A Product Market Fit Show | Startup Podcast for Founders
00:11:56 · Pablo Srugo, Andrew Tai
[00:11:56] S0: That's what I want – that's what I want to dive into. I think when we look back retrospectively, and we summarize the history, it's easy to gloss over a three-year period. Three years, first of all is a serious amount of time, but also not uncommon, especially when you had the reception you're talking about, which is not black or white. It's easy if you put it out and you just two months in, three months in, there's nothing happening. Nobody wants to sign on. You kill the thing. Through the roof, you're the next Uber, amazing. Most of these startups fall in between. I want to dig into that a little bit more. What was that looking like? Which parts, as you go back and you think through those three years, were some of the things that were working and kept you going towards it, kept you in the marketplace frame of mind? [00:12:40] S1: Yeah, I think, listen, at the end of the day we were making money. We were generating revenue. We were adding customers. We were even getting decent press. Those were encouraging signs that kept us going. I think the realization was we – and we tried all kinds of levers to accelerate growth. [00:13:02] S0: What were some of those?
00:13:02 · Pablo Srugo, Andrew Tai
[00:13:02] S0: What were some of those? [00:13:03] S1: Everything from partnerships to straight up advertising. I ran a campaign on radio for a while. We tried traditional advertising, we tried digital advertising, we tried partnerships, we tried – we actually had a lot of good PR and earned media. It’s not that we didn't try a lot of different things. We did a lot of different things, but realized that hey, the trajectory that we're on, we could keep going. If we do, if we just keep going on this trajectory, we end up with a lifestyle-type business. We realized that the Unhaggle business had a certain potential. It wasn't necessarily bad, it's just not what we had set out to build as a company. We learned a lot in that the problem that we were solving is a real problem. Consumers want greater transparency. [00:13:56] S0: Was that the fundamental problem is just that consumers, as much as their problem wasn't solved, there was just so much ads spent on them in terms of car buying, that it was just hard to – the signal to noise was really weak and just hard to become top of mind? What would you say was the fundamental problem that didn't let it really take off? [00:14:16] S1: I think one, it was super hard to get mind share. I think two, keeping dealers engaged at scale was challenging. If you're not growing rapidly, and you're just this tiny little part of the dealer's business, you're not fundamental to the dealer's business. Sometimes they'll pay attention, sometimes they won't. And so the two-sided marketplace was hard to fully keep intact.
00:14:16 · Andrew Tai, Pablo Srugo
[00:14:16] S1: I think one, it was super hard to get mind share. I think two, keeping dealers engaged at scale was challenging. If you're not growing rapidly, and you're just this tiny little part of the dealer's business, you're not fundamental to the dealer's business. Sometimes they'll pay attention, sometimes they won't. And so the two-sided marketplace was hard to fully keep intact. [00:14:37] S0: I guess that's a liquidity problem. Is that how you summarize it? [00:14:40] S1: Yeah, there was a bit of a liquidity problem. That just inherently goes back to two-sided marketplaces. I have a ton of admiration and respect for entrepreneurs and businesses that are able to make it work. For us, it was just headwind after headwind. I think what we looked at was like, okay, it's a big market. There's a big problem here. If we solve the problem differently, can we create a much bigger business? Is there a much bigger opportunity that we can capture? And that's where – the vision always stayed the same. It was about how do I make the car buying experience better, more transparent, faster, more convenient. That vision always stayed the same. It's just how we actually accomplished that vision evolved.
00:14:40 · Andrew Tai, Pablo Srugo
[00:14:40] S1: Yeah, there was a bit of a liquidity problem. That just inherently goes back to two-sided marketplaces. I have a ton of admiration and respect for entrepreneurs and businesses that are able to make it work. For us, it was just headwind after headwind. I think what we looked at was like, okay, it's a big market. There's a big problem here. If we solve the problem differently, can we create a much bigger business? Is there a much bigger opportunity that we can capture? And that's where – the vision always stayed the same. It was about how do I make the car buying experience better, more transparent, faster, more convenient. That vision always stayed the same. It's just how we actually accomplished that vision evolved. [00:15:23] S0: Let me ask this. Now, you're building a second startup. I'm sure you don't want to spend three years on a go-to-market that you then realize is not the best go-to-market. What sort of signs might you look for now? Think about somebody listening here who's early-stage founder, maybe in this gray area, trying to figure out is this the thing, keep pushing, or this is not the thing, shift. What early indicators would you look for, generally speaking, not tied to auto specifically, generally speaking that, that this might just be the wrong go-to-market.
00:15:55 · Andrew Tai
[00:15:55] S1: Yeah, it's interesting. I think hindsight 2020, as I've been thinking about the next business, the way I'm assessing problems is I flipped it on its head. I don't start with the solution anymore and say, hey Pablo, what do you think about this solution that I I'm working on and I'm building? What do you think about it? Most of the time, now, it's actually – there may be a space, or an industry, or a sector that I'm particularly interested in. I think I understand the problem. But where I start now is just understanding what the problem is. Like having the principle or the subject matter expert talk about what the problem is. Hey, if I built this really cool tool to help you buy a car, do you think you would use it? Do you think it's a good idea? There's just a lot of inherent positive bias there. Going back to know what you are good at and what you are built for. I think for us, in hindsight, for me, in hindsight, I now have a much greater appreciation. If I'm going to build a marketplace that requires mass consumer adoption, to build that type of mind share, I'm going to need to be exceptionally well capitalized and be prepared to raise a lot of capital. Those are all elements that I know better the second time around. I think if I was more thoughtful about it even the first time around, probably would've shortened that journey.
00:17:20 · Pablo Srugo, Andrew Tai
[00:17:20] S0: That resonates in two ways, actually. One of the things is, reminds me of when I was working at Gymtrack, my last startup, which was effectively a mini magic leap. It was just a research shop because we were building hardware, and AI, and stuff 10 years ago, and all these sort of things. I remember, distinctly remember at one point I was like I'm a business type. Here I am running, effectively, a research shop with 30-some engineers. I should be out doing sales and marketing. I should be out doing BD, these sort of things. I'm not an engineer, and yet – so I'm not playing my strengths at all. I'll never forget that because I think that's a totally valid point. Whatever go-to-market and start up you start, it needs to start from a problem. At some point, you also need to think about are you the right person for this? It's a competitive environment out there. The right person's going to be working on this. If they're stronger than you at the core things, they'll probably, well, beat you <laugh>. That's the first part. The other thing is totally – one of the things we say all the time here is before startup mode, there's research mode. I think that that's exactly what you're describing. I think it's super common with first time founders to start off with this wouldn't it be cool if idea. Wouldn't it be cool if, in your case, you could just do this, and that, and get a car? [00:18:43] S1: And that was how the light bulb came, right? I was buying a car. I'm like, wouldn't it be cool if I could have just done this? That is often a trap, I think.