Lenny Rachitsky

Emily Kramer

.@emilykramer on why you should hire π shaped marketers https://t.co/rpCEeAXYcw

Full conversation 👇
https://t.co/CyMoPkJcfr

👋 Newsletter https://t.co/LF0tRFp4pl | Podcast: https://t.co/ZQWNT0ipGb | Jobs: https://t.co/h5qbpego8F | Investing: https://t.co/tLghMwfwmW

I’ve now angel invested in 140+ companies. Here's what's most surprised me about angel investing so far 🧵 https://t.co/KQXEWBoaZH

First, a disclaimer:
1. I do this part-time, and I only vaguely know what I’m doing.
2. I’ve been investing through a bull market. Many people look smart.
3. This is only based on five years of data.
4. This is not investment advice. I’m just sharing my experience.

How it's going so far: 12 of my angel investments have grown into unicorns, 10 more are on track to get there this year, and many more will get there over the years.  @AngelList recently shared that I was one of the top 20 investors on their platform. https://t.co/vR4sYVCbga

Surprise #1: I’m usually wrong about which investments will do best

When I invest in a startup, I make sure to record how confident I am in that investment—OK, Good, or Great. Looking back, only a third of my best investments—the companies that are on track to drive...

... the biggest returns—I rated as Great at the time of investing. Meaning, if I invested only in companies I had Great confidence in, I’d have missed out on two-thirds of my biggest successes.

I obviously thought they were a good enough bet to invest in, but I didn’t have 100% conviction in most of the companies I’ve invested in. And it turns out that’s the right move as an angel investor.

"VCs like to pretend that they’re really smart, but ultimately it’s just math. A single 100x or 1,000x deal will return your fund. But it’s nearly impossible to know which deal that will be. The important thing is to invest in enough deals that could 100x+.”
— @JuliaLipton

AngelList also found that early-stage investors do best if they invest in every credible deal vs. trying to pick the few winners. This is also why the general advice is to invest the same check size into every deal.
https://t.co/lNQOLVjwi8

Takeaway: If you see something special about the startup, and there’s a path to a 100x exit, consider investing even if you don’t have full conviction.

2/ Surprise #2: Most deal flow comes from other investors—not founders, friends, or colleagues

Seven of my first 10 deals were in my friends’ companies. The other three came from other investors sharing a deal with me. As I’ve gotten more active, that ratio has reversed. https://t.co/LpCPMbvOYg

Now the majority of investments I make come from other investors (mostly angels and solo capitalists).

“You can’t be a great investor if you don’t see any deals. Being a friendly collaborator with other investors is one of the best ways to see more investment opportunities. You essentially multiply the surface area of what you see."
— @djdan85

Takeaway: Increase your deal flow by building relationships with other active investors. The two best ways to build relationships are to:
1. Build a skill that is useful to startup founders, so that other investors benefit by introducing you to them
2. Share great deals with them

Surprise #3: Great deals are currency among investors

You build social capital with other investors by sharing great deals with them. The more great deals you share, the more deals they’ll share with you.

This isn’t always the case due to status differentials (e.g. I share many deals with Sequoia and it has never once shared a deal with me, lol), but in general this holds true, especially with angels and solo capitalists (where most of your deals will likely come from).

"It’s advantageous (and fun) to be collaborative as an angel investor. Sharing deals with other investors keeps you top of mind for when they’re investing in something. I personally try to only send deals when I’m investing so my ‘signal’ is strong."
— @toddg777

Takeaway: Seek out three to five awesome angel-investor friends and share everything you see with them. Two tips:
1. Once you decide to invest in a startup, ask the founder if he or she is looking for more great angels. If yes, suggest your co-investors.

2. Send a weekly email to your angel friends sharing the deals you’re looking at. Share just the URLs and a short blurb, unless you have permission to share the deck. Once you decide to invest, tell them asap in case they also want to try to join the round.

Surprise #4: Angel investing is more about access than picking

There are three parts to angel investing: capital, access, and picking. Based on my experience, access is by far the most important part. If you have access, you can raise capital, and generally...

