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Matthieu Remy

Matthieu Remy

15 Mar 2024
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How to build product/market fit for a B2C fintech?

For any start-up, it sounds like the quest for the Holy Grail. And the road ahead is anything but straight. Inspired by other entrepreneurs, we have succeeded in implementing a relatively simple method to assess and hopefully maintain our product/market fit. Here are the main lessons learned from this exercise.

How to build product/market fit for a B2C fintech?

For startups, achieving product/market fit is an obsession from day one. However, it is extremely hard to understand what product/market fit really is and how to get there. It is nevertheless easy to understand what product/market fit feels like…or doesn’t feel like. As Marc Andreessen’s 2007 blog post puts it :

“You can always feel when product/market fit is not happening. The customers aren't quite getting value out of the product, word of mouth isn't spreading, usage isn't growing that fast, press reviews are kind of ‘blah,’ the sales cycle takes too long, and lots of deals never close.”

As vivid as it is, this description is not actionable for a start-up as it is a series of lagging indicators of success or failures. In other words, it is too late when your start-up feels like that.

Towards the end of 2020, easyvest had been alive for five years. We had around 600 clients who we helped manage €45 million in assets. We were a team of 2 founders, 1 full-time employee, and 2 part-time freelance. We were bootstrapped, enjoyed a slight profit, and were looking at raising a €3M series A round to grow faster in the pension planning space. Sometimes, when the press talked about us or a big client joined us, it felt that we had reached product/market fit. But that was not happing every day. Most days, me and my co-founder, Corentin, felt more like we were in the product/market fit limbo.

Welcome to the product/market fit limbo

For us, the product/market fit limbo is the place between initial customer traction and repeatable customer acquisition.

To make an analogy with kitesurfing (sport that I try to learn anyhow), it is the time when you manage to repeatedly get out of the water without being able to stay more than 10 seconds on your board because you cannot really control your kite speed or board balance. Obviously, you make a couple things right, but you are missing some elements to go to all the way to being able to navigate effortlessly for hours. Product/market fit limbo is similar in that it drags morale and energy: founders are unable to explain clearly why some things work or why others don’t, and, subsequently, it makes it impossible to give a clear direction to team members.

Eventually, kitesurfing mastery depends on a good instructor pointing the causes of your errors and ways to overcome them, doing your homework by watching lots of Youtube videos, and, above all, practice and perseverance. For easyvest, the instructor was our independent board of directors pointing to the fact that we needed to clearly define our customer persona, our value proposition, and brand identity. See, in the first years, needing to generate revenues, we took every opportunity we could and ended up with multiple personae we could not define precisely and an unfocused value proposition that was a bit “everything for everyone”. Or nothing terrific for anyone.

Defining product/market fit: the revelation

The main reason we had difficulty to define it was a lack of clear scientific and number-based approach. Whatever I could read on the topic was a list of high-level frameworks that would all make sense but leave me with a taste of commonplace unactionable principles.

That was until I stumble upon a blog from Superhuman’s founder Rahul Vohra. He went on to describe in great details how he faced some of our challenges at Superhuman and how he came up with a process to measure product/market fit with inspiration from Sean Ellis, father of the growth hacking movement, who ran the early growth at Dropbox. Unlike the lagging indicators described before, the approach suggested by Ellis is a leading indicator. It means that it can be measured upfront to signal potential product/market fit before the fit (or lack thereof). Also, as it is a metric it means that we can build an engine around it to improve it and get closer to the holy grail of product/market fit.

The beauty of that approach is that it is anchored around one single question: just ask users “how would you feel if you could no longer use the product?” and measure the percent who answer “very disappointed”. After benchmarking a hundred startups with his customer development survey, Ellis found that the magic number was 40%. Companies that struggled to find growth almost always had less than 40% of users responding, “very disappointed,” whereas companies with strong traction almost always exceeded that threshold.

4 simple questions to measure and maintain product/market fit

We then went on to send the following survey to our 591 active customers via a survey tool we developed internally on top of our CRM (if you don’t have a specific survey tool, many start-ups use Typeform):

  1. How would you feel if you could no longer use easyvest?
    1. Very disappointed
    2. Somewhat disappointed
    3. Not disappointed
  2. What type of people do you think would most benefit from easyvest?
  3. What is the main benefit you receive from easyvest?
  4. How can we improve easyvest for you?

Within one week, we had 120 responses, enough to have a representative sample upon which we could derive insights as the margin of error with such sample size is in the 9% range with a 95% confidence level. We used a series a customer “features” (age, gender, language, portfolio size) to assess the representativity of the survey answers by comparing the proportion of these features within the respondents’ group versus our entire client base. Globally we concluded that the respondents were a good representation of our all customers.

Step 1: How would you feel if you could no longer use easyvest?

The initial results of the analysis felt quite unexpected and better than anticipated. With 47% opting for the “very disappointed” answer, we felt ecstatic and we were surprisingly pleased that the metric was so high and above the 40% benchmark. Especially when we know that a success story like Slack achieved a 51%. What pleased us as well was to see such a low 3% on people who selected “not disappointed”. To us is was a signal that almost all our clients had something they loved about easyvest.

