Q: What are the key signs of a good founder-market fit?

Teddy: The best founders spend a significant amount of time thinking about the problem they are solving before starting a company. They may have encountered the problem in a previous company they worked for, or they experienced it themselves and dedicated time to figuring it out. This often means they have tried different ways to solve it, created makeshift solutions, or are using something that partially addresses the issue.

By thinking deeply about the problem, they likely spend considerable time studying the market and understanding what is available, who the key players are, etc.

Finally, good founders may have written about the topic, become known in the industry for their vocal stance on it, and slowly become experts in the field.

Igor Mishevski: A good founder-market fit is indicated by the founder's deep understanding of the market, strong dedication, and relevant skills and experience. When a founder can clearly articulate the market needs and how their product or service addresses those needs, it demonstrates a solid fit.

Additionally, a founder's passion and commitment to the problem they are solving are crucial, as they often face numerous challenges and setbacks. Skills and experience in the industry also play a significant role, as they enable the founder to make informed decisions and navigate the market effectively.

Viktor: A good founder-market fit goes beyond just a founder's passion or preferences. It's about really understanding the market and having a strong network within the industry. When founders know their market inside and out, they can make better decisions and navigate challenges more effectively. Plus, having a solid network can open doors to partnerships, funding, and other opportunities that can help the business grow faster.

Gogo: There are many signs of good founder-market fit, and everybody form incubators, accelerators and early-stage investors / VC’s are looking for the very same signs in a startup. But, I can categorize them into main 4 pillars: personality – what defines you and your goals; your story – why you are doing this journey; experience – how well do you know your industry and the problem you are solving; passion – learning anything there is on the problem / market you are competing.

Igor Madzov: A good founder-market fit shows when 1) the founder really understands the market's needs and pain points, which investors call deep market understanding. It is always a plus when you have worked in the industry for a while if it's a newbie or a young person it's more about his/her ability to learn quickly; 2) they make smart decisions about products and growth because they know the market well and the need for the business; 3) they’re passionate and committed to the vision and stick with it through tough times. The ones that have survived storms are better than those that only jump from one project to the next; 4) investors trust them because they’re a person of their word and aligned with the market.

Q: How important is personal passion versus market knowledge?

Teddy: Short answer: you need both. Market knowledge is crucial because it helps you navigate the current landscape, but markets change over time, and your knowledge may become outdated quickly. You need to be able to adjust accordingly.

However, passion will get you further. One of the key traits of successful founders is perseverance, and you can’t persevere if you are not passionate about the problem you are solving.

Igor Mishevski: Personal passion for the subject is crucial for a founder's long-term success and resilience. While market knowledge and experience are important, they can be acquired over time. Passion drives a founder to push through difficult times and inspires their team. It fuels the persistence needed to overcome obstacles and keeps the founder motivated.

On the other hand, market knowledge helps in making strategic decisions and understanding the competitive landscape. A balance of both passion and market knowledge creates a strong foundation for a successful venture.

Viktor: While personal passion is important and can keep you motivated, market knowledge is what really drives success. Knowing the ins and outs of your market helps you identify opportunities and avoid common pitfalls. It's your market knowledge that will help you create strategies that work and make informed decisions. So, while passion can give you the energy to keep going, it's your market knowledge that will guide you on the right path.

Gogo: For me, personal passion is how you’ll run your business in the long run – threw ups & downs of your business journey. And market knowledge is how deep you understand your market, clients, and key industry players, in order to make fast and reliable decisions.

Ideally, you have to have them both down the line, but it’s ok if you are young professional with some market knowledge and you have excellent co-founder or team that can compensate the experience. Vice versa, if you are industry expert, try to surround yourself with the team who shares the same passion as you.

Igor Madzov: Having both is the best combo. If I need to put one before the other I  would give it to passion for young entrepreneurs and market knowledge for more experienced founders. Personal passion keeps founders going when things get tough and fuels creativity. In the Balkans, I like to see founders driven by “INAT” and true believers in their vision.

