Even in good times, you're slowly falling out of PMF. Inspired by Jason Lemkin, we dive into the signs you need to watch out for, to avoid losing product-market fit.
Sure, you might have been hired after PMF was achieved - but it's still your problem, especially if you're in the go-to-market team.
In the episode, we get into:
Shoutout to John Rougeux who captured the quote from Jason.
Sure, you might have been hired after PMF was achieved - but it's still your problem, especially if you're in the go-to-market team.
In the episode, we get into:
- (00:00) - TRF - 088 - 4 signs pmf is gone
- (02:38) - Not just a founder issue
- (06:09) - 1: Easy gets redefined
- (12:00) - 2: The problem is gone
- (17:08) - 3: Buyer behaviour change
- (24:07) - 4: Willingness to pay
Shoutout to John Rougeux who captured the quote from Jason.
Creators & Guests
What is The Revenue Formula?
This podcast is about scaling tech startups.
Hosted by Toni Hohlbein & Mikkel Plaehn, together they look at the full funnel.
With a combined 20 years of experience in B2B SaaS and 3 exits, they discuss growing pains, challenges and opportunities they’ve faced. Whether you're working in RevOps, sales, operations, finance or marketing - if you care about revenue, you'll care about this podcast.
If there’s one thing they hate, it’s talk. We know, it’s a bit of an oxymoron. But execution and focus is the key - that’s why each episode is designed to give 1-2 very concrete takeaways.
[00:00:00] Toni: Hey, everyone. This is Toni Hohlbein from Growblocks. You are listening to the revenue formula.
[00:00:05] In today's episode, Mikkel and I are discussing 4 different signs that your product market fit is slowly slipping away. And this is not just a CEO founder problem. This is a go to market problem that you should be tackling proactively. Enjoy.
[00:00:24] Hey. Wow. What a nice t shirt you have there.
[00:00:28] Mikkel: Yep. 1 review.
[00:00:30] That's all it'll cost you. 1 review. Just a really great 1.
[00:00:34] Toni: Did you leave a review though?
[00:00:36] Mikkel: No. I think that will be kind of odd.
[00:00:38] I really like the podcast, especially this the the host with the least amount of hair.
[00:00:44] Toni: And
[00:00:45] people would still be in between.
[00:00:46] Mikkel: Yeah. They they would
[00:00:48] still be
[00:00:48] Toni: like, I don't Well, I
[00:00:53] back.
[00:00:53] So Yeah.
[00:00:56] Mikkel: so the thing is yesterday yesterday, you know this, I was working from home and
[00:01:04] Too busy not working.
[00:01:05] Yeah. Netflix.
[00:01:06] You know? Yeah.
[00:01:06] That's it. No. So, usually, the A habit we have is when you're working from home, you're the 1 who drop off and pick up kids. All great. Yeah.
[00:01:13] Super efficient. Right? I go pick up all 3 of them, we Get back home. And then the 2 of them just immediately go to their room and just chill. They're done.
[00:01:22] And then I sit with the youngest 1 and just we just watch, you know, Children's TV and she's all fine. All of a sudden, she's, like, clearing her throat a little bit. I'm like, that's odd for a 1 year old. Did you catch something for your from your siblings because of all this sickness? And then, you know this thing when you go to a hotel, And you want to take a shower and you turn on the water and it's just full speed and you get a bit shocked.
[00:01:46] Toni: Yeah.
[00:01:48] Mikkel: what happened, she just Puked everywhere, so we had to shower.
[00:01:53] Right? Why am I saying this? Because I did not pay attention to the signs. There were obvious clues that this was about to happen,
[00:02:03] and I could have moved I could have moved To kinda
[00:02:06] salvage the situation. And it's funny because today, we're gonna talk about some pretty important signs.
[00:02:12] Toni: I know, but tell me about those signs first, actually.
[00:02:15] Mikkel: It was clearing the throat. Clearing the throat, getting a bit uncomfortable. And
[00:02:19] Toni: It's so it's so funny when it happens and you see when it happens. Yeah. It's like literally like a like a garden hose. Yeah. You know?
[00:02:26] It's like
[00:02:27] Mikkel: Bay so basically and maybe we can cut this into the YouTube. So She's, uh, my wife is with her today because she's sick, and this is how she's sleeping right now.
[00:02:36] Toni: now. Yeah.
[00:02:38] Mikkel: Sorry if you're only listening to the audio version. You don't get a chance to see it. You need to go to YouTube YouTube.
[00:02:43] But so we're gonna talk a bit about, uh, a post That you and I that you and I saw on LinkedIn, uh, a gentleman I forget his name. John I wanna say John wrote. I you know what? I can't pronounce. Doesn't matter.
[00:02:55] We'll drop it in the show notes. He went to a pavilion, meetup, I wanna say, And Jason Lemkin was there presenting, and he he kinda said a really key thing. Yep. Even in the good times, you're slowly falling out of PMF.
