been combined before into a single industrialized solution for Digital Operations, so that's our positioning strategy: we call it "Worksharing."

Market: Avoiding The “Depth” Trap To Reach The Most Customers Possible

Let's get deeper into the pain point or points you were trying to solve. Imagine I'm a customer thinking about using your product or service. How do you go about understanding my pain and creating a solution to address it?

Imagine you're in charge of operations (CEO, COO, VP Ops) for a 100 person company. You've got engineers wasting time doing data pulls and generating reports. You've got data scientists wasting time doing data transformations. You've got feature requests your product team won't be able to build for two quarters, but your operations team wanted those features yesterday. Your operations team is under pressure because you're dealing with a spike in demand, and critical processes are still manual. You've got your customer success teams drowning in support tickets. You've got sales teams wasting time not meeting with clients. And so forth.

The point is: you have custom, critical and complex processes that are still manual. You wish you could automate all of them, but you can't. You may be familiar with the latest automation tools (RPA, no code, etc.), but these approaches are expensive to set up and implement. At best, any one approach will automate 5 to 15% of your overall operations — what do you do with the work that can't be easily automated?

You either keep it all in-house or resort to traditional outsourcing and hire a BPO (Business Process Outsourcing) company. But you can't trust BPOs to do the most custom, critical and complex work, so you keep that in-house. BPOs are like dinosaurs from the 1990s; they aren't tech companies, they aren't fun to work with, and even if they do use automation tools, they have no incentive to pass along those gains to you by lowering unit costs.

Where does this leave you? You are living in a messy and chaotic world, managing a patchwork of internal teams, external vendors, and low-yield, high-effort, and expensive software solutions. Incentives aren't aligned. Scaling your operations will be capital intensive. You're frustrated and miserable.

But things shouldn't be this way. Scaling shouldn't destroy profits.

Operations shouldn't be messy and chaotic. Delegating should be easy! You should be able to rapidly deploy business processes and scale them up or down as you see fit. Automation shouldn't be such a pain—the luxury of megacorps that can afford IT service teams. You need Operations-As-A-Service. You wish that you, and everyone on your team, could just jump on a Zoom call at any time and explain to someone smart and capable what you need to be done, and poof - like magic, your process is built and running, practically overnight. Then, your unit costs start declining over time through automation.

You wish that incentives were aligned. That you never had to pay for a Zoom call or anything other than the lowest possible unit prices for the best possible quality. That every single operator running your processes wanted to maximize quality and speed and had all the tools and training, they need to perform optimally. That all the "operational bullshit," the extensive complexity of coordinating your operations, was hidden from you - behind-the-scenes, invisible. That all the "automation bullshit," the complicated stack of 3rd party and proprietary tools, was hidden from you too. That every single step in every single process was fully optimized and gradually automated. That all of your cost curves were powered by Wright's Law, and that the more times you run your process, you had more deflationary gains to report to your CFO and your Board: better, faster, cheaper.

Yes. Better, faster, and cheaper. And also, agile. Scalable.

Operations-As-A-Service. Digital Ops & Automation on demand. Futuristic outsourcing on a Digital Assembly Line. Outsourcing and automation combined into a single, industrialized end-to-end solution.

That daydream is now a reality.

Assuming you've managed to address the pain points I face as a customer, what additional information did you discover in your journey to PMF that there's a large market in need of a solution to the existing problem?

The problem for us was that the market was too large. And it wasn't obvious which segment to attack. Executives, executive support staff, and individual knowledge workers need digital operations and automation. SMBs with less than 100 employees need digital ops and automation. Commercial (100 employees +) and Enterprise (100 employees +) need digital ops and automation. North America, Europe, Asia - the world needs digital ops and automation. Product, Data Science, Growth, Operations, and PeopleOps — needs digital ops and automation. Every industry — logistics, financial services, energy, real estate, tech — needs digital ops and automation. Everyone needs digital ops and automation!

The dogmatic advice is to "pick a vertical," but which and why? To focus your product roadmap or to give you go-to-market focus, or both?

Our product thesis is that first, there's an app for everything; why isn't everything perfect yet? The world doesn't need more pure software. Usage costs are exploding, and individuals and teams need a digital Uber to "drive apps for them" so that they can focus on the strategic, creative, and problem-solving aspects of building their companies.

