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Our flagship series will propel you to the forefront of the global ecommerce revolution. From analyses of breaking current events to the intricacies of navigating cross-border sales and regulations, Business over Borders entertains and informs any audience who wants to learn more about how international ecommerce works.
Welcome to Business Over Borders. I'm your host, Leo Tucker. And I'm joined here today by Reach's Chief Revenue Officer, Matthew Cannon. Welcome to the show. Now I brought, Matthew on today to talk about product market fit and why it's so important for businesses of all sizes.
Leo Tucker:Let's talk a little bit about where Reach started, what the product offering was, what the product marketing fit was, and, how that looks today.
Matthew Cannon:Yeah. So I think when you look at the success of any company, product market fit is essential. And one area that I made, like, thinking when we first started here is, like, okay. Well, once we find product market fit, we're we're good and everything just keeps growing.
Leo Tucker:Wrap it up.
Matthew Cannon:And the the truth is that it's ever changing, with market dynamics, competitors, what is happening in the world. You're gonna have to continually monitor that and see it to make sure that you have product market fit. It's changed drastically though with reach over the last 10 years. There is one thing of, like, what values are you providing, and what is that that core mission? That usually doesn't change, but then how the the product evolves within that, what type of companies you're targeting, or how they're integrating, or certain products and features that you are that are the main focus. When I look at reach are from when we first started 10 years ago when I started, it the the core values were really helping companies sell globally. Like, taking all the complexities about currency, being able to to process locally, to increase conversion, handle all of the headaches and and complexities with global tax, everything. That has never changed.
Leo Tucker:Right.
Matthew Cannon:But over time, how people utilize the product, how do they how do they come to the product, what features and and things have become more important that weren't as important over the time has greatly affected. But the the core mission and value of of the service and solutions we do have have stayed the same. Yeah.
Leo Tucker:The what hasn't changed, but the how has. Well, let's talk about the how a little bit. So give me an example of something that looks different today than it did when when we first started.
Matthew Cannon:So when we when we first started, there there was an enormous pain for going global. And a lot of the the retailers, like, for our our ICP, for, like, our ideal customer were kind of larger, and they would usually be on, like, their like, these custom bespoke platforms. And they needed a lot of flexibility. They and there wasn't too many companies that really solved what what we did.
Matthew Cannon:So the main business was they would actually integrate to us with the via, like, a custom API.
Leo Tucker:Yeah. Direct.
Matthew Cannon:And it was really flexible. It was everything. And it was some work. There was some lift to integrate, but the the pain that we were solving compared to where the market was, it was absolutely worth it. A lot of times, like, with these these custom platforms, they have technical debt.
Matthew Cannon:So they get on to their road map and get the justification to do this. It's no longer that like, even all the value you're providing may not provide enough because it's no longer good enough to, again, save them money or increase conversions. You also have to be, like, super easy to integrate or plug into their existing infrastructure and not cause problems.
Leo Tucker:So moving from that original model where a customer would integrate directly to our API, we'd fit them into the road map. What pivot happened to start making that process a little bit easier? Like, how did we adjust?
Matthew Cannon:Well, first is, like, identifying where the the problem is. And this is something that all companies have to continually monitor, is through growth, what how your conversion rates are doing, everything is is to keep in mind, do you have product market fit? And what we started to realize is that our values were still very strong. We were getting on a lot of calls. We were getting very deep in in the process, with a lot of these enterprise clients.
Matthew Cannon:But what we are realizing is the go live would get pushed and get pushed and get pushed.
Leo Tucker:Right. Right.
Matthew Cannon:And we were realizing that things just weren't closing like they were before. The core issue was the integration. They no longer you couldn't win. Even if the even if the CFO or the the ecommerce director or whoever wanted to utilize our services. And we figured all this pain, they couldn't get in the priority onto the technical road map and then be able to to stick to that priority.
Matthew Cannon:Right. So we had to look at it. Once you have the problem, then how do you solve that problem?
Leo Tucker:Yeah. How how is that how is that solved? You know, you have the the value proposition is still strong, but the the how is tricky.
Matthew Cannon:Right. So we basically built, like, a an embedded solution where the value again, the value is in the solution we did, but we took out the integration part. We basically kinda backed in. We looked at how do we utilize it where they don't have to change anything in your systems and we just work?
Matthew Cannon:So we eliminate that. And that took a lot of work and and strategic and building in that. But once we were able to do that, then product it was very clear that we have product market fit.
Leo Tucker:Yeah. So you kept the same value add, but you made the the road to get there much shorter and much smoother.
Matthew Cannon:Exactly.
Leo Tucker:Now was that an overnight kinda change? Like, oh, we should, you know, we should look at the platforms and see how they're connected. Let's just do that. Or were there sort of several iterations of that over time?
Matthew Cannon:Several iterations over time and finding out what works, how you do it. Because it's not just as easy. It sounds simple as like, okay. Well, just get rid of the integration process.
