This is the second part of our monthly report of January. In the first part, we shared what we have been up to in terms of the company, consulting projects, and marketing. Now it's time to share the latest news about our products and investment time projects.
For the last quarter of 2016, as the technical development was completed during the 3rd quarter, we intended to achieve product market fit. We all know that this is a very broad concept, so we define two simple metrics to help us guide the process:
Sell one license during this period;
10 activations for Machine Learning as a Service for the same use case.
If we could achieve both these metrics in the last quarter of 2016 it meant that we were in the right direction.
However we've failed, we could not achieve either of these objectives. This does not prove that we don't have market fit, just means we were not able to prove that we have.
From Mid-November on, we focused almost exclusively on Business Development activities. However, sales cycles with utilities and energy companies are too long and we could not achieve results before the end of the quarter. Our conversations with dozens of potential clients allowed us to understand that we needed to:
- Focus on forecast service and ignore other features, allowing us to be really awesome solving a specific problem;
- Make unplugg more robust, benchmark against competitors;
- Evolve our site towards a standard SaaS: have a pricing strategy well-defined and process easier to test and subscribe to the service;
- Hustle for selling unplugg licenses & data consultancy services.
In the beginning of December, mainly due to our presence at European Utility Week we reoriented our approach and establish the following goals:
- Update website for easier and self-service testing;
- Engage with 60 leads for Forecast as a Service from Utility Week;
- Interact in person with 10 prospects clients/partners;
- Define forecast quality metrics;
- Make forecast model more reliable and bulletproof;
- Find alternative and benchmark against them for case study & improve to ensure our solution is better.
The only goal that we failed to achieve were the number 1, 4 and 5 are still underway. But business objectives were achieved, we've contacted 94 leads and had 17 meetings with prospects. This focus on Biz Dev was great to ensure that we are closer to achieve product market fit, gather as much information from potential clients as possible and also have our solution tested in more real life scenarios. This helped us creating an agile strategy and objectives for the first quarter of 2017:
- Have 5 new clients who use unplugg two weeks in a row for energy forecasting until the end of February - Validation Target;
- Re-evaluate if we should stick only with a forecast for energy or have a broader approach.
We establish the metric of 5 clients during two weeks to ensure that we have people using regularly and giving us feedback about unplugg.
However, we will gather more information to evaluate if we keep investing only on Energy market in this phase or if we can start investing in other segments and applications.
To achieve this we planned the specific objectives for January:
- A new site focused on forecasting and easier access to test and subscription models;
- Maximize the number of model runs, which means using the new site we want to increase every week the number people creating an account and testing our API.
- Setup quality metrics for benchmarking;
- Find new sources of leads;
- Validate our final pricing strategy.
As you can all see January will be much more focus on fostering the contacts we've been gathering since Utility Week, allowing them to easily test our solution and subscribe to the service.
The main goal for the fourth quarter of 2016 was to validate Product Market Fit for the restaurants' segment, our initial target. For that, we set in motion an attack plan to engage the more restaurants we could and gather specific information about the market’s reaction to our product. We understood that we should have done this way behind the path so we worked to get actual metrics to help us conclude about the viability of our product in this market.
There are several sub-topics related to our main goal (pricing, for example) but overall our initial, tangible metrics were:
Close 10 contracts inside the restaurants' segment: this one is to remind us of our main, not-that-tangible goal of validating PMF;
Have new sensor hardware version ready for testing, improving some known issues with our current hardware.
To keep it short and straight, our main effort was contacting as many potential clients as we could, try to sell our solution and analysing the results of that weekly so we could improve our method. As of the end of 2016, we got:
- Total Clients Engaged: 99
- Total No’s: 78
- Total Yes’s: 5
- Undecided: 16
Of those, these are the specific results for the restaurant's segment:
- Total Restaurants Engaged: 70
- Total No’s: 53 (75%)
- Total Yes’s: 5
- Undecided: 12
The main reason for saying no was the size of the place not justifying the investment. Many places already have well-established routines for the personnel to make the temperature measurements and they are effective, so they don’t feel the need to remove that. Many also said alarms would only be nice to have since they don’t store fragile goods for a long period so they don’t have the danger of losing goods.
More than this, our analysis show a Customer Acquisition Cost close to Lifetime Customer Value, which isn’t a good market indicator. So either we are attacking the market from a wrong perspective or the restaurants market as a whole is probably not a target for our product. This comes as bad news for us in terms of short time commercial endeavours since the idea came from restaurant experience, but this also made us motivated to step up the goals for the next quarter, based on the experience we had in this one.
Looking back now, we feel like we made another step towards improving our product knowledge. We are now able to clearly see we should have done this work a long way up the road instead of relying on the short feedback we had while doing a pilot, non-paid installations. This naturally changes when you’re actually trying to sell the product.
So for the 1st quarter of 2017, we made the commitment to validate at least 10 plausible segments for Qold. This means an average one segment per week. For January, we are validating 3 segments: pharmacies, museums, and high-end restaurants. The main goal of everyone’s mind is to achieve PMF in at least one segment. It’s either that or rethinking the product at its very core by the end of the quarter.
Meanwhile, we will finish the development of a new hardware version that fixes our main hardware issues.
Also, from now on we present a weekly summary to everyone at Whitesmith, to show what’s going on inside Qold and gather the opinions of our talented Whitesmith team, that will sure help us grow even more.
Like we mentioned in the previous post the primary focus of Investment time is to validate, scale and spin-off our own products into startups. This doesn't mean that we will stop developing our projects because the team is relatively big to work on that too.
In February, we will launch our two new investment time projects - Soundy and SlackerNews. Are you excited as we are? Stay tuned to be the first to know!
So 2016 was a good year in many ways, but there are always a lot of things we are not happy with and want to improve, which in general is good. Now that we adjusted sails, it's time to get shipping better and faster on this new iteration.