So the right solution should be a software-enabled service, which required no change to the client's behavior or stack, and where most of the technology and the UX was "invisible" to the client. Second, that all digital operations processes are essentially the same, and that a single Process Builder architecture can be used to break all custom and complex processes into standard steps. These steps can be optimized, re-used, and ultimately automated, gradually letting us sequence the Enterprise Process Genome and build the world's biggest and best Process Store, selling Standard Process Units (SPUs). Lastly, all digital operations work could be coordinated on a single Digital Assembly Line, managing hiring, training, scoping, routing, operating, QA, resource planning, and incentive alignment.

This resulted in a go-to-market strategy that was agnostic, opportunistic, and evolutionary. We approached the world like an amoeba looking for sugar. Hello Client A. Oh? You need help with X? Okay, we can build a custom process to do X. Here, are you happy with that? Okay, we'll change that for you. How about this? Do you need a tighter SLA? To hit this quality benchmark? To guarantee this capacity? To lower unit costs to this price? Yes, yes, yes, yes. Wow, you love it! Great. Let's see who else needs similar work. Oh, hello Client B. You want something similar to what we did for A, but you want to modify X slightly, you want Y. Got it. We'll do that. Etc.

The terrible thing about this agnostic approach is that evolution takes a long time. There's always the pressure to force product-market-fit too early, to optimize around a single vertical or a single-use case prematurely. But the powerful thing about this approach is that the longer you can iterate on different industries and functions, the longer you can iterate on a horizontal tech platform and operations, the more abstraction you can achieve. Ultimately, the clear winners emerge. You can double and triple down on this logistics use case, that fintech use case, etc. But when that health care company comes to you with an urgent need to fix their supply chain issue, you can say yes.

The multi-trillion-dollar opportunity implied in the company mission — "industrialize knowledge work" — is still open to us. We have carefully avoided falling into a "depth trap," picking one vertical we'll never crawl out of, building software and operations that's too custom to improve margins and scale prematurely. It sounds like something Sean Parker would say... "$100M companies are cool. But you know what's cooler...?"

Technology is abstraction. If you're not abstracting, you're not building technology.

How did you narrow your scope of what portion of the market you wanted to tackle first? Who did you decide would be your first beachhead customers and why?

From 2015 to 2016, I focused on the segment I was most passionate about: which was individuals. But I wanted individuals who could afford an experimental, really far-out solution. "The future is here, just not evenly distributed yet." You can do something incredibly valuable, but not very scalable, and then figure out how to scale it, or you can do something extremely scalable, but not very valuable, and then figure out how to make it valuable. After trying the latter approach with my last company, Everest, I wanted to try the former with Invisible. So we targeted CEOs who were willing to spend $10K/m for a futuristic Executive Support service.

When we realized how hard that would be to scale, we launched a pure unitized pricing model directed at startups from 2017 into the first half of 2018. Startups bought, but they were demanding, erratic and low-volume. Their processes aren't very mature, and they are very price-sensitive, so it didn't make sense to provide a high level of support to a client only testing us out for $100. Our churn was too high. So we iterated on our pricing, and we went upmarket.

We found our first real "Product-Market-Fit" with growth-stage startups with 30-70 employees, and then eventually, we used that to springboard into Commercial companies with over 100 employees. The bigger the company, the more mature the processes, and the more operational complexity they had, the more they needed us. But the level of service required also increased, so we increased our minimums and focused on quality. This kept us busy from mid-2018 to EOY 2019.

After doing that for a couple of years, we finally had a service ready for enterprise in 2020. But because we never did a hard pivot and horizontally built product and operations, we still have clients from every segment: Executive Support, SMB, Commercial, and Enterprise - and all segments are growing, as product and ops improve every quarter. Again, springboard-ing can be much smarter than pivoting!

I started by selling to my own network: other CEOs, other startups -- because that's who I knew. Many of those early clients were not a good fit, but a few were. We did our best to replicate success in the functions and industries that seemed to need us, and we gradually found larger companies with more mature processes to work with. In the beginning, our clients had less than 20 employees. We worked with companies with up to about 60 employees. Then we had our first client with over 100 employees, then our first client with over 1000, and so on. We matured -- our processes, technology, sales, and support -- as we "trained" on more mature clients. There is no way we could have just started where we ended up, even if we had been able to deduce all of our current knowledge about targeting logically. An evolution was necessary. And evolution is still necessary: our client base will have a completely different composition in one year, in two years, etcetera.

