Product-market-fit (PMF) is “the only thing that matters” — that’s a widely quoted line from a superstar venture capitalist, Marc Andreesen. For early-stage startups, the million-dollar question about finding PMF, therefore, is: how do you know if your product is a hit? The easy answer is: when your customers use it.

But the reality is a bit more complicated than that. It’s more than just tracking if your customer uses your product. It’s also seeing which customers use it, how they use it, knowing what compels them to keep using it, and if your product is used the way you intended.

When we talk about what PMF is and how you can measure it with product analytics, the key question for startups looking to measure PMF is: how to use your data to improve your product into one that customers find valuable.

These questions around PMF were discussed in-depth during a learning session moderated by Casie Millhouse, Co-Founder of Element XR, in conversation with Rafael Loh, Solutions Consultant APAC at Mixpanel. Rafael started the discussion by pointing out that “most companies are sitting on a gold mine of product data and don’t have the analytics tools to make it useful.”

Product analytics help startups better understand how valuable your product is to your users. At the end of the day, Rafael says we are “all building products for someone — users!” The dilemma faced by most early-stage startups that are on a journey to find PMF is how to measure PMF when they haven’t found it yet.

Rafael said, “since every startup has a different journey, the need for product analytics evolves according to the stage of the journey.” Basic product analytics needs are around analysing user acquisition and conversion analytics.  As the product matures, startups need to build a data stack to collect and connect more data sources for a more comprehensive view of how people engage with their product, to better inform product decisions. In the final stage, organisations build a culture that is data-driven and must continually ask questions to verify product development decisions.

Also read: Connect with these X-PITCH 2021 startups through e27 Pro

“You need to attract the right users so you can get more data,” said Rafael. “It’s really about analysing usage at the start to find out where users are coming from, who they are, why they drop off, at which stage they drop off, and you might want to compare conversion rates between users and time periods” he added.

Data thus becomes the fuel for iterative product development and experimentation: as product teams release new features, they will need advanced product analytics with the right tool to know if these new features are indeed having a positive impact.

Rafael also explained that making it easier for product teams to get the right answers to make development decisions is even more crucial when a startup is finding PMF since it allows startups to experiment quickly and adjust their offerings based on these insights.

To the question of whether data collected from concept sales or test pilots are viable for finding PMF, Rafael said that this data can “never be 100 per cent but it does give a good idea of how the customers see your product. It gives you your first direction.”

The key learning about PMF is that it always changes — customers change, products change, and business models evolve to adapt to changing market conditions. The time needed to move from using basic to using advanced product analytics to measure PMF differs from business to business.

Why do product teams still struggle to prioritize features and measure their impact?

With so much data at their disposal, Rafael thinks that many product teams are still not confident that they have the right analytics to make decisions around product development. Rafael points out that this often has to do with startups trying to answer product and user behaviour questions with tools that don’t quite do the job.

Some startups try to use marketing analytics to answer questions about their users, but it cannot address key questions around customer engagement and retention such as: why and how customers are dropping off, where they are dropping off, and how much time passes between activation and drop off. Knowing what users do and why they stick with your product is the key to measuring PMF.

Startups are also often attracted by codeless analytics, but a lot of no-code tools are not as precise and lead to poor data tracking. On the other end of the scale, in-house solutions using BI tools like Tableau or SQL are often slow to implement and require technical knowledge. Mixpanel’s self-serve analytics balances these two approaches and offers both depth and flexibility with the right ease of use. “Mixpanel does not require teams to have the technical knowledge and they are empowered to get the precise metrics they need without the need to rely on technical teams”, said Rafael.

Also read: Gearing up for the new normal: What do VCs want and how can startups ace their funding applications

Having an Audience that Cares: Why PMF matters

The reason why PMF matters is that “if you address a market that wants your product then you will succeed, even if your company does not have the best product features or best business model.”

According to Rafael, finding PMF is about identifying features you need to build, having an audience that’s likely to care, and the right business model required to entice your customer to buy the product. That’s why most startups fail, as they tend to address the wrong market or have a product when there is no market need.

“Finding PMF is never a straight path,” Rafael explained. “Combining intuition with being data-informed can dramatically increase your chance of success in reaching PMF. This helps you to get to the point where you’re making products that people want, turning over a profit, and building a sustainable business.”

Common myths about product-market fit

Rafael said that the most important metrics to measure PMF are engagement and retention metrics. “If we look at engagement and retention, it’s never a one-time journey — you might acquire millions of users but retention and engagement, in the long run, is what determines PMF. The question startups must continually ask is: is my product useful for users?”

