I helped scale Canva from $10M to $2B in revenue.

Key Takeaways

• Product-market fit is a process, not a milestone

• Revenue alone is not evidence of product-market fit

• Fundraising and growth can be misleading signals

• Customer behaviour provides the strongest evidence of demand

• Product-market fit is not binary and often exists in specific segments first

• Retention is one of the clearest indicators that genuine value is being created

• Scaling too early can amplify problems rather than growth

Introduction

Product-market fit is one of the most important concepts in startups. It is also one of the most misunderstood.

Many founders treat product-market fit as something a company either has or does not have. In reality, it is far more nuanced than that.

The challenge is that companies often convince themselves they have found product-market fit before they actually have. Once that happens, behaviour changes. Hiring accelerates, spending increases, and growth investments are made.

If that assumption is wrong, the company simply creates problems at a larger scale.

Product-Market Fit Is a Process

One of the most common misconceptions is that product-market fit is a milestone.

It is often discussed as a moment in time when a company suddenly crosses a threshold and everything changes. In practice, it tends to emerge gradually.

The companies that scale successfully are usually obsessive about validating demand before investing heavily in growth. The companies that struggle often assume demand exists and spend years trying to force it into existence.

Revenue Is Not Product-Market Fit

Revenue is one of the most commonly cited indicators of product-market fit. While revenue is important, it does not tell the full story.

Companies can generate revenue through:

• Strong sales execution

• Aggressive marketing

• Founder relationships

• Short-term demand drivers

None of these necessarily prove that customers genuinely need what is being built. Revenue tells you that transactions are occurring. It does not automatically tell you why.

Why Fundraising and Growth Can Be Misleading

Fundraising is another signal that is often misunderstood. Investors backing a company is not evidence of product-market fit. It is evidence that investors believe product-market fit may exist in the future. Those are very different things.

Growth can also be misleading. Growth tells you something is happening. It does not always tell you what is driving that growth or whether it is sustainable.

The Most Useful Question

One of the most useful ways to think about product-market fit is through a simple question:

What happens if the company stops pushing?

What happens if:

• Marketing slows down?

• The founder stops driving every sale?

• Growth becomes less dependent on extraordinary effort?

The answer often reveals whether demand is genuinely emerging.

The Strongest Signals Are Behavioural

The clearest indicators of product-market fit tend to come from customer behaviour:

• Customers return.

• Customers remain engaged.

• Customers refer other customers.

• Customers begin pulling the product through their organisations.

At this point, the relationship starts to change. Instead of constantly trying to convince customers to use the product, the company increasingly finds itself responding to demand that already exists.

Product-Market Fit Isn't Binary

Another common mistake is assuming product-market fit exists everywhere once it exists somewhere. In reality, product-market fit is often highly specific.

A company may have:

• Strong product-market fit in one customer segment

• Weak product-market fit in another

• Strong traction in one geography

• Limited traction elsewhere

• One proven use case while the broader product remains unvalidated

The best founders are precise about where product-market fit exists and where it does not. That precision influences how capital, people, and resources are allocated.

The Risk of Scaling Too Early

One of the biggest mistakes companies make is scaling aggressively after seeing the first signs of product-market fit.

The logic is understandable:

• Growth is improving.

• Customers are responding positively.

• The instinct is to accelerate.

Sometimes that is the right decision. Sometimes what appears to be product-market fit is simply the first indication that product-market fit may be emerging. The difference between those two situations is enormous.

Scaling amplifies everything. It amplifies strengths, weaknesses, good decisions, and bad decisions. The cost of scaling too early is often much higher than the cost of waiting a little longer.

Why Retention Matters

Many of the best operators spend significant time focused on retention. There is a simple reason for that.

Retention is one of the clearest indicators that genuine value is being created.

Acquisition tells you people are willing to try something. Retention tells you they want to keep using it.

When customers continue to return over time, it is often a strong signal that the product is solving a meaningful problem.

Final Thoughts

When assessing product-market fit, it is easy to focus on metrics, fundraising outcomes, or growth rates.

The more useful question is whether customer behaviour is becoming increasingly self-sustaining:

• Are customers staying?

