I chatted with a founder who’s built an early product but hasn’t yet found product–market fit. He has some paying users but still hasn’t come up with that one thing that customers immediately see value in. His product does several things that people collectively like, but not one thing that people love.

As we chatted, he mentioned that he decided not to fundraise right now (he had an investor lined up already). His reasoning was straightforward. Because he doesn’t have product–market fit, he doesn’t know what he would spend the money on. Sure, he could grow the team, but he doesn’t feel that would solve the current challenge. He hasn’t yet identified the thing that customers really want him to build, so he doesn’t have a clear direction for the company or product. He has a small amount of recurring revenue and cash on hand, so meeting operating expenses isn’t a concern.

I like how honest and candid this founder was about the current state of things. He’s very aware of the stage his company is in and what it needs. Job number one is to figure out what customers want, and the team he has, though small, can do that.

I think this founder is headed in the right direction. He has some revenue coming in and is keeping burn low by keeping his team small. Once he finds product–market fit, I’m sure he’ll be off to the races!