How do I explain product-market fit to my team?

We are a well-funded venture but don’t have product-market fit yet. Our sole focus should be on changing that. Yet everyone in the team is obsessed with everything else: more dev, marketing, sales, PR. It’s hard convincing them to wait and not spend time or money on these things, but rather focus on adjusting the product until it fits. Also I feel we’re often slower than we should, planning and perfecting things like a big corporate, except we won’t have enough coverage to fail too often like a big corporate. Death is too imminent in our world, and I often feel I’m the only one who feels this (I have a cofounder). Yet I find it hard to find the balance between complete autocracy and a healthy dose of self-doubt super-hard to do.

 
Hats off to you for bravely recognising that, like other startups that haven’t yet found product-market fit, you’re what Ben Horowitz would call default-dead rather than default-alive. Your analysis is spot on: if your customers don’t like your product much, then your team are wrong in wanting to start scaling up. It can feel even more lonely if your VCs aren’t sufficiently insightful to see the problem, and they’re unduly impressed by new initiatives and increases in top-line sales with poor unit economics.
You’re right that acting like a dictator isn’t the best way out of this. Another approach to consider might be to take it step by step.
  1. Pull together the data from customer behaviour that helps clarify whether you have PMF.
  2. Organise a session where you and your team analyse it to get to a conclusion — your hunch is then confirmed.
  3. Put together a mini-spreadsheet showing costs, revenues and month-end cash if you (a) spend heavily on marketing to acquire leads that don’t convert well and customers that churn fast, or (b) scale back your marketing, sales and PR and focus your efforts on getting the product right.
  4. Then get the team together and show them the evidence your runway is longer if you choose (b).
Remember that it’s way more fun, and makes you feel more successful, to have a growing team and to be hosing money around. But your way, though harder, is the right one.

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