Category: Entrepreneurship
Tags: businessmarketproductscalingstartup
Entities: BraintreeGoogleiPhoneLogMeInMetaMongoDBPadiantPayPalSalesforceSteve JobsUnderscoreYouTube
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[Music] [Music] What we're going to talk today about is how to build a product that scales into a company. It's uh you know it's it's
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super it's super common that when you start a company, you start with the product. So for those of you starting companies, did you have a bolt of lightning where I've got a product idea and that was the genesis for starting the conversation or or did you spend time deep in an industry where you
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understood a problem and decided to explore different products? Who who's started their thinking with a product as opposed to as opposed to a market?
By the way, most people do. That's not that's I'm not trying to uh I'm not trying to imply that that's not the right way to do it.
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It's the right way to do it. Um, but it doesn't always scale into a company.
And so what we want to talk to you about today is about how you take that product idea and how from the beginning you can build in things like thinking about go to market, thinking about pricing, all
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the stuff that turns it into a big company as opposed as opposed to just thinking straight about the product. So the agenda today is to talk about something that we call the the company gap.
Um, and then talk about how we actually design products from the get-go
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to span to span that gap. And that involves both designing for product go to market fit.
And by go to market, I mean you can actually design products to make them easier to sell and that's super important. Um, and then you can architect a business model on top of that which helps you scale your selling.
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So pricing and all of that stuff. So we're going to talk about talk about all of that stuff today.
So the problem you've heard the term uh minimum viable product you've certainly heard the the term product market fit um you know but it often doesn't get enough
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momentum to build a lasting company um product market fit. So in the VC business, one of the things we're seed investors at Underscore and one of the markers we look for when a company is getting ready to a question number one, do they have product market fit?
So I do
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not mean to imply that product market fit is bad. It's just not enough to build a big company.
So when you're going out to raise a series A, we want to see a little bit of revenue. We want to see a class of customer, at least a minimum viable segment.
We'll spend a much time talking about that for which
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that product works. And so you've repeatedly sold that product a couple times, but there's a lot more that has to happen to get to the next round of funding beyond just that product market fit.
So product market fit is just one step, just one step along the way. So the the challenge is something we call
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the the product company gap. And I figured I'd you know, since I I actually started a company, I figured I'd tell you about a company that actually failed to get across that gap.
Um and that might be useful. I started a company called Padiant.
Um it was a mobile payments company. QR code payments
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before it was happening in China and Korea. Like we actually had to write, we had to code our own QR code reader.
We hired a satellite imagery engineer to to build our own QR reader from scratch. The idea was, hey, we could use QR codes instead of credit cards to to pay for
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stuff. Um, we knew like we had we' started companies before and we knew that it was going to be hard to build a company, a direct to consumer company.
How are you going to get millions of people to stop using their cards and and start using QR codes? So, we took a
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different strategy to try to address what I call this gap to take it from a product idea to something that we could actually deploy at scale in the marketplace. And so, we decided to go after huge retailers.
We had success signing Best Buy and Walmart and big
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retailers like that that would use our technology but build it into their own app. So, we were like, "Okay, we're going to use a partner and they're going to be the ones that deploy it for us so we don't have to do the whole direct to consumer thing." The problem was we didn't we had no idea how hard it was to
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get an IT department at Walmart or at Best Buy or Target to actually deploy this stuff and do the work. See that little payment terminal right there?
That is a 10-year replacement cycle. Doing anything on that payment terminal is like brain surgery for a retailer.
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And so although we ended up selling our company to PayPal because we had good kind of core technology, we it never got it never turned into a huge company. We got acquired when we were doing like 10 million in revenue and even at PayPal with all those resources, we couldn't get across the gap into it being a
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scalable company, easy to deploy, millions and millions of users using it. On the other hand, so not all not all kind of bad news.
Here's an example of a company that did get across it. So YouTube, prior to Google, was founded in 2005 or so.
In one year, they're one of
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the fastest growing sites on the internet. 20 million 20 million uh users a month.
Absolutely inc crazy. And in less than two years, they were acquired by Google for 1.65 billion, which in 2006 was just an as absolutely astronomical amount of money.
They were
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growing so fast. Before they were acquired, the platform was falling down.
It was getting way too expensive to run. There was no economic model whatsoever.
And there was no prayer of getting across this gap without someone like Google to come in. And what changed?
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They figured out how to monetize it with advertising. And YouTube alone within the Google ecosystem is going to be like a 30 billion dollar business this year.
So there's it is possible to get across that. It doesn't have to be Google, but you need to think about it's not just
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having the best. YouTube was amazing.
It was one the best product in the world. It was one of the fastest growing internet sites.
But just having the great product isn't enough to get across this gap. So the whole point of today is to talk about the the product company gap.
So it's it's all about the product,
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right? You know, it's it's funny.
I'm showing the iPhone here. Steve Jobs is I don't know, maybe you guys disagree, but he's probably the greatest product manager that ever lived, period.
Right? He's all about the design, all about the aesthetics of the device.
So, what do you And this is a little we're going to
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try to get a little interactive here. And by the way, feel free to interrupt me, raise hands.
What was the big innovation for the iPhone? Anyone?
I mean, uh the touchcreen touchscreen touchscreen. So, the second thing you
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said, so touchcreen clearly the hardware form factor was innovative. They went for a full screen.
The device was gorgeous. Coming out of the gate, it was the thing to have.
It was like a luxury item. It felt beautiful.
It was packaged beautifully. But I'm with you.
The real
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innovation was the app store. The ability to have tons and, you know, tons and tons of apps so that your device could be completely customized to you.
And not just the app store. One year after the app store launched, you know what they did?
They in they introduced inapp purchases. So the ability to and
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we're going to talk a lot about this notion of pricing your products or making it very easy to deploy products. this notion of, hey, I' I download an app, it's totally free, but then you can upgrade and you make an inapp purchase and they get 30% of all of that.
So, it's not always just the product. It's
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not just Steve Jobs thinking of this, you know, beautiful, aesthetically beautiful device. It's also the go to market and the pricing and all of that stuff that turned it into what of course is just absolutely blockbuster business.
Um, so here's something here's something. Maybe it's surprising for
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you, maybe it's not. So you guys are early in your journey.
How many of of those of you who have started a company, how many of you are like actually starting to write code and kind of doing all this stuff? Anyone writing software yet?
Okay. So in the early days of a software
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company certainly you spend all your money on development. It's you know maybe one founder is a technical founder, one's a business founder, but the first five hires are going to be more technical people to kind of build out the product and start to do it.
But as you scale the company, you end up
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spending way more money on sales and marketing than you do on on the product. And I'll I'll share some share some data with you that kind of that kind of backs that up.