The terrible thing about this agnostic approach is that evolution takes a long time. There's always the pressure to force product-market-fit too early, to optimize around a single vertical or a single-use case prematurely. But the powerful thing about this approach is that the longer you can iterate on different industries and functions, the longer you can iterate on a horizontal tech platform and operations, the more abstraction you can achieve.

Solution: You Have To Explore & Exploit Your Way To Build Something Someone Wants To Buy

How did you build your solution to maximize its relevance with the customer and ensure product-market fit?

Most technology companies forget a simple truth: clients don't want to buy software; they want to buy solutions. And the best solutions are easy to use, frictionless to set up, high quality, maximally efficient, end-to-end, versatile, and strategic. Let's unpack how we did that.

Easy to use? It's easy to delegate. Jump on a zoom call with us, screen share, and explain to your account director in human terms, just like you would to a smart and capable colleague, exactly what you want to be done. Then we'll build a formal process, run it and iterate on it until you're happy. You want us to hit an SLA, or a quality benchmark, or a unit price? We'll manage around that. Service discipline!!!

Frictionless setup? You don't have to install any code. You don't have to do any integrations. You just have to provision accounts and give us access. It's secure. We're SOC II certified. We'll build the process, run it and automate it - so you don't have to.

High quality? Operational discipline is not easy, but we've built it into our culture over many long years. And our operational systems and products handle tons of complicated problems that our clients don't even know exist: hiring, training, routing, scoping, coordination, resource planning, QA, payment, and incentive alignment.

Maximum efficiency? We're building and upgrading our Process Builder and Step Library to optimize every step and automate as many as possible, using 3rd party tools and building our own proprietary tools. For the steps we can't automate, we write an SOP to make on-screen instructions as clear as possible for agents.

End-to-end? It's not just outsourcing; it's not just automation - it's both. It's an industrialized approach. As long as it is digital operations work and not creative specialist or highly technical work, we can do it.

Versatile? It kind of makes sense to set up a vendor to solve one immediate problem. Still, it makes sense if the vendor can solve many immediate and future problems, depending on your strategic goals.

Strategic? You have tons of tactical problems, but you don't have time to solve each one serially. You have a limited set of strategic problems and goals that contain a multitude of tactical sub-problems. Because you have to manage at that higher level, so do we: we manage against your big problems and big goals, then we figure out all the details so you can forget about them. We're not just another company selling you a nice widget or a feature that you have to integrate and stitch together with a hundred other tools to achieve what you want. We're your Digital Operations partner.

What are some of the things you did that "didn't scale" to shape your solution today?

Invisible shouldn't exist. We shouldn't have passed through the crucible. But we survived. We broke too many rules, including all three cardinal dogmas of Silicon Valley circa 2015:

Do not have humans-in-the-loop: it's not scalable, low-margin, and an ops headache.
Don't sell services, sell products: products are scalable, high-margin, repeatable, and defensible, whereas services are not.
Don't go horizontal, go vertical: pick one function or one industry, find its use cases, and build your entire product and go-to-market strategy around that.

Unfortunately, the company's whole thesis, which made imminent sense to me, forced me to violate these dogmas. I believed that clients wanted and would ultimately reward us for building a horizontal and powerful service because it had humans-in-the-loop. In other words, the things that clients wanted were the opposite of the things that investors wanted. So I stuck to my thesis and bet on the clients.

What did you learn to best engage with your customers? How did you build a tight feedback loop with your customers to rapidly improve your solution to their problems?

Meet them where they are at. Video calls and emails. We send reports over email. We have conversations over video. For our enterprise clients, we do Weekly Business Reviews. For other accounts, we'll meet at a cadence that makes sense to them. We build custom reports to give clients exactly what they want; then, we build that functionality into our client app. We don't force clients to use our app. We just build the functionality that they want and show them that we use it, so eventually, they learn to use it too.

So many tech companies invest very heavily in a fortress-style (loaded with features) client-facing product in the hopes that clients will change their behavior and use it every day. But our whole thesis was that clients have too many apps. They need a service to use their apps for them. They don't need another app. So our client-facing product has historically received less investment than the tech that runs our Digital Assembly Line and Process Builder. Our approach to building client-facing features is to scale the interactions in meetings between Clients and their Account Directors.