[00:03:08] Toni: Yep. And I think this is, I think, you know, why is this important for people that, uh, uh, maybe not founders? Because everyone thinks, like, PMF is like a founder issue. Yeah.
[00:03:17] It's like,
[00:03:17] Mikkel: Yeah. not my problem. Moving it to another desk.
[00:03:19] Toni: came here after PMF, so I'm fine. Yeah. So but the the reality is it's kind of a this isn't everyone problem, and especially if you're on the go to market. Right?
[00:03:29] So and, again, like, having strong go to market fit, It's you know, I don't wanna go into defining it because I couldn't.
[00:03:35] Mikkel: No.
[00:03:36] Toni: But, you know, outcomes are easier to sell, easier to retain. Guess what? You know, marketing sales see us all of you on the hook for, like, good pro market fit. Right?
[00:03:46] And if that is slipping away, Conceptionally speaking, that will then very reality speaking, slip away your commission check. Slip away. You know?
[00:03:57] Mikkel: That
[00:03:58] marketing program you had running that worked so well is like, uh, no no more.
[00:04:01] Toni: So so it is really something that I think a bunch of more people need to pay attention to, order to kind of really nail, um, instead of just, um, you know, looking you know, pushing this away.
[00:04:11] And I think, Talked to a a guy. He left the company by now, but they were at 4, 5 million or something like this, and he was basically kind of challenging the The leadership team, the CEO, was like, hey. I'm not sure if it's really I think he said it you know, product market fit is usually seen as this binary thing. Yeah. They have it at all.
[00:04:30] He was saying, I'm not sure we have product market fit, which obviously when you tell this to someone that is, you know, went through this. It's like, go f yourself. Yes.
[00:04:37] Mikkel: don't wanna have that problem again.
[00:04:39] Toni: We have Pro Market Fit. But I think it's, um, the the educative piece here is that, I think it's a scale. Right? And I think you can you you always be sliding in the wrong direction. It's like the second law of thermodynamics.
[00:04:54] It's like, you know, entropy is always you will always, you know, always will move away. And, uh, I think there needs to be a good way in a in a company to bring up this thing without, you know, making the whole thing go implode. Yeah. and And that's what Jason basically kind of brought up, and I think he's pretty fucking spot on with that thing. I
[00:05:13] Mikkel: like that. I mean, we at some point, we're gonna get him on the show.
[00:05:16] We have to. He's such a well tuned with
[00:05:18] Toni: We all know he's listening already.
[00:05:20] Mikkel: Yeah. So hi, Jason.
[00:05:21] Hey. Um,
[00:05:22] Toni: Um, Not not now that you
[00:05:24] Mikkel: know, we
[00:05:25] Toni: you on the
[00:05:25] Mikkel: Drop us an email. Drop us an email. So, anyway, uh,
[00:05:28] Toni: By the way, whoever gets us Jason gets, you know, 2 2 t shirts.
[00:05:32] Mikkel: a black and A white.
[00:05:33] Toni: black and a white. A black and a white.
[00:05:34] Mikkel: Oh, 1 for
[00:05:35] you and 1 for your spouse.
[00:05:36] Like, You
[00:05:37] Toni: Yeah.
[00:05:37] Exactly.
[00:05:38] Mikkel: So we're gonna talk a bit about some of the signs because there are signs and clues to watch out for. And we have, like, 3 or 4 we're gonna run through, and we're gonna make it super practical with a couple of examples so you can kinda spot it and hopefully prime a conversation from there.
[00:05:51] Toni: also, people will start to realize, oh, wow.
[00:05:53] Mikkel and Toni, they're Much older than I thought they were.
[00:05:57] Mikkel: Oh, no. Yeah. That's the first ex the first example.
[00:06:01] Toni: It's like, oh, the typewriter.
[00:06:02] Remember? You know?
[00:06:04] Mikkel: A chisel and a hammer. Okay. You wanna
[00:06:09] Toni: the first example, um, So the whole topic here is around, you know, is something get, you know, easy gets redefined in the sense. Right?
[00:06:17] And if that's, uh, the threshold that used to be really hard and that you, you know, successfully cleared for people with your product, um, now you're being perceived as the hard
[00:06:28] Mikkel: Yeah. But it
[00:06:29] kinda sucks. You might Wanna revisit that
[00:06:32] marketing
[00:06:32] Toni: And the, uh, the the, you know, the case they wanted to build this around is HipChat. So Everyone raised their hands to anyone who knows what HipChat actually is.
[00:06:42] And many people were like, sorry, clueless, you know, boomer. But, uh, really, um, basically, this was Slack before
[00:06:50] Mikkel: Slack Yes. It was Atlassian who kind
[00:06:51] Toni: Yes. Atlassian.