What will actually happen is that your expenses will flip. So in the early days, you've got your team, you hire five or six engineers, certainly as seed investors.
When we invest in when
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we invest in seed companies very often it's you know one maybe non-technical person and the rest of the folks are are engineers for example no marketing people no director of sales no customer success people but what happens is as you start to bring your product to
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market and you get past this kind of MVP and what we call founder sales where the founder is the one founder's the one salesperson and they go out and close all the deals. As you start to get past that what happens is it flips.
you start to have to spend much more money on on
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marketing um than you do on development. Now, what what actually happens is that there's there's in the SAS business and I'm maybe not all of you aren't creating SAS businesses um there's rules that have started to emerge about how you benchmark companies that are doing this thing.
There there's a rule called
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402020 where for mature mature companies in a mature line of business 40% of the revenue is on sales and marketing 20% um is on product and research. So it's actually it's actually 60 it's actually uh 60 to 20 60% to 20% in in from SGNA
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compared to R&D for a mature scalable product. And this is literally these are literally benchmarks that people use to to more and more these days too, especially since valuations are compressing and everyone's actually cares about metrics.
Again, these are benchmarks people use and certainly investors use to value companies, decide
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how much money to invest in it. This is data and I put a link down here.
It's actually worth kind of digging into. Um, Crunchb did a survey across all kind of software segments, but SAS was one of the biggest ones, but social networks and others where they looked at how the
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expenditure change uh how the expenditures on R&D changed as a company approached a public offering. And if you look Salesforce and LogMe in two kind of classic public company SAS, Salesforce in fact invented the SAS business model.
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And if you see how their their product spend as a percentage of revenue changed as they approached IPO, just what I was saying, right? It's starting to go down.
Um, both of those companies are profitable. You look at a more recent IPO, MongoDB, they're not profitable even.
So, heading
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into the IPO, they're kind of trending towards trying to get to that 20%. Um, but perhaps part of the reason they're not profitable is they're still spending a ton on on R&D.
And then when you look at someone like Twitter, um, huge in the early days, huge kind of R&D expenses generally t trending down. One of the
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ones I found super interesting though, of course, was Meta. So as Meta was getting ready to go public, they were a super efficient product organization, right?
The expenditure of revenue 10 10 7% 10% as a percentage of revenue. when you compare it to what's going on now with like the metaverse, like these
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guys, I you probably, you know, you've probably read some of the stories, the stocks tanking and all this, they're likely to spend 30% of their revenue now on just the metaverse product. And so that's an example of a company that was at maturity had kind of R&D spent
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expenses in a more appropriate place, but as they invest in a new product line, you will see those expenses go up. So, it's not that it's a hard and fast rule, but on a per product line and certainly when you're just starting up, you have to be prepared for the fact that it's going to flip as you start
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going forward. Any Is there anything surprising there yet?
What's you have a question? Question on your last slide.
I think you have something called GLA. Yes.
GNA. Yeah.
Gen general general and administrative expenses. Yeah.
It's just
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kind of back office stuff. Sorry.
Does SAS So, oh, I'm sorry. I I should have I should be careful with my acronyms.
You're very right. So, it's software as a service.
And so, it's it's the notion where you software lives in the cloud, typically a subscription-based revenue
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model. Um, it's generally the most popular software pricing model now.
Very few people actually sell software that you install on on premise. And subscription revenues are are great for predictability and all that other stuff.
All right, let's keep going. Okay.
So the the purpose of this session is how
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do you think about this stuff up front and how do you build that in to the products the products that you're creating. So let's so what we're going to do for the rest of the session today is this is kind of the agenda of the things that we're going to talk through to kind of guide us through this this this forethought of building products
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for delivery really. We're going to start talking about um just the design in the design stage of the product.
How you actually design a product for gotomarket fit not just product market fit but go to market fit. We're going to talk a little bit about value prop um a little bit about what we call minimum viable segment and then how you build a
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build a repeatable product. So when we talk about designing a product for um product market fit, the first thing you do when you're building, you know, a product is you build an MVP.
It's called minimal viable product. Um this will be a little bit of review, just a couple
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slides. I promise we won't we won't harp on it too much.
Um, but it's super important you triple check your value proposition before you do anything, before you spend any money, before you hire engineers, because if you're not solving a valuable problem, nobody's going to pay for it. Um, and you won't
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build, you won't build, you won't end up building a a a valuable company. And viable viable just means you can kind of build it and deploy it and the software works.
It doesn't mean people will pay for it. So it's important that you really double and triple check that value proposition before you spend even
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a dime so you have that you have confidence in it. This may look familiar to you.
This was part of the stuff that was discussed in that previous session two weeks ago. You know the this is the framing that we used to talk about kind of um to value proposition.
But is is this a product that addresses a need? Is
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there an unworkable unavoidable urgent problem or an underserved market? We call it the four U.
And then there's the 3Ds. is the solution, the product that you've built, is it discontinuous?
Is it defensible? Is it disruptive?
And I again um I know this is a little bit of
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a little bit of review and we those of you remember we did we talk about something called the black and white framework is is the product you know on that you kind of you got we have a nice 2 by two here where we talk about blatant latent aspirational and critical good example of latent and aspirational
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Gucci. It's it's obviously aspirational.
Generally speaking, you see products that look like that more on the direct to consumer side. Consumers like it.
You can build gigantic multi-billion companies with something that's latent and aspirational. So that doesn't mean bottom left quadrant is bad at all in
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this case. Um but it's not it's not um it's not blatant and critical.
On the other hand, um those of you who are are old enough or as old as me remember when the cell phone came out, cell phone was a status symbol for a long time. At first, it was in the car.
You had cords
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and stuff. There was no good reason to do that other than to flex on your friends.
And especially when, you know, the phones were like this big and you had to hold them hold them with two hands. It didn't take long.
Um and the iPhone and the maturity of Android devices really really changed it before it became absolutely blatant and
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critical. It's crit, you know, I have kids like kids get phones when they're 10, 11, 12 because you you don't even know how to pick them up at the bus.
It's blatant and critical for consumers. It's blatant and critical for business.
So, it is possible for products to move from latent and aspirational up as they
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mature. And then I thought I'd just give a, you know, a little example of another one.
So, Oculus or VR glasses. Any of you play VR games?
Guilty. Um, it's late and aspirational now.
It's literally a toy. Um, or or or is it?
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It's not. This is an example of something that right now you might argue is still sitting in that lower left quadrant as an aspirational product.