Leo Tucker:Yes. Get rid of it. Sounds easy.
Matthew Cannon:Yeah. But again, we we looked at our core value. Our core value is we take utilizing Reach as a kind of like a merchant of record or reseller for all these other markets. It's really all the pain we do is from, like, having utilizing our existing corporate structure and entities and operations globally that you can just plug into to to really optimize your global sales, increase sales, reduce cost, eliminate all of the liability. That's like our our core focus, and that's our value.
Matthew Cannon:Understanding our value, you can go in and say, well, if our core value is, then how do we utilize these platforms to then enable this core value?
Matthew Cannon:And it changes a little bit depending on how the platform is done, which we had to iterate and go into. And there is still a huge technical piece to it to, like, capture all that data and do everything and provide our value into that. But by doing that and enabling it, it's now once you eliminate the blocks we had where we did have a broader market fit, you can see incredible growth.
Leo Tucker:What sort of things would a company be wise to look at? Like, what do you measure? How do you measure, whether or not you're just a fit for the market you're trying to sell into?
Matthew Cannon:When you're looking at product market fit, depending on where you are with the product, there's there's multiple things you need to look at. Right? Like, you can look at just are are you able to get some some initial companies live through it and then track their usage, what they're doing?
Leo Tucker:Right.
Matthew Cannon:And then you can look at, well, like, are they referring clients? Are there are you able to then consistently bring it in? And then you just start to really, really go in and scale. Then it becomes, like, can the numbers start to be predictable? And and then the the the next level that you want to get to is understanding, okay, so now it's pretty predictable.
Matthew Cannon:We start looking at your your total cost of acquisition versus, like, lifetime value, and you start really looking at that. And I think at this usually beginning stage, you wanna see a very high CAC to lifetime value. And then you then are you that's when you really know you have product market fit.
Leo Tucker:Okay. So let's talk about core functionality of the product that Reach offers. Like, what has changed? What has been introduced that's new?
Matthew Cannon:One thing that we saw at Reach where we've always kind of helped with with tax and and local regulations across the world. What we saw specifically, like in retail, where in 2020, 2021, there's been now these new global tax regulations where before, like, say, if you're a retailer shipping a product into Europe or to say to UK or to Australia, there wr the taxes are already responsible on the end customer. Now they you know, in a in a graph for these governments to get more money because, their custom brokers probably weren't capturing everything
Leo Tucker:Oh, yeah.
Matthew Cannon:That were going through the border, that they now said, oh, well, this now regulation is now on you. That the retailers shipping
Leo Tucker:Yeah.
Matthew Cannon:These products to Australia and UK, and and there's more markets are adding it there. So that's where we looked into it a lot of times. The tax then became, way, way bigger, more important product where that changed, like, the marketing of the feature
Leo Tucker:Mhmm.
Matthew Cannon:Where, saying that we provide tax solution and and take on our liability and stuff was always, like, at the back of the presentation versus now being front front and center for for a lot of these retailers because they're trying to understand these new regulations, these new laws, having to register these local governments and file in their formats and stuff. It's just this very complex giant issue. And a lot of them are now becoming, like, have these big liabilities because they're not doing it or they're not doing it correctly. So it's become a major pain point. And now, like, a focus of our product where it it was never, a core thing that we went to market with, where now it's, like, it's a big value add that we do.
Leo Tucker:Yeah. Move from an afterthought to a a main tax product for sale.
Matthew Cannon:Yep.
Leo Tucker:That's interesting. When reach started out, I imagine it was mostly physical retailers, you know, shipping goods, locally or in internationally. We've come across a large number of digital merchants and moving into that space and, you know, like you said, with the taxation on not just physical merchants, but digital as well. Has that kinda changed the landscape of who our offering is is is valuable to?
Matthew Cannon:Yeah. Absolutely. Whether you're a a digital, company selling globally and you're doing most of your stuff cross border or you're a retailer selling globally, our value adds are still the same.
Leo Tucker:Yeah.
Matthew Cannon:We take out all the complexities. We handle currency conversion, reduce fees. Tax. We we get that tax liability, the regulations. We take on all all liability.
Matthew Cannon:The value is the same, but the the core problems that they're they're facing are are different. The the language that they use is different. Some, you know, like, for example, a lot of digital merchants, they're going to be having recurring subscriptions.
Leo Tucker:Sure.
Matthew Cannon:Right. That's a core thing that you need to support where you will have subscriptions with retailers, but it's not as Yeah. But it's not like their primary function. Having the right reporting and everything where looking at auth rates, it like approval rates.
Matthew Cannon:And, like, one of the biggest factors that we do is because we can do everything locally, the payment approval rates go up drastically. Increasing the the initial transaction is incredibly important for digital merchants because the lifetime value of that customer is is great for subscription, but they're also keenly aware and need to understand what their approval rates are for the the what's their churn rate? How are they keeping these existing customers? How are you making sure that those recurring transactions are successful? So the the reporting, the tools and everything, Although the functionality in the core is the same, it's the different nuances of reporting and how do you have to support it.