[00:06:52] Yes. And then then then basically, they agreed, okay, we lost against Slack. And then they got shares from Slack in return to kinda stop the the HipChat thing, by the way. It's a cool story. But actually, uh, and this is maybe even even worse, do people still remember IRC?
[00:07:10] Mikkel: I don't think this is so far back. This is so far back. Like, people used it for, you know, illegal downloads and stuff, But also for
[00:07:18] Toni: it's it's a chat. It's a host of chat. It's basically kind of the next evolution of this is now, uh, what is called Discord. Discord is basically IRC and you. Right?
[00:07:27] So you have this group chat kinda thing going on,
[00:07:30] and, uh, that was for, like, you know, whatever reasons, like private reasons. And then HipChat, uh, started to be the business version of that. Um, then, you know, I I back then when we were using HipChat yes. We used HipChat in a company, And we used it because the developers used it, because they used Jira, because Atlassian is kind of the thing. That was the reason, by the way.
[00:07:51] Um, And it was HipChat versus Hangouts.
[00:07:54] Mikkel: Yeah. And I remember testing Hangouts.
[00:07:58] Oh.
[00:07:58] Toni: who even knows what Hangouts is? Well, it's the it's the chat tool that Google developed.
[00:08:04] Uh, and we were a Google shop, so kind of that was, you know, second nature to use that.
[00:08:07] And, obviously, all of that got, you know, wiped out, know, once we kind of and and that was so that was so freaking silly. That decision making process, I was kind of Managing this, the decision making process was the emojis are nicer on Slack. It's like no joke. That was literally the decision.
[00:08:27] The emote I mean, let's let's face it. The emojis that
[00:08:30] Mikkel: But I also just remember, like so definitely HipChat was more convenient than Hangouts. Let's just be clear. Hangouts was like a sticky bar in your browser in the lower right corner. You didn't Channels and stuff. then obviously, HipChat did have channels, but the thing is it was always down was my impression.
[00:08:46] Um,
[00:08:46] Toni: you couldn't so the worst thing about HipChat in in my experience was you couldn't trust the notifications.
[00:08:52] Mikkel: Yeah.
[00:08:52] Toni: There was, like, either you didn't get pinged at all or it got pinged, and then it disappeared for, like, not the You read it and you forgot to put it unread or the, um, uh, someone deleted a message, kind of the the valid reasons Yeah. But for, like, Invalid reasons. Yeah. And and then and then basically, it became a we can't we literally can't trust our communication hub anymore. You know, that became like a a A killer piece actually for
[00:09:20] Mikkel: And I mean, part of that is also more I guess, That's not really anything to do with ease of use. That's more a business problem that they just didn't, you know, succeeded in solving, but to be honest. But I think the other kicker was with Slack, and I don't know if this was there in the beginning, but at some point, they they went big on integrations. Yeah. And you could start getting, like, hey, meeting booked and all these kind of signals
[00:09:42] that just
[00:09:42] Toni: had the same thing. They had the same But Hipchat was more like a, um, I think it was more of a developer crowd.
[00:09:49] Um, and then the the motion was actually pretty cool. Kind of the upsell motion was pretty cool. Kind of you landed with Atlassian, I don't know, Jira, whatever they use. Right? and, uh, then, hey, HipChat, that's pretty easy.
[00:10:00] But once you have 30 percent of your company on, like, a chat tool, it's like, yeah. Let's just roll it out to the rest. I mean, you know, Ripping this out and replacing it, um, that seemed silly because you had those, integration with GitHub and so forth. Kinda was already there with HipChat. And, uh, and, actually, kind of that HipChat lost that game.
[00:10:20] It's pretty crazy, actually, when
[00:10:21] Mikkel: Yeah.
[00:10:22] Yeah.
[00:10:22] Toni: And and I and I think, You know, yes, there's there's validate. Those those notifications didn't show, but at the same time, it it it for some reason, these Slack guys, they just nailed the product product was so much easier, so much more convenient, so much nicer looking, yada yada yada. And, um, and it also became the cool thing to do. Yeah.
[00:10:40] Right. It's like, you know, Apple, uh, a decade ago was the cool thing to
[00:10:44] Mikkel: Yeah. Yeah.
[00:10:45] Toni: on HipChat.
[00:10:46] Mikkel: you know what? It's also funny. Like, I think the, um, I told you before we hit record, it's like, I used to work with WordPress 10 years ago.
[00:10:53] It was the easiest solution out there. What's happened in those 10 years is more and more plug ins, more and more functionality. So it's it's gotten more complex than it used to be, But then you also just have new solutions out there, like, I don't know, Webflow or what whatever they're called where it's just it's just Easy. You can get going fast. And and I think that's just the point we're trying to make that things, they actually change, And you gotta watch out for those signs.