...the most popular deals (i.e. the ones already discovered) also end up doing well. So picking becomes secondary.

"As an angel investor, it’s more important to be swimming in a pool of good potential investments than to be an exceptionally good picker. Obviously if you’re able to be both, it’s better :) but if you had to choose between being in a position to see great deals and picking...

... randomly, or coming across average deals and picking expertly, choose the former."
— @jaltma

Looking at my own data, over 2/3 of my biggest winners were “hot” deals at the time, and similarly, over two-thirds of the hot deals I’ve invested in have gone on to do very well. Not all investments in hot deals will do well, but broadly, getting access to hot deals is key.

"There are so many incredible founders building great companies today that one of the hardest things to do is to stand above the noise. Even exceptional products need help telling their story and reaching customers and potential hires. Being able to bring that to the table...

...is a leveraged way to help: instead of recommending one hire, you can tell their story to an audience of hundreds of potential hires."
— @packyM

One way to track your “access” is: whenever you see a big fundraising round or great exit, to ask yourself—did I have a chance to invest in that company?

All that being said, your picking skills are still important to build over time. A third of my best investments weren’t in hot rounds, and not all hot deals do well. Even top VCs often make terrible decisions. It’s wise to place a portion of your bets on under-the-radar deals...

that you’re excited about. Especially if you have unique insight into the opportunity that other investors may be missing.

Takeaway: Work on building your ability to get into hot deals, and don’t stress out about not being able to pick, especially early on.

Surprise #5: It’s mostly about becoming someone founders want on their cap table

To build on the above point, the best way to get access, and thus accelerate your angel investing career, is to become a person founders want on their cap table. There are four paths to this:

1. Useful knowledge: Become very smart about something founders will need help with, e.g. hiring, fundraising, growth strategy, product, marketing, scaling internationally, etc.

"Money is cheap now, so you have to have something other than money to get access. The best thing to have is unique expertise that founders want access to. In my case, it’s my experiences and lessons learned from working on growth early on at companies like Twitch, Reddit,...

...Mercury, and Notion that founders tend to find worthwhile. It can be in any important area, though: sales, operations, people, engineering, marketing, etc."
— @jamiequint

2. Audience: Build an audience that founders can someday rely on to amplify the startup’s story (e.g. @packyM, @HarryStebbings, @eriktorenberg, @SahilBloom).

"Building an audience today is more crucial than ever. Why? In compressed fundraising timelines, content allows you to build a ‘pre-sales’ relationship with founders where they know you and how you think, well before meeting you in a raise."
— @HarryStebbings

3. Signal: Build status as an investor such that your being on the cap table becomes a strong signal (e.g. @eladgil, @cyantist, @naval).

4. Reputation: Build an amazing reputation with founders, such that they tell all of their founder friends about you.

"Founder NPS scores matter a lot. You may not see the value of being a service-oriented investor in the short run, but over the long run it compounds and the results show up in the most unexpected ways. And founders don’t forget."
— @sriramkri

Surprise #6: Follow high-signal leads. But not only.

After seeing how professional VCs operate, particularly how much time they spend on due diligence, reference calls, market research, etc., I’ve come to realize that as an angel investor, I’ll never be as good at picking deals.

I’ve found the best strategy as an angel is to try to get into deals led by top investors for the majority of your bets. It sounds obvious, but many angel investors try to find just the diamonds in the rough. I think that’s a losing strategy, especially if you do it part time.

"For companies that get to the finish line, it’s not unusual for me to spend 2-3 weeks getting to know the founder and their business. Now, this is partially due to my strategy—only invest in 2-5 companies per year and spend a lot of time with them...

...I will look into a number of pieces around the business, including their investor updates (to assess how their thinking evolves) and the feature updates (to assess speed of building), and will spend a lot of time on core beliefs around their business (what they believe that...

