Building a product is a process, not a discrete action. And the Internet is efficiently arbitraged. Every single simple thing that can be done is being done, or has been done. The lesson of history is that product-market fit is very precise—one wrong tweak or slightly bad timing and you can miss the whole thing.

So the only way you’re likely to find product-market fit is if you’re almost irrationally obsessed with the market and if you’ve been working on it for a long time. Where the journey is the reward. Then, you’re likely to have unique insights (in the details) and consistent execution, through thick and thin, to find fit.

Often, the best companies are ones where the product is an extension of the founder’s personality, which shouldn’t be a big surprise, since everyone is passionate about themselves.

Don’t talk to one investor at a time, talk to all of them at once. It’s the only way to get market-clearing terms.

Meeting every investor over a short period of time creates a positive feedback loop of social proof and scarcity that closes deals.

Recently, we’ve noticed a new way of making this mistake. The entrepreneur says, “I’ll use AngelList if my other intros don’t work out.”

If you can get intros on your own (and all the good startups can), you should use AngelList at the same time, not afterwards. Why?

First, no matter how good your offline network is, it’s unlikely to introduce you to the optimal investors, or help you close the deal as quickly as AngelList can.

Second, if your other intros don’t work out, AngelList probably won’t work out either — the startups that do well on AngelList are the ones that use it to complement their offline intros.

Related: Why would a seasoned entrepreneur use AngelList?

I’ve also included the new presentation below. Watch it in full screen mode for maximum pleasure. The full screen button is at the bottom right of the embed and it looks like this: .

(Slides: A Quick And Dirty Guide To Starting Up (pdf))

Here are some of my favorite quotes from the presentation:

“We are faced with insurmountable opportunities.” – Pogo

The most important thing: idea intelligence connections experience determination.

Ideas, and therefore NDAs, are worthless.

“… as in all matters of the heart, don’t settle.” – Steve Jobs, on picking co-founders

Co-founders are the biggest failure mode for startups.

“If you are facing in the right direction, keep walking.” – Buddha, on focusing your time in a startup

Markets are relatively efficient, so your first product is probably wrong.

(Slides: A Quick and Dirty Guide to Starting Up (pdf))

Here are some of my favorite quotes from the presentation:

“We are faced with insurmountable opportunities.” – Pogo

The most important thing: idea intelligence connections experience determination.

Ideas, and therefore NDAs, are worthless.

“… as in all matters of the heart, don’t settle.” – Steve Jobs, on picking co-founders

Co-founders are the biggest failure mode for startups.

“If you are facing in the right direction, keep walking.” – Buddha, on focusing your time in a startup

Markets are relatively efficient, so your first product is probably wrong.

If there’s demand, we’ll turn this into a slidecast.

In Part 1, we wrote,

“Lead investors want at least half the round—and they often want the entire thing. If they don’t want the entire round, they will help you find followers (and some leads will close immediately even if they’re not taking the entire round). They believe your stock is worth more than they’re paying. They don’t need social proof or scarcity to make an investment decision. Like great entrepreneurs, they are mavericks.”

If you’re doing a seed round, you may be able to mass syndicate the financing without a lead. Otherwise, here are three microhacks for finding a lead, in rough order of importance—but you should probably try them all.

1. Ask the followers for introductions. #

If the followers have good reasons to not lead, ask them for introductions to potential leads:

“Can you suggest any firms who would be interested in leading this investment? Why do you think they would be interested in leading? Would you make an introduction?”

This simple test will tell you whether the follower has good reasons to not lead. If a follower won’t make introductions, he doesn’t have a good reason to not lead. If the introduction doesn’t respond aggressively, the follower probably made a half-hearted introduction—he doesn’t have a good reason to not lead. The follower’s level of effort indicates if he really wants to find a lead or he just doesn’t want to say ‘no’. (Caveat: This logic mostly applies to VCs, not angels.)

If a follower doesn’t have a good reason a priori, don’t ask him for introductions at all. Skip this microhack altogether. An introduction by someone who can and should lead, but would rather follow, is a useless and harmful introduction. It’s a strong negative signal. Go get your own introductions.

Finally, if a follower introduces you to the eventual leader, the leader will rarely cut out the follower. (Investors who don’t accommodate the middleman who gives them introductions stop getting introductions.) You’ll end up with two investors and more dilution. But that’s better than the alternative: zero investors and no dilution.

2. Find seed stage investors.

Every professional investor’s fantasy investment is a sure thing: zero risk and infinite reward. If you’re early stage, you can circumvent this fun fact by doing a seed round:

1. Focus on investors who go out of their way to invest in seed stage companies with lots of risk, not investors who say they invest in seed stage companies:

“What seed stage companies have you backed in the last 2 years? What exactly did the company (team, product, traction) look like when you invested?”

Does your company look similar?

2. Find non-professional angels whose primary motivation is working with great entrepreneurs, not profit. In particular, talk to folks who already know you well and are willing to to bet on you.

Seed investors increase the probability of raising money from VCs. High-quality seed investors raise your valuation, provide social proof, and obviate the need for extensive due diligence in the VC round. Many companies close a small seed round and do a larger VC round in a few months.

If you want to skip the seed round, mere commitments from high-quality seed investors have a similar effect. And these commitments provide a strong alternative as you negotiate with VCs. Obviously, if you do the VC round, don’t cut out any seed investors you have committed to.

3. Find investors who know your market.

If every prospective investor says “we don’t know your market,” find investors who have backed companies in your market or similar markets.

Educate investors about your market. It’s your job to convince them the market is great. Find successful companies in your market and figure out how they got there, how long it took them to get there, how much money they raised, how much money they’re making, how much money they would be making if they were as smart as you are, et cetera.

Talk to the management at these companies and see if they will personally invest in your business or advise you. Ask if their company wants to be a strategic investor.

Yet more ways to find a lead.

In Part 3, we’ll suggest two more ways to find a lead investor.

Image Source: Funny Treat.