A Product Market Fit Show | Startup Podcast for Founders
00:10:44 · Tushar Mishra
[00:10:44] S0: So since we were already sort of in the space, multi location physical businesses, we knew that space really well. And he knew that this problem is more exaggerated when you have multiple locations and especially when you have employees in the location who don't work behind a desk. So who cannot use something on your desktop, you need mobile as the main way in which you will interact with software. So we wanted to focus there, but we still were not very clear about who the actual customer would be. And the most natural intuitive place for us to go to was some of the customers we had in our old company that were interested in sort of this kind of thing. One of them was incidentally a franchise owner who had a few subway locations. And they decided to be like our design partner or somebody who's building the app with us. But very foolishly, since we were coming off that high of our last company, we thought, yeah, we got this. And so we built the app and we quickly launched it and quickly scaled that to about 200 locations, which is reach out to another owners without knowing. So there were some people who own like Canadian stores. So we had people who own external level locations. We had people who own Burger Kings. It was mostly in sort of that food kind of series. We had one guy who owned, like, a few Planet Fitness locations as well. So those were typically customer. There was one brand which was not franchisee at all. It was just a chain of restaurant. But those are the guys that we eventually, like, signed up on the platform.
00:12:09 · Pablo Srugo
[00:12:09] S1: You're generally from this space, you have access to these customers. And you had most of the idea right, but you didn't get that PMF moment until, like, almost three years later. What happened? Like, what what was some of the big learnings that had to happen in those three years to kinda get you there?
00:12:22 · Tushar Mishra, Pablo Srugo
[00:12:22] S0: The first mistake we made was launch our app and our assumption was we make it free, we sign up a bunch of customers, they start running a few checklists. As they get addicted to the app, now we turn on monetization and then our revenue would go like this. So that was sort of the main purpose and we quickly got traction. So we got even more excited. Okay. This is working and now we just need to turn the faucet on and it's gonna like... We'll scale to 1,000,000 in revenue. That moment never happened because since the customers were not paying anything, they did not have a lot of skin in the game. They found the concept interesting. They would set up one or two different checklists, but then nothing would happen after that. So they rolled that out and we would see there's actually nobody using the app in these businesses. Right? Like there's there's there's nothing happening. So we knew that what we have probably makes sense from a problem perspective because the messaging is sort of working. But we still don't have that repeatability. I don't have a way to reach out to those customers in a repeatable manner. And we definitely don't have product market fit because none of them are actually using the product and none of them are paying us a single dollar. [00:13:31] S1: When you get this 50 location customer, they're finally willing to pay you, you know, post pilot or whatever, they're willing to pay you. What was the difference between them and and the customers you had so far?
00:13:40 · Tushar Mishra
[00:13:40] S0: So number one, we were ruthless with our qualification because we'd had that sort of experience. And within those two and a half years or so, we multiple times had those experiences where, okay, there's something working and you get really excited and now you feel like you got it. And so we were very cautious to watch for noise versus signal. And so the first thing we did was we were ruthless in our qualification. So, we basically gave them every opportunity to not use the product, which is why you're selling and you're giving demos. You're talking about, okay, here are the use cases. Here are things that you're talking about that we would never build or we would not build. Focus on who this customer is and can I find more customers like this? Or is it, I just found somebody who has a problem that I'm looking to solve for? And I'll walk through, we had a system basically to do that and was part of like a big list that we had. And then eventually when you start onboarding, work very, very closely right from onboarding to make sure everybody is set up on the app. They have actual use cases and they have something that they can measure to know if what you're doing is working for them or not. So qualification, knowing that they actually have a problem and this is a customer that I can find again and again. A lot of focus on onboarding, which is making sure they're actually set up for success. And third, actually setting those success criteria so that us and them have a clear understanding of what it means if this works for you.
00:15:09 · Pablo Srugo
[00:15:09] S1: You mentioned you have like a list on qualification. Let's go through that.
00:15:11 · Tushar Mishra
[00:15:11] S0: Yeah. So this... We did it in two different ways. So number one, qualification was the messaging qualification. For example, if I'm... Tomorrow, if there's a bike repair shop that comes to me and says, hey, I have the same problem. Can you solve it for me? Versus there's another business like the one that we signed with 50 locations, which is a franchisor. What is the difference between them? Right? So in messaging, it's really important. Or when you're doing outbound, like repeatability becomes really important. There needs to be something that is common across these customers. They need to speak a shared language. They need to speak or have shared goals that now I can scale across. So that was first level of qualification, which is knowing and basically being non delusional to yourself, knowing that is this the actual customer that I'm building for? The second level of qualification comes in customer commitment. And the list there basically starts from how sharp is the pain. Because if the pain is not sharp enough, they just like you, then those are not the right reasons they would actually not use the product. So how sharp is the pain? Second, is this pain sharp enough that they would actually pay for it? And third, do they understand what will happen if this pain is solved? And the third part is more nuanced because a lot of times you would find, especially when you're trying to do something new, you would find a lot of customers want to solve a problem, but they don't know what the final outcome looks like. So, they have a fantasy in terms of, I want you to come and train our employees, right? Maybe that's the solution that they have in mind and the output that they have is, hey, if you would restrain because you would give them a certificate. So those were the three things that we use to really qualify them once the messaging or the ICP qualification was done.