While it's always usefull to be great at fund raising, it seems not always wise to raise big $$$ before achieving product-market-fit. When such a startup fails, it always makes for great headlines and 20/20 hindsight commentary.<p>What are good examples of where it did work out great? And what can we learn from it?
The underlying assumption behind the negative attitude here is that everything worth doing, is easy. That for every line of development which will turn out to be worthwhile, it's possible to build a minimum viable product on a shoestring. This is an understandable idea, because it would be great if it were true. It would be very handy indeed if the universe worked this way.<p>Unfortunately, it doesn't. Sure, it's true enough for websites because the industry spent several decades building infrastructure to the point where a couple of guys in a garage can build a website. It's not true for much anything else. If we want to make the transition to clean energy before we wreck our environment, if we want to do something about the degenerative diseases collectively referred to as old age before we all bankrupt ourselves trying to prolong dying, if we want to get off this planet before we get snake eyes on the cosmic dice, we need to get back into the habit of understanding valuable goals need big investments.
Pixar - <a href="https://en.wikipedia.org/wiki/Pixar" rel="nofollow">https://en.wikipedia.org/wiki/Pixar</a><p>"..the Image Computer never sold well.[21] Inadequate sales threatened to put the company out of business as financial losses grew. Jobs invested more and more money in exchange for an increased stake in the company, reducing the proportion of management and employee ownership until eventually, his total investment of $50 million gave him control of the entire company."<p>I highly recommend reading 'Creativity, Inc. - Ed Catmull' which talks about how Pixar was formed.
Palantir and Addepar both would have gone bankrupt many times over if not for Peter Thiel and Joe Lonsdale's fundraising ability, which kept the companies solvent long enough to survive and stumble onto an even footing.
The push toward PMF has been really great for the industry and really helped avoid wasting a ton of cash.<p>The only argument AGAINST it rally is when a team has a proven track record and already KNOWS how to find PMF and knows that it has value.<p>PMF is amazing when you do it right. With <a href="http://datastreamer.io" rel="nofollow">http://datastreamer.io</a> we were actually a meme tracking app (similar to hacker news) but what ended up happening is that people basically said "hey, that's cool and all but we really just want to license your blog data crawling platform".<p>At the time I was thinking that I could just use the licensing sales to continue developing the meme tracking app.<p>At some point it just dawned on me that we had 10-15 customers and that it was the tail wagging the dog so I dropped the meme tracking app entirely and then focused on the crawling and data licensing component.<p>For Polar, <a href="https://getpolarized.io/" rel="nofollow">https://getpolarized.io/</a>, (which is something new I'm working on) I needed it for my own personal use as my document collection was getting out of hand and I need some way to manage annotations. I wanted something close to an IDE where I could keep all my books and web content tagged and in one place.<p>Initially I was worried that there might not even be a market - even as just an OSS product.<p>We've been soft launching for about 2 weeks now as an MVP and the results have been really fantastic.<p>The app is definitely not complete - not by a long shot. There are pretty clear holes in the app. For example, I shipped it without the ability to delete books - which is kind of important.<p>If your customers are willing to put up with a feature incomplete and a broken app and are interacting with you and requesting new features and suggesting bug fixes - well you might be on to something.<p>I think the trick is realizing the minimum viable product that you need to ship to measure this and then iterate from there.<p>If you keep iterating on an MVP that people are actually USING you will eventually hit PMF and then take off.<p>None of this is new though.. the whole lean startup space talks about this excessively.
Any product that took a lot of time and effort to build before it was launched.<p>Such as Lightbulbs, Cars, Airplanes all famously took an incredible amount of tests and funding before they achieved product market fit :)<p>Fundraising is more a function of having access to capital by knowing the right people or being inside the right company, than about the product. It’s rare that the product itself is such a new and revolutionary idea that has a simple implemntation — but perhaps that happens occasionally whenever a new platform comes out.
Successful innovation by growing or established companies are examples of this — one of the superpowers of scale is being able to devote large amounts of capital to essentially new ventures without having to return to the capital markets incrementally and therefore pursue growth incrementally. Eg Apple. I would say this is the <i>main</i> advantage of scale.
Ones where the team pivoted early on? I think that's how Reddit got started; they got funded based on the team with a completely different idea, then moved over to their current one and made it a huge success. Quite a startup accelerators fund teams rather than ideas, including the one that runs Hacker News.
Depends on your definition of "big $$$" probably.<p>I don't have many specific examples, but the cases where it <i>would</i> work tend to be focused around investing in people with track records doing capital intensive things.