Product market fit can be very elusive for startups with a unique idea, and it often takes time to get it right. Your idea isn’t unique if you find product market fit too quickly because a competitor already did the work, so it’s important to avoid competition and look where others have not in order to maximize your impact.
THE BEGINNINGS
Last year, we started a journey to raise money and build a product that allowed the masses to drop the price of products as more people shared and engaged via social media. The possibilities were overwhelming with so many diverse product categories and demographics. It seems like we tried to promote every type of product to different groups of people.
The best entrepreneurs have a tendency to be overly ambitious with grandiose expectations. For most first time entrepreneurs, this is a common fault that takes a kick in the ass to overcome. It often causes startups to spin their wheels and burn through resources. Thinking small and setting achievable milestones is a virtue entrepreneurs should embrace. The journey takes multiple iterations, and sometimes even a pivot, before a company finds its identity. Ultimately, it’s important to look around you and ask people questions instead of just studying data or depending on expert advice.
THE EPIPHANY
One day, while stuck in traffic, I passively mentioned to my wife that kids’ products seemed to be the most popular on our site. She said very matter-of-factly that of course they would be because her mommy friends always share about their kids on social media. I was baffled and asked her more questions about how often they shared and commented on their children. She showed me her Facebook feed and proved that moms communicate regularly about what they’re buying for their kids.
I did some research and learned that over 80% of new moms are Millennials and are highly active on social media about kids topics. I started asking women more questions and discovered that they can be very collaborative or competitive depending on the nature of the product. I felt like Mel Gibson in the film “What Women Want.” I was totally confused but, at the same time, intrigued. I studied how women behave on social media and learned that they don’t share certain things like clothing or shoes. No women want to show up to a party with the same dress.
Recently, many of my friends started getting married and having babies. It didn’t take me long to realize that the woman is the CEO of the household after a few years of marriage. This becomes more pronounced when babies come into the mix because the woman starts nesting. Therefore, it makes sense that women control the majority of household spending and men are along for the ride.
THE HAPPY OUTCOME
We decided to pivot the company after realizing that moms are highly collaborative when they shop, share, and save for their children. Dropprice now focuses entirely on promoting kids and baby products. We have found great traction and over 80% of brands we demo decide to sign up and give us a try. On average, 25% of moms who visit a promotion join to drop the price. This is an incredibly high conversion rate when compared to other online advertising campaigns.
THE 3 ELEMENTS OF PRODUCT MARKET FIT
In my opinion, product market fit comes down to three main things:
1. Synergy
2. Incentive
3. Luck
The good news is that entrepreneurs can control number one and two. Number three is one of those things where if you have resilience and perseverance luck tends to find you. In my case, luck was indeed a lady. Multiple ladies on Facebook taught me that our model has synergy with the natural behavior of moms. For example, moms don’t share a dress they want to buy but do share kids’ products they feel will benefit other moms.
It’s very important that the incentive structure is strong and sustainable. People will always respond to financial incentive, but Millennials expect more than just that. Companies must be authentic and transparent. The public wants to understand who’s behind the company and what inspires the team to build the product. Think about Jessica Alba’s billion-dollar company, The Honest Company. The Millennial consumer wants to respect the good intentions that sparked the product. They want the whole package and entire story. The mission must be greater than just generating revenue in order to attract the loyalty of Millennials.
Ultimately it’s about being genuine and sharing your passion with customers. Product market fit can only be achieved if everything aligns perfectly. That’s why our mission is to help moms save money while exposing quality brands to a community that is incentivized to use our product. It may take luck but if you have a sound model that is unique, the odds are that customers will follow.