To most entrepreneurs, the road from launch to market-fit is tough. It's filled with bottlenecks and rejections, ranging from "who else has subscribed to your service," to "please come back later when you're ready." We all know the 'soft no' when they promise to call back.
Eat is a food tech startup, powering restaurants and hotels with a reservation system and a digital gateway to acquire online users. Think OpenTable, but for the Middle East. We got approved on the App Store in February 2015. Exactly one year later, the platform seated one million diners. Our strategy to reach market-fit worked.
The journey has been both remarkable and exhilarating. There was a lot of learning, so I thought I would put together a list of key takeaways:
1. Pick the right market
The Food Tech space in Dubai has become extremely competitive, with a number of international players such as OpenTable, Zomato, Quandoo and ReserveOut, all competing for the same restaurants. Rightly so, Dubai has the highest number of fine-dining restaurants compared to all other GCC countries. As a result, restaurants receive cold calls all day, and have been become extremely selective and unforgiving; a less than stellar product will find it very difficult to get a meeting.
As young startup, we knew we needed a user base that was more forgiving; a core group that allowed us to test our technology and that would give us crucial feedback. So we decided to launch in another market, just an hour flight from Dubai, but far away from competitors. We launched in Bahrain. It had almost 20% of the number of restaurants in Dubai, but it was perfect, we could launch uninterrupted and work our way to a solid product. That strategy worked; we managed to acquire 92% of the fine-dining market, including the Four Seasons Hotel. We then moved to Dubai 8 months later, claiming market leadership in Bahrain as a selling point to restaurants who previously would have refused to speak to an unknown start-up.
In summary: pick a market that is less competitive, focus on getting your tech right, then enter the war zone.
2. Invest in tech before acquisition
From day one, we asked ourselves: how could we build something different? We knew we had to stand out to survive. So rather than look at what our competitors were doing and trying to build something better, we decided to focus our efforts on a very specific market. We built a product that was tailored to the mid to high range restaurants operating within hotels.
Most startups invest their seed funding in sales and acquisition. We did not, instead, we hired more designers to rethink our UX, and more engineers to build a seamless Ruby backend. We cut out the generic features, and spent countless hours at the restaurants observing their behaviour. We analyzed their key problems, and then built a product dedicated to this core group. We now have a product that has a high sales conversion ratio in both Bahrain and Dubai, especially when compared to our competitors.
To summarize, you can't please everyone from day one. Have a strategic focus on a highly defined market segment and build a product that caters to their needs extremely well, rather than having a more diluted product that tries to please everyone.
3. Hire a likeable team
Yes, this might sound cliché, but hiring staff that are positive and friendly can go a very long way, especially when you’re going to make mistakes early on. This is important, your product will bug, and you will make mistakes, so getting users to forgive you is crucial. One of our first hires was head of customer happiness. Her KPIs were to visit all clients in our portfolio several times per month, building relationships with the restaurants, and getting them to speak truthfully about the products and how we could improve. Because of this, we had very little churn (less than 5%).
To summarize, the human element is extremely important. Hire staff people like, gather key feedback and be able to smooth over any rough patches that may occur.
Getting to market is tough and can be a lot harder if you don't have a focused strategy and clearly defined goals that can help you reach the next stage. If you have any questions, please feel free to reach me personally on [email protected]
Hope this helped.