...they are not willing to let go). I also spend time talking to customers if they have them and references for the founders."
— @annimaniac

Looking at my own data, over 80% of the investments I’ve made with high-signal investors are on track to become big successes. Unless you think you’re a uniquely talented picker you’re probably better off trying to get into high-signal deals vs. discovering hidden gems.

Takeaway: As an angel, most of your investments should probably go into rounds led by top-tier funds. But place maybe 30% of your bets on low-signal startups that you’re very excited about or have unique insight into (e.g. the tech, the founders, the market).

Surprise #7: Power laws are real

70% of my paper gains are currently from a one company (which includes three separate investments in subsequent rounds), and 80% are from just four companies. If I had missed these investments, my performance would have been incredibly average.

But I didn’t, and that’s the key. You need to hit a few 100x to 1,000x returns in order for this whole endeavor to be worth your time. Which again comes back to the broad strategy of betting on many companies vs. trying to pick the few winners.

"It’s not about all your deals being winners, but instead a few mega-winners that drive all the returns. Do you believe that these founders have the talent, the resources, the vision, and mostly the will to try and build not a $1b company but a $100b company?”
— @louisberyl

Takeaway: Optimize for not missing the 1,000x returns vs. avoiding losing bets. Which, coming back to the very first lesson, essentially means placing many bets. Budget to invest in 30 companies. Plan ahead.

For much more, including how to get started in angel investing, what I look for in companies, and a TON of advice from many other angel investors, don't miss this week's post https://t.co/pyIgY50Fmh

Big shout out to everyone who contributed their insights to this post (too many to list here), plus the @WeAreAirAngels crew 🧡

A guide to prioritizing at a pre-PMF B2B startup

Handy summary in thread 🧵
https://t.co/E62rFtISWX

1/ Broadly, your single goal as an early-stage pre-PMF startup should be to make 10 customers very happy. Everything you prioritize should be in service of this goal.

2/ Why 10? If you can make 10 customers very happy, you can probably make 100 customers very happy. From there, you can continue to add value, reduce friction, build your growth engine, etc. On the flip side, if you cannot make 10 customers very happy, you're in trouble.

3/ Why very happy? Because there are endless products fighting for your customers’ attention. The bar for people continuing to come back to (and pay for) your product is much higher than you think. When you’ve solved a real problem, people will beg you to take their money. https://t.co/2bh6YfMU7S

4/ What does very happy look like? Check out these two posts.
https://t.co/vIWr8X0HHx

https://t.co/7dw8HBPjh3

5/ How do you make 10 customers very happy?

SUSS it out: Segment, Understand, Solve, and Stay focused 👇

1. Segment: Narrowly and concretely define who you’re building for. Here's a template I like by @carolinedclark.
https://t.co/mtFMUdcDhA

2. Understand: Talk to many (ideally 100+) people from this segment. Identify a major pain point that you can solve. Here's a guide to interviewing for PMF.
https://t.co/dqm7PWucpy

3. Solve: Put all of your energy into building a product that significantly reduces this very specific pain point. Come up with ideas, test them out, and continue to iterate until your customer can’t live without your product. The bigger the pain, the bigger the opportunity.

4. Stay focused: Resist solving adjacent problems, or problems for other segments. Continue to come back to your primary segment and the primary problem you’re solving for them. Unless, of course, you discover that the segment or problem isn’t big enough and intentionally pivot.

6/ What should I actually prioritize when working to solve these pain points?

Prioritize work that will bring you closer to 10 very happy users—across these three buckets 👇

1. Increase the value of your product (~80% of your time): Focus on reducing your users’ pain, saving them time, and helping them do better work. Look for:
• Blockers
• Retentive features
• Acquisition features
• Differentiators

2. Improve onboarding (~10% of your time): Though most of your time should be spent increasing the value of your product, there’s also value in making it easier for new users to experience that value. If a great product exists and no one is able to use it, does it even exist? 🤷‍♂️

3. Create delight (~10% of your time): Your users are human—part rational, part emotional. Delighting your users with humor, design, personality, surprises, or even simply quick turnaround on issues. These can go a long way.

