The issue with this is that it means your software won’t meet that clients requirements.
If you want to go into the enterprise space early rather than pivot their later, you can’t start by point blank refusing requirements from your first big client - particularly as you don’t know what customers want yet (or more accurately - your customers are telling you but you are saying it doesn’t meet your vision).
The problem is that if you want to break into enterprise and aren’t willing to make things bespoke, it probably means that your MVP is going to be huge for certain types of software.
This isn’t a rule for all types of software and things like infrastructure provisioning / internal IT tools are different - but I can see where he is coming from.
It’s also different in terms of selling to the SMB or consumer market, where the requirements will either be less-varied (consumer) or the customer will generally sacrifice a lower match to their functional requirements to save cost (SMB). This of course depends on how mature the market is, and in a mature market the MVP gets bigger (for example, word processors).
The only companies I’ve seen be successful starting with the enterprise have older founders who have spent a decade or more working in the industry and already have the professional network and clout to reach their buyers. Without that professional network and a track record of delivering, you’re not going to make it past the front door.
And in these types of environments, consulting / maintenance absolutely must be part of the business model. Your customers will demand it (or at least demand you have SIs lined up as implementation partners).
Often the problems 'enterprise software' solves aren't overly difficult, and if every company worked the same way it would be trivial to write the software, but the issue is that every company is different, and building everything custom isn't scalable or supportable.
However, the problems he describes can easily affect enterprise SaaS companies in a niche. If your market literally has a few thousand potential customers, you could end up in a situation where onboarding a big new customer is a double-digit percentage of your current revenue. At that point, it doesn't matter if you're a SaaS or not, you're gonna feel the pressure to do things for the sake of them.
Why does a successful software business need to be a "visionary startup"? Taking on consulting work and discovering the product by listening to customers seems like a reasonable approach.
In this case, your customer is more abstract, it could be a million people using your, maybe free, or maybe "pay once" product, physical or digital.
But then you seek another market because management realises that your product will sell to different market, completely different million of people. But that will take new development. Team 2 is born. It is a project in a sense that this team works with one single goal in mind: get the project off the ground and start selling it.
This doesn't look like consulting company at all, but the problems are the same: technical debt, maintenance, shared code, and eventual rewrite and platform.
You don't see "strong product vision" and "iterating to find product market fit" as contradictory?
A "strong product vision" is a bad thing when you are "iterating to find product market fit", because most people tend to be unable to kill their darlings and do what is needed to achieve said market fit.
If your "strong product vision" is really as strong as you believe, it should already contain an idea which market and target group is ideal — or if it is a really genius idea, this won't even be necessary because it will create it's own market.
imo vision is “how is your customers world going to change as a result of using your product?” not “this is precisely what the product will look like”.
The product market Fit thing is just right.
Here’s a tell tale sign that you have product market fit - your product is buggy and sucks and your customers constantly complain and demand more improvement but they can’t give you up. They need to pay you because you serve a need they can’t or wont find somewhere else.
The customer needs a bespoke feature that really only they will use and isn’t general to anyone else? Is the founder team disciplined enough to say no and focus on what really adds value? Sure, they would love for you to be a cheap outsourced dev shop, but that’s why your CEO needs to push back and sell the vision of the company.
Phases 1, 2 and 3 are backwards. Why is the startup trying to be a consulting company? This doesn’t sound like the story of any visionary startup I know of. It sounds like a group of developers who can make a profitable software consulting company trying to pivot to making a product. IMHO a startup can be really dysfunctional in its dev process and management and still succeed, if they find product market fit first.