It's clearly going to move up up and to the right. And not just because of what Meta is doing with the metaverse, but
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because of industry. um you know the ability to check the this I think one of that screenshot at the top was the ability to kind of check the skin of an aircraft with VR goggles that can kind of detect stuff that you can't with your eyes to operate factory machinery and you know not a pleasant subject but every day on TV um with what's going on
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Ukraine you see what's going on with drones and everybody is wearing VR goggles to pilot those drones it's now it's now a absolutely common part of war fighting question in India we have a defense incubation center called uh forge Okay. And uh the weaponizing drone part
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is something that that is so deeply rooted with ARVR and uh and uh and camera based drones. It's it's so critical that at any particular point of time there's a pilot flying that drone and he or she is supposed to neutralize
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some targets and even a latency lag of a microcond can can result in someone else being shot. So this is how critical it is becoming lit literally literally life and death.
Yes. Literally life and death.
Literally life and death. And it's you know and look not everyone's
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building kind of you know a hardware product that that evolves and maybe you are that evolves in that way. The broader point is to think about how your product fits in this matrix in the late and aspirational blatant and critical matrix as part of your envisioning your
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value proposition. So you understand whether you're building something that's valuable and that may be even more valuable as you as you kind of grow into it.
So when we talk about bringing an MVP um to market minimum viable product you've built and I I'll I'll continue to
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do software examples just since that's my word and I apologize if you're you know you're building you're building something else or a piece of hardware but you built something small. Um, typically you're building a fraction of your total vision and you and you've got an idea of the people that you want to sell it to, but the most important thing
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is to be able to sell it to somebody repeatedly and to be successful when you do that. And that almost always means you need to find what we call a minimum viable segment.
And what do I mean by that? What that means is of your grand
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market where you have a dream of, you know, building a deck of corn that could, you know, sell all of your stuff to all of these people. You find one segment of that that has consistent needs either based on the four Us and and the 3Ds and stuff that we talked about, but that has consistent needs
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that you think you can take your small product, solve a problem that's important enough for them, and do it over and over again. Because one of the most important things when you're when you're starting a company is to be able to prove to yourself and prove to
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eventually your investors that you're solving a problem that's important enough. Even if that first segment is relatively tiny is not enough to you know do hundred million dollars of revenue at scale.
Prove that your first idea either works or doesn't for a minimum viable segment before you try to
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blow it out and create something much much bigger. It's abs absolutely critical to think that way.
And so you find the MVP, you fit it into these needs, and by the way, you ignore those other segments for now. You've got your minimum viable segment, and all you want
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to do is make them successful. Question, what's the size of the minimum viable segment?
It depends on what you're building. Ideally, you want to be able to generate some revenue in there, but what but as investors, we don't when someone talks about a minimum viable
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segment, we're not we don't ask about the TAM for a minimum viable segment. So, the way we think about it um is that the segment is small enough that if you're right for the problem you're solving, you can dominate.
You could actually dominate that market. So,
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you've kind of you've carved out a space that's like, okay, maybe there's not a 100 competitors. I'm going right after this thing.
I'm solving a very particular problem and I can absolutely do dominate it. And by dominating it, it's viable.
You've proven you can succeed in this market with your first idea. And by the way, doesn't matter if
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it's your first idea because you might try, you might try it, it might be your second, it might be your third iteration, but it's small bets. You're not make you're not betting the whole house kind of right out of the gate.
But you want to make sure that there that it's a combination of pain points, budget, product, use case, channel. How
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would you sell into them? How would you sell into that customer profile?
And the the center of the ven diagram is your your MBS cluster of demand. That was actually uh actually coined by a um Dez Trainer, the founder of Intercom.
It's a
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decorn out on the West Coast. Um and so and that's important, right?
Because what you've done is you've simplified the problem. There's only one channel.
You're only talking to one department for their budget. It's a simple product use case.
Um, but you want it to be you want it to be big enough that you can
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prove those points, but it's not about at this point it's not about revenue. It's about showing that you that your basic idea and then you repeat it and that you can repeatably sell it.
So you've got it, you found a couple customers that want to take this product and then you find
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five more that look just like them and you're able to do that. then you have something and then you know you can put the pedal to the metal and be like okay I've got this like I'm dominating and by the way sometimes you can actually go out and raise money just by if the segment to your point if that minimum
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viable segment is small enough and you're getting just traction and and we'll talk about business models in a second if you've got a PLG productled growth where it's free to try and all of a sudden people just orders start coming in sometimes you can raise money on that first shot because you've proved you've got something going especially if you
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have the vision the expansion vision to go along with it. So here here's an example.
Um this is an example from our our portfolio. Um a portfolio from a a company that first did it the wrong way and then switched and figured it out.
So it's a company
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called a ploy. Um and when they started what they do is they're um they're a healthc care hiring and onboarding platform.
Nurses, doctors, um you know physicians assistant, etc. All of that stuff.
But they had a grand vision for what the platform was going to do. They
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had 20 different features. They were going to go after nurses, doctors, skilled nursing, home health care, senior centers, vet vets, like everything.
Spent a lot of time trying to build the product across it and did not do well. They struggled.
Struggled
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to raise money. Struggled to kind of get off the ground.
They peeled the whole thing back and said, "You know what? hiring nurses, nothing else.
And they had tailwinds from the pandemic, but they did this. They made that switch before the pandemic.
The company started
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going like this. And now, if you go to their website, guess what's back?
Home healthcare, senior living, veterinary care, because they proved to themselves, proved to their investors that they were on to something. Honed the value proposition, then expanded.
tried to do
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too much at first, went for the minimum viable segment, boom, and now they're they're one of the best performing companies in our portfolio. Question.
Yes. The question I have, how do you you determine the price for your MVP?
So, we're going to we're going to talk a little bit about pricing. So, let me I
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promise you we'll get we're going to do a whole little chunk on on pricing because it's it's it's really important. Um so, pause that and then you hit me up if I don't get it right.
Is there a question in the back? How do you balance simplifying the problem and going through the small segment um with I guess like pigeon holing yourself into
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one like solving one problem when versus the multiple that you may have in your longerterm vision. Yeah.
So so I'll put on the investor hat. So when we really like to see people that in the seed investors so we're usually like the first real check into a company and so
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we re we're betting on two things. We're betting on you and we're betting that the vision is big enough to build a big company.
And so the vision is absolutely critical. An understanding of what you want to become, how big it is, how you could that's what you know that's when
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you get the questions on TAM and all this how big like VCs will come right out and ask you how big can this get? Sometimes they'll turn you down and be very blunt and just say I'm not sure this can be a big enough company.
So the vision is critical but when you start spending money and you know hiring engineers or other people to build
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something or a factory etc start with the small but always be able to articulate the big story. Is that is that helpful?
