When Product-Market Fit Happens Before You Have Your First Customer

True product-market fit usually takes years; most startups don’t get there.

But there’s a rare situation when a software business can start with product-market fit and ecstatic customers years ahead of the rest:

  • First, you need to build a complete software solution inside your business that produces amazing results and gives you a massive competitive advantage.
  • Second, your business is unusually similar to other businesses in your industry that have faced the same problems.

This is the situation experienced by Paul Van Metre, co-founder of ProShop ERP, who shares their story on the Practical Founders Podcast this week.

Paul co-founded a successful machine shop that manufactured custom parts for the aerospace and medical device industries.

Over 15 years, they created and improved software to run their entire business, which created huge efficiencies and helped them manage their growth.

They sold that business in 2014 to focus on selling their complete ProShop software platform to other forward-thinking machine shops.

ProShop is now one of North America’s leading ERP (enterprise resource planning) software platforms for machine shops. The software manages every aspect of a machine shop business, from orders, finances, inventory, and shop floor operations.

The company grew quickly with no outside funding as happy customers spread the word in their industry.

In 2023, ProShop received a $32 million growth equity investment from Mainsail Partners, which allowed the founders to take money off the table and fund new growth.

Real product-market fit means you don’t sell to bad-fit customers, which most companies struggle to do.

Paul describes their successful, focused approach:

“Most of our competitors are selling the moon and don’t deliver, so we do the opposite. We try to be as transparent and cautious as possible. We do not want to sign up companies that are not a good fit for us.

“We kick prospects out of our sales funnel all the time because they’re either not the right fit on paper or we see they’re going to be a real headache, and we don’t want to put that onto our client support team. We’re pretty selective even today.

“Sometimes it seems a little harder up front, but ultimately, our business is in a much stronger position when all of our clients are well aligned and good clients. Our NPS scores are over 70, which is unheard of in ERP software. We leaned into that, and it worked for us.”

ProShop is unusually disciplined about delivering great customer service, maintaining a specific company culture, and constantly improving internal processes.

They are building a long-lasting business that will change the industry—from the inside.

Listen to this interview with Paul Van Metre on the Practical Founders Podcast.


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