Adventure-Time: Trying to find Product/Market Fit for a Marketplace
Product/market fit isn’t the first step in building a startup, but it is the first step in building a successful startup. It comes from finding early adopters, gathering feedback, and really studying what they’re interested in. And while there might be a few people who can judge the “fit” of a product naturally, most of the time it means that you deliver your product to the world and see what happens.
Now, to reduce the scope of this article to a question that I can really talk about, remember that what I’m saying applies only to marketplaces and on-demand startups.
Defining your value as a Marketplace
Marketplaces and on-demand startups are a very special breed of companies, just like SaaS startup are. Most of the time they facilitate the access of potential customers to a supply. The supply is, in itself, a product that already exists and that is being sold at a small scale. Marketplaces and on-demand startups usually allow this supply to be sold at a much bigger scale, thus adding value that did not exist before.
It means you have to answer this question: why is it better to buy something from you than the “normal way” of buying it ?
A few simple examples just to be clear:
- Amazon sells everything, but their value (or at least part of it) lies in their next-day delivery. Instead of verticalizing they keep improving their logistics chain because that is a big reason why clients buy on Amazon and not directly from the online-shop of every brand.
- AirBnB rents apartments but their value comes from good design, beautiful pictures and ease of use. You don’t really rent on AirBnB (rather than, say, Craigslist) because it’s cool and because you’ll get a feeling of “belonging” or “being home” (at least not yet); you rent on AirBnB because you actualy get a good sense of where you’ll live for a few days before paying.
How to verify it
Competition, of course!
To win against Amazon you need to deliver faster, sell at lower prices or have a bigger inventory. To win against AirBnB you need to provide a better experience or a bigger bang for your customer’s bucks (either lower prices or additional services for the same price).
And those different types of competition are essentially why AirBnB is getting much more heat from its competitors than Amazon (Walmart? Best Buy? Target? Come on, they aren’t even close…).
For a marketplace, you have to realize that since you’re selling something that is already being sold, product/market fit is the advantage you’ll have over incumbents.
This could be something as simple as a great curation site like Nasty Gal. But let’s be clear: the time when aggregating and giving access to products through a marketplace was all it took to create value is over. Stop thinking you can make Ebay or Craigslist. The internet and online/secure payments aren’t values in and of themselves. They’re commodities, and commodities by definition aren’t worth much.
How to win
Finding your market fit boils down to knowing what you are selling to such a degree that nobody else understands it better than you. “What you’re selling” is not the product that the customer buys. It’s what the customer understands your value to be, even before they actually make a purchase. It encompasses the whole business model (to be defined) of your company: from the message you send to the acquisition of prospects to the sales funnel and finally, to delivery.
Here at Trekker we struggled for a long time before really knowing what our customers were looking for. The most difficult part of it was that market/fit is not binary. It is however very clear when your product does not have a market fit.
One iteration of your product will probably get a bit of attention. Another iteration might get no traction at all, and that’s pretty obvious. You’ll get back to the drawing board and produce another version, closer to the original one. This is where you’ll really start improving your offer, forming a tighter and tighter bond between your product and your target market.
How we found Trekker
This is a very literal description of what we do:
Trekker is a website that allows you to book outdoor activities with professional guides. Our products include canyoning, jetskiing, rafting… even off-piste skiing in the winter season. Every one of our activities is hand-picked so our customers can experience a memorable moment, a real adventure for a day. Every booking also comes with a guide of the region so our clients can immerse themselves in the local life. We give them addresses for hidden restaurants, bars and the “Good Spots,” those special places to catch a beautiful sunset after their activity is over.
Of course this is a rather boring description of our product, one that’s very literal. The way we sell it to our clients is quite different.
Experiment #1: Unique, mind-blowing adventures
At first, just like every tourism related entity we thought we were selling beautiful landscapes with wide-angle shots and eye-popping colours. Of course we weren’t actually selling awesome pieces of land but instead the opportunity to live out unique adventures in magnificent places. This is a proved strategy to attract customers and it worked — to some extent.
We started seeing some conversion in our funnel, some sales and some word of mouth. In a sense this was a market fit but it wasn’t enough. We knew there was something far more emotional in our product than amazing landscapes, something that everybody could understand just by hearing you talk about it.
Experiment #2: Feeling alive, the adrenaline
To deliver our second iteration we talked to our customers. We asked them how it went and to describe their day with Trekker. Every single time they talked about their feelings, the emotions they went through and how they felt.
One of them described this particular feeling you experience when skiing off-piste: the anticipation slowly mounting as you reach the summit, embracing a gigantic 360° panorama and feeling so small against Nature. He talked about his heart pounding in his chest as he prepared to take the leap onto the slope, the half-second rush of adrenaline when he jumped down and the 15 seconds of total bliss when he cut through the virgin powder.
Even if you never practiced off-piste skiing you can imagine, even feel, these emotions. They are universal and this was our second iteration.
It didn’t work well. Describing feelings through video is great but it also had a big problem: people felt it might be too much for them, too hard, too dangerous. This was pretty much like watching GoPro videos — they’re amazing, but you don’t see yourself doing the activity, you just go buy the camera.
Using this strategy we didn’t get any bookings. We did, however, get a lot of interest, video views, reach and comments…but no direct sales. This was a complete failure in terms of market fit.
Experiment #3: Back to the drawing board
Something was wrong so we got back to our customers, talked with them some more and listened to those interviews over and over. We finally found the key: people were describing their feelings, but they were also using “we” to describe the day.
This was a tiny difference that we had overlooked — and it was crucial.
The group experience in itself was far more important than the emotions. The prospect of doing something together was what drove them to book on Trekker. They were looking for memories, memories they could share as a group of friends. Once we realized this we found it painfully obvious. It was there all along! Among the hundreds of bookings we had during our first month, only one was for a single person.
So what is Trekker?
Trekker isn’t selling outdoor activities. Trekker is an EPIC day with your friends, a day that you’ll remember for years to come. A day that starts at dawn and ends with a sunset, a few beers and a full belly.
All the “Good Spots” we give our customers are the cement of our product, they are the real value that people look for in our brand: the guarantee of an awesome adventure.
Want to see for yourself ?