But being skeptical by nature, we rapidly came down back to earth and asked ourselves an important sub-question: although easyvest seems to have achieved product/market fit, are there meaningful differences between certain client personae?

Insight #1: easyvest fans are likely to invest 2x more than the others

As we derived our revenues from a percentage of the assets under management (AUM), we looked if “very disappointed” very more likely to have high AUM. And what we saw was astonishing: indeed, “very disappointed” were likely to invest 2x more than the “somewhat disappointed”! Another reason to try to improve the “very disappointed” metric.

Insight #2: product/market fit has not been achieved yet among the Dutch-speaking community

We noted major opinion differences within clients speaking different languages: while 49% of our French-speaking clients would feel very disappointed not having easyvest anymore, the figure dropped to 26% for Dutch-speaking ones and peaked at 70% for English speaking clients. The finding was remarkable but not so surprising though. easyvest is active in Belgium and serves its clients in French, Dutch, and English. At the time, our team was exclusively composed of native French-speakers, who could speak English rather well and whose Dutch was kind of ok. Despite our team best effort to appeal to Dutch-speaking clients, both in oral and written language, it made it difficult to build an amazing experience for those clients. It felt normal that our product/market fit reached a much lower score with them. That insight led us to rapidly hire a native Dutch-speaker.

Insight #3: neither age, portfolio’s size nor gender are defining factors of our product/market fit

Our data suggested that clients who love easyvest come in all sizes and shapes from €5k to €750k, and they all advocate easyvest for the same reasons. It is the same for age and gender : our champions were evenly distributed across the 20 to 80 years old range and between male and female clients. We concluded that neither AUM, age nor gender were defining factors of our product/marker fit.

Step 2: What type of people do you think would most benefit from Eayvest?

This is a very powerful question, as happy users will almost always describe themselves, not other people, using the words that matter most to them. This lets you know who the product is working for and the language that resonates with them (providing valuable kernels of insight for your marketing copy as well). We used the answers given by the “very disappointed” to this question to describe the ideal customer who would act as a “high-expectation customer” for easyvest, according to what Julie Supan, who built the YouTube, AirBnB, and Dropbox brands’ image, explains in a blog :

“The high-expectation customer, or HXC, is the most discerning person within your target demographic. It is someone who will acknowledge—and enjoy—your product or service for its greatest benefit. That discernment is key, because this customer is also someone who can help startups spread the word. The high-expectation customer is the truest form of virality.”

Using our customer’s words and Susan’s tips for building profile, as well as existing demographic data we had about our customers, we crafted a rich and detailed vision of the easyvest HXC, that can be summarized as this:

Thomas feels concerned with his long-term financial wellbeing and the one of his family. It is not a daily obsession nor a particular source of anxiety, it is just that Thomas is a planner who likes to be well prepared. Being pragmatic, he knows that he needs to put his capital at work to beat the low returns of regular savings accounts and the inflation.

He is a busy person, who balances his time between his professional interests and social activities. He is a high achiever active in a field that requires an analytical mind and attention to details. Real estate was the first investment he ever made when he started to save money, but today, he also invests in stocks & bonds in the name of diversification and because administering his appartement takes more time than he has at hand.

Generally speaking, he doesn’t want to invest in stocks and bonds by himself. That is because he doesn’t have time to put in the research and take the effort to build and monitor an efficient portfolio, or because he doesn’t have enough knowledge on the inner workings of the financial markets to trade by himself on an online brokerage platform.

But he doesn’t trust any investment professional blindly. Quite the opposite, he is wary with the status quo of traditional bankers, investment advisors, and insurance brokers alike. He wants his advisor to be swiftly available on call. He also values an advisor who can propose a simple investment strategy and explain it in lemon’s terms.

He especially looks at FinTech because he is tech-savvy and he loves to control all aspects of his life – a trait he derived from his education and work in a technical field – and so, he must feel that he has a high-level understanding with what is happening with his investments. The sense of simplicity, transparency, and ease of access that a mobile app gives is appealing to him.

Besides having a now focused customer we could serve, we had found a person that we could fall in love with and be excited about, because, as a company, we would spend a lot of time with her. In many ways, we all wish we could become that person. And that is great, because as a start-up, if you are not building something you want to build, it is impossible to stick it out. If we embraced our HXC, we would gain a new form of energy and a sharper focus. It would help us with hiring too: everyone working at easyvest should channel our HXC and know who our products stand for.

Step 3: What is the main benefit you receive from easyvest?

To understand why users loved easyvest, we once again turned to the segment of those who would be very disappointed without our product. This time, we looked at their answers to the third question on our survey. To see which patterns emerged, we drew a word cloud using their raw answers as input. Tips: first we translated all answers to French using the neatty translate formula in Google Sheets.

Some common themes emerged: the users who loved our product most appreciated easyvest for its simple and affordable yet performant passive investment approach, its ease of use and access, and its excellent and responsive customer service.

