A Product Market Fit Show | Startup Podcast for Founders
00:49:58 · Lee Silverstone, Pablo Srugo, Rob Woodbridge
[00:49:58] S1: Because there's always going to be, in any business, there's always going to be pressing issues. There's always going to be new issues that come up. If you are not this severe pain point that they have, you're always going to get pushed to the bottom of the pile. It's going to happen over and over. [00:50:15] S0: Customers don't buy any ROI, they buy the best ROI they can get. If you are ROI Number 10, but they got one, two, three, they're always going to go back to one, two, three, one, two, three, one, two, three. [00:50:25] S1: Yeah, that's why a lot of times, when you're thinking about a competitive landscape for a product, there's a whole other set of competitors, which is they're solving problems for their customer that you're not even thinking about, right? They're not direct competition, they're just competition for dollars. [00:50:39] S0: For wallet, yeah, 100%. [00:50:40] S1: Yeah, for wallet and for mind share, wallet share. They're not direct competitors at all, but they are because they're solving a bigger problem for the customer. [00:50:47] S0: The big revelation was of… [00:50:50] S2: There was three other – two other companies that were doing similar things, right? Remember that we had competitors out there and they were doing it very – it was very costly to implement them and their technology was very costly to maintain or they were doing it manually. There was one guy who would go to all the gyms and sit there with a checkboard. Remember that? [00:51:10] S1: Oh, I forgot about that guy. The consultant, yeah, yeah, yeah.
00:51:10 · Lee Silverstone, Rob Woodbridge
[00:51:10] S1: Oh, I forgot about that guy. The consultant, yeah, yeah, yeah. [00:51:12] S2: We got friendly with him and he was a nice guy. We were trying to sell him our sensors to make his job a lot easier. We were looking for ways to partner but we looked at the competition as well. Here's another lesson not to do. We were saying like, how can we make it cheaper and easier than what they're doing, right? We had this idea of what it was we did. We got to three of ten in research. We got the feedback, the visceral feedback from the conference. Then we came back and we started looking at the competition. We said, okay, we're going to make it cheaper and easier and we did. We made it cheaper and easier to use our technology, but the problem was that the total market for this was just those two guys and their three employees. We didn't realize that it wasn't as big a problem. Can you imagine going to a gym and saying, we're going to put all these sensors on and we're going to tell you how much you overspent on the equipment you already bought. That's what we were telling them. [00:52:08] S1: It's also true. It's not like it’s sensors for a restaurant to tell them how much produce to buy on a daily basis that they're constantly doing. A gym buys equipment and that they never buy equipment again for 20 years. If you don't understand your customer intimately, it's so easy to make these logical – come up with these logical fallacies in your mind that you're just like, take these leaps that make no sense at all.
00:52:08 · Lee Silverstone, Rob Woodbridge, Pablo Srugo
[00:52:08] S1: It's also true. It's not like it’s sensors for a restaurant to tell them how much produce to buy on a daily basis that they're constantly doing. A gym buys equipment and that they never buy equipment again for 20 years. If you don't understand your customer intimately, it's so easy to make these logical – come up with these logical fallacies in your mind that you're just like, take these leaps that make no sense at all. [00:52:32] S2: How many times do you open your fridge? That's what we were basically solving for them. It didn't make a difference. [00:52:39] S0: For me, the part that really hit it home was when we finally get a pilot somewhere or somewhere in I think it was in San Diego, or San Jose I think. We get a pilot in San Jose and massive club. Finally, so much work for $3,000. We're going in and we have to install, by the way, we have to go – just the plane tickets there were already negative LTV something, but… [00:53:03] S1: What's your cocktail LTV? Don't ask. Don't ask.
00:53:03 · Lee Silverstone, Pablo Srugo, Rob Woodbridge
[00:53:03] S1: What's your cocktail LTV? Don't ask. Don't ask. [00:53:05] S0: Don't count the flights. We're good. We're installing the things and I'm talking with the operations person and he's taking me around the gym as they always do. They show us everything and the guy's like, yeah, actually over here, I just got four new leg presses and four treadmills that are on the way. I'm like, oh, how much you spend? He's like, $80,000. Man, that's what we're supposed to solve. You just spent $80,000. Today, you woke up and you were like, man, we need more – and you spent $80,000 and I've been hustling for months for three and I have to come here and install it? Dude, we're doing something wrong, right? That was just… yeah. [00:53:43] S2: That's when I said, shove that voice down your throat and keep going, Pablo. [00:53:50] S0: Don't think. [00:53:51] S2: Then we did a pilot in Ontario with MOVATI as well. We started to get – the problem was we got that momentum and I go to the MOVATIS here in Ottawa and I still see our sticker on all the equipment every single day. I see it every day and I'm like, there's legacy there, right?
00:53:51 · Rob Woodbridge, Pablo Srugo
[00:53:51] S2: Then we did a pilot in Ontario with MOVATI as well. We started to get – the problem was we got that momentum and I go to the MOVATIS here in Ottawa and I still see our sticker on all the equipment every single day. I see it every day and I'm like, there's legacy there, right? [00:54:07] S0: A reminder of what could have been, yeah, but that's the thing. That's the danger is when you actually get – if you put something out and you get nothing, it's easy. You crush it. It's easy. When you're in this middle zone, you gain some traction, but it's not enough, that's where you can just spend tons of time wasting it, but I think ultimately the question is, and you're not always ready to answer it, but it's, am I truly solving a Number 1 or Number 2 problem? If I go to my ICP within that gym, which is the operations lead, and I ask him or her, what do you think about every day? Do they really say the problem I'm solving? That's the thing that you always got to come back to I think to ground yourself. [00:54:44] S2: We would even look at these dashboards that we were making. They were web-based dashboards and we would look at utilization stats, not the gym equipment, but how many times people logged in and it was next to none. Never did they log in. Then Pablo would spend a day writing these reports on most used equipment and we would send them individual. Remember that as well? We would send these reports, never opened. There was telltale signs there.
00:54:44 · Rob Woodbridge, Lee Silverstone, Pablo Srugo
[00:54:44] S2: We would even look at these dashboards that we were making. They were web-based dashboards and we would look at utilization stats, not the gym equipment, but how many times people logged in and it was next to none. Never did they log in. Then Pablo would spend a day writing these reports on most used equipment and we would send them individual. Remember that as well? We would send these reports, never opened. There was telltale signs there. [00:55:11] S1: I think because if someone, if the gym owner or the gym operators in the gym every single day, they don't need sensors. Their eyeballs work better than the sensors. The pen and paper or an app on your phone works better than GymTrack V1, right? It's this whole thing of, again, if you build it, they will come. No, they're already doing something. That thing probably is better than what you have. I think again, Pablo, you've talked about this before. If your customer is using pen and paper to solve their problem today, your competition is not the ten other software companies trying to solve it. Your competition is the pen and paper. You’ve got to be better than that. Yeah, status quo is the competitor. How can you be better at that? [00:55:52] S0: Let's shift gears. I think we're getting close to the end here. I want to end on something that you'd probably get zero value out of, but it's funny. So let's do that. Here's my intro, okay? [00:56:02] S1: I'm here for the – I'm here for the jokes. I'm not here to give anyone value. My assumption. This is the comedy podcast, right?