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Quest for Product Market Fit: 5 Pitfalls

By: Danny Pantuso

Some Perspectives from Web3 Deal Flow

As a founder, you know you have product/market fit when your customers start demanding your product faster than you can ship it. Your biggest problems are about scaling fast enough and keeping the servers running rather than wondering how you’re going to sell your next unit.

Until then, achieving early product/market fit remains a subjective endeavor. There is no definitive method to demonstrate it to investors, but there are certainly missteps to avoid. Drawing from my conversations with numerous Pre-Seed to Series A startups, I’ve put together a concise list of common pitfalls found in pitch decks that indicate a lack of product-market fit.

1. The solution doesn’t match up with the problem statement

I see a lot of decks whose problem statement doesn’t align with what the product actually does, and it’s an immediate signal that the product doesn’t have product market fit.

Problem: It’s hard to smartly invest in crypto for the average person.

Product: A platform that allows you to track what sharp investors are buying/selling.

Pitfall: Do more data points make investing harder or simpler?

The key is often to get more specific about the problem you are solving or get more specific about the solution. In this example, the problem being solved is actually strategy generation for other sharp investors. It’s often best to establish product/market fit for a niche use case, and then to expand into other verticals and features than it is to solve generic problems.

2. Presenting value propositions instead of use cases

Especially in early stages and/or in bear markets, it is often more impactful to emphasize use cases rather than high-level value propositions.

Use cases highlight the practical applications and tangible outcomes that customers can expect from using the product. They illustrate how the product solves a problem, fulfills a need, or improves a particular aspect of the user's life or work. They’re also what users ultimately pay for jobs to be done.

While value propositions outline the overall benefits and advantages of a product, these are oftentimes easier said than done. As a VC, I tend to discount value propositions until I see them in action.

Top of Mind

• Family offices are among the most innovative groups of capital allocators today: Paul Hsu commented on the state of family offices in a Business Insider article. Learn more here.

• The current state of e-commerce has led to 79% of customers abandoning their online shopping journey: Venture Investor, Lauren Tierney discussed how immersive web3 technology can solve this here.

• Interactive consumer experiences are the future: Marketing Manager, Grace Casey, delves into Rhianna’s Fenty Beauty Roblox debut here.

• Embracing innovation and design with augmented reality: Venture Investor, Danny Pantuso breakdowns Apple’s world-class spatial design principles. Explore his thoughts here.

Where to Find Us 

• Check out the highlights of Paul at the MoneyLive on June 26th here.

• Lauren spoke on the “Charting the Course for a Thriving a Web3 Ecosystem” panel at Collision Conference on June 28th check out her post about it here.

• Paul is speaking @ WebX on July 26th

Chicago Web3 Investor Day | July 20th

Decasonic’s 2nd annual Web3 Investor Day is quickly approaching on July 20th. This is a unique invite-only opportunity to convene, network, and collaborate with a select group of prominent capital allocators, family offices, endowments, and builders who are blazing trails in web3. The event comprises panel discussions, fireside chats with top web3 leaders, interactive workshops, and top-tier founder pitches.

Learn more about the event here.

Thanks for reading!

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Are you or someone you know building in crypto or web3? Get in touch with the investment team here.

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