For more, including 🔥 insights from some of my favorite founders (@benjaminencz @christinacaci @juliannaelamb @may_habib @rujulz @TommyDANGerouss), and the most common pitfalls of early-stage prioritization, don't miss today's post https://t.co/E62rFtISWX

Top 10 most popular posts of 2021 🧵 https://t.co/2WlIOGp6ah

1/ Choosing your North Star metric—in collaboration with @a16z
https://t.co/ujQEuwnDE9

2/ The 10 commandments of salary negotiation, by @mediumsizecats 
https://t.co/gKTnhFDjdn

3/ Content-driven growth
https://t.co/kQdsEk3mhT

4/ A quickstart guide to positioning, by @aprildunford 
https://t.co/PYx4sHJtjJ

5/ A founder’s guide to community, by @DavidSpinks 
https://t.co/jxOWE95LUR

6/ Six rules of hiring for growth, by @ElenaVerna 
https://t.co/WZFx3p5GeH

7/ What is product management
https://t.co/0nFSFf9FVT

8/ The top 5 things PMs should know about engineering, by @itunpredictable 
https://t.co/CiywGDpQ3q

9/ Picking a wedge
https://t.co/I6jIFx2UMz

10/ GTM motions of 30 B2B SaaS companies
https://t.co/bA21k3IGqX

11/ Runner ups

Taking time off by @djdidonna:
https://t.co/Li0XVC4jSF

How behavioral science can boost conversion by @bermster: https://t.co/ZBQ8Fvfn17

60 growth boosts by @abouelatta_ali: https://t.co/oBAVNuNJYv

How people discover new products: https://t.co/072hOPh4oK

Subscribe to get each and every issue, each and every week 👇👇👇
https://t.co/jk8F9B8WRf

2021 was a huge year for my newsletter:
1. Hit #1 paid business newsletter on Substack
2. Crossed 90k subscribers (2x’d)
3. Published 58 posts, plus 52 additional posts from the community itself
4. Grew to 6k+ members in the Slack community
5. 1m+ page views

So grateful 💝 https://t.co/W8gCpiYJcF

For this week's post, I've pulled together the most popular posts of the year, and shared a peek at what's coming in 2022 👀
https://t.co/4fWdiQ0hOX

Thank you to everyone who's been a supporter of the newsletter, to everyone who's shared a post, to everyone who participates in the community, to every guest author and contributor, and to Shre, Kiyani, and Natalie for helping me level-up the community+newsletter.

THANK YOU 💝

The most common pitfalls of new product managers:
1. The Coordinator
2. The Dictator
3. The Dreamer
4. The Feature Factory
5. The Busted Umbrella

Read on 👇 https://t.co/mI2PU4PQ9J

1/ The Coordinator

You are a product manager. Not a *project* manager. You weren’t hired to just coordinate other people’s work. You were hired to bring your own point of view. To help shape the product. To deliver optimal business impact.

You do all this not by simply executing other people’s ideas but by actively pushing your team in the right direction and making sure the right product decisions are made.

2/ The Dictator

At the other end of the spectrum is a PM who fully embraces the supposed “mini-CEO” role. This person may have recently transitioned from an engineering or ops role, or is fresh out of an MBA program, and has been waiting for their chance to finally run the show.

They think they need to have all of the ideas, micro-manage every decision, and that their teammates are there to execute their plans. Unless you work at Zynga, this won’t work out for you. Your teammates didn’t sign up to report to you. They expect for their ideas to be heard...

...and their input to be taken into account. The good news is that this will lead to better outcomes (and better teammates). The bad news is that you need to learn to lead through influence.

3/ The Dreamer

Your first responsibility as a PM (especially as a new PM) is to help your team execute, today. To ship, to hit dates, to make sure everyone knows what they should be working on. But many PMs come into the role expecting to spend most of their time developing...

...strategy, visioning, and thinking big. That’s fun, but that’s not the role you signed up for. You need to earn this right. Yes, strategy and vision are essential, but not at the expense of the immediate needs of your team.

