Building Products from Scratch
Mark Tisrekas, is the CEO & Co-Founder of TimeWith, which was spun out of Trinity Mirror Group, where Mark was previously (at the time of filming) an Entrepreneur in Residence.
TimeWith is a platform which matches patients to the right qualified therapists whereby therapists get clients and access to a full clinic service in a faster, better and significantly cheaper way.
Before this he built a self-serve advertising platform for Schibsted Media Group and also had his own business called Oba, which was an app that helped people find the right meal. Essentially placing it at the intersection of Artificial Intelligence and nutrition.
Firstly, what is an entrepreneur in residence vs. product?
An entrepreneur in residence is a hybrid, between an entrepreneur’s role and the product manager’s role. For instance, in the UK at least, the entrepreneurs in residence that I know of are brought in to larger corporations and they are funded directly by the corporation in order to asses new markets and create new products in these markets. Entrepreneurs in residence build new companies from scratch, exactly like being an entrepreneur but having a wider access to resources, as well as a larger cushion, which is more similar to what a product manager does.
The difference between an entrepreneur in residence and a product manager, in my experience, is that the product manager usually comes into an already existing vision. There might already be traction in the product and certain operational aspects may have been resolved, but they keep building on top of that, drilling down into the product, the metrics and the users, whereas an entrepreneur in residence has to really define what this company is going to be, run hiring, operations, finance, and all the other facets of a business.
How do you identify a relevant problem?
I like to start by trying to think of the things that I hate, because I think that’s a really important driver to try to make a change. If you have a problem or something that you hate, there’s a decent chance that other people have the same problem.
I think the most objective way, though, that a lot of people undervalue this, is to observe a problem that somebody else is having. So you’re not exactly biased but you’re seeing a problem that somebody else has already voiced to you. I think that’s the best, most serendipitous, “eureka” moment you can get.
There are also other ways of finding problems, which are a bit more technical and analytical. For instance, you might go into an industry that you have experience in and drill down to the actual exchange of value between players, analyse the value chain, and identify a lot of inefficiencies that are happening between these exchanges of players and dynamics. In which case, then you can extrapolate and say, “If there were a solution that covered that inefficiency, would it be interesting?”
Finally, I think there is a more marginal exercise, which is more suitable for the B2C type of products which is the opposite of the “hate” one. It’s about thinking of what is delightful, what would be cool if it happened? You can think about that in a very lateral, open-ended way in any sort of industry, without any kind of constraints at all.
Once you have a relevant problem, how do you assess the market?
Let’s say you have this new idea, now, and you want to assess if you should proceed with it. Basically, the big elephant in the room is, “Can I get money out of it?”. Everybody has a different process and I think business is more of an art than a science, so we should have some sort of process (that doesn’t mean 100% that it’s right). The first thing that is a good exercise for anyone to do is understand the total addressable market. You can start by going top-down and start drilling down to what would be your specific customer, or you can go from the bottom-up, from your specific customer, almost like an inverted pyramid, and understand how big the general market is. If the market is big enough and your target audience is a significant enough portion of that market, so that it makes sense for your investors or for the larger company to fund that project, then that’s a good thing. But obviously in entrepreneurship, specifically, we have seen that a lot of markets that seem very small in the beginning are not necessarily that small, could become bigger, or create a market. So that’s just a check.
The other thing that I personally really enjoy doing is understanding the competition very well, so the consolidation or fragmentation of the market. That’s a really good indicator, specifically for marketplace-type products.
If a market is consolidated, then one player is dominant – or at least a couple of players are dominant – and they really control the market in ways that will potentially make it difficult for you to penetrate it. You could face retaliation if you try to do the traditional things, like undercutting them in price, aggressive marketing, or even a product offering that is unique that you might feel that could get copied.
On the other hand, if they’re fragmented in the industry then you can start attacking the market with an architectural innovation. You essentially become a provider for every single player that is in the market and is alone, which they potentially find advantageous because they could not scale their product economics.
Another thing is understanding what the current competitive advantage is in the market you’re trying to compete in. Who has the best rendition of a product in this market, and why? What does that competitive advantage cost you? Can you copy it, can you surpass it, or is it something that is really solid? Google would be a really good example of a competitive advantage in search that is insurmountable, some would say.
