What Does Product Market Fit Sound Like? This. by Steve Blank

Finding a customer for your product in the Department of Defense is hard: Who should you talk to? How do you get their attention? Looking for DoD customers? How do you know if they have money to spend on your product? It almost always starts with a Program Executive Office.

Imagine you got a job offer from a company but weren’t allowed to start work – or get paid – for almost a year. And if you can’t pass a security clearance your offer is rescinded. Or you get offered an internship but can’t work on the most interesting part of the project. Sounds like a nonstarter. Well that’s the current process if you want to work for companies or government agencies that work on classified programs.

Seemingly overnight, disruption has allowed challengers to threaten the dominance of companies and government agencies as many of their existing systems have now been leapfrogged. How an organization reacts to this type of disruption determines whether they adapt or die.

We just finished the 14th annual Lean LaunchPad class at Stanford. The class had gotten so popular that in 2021 we started teaching it in both the winter and spring sessions.

During the quarter the eight teams spoke to 919 potential customers, beneficiaries and regulators. Most students spent 15-20 hours a week on the class, about double that of a normal class.

In the 14 years we’ve been teaching the class, we had something that has never happened before – all eight teams in this cohort have decided to start a company.

We just finished our 9th annual Hacking for Defense class at Stanford.

What a year.

Gordon Bell passed on this month. I was a latecomer in Gordon Bell’s life. But he made a lasting impact on mine.

Kodak and Polaroid, the two most famous camera companies of the 20th century, had a great partnership for 20+ years. Then in an inexplicable turnabout Kodak decided to destroy Polaroid’s business. To this day, every story of why Kodak went to war with Polaroid is wrong.

The real reason can be found in the highly classified world of overhead reconnaissance satellites.

Here’s the real story.

The connections between the world of national security and commercial companies still has surprises.

One of the most exciting things a startup CEO in a business-to-business market can hear from a potential customer is, “We’re excited. When can you come back and show us a prototype?”

This can be the beginning of a profitable customer relationship or a disappointing sinkhole of wasted time, money, resources, and a demoralized engineering team.

It all depends on one question every startup CEO needs to ask.