4/ The Feature Factory

The flip side of the above is the PM who equates shipping with success. “Look at us, we’re shipping left and right and giving customers everything they want. We’re killin’ it!” Wrong. Shipping isn’t success. Success is shipping work that...

(1) has meaningful impact on the business, (2) has high ROI relative to other opportunities, and (3) moves you closer to achieving your strategy. Teams become factories when they lack a strategy. A good strategy tells you what you need to do to win but, ...

more importantly, what you should not do. Without a strategy, you may be moving fast, but you’re not going anywhere.

5/ The Busted Umbrella

And finally, there’s a reason PMs are often called “shit umbrellas.” It’s their job to shield their teams from stupid shit. Like time-sucking questions, unnecessary drama, and the whims of execs. People outside your team have no idea how much impact...

...their ad hoc asks and “quick” questions have on the team. It’s your job to help them see this, and to protect your team from them. Help your makers (e.g. engineers, designers, etc.) stay focused and in flow. Unfurl your shit umbrella.

Read on for the most common PM pitfalls, how to know you're pitalling, and how to avoid them
https://t.co/Z3pVhGfcfS

Decided to put together a gift guide to help you win the holiday season. 50+ products I love that also make great gifts (with a bunch of discounts). Read on 👇 https://t.co/rxYbPumMZg

1/ Centered

My main to-do app, and probably my most-used app period. It combines a simple task list with flow-inducing music, distraction reminders, and a community of fellow-concentrators. Use code FLOWWITHLENNY to get 50% off your first year.
https://t.co/TVHX4Hn4RR

2/ Taika Matcha Latte

My go-to drink when I want to focus. Delicious and effective. It’s made from organic ceremonial-grade matcha, a blend of adaptogens and functional mushrooms. Use code LENNY to get 20% off.
https://t.co/hNYvfeRHJe

3/ Magic Mind

My other favorite focus-inducing drink, made by my buddy @jamesbeshara. Pairs well with green tea. Use code LENNY23 for 23% off.
https://t.co/rKKiOmFYdd

4/ Mailman

A Gmail plugin that batches your incoming email and keeps your lizard brain from getting distracted by the endless trickle of new email. It’s a game-changer. Use code LENNY for 50% off an annual plan.
https://t.co/8JRUJJvR2Y

5/ K9 dog backpack

For any dog owner in your life. Here’s our little guy in action.
https://t.co/h9tBU5hWq9 https://t.co/5jy7F1VFH2

6/ Drawing Links by Edith Zimmerman

A comics newsletter with short illustrated stories about Edith's life.
https://t.co/K1bv8HJlWK

7/ iOttie wireless fast-charging stand for iPhone

Best device I’ve found to charge my phone at night.
https://t.co/3k5l2O1WW8

8/ Combo Lightning and Micro USB charging cable

Never make the mistake of bringing the wrong charging cables again.
https://t.co/mrDmQWmYQO

9/ COCOFLOSS Coconut-Oil Infused Woven Dental Floss

Seriously, try this floss.
https://t.co/9jflt1eCva https://t.co/tCs6mIodsx

10/ Magnetic Measuring Spoons

Love these friggin’ spoons. Easy to keep together, easy to use, easy to wash.
https://t.co/6XYAorKy8s

11/ Katie Gong art
https://t.co/7ySTaXSKq2

12/ Molly Kars art
https://t.co/mCCA9M1mTj

13/ Topo Designs Global Briefcase

My favorite travel bag. Fits 3-4 days of clothes, has plenty of room for electronics, and includes a special slot for a laptop. It also looks great, and you can wear it as a backpack.
https://t.co/96VrOnsxVI

14/ A subscription to https://t.co/wAw5K5EIZ4

High-quality products from the same manufacturers as top brands, but without the brand name and for 50%-80% less. Great for sheets, towels, sunglasses, jackets, shoes, and so much more. Almost too good to be true.

For many more gift ideas, check out today's full post https://t.co/h9RGOjGyIW

What is product management?

