A Product Market Fit Show | Startup Podcast for Founders
00:00:00 · Pablo Srugo
[00:00:00] S0: It's really common as a founder to be told that if things aren't working, you should pivot. And frankly, it's obvious. The hard part isn't actually making the pivot, isn't making the change. It's realizing whether you should pivot in the first place because the reality is while you're told to pivot, and pivot, and pivot, you're also told to never give up. How do you find that balance between continuing to push, and continuing to power through, to be relentless on the one hand, and on the other hand realizing, hey, this thing's never going to work, let's switch it up. That's really what we dive into here with this episode. I spoke with Andrew Tai, who's an amazing founder. He started Motoinsight, which was ultimately acquired by Autotrader for tens of millions of dollars. He grew that business to about $20 million in revenue. The interesting part of his journey – it was a long journey, 12 years, actually, in the making. He started off launching this company called Unhaggle, which was a marketplace. Then he shifted and pivoted into what was ultimately Motoinsight, which was an enterprise software play. Both in the auto industry, but obviously quite different. It took him three years. He did the first marketplace for three years before deciding and realizing that he should pivot. We dive deep into that part. I think by listening to how Andrew Tai thought about it, it can help you figure out when it might be time to pivot. Welcome to the Product Market Fit Show, brought to you by Mistral, a seed stage firm based in Canada. I'm Pablo. I'm a founder turned VC. My goal is to help early-stage founders like you find product market fit. Welcome to the Product Market Fit Show.
00:01:35 · Andrew Tai, Pablo Srugo
[00:01:35] S1: Happy to be here. Good to be with you, Pablo. [00:01:37] S0: It's a pleasure to have you here. Andrew. Just for quick background, I mean, Andrew is a founder and father of two kids now, as I was just chatting with him earlier. His first startup, called Motoinsight, was acquired ultimately by Autotrader, the group that runs Autotrader. And it was a pretty long journey. I mean, it was about a 14-year journey, grew the company well into the eight figures of ARR. It started a bit differently. Ultimately, the business was around selling software to dealerships, classic B to B SaaS, even more enterprise type SaaS. It started off as a marketplace. Today, we'll be talking about how to pivot and the journey from going from, and pivoting specifically from, a marketplace to B-to-B SaaS, two very different business models, and just walking through how to do that but also why you did that. I think that that's where we'll uncover a lot of insights that founders might be able to use. With that said, let's start at the beginning. How did you come up – what was Unhaggle, actually? Maybe let's start there.
00:01:37 · Pablo Srugo, Andrew Tai
[00:01:37] S0: It's a pleasure to have you here. Andrew. Just for quick background, I mean, Andrew is a founder and father of two kids now, as I was just chatting with him earlier. His first startup, called Motoinsight, was acquired ultimately by Autotrader, the group that runs Autotrader. And it was a pretty long journey. I mean, it was about a 14-year journey, grew the company well into the eight figures of ARR. It started a bit differently. Ultimately, the business was around selling software to dealerships, classic B to B SaaS, even more enterprise type SaaS. It started off as a marketplace. Today, we'll be talking about how to pivot and the journey from going from, and pivoting specifically from, a marketplace to B-to-B SaaS, two very different business models, and just walking through how to do that but also why you did that. I think that that's where we'll uncover a lot of insights that founders might be able to use. With that said, let's start at the beginning. How did you come up – what was Unhaggle, actually? Maybe let's start there. [00:02:42] S1: It’s funny. I always think about it as, man, that was a long journey. You think he said 14 years. By my count, it’s probably 11 or 12 depending on how you actually count it. It started really as a marketplace to help consumers find and buy new cars easier, faster, more transparent. There was a bit of a Priceline inspiration there were – dealers would compete for your business. You can configure the exact car that you were looking for and get local dealers to offer you the best prices on inventory that –
00:02:42 · Andrew Tai, Pablo Srugo
[00:02:42] S1: It’s funny. I always think about it as, man, that was a long journey. You think he said 14 years. By my count, it’s probably 11 or 12 depending on how you actually count it. It started really as a marketplace to help consumers find and buy new cars easier, faster, more transparent. There was a bit of a Priceline inspiration there were – dealers would compete for your business. You can configure the exact car that you were looking for and get local dealers to offer you the best prices on inventory that – [00:03:14] S0: What was happening? Maybe just walk us through. Today, the world of car buying, there's just so much innovation happening there. What was alive back then? Was Carvana a thing? How big was Autotrader? What were the options, really?
00:03:14 · Pablo Srugo, Andrew Tai
[00:03:14] S0: What was happening? Maybe just walk us through. Today, the world of car buying, there's just so much innovation happening there. What was alive back then? Was Carvana a thing? How big was Autotrader? What were the options, really? [00:03:26] S1: The market was way more static back then. This was 2011 when we started. As of late, you see all of the big names like the Carvana and the likes that have garnered a lot of attention both up and – up and down through the cycle. In 2011, none of that was reality. It was still very much a classified listings model. Autotrader was in existence. I think back then Autotrader, actually, a component of their business was still printing paper books, Autotrader books. I remember reading those growing up. This was a very different time. The concept of bringing the buying experience online was a major step forward in and of itself. We wanted to really transform the model. Instead of you shopping around and negotiating to be able to eliminate that and bring transparency in pricing. In addition, the convenience of being able to do much of the transaction at home. And it started as really a scratch your own itch moment. I was going through the process of buying a car. For someone like me that grew up on the internet, the traditional process made very little sense. The light bulb was just, hey, there's got to be a better way. And, and technology should be able to help.
00:03:26 · Andrew Tai, Pablo Srugo
[00:03:26] S1: The market was way more static back then. This was 2011 when we started. As of late, you see all of the big names like the Carvana and the likes that have garnered a lot of attention both up and – up and down through the cycle. In 2011, none of that was reality. It was still very much a classified listings model. Autotrader was in existence. I think back then Autotrader, actually, a component of their business was still printing paper books, Autotrader books. I remember reading those growing up. This was a very different time. The concept of bringing the buying experience online was a major step forward in and of itself. We wanted to really transform the model. Instead of you shopping around and negotiating to be able to eliminate that and bring transparency in pricing. In addition, the convenience of being able to do much of the transaction at home. And it started as really a scratch your own itch moment. I was going through the process of buying a car. For someone like me that grew up on the internet, the traditional process made very little sense. The light bulb was just, hey, there's got to be a better way. And, and technology should be able to help. [00:04:42] S0: Before jumping into the, the, the big change and, and the thing that really worked. Let's talk a bit more about what didn't work. What was the original conception, the thing that you saw that was broken in terms of the car buying experience that you desperately wanted to fix?