Felicis Ventures partners share the four pillars of scaling a SaaS startup

Your total addressable market needs to break at least $1 billion to be considered a factor for investors.

Along with a massive addressable market, investors are also looking to see that you have existing customers who love your product.

It can be difficult to communicate the steps between your existing users and your long-term potential as a company.

At the Early Stage this month, we sat down with Felicis Ventures partners to talk about scaling, product-market fit, and why it's crucial to be better.

Product-market fit

It's important for startup companies to be able to demonstrate that their users love their product.

Faga and Pezeshki believe that a framework is needed to measure the initial push into a niche audience. They suggest asking your first group of users how they would feel if the product were to disappear. One of every two users should be upset if the product is below the 50% threshold.

It is important to stay focused on the niche you are building for before moving on.

Faga said that a founder is working with someone who is building in the beauty space, and they are interested in applying what they are building to the market.

She explained that they had to take a step back and say, "Let's do that really well." Let's repeat it. Let's scale it. That gives you the right to move into the CPG space because it might take you in a different direction. You can get there, but you have to be beautiful first. Do it well. That gives you a graph that is up and to the right, which gets a lot of investors excited.

While maintaining focus on your niche and working to hit that 50% threshold of users who couldn't continue on without your product, start paying close attention to your Net Promoter Score. If you find a group of users that rate your product a nine out of 10, you can charge them for it. You don't have a product-market fit if your NPS drops to two.