A thread 👇

1/ Your job as a PM is to deliver business impact by marshaling the resources of your team to identify and solve the most impactful customer problems.

Let's break this down.

a. Deliver business impact

Fundamentally, you are responsible for delivering business impact. If your team drives positive impact—hitting important goals, reducing costs, shipping an important project, etc.—you’re doing your job.

b. Marshal the resources of your team

Your job isn’t to do the building yourself but instead to increase the leverage of your cross-functional teammates—designers, engineers, DSs, etc.—to deliver impact. To paraphrase Andy Grove, a PM’s output = the output of their team.

c. Identify and solve the most impactful customer problems

Business impact comes from solving customer problems. Thus, it’s your job to lead your team to correctly identify, prioritize, and solve the most impactful customer problems.

2/ Another way to define the role of a PM is to break out the day-to-day jobs of a product manager: https://t.co/a5d9jhkCUt

a. Shape the product: Harness insights from customers, stakeholders, and data to prioritize and build a product that will have the most impact on the business.

b. Ship the product: Ship high-quality product on time and free of surprises.

c. Synchronize the people: Align all stakeholders around one vision, strategy, goal, roadmap, and timeline to avoid wasted time and effort.

3/ A different approach to understanding the PM job is to look at how PMs are evaluated. 

I looked at dozens of company career ladders and found that there are 10 attributes that companies most look for in product managers
https://t.co/8DfNglRz9O https://t.co/thZiIiGPWT

If you're a new PM, focus on these five:
• Communication
• Collaboration
• Execution
• Customer insights
• Strategy

4/ Though there's a baseline concept of a product manager, the role varies widely by company. I surveyed about 1,000 PMs across hundreds of companies and found that there are two ways the PM varies:

• Skills: Which skills matter most
• Influence: How much influence PMs have

a. Skills

Though companies look for the same broad set of skills in their PMs, the skills they care about the most vary widely. Here’s a look at which skills a bunch of well-known companies emphasize (the darker the color, the more important it is to them). https://t.co/BkYVYnsIRB

b. Influence
The amount of influence a PM has within an organization also varies widely. On one end of the spectrum, we have the mini-CEO, who is very much in charge. On the other end, we essentially have a project manager—with little say over what gets built. https://t.co/3mpPVYm0C4

5/ Finally, when looking at the PM role, it’s important to differentiate between a startup and a big-company PM. The differences are even more significant than the two spectrums we looked at above. Every single part of the job is different. https://t.co/loPSVDzcfY

For more, don't miss today's full post https://t.co/0nFSFf9FVT

🎺 Big news: I've just opened up applications for a second cohort of my Product Management Fundamentals course. This is the course I wish I had when I was starting out as a PM. Spots are limited, so apply now 👇👇👇
https://t.co/fTJmPBNg0m

1/ The course is part-time (evenings PST), and fits into a busy PM schedule. After the last course, I heard from dozens of students who credit the course with helping them get a promotion, land a better gig, or simply become more confident in themselves.
https://t.co/cZpCgGHWwd

2/ This course is targeted at new PMs (<2 years experience), and will run 11/29-12/17. It'll include live lectures, group breakouts, practical assignments, amazing guest speakers, and a few surprises. I took all the feedback from the first cohort and made this cohort even better. https://t.co/N9gjnf1BXV

3/ This will be active learning alongside peers, not passive lecture watching.

