A Product Market Fit Show | Startup Podcast for Founders
00:11:53 · Andrew Lockhead
[00:11:53] S0: I think most of the time they're just going to spitball. They will give you 90% of shit that you won't be using. Let's be honest about it. The mindset of talking with 12, 20, 50 people in the end to start to develop something, you understand, oh, there's something in there that maybe people are telling, maybe people are not telling about. For us, it was always about, if you had to find accommodation for your next South by Southwest and so on, where do you start to research? Do you go on Google? For us, we always came to the conclusion that they're always going to end on the direct brand, Booking.com, Airbnb, Expedia, wherever they have more loyalty point, so for us to create such a strong brand that we will be able to attract customer to us where they will search for the event was almost impossible. We're like, if we want to keep in that field, either we're going to do Reddit promoted posts. We'll have to find a good B2C ad together or spend millions of dollars on advertising, or we go and find a different strategy to get to those user. I guess this was one of our first learning.
00:12:51 · Pablo Srugo
[00:12:51] S1: That really validated that you needed distribution. You needed to be at the right place at the right time, and that meant these partnerships. Realize, okay, events are great because you solve a clear pain point, which was – for them was, if you just think about the priorities, you're running a conference. You have so many things to do, and you have this nuisance which is people need to travel here, and they need to stay somewhere. If I don't solve the problem, they won't come to the event, but if I do solve the problem, it's spent – it's time. It’s not just time. It’s money. It's all these risks that you just get no value out of. Okay, I get that. Problem is it's once a year. Now you go to ticketing, and you're like, hey, this should probably help you sell more tickets. They're like, yeah, maybe it will, maybe it won't. I don't really know. I've got other things. What do you do?
00:13:34 · Andrew Lockhead, Pablo Srugo
[00:13:34] S0: Exactly. First off the bat, we came – we did an ad back in the days with [unclear]. We're working with the biggest brand, with the biggest event. We're also using the event to give us warm introduction to those ticketing platform. If I was working with South by Southwest, I'm like, “By the way, your ticketing provider right now is not using you. That will be a great way to help enhance the user experience and drive more bookings.” He’s like, “Cool, let me introduce you.” Once you get those one, two, three, four, five introduction by their own customer, now they're like, “Okay, everyone's bothering me about it. Might as well integrate it.” We use a bottom-up acquisition channel to just say, you know what? Once we have enough outreach by those customer, they're going to be open to hear about your product and strategy there. [00:14:16] S1: Thats’s surprising. It’s surprising because it wasn't the product that you changed. It wasn't even maybe the messaging. It was, actually, literally the go-to market, the distribution, the how you get into the door. Is that because once they gave you the time they realized that there actually was a lot more value than they might've otherwise perceived, or maybe when they launched the product, is that when they really saw, holy shit, this actually moves the needle for us?
00:14:16 · Pablo Srugo, Andrew Lockhead
[00:14:16] S1: Thats’s surprising. It’s surprising because it wasn't the product that you changed. It wasn't even maybe the messaging. It was, actually, literally the go-to market, the distribution, the how you get into the door. Is that because once they gave you the time they realized that there actually was a lot more value than they might've otherwise perceived, or maybe when they launched the product, is that when they really saw, holy shit, this actually moves the needle for us? [00:14:40] S0: Some people told us. They pitched an idea a couple of times. They’re like I've worked with companies similar to yours. It went down. I've lost everything. It's not worth the time to integrate and so on. One of our first partners, NIGHTOUT, we had to send over a letter of our board to say, by the way, we're a legit company. We're not going down. Here's the financial. [00:14:56] S1: Wow. [00:14:56] S0: Some people, we had told them you know what? We'll pay you $5,000 up front, and we're going to recoup that money. As soon as you generate revenue, I'll send you money. [00:15:06] S1: You paid them to become customers. [00:15:08] S0: We offered them. As soon as you offer, you know what? If it's still not enough, I'll pay you 5,000. [00:15:08] S1: Wow.
00:15:08 · Pablo Srugo, Andrew Lockhead
[00:15:08] S1: Wow. [00:15:08] S0: After a couple of months, you will generate enough revenues. I'm going to recoup that money and pay you back. That actually made the switch. One of our first sales with NIGHTOUT was exactly – it was like, okay, you guys seems legit enough. You guys are ready to put your balls on the table. I'll fucking do it. Sorry about it, my French. I'll do it, and we're going to see whether it work out. In the end, it work out really good, and after this, obviously, it's much easier to sign a second partners and a third one because you're already in bed. You already test out what are the pain points during the process, so you get better. [00:15:40] S1: I hadn't heard of that. It makes sense. I mean, it just shows how much you believe in it. What was the outcome? When they put this in, what kind of ROI did they see? Do you remember? They actually sold quantitative – more tickets, or maybe what did you do to be able to measure that ROI because that's what then helps you sell to other customers?
00:15:58 · Andrew Lockhead
[00:15:58] S0: Yeah. For us, it was all about conversion rate. What was your previous conversion rate before? What is a new conversion rate? Are we helping you out, sell more ticket, or actually, are you losing on tickets? Some of them were really stressed out. They're like you're going to purchase two tickets for Justin Bieber back in the days. That's $500. Then you will have to add another $400, $400 for a night at the hotel. Maybe the card’s value will be too high, and people are going to drop off. If it's not the case, they're going to just remove it from there. Good thing for us, actually, the opposite happened, so people were actually booking more tickets with this because now they were able to do just a full package. They're like, okay, cool. I book my tickets. The next thing I need to do after purchasing my experiences is book my accommodation. In our pitch deck, One of the things that we said to investor was the way that travel changed over time. Back in the days, your parents probably just book their flight, or their bus, or they took the car, and after this, once they were at destination, they were finding, okay, what are we going to do now? I dare you to find someone today that's going to book their flight tickets, and they’ll have the tickets for the Super Bowl, to go see the NBA, the NASCAR, whatever experiences you want. This is now the first step, so we managed to find ourself right after the transaction take place. Once your dopamine level gets high, you're super excited. You got your credit card in hand. You just got your tickets. You're like let's do this. I'm ready to spend money without tickets, and that's the reason why your conversion rate went higher because of it.