That a question about the tam uh what if you're doing well sure like there's lots of ways to do a
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company. So, um, the VC route kind of assumes you're going after a large market, right?
But you could still have a very successful business, you know, making millions of dollars a year, be a smaller company. Um, but probably can't go the VC route for that, I'm assuming,
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right? So, so 100%.
And if you and I were having a beer together and you were talking about starting company, we'd have a very serious conversation about whether you want to build a VCbacked company or whether you want to build a different type of business. And the reason is exactly what you said.
As
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founders, and this is goes against the business I'm in, but as founders, you can build an awesome business without taking VC money. You can do SBA loans, you can do grants, you can do all sorts of other stuff and continue to own most of the company and build a company that
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would not be interesting to VCs, but would be an amazing outcome for you, for your family, for what and lifestyle. So, it's an important decision.
Like, you shouldn't just assume that VC is the only I think that's what you're getting at, right? That's not the only like because because I heard like a VC might
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say no, but then like somebody might take that as a value judgment of their company. Even if a VC is not interested, it could still be a very good company, right?
Yep. To totally agree.
And you know, and certainly I try to be direct on nos and you know, and it's and it's
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worthwhile if you're having a conversation with the VC and they say no, try to cut through try to cut through the response, right? Try to try to cut through the the kind of handwavy response.
Say, "No, no, I actually would really love feedback. I love when founders do that." And I will
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I will flat out say, "Hey, that sounds awesome. That sounds like the kind of company I would want to work for.
Here's how we think about investing in businesses. Our business, we're venture capital is largely a hits business.
You want to invest in companies that can
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become very, very large. 100 million in revenue is kind of how we think about it.
We like we want to be able to see a company that without squinting at it could become a hundred million company, therefore worth a billion dollars or more. And if you have something that's a small a smaller market and it's you know and the biggest company that's ever
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existed in that space is only 50 million that's okay especially if you've got a better product but we'll tell you directly that it's probably not a the word we use is a venture scale business but it that doesn't mean it can't be an awesome business totally true.
27:08
How do you carve out which is the minimum viable segment? So in this case of the uplo they have veterinary, senior living, healthcare, nurses, all these like different segments that have different needs and different features for the product they're building.
How do
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you choose one of them to start focusing? Or if you're building a fintech, you have low income, middle income, unbanked, unemployed, formal employed, gig gig economy and you can build a product and solve a problem like for a whole lot of customers but depending on the segment your product
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will look differently. How do you what is your criteria to choose one segment to start trying that MBS?
So the best answer is will be very unsatisfying but it it's talked to 200 potential customers and in your universe. So if
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you look at if you look at go back to kind of the big the big universe that we're talking about you talk to as many people in that universe before you do anything before you spend a dime before you drop out of HBS you talk to those you get in an airplane you talk to those 200 you talk to those 200 customers and
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you start you start doing pattern recognition that's the best way it doesn't cost anything other than time which obviously has value but doing that and understanding where your idea resonates the just and and you guys, I'm sure you've taken tons of classes on it, but when you talk to a customer, you're
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not just saying, "Hey, what do you think of my idea?" You're saying, "How much would you pay for it?" Or you're saying, "What are the four most critical things in your organization that if I could solve them for you tomorrow, you'd be willing to pay for?" It's that sort of Q&A. You do this, you know, you go on a you go on a tour and you talk to all
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these customers and from there, you start to make some guesses of what it would be and then you can do stuff. By the way, you don't need to build a complete product either to do this.
We would do at PayPal. I was a PayPal for five years.
We can do paper prototypes. Like we would literally bring people
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into our focus, you know, we of course fancy focus group sessions, but it doesn't have to be fancy. You can sit in a Starbucks with paper mockups with one of your customers and kind of describe what you were trying to build to get feedback.
It can be very inexpensive. It's it's like it's gorilla customer
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research. But that's the way to do it is to actually talk to them.
And that is if you have a workable prototype or a clickable prototype, something that doesn't have any code behind it, then you can go back and refine and see if your original assumptions were right and wash, rinse, and repeat until you feel confident enough, okay, I'm going to
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actually spend some money on again in software, real software development. Approach them with an idea and see to which segment it resonates more or you approach to them just to understand the different problems they have to then build an idea around them.
either it dep
29:47
it depends on who you are and the type of company you're starting and how you want to start. It's you know I asked everyone to raise who started with a product idea right that a lot of people think startup is all about you wake up from a dream I've got this product idea I'm gonna build this thing right lots of people start companies by just going and
30:04
interviewing a segment like you might have an interest I'm interested in veterary care or whatever just to harp on a similar theme and rather than kind of trying to invent a product I'm going to have coffee with 200 vets and ask them what their pain points are um
30:20
that's even ideal Clearly, that's even better than kind of dreaming up a product and going and test it to him because it's even cheaper. Does that make Does that make sense?
How do you go about getting your 200 bets? That that's old that's oldfashioned
30:36
pounding the payment. That's I mean there's there's no there's no shortcut to that.
You can buy lists. You can get on LinkedIn.
You can ask every single you can walk into where you dog where you take your dog gets taken care of and ask them for introductions. That's that's largely old school.
I mean, other than kind of buying a list, the nice
30:52
thing is that so much of that stuff's online. It's not super hard to quickly generate a list of folks to talk to.
You show up at a conference is a is a good one. You buy just a you buy a guest pass to a conference of vets and you start walking around and meeting people at the bar or whatever.
That's I actually like
31:08
doing that. I just think that sort of thing.
You start to go to a conference. I had a buddy who was trying to, you know, was going in trying to get into the contracting business and he started going to architect conferences.
That was it. He just bought a pass and he's not an architect and he went and he just started meeting people and realized for this there was a segment that was
31:24
underserved in construction. Okay, minimum vial segment crazy ven diagram but what you're really doing is simplifying the problem before you start pouring a lot of money into a hole.
It's not just about product market fit. Narrow your target, segment it by need.
31:40
Really, really focus your product, but this helps not just the product building part of the equation. It helps you start to hone your messaging and how you talk about it, not just to potential customers, but to investors.
It lets you start to think about packaging and pricing because when you ask when you
31:56
ask someone, you're on your tour for 200, you know, 200 people, you're trying to figure out your minimum viable segment, hopefully your little 10 question list includes things like how much would you pay? Do you have a similar product today?
How is that packaged? How does that priced?
What do you like about that? What do you hate about that?
When you have these
32:12
conversations and you're narrowing your target, you start to get answers to all these questions, doesn't mean you get it 100% right, but you start to land on a place where you've got something you feel like you can kind of wedge into this this minimum viable segment. You
32:28
start to learn things like channels and distribution partners. I'm going to talk about all kind of all this stuff in a second.