Leo Tucker:Right. Right. That makes sense. Yeah. I think, I think one of the things Reach did early on, was to make sure that our product fit the market from a custom integration that was difficult and onerous and took time on the road map to, you know, our embedded solution, which can be turned on in, you know, a matter of days, and our tax product, which was, you know, for a very narrow set of merchants and now was a broad tax offering.
Leo Tucker:You know, Reach is a good example of finding product market fit and, you know, not necessarily pivoting, but evolving into, you know, different spaces and changing that product to, you know, to maximize our our customer base.
Matthew Cannon:Yep. Yeah. And I'm sure it will continue to evolve. It's something that it you can look at the data, internal data and stuff, but I think it's also the the world moves so fast. Yeah.
Matthew Cannon:And so I like things I like to keep on my radar is, like, well, what's going on with the global tax regulations? What new countries are coming in with new stuff and changing tax laws? Or what we're seeing now is with all these new tax laws, then you start to see lawsuits come in because it's always very vague. They initially do it, and then there's usually a couple of big lawsuits that that happen. And then they then you now have, like, standing.
Matthew Cannon:And then you can say, okay. This is this is now for
Leo Tucker:Yeah.
Matthew Cannon:So and that could affect how the product is, how you market the product, what features, functionality you need in the product. So you have to look at a global scale of that. You have to look at, like, well, what are your competitors doing? What are the platforms doing?
Matthew Cannon:And there's what's the the general market of it? And then also getting feedback from your customers.
Leo Tucker:Yeah.
Matthew Cannon:It's not just looking at, like, okay, here's our our our close ratio. Our MP score is is very high. You have to look outside of that as well, which is very difficult because it's so easy to get into the weeds. Yeah.
Leo Tucker:Yeah. Your product doesn't live in a vacuum. It it lives in an economy. There's you know, you can sell into and out of countries, and it's, you know, it's the environment it it's in that matters just as much as what you're trying to sell.
Matthew Cannon:You're right. Right.
Leo Tucker:So we've talked about product market fit more generally and the success reach has had with our product market fit. Can you give us a good example if you've got one of bad product market fit?
Matthew Cannon:You always have products that are going in and out. Right? I would say, looking at it more holistically, it's it's when do you make a decision that you're out of market and that you need to change?
Leo Tucker:Yeah.
Matthew Cannon:And I think that's where, like, at Reach, like, I felt for a little bit where you've have your your product market fit and you've you've been building a very successful business that even what the data is telling you and everything, that you're resistant to change. You're resistant to completely going in and investing in because anytime that you invest in this, there's a gamble. There's always risk. And sometimes it's easier to say, you know what? I think if we just keep keep trucking and keep going at this, we're going to see it. Right?
Matthew Cannon:And I when I look back, the assessment we've had with the with now, I always wish we would have done it 7 months earlier.
Leo Tucker:Right.
Matthew Cannon:Right? Because I the writing was on the wall, but you still had hope. I still had this. And so trusting the data, trusting what you're seeing around you, sometimes it's best to to to go in and do that. And but then find ways what you don't wanna do is say, we don't have product market fit and just then go into the the board meeting or go into everyone's, we need to change everything.
Matthew Cannon:Everything that needs to stop. You gotta find ways to then find iterative ways to to to to define and find that product market fit and ways you can. Like, for us, when we first went, we've we've fit one specific platform. One that was limited.
Matthew Cannon:One way we could start with more of a manual operation to get a couple pilots just to prove it out. Mhmm. And and and then slowly go before you start investing everything.
Leo Tucker:What kept us as a company from doing what we did a year ago 7 months prior to that? Like, like, what kept us still and held in that position?
Matthew Cannon:Changing something that's been working for a long time and then saying we need to do it. Change is always hard.
Leo Tucker:Yeah.
Matthew Cannon:And getting everyone aligned because it's like, I can come in and say, like, leading the sales team and Op revenue, I can go and say, we need to change this. But then, like, operations, the the We just
Leo Tucker:we just agreed to this thing.
Matthew Cannon:Yeah. Yeah. The the board to say, okay, this is where we're at, and and this is what we've done. And it's it's a hard discussion to to to have as well. But I think it's something that you have to be have more of these discussions and be more aware of it.
Leo Tucker:Yeah.
Matthew Cannon:I think it's all you're always gonna fall a little in and out of of that. And just now it just track it incredible, like, getting constant feedback, understanding, looking at the numbers, the conversion, all of that matters, and and then continue trying other places just seeing what's going on in the world.
Leo Tucker:Alright. Yeah. Thanks for sharing that with us. Yeah. Well, I guess that's all we got for today.
Leo Tucker:Thanks everybody for joining in. If you thought this was interesting or fun or both, go ahead and like and subscribe and hit that little bell if you wanna hear more when we release episodes. Thanks.
Matthew Cannon:Brought to you by the reach network. Visit withreach.com/network for more.