Is your product truly scalable?
The top risk to product/market fit is use case scalability—a re-framing of product scalability.
Climate PMF Newsletter by Peter Nocchiero
Hey! I’m Peter and I help climate founders find and improve product/market fit. I created a practical, experience-based approach called PMF 2.0 for Climate Startups.
Disclaimer: no AI was used in the creation of this post or any of my content. You’re stuck with the madness swirling around in my brain.
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Let’s dive in.
When it comes to product scalability strategy, most founders gravitate toward problem x market size x technology.
The thinking is something like “tech is infinitely scalable with good margins and if I apply this product/business model to a problem in a large market, then I’ll find product/market fit and I will scale appropriately.”
Unfortunately, a problem at large, in a market at large is not really product-centric thinking and therefore not addressing the nitty gritty of product scalability.
What if your target problem manifests itself differently across customers in your market?
All of the sudden your market has either shrunk or, more likely, it’s not actually contiguous. This means that there are large gaps in product functionality that you’ll need to cover as you move from sub-segment to sub-segment.
If the gaps are small enough, great no problem, you’re on the path where fast iteration inside of an existing vision/strategy/roadmap will work.
If the gaps are too large, you will need to build and maintain too many different versions of your product and you’re going to be spread thin. Not a cohesive vision/strategy or market narrative. Not enough product dev or gtm resources to fully bring this thing to life. Not a recipe for strong product/market fit and no real chance of scalability.
Gut check time. Ask yourself the hard question. Could this be true for your startup? Have you been in the trenches with 100s of your prospective customers to really map this out and validate it deeply?
Product scalability challenges show up in subtle ways at first.
It’s a pretty quiet signal until about $1M in ARR. Until this revenue benchmark you have louder signals telling you other things more clearly like “we have 10 customers that love us” or “no one is interested in what we are doing”. Hard to think critically about true scalability in the face of these early, loud signals. It’s easy to kick the can down the road operating under the illusion of “big problem, big market” thinking.
Eventually the product scalability challenge will be screaming at you (looking at you Series A startups). There’s no time like the present to address it, it’s a challenge that has to be worked continuously – idea stage to Series B. It’s the thing that gets you to Series B.
In climate tech, product scalability challenges are incredibly common. Many (not all) climate solutions are fairly niched – a ripe environment for this challenge to exist. Even broad-based climate solutions like carbon accounting or carbon removal get hung up on this challenge because of the uniqueness that exists inside of scope 3 supply chain decarbonization.
Don’t get me wrong, the classic strategy to go after a niche “an in/cm wide and a mi/km deep” is the way to startup success, but you also need a reasonable path to scale your product. A GTM machine alone is not good enough.
The re-frame…
Focus on use case scalability.
A scalable use case is one that is similar in pain, frequency, and process across ICPs.
It’s many variations of a central use case that fit together like a puzzle.
You are most likely to think about pain, frequency, and process when you’re deep in product iteration loops with customers, but how often are you actually dedicating intense focus and humility to these variables? I’m sure that you think of them at least some, but the key here is that you must think about all three simultaneously and with productive skepticism.
You have to triangulate pain, frequency, and process to have use case scalability.
There’s two primary ways to look at a scalable use case – top down and bottom up.
The most obvious version of a scalable use case is top down. These are content/data agnostic platform plays like slack, notion, and salesforce. The use case for these products looks extremely similar for every customer in the world. I’ve been on slack teams at large companies, small companies, independent communities, etc and it really doesn’t look any different— annoying channels and a barrage of DMs that make you want to hide under a rock ;). In climate, carbon platforms like persefoni and watershed are probably the closest to this model, but again I think intricacies in scope 3 decarb is a place where these platforms are starting to see their top down approach break. As carbon platforms move deeper into scenario planning and offering low carbon tech to help with emission reductions the product strategy is no longer content/data agnostic.
Unfortunately, the top down version of a scalable use case is actually incredibly rare. It feels common because these are typically the largest tech companies in the world and all of us have touch points with them. For us climate founders, there’s some survivor bias (these are the top .1% of startups) and familiarity bias (assuming our local reality is globally true) that we have to fight off here when working on our own products.
Statistically across all startups, and especially in climate, we are working on fairly niche solutions, and top down, broad based platform thinking is not helpful. It’s often detrimental.
All successful businesses look like platforms, but they are usually built in reverse. From the ground up.
Bolting on use case after use case after use case that share significant overlap in the way that pain, frequency, and process exist inside and across your customer’s businesses.
This product strategy centers around a central use case and finding variations of it that fit together like a puzzle.
This is bottom up use case scalability and it’s your path to product scalability and PMF.
Thanks for listening.
Peter💚✨
🙋♀️ Questions about PMF? DM me and I’ll answer them.
Climate PMF Newsletter by Peter Nocchiero
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