Um, and reference selling, network effects, viral, business alignment. We're going to go into all this stuff.
And so, this is just a agenda slide. We kind of hit the front part.
We're going to go into the back
32:43
half. Getting to market.
Um, we're kind of toying around with this this word product facilitation. Um, what we're really talking about is getting facilitating getting your products into people's hands so that they so that they so that they purchase it.
And you know what? If you could literally slip into
33:00
the lead in your minimum viable segment. And so we've created a pneummonic device here.
We call it slip. Um, and we're going to kind of walk through four key elements of this that we think can really really help um how you it's a good framework for thinking about how you build a product that will be very
33:17
very easy to distribute. Um the four the the pneumonic device goes like this.
It's slip s is simple to install and use low to no initial cost instant and ongoing value and plays well in the ecosystem. This is very similar to and
33:34
you can read all sorts of books on the notion of productled growth and so you'll see some similarities there. It doesn't mean to it's not meant to replace it.
It's more of a pneummonic device that that helps you think about the different components of productled growth. So simple to install um you know one way to think about is out of the box
33:49
experience and I don't necessarily mean I'm using that as a as a metaphor. It doesn't necessarily mean there's a box but if there is a box it does mean hey it's easy to open the packaging.
It's easy to take it out. It's easy to assemble.
But if it's software out of the box experiences, hey, how how is this super super easy to install? Do I
34:06
have to even think about it? Is the onboarding process really really really easy?
And you want it to be simple to use as well. It's not just simple to get going, but simple to use.
Complexity is almost always bad in kind of an onboarding process of any sort for
34:23
software. Um and the first and you need to think about you know first principles advantage disadvantage the a true competitive advantage is a combination of innovation and simplicity.
So you want to you want to
34:39
innovate but it can't be innovative to the point where it's so complex that no one will ever use this thing because then you then you just get tripped up even even if you've been successful in selling it right out of the gate. Um le less is almost always more.
I know we keep I I know we keep talking about kind of simplicity simplicity minimum viable
34:56
segments and all this stuff. you look at, you know, these two remotes, one is clearly a superior product, easier to use and all of that stuff.
And, you know, it's like it's the reason why things like software as a service, like you know, Google Docs and all that
35:11
stuff. Like, you know, I don't know if any of you have used Word recently.
It's like it's insane like the number of menus and the number of features and all that stuff. And people have kind of pulled back from that in general in the software world and are really looking for products that solve basic problems super super super easily.
And this is just an obvious obvious example.
35:29
Um, and simplify it, you know, simplify it to your core value. Again, this is just focus guys, especially for this first kind of wave of investment that you're going to be making.
Keep it simple. Minimum viable segment.
Solve one or two, maybe three critical
35:45
problems for this group that you've identified that has a handful of needs and nail it. Oh, question.
Yeah, fresh point. So the picture you just showed what the the remotes.
Yeah. So you said one is clearly the most superior and
36:02
simple simple um or to use but I don't know. I would say maybe you could say one is more superior and the other would be more simpler.
You're right. I made a value judgment.
You're you're No, you're totally right. Like there in this this particular case where buttons versus
36:19
control services and stuff happens to be a fairly uh subjective a subjective uh design principle. Um Apple historically absolute leaders in design.
They create a device that's tiny. The battery on
36:35
that little thing lasts a year. Um is it superior design?
Would you prefer to use it rather than buttons? You're right.
It's personal taste. I can't give you like hard facts and data but I will tell you this that um the notion of instant gratification in consumers has become
36:51
very very powerful. Um it kind of started with the internet and being able to you get online instantly.
You can purchase something with you can purchase something with one click. You order something, it's in your house in one day.
Like this whole this whole push towards everything is one motion economy
37:07
of motion and then you get you get the dopamine hit of your p you know your Amazon package showing up within 24 hours of ordering it. That is a trend and that's that's clearly happened.
Um there's also economies of uh economies of scale and building simpler simpler devices that do one thing incredibly
37:24
well. Um especially with consumer devices though it is it consumer consumer devices in particular are very taste driven.
Um do I think that we're going to you know go back to a world of you know giant phones with lots of
37:39
buttons? I don't.
Um I think that this this this technological move into kind of simpler looking devices aesthetic devices is probably permanent. So is this framework part of testing the
37:55
MVP? Because what I'm struggling with is especially for hardware products how to use these framework because initially you are going to start with something complex and then over time it well well not necessarily I mean I so are you a
38:11
hardware person? Is that is that what you're asking?
Tell me tell me about what you're working on. And I'd like to I haven't wor working on anything but previously we were trying to do this uh wireless uh chargers embedded furnitureures in embedded in furniture.
38:26
Yeah. Oh awesome.
Right. But then the technology takes time to evolve but we we wanted something to test a MVP.
So, so I think I think what you're referring to, and correct me if I'm wrong, is that when you design something on a hardware
38:43
basis, especially electronic device, you've got breadboards, you've got wires coming out all over the place, it's maybe bigger than you want it to be at scale and all that stuff. There's the complexity of a prototype.
Um, what I'm more talking about is the complexity of the problem that you're solving. So you
38:59
could have this crazy prototype that looks like look, you know, this Rube Goldbergian crazy thing that kind of came out of the lab and looks like it. But what you're really testing is if I put a piece of cloth over it and I just rest my phone on it that it instantly starts charging.
And so it's it's the
39:15
simplicity of the use case more than especially in the early days when you're prototyping hardware. Does that make sense?
Is that a fair answer? Is it cuz it's not like cuz I cuz I I'm what I'm if you had told me hey the first device we have is going to allow
39:32
charging in an armchair and charging on a refrigerator and it's going to have it's going to have a connection for you know Apple watches and and AirPods and all this other stuff. I would actually say why don't you just start with the let's make sure the armchair works and that consumers like it like someone a
39:48
furniture maker because you'd probably want to do that through partners. furniture maker would actually embed your charging pad your your charging pad into that.
Get that question answered before you start adding features to it. That's that's the simplicity that I'm trying to drive you towards.
Does that make sense? Is it okay?
Yeah. Yeah.
40:04
Yeah. One of the questions, how do you think about MVP for such hardware projects because you don't want to invest so much uh effort up front before knowing whether there's a market already, right?
40:19
harder hard harder and hardware because it a so again I think I'd go back to the same thing again for um for let's just use your example for a hardware charging device I would encourage you to find find a furniture maker that's you know
40:34
you know that's that's doing kind of a you know kind of a group a group financed uh piece of furniture you find someone in Etsy that's making something or you you work with wood you don't have something that gets covered with necessarily has to embedded in the manufacturing process. Perhaps it's
40:50
something you could stick on, you know, a chair, an adhesive with a battery that lasts four years or whatever it is. But again, a simple use case as opposed to trying to solve every problem that you're envisioning.
