Professor of Management Practice
Having a deep and relevant connection with the industry or market you are entering as an entrepreneur is of crucial importance. Yet, this so-called founder-market fit is an often-neglected condition for success. Entrepreneurs are attracted to a specific industry because they want to solve a compelling problem – or build a groundbreaking solution. Whilst passion and vision are undeniably important, the lack of a strong founder-market fit may lead to a significant disadvantage. Yannick Dillen, Professor of Entrepreneurship, explains why launching a business or a product in a field where you have little to no prior experience can be a recipe for failure.
Why is having a founder-market fit so important for budding entrepreneurs?
Having prior experience in the industry equips founders with an understanding of the challenges and obstacles that potential customers face. This knowledge allows for the creation of targeted, effective solutions. Prior experience also gives them an inherent credibility and network that helps them build trust and open doors with customers, investors, and partners. Moreover, entrepreneurs who have a founder-market fit can skip the learning curve that inexperienced founders face when trying to get a foothold in a new industry. This accelerated understanding can be a significant competitive advantage as their time to market is likely to be much shorter.
Professor Yannick Dillen explains why it's important for entrepreneurs to have a deep and relevant connection with the industry or market they are entering.
Can you give examples of successful firms where the founders showed a clear founder-market fit from the start?
A good example of a clear founder-market fit is Silverfin, a company that found its true calling in the accounting industry. This Belgian accounting tech startup achieved remarkable success when it was recently acquired by Visma. What set Silverfin apart was the clear founder-market fit it embodied. One of its co-founders, Joris Van Der Gucht, had extensive experience in the accounting industry before launching the company. His background and expertise allowed Silverfin to create innovative solutions that directly addressed the challenges and needs of the accounting industry. This intimate knowledge of the market played a pivotal role in Silverfin's growth and eventual acquisition.
What is your advice to entrepreneurs with a passion for a certain market or industry but no experience yet?
If you lack direct experience in your chosen industry, you should take steps to bridge the gap. You could conduct thorough research to gain a deep understanding of the industry, market, and target audience. Next to that, you can connect with mentors, advisors, or partners who have expertise in this industry to fill knowledge gaps. Last but not least, you should commit to ongoing education and self-improvement in your chosen field to keep abreast with trends and market developments.