April 8, 2025

The Progress Report

Phew. What a week. Since I last appeared in your inbox, the headlines have been relentless: more tariffs, slumping indexes and uncertainty everywhere.

Before you go full Chicken Little, remember something that is certain: while market conditions change, the fundamentals of building something valuable never do.

In fact, there's something fascinating about turbulent times: they separate the essential from the optional. 

• In easy markets, you can sell vitamins (nice-to-haves that might make life better).

• In challenging ones, people only buy painkillers (must-haves that solve genuine problems).

That's why Product-Market Fit matters more than ever right now. PMF isn't about how much you love your idea. It's about how much it hurts your customer to lose it.

In this newsletter:

• Getting through the transition phase of your startup

• Why economic uncertainty breeds strong companies

• How to tell if you’re going to go the distance (quantitatively)

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Weekly Insight

Most relationships start in the honeymoon phase. You’re learning more about one another and enjoying the discovery of it all. But after that comes the hardest part: the transition phase.

It’s when you’re forced to face real challenges together, like competing priorities and conflict management. It’s when reality hits. And, sadly, it’s also where most relationships end.

But the ones that make it through do so by using the same tactics as everyone else:

• Open, honest communication

• Learning to ask the right questions

• Responding to feedback, and making positive change

It just so happens, startups have the same playbook.

In economic downturns, both new and established businesses face their own transition phase. The honeymoon of easy funding and comfortable margins gives way to genuine tests of value. This is precisely why tough times produce more resilient companies. 

Many of today's most enduring companies weren't launched in boom times. They were built in the middle of economic pressure—when consumer spending was low, investor capital was scarce and optimism was hard to come by:

Their constraints didn’t kill them. They refined them.

Just like a relationship that survives adversity, these businesses came out stronger because they were forced to do the hard work.

Startups born into recessions:

• Launch with constrained resources → build lean, efficient teams

• Focus heavily on core customer value (because they have to win users)

• Stay grounded—less caught up in hype or VC fads

• Iterate fast to meet clear, urgent pain points

And, most importantly, they know they’re doing right by their customers. How, you ask?

Easy. They ask.

Intent to Action

What to do right now may feel complicated, but it isn’t. You just need to focus on asking your customers a single question:

“How would you feel if you could no longer use this product?”

If at least 40% of users say they’d be “very disappointed” if your product disappeared tomorrow, you’re on the right track. If they don’t, you have work to do to get there.

This is the cornerstone of the Product-Market Fit score—a tool introduced by Sean Ellis (in charge of early growth at Dropbox) that gauges whether your offering is truly resonating.

It sounds simple, but this one question cuts through noise. It tells you:

1. Are you building something people depend on?

2. Or just something they kind of like?

Vitamin vs painkiller. A distinction that means everything in tight markets.

And that, my friend, is exactly how you’re going to start solving real, persistent problems better than anyone else.

PS: Founder and CEO of Superhuman, Rahul Vohra, discussed this concept recently on Lenny’s Podcast. Highly recommend a watch/listen.

Your Weekly Challenge

Turn the PMF question into a customer discovery mission this week:

1. Identify 5-10 current customers (or potential ones if you're pre-launch)

2. Ask them: “How would you feel if you could no longer use [your product/service]?”

3. For those who say “very disappointed,” follow up with: “What specific problem does it solve for you?”

Listen carefully to how they describe the problem, in their own words. You're looking for what venture capitalists call “hair-on-fire problems”—issues so painful that customers would do almost anything to solve them.

Some revelations to watch for:

• If customers describe your product in terms different from your marketing, you've found a positioning opportunity

• If they highlight a feature you considered secondary, you may have stumbled on your true value proposition

• If nobody would be very disappointed, that's valuable data too—it means your current offering is more vitamin than painkiller, and it’s time to pivot

Closing Thought

I, like your parents and friends, care about your ambition—but the market doesn’t. It cares about your usefulness. 

In tough times, that’s your moat. Make sure you're building something your customers can’t go without.

Next week, I’ll dive into revenue models and figuring out your pricing (unless, of course, the world has other plans… again 😅).

See you then.

—Simon