Weebly Founder: How to Find a Product That Fits the Market?
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Weebly Founder: How to Find a Product That Fits the Market?
Finding the right product-market fit and building a world-class team are the two most difficult things for a startup.
Navigating Web3 tides with focused insightsCompiled by: TechFlow
Note: This article is part of the TechFlow series "YC Startup Class Chinese Notes" (updated daily), dedicated to collecting and organizing Chinese translations of YC courses. The fifth installment features Weebly founder David Rusenko’s online lecture, “How to Find Product-Market Fit.”
The Weebly Journey
Weebly is a simple way for entrepreneurs to build websites or online stores. Before Weebly existed, the only option was learning how to code yourself. Now, numerous tools and services allow you to drag, drop, and build a website easily. Weebly grew rapidly—by 2018 it had 50 million users and was acquired by Square for $365 million.
Half of the U.S. population visits a small website every month, reflecting entrepreneurial success—people are actually achieving results through their own websites. Therefore, I believe that figuring out product-market fit is the primary challenge everyone must face.
In 2006, I wrote the first line of code at Beaver Stadium in Pennsylvania. Six months passed, and my co-founders and I still hadn’t launched. I saw YC mentioned on Slashdot, spent two hours applying, then called my co-founder to ask his opinion. The next day, we drove to the interview and got accepted. Initially, we had only two servers and worried they might burn out. So we decided to put users on a waitlist after registration, then contact them later. After a media spike, user numbers plummeted until the entire site shut down.
In January 2007, after 11 months of work, my co-founders and I dropped out of school, packed all our servers into a car, and drove to San Francisco. We rented a two-bedroom apartment, pushed three desks together, and worked full-time, exhausting ourselves nearly every day except Saturday. Despite some media coverage, new user growth kept declining—meaning we lacked product-market fit.
By May 2007, we had only $100 left in the bank, and rent was rising. One week before Demo Day, we closed a $650,000 Series A round at a $2 million valuation. It was called a Series A back then; today, it would likely be labeled a pre-seed round, slightly above average.
Yet for 18 months, our product failed to achieve product-market fit. Everything changed at month 20—we started gaining real traction and attracting many users. It wasn't until February 2010 that we truly succeeded in the market.
Product-Market Fit
Defining product-market fit is crucial in a startup's journey. Finding product-market fit and building a world-class team are the two hardest things in startups. Making money and scaling into a large, enduring company are also highly challenging. Throughout this process, never stop refining and building product-market fit. The best companies create entirely new markets, and discovering hidden needs is the most difficult part. Market research isn't useful for creating new markets—you need to uncover demands others haven't noticed.
In summer 2006, right after writing the first line of code, I attended a tech conference in New York. After talking to 1,000 people, I discovered a hidden need: many wanted to create their own websites but found it extremely difficult. We recognized this need and built a service enabling people to easily create websites.
Crucially, understand what job people want to get done, then offer a better alternative.
When creating a new market, people may mistakenly think you're just responding to existing demand—so you must build an exceptional product.
Specifically, step three is writing a market thesis—understanding customer needs and problems. Then conduct rapid prototyping and user testing, build solutions, and test their effectiveness. If successful, repeat the process continuously.
Rapid Prototyping and User Testing
Talking to customers and listening to their needs and problems is essential. In innovation, don’t rely on market research—instead, validate assumptions through rapid prototyping and user testing. Get a functional prototype early and show it to users. Don’t worry about scalability or monetization yet—focus solely on getting the product experience right. Expect to iterate roughly ten times to refine the product.
This includes maintaining low burn rate, building a fast-iterating team, talking to target customers, remaining flexible in your assumptions, avoiding overthinking, showing prototypes early, and using tools like customer interviews, UX testing sessions, and metric tracking to improve the product.
Among these, UX testing sessions are one of the most important activities: let others use your product or service, encourage honest feedback, have them perform tasks, and give no help or hints. Collect valuable insights about the user experience. Conduct three to five such sessions.
I believe just three UX tests can reveal the most critical user experience flaws. For example, we once launched a homepage and tried minimizing friction in Weebly registration by reducing form fields—so we removed the password confirmation field.
Actually, email confirmation wasn't necessary either, so we only asked for email and password. However, in edge cases, some entered incorrect passwords, causing their emails to reset. When someone input both email and password correctly, they'd need to create a new account—but this wasn't a major issue.
We placed the sign-up form on the page with “Register Here” written in 100-point font. Yet during UX testing, some still couldn’t find the form because they assumed it was a login form, not a registration form.
This led us to add a free text field asking only for a name, giving us three fields: email, password, and name.
Only through repeated testing could we identify and fix these issues—so I recommend constant iteration at every stage.
When Should You Launch Your Product?