Walk me through how you landed your first few customers as you were building your product or service.

Explore & Exploit.

Explore is about casting a wide net. The point is that if you have enough shots on goal, eventually you'll get lucky, and you'll find one great client that needs you, even though you still kind of suck.

Exploit is about replication, like an amoeba looking for sugar. You find one real estate tech marketplace, and you target others. You find one insurance company, and you target others.

The discipline in building a horizontal company is this: don't abandon explore just because you found an exploit. Explore is the goose that lays the golden eggs. But don't make the opposite mistake either, and spend all your time chasing shiny objects, mesmerized by the infinite potential of your service... otherwise, you'll never actualize that potential. Fundamentals matter, so take the thousand little steps that make those better over time and do everything you can to buy yourself. Your organization time to evolve — evolution rarely happens when forced into an artificial fundraising cycle.

Our primary value proposition was to build a custom, end-to-end solution because we're a service business. Price and even quality were secondary to that at the beginning. Then quality solidified our market position. Now declining unit prices through automation is making what we offer increasingly disruptive. But the core capability: to rapidly build your custom, complex process overnight -- that's still at the heart of what we do. Investors didn't think it was possible to standardize process steps and scale a service that offered custom work. The prevailing wisdom was that "custom doesn't scale." But if custom processes are made of standardized, scalable legos...guess what?

The discipline in building a horizontal company is this: don't abandon explore just because you found an exploit. Explore is the goose that lays the golden eggs.

Team: Maneuverability Is Key Running A High-Impact Startup

If you're a solo founder, walk me through a time that you had a conflict with your team. What was it about? How did you handle the situation? What was the resolution, and how did it impact your working relationship with your team?

I've had to referee many frictions between my lieutenants. Over time, I got a sense of who was more credible in any given situation and relative strengths and weaknesses. Sometimes you'll have a very strong performer who is rough around the edges. Or a high influence and very like-able person who just isn't delivering enough outcomes. Or you'll have two teams silo-ing instead of integrating. Or there will be passive-aggressive behavior when people should be in "hard sync."

Managers have finite maneuverability. You can go up (promote or increase comp), down (demote or fire) or maintain in terms of hard incentives. In terms of indirect approaches, you can reorg, coach, project-manage, observe, build charts, force a decision, instill principles, build systems, and more. The point is: you have maneuverability, but not infinite maneuverability.

"Grace" is required in making all of these decisions. They are delicate, personal, complex, and the truth — the information, the relevant principles, the right way to apply those principles — is often hidden. The right prayer is Solomon's prayer. The right symbol is splitting the baby.

What key qualities did you look for in key early hires to increase your chances of discovering product-market fit, and how did you prioritize what types of hires you needed to make first?

There's a certain hunger and tenacity I looked for. A "hustle." We use the word "ownership," as in Susan has an "ownership mentality." It manifests in various ways. There's the "willing to be a janitor" thing. There's the "manages at the goal-level" thing. There's the "fire-and-forget" thing - can you trust them with a high-level delegation and a big problem, move on to the next thing, and sleep at night knowing that they will report back as necessary and make the right decisions in your absence?

These qualities are rare. Most candidates are entitled. They have an "employee mindset." They aren't going to go the extra mile. They will get bogged down in the details. And you have to micro-manage them.

If there was a potential employee of your startup reading this Case Study right now, how would you convince them that joining your team is the next best step in their career?

I'm not interested in potential employees. I'm interested in potential partners. I'm not interested in working with you for two years. I'm interested in working with you for twenty. I'm not interested in your career. I'm interested in building this castle, this cathedral, brick by brick, stone by stone. I'm not interested in convincing you. Convince me that you, too, can imagine a world in twenty years that is less dire and more heroic because of something we built.

This is the hardest part. There is no formula for personal evolution. I read books by dead people for inspiration. I remember at one point, about eighteen months in, everything seemed really bleak, and I was struggling to keep the hope alive that someday the company would realize its vision and become great. And I happen to read the Japanese book of the samurai, Hagakure. It says something like, "Just become insane and desperate to die! Ten men cannot stand against such a man!" So, I became way more aggressive. I made plenty of embarrassing mistakes, but I tried to remember the wisdom of the samurai and inured myself to the shame and judgment that came with taking risks and being aggressive.