[00:11:19] You gotta look at what is moving in the market. Uh, have you gotten a bit too complex with the solution you're offering? And, you know, Be be careful. And and you see it especially in the design realm. It used to be all Adobe.
[00:11:30] Yeah. Then Figma came and even Canva. Right? So they they've just managed to kind of strip down parts of it for for the segments they're going
[00:11:37] for and making it
[00:11:38] Toni: mean, this kind of easy gets redefined to a degree. It's really this, um, and I'm not sure kind of we're gonna getting in into this later on potentially, but it's this, you get disrupted from the SMB always.
[00:11:48] Mikkel: Yeah. That's a
[00:11:49] Toni: And here it's kind of you being, your moat is being, you know, pulled away by being easier. Yeah. Being dumber, simpler. Right? You will always lose to the simpler solution.
[00:11:59] Let's maybe go to the next one.
[00:12:00] Mikkel: So, um, the other 1 is that the problem you were solving is simply gone now. It doesn't exist anymore. That's kinda scary When you think about it
[00:12:09] Toni: Yeah. And then I think to a degree, there's also the, uh, innovators dilemma and stuff. Right? It's, um, you build a whole business around a specific problem, and you wanna kind of make sure you are not,
[00:12:21] You know that the the basis Yeah.
[00:12:24] For this whole business doesn't just disappear overnight. But the thing is, if you can think about a way how it will disappear, chances are that someone else will also be thinking about
[00:12:32] Mikkel: this. Yeah.
[00:12:33] Toni: and then it will disappear no matter what. You can either you can you can have that piece of cake,
[00:12:39] Mikkel: And eat
[00:12:39] Toni: or it's someone else.
[00:12:41] Mikkel: Yeah.
[00:12:41] Okay. I
[00:12:41] was
[00:12:41] Toni: of the cake. I don't know. Whatever it is.
[00:12:43] and the the, um, thing, You know, the case we were thinking of is actually, um, iTunes.
[00:12:49] ITunes in the older days. Right? Kind of when we really think
[00:12:52] Mikkel: Not now. Not today.
[00:12:53] Toni: was fucking awesome.
[00:12:55] Yeah. Right? Um, I'm an introvert. You know, I like music, but not as much to kind of go into 1 of those Big places where you buy those albums, those CD ROMs, and, like, you know, you kinda flip through the thing. Like, everyone around is, like, 20000 times cooler than you are, And you don't have any fucking clue anyway.
[00:13:12] Um, and and you don't wanna be there as me, basically. Um, didn't change at all still.
[00:13:17] Mikkel: You
[00:13:17] definitely don't wanna go over to the store where you can just hit play Yeah. For the CD and just listen.
[00:13:21] Do I actually wanna buy
[00:13:22] Toni: Yeah. So iTunes, they solved that problem. Right?
[00:13:26] So I can I mean, it's it's not like I could go nuts because I didn't have any money for this, but iTunes was a great place to go and, you know, buy some records that That kind of avoided this whole going to the store kind of
[00:13:37] Mikkel: thing? Yeah.
[00:13:38] Toni: Which I think was great. could put it on your iPod. They built this whole ecosystem, this golden cage, fantastic
[00:13:46] Mikkel: They were raking in the
[00:13:47] Yeah. Lot of money.
[00:13:48] Toni: Fantastic kind of business case. And, um, then those Swedish guys came along.
[00:13:56] Mikkel: Yeah.
[00:13:57] Toni: And they're
[00:13:57] just like, no.
[00:13:59] Screw all of that. Just click this button here on on Spotify and listen to whatever you
[00:14:04] Mikkel: want. Yeah.
[00:14:05] Toni: And you know what? If you let me play, you know, adverts, then you can listen to it for it for free.
[00:14:16] I mean, that's just crazy. And also, by the way, the whole story of Spotify executed this thing, insane. Um, insane. Right? So What many people don't know is actually they, um, gave the big studios like Warner Brothers and Universal and so forth.
[00:14:31] They're like they gave them, like, shares of Spotify
[00:14:34] Mikkel: Yeah. Yeah. Not a small. Not like, hey, you get
[00:14:36] Toni: no.
[00:14:36] Exactly. All of those studios, uh, massive shareholders in Spotify, Which basically broke up the whole market for them Yeah. Versus Apple and iTunes bullying themselves into it.
[00:14:47] Mikkel: Yeah. Yeah. Yeah. They had so
[00:14:48] much leverage, and
[00:14:48] then it's like, boom,
[00:14:49] Toni: They had. Um, and then Spotify basically, you know, flipped the script on the whole thing and basically, you know, unified the whole studios, which then gave them this crazy advantage. And suddenly and I mean, iTunes 2 degree is kind of less so affected.
[00:15:03] Well, You didn't need to go to the store anymore anyways, but he also didn't need to buy anything anymore. You just had it there. You just had it there all the time. And Having a thousand songs in your in your pocket, who cares? I actually had now a billion songs in my pocket.