I believe the “minimum remarkable product” is more appropriate than the “minimum viable product,” which implies you can launch the worst possible version of your idea.
Instead, focus on building an excellent product and launch when it becomes clearly superior to existing alternatives.
Finally, I believe the best way to prioritize is to focus on what gets you to the next milestone and optimize for learning to resolve your biggest unknowns.
I think there are three key metrics to track:
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First, is return usage rate. This metric tracks how many users who registered or visited your website or app come back within one day, three days, seven days, and thirty days. Tracking this is more important than any other metric—it’s the ultimate indicator of whether things are working. Early on, I gave login details to all my friends and family, but they didn’t return. These were the people who loved me most and genuinely wanted me to succeed. If they didn’t return, no one else would. So I consider return usage rate critically important.
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Second is core motivation source. Many tools can track this. Today, if your core motivation score exceeds 50, you’ve likely achieved product-market fit. This is measured by asking: “On a scale from 0 to 10, how likely are you to recommend this product or service to a friend?” Those who answer 9 or 10 are promoters. Those who answer 0 to 6 are detractors. Those who answer 7 or 8 are neutral and excluded. Early on, Weebly scored 80% on this—about 88% answered 9 or 10, 8% answered 0 to 6. If my math is correct, 12% were neutral. So if your core motivation score exceeds 50, you’re doing well.
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Third is renewal rate among paying customers. Once you have paying customers, monitor their renewal rate. I dislike using churn rate because it simply divides lost subscribers in a period by total active subscribers, ignoring cohort effects. Instead, I prefer renewal rate, which considers both eligible upgraders and actual upgraders—making it cohort-based. So if your renewal rate is high, you’re doing well.
Which Metrics Should You Ignore?
First, registration rate. We should focus instead on active users because strong return usage and conversion naturally lead to more active users. But if the user experience is poor, registration will stall and active users will decline. Even if your sign-ups grow, if usage is low, those numbers will eventually drop.
Second, conversion rate. When building a SaaS business, initial conversion rates are always low. Over time, I shift focus to other metrics.
What Does Product-Market Fit Feel Like?
You’ll know you’ve made it when customers start coming to you. If you don’t feel that, everything feels hard—like pushing a giant boulder uphill, trying to push customers toward a solution. They might be polite and not say no, but they don’t return or use your product. But when you do feel it, the whole world walks toward your door—everyone wants your product, and the media covers it. So if you don’t feel customers pulling you forward and heading toward your door, you’re probably not there yet. As your business scales and time passes, you may realize you’re smarter than you thought—but that comes later.
Beyond Product-Market Fit
I believe three things are needed to build a successful startup:
- First, your product must be better than alternatives—this is your competitive advantage;
- Second, you must acquire customers in a scalable, differentiated way;
- Third, you must create a business model without breaking your traction.
But sometimes, even if you build a product that works well in the market, it may become obsolete because your pricing model doesn’t match user needs.
So when designing a business model, ensure alignment between channel and model.
Team Size
Also, keep the team small before scaling—this allows for micro-management, ensures you know all critical information, and enables truly great decisions. Once product-market fit is achieved, aggressively scale and build a proactive, thoughtful team. However, in any given year, company size shouldn’t grow more than double, or the skyscraper will collapse. When you find product-market fit, actively scale.
Building a Brand
Brand-building is also important, but spending too much time thinking about it isn’t worthwhile—especially in early stages.
Great brands are built on insights into consumer behavior—truths that exist but haven’t been acknowledged. Ideally, this insight aligns with your product’s foundation. So if you can identify such an insight early and embed it into all messaging and product design, it becomes powerful and forms the basis of your brand.
For example, Virgin America discovered early on that people choose airlines based on only four factors: schedule, price, destination, and terrible flight experience.
They decided to create an airline offering amazing flight experiences at slightly higher prices—everything centered around the experience. Through staff training, PR campaigns, and more, they turned this into the foundation of both brand and product. They created a new reason for people to buy tickets—and succeeded brilliantly.
The key is understanding this insight and embedding it into your product so it gradually becomes the foundation of your brand.
Motivation
I think we were young and foolish back then—but that actually helped a lot.
Many believe entrepreneurs must be risk-takers, but I don’t think most founders I know are reckless gamblers. Instead, I see them as calculated risk-takers.
To me, entrepreneurial success requires two key traits:
First, optimism—seeing opportunity where others see risk;
Second, determination—once decided, you move forward relentlessly and never quit.
I think these two traits are often unrelated. Your company only fails when you give up. As long as you keep working by definition, it continues to exist.
Therefore, I believe that with such determination, even when all evidence suggests the plan won’t work, I won’t blindly strategize. But as long as you stay determined and confident that your product meets real needs, persistence is key.