In other words, the things that clients wanted were the opposite of the things that investors wanted. So I stuck to my thesis and bet on the clients.

Fundraising: Focus On Maintaining Control And Selecting The Right Capital Source To Scale

How did you set expectations with investors at Seed and Series A? What is the main difference in those expectations as your company grows from one stage to another?

I signaled that I was a contrarian and that my team and I were hellbent on ultimate victory and tough — willing to go through the ups and downs required to build a great company that would survive. I also was upfront, perhaps too upfront, about the risks, and I didn't try to raise large amounts of capital at unrealistic terms that we hadn't earned. While we took a bunch of dilution, especially early on, I avoided yielding control. Thankfully, we found incredibly supportive investors that were willing to take this contrarian and romantic bet with us. Hopefully, we reward them with incredible outcomes and, you know, change the world.

How does dilution work as you go from Seed to Series A?

We've raised about $7M. We're five years in, and we haven't raised a Series A yet. But then again, we tripled revenue last year, and this year the plan is to more than double. So when that Series A does come, it will be a big milestone. We took a lot of dilution to get to this point, especially in those early angel rounds. The plan is to get to profitability and use buybacks to provide liquidity to early investors and former team members, thereby reducing dilution. Most companies plan to IPO or get acquired.

Still, we actually hope to keep the company private, use buybacks as the only exit mechanism and keep the majority of the ownership and the control in the hands of the people running the business. They're the ones creating the value, and it stands to reason that motivating them is the best way to optimize long-term outcomes. For Series A, we'll be looking for a long-term capital partner that understands this. That might look more like a Growth Equity firm than a Venture Capital firm, given the models of those two classes of capital: structural alignment is a prerequisite for other forms of alignment.

I signaled that I was a contrarian and that my team and I were hellbent on ultimate victory and tough — willing to go through the ups and downs required to build a great company that would survive.

Takeaway: Product-Market Fit Doesn’t Exist. The Fundamentals Do.

What are the key lessons you have learned so far from your journey to achieve product-market fit?

THE EMPEROR HAS NO CLOTHES. THERE IS NO SUCH THING AS PRODUCT MARKET FIT. THERE ARE ONLY FUNDAMENTALS.

Supply. Demand. Customers. Solutions. Revenue. Subtract Cost Of Goods Sold. Get Gross Margins. Subtract Sales, Support & Marketing. Get Contributions Margins. Subtract R&D and G&A. Get Net Income. Build Technology and Operations to enable, scale, and defend this. Team. New Sales. Activation. Support. Expansion. Quality. Price. Experience.

Get the fundamentals right, and the emergent phenomenon we call product-market-fit happens. There is no formula. There is no get-rich-quick scheme. Be wary of dogmas.

What's the hardest problem you're facing now after solving the prior one(s)?

Forecasting, which implicates the whole business. We've got a plan. We want to meet or exceed it. The plan has targets for every metric on the Income Statement. Each of those metrics has key activities and sub-metrics that drive it. Revenue, for example, is driven by all of our accounts' activities, and it is driven by New Sales and Activation and the whole funnel. So to do forecasting well, you need to get to the point where day-by-day, even tick-by-tick, you understand what your business is doing, and you understand all the plumbing, all the mechanisms that drive it. Forecasting isn't just about seeing clearly, understanding what is going on. It's about driving. You want the visibility so you can steer the wheel and maneuver. You're optimizing performance against runway, against equity and debt optionality, against your valuation, against control and ownership. It's a whole equation that my management team and I revisit every week.

THERE IS NO SUCH THING AS PRODUCT MARKET FIT. THERE ARE ONLY FUNDAMENTALS.

Three Cool Founders You Should Know About:

Zak Holdsworth, Founder of Hint Health: Hint Health is focused on enabling and powering provider-led solutions that drive step-change/transformative improvements in cost, quality, outcomes, patient and provider satisfaction.
Roland Ligtenberg, Founder of HouseCall Pro: Housecall Pro is a full-service tool that enables service professionals to run their entire business on their smartphone and complimentary web portal.
Danilo Vicioso, Founder of Main Street: Main Street allows startups to get $50K+ back from the IRS in 20 minutes, as they hunt through 200+ tax credits for you & do all the paperwork.

Click Here For Invisible's Founder File!

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