Rafael addressed some of the common myths that have sprouted around PMF, including:

• PMF is always a discrete, big bang event: finding PMF is never something that happens in a single moment in time.
• It’s patently obvious when you have PMF. It takes time to understand. Finding PMF is a subtle process that needs to be understood as a continuous process.
• Once you achieve PMF, you can’t lose it. It is possible to lose PMF.
• Once you have a PMF, you don’t have to sweat the competition: Rafael cited the case of Airbnb which lost a large amount of business after the COVID-19 hit. They recognised the loss of PMF and changed their product to include digital experiences. While they did suffer losses, the company was able to quickly adapt to find a new PMF. It shows that PMF is not something that will continue forever or can be taken for granted.

Rafael was asked who is responsible for monitoring PMF in a startup. PMF is never always the sole responsibility of the product manager even if they do have visibility into every aspect of the product and business. Product teams need feedback from leaders, marketing teams, and customer teams because these teams on the ground know what is happening in the real world and can provide a full view of what is happening in the market.

What does product-market fit look like?

You can spot some of the classic signs of a product with good PMF, such as, when there is visible excitement among potential customers and there is a genuine buzz when they hear about the launch or look at your product even in the pre-product launch stage. Typically, people are willing to queue for early access to the product.

Post-product launch, PMF is mostly visible from how users stick around and engage with the product. Users are disappointed if your product goes away, and the product organically sees exponential usage and growth.

Cost-efficient growth is also a healthy sign of a product finding PMF: when customer acquisition costs are consistently lower than customer lifetime value, it means that customers are clamouring for your product.

While the above signs are a good representation of PMF, Rafael added that PMF can also be considered analogous to user retention for product teams.

PMF means retention, user activation, and habit-forming

User retention is a very good indicator of PMF. Even for startups with exceptional customer acquisition numbers, active users quickly drop when user retention is not there. For a product where the natural frequency of the typical use case is more than one month, the product enters the “forgettable zone”, and you must re-acquire the customer.

PMF is about defining that habit-forming moment that shows that users are likely to become engaged. Teams looking to find PMF should focus on defining these moments for their products. That is why companies like Slack or HubSpot define this habit-forming behaviour in terms of “x out of y days in which the product has been used,” said Rafael.

Also read: These 3 Taiwan startups are looking to expand in Southeast Asia

Therefore, product enhancements should be done to increase retention and engagement metrics. Rafael said product development should be about asking “is the new feature allowing users to stay in the product and get a better experience?”

Rafael pointed out that a key aspect of Mixpanel is that it allows you to see if new features help in retaining users. “We need to know if a new feature is helping customers find more value in the product. This is one way to find PMF. The second way is to look at reverse or negative metrics. If they cannot find what they are searching for they will churn out and leave,” he continued. The idea is to look at potential reasons you are not retaining users, he explained.

Key takeaways on finding PMF

Finding PMF is a milestone that makes fundraising easier. VCs will be knocking on your door the moment they see a PMF. Rafael said that PMF can be discovered in a scientific and repeatable way. It is closely linked to retention, and you can find it by understanding the “Aha” moments and habit-forming moments to define and optimise your activation funnel.

Finally, leveraging strong product analytics tools like Mixpanel, can help you gather measurable and actionable insights to guide you along this journey of finding PMF. To listen to the full discussion between Casie and Rafael, click here to view the full webinar.

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This article is produced by the e27 team, sponsored by Mixpanel

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PouchNATION, Singapore-based SaaS guest management and contactless payment provider for venues and events, has wrapped up an undisclosed bridge funding round from a slew of venture capital firms including SOSV, Artesian, Found Ventures, and Huashan Capital. 

Existing investor Traveloka also joined, besides other unnamed angels.

The round comes on the heels of an unknown amount of convertible notes from SOSV and IndieBio this May, as noted on Crunchbase.

The company has also not disclosed any of its fundings so far. It is also said to be under discussion to raise additional funding round to expand its SaaS system outside Asian boundaries and pursue a global strategy.

According to the press statement, the startup will use the new capital of the bridge round to accelerate its expansion of contactless SaaS hospitality platform as many tourist destinations are reopening in Southeast Asia.

Also read: PouchNATION is changing the game in crowd management tech

Founded in 2012, PouchNATION offers an all-in-one cashless and guest management solution for venues and events using near-field communications (NFC) wearable technology. 

It boasts that the solution helps clients digitise operations and increase guest spend by 30 per cent on average. 