• Are they returning?

• Are they referring others?

• Is demand becoming easier rather than harder to generate?

Ultimately, product-market fit is not something a company declares. It is something customers demonstrate through their behaviour.

The companies that become truly exceptional are rarely the ones that scale the fastest. They are usually the ones that understand exactly where product-market fit exists and then scale deliberately once they have found it.

Key Takeaways

• The real impact of the proposed CGT changes is not just financial, it is behavioural

• Startup ecosystems are built on long-term risk-taking and delayed upside

• Changes to after-tax outcomes influence the attractiveness of that trade-off

• The most important effects are second-order and will emerge gradually over time

• Strong startup ecosystems tend to disproportionately reward long-term risk-taking

Introduction

There has been a significant amount of discussion around the proposed capital gains tax changes in Australia over the past few days, particularly within the startup ecosystem.

A large portion of the commentary has focused on the mechanics of the changes themselves: how the CGT discount changes, what indexation means in practice, and what gets taxed and when. Those details matter.

But in my view, the more important issue is incentives. Because the long-term impact of changes like this is not just financial. It is behavioural.

Startups Are Built on a Different Economic Trade-Off

Startups operate on a very specific economic model. Founders, early employees, and investors all take on elevated levels of uncertainty in the short term in exchange for the potential for long-term upside.

That trade-off underpins the entire ecosystem.

Founders often spend years building businesses with limited short-term financial reward. Early employees accept lower cash compensation in exchange for equity participation. Investors allocate capital into opportunities where most outcomes are highly uncertain.

The potential long-term upside is what justifies that risk.

Incentives Shape Behaviour

When the treatment of that upside changes from a tax perspective, the impact extends beyond the immediate financial outcome. It changes the attractiveness of the trade-off itself.

And that is where the second-order effects begin to emerge. At the margin:

• Fewer people may leave stable careers to join early-stage startups

• Fewer founders may decide the risk-reward equation is worthwhile

• Investors may adjust how much capital they allocate to venture and early-stage businesses

None of these effects occur immediately. And importantly, they are not directly observable in the short term.

The Effects That Don’t Show Up in the Data

One of the challenges with analysing changes like this is that the most important consequences are often invisible.

You do not see a line item in a budget for:

• Companies that were never started

• Founders who chose not to take the risk

• Early employees who opted for certainty instead of equity participation

But those effects are real. And over time, they compound.

What Strong Startup Ecosystems Reward

If you look at the most developed startup ecosystems globally, there is usually one consistent characteristic: They disproportionately reward long-term risk-taking.

Not just success in isolation, but the willingness to commit time, capital, and effort into highly uncertain outcomes over extended periods of time.

That incentive structure matters because it shapes behaviour across the broader economy.

It influences:

• where talent flows

• where capital is allocated

• how willing people are to innovate

• how many businesses ultimately get built

Not All Capital Gains Are the Same

There is also an important distinction that can become blurred in broader discussions around tax policy.

Building a company over 5–10 years involves a fundamentally different risk profile compared to passive asset appreciation. Those forms of capital are not created in the same way.

And if they are treated identically from a tax perspective, the system becomes less differentiated in how it rewards different forms of risk-taking.

Over time, the system adjusts accordingly. Capital gets redirected. Talent chooses different paths. Fewer people take the initial step into entrepreneurship.

This Is Not an Argument Against Reform

It is important to be clear that this is not simply an argument against tax reform. There are valid reasons to review tax systems over time, particularly where distortions exist.

But the nuance matters. Because the impact of changes like this is not limited to the immediate budget outcome or the near-term financial effects.

The broader impact sits in how behaviour evolves over time.

Why the Long-Term Effects Matter

The startup ecosystem is highly sensitive to incentives. Small changes to the long-term risk-reward equation can materially influence behaviour at scale over long periods of time.

And those effects are rarely immediate. They emerge gradually through:

• reduced risk-taking

• lower startup formation

• less venture investment

• slower innovation cycles

Over time, those effects compound.

Final Thoughts

The discussion around the CGT changes should move beyond the mechanics alone.