Verticalization
Typically, advice for niche markets is to go vertical—customizing products to meet specific target group needs.
However, in some cases, we may choose to act counter to this pattern. In our specific case, vertical markets weren’t deep enough to support the level of investment we required.
In fact, we needed a fully-featured platform including blogs, e-commerce, forums, CMS, and all essential functions. No single vertical market could independently sustain such a platform.
Generally, platforms like Weebly or basic website builders and e-commerce platforms follow a model starting with a vertical market. Over time, they gradually add all necessary features and eventually begin customizing for verticals.
Thus, in our case, we chose a path opposite to convention. While targeting specific verticals is usually good advice, it wasn’t optimal for us.
Creating a Market
When creating a market, the key question is: How do you make people realize they need a new product they’ve never known before? In my experience, this is usually the first step in market innovation.
In Weebly’s first three to four years, we primarily focused on convincing people they could easily build their own websites. This was challenging because most believed they couldn’t build a site unless they knew how to code.
We spent a solid four years researching and educating people—eventually, more tried it, mastered it, and the market formed.
Services like Uber and Airbnb are great examples of market creation. At first, I was uncomfortable using a stranger’s car or staying in a stranger’s home, but as more people tried and recommended them, they became widely accepted.
Once a market is successfully created, the focus shifts to product expansion and improvement. The challenge is no longer convincing people of the product’s necessity, but helping more people use and love it.
Market innovation is a long and difficult process, but once achieved, the next phase is scaling and improving the product.
Key Performance Indicators
We didn’t monitor or measure these indicators—that’s probably why it took us 18 months to turn things around.
In reality, it could have taken much less time. When considering sign-ups, most people focus on this—but it’s a poor metric.
Looking at how many registered users became active, we found the conversion extremely low. Also, observing daily and weekly registration trends, they were consistently declining.
So clearly, our product-market fit was weak—we needed to keep iterating until we finally achieved the desired outcome.
Product Pricing
Initially, the Silicon Valley mindset was: don’t charge, don’t make money. The belief was that once you generate revenue, your company becomes less attractive. Back then, selling dreams without earning money was ideal—it inflated valuations. So from 2006 to summer 2008, our product was essentially free.
But over time, we realized we needed to start making money. In January 2008, we launched a paid version—Weebly Pro—at $4 per month. Before launch, when discussing with friends, we had high sales expectations. But in reality, we sold ten times less than our lowest forecast.
Though results were disappointing, we kept growing and achieved positive cash flow by January 2009—allowing us to keep operating. For the rest of our history, we continued developing and expanding.
What Should You Focus on When Calculating Active Users?
Even during periods of low user engagement, I believe calculating active users remains valid and valuable.
The key is determining whether users successfully used your product—even if they don’t return daily, maybe they come back every six months.
So in such cases, I still find the metric useful—it provides data that prevents blind decision-making.
Discontinuous Improvement
I believe discontinuous improvement works when you make a big leap. Sometimes, small incremental improvements won’t enable that giant jump. For example, starting from a Palm Treo, you could keep improving the OS, apps, or keyboard. But to create a new market, you usually need a bold leap—a discontinuous improvement. That means rapid iteration, uncovering hidden needs, understanding what people truly want, and building solutions. Optimizing for learning is critical here. So we must constantly ask questions, explore unknowns, and seek answers.
Fundraising Process
Most companies can’t raise funds before reaching traction—only after gaining traction can they secure investment. But reality varies—you might have friends or family willing to invest early, or join accelerator programs like Y Combinator.
However, most companies need prior track records—such as founders who’ve built successful products before or have significant influence in the industry or elsewhere.
If you hope to gain traction without fundraising early, that’s a realistic expectation. But how? It’s a chicken-and-egg problem—everyone solves it differently. Today, many do it by leveraging equity, assembling smart people, building what’s needed, keeping costs low, and moving as fast as possible toward the goal.
Why Is Focusing on Customer Needs More Important Than Following Competitors?
When you have something better than competitors, bring it to market. Build a holistic product—not just a feature checklist.
If you only focus on features, you’ll never win—you’ll always be behind. I prefer the “customer-first” philosophy because if you’re always watching competitors, you’ll always be following.
Whatever new product they recently launched—they started building it three months ago. So when you launch and lead the market, they’ll begin copying you.
I remember a South African company raised $40 million while we raised only $650,000. They completely copied our interface and launched a similar product—but ultimately failed.
Therefore, we must focus on customers, not competitors. It’s not about feature parity—your product should have unique strengths. Maybe ease of use, usability, or a specific feature—these can open new markets. Such qualities may be exactly what people need, driving them to buy your product.
So your product doesn’t need more features than others—what matters is meeting customer needs better. That’s the true goal.
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