PouchNATION’s newly-launched contactless hospitality platform offers a contactless experience for visitors staying in hostels, hotels, resorts, and theme parks, improving the hygiene standards when travelling. 

Guests are handed an NFC wristband upon arrival that serves as a digital identity, door key, and cashless wallet all in one. This allows visitors to purchase food and beverages as well as redeem breakfast vouchers without having to touch them.

“[Due to the pandemic], many hospitality providers are embracing contactless technology to guarantee higher hygiene standards for their guests,” said Ricardo Santos, PouchNATION’s VP of Growth. “We’ve always felt that faster adoption of technology can play a big role in providing a better experience for the hospitality industry.”

Since the onset of the new contactless hospitality platform, the company claims to have won some high calibre clients including Collective Hospitality, Asia’s hostel company and fourth-largest globally. 

Prior to tapping into the hospitality sector, PouchNATION has operated two verticals PouchEVENTS and PouchVENUES as a cashless payment wristband for events in 2014.  The use of NFC technology enables organisers to manage crowds process payments, collect data, as well as offer events and recreational venues space in Asia.

With operations in seven Asian and Australian nations, the firm is said to have clocked over two million guests and US$100 million in transaction value.

In 2019, the company secured its Series B round led by Traveloka and joined by SPH Ventures. In early 2020, PouchNATION announced another amount of funding from the Indonesian online cinema tickets platform TIX ID.

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Image Credit: PouchNATION

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Traveloka explores IPO option after SPAC merger plans falls through
The Indonesian tech giant had earlier suspended merger talks with Bridgetown Holdings amid a broader souring of mood at Wall Street towards SPACs; The US market will offer Traveloka access to a global, experienced investor base and greater liquidity to finance its regional expansion plans.

Spenmo bags US$34M to grow its smart corporate cards, automated bill payments biz in SEA
Investors include Insight Partners (lead), Addition, Alpha JWC, and Salesforce Ventures; Spenmo offers payables software that brings internal spend management, corporate cards, automated bill payments, approval workflows and accounting reconciliation into an integrated view.

Alpha JWC hits first close of US$300M Fund III
The Indonesian VC is likely to close the fund at US$400M in the next couple of months; A final close at US$400M will make the largest seed to Series B vehicle in SEA; IFC is one of its investors; CTBC Venture Capital has also committed US$3M to the fund.

Evermos lands US$30M Series B to take its e-commerce platform for halal products to new markets
Investors are Asia Impact Investment Fund II (lead), IFC, MDI Ventures, TMI and Future Shape; Evermos claims to have generated micro-entrepreneurship opportunities for 100K+ active resellers across 500+ tier 2 and 3 cities and regencies.

OY! Indonesia bags US$30M Series led by SoftBank Ventures Asia
OY! is engaged in money movement and provides financial infrastructure, both for online payments and offline/cash payments; It acts as a bridge for all economic players, ranging from consumers, business owners, fintech, and banks.

Crescendo-backed Singapore logistics startup mulls US listing
Qxpress, a pan-Asia cross-border logistics company whose investors include a firm backed by Peter Thiel, is weighing an initial public offering in the US as soon as next year; The potential public offering could bump the Singapore-based firm’s valuation to between US$500M to US$1B.

iPhone co-inventor-backed insurtech unicorn bolttech adds US$30M to Series A
Investors are EDBI and Alma Mundi Insurtech Fund; The additional capital will help bolttech further enhance technology and digital capabilities and strengthen its presence in Southeast Asia, Europe, and its other existing markets.

Dagangan nets US$11.5M led by Monk’s Hill to supply FMCG to underserved rural communities in Indonesia
Investors are Monk’s Hill (lead), MMS Group, K3 Ventures, Spiral Ventures, and PnP; Dagangan distributes 20+ private-labelled products, such as rice, brown sugar, and snacks items, and has 20K+ active users that manage over 3,000 SKUs.

Emerging Vision nets US$4M to expand online spiritual wellness services beyond Singapore
Investors are Lightspeed and unnamed angels; Emerging Vision allows users to receive interactive live-streaming consultations with credentialed astrologers, tarot readers, life coaches, and mentors from the comfort of their homes.

Guest management and contactless payment provider for venues and events PouchNATION raises bridge funding
Investors include SOSV, Artesian, Found Ventures, Huashan Capital, and Traveloka; It aims to accelerate the growth of PouchNATION’s contactless hospitality platform as many tourist destinations are reopening in SEA.

