Product-market fit keeps customers buying through mistakes

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

1. 2:00:15

   this that come from advertising or marketing or sales. So if you kind of split the world into two people, you've got the engineers and you've got the people that sell it. Shape rotators and white cells. And I think both of those people can run into two issues where they become the man with a hammer and they see everything through that. And particularly people that go through like a performance marketing hole, they end up just seeing the customer as something that clicks, something that gives them things. Um, and the big thing for me was really kind of going back to, well, what makes a good product and kind of forgetting advertising or marketing the same way, like someone who's learned kickboxing couldn't kind of forget it, go and do jujitsu and then come back and you combine them. It's actually quite a useful

2. 2:00:56

   combination and for me again product market fits one of those words where it's a little bit like taste it's a little bit like what is that um and they'll be like well your mps score if your mps score says that 40 percent of people like hate the product like what i might give me something like i can drop on my foot like give me a tangible thing and the big takeaway i had was um i got to know james from element um who's like one of the smartest entrepreneurs i know and he's like also annoyingly like a great human being like he's the loveliest guy and uh we kind of worked together I helped him like write a little project and we hung out for like five days and I realized the realization about product market fit which was that if James sat me down at the end of those five days and just said George can I be nice with you like yeah sure mate of course he goes I fucking

3. 2:01:43

   hate you he goes if he said I think this about your girlfriend I think this about your mom I think this about your family dog I think it's all atrocious I hate your country I'd be kind of sat there for like four days going that was one of the worst experiences in my whole life but come friday i'd be back on drink element.com ordering the watermelon salt because the product's that good and that's my realization that product might like true product market fit is could you like fuck everything up and people would still buy from you and the big lesson i actually had from a marketing lens was about five six years ago you'll probably know this sean there was a moment in time everyone's forgotten about now, where Apple released this new iOS change that was supposed to impact Facebook ads, post the whole Cambridge Analytica stuff. And it's just a storm in a teacup

4. 2:02:27

   felt everything at the time and now everybody forgets it. But it was this idea. that Facebook ads are going to die and all these businesses are going to close down. And so many advertisers were furious. This is an example of antitrust. This is an example of monopoly. This is example of abuses of power. How could Apple be allowed to do this? And the US government isn't doing anything. That's what all the advertisers were saying. And I didn't see one. I didn't see one give up their iPhone. I was like, that's product market fair. It's so good that I'll buy it in spite of yeah and that's like the amazon box phenomena you know that it's like complain about amazon's business practices but have like 10 boxes short of your house every day actually buffett used this so buffett made the biggest gains of buffett's life was uh the best investment

5. 2:03:13

   he ever made was his apple investment like six years ago or something like that which is crazy because apple's so obvious it's not like he found some obscure company called in the in nebraska nobody's ever heard of he just literally looked at apple which was like the third biggest company in the world at the time or whatever and just put a huge check into it and grossed like this huge return and this is like the iphone come out 10 years prior like it was no surprise and they were like you know warren you never invest in tech usually in fact you were really good friends with bill gates and you famously didn't invest in microsoft even though he told you to and others did and you've said like i just didn't understand it he goes oh yeah because apples it's not about tech it's about brand and it's about product he goes and so warren is famous

6. 2:03:55

   for he would go like kind of stand in a store and he would ask people questions so like one of his other wins was american express when they had this big crisis like there was a big fraud that happened and american express had like american express had lent this guy a bunch of money because he said he had like a salad oil dressing and then like later they opened up the barrels and there's just seawater inside and they're like oh shit we lent this guy all this money and there's no salad oil to like collateralize and he stood in a store and watched people swiping and he talked to the cashier he's like do you like distrust if somebody's going to use american express now like american express that's that's like of course i like i trust american express with my it's always going to go through so he realized people were mispricing it same thing

7. 2:04:34

   with apple he was like um if you have somebody with an iphone um there isn't like you have to pry it from their dead lifeless fingers to get them to switch by default and he's like that is an unbelievable thing they have unbelievable pricing power and so he made all his money just by like talking to people that i who are iphone users and realizing the extent of the uh the switching cost to them mentally in their head forget even how much you might hate the that's doing it because Kanye West is like the canonical example of that. Like how many ways can you put both feet in your mouth over a decade's period and then still sell out stadiums and have bangers? People will listen to his music in spite of hating him and still not be able to not like it.

8. 2:05:16

   Right. But the thing with Apple that's really impressive is they've even torpedoed their own product. The keyboard makes me feel like I've got cerebral palsy. Like I can't type on the keyboard.