5. What to Do If Things Go Wrong

Introduction: When Your Tests Don’t Work

Reaching Product-Market Fit (PMF) is a challenging journey, and sometimes things don’t go as planned. You might fail to find the right solution fit or struggle to secure market fit despite multiple iterations and experiments. This section focuses on what to do when things go wrong, providing real-world examples of failures and lessons learned.

Let’s start with an example from O Boticário, where Bianca shares the difficulties they encountered while building a new solution.

Real-World Example: O Boticário's Challenges

Mistake 1: Lack of Integration with Existing User Journeys

One of the key difficulties O Boticário faced was the lack of integration with their existing sales representative app. Due to technological constraints and reliance on third-party solutions, the new tool was built separately from the main platform that representatives were already using. This resulted in friction, as users had to adopt a new tool that wasn’t part of their familiar workflow. Ultimately, this forced O Boticário to refactor their product to better integrate with the existing system.

Lesson: When users are accustomed to a particular journey or tool, any new solution needs to be seamlessly integrated to minimize disruption. Creating something apart from their current experience can lead to low retention and user dissatisfaction.

Mistake 2: Underestimating the Digital Literacy of the Audience

O Boticário’s sales representatives were primarily from socio-economic classes C and D, with limited digital literacy. This required the product and design team to rethink the usability of the tool, ensuring that it was simple and intuitive. They faced significant challenges motivating users to adopt the new digital channel.

Lesson: When targeting users with limited digital experience, usability should be a primary concern. Simplifying the user experience can significantly impact adoption and engagement.

Mistake 3: Premature Scaling Without Strong Retention

Another mistake O Boticário made was investing heavily in acquiring new users before their product was ready. They ran incentives to get more representatives using the digital tool, but without solid retention, they lost many of those users soon after. This was a costly lesson in understanding when to scale.

Lesson: Don’t invest in user acquisition until you have solid retention. Scaling too early without ensuring a good user experience can result in wasted resources, as users will drop off if they don’t find consistent value in your product.

Mistake 4: Focusing on Vanity Metrics

O Boticário initially tracked the number of “active stores” as a key metric, which measured the number of sales representatives creating digital storefronts. However, this metric didn’t reflect whether the stores were being used effectively or whether they were generating sales. Over time, they realized that they were focusing on a vanity metric that didn’t truly measure success.

Lesson: Vanity metrics—numbers that look good but don’t drive the business forward—can be misleading. Focus on metrics that directly impact product performance and business outcomes.

Cultural Barriers: Aligning Stakeholders

The team at O Boticário also struggled with internal cultural barriers. The company was undergoing a digital transformation, and many stakeholders didn’t yet see technology as a strategic enabler. Early on, business stakeholders dictated what the technology teams should build, rather than collaborating based on data and user needs.

Lesson: Build strong collaboration with stakeholders by using data and clear goals. Instead of rejecting their suggestions outright, understand the underlying business goals and show how your product strategy aligns with them.

Real-World Example: Nubank's Challenges

At Nubank, they also encountered several challenges while developing their PJ (business account) products. Here are a few key difficulties they faced:

Challenge 1: Scaling During the Pandemic

Nubank’s PJ team launched in 2019, shortly before the COVID-19 pandemic began. The pandemic brought challenges like talent shortages and currency devaluation in Brazil. Nubank struggled to grow its teams at the speed required to develop the PJ product line.

Lesson: External factors like pandemics, talent shortages, and economic downturns can heavily impact product development timelines. Flexibility and patience are critical during these times.

Challenge 2: Misaligned Focus on Customer Segments

Initially, Nubank was heavily focused on the personal banking sector. When they started working on the PJ product, many internal stakeholders weren’t used to considering business clients in their discussions and strategies. Over time, the PJ team had to work to shift this mindset across the company.

Lesson: If your company is expanding into a new market or customer segment, ensure that your entire organization is aligned with this shift. Changing internal culture can be as important as external product development.

Challenge 3: Overcomplicating MVPs

Nubank realized, after launching some features, that they could have built simpler MVPs. For example, they spent too much time developing unique features for the PJ debit and credit cards, which delayed the launch unnecessarily.

Lesson: MVPs should focus on delivering the core value proposition as quickly as possible. Don’t over-engineer or add features that aren’t critical for the first iteration.

What to Do When It’s Not Working

If your experiments aren’t working or you’re struggling to find solution fit or market fit, here are steps you can take:

1. Reassess Your Hypotheses

If your initial tests aren’t producing the results you expect, go back to your hypotheses. Are you targeting the right customer pain points? Are your assumptions about the market still valid? Re-evaluating your hypotheses can provide new insights that might lead to a better product direction.

2. Iterate on Your Product

If you’re not finding product-market fit, consider pivoting or refining your product based on feedback. Sometimes, minor iterations—such as improving usability or adding a critical feature—can make a significant difference.

3. Revisit Your Audience

If your product isn’t resonating with your current audience, you might be targeting the wrong segment. Explore whether a different customer segment would be a better fit for your solution.

4. Pivot or Transform

If your market or product is no longer viable, you might need to pivot. Many successful companies pivoted before finding their ultimate product-market fit. Examples include:

5. Learn from Failures

Even if your product doesn’t work, there are valuable lessons to be learned. Failure can provide insights that help you avoid making the same mistakes in the future.

Final Thoughts: Keep Evolving

Achieving product-market fit isn’t a one-time event. The market, competition, and customer needs are constantly evolving. Companies like Google+, Orkut, and ICQ lost relevance because they failed to keep up with market changes.

If your product starts losing traction, be prepared to iterate, improve, or pivot. Continuously listen to your users, monitor the market, and stay agile.

As you wrap up this lesson, remember that even the biggest companies face setbacks. Your ability to learn from mistakes and adapt will determine your success.