What Comes After Product Market Fit?
co-founder at Intercom
About the speaker
Des is the Co-Founder of Intercom, the platform for all customer interaction needs from marketing to support to product development. Previously he worked as User Experience Lead at web app development agency Contrast, and he was a Co-Founder of popular social networking search engine Bigulo.
Conference: WebSummit 2018
The Epidemic of Startup Advice
When you're trying to build your business, everyone around you seems to have answers to your most perplexing challenges. You'll meet with advisors, mentors, and potential investors who will push you to think differently about your business. But sometimes, advice is just plain bad. As an entrepreneur, trust that gut feeling if it’s telling you to run the other way.
As Mr. Traynor said, _“Intercom started in 2011 with just 4 people, $0 revenue and an ambitious 6 million dollar goal. Now we’re 600 people, with 5 offices, serving over 30,000 customers and are valued at over 1 billion dollars. And it was NOT all about product market fit. When it’s just you and your product, yes, ‘fit’ is all that matters. But, if your product catches on you’ll need to start marketing.This is where you define yourself, and let the world know what you do." _
The Marketing Stage
The beginning, is when to capture and establish your brand’s core message. Your company’s voice should reflect it’s values in a way that relates to your customers needs and makes them want to be associated with you. It’s imperative to offer valuable content to influencers who can help spread the word about your brand.
To Mr. Traynor, the four most important parts of the marketing stage are: Solve a problem from the inside out. Market the job to be done. Learn the ways people buy. And, practice effective testing. _“The old way of marketing… spending lots of money to get a bunch of customers - who don’t stick around - isn’t as effective as understanding how to make your initial customers happy, long-term. Once word-of-mouth gets rolling and you decide to do additional marketing, be sure that: What the customer thinks they’re buying is what your product team is building, what the marketing team is marketing, and what the sales team thinks they’re selling. All four need to have the same vision.” _
To Mr. Traynor, the four most important parts of the marketing stage are: Solve a problem from the inside out. Market the job to be done. Learn the ways people buy. And, practice effective testing. “The old way of marketing… spending lots of money to get a bunch of customers - who don’t stick around - isn’t as effective as understanding how to make your initial customers happy, long-term. Once word-of-mouth gets rolling and you decide to do additional marketing, be sure that: What the customer thinks they’re buying is what your product team is building, what the marketing team is marketing, and what the sales team thinks they’re selling. All four need to have the same vision.”
Understand Your Competition
Competition can come in many forms, but it always exists. Even if you are creating a new industry through your startup, you should understand who the legacy providers are. For example, who are your target customers using to provide a similar solution? This could be a business that’s been around for decades or another entrepreneur attempting to address the same problem.
As Mr. Traynor said, “Know who you’re fighting with and why. Most people only focus on direct competitors, but think about how Skype competes with the travel industry, or McDonalds competes with Weight Watchers. When people consider switching from the competition 4 questions apply: what’s attractive about the new world, what’s making them stay in the old world, what’s the hesitation, and what’s the nostalgia that keeps them in their current world?”
How People Buy Your Product
In order for a prospect to see your value, you have to understand the reasons about why they are looking for it in the first place. Once you explore the different motivating factors, you can provide information that will make your product or service irresistible.
Mr. Traynor believes there are 4 core motivating factors about why customers buy. “Some people go looking to solve a problem. Others will shop by category - like a good project management solution. Some people want something better than the product or service they’re currently using. The ultimate reason is, they want your brand; nothing else will do. When marketing, you need to speak to all of those categories.”
Practice Effective Testing
The design of your website is massively important for conversions. Design is marketing. Design is your product. At the end of the day, the quality of a web design can only really be measured quantitatively in the results it brings a site. As they say, results speak for themselves. As you analyze results, you should redesign not just “optimize.” Small improvements - like changing the purchase button size or color, isn’t going to cut it.
As Mr. Traynor says,_ “There is this black hole people get sucked into with small optimizations. You have to ask yourself, how much with this change benefit us? After the redesign, how long do we run a new test? And… is it worth the wait? Small changes mean a longer wait for results. You can see the impact of big changes a lot quicker and they’re much more profitable.” _
The Scale Stage
The Scale stage is the make-or-break stage for many startup companies. It is during this stage that a company’s products or services must evolve from selling early adopter customers to selling to massive, but difficult-to-please customers.
In stage one you develop your road map, stage two is when you evolve how you build, stage three is about how to maintain your edge, and the final stage is about being aware of dogma.
Mr. Traynor offered his insights,"Early in the process, startups like to work off of gut feelings. That’s good at the start, but, it doesn’t scale. You need a roadmap that helps you decide what to work on. To remain focused as you expand, you have to act on the ‘behalf’ of the majority of your customers. But, beware of adopting changes that make you look more like the competition. You’ll lose your edge.”
Beware of Dogma
Dogma, in business, is a stance to be accepted unquestioned, usually unsupported by corroborating facts, or in defiance of evidence to the contrary, imposed by a set of inflexible rules.
Mr. Traynor, closed with, “Every opinion you hold should expire, because things change. A foolish consistency to yesterday’s world is the hobgoblin of little minds. Either you kill the dogma in your company, or your dogma will come back and kill you.”