You can tell the you can tell the VCs that are going to back you, I'm going to solve this. It's going
41:06
to be in everything. It's going to be in every airline chair.
It's going to be in every chair, every public space and all that. That's the story you tell when you're painting how big your idea could be.
But when you're first getting started, if you could have that giant vision, but if you can't get a single furniture manufacturer to agree to embed
41:22
that thing in there, it's not going to work. And so you want to prove that first.
Is that is that I'm not a hardware guy, so hopefully I didn't like step in it, but it's a So let's Why don't we do we thought we'd do we thought we'd do a little um session kind of breakout with each of your groups here. Um, one of the here
41:40
here's here's the first idea and and we thought that you could maybe have a group discussion of what is one way you can make your product super simple to install and since we have hard hardware people I I think you can think about that expansively depending on what your company is you know is it s is it simple
41:57
to install is it simple to deploy is it simple to use but within your group have that conversation and then you know we can chat for five minutes is that we're doing kind of five minutesish and then we can kind of get readouts from folks on what they what they talked about. It's also a great way, you saw everyone
42:13
kind of raise their hands. I'm sure everyone doesn't know each other.
It's also a great way just to hear how other entrepreneurs think, which for all for me was always the most amazing thing. So, all right, let's do it.
Five minutes or so. Okay, cool.
I need one or two teams that came up
42:30
with something interesting and unexpected in the conversation. Did you learn something?
Who wants to who wants to share? We're not going to do everyone.
We're going to we'll pick as we we've got a few of these. So, we'll pick on other people.
Everyone will get a chance to talk. But any volunteers to jump in out of the gate.
I explained my
42:48
company and what I want to get done and I don't think we talked about like how we can make it simple. We just talked about how how it's going to work.
So, I'm sorry that we did not No, that's okay. What's your company?
Just because that that might be interesting for everybody. So, my company is called the
43:04
Pitch App. I'm trying to design an app um that it's like a Tinder for entrepreneurs and investors.
So, you sign up as an entrepreneur and you sign up as a as an investor. Much like Tinder, uh you upload a 45se secondond video of yourself pitching your idea and
43:20
the investor is able to swipe left or right and connect you um based on geoloccation and or category. I do think this could get bigger.
Um I eventually would like to to go to like music or actors. So like if you're a musician and
43:37
you don't need a manager um the app can connect them that way. But I think the MVP or what I learned here with or my segment would be um the investor entrepreneur um route that I would take.
Super super
43:53
cool. Super cool.
Thanks for sharing. Anyone else want to We got one in the back.
Why don't we So hi everyone. My name is Leil Ker.
So my venture is called Foodie. Thank you, Leo.
Right now we're in in the process of interviewing restaurants. So it's in the food technology uh segment.
Don't be stuck
44:11
with the name because name name is going to change. So it's an um it's an app that integrates processes at restaurant.
So with the help of QR codes on the table QR code as well. Um you can uh it allow the app allows the customer to uh
44:27
browse the menu, select their items, edit their dishes, place the order and also make the payment and leave whenever they want. So what we were thinking to uh make the installment process simple is that what we're thinking is that why
44:42
don't we remove the installment at all. So rather than starting with a full-on app, proper app with a lot of features, keep it as simple as possible.
Simple is good. So we would start with a web- based app.
In this way, the customer does not need to download the app. They
44:59
will probably not even know that it's an app or our company is called Foodie. They're just scan the QR code on the table which will take them to the platform and they will just order uh and pay and leave.
That's exa exactly exactly what we were talking about.
45:16
Other things that came up actually in the group discussion uh we need to make the QR code uh process as f frictionless as possible. So probably uh put be below the QR code put the Wi-Fi code so everyone has the access.
Make sure that
45:32
actually the restaurant has Wi-Fi so we can uh actually the app works. Is it looks like there's a question right behind you or is it question?
I think you should also talk about how you are going you should also mention your awesome idea of how you are going to integrate it directly with the
45:48
restaurant's already existing systems so the cooks immediately know what they have yeah exactly there was a question whether we would have a second dashboard in the kitchen and the idea is for us to integrate in the c in the restaurant's API or POSOS system so they would
46:05
automatically get um the the orders under on screen and they don't need to follow two types of screens or reporting. Perfect.
It's exactly the type of thinking we want to be doing kind of at this stage. Thanks.
Thanks for being brave enough to share. All
46:21
right, let's keep going. All right, the second.
So, we're just to circle back to the kind of simple to install was number one S. Now we're getting to L, low initial cost.
Um, and what does that mean? Um, it could mean frictionless
46:37
trials. It could mean free samples of textiles, enough maybe to test manufacture some stuff.
Um, it means lower cost of customer acquisition. Um, you can identify prospects with a premium.
You know, everyone know what premium is? It's free and then you
46:52
upgrade premium offering. Um, but be careful because free often people will often equate the value of a product with what you charge for it.
And so sometimes there are certain products that if they're free forever, they start to think of it as valueless. And so
47:10
generally speaking, a free trial period that emerges into, you know, into something that people have to pay for is is is uh is preferable to kind of just going full free all the time. Um because then also when it's free, if there's a like a free version, you have to you're
47:25
constantly upselling to to get people to kind of to kind of uh to kind of upsell. And an example of this is LinkedIn.
We all use LinkedIn. It started as a place to just upload upload your resumes.
I mean to basically have an online version of your resume quickly became a social
47:42
network. But what these guys have done a brilliant job of is there's they've they built a giant they got all the network effects by having a free product and they have just piled on the the uh the premium products.
You've got sales navigator, you've got inmail, you can buy extra inmail messages, you can have
47:58
the premium version of of LinkedIn. And so it creates this virtuous circle, but they got the network effects, get everybody hooked on it with the free product to start.
So low initial cost I instant and ongoing value. So you want
48:16
to reduce the pain and this is what I think you were exactly what you were talking about um when you were talking about you know your ideas in especially in a restaurant setting. Reduce the pain for customers to try um and adopt it.
pain is the single biggest barrier to getting people to adopt your product.
48:32
And so you need to demonstrate enough gain quickly enough that you'll overcome you'll overcome the balance. And so if you if you think about the gain, we talk about it in terms of the gain pain ratio.
You know this there's this thing that we call inertia risk which is in the middle which is switching costs. Ah
48:48
I've already got something that does something similar. It's kind of a pain in the butt to switch.
doing nothing is probably just is is easier than kind of trying a new product or maybe there are other alternatives that are good enough. I don't want to risk I don't want to risk a big license fee on a startup.
