Portfolio Company Failure Due to Lack of Product-Market Fit

Many portfolio companies fail because they struggle to achieve product-market fit. During a period when companies had ample funding and were purchasing multiple SaaS licenses, startup founders often became complacent when they reached a certain level of annual recurring revenue (ARR). However, they often mistook their product as a nice-to-have rather than a must-have, leading to a sudden realization that their business lacked essential market demand. One example is Bloom Reach, a company that initially thrived by offering an automated SEO product. As Google's algorithms and policies changed, Bloom Reach faced difficulties adapting, causing revenue to decline. Despite the near-death experience, Bloom Reach survived and became a multi-million dollar company, serving as a case study on the need to guard against platform risk.