Have you achieved product/market fit? Your success with your business hinges on this. Achieving product/market fit is worth every effort. As an entrepreneur I am always looking for a better product/market fit, but here are 4 keys that I learned during our early days that might help you get there.
1. Market research
Do your homework. You can learn a lot about what is or isn’t a good product/market fit from your competitors. Who has the most traction? What is different about their model, product or approach? In our case we decided to focus on the student housing search niche of the apartment search industry. We felt it was a big enough market but was also quite different from the standard multi-family housing market and we saw no big competitors focusing entirely on this niche. We were naive enough to think that we didn't have any major competitors.
LOOKING BACK: We could have done a better job researching the competitive landscape and it would have helped us with our product plans. For instance, while some of the big players didn’t call themselves out as “Student Housing” specific search platforms many of them structured their websites to make their listings university specific, making SEO extremely competitive. In addition, Google continues to promote local results to the top of each search, so a few of the complexes themselves will always out rank us and will always be able to pay more per keyword traffic to their websites because they make more off the clicks than a third party would. How would knowing this have changed our business? I’m not sure, but we certainly would have started doing more work SEO earlier had we known this. What SEO work? That's a topic for another day...
2. Early adopters
If I had a to pick the most important of these four items it would be this one. At this point in your business you are still in idea mode. You need people that will give you real feedback and help you achieve product/market fit. In order to find these people I called 15 companies a day and said, “I’m a student at BYU and I’m thinking about creating a website and mobile app that helps connect students and property managers. Would you be willing to listen to what we are up to and let me know if it is a good idea?” This is your chance to wow people so they will meet with you in person and provide the feedback on your product that you so desperately need. If you really have a great idea, and you know how to talk about it, people will be interested. Many of the companies I called thought our idea was unique and had potential. I asked them additional questions and listened to their answers. I also asked if I could continue to follow up with them as we built the product to get their feedback. Almost all of them said yes.
This was the easiest time I’ve ever had in sales. I think we did a good job with this, but I wish I had done even more calls! The companies I interviewed became our early adopters and our most loyal customers. We maintain great relationships with them to this day. If you want to learn more about how Belly used this strategy to help rev up their growth quickly click here.
3. Real users
In our case we had to appease our customers (the property managers) and more importantly their customers (the students). If students didn't flock to our product then we would have failed. You are going to be wrong about many things in your design and execution. The more consumers you can get your product in front of the better. In our case I went to Brigham Young University a few times a week during lunch time with $5 Jamba Juice gift cards. I asked people if they were looking for a place to live for the next school year, then offered the gift card to anyone that was looking and was willing to let me watch them use my website to find a place to live. I recorded their actions on the screen, watched them interact with our product, asked them a few questions, then moved on to the next person. Once the gift cards had been used up I met my co-founder Scott and we watched each student interact with our product together. We analyzed their behavior and what changes we could make to improve the experience.
We learned some extremely valuable insights during this process that we simply couldn’t have known on our own. Before we launched our product many people had tried it and found issues with it. This is a must have when striving for that product/market fit.
A mentor of mine once told me “I never built a product without building a product.” At some point you have to build something and get it in front of people, and you want that to cost you as little as possible while not compromising on the bare essentials of the product. Many people refer to this early stage product as a minimum viable product (MVP). Whoever is building the product should take every aspect into account and consider, “Is this really a ‘must have’ for our product or could we do without it?" It’s hard, but you have to learn how to hack away as much as possible to leave you with a true MVP.
Note: I have seen a few people pull off great MVP experiments without any product at all which is ideal given the costs involved in building a product.
Why create an MVP? One of the key concepts in starting a tech business is failing fast. We want to fail as fast as possible so we can iterate on our failures and find the right way to do things. I love this part of starting my own business. One of our early investors told me “Jordan, the purpose of your Seed round of financing is to swing at every ball. You don’t know what works and what doesn’t yet. Your angel investors believe you have what it takes to find what works, but you’re not going to find out without trying some things.” That same investor also said “The reason startups fail is because they run out of money. They don’t survive long enough to find what will really work.”
LOOKING BACK: My investor was spot on. We have pivoted multiple times and continue to try new things daily. Many of our ideas do not work, but the ones that do work make all the difference. Don't get caught up on failed experiments. Be passionate about finding the answers. We are finding out what works now so we can go into a Series A round and say “We’ve tried x,y,z,a,b,c,d,e… and we know that b and d work. We’ve seen results and are ready to hit this out of the park."
My journal entry from 7/14/2014: "The company that Scott Weinert and I are starting is looking good so far. I met with the folks from Aspen Ridge on Tuesday, and a manager at the Riviera apartment complexes in Provo this week. Both meetings went well and both seem like they will be excellent fits for us... My goal is to get Provo on board by March of next year. I think that is a bit aggressive, but I think it is doable."