Market knowledge is essential for making informed decisions and recognizing real problems before they occur. A good advisory and support team can compensate for this, and the founder can be in the center of the tornado (the market), not observing it from far and creating solutions for no problems. The best founders balance both passion and knowledge.

Q: But can founder-market fit evolver over time, and if so, how should founders adapt?

Teddy: The more time you spend working on something, the better you become, and your founder-market fit improves. Not only can it evolve, but it must. Markets change constantly, and you need to adjust to remain relevant. If you are fortunate enough to be in this position, you should embrace continuous learning, whether by reading books or through experiences. Successful founders constantly upgrade their knowledge and perception of the world.

It’s okay to change your opinion on a topic as well. Good founders are open-minded to new ideas and approaches, curious, and good listeners. These qualities are what got them where they are in the first place. Having a coach has been quite beneficial for me.

Additionally, giving back by teaching others or supporting other founders keeps you engaged and up to date with the latest trends, and it forces you to think and research.

Igor Mishevski: Founder-market fit can indeed evolve. Founders should be adaptable and open to changing their approach or even pivoting their product as they gather more insights about the market. This requires a proactive attitude and continuous learning. By staying close to their customers and being responsive to feedback, founders can refine their offerings to meet market demands better. Adaptability is critical to maintaining a solid fit with the market as it evolves.

Viktor: Founder-market fit has to evolve! Markets change, and founders need to change with them. This means constantly learning, staying updated with industry trends, listening to customer feedback, and being ready to pivot when necessary. It's all about being flexible and willing to adapt your strategy based on new information. This ongoing learning process helps maintain a good fit between the founder and the market as the business grows and the market evolves.

Gogo: That’s almost a certain in today’s ever-evolving industries. As market dynamics change, so should founders in order to adapt, learn new skills and be agile in order to be aligned with the new market conditions.

Igor Madzov: Absolutely It can evolve, and here are some suggestion I give my founders: 1) regularly assess fit: keep checking how well you align with the market; 2) adapt and learn: be ready to learn new things and pivot when necessary. 3) build a strong team: fill gaps by partnering with or hiring the right people.

Q: All these inspiring stories, we couldn’t help but ask can a perfect founder-market fit save a failing startup?

Teddy: There are many reasons why startups fail, and founder-market fit is certainly an important one. However, product-market fit and co-founder relations are probably the biggest determinants. No amount of founder-market fit can compensate for a lack of market need for your product or poor co-founder relationships. There are examples where founder-market fit contributes to the creation and success of a company, but only when the product is already relevant and other criteria for success are not in question.

Igor Mishevski: A perfect founder-market fit is not a guaranteed solution for a failing startup. Even with a strong fit, other factors such as financial management, team dynamics, and external market conditions can lead to failure. Founders must align all aspects of their business, including operations, strategy, and execution. Dedication and a willingness to learn from failures are crucial. A founder's commitment to not giving up and continuously striving for improvement can significantly influence the startup's chances of success.

Viktor: Even with a perfect founder-market fit, other factors can cause a startup to fail. Issues like lack of funding, team problems, a flawed business model, or external economic conditions can all play a significant role. While having a strong alignment between the founder and the market is beneficial, it's not enough on its own. You need a solid business plan, a cohesive team, and good financial management to succeed truly. So, a perfect founder-market fit is important, but it's not the only thing that matters.

Gogo: This is a very tough question. Personally I don’t believe that a „perfect“ founder-market fit can save a startup if there are lot of things going south at the same time. But it can definitely help the startup in building the right culture, mechanisms & tools for success.

I’m afraid that, if analyzed alone, excellent product-market fit can’t save a startup from failing, it just won’t be enough, but hey – prove me wrong!

Igor Madzov: While it helps a lot, it’s not a magic fix. Success also depends on timing, execution, funding, and market conditions. But a good fit makes it easier to pivot and find solutions to keep going.