A Product Market Fit Show | Startup Podcast for Founders
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.
00:18:43 · Andrew Tai, Pablo Srugo
[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. [00:18:53] S0: I think so because you end up starting with the solution first, as you said. Just naturally from there comes a solution. Then you try and fit that into a market. It's not too bad if you're just solving it for yourself. If you're a consumer, and you assume there's many other consumers, maybe that's not too bad. In your case, you have dealerships that are a huge part of it. Even on the consumer side, there's so much before that part of the funnel <laugh> that you need to think through. I think starting with problems first. I would assume if you had gone into dealerships and interviewed them high level around what problems they deal with on a day-to-day basis, how they – you would probably find that this thing might be hard to make top of mind for them.
00:19:32 · Andrew Tai
[00:19:32] S1: Yeah. I, I mean, I think there are other things as well. I mean we spent a lot of time on this, but I'll give you one more, really understanding the pain point that we're solving, as you said. Buying a car, yeah, in many cases it's a frustrating experience, but it's also one that happens every 4, 6, 8 years for a consumer. And so when you think about from a marketplace standpoint, for me as Unhaggle, to actually have to find your attention at the right moment in time in that 4, 6, 8 year time span where you're buying a car, and then actually convert you properly. It just became an exceptionally expensive and difficult endeavor. It wasn't a persistent problem that I as a consumer face every single day. It's something that I might always be interested in. That was just another headwind, not to say that any startup founder should be opportunities and ideas for startups now. I look at it through that different lens. I'm looking for tailwinds over headwinds. I'm looking at deeply understanding a real acute problem as opposed to something that feels like it's a cool idea.
00:20:46 · Pablo Srugo, Andrew Tai
[00:20:46] S0: Makes sense. It actually reminds me, I always see these startups probably every few months or so, trying to fix renting, right? Inevitably, some young person goes through this renting cycle. They're like, wow, renting really sucks. It's one of these things, how often does it happen? Once every three years? What's the status quo with DG and Facebook marketplace? It's not great, but it's also not that bad. So it becomes a really, really hard problem to 10x – have this 10x better solution and these sort of things. Anyway, so you start. You're kind of three years-ish into this Unhaggle marketplace. It's going well, but not so well. How do you start – you ended up at vertical SaaS selling just to dealerships. How do you get – [00:21:25] S1: Dealerships and automakers. [00:21:26] S0: Dealerships and automakers, but do you start hearing things – because you're working with them already, are you hearing things from them that kind of inspire you towards this SaaS platform? Or how do you start to go and lean that way?
00:21:40 · Andrew Tai
[00:21:40] S1: Yeah, I think what's interesting is the experience that we delivered through Unhaggle. We realized we are creating real value here. There's a very positive customer experience and in many cases efficiency and a positive experience on the dealership’s side as well. It was very difficult to get that positive experience that happens one time or 10 times or 100 times and have it happen 10 million times. So we knew we had something there. And really, what we did was okay, instead of trying to get all the consumers to come to Unhaggle and experience this experience and that experience being, hey, you get transparency online in terms of pricing and be able to complete much of the transaction before you even step foot into the store, right? Or ultimately even buy it online. We were early to that game. But we could see that there was real customer delight when it actually happened. It just wasn't happening at the volumes that we wanted to through the marketplace. And so we saw dealers using it. We saw consumers using it. We just decided hey, what if we actually enabled the dealers and the automakers that we had started working with to deliver that kind of experience to the audience that they already own, right? And that was the just very kind of small – it was almost like we had a solution, which was an easier buying experience enabled online and digital first with transparency at the heart of it. We just kind of found a different delivery mechanism. It was almost like a shift in go to market, if you will. Instead of using a marketplace to go to market directly to the consumer and have it consumer-led or selling it to automakers and dealerships so that they can enable their version of the experience.