At Human Ventures, we have a fund for pre-seed and seed-stage investments, a venture studio and an Entrepreneur in Residence (EIR) program.
Through this work, we’ve discovered a lot about how different founders fulfill their journey of customer discovery and product-market fit. One of the largest challenges for pre-seed and seed stage founders is determining where to start: There are a million things to do. What should you do at each stage?
We interviewed three founders from our portfolio, all of whom ran discovery experiments to find their product-market fit at different stages of their company’s development.
Here’s what they had to share:
Pre-MVP/customer discovery phase: Tiny Organics
Tiny Organics is a plant-based baby and toddler food company on a mission to shape childrens’ palates so they’ll choose and love vegetables from their earliest days. The company raised $11 million in their Series A in 2021 and is growing at over 500% annually.
Founders Sofia Laurell and Betsy Fore joined our venture studio as EIRs and went through a six-week discovery sprint. As Sofia explains, they knew they wanted to build something to make parents’ lives easier and threw a lot of initial ideas at the wall from the Finnish baby box 2.0 (Sofia is Finnish) to an easier way to create Instagrammable baby pictures.
They went through multiple exercises to test the viability of new parents’ most pressing and urgent needs:
- Conduct a “Start with Why” exercise
- Define the “Jobs to be Done”
- Create a lean canvas for each (viable) concept
- Define the user journeys
- Conduct user surveys using platforms like pollfish.com and 1Q (instant survey tool)
- Identify and define their customer personas
- Conduct customer interviews and synthesize them
- Construct concept prototypes
They also met prospective customers, conducting a focus group of 10-15 moms. When the founders asked them to text them what they were feeding their children along with pictures for a week, they realized the lack of healthy finger foods in the market, thus sparking the idea for Tiny Organics.
As the founders started running product experiments, one key test ran was identifying parents’ groups in New York City to test their initial products more broadly, and asking them to become “Tiny Founding Parents.” They then had a chef prepare food based on the initial data they had gathered and handed out samples to parents in unmarked cups and coolers.
Then, they collected feedback from a 100-person group to see which recipes stuck. The next test involved testing this founding group’s willingness to actually pay for the product. They conducted a ‘shipping test’ where they asked parents to just pay for shipping to see how many actually entered their credit card information.
From this initial 100, the founders chose a group of 25 parents to be “Power Testers” to conduct more thorough feedback. Their system involved a detailed Google form that the testers could fill after trying each of four recipes (with three versions of each recipe per test), daily SMS check-ins, and in-person discussions. From these customer experiments, the founders were able to launch with 10 meals and have continued to create new SKUs to adapt to babies’ and parents’ needs.
Mid-MVP phase: Tabu
Tabu is a sexual wellness company, and launched with The Kit, a sexual wellness product made for people experiencing menopause. Founder Natalie Waltz participated in the Humans in the Wild Spring 2021 Health & Wellness cohort. She entered the program with a product in market, and during Humans in the Wild, she developed stronger personas around who her consumer is, how to talk to her, and where she lives online.
Before we unpack the MVP-phase, here is a high-level synopsis of Tabu’s conclusions in the customer discovery phase. Tabu listened to two core groups: women’s health experts (OB/GYNs, pelvic floor physical therapists, sex therapists, midwives and psychologists), and peri- to post-menopausal women (women aged 41-71 and with a range of familiarilty talking about or engaging with sexual wellness tools).
Through hundreds of conversations with both groups, Natalie navigated to the need: A kit with all the components required to start a sexual wellness routine, involving some sort of personal massager, lubricant, and educational content. In the customer discovery stage, she also learned from experts that the features best-suited for women experiencing this subset of sexual wellness symptoms were the shape of the product, warming ability, and intensity.
As for the MVP phase, Natalie went out and bought every vibrator-like product she could find that checked one or two of the “feature” boxes, and had women test, score, and provide feedback via a Google form. She learned that color was a surprisingly big consideration, too many speeds were overwhelming, textured surfaces could irritate and cause bleeding, and the warming feature was incredibly popular.
Ultimately, she was looking for trends in uptick of use: Did women look forward to using a specific tool again during a test period (e.g. 1 week) or was a tool so off-putting that they didn’t find any joy in the experience?
With all of this newfound knowledge and feedback, Tabu launched The Kit, which contains an ergonomically designed personal massager and lubricant. As Tabu had tested, it also features an optional warming system to help stimulate blood flow.
After product is in-market: Teal
Teal is a free service that provides one place for job-seekers to manage and organize their job searches.
Teal launched an initial product in November 2019, but it took the team nearly two years to find product-market fit. Originally, Teal started as a job search concierge — the team knew how much people hated looking for jobs, and realized that people would pay someone else to do it for them.
But while people were willing to pay and Teal had “market-problem fit,” the company had trouble actually productizing the idea. Job searching is emotional and psychological, and it’s hard to determine what people say they want versus what they actually want. This was what Teal decided to test.
Teal first started only sourcing jobs for people, but found that people wouldn’t actually apply once a job was shared with them. The company decided to pivot, and start rewriting people’s resumes, thus making it easier for them to apply. But people still wouldn’t.
Teal pivoted again, this time trying to actually apply on behalf of their customers. This proved to be difficult when it came to submitting people’s credentials, scheduling interviews, etc. However, this third pivot unlocked something big: You can’t outsource applying to jobs. Similar to weight loss, the customer must have a certain amount of ownership to be successful. You had to build the tech to empower people.
This led to the creation of a Chrome extension that let people bookmark jobs from job boards. But even then, the Teal team found themselves experimenting and pivoting when it came to payment models. First, they tried a subscription, but, psychologically, users did not want to subscribe, as they are used to subscribing to things they get enjoyment from. Also, why would you subscribe to something you want to end?
Teal also tested how the bookmarking tool would work if they capped the consumer at 20 job bookmarks and made them pay for more. But that created a scarcity mindset, and the truth was, the team wanted people bookmarking hundreds of jobs so they could have a huge top-of-funnel. Plus, this didn’t allow them to see the full value of the platform. Next, the company tested a trial, but the problem with a trial is that people quickly want to decide whether they’re going to invest in the product or not. So it compressed the decision-making time, and that didn’t work either.
As Dave Fano, Teal’s Founder and CEO explains, monetization can be a huge impediment to engagement. “We were more focused on how to get people to monetize than how to get people engaged,” he said.
So, in May 2021, the team pressed pause on charging for the product. They simply observed and essentially returned to the customer discovery phase. They started to see from talking to users and observing the community that people were actually spending money on courses. People would ask, “Does anyone know someone who’s gotten a PMP certification?” Or, “Where did you get your Agile course?”
The team observed that people were spending money on job change by taking courses, joining communities, and getting credentials. Additionally, they were doing it with little information as to whether it would actually help them land the job. They observed that 70% of their users were going to sites like Grammarly, MasterClass, Coursera, and Udemy. So, they connected the dots, receiving affiliate fees for bringing these platforms engaged customers.
Despite their different focuses and journeys, all of these companies had to tackle finding their right product-market fit. The overarching theme seems to be this: Listen to your demographic, learn from their experiences in order to find a way to truly service them, and don’t be afraid to pivot if needed. Companies like Teal go through multiple pivots before they are able to figure out what works, and that’s perfectly fine.
At the pre-seed and seed stage, VC funding is used for experimentation to find product-market fit. And while founders are often told to “test, test, test,” it’s evident that the quest for product-market fit is unique and ever-evolving for everyone.