The founders of Uber and Segway started with an identical mission: to transform transportation and increase the interconnectedness of cities and people by counteracting the silo of private vehicles.
While one company went on to amass a $50 billion valuation and pioneer a whole new industry for ride-hailing services, the other became the butt of ridicule for inventing a souped-up, overpriced scooter used by mall cops and Philadelphia tour guides. What sent these similarly motivated brands on inverse trajectories?
Product market fit.
While this buzzword is most bandied-about in startup circles, any customer-centric organization should be obsessed with designing products their customers love.
The most reliable readout on customer sentiment is whether or not customers are spending money with you, Jocelyn Miller, a former product manager at Google and Amazon, said at a recent event at Product School New York.
When you’re testing the feasibility of a new or existing product, your prospective customers might tell you they like it, but it doesn’t guarantee they’ll pay for it.
Measuring product market fit is inherently intuitive, says Miller, who runs her own "personal accelerator," JM Coaching and Training, serving clients like Capital One, General Electric and American Express.
You’ll know market fit is missing if: “You don’t have that many customers, people aren’t necessarily talking about [the product], you’re not getting high growth for the customers you’ve identified, the deals are taking too long to close or they’re not closing at all.”
PMF is an important yardstick because a product- rather than customer-oriented company might assume – correctly or incorrectly – that the lack of uptake is down to mistargeted marketing or an unsuitable price point. But that’s not always the case, and some companies allocate millions of dollars to remarket products that don’t resonate with customers.
“If there is not a market for your product, you need to stop,” says Miller. “You need to pivot, you need to adapt now.”
The best products reduce customer effort
Uber’ achieved stratospheric success by reducing customer effort for taxicab riders, who no longer needed to reserve a ride by phone in advance and fumble with credit cards or cash before disembarking.
Conversely, Segway created customer effort – the two-wheeled, self-balancing electric vehicle needs charging and a parking space, two infrastructure needs cities weren’t prepared for.
Pundits believed the Segway would be a game-changer in urban planning as an eco-friendly substitute for the automobile, but due to a lack of market conditioning and failure to woo its target customer, the vehicles were banned in certain countries from sidewalks, roads or both.
Products that don’t solve a customer’s pain point are novelty goods or “nice-to-have products” as Miller calls them, with elastic demand that is easily killed by a new fad or an economic recession.
Companies like Bird and Lime, which hail themselves as “Rideshare 2.0,” provide electric scooters that are inarguably less luxurious than the Segway, but the mobile app experience and positioning as a sustainable transportation solution for rides of two miles or less elevates them to a lifestyle-cum-advocacy brand.
Most importantly, both companies reduce customer effort by providing clear instructions on how to ride and park the scooters - in bike lanes and on bike racks - while allowing other riders to earn money for picking up unused scooters and charging them in their homes.
...Or they counteract customer pain
Knowing your customers goes so much deeper than sorting them into psychographic buckets. It’s about understanding their pain points, which is where empathy mapping comes in. “We want to understand who we’re aiming for, what are the real problems they have and we want to make sure we’re solving at least one of them,” Miller said.
There’s a neuroscientific justification for addressing customer pain points: We register pain at five to ten times the magnitude of positive experiences,where trauma is more easily remembered than triumph. Sometimes, customers don’t know what they want, but they always know what troubles them.
Rather than asking generic validating questions about your product like “Do you like this product?” or “Would you use it?” Miller recommends quizzing the customer on pain points in their lifestyle, and asking them to comment on the negative aspects of your product.
“Sit down with the customer and say: ‘Tell me about the things that bother you the most.’ ‘Tell me about the things that are most inefficient in your day.’ ‘Tell me about problems you have in e-commerce with returning or purchasing products.’”
The goal is deep empathy. Empathy mapping is a way to characterise your target users to make effective design decisions. User journey mapping, on the other hand, is a way to deconstruct a user’s experience with a product or service as a series of steps.
Expectations of the online shopping experience, for instance, can differ wildly from one customer to the next. While working as director of product management for Zazzle, an online marketplace for custom art and design products, Miller had a coworker who’d recently given birth.
Before falling asleep at night she would suddenly remember she was running low on diapers or paper towels, and would snatch up her smartphone to order the items before going to bed.
“It’s important to understand all of that context,” said Miller. “Mobile shopping is very different when you’re in bed, you want to sleep and you’re like, Damn it, we need diapers.”
E-commerce giants like Jet are offering more in the way of commodities as the practice of buying groceries and personal hygiene products online becomes normalized, so the interface is designed to facilitate repeat purchases of the same few items rather than a site like eBay, whose unique selling point is personalized product recommendations.
An empathy map accounts for what the customer sees, hears, feels, says and does in their day-to-day experience. It delves into deeply intimate questions like: What matters to the customer? What occupies their thinking? What is her attitude towards others?
Iterate over time, then iterate again
Crafting products customers will love is not a set-it-and-forget-it process. While it’s true that consumer buying habits don’t change much, tastes change, pain points change, as do your competitors. The build, measure, learn loop of continually iterating and reiterating doesn’t only apply to tech startups; even cash-flush giants like Amazon are always piloting new iterations of their product.
“When you visit the Amazon website, you are in hundreds if not thousands of experiments at any given time,” says Miller, a former product manager at Amazon. “When you load the homepage, there are different contingencies of what it will do for you based on what treatment you are in.”
Launch a minimum viable product
Prototyping allows companies to gauge product market fit before going full speed ahead on a new product. It’s particularly salient for potentially disruptive companies that are founded on a leap of faith. When Dropbox, valued at $10 billion, had its soft launch, the product didn’t even exist yet.
Founder Drew Houston cobbled together a landing page with a demo video showing what the product could do as if it already existed, and a form for collecting the email addresses of interested prospects. The purpose was to gauge future uptake for a product that would solve a problem most people didn’t know they had: the struggle to synchronize files on the web across multiple devices.
“Rather than build that system at first, they said, let’s make sure anyone gives a crap,” said Miller.
Houston posted a link to the landing page on Reddit to solicit feedback from a tech-savvy, unabashedly opinionated community. While Dropbox today isn’t such a far cry from its initial prototype, the founder was able to validate it before spending money to develop high-capacity servers and cloud storage that would change file synchronization forever.