The more important question is how these changes influence the incentives that underpin innovation, entrepreneurship, and long-term risk-taking.

Because ultimately, incentives shape behaviour. And behaviour shapes economic outcomes.

Not just for startups, but for the direction of the broader economy over the long term.

Key Takeaways

• Fundraising is not a series of conversations — it is a process

• Preparation and narrative clarity matter more than most founders expect

• Momentum is critical and comes from running a compressed process

• Consistency in communication builds confidence

• The best outcomes come from managing both information and perception

Introduction

Raising capital is often treated as a function of the pitch. In reality, the outcome is usually a reflection of the process.

You can have a strong company and still struggle to raise if the process is weak. Equally, you can generate meaningful investor interest with an average business if the process is run well.

This is where many founders underestimate what matters. Fundraising is not just a series of conversations. It needs to be managed deliberately.

Preparation Sets the Direction

Before speaking to investors, clarity is essential. Not just on what the business does, but on why it matters, what is working, and where it is going.

Once conversations begin, there is very little room to refine this in real time.

Alongside narrative clarity, preparation also includes:

• A well-structured pitch deck

• Supporting data for deeper conversations

• A clearly defined investor list

The investor list is often rushed, but it plays a significant role in shaping the outcome.

Momentum Is a Function of Timing

One of the most common mistakes is spreading outreach over too long a period. A few conversations one week, followed by a few more the next. While this feels natural, it works against the process.

Fundraising is most effective when it is compressed. Conversations should happen within a relatively tight window. This creates momentum.

When investors are aware that others are also engaging with the opportunity, the dynamic changes. The process becomes more competitive and, ultimately, more effective.

Sequencing Improves Outcomes

The first few investor conversations are rarely the strongest. There is always a learning curve.

The narrative becomes sharper. Answers become clearer. Common questions become easier to handle. For that reason, sequencing matters.

Starting with lower-priority investors allows you to refine your approach before engaging with your top targets.

By the time those conversations happen, you are operating at a much higher level of clarity and confidence.

Consistency Builds Confidence

As conversations progress, consistency becomes increasingly important. Different answers to the same question across meetings create doubt.

Strong fundraising processes are characterised by:

• A clear narrative

• Consistent messaging

• Aligned communication across discussions

This does not mean scripted answers. It means deliberate communication.

From Pitch to Conviction

As the process moves forward, the nature of conversations changes. Early discussions focus on understanding the opportunity. Later discussions focus on validating it.

Investors spend more time reviewing data, asking detailed questions, and building conviction.

At this stage, the focus shifts from presentation to substance.

Where Decisions Are Made

Partner meetings typically carry the most weight. This is where investment decisions are often finalised.

By this point, investors are generally aligned on the opportunity. The question becomes whether they want to back the team.

Clarity, composure, and confidence are critical here.

When Momentum Takes Over

If the process is working well, momentum becomes visible.

• Responses become faster

• Conversations progress more quickly

• Multiple investors move in parallel

This is where the dynamic changes. Instead of convincing investors, you create a situation where investors are competing to participate.

That shift has a meaningful impact on the outcome.

Choosing the Right Partner

When offers come in, valuation is only one part of the decision. You are choosing a long-term partner.

The more important considerations are:

• Who understands the business

• Who you trust

• Who can add value over time

The relationship will extend well beyond the raise itself.

Where Processes Break Down

Fundraising rarely fails because of a single issue. It breaks down when the overall process is not managed effectively.

Common patterns include:

• Outreach that is too spread out

• Lack of momentum

• Inconsistent messaging

• Timelines that extend too long

When these occur, it becomes significantly harder to achieve a strong outcome.

Managing Information and Perception

A useful way to think about fundraising is that you are managing two things simultaneously:

• Information

• Perception

You are sharing information about the business, but you are also shaping how that information is interpreted.

Momentum plays a central role in that perception.

Final Thoughts

Fundraising is not just about the strength of the company. It is about the strength of the process around it.

Clarity at the start. Momentum through the middle. Discipline throughout.

When those elements are in place, everything else becomes easier.