There's kind of this this inertia that
49:04
can keep people from trying stuff. So your job um is to create the value proposition that overcomes that pain gain ratio.
Whether it's generating new revenue, savings, you're saving time, you're saving the cost of hiring people,
49:20
competitive advantage, reputation, etc. to overcome the pain that it takes people to discover something, try it, buy it, imple implement it, deploy it, and own it.
And if you can do this instantly, it's incredibly incredibly powerful. Um, you know, we talk about
49:37
instant gratification. I'll give you an example of a company that I think does this very well.
Um, but in the enterprise setting, if you're selling something to a big company, um, if you can, we call it, we call it time to value. If the time to value is sub three months, that tends to be great, um, in
49:52
the enterprise world when you're selling to big companies because it makes it easy for people to do um, you know, cost models on what it's going to cost to do this and when payback begins. If it's takes longer, like super long time to implement and, you know, install it at the factory and all that other stuff,
50:07
it's much harder to get to get over the hump. And so you want to get this time to value as short as possible.
Um, and the ongoing value again, make sure that you're delivering value on an ongoing basis. It's not just kind of a oneanddone.
Increases revenue, reduces time, drives competitive advantage, and
50:23
in the consumer world, consumers just simply can't live without it. One one example, and this is an enterprise enterprise software company.
It's an investment that I made. It's called Pagos AI.
Um, and one of the things that I like about them is they they've actually, and before I was getting set up to do this, I didn't realize they had
50:39
kind of hit all of the SLIPs. It was kind of baked baked into their baked into their DNA.
And there's a reason for that. The guy who founded it was one of the early employees at Brainree, which is a giant payments company owned by owned by PayPal.
and they basically decided to build a company of all the
50:57
dozens of things that customers complained about when he was at PayPal, but PayPal could never get around to fixing. They built a company that did all that stuff.
And the interesting thing is that these guys, so basically what they do is if you're a big e-commerce company like Adobe or Ticket Master or something, you've got 10
51:12
different companies that process your payments all over the world. There's no way to analyze all that payment data yourself.
They aggregated all that payment data and do analytics and all this other neat stuff. But the neat thing, the sales guys can onboard them in a phone call.
They say, "Hey, give me
51:28
the key to your payment provider, you know, the the encryption key so they can get the data and they will demonstrate their first demonstration will be ingesting the all the data into their product over the phone and they get to see all their data in these dashboards.
51:44
And so it's literally instantaneous." And so that means it's easy on boarding and as as you'll see when we talk start talking about pricing models, low initial cost, they do something very close to a premium model. Um instant value creation because people deploy it right away and start saving money
51:59
detecting fraud and all that stuff. And um and and it supports all all of the payment platforms.
It plays nice plays nice in the ecosystem. So if you're so here's a startup secret self-proving value.
If your product is about improving a process, provide proof
52:16
as as part of the product. Um, these guys, PAOS, they baseline all the results of these payment processing companies.
Then when they install the product, you actually start to see how you're performing against benchmarks. Provide key metrics and visibility into the progress.
So people are like, "Oh,
52:31
this is working. I can actually see." So it's it's almost self-documenting it in the product.
It itself proves that what you're doing um what you're doing is actually delivering value. Um, and that means analytics and surfacing reports that prove the value kind of right right out of the gate.
So, here's another
52:47
quick exercise and we we may skip one or two of these just since we're we have so many we had so many questions and we're running a little short on time, but I think this is a good way good one because when we you know I started talking to people about the last question, you know, one was how can you make it easier to install? Good question.
Well, it's an app and apps are
53:03
easy to install. And so, we had a follow-up in that.
Another person shared that I'm building a textile product. There's no installation.
And so we had we had a sidebar. I think this particular one um actually should work well against kind of all the different types of companies that we're talking about.
If for the company that you're
53:19
building, what are different ways that you could streamline that time to value for your first for your MVP and for your first market segment? So why don't we take a quick five minutes on that and then we'll hop back in and uh and and get going.
53:34
All right, we got we got our first team talking here. All right.
I'm working on a book for uh parents that have children with learning difficulties and are having a hard time to learn how to read. So the idea is
53:51
that with this book that we have actually developed and tested but with professionals that work with children with learning difficulties um to turn it into a book for parents. So the things we were thinking uh of how
54:07
to make this instant value was maybe coupling the book with an app so parents can test the their children to see the progress and where they start. So maybe they can understand okay maybe my children is not at the same pace of reading as other children their age and
54:24
then see how they progress and that would also give us evidence that the book is actually working. That is super interesting.
Bingo. I think you nailed it.
What do you guys think? Well done.
All right, we're going to keep going. Thank you for that.
That's awesome.
54:40
Okay, the last part of Slip P plays well in the ecosystem. And I'm going to talk to you a little bit about uh what that means.
I I'll just I'll use another example. This company Tetracience, they're they're local actually.
They came out of they came out of Harvard Harvard Business School. They build a cloud for the life sciences.
that
54:57
connects all of the research devices um collects data from all those research devices and builds a cloud. And if you start to look at the ecosystem that they play in.
So we're talking about playing nice with others. Look at the complexity here.
And the way they talk about it is
55:13
we're going to be this cloud that ties all these disperate platforms together. And so they're part of their explicit strategy is to play nice in the ecosystem.
Not only that, a beay clearing house and a central point. So this involves, you know, partnerships with all of these different companies,
55:30
technology integrations, but this is an example of a company that explicitly was about the ecosystem and being a player in the ecosystem. We talked about Slip.
I'm going to skip that. Let's jump into pricing um because I wanted to make sure we spent spent some time on this.
How
55:46
you price your product is super important to that early friction. And you know, I'll show you an example that you'll all be like, "Oh, yeah, like every everyone does this." But the idea is if you can, if there's a way, I'm thinking textiles again.
is is there a
56:02
way but I think there's a way that you can provide things like free free samples and other stuff or make your platform free or create developer kits for hardware that doesn't cost anything so that people can start to use your product test it out and then you have a
56:17
way to step them through increasing the value of your offering and increasing the price that you charge them and what does that what's an example of that in the in the software world and even things like airlines lines. Everybody does this.
That's HubSpot. That's Slack.
56:37
That's Vimeo. That's WordPress.
You guys, I should have put JetBlue in there. You ever seen what the JetBlue pricing looks like?
It looks like that, too. It's basically you get to walk through.
