A Product Market Fit Show | Startup Podcast for Founders
00:03:34 · Pablo Srugo, Steve Tuck
[00:03:34] S1: I love that as the signal, like the defining feature of what product market fit is, is where your problem is not generating demand, but meeting the existing demand. Like you just said, it's like sold out, right? It happens a lot, obviously, in your case, physical products, right? But many people are selling softwares, there's no like true sold out. Like it doesn't really, but it's, that is really product market fit. Like when you're sold out, because either you don't have the inventory or in a software context, you just can't onboard the customers fast enough. You can't get into success fast enough. To me, that's like the sharpest definition of product market fit. [00:04:05] S0: And it's not, I mean, it's not necessarily fun because we are having to delay other customers. Lead times are extending. We're having to say no to some customers while trying to build that production capacity, which you can't just turn on overnight. And this is what, you know, this is the additional challenge of doing hardware as well as software. You've got to scale these things in tandem. But it was very much the combination of doing hardware and software together that led to that moment of commercial takeoff. [00:04:35] S1: And when was this? [00:04:36] S0: So we founded Oxide in September of 2019. And this was the summer of 2025. [00:04:43] S1: Wow. Okay. [00:04:44] S0: We were a good five and a half years in. And it was four and a half years of near-death experiences. [00:04:51] S1: When they say hardware is hard, like it's those years that they're referring to.
00:04:51 · Pablo Srugo, Steve Tuck
[00:04:51] S1: When they say hardware is hard, like it's those years that they're referring to. [00:04:55] S0: And when they say hardware is hard, there's a lot of elements to that. Because yes, like hardware is hard. And you could argue that hardware today is easier than building hardware five, 10 years ago, just given a lot of the open tooling and a lot of the mechanisms that are available. But one of the most difficult aspects was getting the company booted in the first place because of hardware. Venture capitalists in 2019 did not want to invest in hardware. Cloud SaaS was the entirety of the economy. It was where the whole economy was going to go. And apparently, you could just have amnesia to the fact that all that software had to run somewhere. [00:05:31] S1: Before the SaaS apocalypse, it was B2B SaaS only. Like we only operate, by the way. Like we're black and white. It's either the best or the absolute worst.
00:05:31 · Pablo Srugo, Steve Tuck
[00:05:31] S1: Before the SaaS apocalypse, it was B2B SaaS only. Like we only operate, by the way. Like we're black and white. It's either the best or the absolute worst. [00:05:38] S0: You had to have the apocalypse. You had to have the SaaS super cycle. And it was the only thing. SaaS was the moat. So right in the midst of that era, we were going out to Sand Hill and saying, hey, we need to go raise $20 million to start the first kind of full systems computer company in America in the last 30 years. And got, you know, the treatment you would expect from career finance folks in VC. And would take us dozens and dozens and dozens of meetings to find the hard tech corner of VC. And I'll never forget, you know, the next in a litany of meetings, we go into Eclipse Ventures and sit down and you look around the room. And instead of like career finance person, career finance person, career finance person, it is all operators. It is the president of a semiconductor company. It is Pierre Lamond, the godfather of Silicon Valley. It is Lior. [00:06:31] S1: He was on the show, by the way. [00:06:33] S0: Oh, he was? [00:06:33] S1: Smart dude. Very smart dude. Yeah. [00:06:35] S0: Ah, he's fantastic. And we start talking through the importance of hardware, software, co-design brought to this industry. And we got stopped and they flashed up a slide that said 23 of the world's 25 most valuable companies do hardware and software together.
00:06:35 · Steve Tuck, Pablo Srugo
[00:06:35] S0: Ah, he's fantastic. And we start talking through the importance of hardware, software, co-design brought to this industry. And we got stopped and they flashed up a slide that said 23 of the world's 25 most valuable companies do hardware and software together. [00:06:53] S1: You have to find believers. Like that is what just happened. I mean, your initial round is all about finding people who just believe what you believe. And so it changes the complete, the total dynamic of everything that happens afterwards just depends on that piece.
00:07:08 · Steve Tuck
[00:07:08] S0: One of the aspects of anything being hard, but just in the point you made of hardware being hard, you have to have staying power. You've got to be able to have strong stomachs across the company, but importantly, the investor base. You've got to have a cap table that is able to kind of weather through stormy waters, because believe me, you're going to have plenty of them. You know, when you're standing over your first PCBA and you're hoping that thing comes up and hoping it doesn't smoke when you power it, you are, you know, and then when you need to redesign something and it's not a three day, but a three month setback in timeline, you know, with the wrong set of investors, you can be forced into short term decisions that absolutely compromise the long term success of the business. The engineering and the technical work that you are doing is equally important to having the right foundation for the company culturally from a team perspective and from a capital perspective. The investors that, you know, we just had the very good fortune that at each fork in the road where the right decision for the short term was to go left and the right decision if we happened to live was to go right, our investors every single time encouraged us to take the long path decision. And then when we lived and we started shipping product in 2024, it was like, thank God that we've got this foundation that we can go build a big company on top of. And we didn't have to make these compromises around the integrity of the system, around the integrity of the product, around the integrity of the team to be able to go do that. Because it is, it's hard.
00:08:42 · Pablo Srugo, Steve Tuck
[00:08:42] S1: Pain is relative. And I found myself many times when like things are, you know, hard or whatever. And you hear a story about somebody who, you know, grew up really poor, had this trouble, that struggle, and it just puts things in perspective. And so I'll say this, like if you're out there raising for your AI startup and you need like $2 million to turn your half a million in revenue to $5 million in revenue, there are hardware people out there raising $20 million to like build MVP one in, you know, three years from now and then maybe ship it, you know, two years after that. And so it's, pain is very relative. And raising for hardware is tough. [00:09:14] S0: If you're raising like, you know, like launching an AI startup right now is hard. It's so noisy. And there's so many difficult nuances to that particular business, whatever that is. And I think the thing that I would say is work to find the right set of investors, even if it looks fraught getting through that first phase or two. It is so important that you find folks that are curious, that have a real long view of what the business could become. And it is worth not lurching at that first offer that comes in from an investor that may not be the right fit.