SoftBank co-leads US$210M round of ex-Lazada CEO’s luxury marketplace Vestiaire Collective
The startup, helmed by Lazada founder Max Bittner, plans to use the fresh capital to expand in new markets including Asia, as well as develop its technology; Vestiaire recorded an over 150% jump in the number of orders from Asia Pacific in the last 12 months.

iVS rakes in US$3.2M led by Tin Men Capital to expand its video ad platform beyond SEA
Other investors are Kickstart Ventures, Vulpes and SG Innovate; The video advertising enablement platform will use the investment to foray into new territories in the Asia Pacific, namely Japan and Australia.

DiMuto raises US$2.3M in Series A to scale up product development
Investors are The Yield Lab Asia Pacific, SEEDS Capital, PT Great Giant Pineapple, Patrick Vizzone, Ocean Crest Investments, and Asia Capital Pioneers Group; DiMuto uses blockchain, cloud, IoT and AI to create combined visibility between the movement of goods and money on DiMuto Platform.

Komunal lands US$2.1M Series A to boost financial inclusion in Indonesia through neo rural bank services
Investors are East Ventures (lead) and Skystar Capital; Komunal enables societies nationwide to access the highest possible government-guaranteed deposit rates from rural banks in any region without visiting the bank.

SGRecycle bags US$1.4M from Tai Hing Group
SGRecycle is a network of SGRecycle stations placed around Singapore; It allows contactless recycling of paper waste by combining built-in sensors and cloud technology; The stations allow the general public to receive cash incentives or merchant vouchers when recycling waste paper.

Report: Asia takes lead as home of unicorns among emerging startup ecosystems
Asian startup ecosystems are now worth US$1.1T in terms of Ecosystem Value or about 30% of the global total; In general, the Asian startup ecosystems continued to rise in the ranking with Tokyo climbing up from #15 to #9, Seoul from #20 to #16, Shenzhen from #22 to #19, Bengaluru from #26 to #23, and Hangzhou from #28 to #25.

‘At the early stage, valuing startups can be more art than science: Kuo-Yi Lim of Monk’s Hill Ventures
The most crucial consideration is arriving at a valuation that will set the company up for success; This often means managing dilution on the founders’ ownership while ensuring that the valuation is supported by fundamentals that the company can meet, he says.

Meet the startups from the latest batch of Singapore Tourism Board accelerator programme
Consisting of both local and global companies, these startups are working together with travel and tourism industry players in Singapore to help them revive their businesses –which have been hit heavily by the COVID-19 pandemic.

Deconstructing digital banking: How it can cater to the underserved in Malaysia
Despite the flurry of activity, there are three burning questions at the heart of the digital banking industry in Malaysia — ‘where is the path to profitability for digital banks?’, ‘can and will digital banking truly serve the underserved?’, and ‘what differentiates a digital bank from a conventional bank?’.

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Image Credit: Traveloka

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Global participation in the gig economy has grown rapidly over the past few years. Freelance service platforms such as Fiverr and Upwork are among the first visionaries that introduced the world to the potential of the gig economy and remote working.

According to an APAC Workforce Insights Survey by Persolkelly in 2018, 61 per cent of Generation Z tends to look for contract-based roles instead of permanent full-time roles, with 60 per cent of respondents valuing flexible working.

The gig economy is here to stay and will only continue to grow. A recent survey by Microsoft shows that 41 per cent of the global workforce is considering leaving their current employer over the next year, among which millennials account for 54 per cent.

Many of them are poised to embrace the “YOLO” mentality to work as freelancers instead of loyally staying at the same company for years on end.

As the pandemic has reshaped the global economic landscape, workers are now looking for greater flexibility, autonomy and work-life balance, with more free time to pursue their life goals.

The startup dilemma: how to scale up?

The pandemic has also accelerated the pace of digital transformation. Industry leaders have recognised the importance of digital innovation and reimagined how their businesses work with new strategies and solutions.

Startups are an important stakeholder of the digital ecosystem, as they can become industry disruptors who drive innovation. However, most startups are currently facing struggles to scale up as they lack the necessary support or capabilities.

B2B buying dynamics have also shifted rapidly over the course of the pandemic. Sales representatives only have roughly 5 per cent of a customer’s time during the purchase journey as customers can now conduct research and gather information independently through digital channels.

Traditional B2B sales channels such as cold calls or emails have reached a bottleneck, whereas many cancelled exhibitions and seminars over the past year have greatly reduced exposure to potential clients, leading to lower conversion rates and sales opportunities. Without successful scaling up, it will be challenging for these companies to grow.

Also Read: Dinner date with data: How F&B retailers can use retail data to drive sales in a post-pandemic world

Coming next: On-demand virtual salesforce

To win in this B2B sales environment, companies have to be strategic in providing customers with specific and pertinent information that can cater for their needs.

