🪴 Four pillars of $100M startups
running a successful startup is much more than just having "a great product"..
When you ask a VC or a successful founder what’s the way to succeed, they usually respond in lines of “Build something people want” or “Build a great product and customers find you”.
This is actually just about a tenth of what you need to build a $100M+ startup.
There are great products that never see their first million, let alone set their sights on $100M.
There are products that are absolutely atrocious and still hit way beyond that.
By simple logic, it can’t be just the great product that makes you succeed. According to Brian Balfour, this thinking leads to product death cycle.
Believing that all you have to do is “build a great product” is essentially thinking “if you show up, you succeed” — which is dead wrong. (e.g., if you show up daily but make the same mistakes every day, you’ll suck just as much in 365 days as you did when you started).
What makes one SaaS idea take off while others stall? Join us for an honest, open conversation with founders who’ve walked the path—from that first “I need to build this” moment to sustainable growth and potential exits.
Whether you're bootstrapping or chasing VC, building in private or going full build-in-public, this session dives into what actually matters.
Join Paddle’s panel of seasoned SaaS founders as they dive into the real decisions, tactics, and mindset shifts that turn an idea into sustainable success.
Another common answer is “Get a product-market fit and you’ll make it out of the trenches.”
This is also only a part of the enchantment.
If you are an inexperienced founder, it’s very easy to mistake a small growth for hitting PMF.
There’s much more to startups than just product-market fit. Success hinges on four foundational pillars: market, product, channel, and business model. These pillars create the essential fits all $100M startups must have (to some extent).
How the pillars work
Each pillar is a critical piece, where neglecting any one can sink all your prior work.
Market: This is about who you serve. Understand the size, needs, and dynamics of your target audience. A massive market with urgent problems can carry a mediocre product further than a perfect product in a tiny, indifferent market.
Product: Your solution to the market’s problem. It doesn’t need to be flawless, but it must deliver real value. Obsess over what your users actually need, not what you think is cool.
Channel: How you reach your market. Even the best product is invisible if no one knows it exists. Channels — whether ads, partnerships, or organic growth — must align with how your market behaves.
Business Model: How you make money. A great product with a broken revenue model dies fast. Pricing, margins, and scalability need to match your market and channel dynamics.
These pillars don’t work in isolation. They interact, and their alignment creates the fits that separate good startups, from the mediocre ones.
The essential fits
Product-market fit: Your product solves a real problem for a specific market. It’s not about early traction or a few happy users — it’s about consistent, scalable demand. Without this, your startup is a solution looking for a problem.
Channel-market fit: Your distribution channels must reach your market efficiently. If your audience hangs out on niche forums, blasting Instagram ads won’t cut it. Match your channels to where your market lives and breathes.
Business model-market fit: Your revenue model must fit your market’s willingness and ability to pay. A subscription model might crush it in enterprise but flop with budget-conscious consumers. Get this wrong, and even a loved product starves.
Channel-product fit: Your channels must amplify your product’s strengths. A complex B2B product won’t sell through TikTok virality, but it might thrive via targeted LinkedIn outreach or webinars. The channel has to showcase what makes your product compelling, or the message gets lost.
These fits evolve as your market shifts, competitors emerge, and customer needs change. The best founders relentlessly test and tweak their alignment across all of these metrics.
Breaking down the fits
To build a $100M startup, you need to nail all four fits. Here’s how each works, what founders get wrong, and how to test and optimise them.
Product-Market Fit: Start with the problem
What It Is: Your product solves a burning problem for a defined market. It’s not about “liking” your product. It’s about customers needing it so much they’d be willing to switch from your competitors, even if your product is worse in the beginning than theirs. However, they see the potential and your ruthlessness in execution and know your product will be better in no time.
Common Mistake: Founders assume a few sign-ups or a high NPS means they’ve hit PMF. Early adopters aren’t your market. Real PMF shows up in flat retention curves and organic word-of-mouth growth.
How to Test It:
Define your market: Who are they? What’s their core problem? Why does it hurt? Use customer interviews (10-20 minimum) to map pain points.
Note: Treat carefully. Most users don’t really know what they want. If Henry Ford built what his users wanted him to, he’d end up with faster horses instead of a car.Build a hypothesis: What’s the simplest product that solves this? Test an MVP with a small cohort ASAP.
Measure: Look for retention (are users sticking around?) and direct traffic (are they telling friends?). If growth stalls without heavy marketing, you don’t have PMF. Cohorts analyses can also provide valuable insight how the feeling around your product changes.
Example: Airbnb nailed PMF by focusing on budget travelers who needed affordable, unique stays. Their early retention was sticky because hosts and guests kept coming back.
Action: Run a “problem discovery sprint” this week. Ask customers: “What’s the hardest part of [their job/task]?” Build from there. Most startups don’t start with a sexy problem.