Our next step was somewhat counterintuitive: we decided to politely pass over the feedback from users who would not be disappointed if they could no longer use the product. This batch of not disappointed users should not impact your product strategy in any way. They’ll request distracting features, present ill-fitting use cases and probably be very vocal, all before they churn out and leave you with a mangled, muddled roadmap. As surprising or painful as it may seem, don’t act on their feedback — it will lead you astray on your quest for product/market fit.

That leaves the users who would be somewhat disappointed without your product. On the one hand, the “somewhat” indicates an opening. The seed of attraction is there; maybe with some tweaks you can convince them to fall in love with your product. But on the other hand, it’s entirely probable that some of these folks will never be very disappointed without your product no matter what you do.

To fine-tune who we took our cues from, we segmented once again. From analyzing our third survey question, we knew that happy easyvest users enjoyed simplicity of our offer and the ease of use as their two main benefits, so we used this as a filter for the somewhat disappointed group. After splitting the somewhat disappointed group into two new segments around simplicity and ease, here’s how we decided to act on their feedback. Somewhat disappointed users for whom simplicity and ease was not the main benefit: we opted to politely disregard them, as our main benefits did not resonate. Even if we built everything they wanted, they would be unlikely to fall in love with the product. Somewhat disappointed users for whom simplicity and/or ease was the main benefit: we paid very close attention to this group, because our main benefit did resonate. Something  -  probably something small  - held them back.

Step 3: How can we improve easyvest for you?

Focusing on this last group, we looked more closely at their answers to the fourth question on our survey. Again, we drew a world cloud to spot recurring patterns. Common asks for developments were more automation (so that clients could set up top-up plans directly in the app), better website translation and customer service in Dutch, refresh our brand image, include an ESG/durable investment offer and allow more active investment plans.

While the three first suggestions were no-brainers (we could and we wanted to do it), the two others were further from our investment beliefs. However, on the ESG topic, it sparkled a deep reflection inside easyvest on how to include durability into our offering, get more educated on the topic and communicate about it. So rather than offering ESG funds which would probably move us away from our vision of passive investing and complexify our offer, we decided to write a blog to explain our current position on the topic. On the active investment theme, we decided to respectfully ignore the request, and keep in mind that it had been done. Maybe one day, we would have to think of it, but for now we decided to stick to our beloved simple passive investing approach. We also thought it would be good to relaunch/resend a blog series on why we believed passive investing was best. Finally, it felt like a good reason to (re)clarify our brand identity to the public and to launch a rebranding exercise.

With a clear understanding of our main benefits and the missing features, all we had to do was funnel these insights back into how we were building easyvest. Implementing this segmented feedback would help the somewhat disappointed users get off the fence and move into the territory of enthusiastic advocates.

Step 4: Build our roadmap

Even though we understood why users loved our product, and what held others back, it wasn’t initially clear how we were going to navigate the tension between the two when it came to committing to a product roadmap.

We eventually came to this realization: If you only double down on what users love, your product/market fit score won’t increase (we would likely attract users in the same proportion). If you only address what holds users back, your competition will likely overtake you (our competitors would get better on our simplicity and ease turf if didn’t keep innovating and improving on our core benefits).

This insight guided our product planning process, effectively writing our roadmap for us. To double down on what our very disappointed users loved, half of our roadmap was devoted to the following themes:

To gain ground with our simplicity and ease-loving-yet-somewhat-disappointed users, the other half of our roadmap was focused here:

To stack-rank amongst these initiatives, we used a very simple cost-impact analysis: we labelled each potential project as low/medium/high cost, and similarly low/medium/high impact.

Step 5: Make PMF most important product development metric

As time went on, we continued to use this survey and metric to increase the “very disappointed” percentage. We were careful not to survey users more than once, so as to not throw off the 40% benchmark. This became our most important and visible product development benchmark. We repurposed the product development team to work exclusively around that metric and created an OKR which sole key result was the very disappointed percentage so we could ensure that we continually increased our product/market fit.

And we’re not done — the product/market fit score is something that we’re going to continue to track. I think it's always useful for startups to look at this metric, because as you grow, you'll encounter different kinds of users. Early adopters are more forgiving and will enjoy your product's primary benefit despite its inevitable shortcomings. But as you push beyond this group, users become much more demanding, requiring feature parity with their current products. Your product/market fit score may well drop as a result.

However, this shouldn’t cause too much anxiety, as there are some ways around it. If your business has strong network effects (think Uber or Airbnb), then the core benefit will keep getting better as you grow (the network will talk about the benefit for itself). If you're a service company like easyvest, you simply have to keep on improving the product as the pool of users expands. To do that, we rebuild our roadmap every quarter using this process, ensuring that we’re improving our product/market fit score fast enough.

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Note: This article was written when Easyvest was authorized and regulated by the FSMA as an agent in banking and investment services.

Easyvest is a brand of EASYVEST NV/SA, with company number 0631.809.696, authorized and regulated by the Belgian Authority for Financial Services and Markets (FSMA) as a portfolio management company and as a broker in insurances, with registered office at Rue de Praetere 2/4, 1000 Brussels, Belgium. Copyright 2024 EASYVEST NV/SA. Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. All securities involve risk and may result in loss.