With the new normal economy and ways of working post-pandemic, digitalising sales models has become increasingly important for companies to maintain their market competitiveness. To do so, companies should consider forming their own virtual sales force and leverage the ever-growing gig economy. 

Virtual salesforce refers to activating a network of people who have genuine customer relationships and know-how along with product knowledge, a sales mindset and sales capabilities. Companies can leverage the customer relationships of virtual sales forces to create sales opportunities and business referrals by offering rewards.

While the concept of virtual sales has been very popular in western countries, it still remains in the primary stage in Hong Kong and APAC markets. Studies suggest that the global demand for virtual sales forces will increase by at least 30 per cent due to their extremely high flexibility and wide application.

Virtual sales can push past the limitations of traditional sales channels. While the effectiveness of cold-calling and cold messaging is fading, a skilled virtual sales force is able to create sales opportunities by making use of their interpersonal networks, dramatically increasing cost efficiency. 

Compared to a full-time in-house sales team, a virtual sales force can provide companies and startups with higher scalability and flexibility. Take Hong Kong as an example, where the base salary of a salesperson is around HK$15,000. The bigger the team, the higher the scale of the operational expense.

When sales and marketing departments reach a bottleneck in terms of manpower, headcount, and efficiency, companies can consider expanding their sales force through virtual sales platforms as an effective way to cut down hiring costs by at least 50 per cent on average.

Companies in any industry can also then more adequately plan their payroll finances and dynamically expand their sales team at any time based on performance.

A fairer gig economy

The post-pandemic economic recovery lies in digital transformation and the growing gig economy cannot be ignored. The gig economy provides great benefits for both employers and employees, but a lack of all-around regulation and benefits has failed to provide a safety net for gig workers. This affects the future development of the gig economy ecosystem as a whole. 

Public and private sectors should collaborate closely while legislation has to keep pace with the gig economy’s growth in order to foster a more rapid recovery. Government officials can kick start conversations with different stakeholders to ensure fair and transparent terms of engagement for both employers and employees, while companies can explore the possibility of providing tailored benefits and insurance packages for temporary and contract workers.

In the long term, all sectors should work towards an all-around portable benefits system that provides gig workers with regulated benefit offerings and retirement plans in order to help ensure gig workers’ self-sufficiency over the course of their careers.

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Singapore-based edutech startup T-Lab today announced that it has secured a US$1.6 million seed funding round. Led by East Ventures, the funding round included the participation of K3 Ventures, Blue Elephant Capital, and Plug & Play.

In a press statement, the company said that the funding will be used to strengthen T-Lab’s research and development (R&D) division and enhance the curriculum for providing high-quality Chinese language educational resources. It also aims to acquire more users and upgrade its products.

T-Lab is an edutech startup that provides Chinese language learning for students in the US and Southeast Asia. The startup introduced its T-Lab Linnet Chinese platform in 2021; it claimed to be one of the world’s first AI+Live course teaching systems.

It leverages AI technology to optimise the online learning experience for K-12 students, T-Lab teaching team, and parents. The AI gamification teaching aims to stimulate students’ interests and allows them to enjoy and engage with the courses.

T-Lab also builds its tech to adapt to the unique learning requirements of different countries and markets, as well as the individual physiological needs of students. It also provides a learning management system (LMS) to help teachers create interactive courseware and track students’ progress.

Also Read: Edutech is surging, but here are the 3 issues it is facing

In addition to a technical support team, T-Lab also owns an Education Research Team that comprises international Chinese teachers and a Teaching Team that consists of professors specialising in Chinese language at notable universities such as Peking University and Beijing Foreign Studies University.

The company’s co-founders Gin Zhang and Phillip Zhao started the company when they realised a “serious Chinese language resource and market dislocation overseas.”

“As of 2018, the number of Chinese learners worldwide has reached 180 million and kept growing up to 14.2 per cent annually, while 95 per cent of qualified Chinese teachers are mainly located in Mainland China. Therefore, offline Chinese teaching institutions cannot meet students’ needs in terms of quantity or quality. Students get poor learning experiences and learning results at a high cost,” the company stated.

“Each region has different learning expectations. Meanwhile, offline and online learning institutions still lack authoritative professional experts to formulate, research and develop a complete system of teaching models for different national markets. Despite the mushrooming of online Chinese teaching institutes nowadays, there are still very few applications with AI courses that interact with students’ individual learning needs,” said Zhang.

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Image Credit: T-Lab

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