[00:15:19] Mikkel: And I think, actually, what shocked me about this whole thing, because it was very clear that that problem was kind of disappearing, actually, when when Spotify came around. Obviously, it's like they didn't go global, and they they're not even in every single country yet. Right? Keep keep that in mind. But what baffled me was how long it took for Apple to adapt.
[00:15:38] And that's, I think, the whole, well, we're still earning lots of money. Yeah. Do we really wanna shift it? And, you know, so you're kind of also locked in to a degree to kind of, You know, get the high and then also the low.
[00:15:49] Toni: but also, actually, if you go 1 step earlier, I just remembered that, um, you know, what what paved the way for iTunes was actually Napster.
[00:15:57] Mikkel: Yeah.
[00:15:57] Yeah. True. Yeah.
[00:15:58] Toni: Napster was the beginning.
[00:15:59] Illegal, though. Minor minor issue.
[00:16:05] Mikkel: Yeah.
[00:16:06] Toni: So there could have been the Spotify if they instead of, you know, being a legal partner up with the the big studios, I don't think the market was ready there yet. So kind of to be, you know but It was Ben Horowitz, I think, kind of doing, um, doing kind of the the Napster thing. Um, but then no.
[00:16:21] Sorry. This is total
[00:16:22] Mikkel: Sean, uh, no. What's it? You know
[00:16:24] what? This
[00:16:24] Toni: was total bullshit. He did the browser.
[00:16:26] I forgot. Anyway, uh, Yannap's the
[00:16:29] Mikkel: browser.
[00:16:29] Yeah. Good.
[00:16:31] Toni: Oh, wow. Are we gonna edit this out? I'm
[00:16:33] Mikkel: sure.
[00:16:33] Okay.
[00:16:34] Toni: moving on. So the the real thing here really is, um,
[00:16:37] Mikkel: This is like the rock
[00:16:38] Toni: No. Yeah. But the the the the point is basically the the problem disappeared. Right?
[00:16:42] And now iTunes obviously changed into, um, they bought Ay. Um,
[00:16:51] Mikkel: Yeah. forget.
[00:16:55] Toni: I forgot as well. But now it's kind of Apple what
[00:16:58] Mikkel: Music? Music.
[00:16:59] Yeah. Yeah.
[00:17:00] Toni: Right? Um, and basically kind of that's what it is now.
[00:17:02] Mikkel: I think so the point is, like, you You won't just go from waking up 1 morning and then, uh, the problem is gone.
[00:17:08] No 1 no 1 needs this anymore. They all canceled. That's not how it's gonna play out. Um, so you will see the signs here. let's move to the next 1, and it's actually eerily close when you look at the case Yeah.
[00:17:20] We marked down. But this is really where a buyer behavior is changing. And you will probably see this, you know, commonalities in the cases, but we'll try and portray it a little bit differently Because we picked Blockbuster. Again, just to depict how old we really are
[00:17:36] Toni: And so, I mean, I never bought anything from Blockbuster.
[00:17:39] Yeah.
[00:17:39] Mikkel: I worked there. I mean, way back.
[00:17:41] Yeah. Yeah. Yeah. Way back.
[00:17:43] Toni: Maybe it's also an East Germany
[00:17:44] Mikkel: thing.
[00:17:45] Toni: You know? All of those Those those those American brands, you know, it took a little bit longer.
[00:17:51] Mikkel: So the so the thing is, I I remember When, uh, when the first couple of smarts smartphones came out, like, with a touchscreen so we're talking before the iPhone.
[00:18:01] And I also remember the iPhone, I was like, Why can't I have my phone on this, or why can't I go on the Internet, and all those things? And then as everything progresses, like, why can't I watch movies on this thing? I can hear music. Why not movies? Right?
[00:18:13] I don't wanna, you know yes. I wanna watch that new movie, Jurassic Park, but do I wanna, you know, hop on my Yeah. Exactly. Do
[00:18:20] I wanna hop on my bike in the rain and go down there, see that they don't have any rentals I've had left, rent something else, bike back, and then return it the next day. It's like, no.
[00:18:30] I don't wanna do that. I'll just download it on Napster. Thank you very much. It's like, that's so I think there was a shift in the whole behavior of people of Where they
[00:18:40] Toni: Shit. It's called Netscape.
[00:18:43] Mikkel: You
[00:18:43] called it NAFTA.
[00:18:44] Yeah. Yeah.
[00:18:45] Well, edited, Quotation
[00:18:47] marks.
[00:18:47] Toni: Shit.
[00:18:49] Mikkel: Sorry, Ben.
[00:18:50] I know you're
[00:18:50] listening. Yeah.
[00:18:51] Toni: Beers on me time.
