The market does not need your product (story of a failure)
This is a story of an adventure that lasted for a year and a half ended in failure.
As failure I consider this experience the most important lesson from the market.
We are at the Milan airport after a training course. We are in front of a vending machine to get a coffee but we don’t have money.
As entrepreneurs our brain try to find a solution and after many options we start to talk about Qrcode and all its possible applications. Two days later we are exploring new business idea: Checkit.
Checkit is (a.k.a. was) a customer loyalty platform. It’s really simple. The merchant receives a Qrcode. Every client is able to scan this code on every purchase to pick up discount points using the Checkit mobile app.
The web account allow the merchant to keep control of the discount points distribution.
The merchant encourages customers to come back and loyal customers receives special offers.
We begin to talk about the idea with other people and it seems to strike. We prepare pitch, participate in events and are even selected for a week of training in Milan with an important Italian VC fund (dpixel).
Let’s get inside that if it works it could be our chance.
Franchises, and all international companies have different needs from simple local businesses and rely on custom solutions with completely different characteristics compared to a simple app.
First of all, loyalty in Italy depends on the personal initiative of the shop owner. There is no strategy.
So we are focused on local merchants.
At the same time my partners go around the cities to collect feedback and memberships to this new app being launched.
The most promising environments are food and beauty but the first issue arrive soon.
Italian shop owner are self made artisans. Completely distant from any technology. They have deeply rooted habits and convolutions. They not have any retention strategy, it depends only by the personal feeling of the shop owner.
Francesco (our lead of marketing) understands that every time he uses the term loyalty or retention shop owner puts himself in the defensive mood. Probably because they do not know the meaning.
So currently the problem is not addressed from our target.
We create a mini pdf guide in three steps to install the app and do the first scan so the merchants do not have to explain to customers how to do.
We deliver the Qrcode in 5 different formats from the poster up to the mini ticket to use it in all environment.
We insert a demo on the website so our customers can see live how it works.
Also I (as developer 😨) go to the shops to collect their opinion and impressions hoping to be able to improve the product. I must admit that it was very hard for me and from that day I have a deep esteem for all sales man around the world.
We focus on social proof and flood social media and mail lists with pictures and stories about other shop owners who are using the app.
Nothing, the on boarding process is super hard and there’s not many feedback to talk about.
We are thinking that we could be the problem, we are young and we do not know how to market this product, we do not have enough PR.
Francesco is sad because he sees only indifference and Sebastiano is baffled because we only receive phone calls from people who complain about taxes and financial crisis 😆.
We start a personal fundraising from friends and family collecting enough capitals to pay marketing experts 🙈 🙈 to break the doors of this business.
After a year and tens of thousands of euros spent we have 500€ in yearly recurring revenue and shop owners ignore us.
Now it’s time to tell ourselves the whole truth:
“The market does not need the product”
Now Checkit is abandoned and there’s no plan to re-launch the product.
It’s been a long time but I keep getting lessons from this experience thanks to all the mistakes that we have made.
We have improved our communication skills thanks to failures like this. We have learned to stay away from the product but close to the customer. The more we learned the more it became clear that the product had no market.
Our friends and colleagues were insanely supportive and helpful in the day to day and several of them took even bigger risks, investing some of their savings in Francesco, Sebastiano and myself. We are supremely grateful. I’m hopeful that our experience so far is useful for aspiring other entrepreneurs.
Follow me on saas:gist I’m exploring the path to develop a product driven company.