August 12, 2021

Ask a Seed VC: How much should I spend to find product-market fit?

Welcome back to Ask a Seed VC, Eniac’s advice column about startup fundraising and investing. Today’s question comes from the founder of a Latin American carpooling app:

How much money should be required to fully test product/market fit? We have only spent somewhere in the area of $1000 on marketing thus far, and that has been enough to get us a little over a thousand users, and the users we have been getting are using the app and seem interested. However, we are running into the chicken-and-egg problem — we need enough drivers to handle all the trips that the riders request, and we need enough riders to support the drivers who join the platform. Our intuition is that we need to spend more marketing dollars to reach a higher critical mass of drivers/riders in various routes. But the problem is, we don’t really know how much we need to spend.