[00:18:57] Mikkel: So I think
[00:18:58] I I think the sign is really
[00:18:59] Toni: We'll meet at me to Jason's place. Okay? Yeah.
[00:19:01] Mikkel: Yeah.
[00:19:02] Let's move on. I think the sign is really that there's either, you know, usually new innovation happening or there's external changes Driving changes to consumer behavior. And I think the best example you've seen recently is COVID that drove a lot of change in behavior.
[00:19:18] Like, folks
[00:19:19] Toni: You need to be careful saying best. Right? But basically, that changed a bunch of things
[00:19:24] Mikkel: Yeah. Yeah.
[00:19:25] Purchasing groceries online.
[00:19:27] Toni: Yes. Um, and you could say it changed a lot of things back almost. Yeah.
[00:19:31] Right? Kind of that's that's what this whole tech bubble is actually about. It's like everyone's like, okay. Now we're gonna be digital for forever. Everything's gonna be digital, and it's like, ah, well, you know, not actually.
[00:19:39] But let's get back to kind of the blockbuster thing. Right? So the,
[00:19:43] The the
[00:19:43] the buyer behavior I mean, you could say it became, uh, more lazy. You know, everyone was was navigating towards the lazier
[00:19:50] Mikkel: say on demand was kind of the thing you were used to being able to make your travel plans on phone and know when to Hop on the train. Right? You could text someone.
[00:20:00] You couldn't do that. You
[00:20:01] know?
[00:20:02] Toni: So no joke. I was at my mom's the other, I don't know, month or something like this.
[00:20:07] Um, and I I looked at her and kind of I honestly asked her. So, mom, um, before the phone and the iPhone and stuff, how did people meet, actually? I mean, how did you how did you say, hey. We're gonna meet at this place 2 PM. Be there or be square.
[00:20:28] I mean, like, how did that actually happen? Right? Kind of I don't I don't even know how I I I don't know how this worked, honestly. Honestly.
[00:20:36] Mikkel: They sent a letter agreeing, you know, 3 weeks
[00:20:38] Toni: out.
[00:20:38] No. But, also, they didn't have any agreements. They just walked over. As I knocked on the, hey. Is it time? No. Okay. Well, you know, walk to the next 1. No. It's like, um, when I think about this now is, uh, even the planning to get
[00:20:51] Mikkel: Yeah. Yeah.
[00:20:52] Toni: You do this, you know, while you're walking out the door.
[00:20:55] You're doing this basically on the fly. Right?
[00:20:58] Anyway,
[00:20:58] I'm not sure where we're going there, but it's like that's kind of the that's kind of the the unlocks It kind of happened that changed everything in a completely different way. Right? You can say in the Blockbuster Netflix kind of case, it was like, well, Netflix was basically betting on that Internet bandwidth is gonna be good enough eventually, uh, so you could watch this
[00:21:15] Mikkel: thing. Well, I don't know if they knew, but, you know, but but but just to say there were a couple of changes happening back then. You also had ecommerce really Getting bigger and bigger and bigger and people getting used to, wow, I can just order it and it'll arrive by mail. And that's where Netflix really started when
[00:21:28] you think about it. It was, You know,
[00:21:30] I don't wanna say mail order because you didn't own it.
[00:21:33] It was mail rentals, I guess. Um, and I think that's just where you'll notice that change where people got more savvy with Tech and the Internet and all that stuff and technology caught on, um, and that drove changes in consumer behavior. And that's that's Definitely something to watch out for. Right now, you have 1 thing with AI, for example, where people will add, yeah, we're an AI company, and then people expect that there's, you know, A nice little chat browser where they can do prompts, and it's not there. Right?
[00:22:00] Toni: No. I mean and then there's I mean, this is this topic is actually centuries old. Let's just be honest about that.
[00:22:07] Right? So this is not a lot of PMF. Oh, cool. New topic. No.
[00:22:10] This is, like, been going on for a while. There's lots of actual research. So funny. Who was that? Who was that?
[00:22:15] We had we had Dave Boyce on the show the other day. Um, you know, probably aired by now, uh, when you're listening to this. And, um, he was saying, hey. We are playing scientist All the
[00:22:23] Mikkel: time. Yeah.
[00:22:24] Toni: yeah.
[00:22:25] Yeah. That's totally what it is. No. And then you have actual scientists. You know, you you could say, like, hey, is management is that Is that a science or is it not?
[00:22:33] But you have extra scientists that can now think about, you know, what are the disruptive forces kind of for your business. Right? And, you know, Porter's 5 forces and all of that stuff.
[00:22:41] Mikkel: folks developing the god particle or whatever. Right? You know, there's No. This is
[00:22:44] Toni: You know, this just hobbyist.
[00:22:46] No, but it's, um, um, uh, my my point is, These new technologies, they will mess with your business.
[00:22:53] Mikkel: Yeah.