Topics we'll cover:
✅ Leveling up your strategic thinking and vision
✅ Strengthening your written and verbal communication
✅ Collaborating and influencing your peers more effectively https://t.co/u3VFwMsTDA

✅ Mastering the art of shipping on time while keeping your team happy
✅ Gaining confidence as a PM
✅ Leveraging  user research, metrics, and stakeholders to prioritize
✅ Leveraging the Minto Pyramid to delivering better presentations
and much more https://t.co/mcfWeIfoO3

4/ In addition to myself and a host of amazing guest speakers, you'll also have @AustinRamsland and a team of senior PM coaches, plus a community of students in the same place in their career, supporting you throughout the course. https://t.co/Oc1ZCdTHpc

5/ You'll leave this course a more confident and resilient PM, armed with a toolkit of actionable advice, strategies, frameworks, case studies, and templates you can immediately put into action. https://t.co/tKsu0dcBjF

6/ Learn more and apply here 👇👇👇 

Pro tip: Ask your manager if you can expense this to your learning and development budget.
https://t.co/9yeFW57toK

Why, when, and how to pick a wedge—a thread 🧵 https://t.co/Qzfk9d9Gkz

1/ Whenever I think of wedges, I think of this guy https://t.co/EnIUKaohGq

2/ A wedge in business is the same idea—you drive a wedge into the market and then use that wedge to win the market https://t.co/Wq1UvCWDU4

3/ @Twilio started with an API to send SMSs and is now the de facto communication API platform, worth over $60B. @Airbnb started out allowing people to rent their extra rooms and now accounts for a fifth of the $90B vacation rental market.

4/ What exactly is a wedge?
A wedge is simply a strategy to win a large market by initially capturing (1) a tiny part of a larger market or (2) a large part of a small adjacent market.

5/ "The wedge metaphor to me is most useful in making sure you’re not a blunt instrument trying to chop into a market by being everything for everyone, but instead the sharp blade with extraordinary focus on a specific persona/use case to start." @sarahtavel

6/ In business, as in rock cutting, a wedge is made up of two parts: (1) the right tool and (2) the right place to strike. In other words, the right initial product and the right initial market.

7/ Tesla’s wedge (into the larger transportation market) was a luxury car targeted at affluent early adopters. Robinhood’s wedge (into the consumer finance market) was a commission-free trading platform targeted at millennials.

8/ Do I always need a wedge?
I don’t think so. Companies like Zoom, Slack, Workday, Notion, and Datadog went straight at their respective markets with an amazing product and won. You can argue about semantics, but as far as I can tell, these companies didn’t use a wedge strategy.

9/ e.g. Datadog: "We kept hearing that to enter a big market, you need a wedge—something really sharp and really specific, and then you expand from there. It turns out for some classes of problems, such as infrastructure management, which is what we do, the wedge doesn’t work..."

"...There is a large amount of stuff you need to do from day one if you want your product to be useful. Our initial product was positioned as a very broad platform to bring multiple teams together, and actually didn’t have that wedge aspect.”
— @oliveur

10/ When do I need a wedge?
A wedge seems most valuable when you’re going after a market that is (1) entrenched or (2) crowded. When it’s hard to break in head-on. https://t.co/lYn6tuITFY

11/ The more entrenched and competitive the market, the more valuable a wedge will be. Chime needed a wedge to get a foothold in the entrenched banking market. Stripe needed a wedge to break into the entrenched payments market.

12/ Why is a wedge useful?
A wedge gives a startup a number of advantages over its competition—primarily driven by having a narrower, more precise focus. https://t.co/pK7WvKo2Hg

13/ "When I say it needs to have a good wedge, I’m looking for an entry point that provides some sort of power to the startup." — @annimaniac

14/ @sarahtavel has a similar view https://t.co/mmwsYjXfZZ

15/ What makes a good wedge? https://t.co/tYifJWzD5v

16/ "Wedge selection should be very intentional. Don’t just build for the first customer persona you think of or the closest city to where you live. Build for the group that has the most acute pain point, or the highest willingness to pay, or the fastest sales cycles. ...

"...The more carefully you pick your wedge, the easier it will be to succeed and to expand to the larger market. A product that’s 10x better on average might actually be 50x better for some groups but only 1.1x better for others." — @lpolovets

17/ How to pick your wedge

Find a large market and then:
1. Pick a very narrow (and very painful) problem
2. Pick a very specific segment of people to solve that problem for

For additional advice on how to pick your wedge, and what to do once you've figured it out, and much more, check out this week's full post
https://t.co/I6jIFx2UMz

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