Channel-Market Fit: Reach where they live
What It Is: Your distribution channels connect directly to your market’s habits. If your audience is on Reddit, don’t waste cash on YouTube ads.
Common Mistake: Spraying and praying across every possible acquisition channel, hoping one sticks. This burns budget and dilutes focus. 80/20 rule. One dominant channel drives 80% of $100M startups’ growth (e.g., SEO for Yelp, virality for Dropbox).
How to Test It:
Map your market’s behaviour: Where do they spend time? What do they trust? (e.g., enterprise buyers read Financial Times, Gen Z scrolls TikTok.)
Prioritise one channel: Pick based on cost, scale, and alignment. Run a 14-day experiment with a small budget.
Measure: Track cost-per-acquisition (CPA) and conversion rates. If CPA is too high or conversions tank, pivot to another channel or change the strategy.
Example: HubSpot crushed channel-market fit with inbound marketing (blogs, webinars) because their SMB market devoured free educational content.
Action: Create a “channel hypothesis” table. List three channels, their pros/cons, and test one with a $500 budget this month.
Business Model-Market Fit: Find what they are willing to pay
What It Is: Your revenue model matches your market’s willingness and ability to pay. A $10/month subscription works for prosumers, but enterprises expect $10K/year contracts.
Common Mistake: Founders copy competitors’ models without testing. If your market can’t afford your pricing or hates subscriptions, you’re dead.
How to Test It:
Research willingness to pay: Survey customers or analyze competitors’ pricing. Ask: “What’s this worth to you?” Many startups make a mistake by charging way less than they should be. There’s always going to be crybabies complaining about your prices, chances are you don’t want those users anyway. *****reddit post******
Test pricing models: Try 7-day free trial, one-time purchases, or tiered subscriptions with a small cohort.
Measure: Calculate average revenue per user (ARPU) and churn. If ARPU is too low or churn spikes, your model’s misaligned.
Example: Slack’s freemium model fit its market (teams needing collaboration tools) because free trials hooked users, and paid tiers scaled with team size.
Action: Run a pricing experiment. Offer two price points to 100 users and track which drives higher conversions.
Channel-Product Fit: Amplify your product’s aura
What It Is: Your channels highlight what makes your product unique. A simple app might shine via viral invites, but a complex SaaS needs demos or case studies.
Common Mistake: Founders force their product into trendy channels (e.g., TikTok for B2B software). If the channel doesn’t showcase your product’s value, it’s a mismatch.
How to Test It:
Define your product’s hook: What’s the one thing that grabs attention? (e.g., instant results, cost savings.)
Match the channel: Pick one that boosts your hook. Test with a small campaign (e.g., LinkedIn posts for B2B, Instagram Stories for D2C).
Measure: Check engagement (clicks, shares) and conversion to sign-ups. Low engagement means the channel isn’t amplifying your product.
Example: Notion’s channel-product fit came from community-driven channels (Reddit, Twitter) where users shared templates, showcasing its flexibility.
Action: Write a one-sentence hook for your product. Test it in a channel that matches your market’s behavior and track engagement.
Key Takeaways
Fits are interdependent: Change one (e.g., pricing), and you must retest the others (e.g., channels). Ignore this, and you’ll break your growth engine.
They’re not binary: Fits exist on a spectrum from weak to strong. Weak fits mean slow growth; strong fits feel like the market’s pulling you forward.
Iterate constantly: Markets evolve, channels die, and competitors copy. Revisit your fits every quarter to stay ahead.
If you want to dive deeper
Market: Read “The Market Sizing Blueprint” by First Round Review. It breaks down how to quantify your market’s potential and avoid chasing niches too small to scale. Pair it with customer interviews to validate demand.
Product: Study “The Jobs-to-be-Done Framework” by Clayton Christensen. It’s a practical lens for building products that solve real customer problems, not just shiny features. Test your assumptions with rapid prototypes.
Channel: Check out “The Channel Prioritization Matrix” by Growth Tribe. It’s a step-by-step guide to identify high-impact channels for your market. Run small-scale experiments to find your power-law channel.
Business Model: Explore “The Unit Economics Toolkit” by Andreessen Horowitz. It helps you model pricing and margins to ensure your revenue model supports growth. Benchmark against competitors to spot gaps.
Fits in Action: I’m going to write deep dives on Dropbox (strong product-market and channel-product fit via viral referrals) and Slack (channel-market fit through community-driven growth) next week for premium subscribers. Upgrade if you don’t want to miss this.
Execution: Read “The Hard Thing About Hard Things” by Ben Horowitz for raw insights on prioritizing under pressure and iterating fast. Apply its lessons as you grow your company.
How I can help
Software
I own a software house with 160+ software developers. Need a product built? Message me and I’ll build you a dream team!
Advertising
Advertise in my newsletter to get in front of 10,000+ founders.
clearest framework of thinking I've seen, thank you!