[00:22:53] Toni: Like, let's just be clear about the and, um, uh, you know, the Internet messed with of those business that we just talked about, basically, that's actually what happened. Right? And probably AI, and I hate I hate the topic so much.
[00:23:06] It's I think it's overhyped. I think it's overdone. Blah blah blah. But, yes, you have to recognize. You have to you have to, um, you know, understand That 1 way or another, this thing is definitely going to mess with the business that you're in.
[00:23:21] Yeah. And it might mess In good ways or bad ways with your job, by the way. Right? So there's also a PMF for you as a person almost that you suddenly need to think, which is the scary thing, actually. it's like, ah, it's this company and the product.
[00:23:32] Who cares? Let me have a better product. No. This time it's like, no. Actually, this machine is a better product than you.
[00:23:39] Mikkel: But I think it's also, like, you can use some of those trends obviously to to your advantage. We're talking about Signs that you're losing product market fit. But think about the Robin Daniels we had on the show and the work they did at Matterport.
[00:23:52] They basically disrupted themselves. They had they saw the emergence of the iPhone. Right? And it was like, hey. Let's try and get this tech onto the iPhone.
[00:24:00] Obviously, lots of resistance to navigate, Which is why, you know, it's so dangerous to not, you know, disrupt yourself. So anyway, go back and listen to that episode.
[00:24:07] Let's move to the next
[00:24:09] Toni: The the next 1, it's like 2 apple x apples.
[00:24:13] Mikkel: Great.
[00:24:13] Toni: It's
[00:24:13] just it's just because we're using Apple too much,
[00:24:15] Mikkel: because they're so big.
[00:24:17] Toni: Yeah. Exactly.
[00:24:19] Um,
[00:24:19] storage on the iPhone.
[00:24:20] Mikkel: Yeah.
[00:24:22] Toni: And, um, this was like, this was like a biggie, uh, for a long time. Right?
[00:24:28] Because you, uh, you had to opt When you bought the phone, which you have for usually 2 years, which how much storage do you wanna have on the phone? And, um, and this was a real pain. You know? If you didn't have the money, you kind of went for the smaller thing, but the camera was really powerful. So really quickly, like, it says, like, uh, no No.
[00:24:47] No. You know, when you took a picture, it's like, uh, storage is full. Yeah. I mean, it that was honestly, that was
[00:24:53] Mikkel: And, honestly, I hated it. I ab I was absolutely disgusted when you look and it's like, do I need 60 gigabyte or a hundred and 20. I kinda really want the hundred 20, but this is is disgusting.
[00:25:03] No.
[00:25:03] Toni: But also, you know, once kind of the next, you know, iterations of the iPhone came, it's like, well, you know, the they didn't even sell it in 32 anymore Because like, oh, then you could take 20 pictures, then 32 is full.
[00:25:16] Mikkel: Yeah.
[00:25:17] Toni: Because it's like a 20 gazillion megapixel
[00:25:19] Mikkel: Yeah. Um,
[00:25:21] Toni: So and the the interesting thing is, right, I mean, this was a massive profitability thing for them. Right?
[00:25:26] Is it is it a hundred 20 and 250 gigs? It's like, they don't
[00:25:29] Mikkel: It's the same cost for them
[00:25:30] Toni: it's a 5 5 dollars more for production. Right? Kind of.
[00:25:33] That's the thing. But they basically kind of charged, I don't know, not double, but, like, 30, 40 percent higher. Right? So All of that is sweet sweet profit right there. Right?
[00:25:42] then what happened, and it actually made click for me super late, like super late, because usually, you think about like online store just like Dropbox or Box or kind of all of these things and it's kind of an awkward integration with your, uh, with your pictures. They can do it, by the way. It works. We did it. But the much simpler solution is you just do an what is an is it an iCloud?
[00:26:02] ICloud storage or something like this?
[00:26:04] Mikkel: Plus, you also have streaming services now where you don't need them on your device.
[00:26:08] Toni: No. But it's I'm I'm just saying. Right? It's, um, you just buy I think My wife and I, we have, like, the family set up, like, I think we're sharing, like, 50 terabytes.
[00:26:18] Mikkel: You must have a lot of pictures.
[00:26:20] Toni: T. Not gigabytes, terabytes. Um, kind of we went for this subscription.
[00:26:25] Right? And what happens now, I we always, by default, buy the smallest phone possible, which is like, it's still gonna be 250 gigabytes, by the way. because, Yeah. You're not looking at every single picture all the time, which basically means what the iPhone does, it stores the low resolution version of it, when you kind of scroll up and down, that's what you see. but the actual high resolution is just deleted from your phone and it lives in the cloud
[00:26:50] Mikkel: Yeah.