Finally, another really interesting thing about the market would be your capital expenditure structure. So if, for example, you are going into real estate, then just to begin with you need a lot of money up front, whereas if you go and build a business online, the money that you need if it’s a web app, for instance, might be less comparatively. What does that mean for your team’s competence and your skills, by comparison with capital expenditure?
How do you then identify product opportunity?
Once you have a problem in mind, you’re trying to make sure that it’s a real problem. Then you’re building a solution, which is a product that can – in a scalable fashion – tackle that problem.
The way you do that is by going and speaking to potential users or clients facing that problem. You really just have to listen to what they have to say, and specifically understand their user journey. That’s a really interesting way of figuring out from the beginning to the end, what are all the steps the user is taking to be successful at solving that problem? During that journey the user will mention – or hopefully you will pick up on – the several points at which they are facing a waste of time, money, or at which there is a really distressful moment in that process. All of these points are essentially key opportunities for your product to solve, and then provide the value to the customer. If you do that, then that’s a clear opportunity.
In your opinion, what is validation?
It depends on the product, really. If you’re starting a consumer web product compared to an e-commerce product, it’s very different. But generally, validation – or at least as I perceive it – is real commitment from your users or client base, which can then be expressed in some sort of cost for them. When you’re getting commitment from your user, it could either be that the user is paying you already, so you have them transact with you, or that they’re spending a lot of time in your platform product, or whatever it is that you’re building, and finally if you can get them to share their social currency. That’s another really big one and why we’ve seen a lot of landing pages nowadays where you have referral schemes that are becoming more and more popular.
In contrast to that – something I’ve done and seen a lot – we might use some more vanity metrics. For instance, a lot of people clicked on my ad, or a lot of people landed on my web page. But I think that the most important thing to consider at that stage, and it is tricky, is, did anybody really show commitment to your product?
How do you validate your product?
In my previous company, we were building an app that we were going to monetise in the app, so the app would be free. What we thought was a really good experiment was to set a ridiculous price for an app that should be free and see if anybody would buy it. A lot of people bought it and then we made it free immediately because we had already got that validation. So if you are running a consumer web business, sometimes you might actually be able to get the validation through the transaction, sometimes it could be engagement. In our case that worked.
Currently, here I am working at a marketplace for specialised professional services. Because it is a marketplace, it has the inherent difficulty that you need to validate both the supply and the demand. In order to validate the supply, what we did is ask them to produce content, specifically to write articles for us if they want to be onboarded. The onboarding was a lengthy process and finally we asked them for exclusive hours. We actually turned that into a financial commitment from them. We said that for two weeks we needed at least five hours of their time that they would sell to clients. We got that part and validated them. On the demand side what we did is ask every single person that was signing up to our landing page to take a really lengthy – and by that I mean something like five minutes – survey. A lot of people did bounce, but the ones that stayed, which was a decent amount, proved that we were on the right track and now we have an even better idea of who our customers are.
How do you know when you’ve found product market fit?
You know because some sort of metric is going way better than you expect. It could be your referrals, your revenue if you have a product you sell, your general user growth, your acquisition cost is dropping suddenly because there is word of mouth, or you perceive there to be word of mouth. It’s one of those things that, once you’re there you know you’re there (I think Paul Graham said that, actually, in Y Combinator). It’s a positive surprise! I don’t know if there is any formula for product market fit. Usually you somehow grow unexpectedly and magically because you’ve built the thing that your customer base needs and wants.
When scaling, what problems have you faced, and how did you go about solving some of them?
When you’re scaling you have to simultaneously deal with different types of problems, you need to understand: What is the most important problem to be solved, urgently? I’ll give an example.
When I was running my previous company, which was in the intersection of artificial intelligence and nutrition, we had initially built a Twitter bot for our marketing acquisition. It would look at Twitter profiles and target users based on a key word, and then it would essentially infect their Twitter with a Tweet and a link to our landing page.
That was great, and it was converting better than anything I’ve seen so far. The problem is that Twitter blocked us after a certain point, so the mentality changed completely because we were going from hacking an acquisition for free but couldn’t scale, to thinking: Can we optimise the return on investment on a different channel?
So because we’re dealing with food, we actually found Facebook to be very valuable. We’re targeting some brands from different countries. Specifically, we’re targeting a German bread that seemed to be converting amazingly with people in the UK, and because we we’re selling the app, we had to start thinking on a different structure. With scaling, you need to change your mentality rather than the things you do.Looking for a new role?