How We Pinched Pennies While Testing Into Product-Market Fit
Dec 07, 2018
When you’re a seed-stage company, you’re on a quest for one thing.
Just one thing.
It’s called product-market fit. This means people really want your product.
It means they will go to great lengths, possibly even walk through fire, to get your product.
It means if you ask customers whether or not they’d be disappointed if your product disappeared, at least 40% of them would shudder and say, “Don’t even ask me that! It’s too upsetting to contemplate!”
It’s not easy to create product-market fit. If it were easy, somebody else would already be doing it. In which case, you wouldn’t be creating something new or disruptive.
There was a lot to keep in mind when testing one’s way into product-market fit. Like finding ways to learn quickly. And understanding our customer’s DNA to the point where we could finish her sentences. And uncovering unique twists that would genuinely delight her.
And of course, we had to be responsible with our money the whole way through.
Kimberly and I decided early on that our approach to money would be simple. Even though we’d raised some, we’d invest only where it counted: getting the product right and serving our customers well. And we’d be extremely frugal where it doesn’t count – or when our imagination could produce a lower cost alternative.
Here are three ways we problem-solved our way to lower expenses:
First up was the question of rent and facilities.
Ugh. Can you imagine paying for anything less likely to contribute to product market fit?
For a while, we worked at each other’s kitchen tables. We worked in San Francisco cafes with free WiFi, where one of us would pay for beverages and lunch while the other would bring in the occasional hard-boiled egg from home.
But the kitchen table/cafe squatting approach wore thin when we made our first hire. She needed more than a “where shall we work today?” place to be productive. Still, we couldn’t bring ourselves to sign a lease.
Then, a miracle fell out of the sky. We looked so visibly forlorn that one of our investors offered to let us work out of their offices for three to six months.
It’s been eight months now. We’re really grateful. And very careful to be good guests. We’re great with the alarm. Eager to help with things like receiving packages when they’re traveling. Consciously quiet. We even bring our own tea bags.
Then there was the issue of data scientists. They can be expensive.
Given our reliance on technology to produce perfect-for-you clean makeup picks, data scientists fall into the “should invest” category.
But Kimberly is always looking for a creative alternative. After all, she serves on the board of the Data Institute at USF. By September she was in full form. She presented the NakedPoppy challenge to students. And landed not one but two data science interns.
These young ladies could not be smarter or more passionate. Everybody loves the situation. They get to cut their teeth at a company with a challenging problem to solve. And NakedPoppy gets two extraordinary data science interns.
We used our imagination to save money on the marketing side too.
Now, when you’re looking for product-market fit, you should not be doing much marketing.
But we do have an Instagram account with a small following. And a Pinterest account. This is because social media accounts are pretty much part of your product – or let’s call it customer experience – when you’re a clean beauty brand.
You have no idea how voraciously Instagram and Pinterest consume photos. And how much it can cost to stage a photo shoot. We received a cut-to-the-bone “startup” proposal for our recent photo shoot that cost many thousands of dollars. Yikes.
So, we perked up when we met a technology company that’s trying to solve this very problem: social-media worthy photos at non-Kardashian prices.
The best thing about Catalog, this photo technology company, is we understand each other. They too are solving a tough problem and iterating their way into product-market fit. So we both decided to get strategic and help each other.
We endorse their product on their website. We provide feedback. And we tell their potential investors why we’re a happy customer. Because we are.
In return, we get photos. Many, many, many beautiful photos at a price worth writing home about.
There may be a day in the future when we just spend money to buy things – but I hope that day never comes.
Scarcity breeds innovation. It’s the lifeblood of our company.