[00:26:51] Toni: Which basically made this whole thing disappear of, oh, you can't store anything anymore. Right? The only thing we get is I upgrade your iCloud storage, which, you know, 50 terabyte doesn't happen anymore. But, um, it's another case. And again, kudos to to Apple, you know, disrupting themselves here
[00:27:09] By taking the sweet sweet profit margin and kind of flushing it down the toilet.
[00:27:13] Because the the the the, you know, cloud storage, Not that profitable. It's it's not that profitable as that. I I mean, the iPhone, basically, I think in history of the planet has been the most profitable piece of anything
[00:27:26] Mikkel: Yeah.
[00:27:27] Toni: And and cloud storage is just so undercut by AWS and Azure and stuff. Like, it's, you know, this is not this is not so super profitable anymore, But they realized that this is where the market is going, and then they kind of wave goodbye to this.
[00:27:38] Mikkel: Yeah. And so I
[00:27:39] think what's really important is the sign is really around the willingness to pay at the end of the day.
[00:27:45] Right? And I think you and I, we discussed there is, like, 2 dimensions. Either you the utility drops while the price is the same, which is essentially what happens with the storage. Uh, if they had kept that pricing model, The utility just wouldn't be there, honestly, and they wouldn't be willing to pay or even able to or prefer going somewhere else. Right?
[00:28:03] Um, and the other case is, obviously, we've, You know, I thought a lot about this in, you know, some of our episodes where we've talked about price increases and how it compounds and is such a magical way to grow your business. But try and, you know, extrapolate this 5, 6 years out. The customer has an exponential cost on their end. Have you then justified that with Additional functionality. And I think this is absolutely critical.
[00:28:26] And that change like, this problem can be self inflicted or Or it can be inflicted by change, uh, in the market, right, by technology, by consumers, by competition.
[00:28:36] Toni: Yeah. And I think the the really cool thing here is they, um, they actually increase utility, decrease price, Basically, at the same time. Right? Yeah.
[00:28:46] and, um, they they found a solution that is, um, not making you feel like you have less you have less storage, comparatively speaking on your phone, but you never needed all of that storage anyway. Right? So kind of they found a way to kind of to to, you know, hit, uh, you know, on both ends, But also, um, knowing that online storage is kind of perceived differently, they made this price ridiculously low.
[00:29:10] Mikkel: But even more non obvious, business challenge wise, they've commoditized that part product. Right? They they they are in a commoditized space. So there's, like, to your point, there's lots of competition there on cloud storage.
[00:29:23] Right? And that's just another factor as well, I think, with with this piece, what might happen for some. So I'm thinking about all the calendar booking tools
[00:29:30] Toni: No. Actually actually, kind of just to kind of stay in this vein for a second, what they what they have done is they basically presented an easier solution than the Dropbox. Right? That's actually what they did kind of because that's what we had before, uh, kind of a, you know, Dropbox. You have it on your phone, and then, basically, everything that's goes into the photo folder is being uploaded.
[00:29:49] But it would seem to go and delete the photos, actually. And what, uh, Apple is doing, they're just doing this, it's just automatically
[00:29:55] Mikkel: Yeah. Yeah.
[00:29:56] Toni: don't need to care about it
[00:29:56] Mikkel: then probably some smart listener will go, Well, you can have the iPhone automatically delete the photos, but then you
[00:30:01] have to, uh, do that.
[00:30:02] Right?
[00:30:03] Toni: I need to teach
[00:30:04] Mikkel: yeah. This is like, no. Path of least
[00:30:07] resistance. So
[00:30:11] Toni: I think, you know, what are the take there's some cool stories and stuff. I get that. But takeaways here, We took some very non saaS, non b to b big examples here to kind of build the case.
[00:30:25] Also, to show you and maybe your CEO, it's a normal thing. These things do happen. Don't get married to, you know, you having the PMF check mark. It it might be fading away. And it that's okay.
[00:30:36] I need to be thinking about this. I need to be thinking about this not only as a CEO and founder, But as a commercial leadership team as well. Right? Because a lot of your metrics will kind of cling to that 1 thing or will really come out of this thing. And then we talked about a couple of different ways to think about it.
[00:30:51] You easy gets redefined, the problem suddenly kind of disappears, buyer behavior changes. And, you know, this is like a PLG thing, actually, kind of. That's buyer behavior changing, by the way. then, you know, unable to to kind of pay necessarily or the utility of whatever you paid for kind of decreases for you. Right?
[00:31:07] And there are probably a couple of others, but I think that was a really cool list to kind of go through. And, um, Again, don't shy away from that stuff. lean into it rather because that's just that's just the laws and physics of of how the market works and And try and tackle that conversation, um, you know, if you see it, it needs to be done.
[00:31:24] Mikkel: Yeah. That's it.
[00:31:25] Toni: Thanks everyone for listening, and, uh, see you next time. Bye bye.
[00:31:28] Mikkel: Thank you. Bye.