There's a way you can get in cheap and then there's a way that you can upgrade. And in the world of
56:53
startups providing especially if you need if it's BTOC and you need lots and lots of users or it's a it's or it's um or it's you're selling into an enterprise you want to get them using your product as soon as possible but you have to have a way to kind of walk them
57:09
up the value chain. And it's things like this.
This is what we call product growth in the software business which is you install the product. free and as soon as people start using it, you start doing chuch-ching as they upgrade for more seeds and kind of all of this other stuff.
Very, very important. Um, and
57:25
talking again, just going circling back to the ecosystem and playing nice with others. It's not you don't have to just think about being the center cloud of the ecosystem.
That's that's not always what it looks like. There's a a local company called Clavio that does SMS marketing and they they have an a plat
57:43
platform for SMS marketing. and they were kind of selling it to e-commerce customers so you can kind of market and send text messages to them and all that stuff.
But in order to do that, they needed to have partnerships both technical and business partnerships with all the wireless carriers so that they could send text messages over over the
57:58
wireless network. But the thing that made these guys made them into a billion-dollar company was their partnership with Shopify.
So they started off as a feature in the Shopify, you guys know what Shopify is the e-commer you know e-commerce uh platform. They started off as a feature and then along the way Shopify blessed
58:15
them as kind of the the default standard, the preferred I think they call it the preferred marketing and SMS platform. Boom.
Unicorn uh unicorn was born. And so partnerships, it's not just playing nice in an ecosystem with the different masters that you serve and
58:31
kind of a super complex like that life sciences product. It's also picking partners that are part of your product from day one that can help you grow.
They're either on the right side here. They're necessary for creating the business in the first place or they can be provide leverage for you to make the
58:47
product product explode. Did you have a question?
You're raising a quick comment about that. I do a lot of e-commerce consulting with Shopify customers.
Yeah. And I'm in a Facebook group and in the group it's like a free CEO who paid at least $2,000 a month to be on Shopify's
59:03
highest tier and everybody in that an an app provider in Shopify pays. Um, so it's like a community where he pays to be in the higher tier.
If you're in this tier, here's this group. So like all the users of Shopify who are like the owners of the companies, they they're in that
59:18
highest tier. They talk in that group and that you could hear them always talk about this tool.
Clavio to each other. Yeah.
They're like, "What do I use? Use Clavio." And it was weird because it was new at the time.
Yeah. Like they somehow managed to get into that like word of
59:34
mouth. Well, so they they got into word of mouth, but then also so it was a combination.
It was rising tides, right? They were doing quite well and at some point Shopify, it became a tight partnership, but partnerships can change the trajectory of your business, whatever the whatever your business is.
You know, you could have a partnership with the hardware manufacturer, a
59:50
partnership with the furniture manufacturer, you know, partnership on the on the textile manufacturing side. Super super important way to to think about playing playing nice is the P on the slip.
Playing nice in the ecosystem. So really good question.
And I'll just repeat it for everybody. Do we So, and I
00:06
think what you're talking about, so one of the ways a partnership can take place is you can actually sell through partners. You could say, "Here's my product and the partner is going to do distribution for you and they kind of they end up being in front of you in in between you and your customer potentially or is it better off to kind of just go it alone and kind of and and
00:23
launching your own?" That's actually it really depends on the business and what you're saying is true. Um that said, if you it depends on how much you think a partnership could accelerate what you're doing.
And so you have to kind of balance balance the the loss of a 100%
00:41
of customer control if you have a selling partner um with the acceleration of your business. One of the common ways to solve for that is a short contract if you really want to go it alone because that's that's a so that's exactly what my company we We're like, you know, we actually partnered with big
00:57
uh big companies that were actually reselling our stuff and eventually we were able we got enough traction that we were able to switch over and kind of cut the cut them out of it and go direct to our customers because we had built built credibility. Okay, we're coming to the the home the home stretch here.
Um so
01:13
let's let's let's do this. I'm instead of doing kind of a a proper breakout, I'm going to just give you the chance just to we'll do this kind of one in real time, but for each of you think of one partner or two partners that you think you should partner with for your
01:29
particular idea, and I'll give you like 60 seconds and then I'll just start calling on you randomly. You got one already?
All right. What do you got?
So, with my app idea, I think I would be able to partner with LinkedIn and call it LinkedUP. I can just add a feature
01:45
and it'll be a feature to to their product that's already developed. So linked up for pitch pitch decks or pitching swipe right swipe left embedded LinkedIn.
I like it. Uh so I think I can partner with uh curriculum associates.
So quickly what's the business again? So
02:02
I help um classes diversify by bringing experts of color into the classroom. Yeah.
Um so now that everybody there's a lot of conversation around uh diversity in the classroom. I can get the big
02:19
textbook um companies to use my product to help Pearson McMillan like this to bring that diversity in the classroom. So they integrate my own product directly into um their own products.
Now
02:36
it's it's a great idea. Super big company.
Maybe you partner with them in a way that it's not in all their textbooks. You become you you do it on a smaller publication that you can get them to pay attention to you at first.
Then you work your way through the organization. But you have to find in these partnerships, you have to find a
02:51
champion that believes in what you're doing and has enough pull to kind of do something with it. Anyone else want to share a partnership idea?
We don't I think we can partner with POS systems. So Toast is the market leader, but the mark POS market is extremely fragmented.
03:07
Even though Toast is market leader, they only have 15% market share. So with any POS systems who are ready to take down Toast with us, I think they'll be interested in partnering with us.
Plus, they're local. You can just you can walk over there and just bang on their door if if you want to.
You and I can have a
03:23
conversation about trying to partner with Pause, by the way. It's uh super fun.
Anyone else? All right, home stretch, guys.
Um, okay. So, we talked we talked about bridging the product company gap.
Hopefully,
03:38
you've kind of you understand how that's different from just product market fit, right? You get product market fit and then you need to get over the gap with a product that has a good value proposition, minimum viable segment, keep it small,
03:53
repeat it, and then you can kind of go broader. And then we the second half we talk about business model and you can build you can be doing this thinking of business model from day one.
It's not something that comes later right you architect your product for slip super easy to install low cost etc. That can
04:09
all be part of day one planning. Um it just requires thinking.
It doesn't require a whole ton of actual kind of work to do it. Package it price it free to try for actual pull.
Make it very easy um and make it very easy for people to to adopt it and use it.
04:25
Anything else? I'll stick around, by the way, if you guys want to, you know, pick my brain.
I'm gonna drink a water and just park for a bit if you guys want to chat. And we'll I'll make sure that you also you guys I'll just send my email.
It's Chris_.VC if any of you guys want to reach out. I'm happy to chat, happy to come on campus, happy to spend time
04:42
or do a coffee hour or whatever. All right.
Thanks. Appreciate it.
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