Product Market Fit of a Fidget Spinner
And what that says about our existing evaluation frameworks
Earlier, I posted an article on how one of the major things we look at is “high pain points that are not straightforward.” The truth is, this is one of the major things we look at, but not the only thing we look at. Throughout history, we’ve seen products and services succeed that weren’t exactly solving a “pain point”; rather, they were addictive, desirable and sticky. These qualities made them popular but if you put them in a lean canvas or a pitch deck setting, I’m not sure they fit neatly under the existing “product-market-fit” framework. Below, I demonstrate this concept through the cases of the fidget spinner, video game industry, and “As Seen on TV.”
How the Fidget Spinner Became Viral
Catherine Hettinger, an inventor from Orlando, originally created these fidget spinners around 25-30 years ago because she was observing angry kids throw rocks at police officers in Israel. She had this idea that these toys would promote calmness in the mind, and would give these kids something to do that wasn’t destructive. However, these didn’t start becoming really viral until around 2017, when masses of students and adults alike started buying up these toys for their supposed benefits around helping with anxiety and ADHD. Almar Sales Co, a fidget spinner manufacturer, reported selling over 20 million units of these in April 2017 to different department stores like Walmart, Toys R’Us, and Party City.
This all seems fine and dandy but let’s imagine that there was an alternative universe where fidget spinners weren’t invented until 2021 and the inventor/founder of this product was pitching to traditional VCs/angel investors in the UK (with no traction except a waitlist and a few pre-orders). What would they say?
“What problem is this solving exactly?” Giving wild kids an activity to do to stay calm.
“Is this the right solution to this problem?” I believe so.
“How do you know?” Um…
“What is this competing with in the kid’s toy space? Does this have a moat/network effect?” Board games, toy cars/horses, wooden guns, bows & arrows, etc. What’s a moat?
“Can you say for sure if this gets more kids asking for fidget spinners for Christmas instead of toy cars and wooden guns?” Um…
“What percentage of the toy market in the UK do you need to have a positive CAC:LTV?” 1%?
“What do you need this money for?” Manufacturing, marketing, team building.
And to be honest, the fidget spinner wouldn’t have a very good answer for any of these questions. Although in hindsight we now know it to be one of the most viral toys in history, this product would make a terrible pre-seed pitch deck. Makes us think…
How Video Games Became Popular (and How the Space Got so Crowded)
The first ever video game were invented in 1958 by physicist William Higinbotham as a way to add something interactive to his annual visitors’ day lab tour (most exhibits, he claimed, were rather boring). Otherwise known as “Tennis for Two” (basically pong), it was a simple game where players turned knobs for adjusting the ball angle and pushed a button to hit the ball to the other player. It became immensely popular, but later on this machine was retired and the scientist never really thought to commercialise this properly. Video games as an industry didn’t actually take off until around 1972 when Atari created Pong (a more advanced version of “Tennis for Two”), and since then video games have mostly been a consistently booming industry (save for the video game crash of 1983).
But let’s imagine that we transported William Higinbotham to 2021 and he was pitching “Tennis for Two” to pre-seed VCs and angel investors in London (again, with no traction except a waitlist and a few pre-orders). Let’s also imagine that we got stuck in a technological ice age and video games were still not invented yet (and we were still using analog radios, iceboxes, typewriters and lead paint). Let’s run “Tennis for Two” by the same exercise as above:
“What problem is this solving exactly?” Existing science exhibits are boring and not interactive.
“How many people think that?” A decent amount of people, according to our survey.
“Is this the right solution to this problem?” I believe so.
“How do you know?” Our early tests show that people would love this idea.
“What is this competing with in the science exhibit space? Does this have a moat/network effect?” Movies, infographics, dinosaur statues…
“Can you say for sure if this gets more science labs asking for Tennis for Two over movies, infographics, and/or dinosaur statues?” I foresee like 10% of science labs buying this to complement their existing plethora of exhibits.
“What percentage of the science exhibit market in the UK do you need to have a positive CAC:LTV?” 10%.
“What do you need this money for?” Development, manufacturing, marketing, team building.
It does a little better than the fidget spinner in this exercise but it still comes out as a fairly mediocre pitch deck, not something that would jump out of the page like Dropbox did in 2008. As we now know in hindsight, video games changed its target market from science labs to kids and young adults wanting digital entertainment. Because video games have been around for so long now (and even the mobile game market maturing), specialist gaming investors have learned to use a separate set of metrics when thinking about investing in them. These include sector, founder/investor fit, gameplay, storyline, features, competition, and studio mission but not so much a traditional “pain point.” That’s because video games don’t really solve “pain points”; rather, the most dominant video games in each genre are the most engaging (both single player and multiplayer), have the best brand name, contain the biggest communities and/or bring something innovative to a genre that other games don’t bring.
Consider the first person shooter genre. On iOS, competing titles include Call of Duty Mobile, PUBG Mobile, Shadowgun Legends, Modern Combat 5, Infinity Shooting, amongst many others. Each of these games have built decently-sized audiences in a crowded space due to variances in theme (some are more realistic, others rely on fantasy weapons), storyline, multiplayer modes, community engagement, and brand. Which goes to say:
In pleasure > practicality industries such as video games, finding a sub-niche utilising the aforementioned elements is extremely important in order to win attention time from spoilt-for-choice consumers.
There are a limited number of products/services who can all compete in a certain industry and still achieve positive unit economics. However, we have not yet hit the limits of sector innovation, and we have so much yet to discover. Every player has to be on their toes at all times and never get complacent.
A Cautionary Tale: The Worst Products of “As Seen on TV”
For those of you that have never lived in the USA, “As Seen on TV” is a generic brand for innovative physical products sold on a toll-free number. Inventors will send all sorts of random creations to them in exchange for a cut of the sales achieved for that particular product. Sometimes, you’ll get really useful items such as the Shamwow cloth (washing up spills and splashes), the Tubshroom (for unclogging the drain), and the Shoe Slotz (a unique shoe storage mechanism that saves lots of space). However, the worst products on “As Seen on TV” are ones that neither solve a pain point nor are engaging and user friendly enough. Items such as the “Bowl Brite” (fluorescent lights for the toilet) are downright useless and creepy, while “My Secret Hair Enhancer” was nothing more than coloured spray paint for your scalp. The funniest one is probably the UroClub, which is “a hollow golf club that you pee into while a green towel discreetly covers your crotch. These items most certainly do not have any semblance of product-market-fit (they might be some of the greatest examples of product-market-misfit).
So what did we learn from reading about these? Everything created has to fill a unique niche and give people enough of a reason to buy/subscribe and refer to their friends. This is a free market after all; consumer decisions dictate what gets curated, what stays on the market, and what goes. When in doubt, pretotype.
What’s We’ve Concluded
There are many different ways a product can succeed. As much as these frameworks help us, if we truly want to predict the next viral (or just profitable) products/services at the earliest stages with accuracy, we sometimes have to bust our mental frameworks and rely on other metrics instead.
Addictiveness, desirability, and stickiness are just as important as practical “pain points.” However, in the case of some of the most useless items on “As Seen on TV” every new product has to either be solving something or introducing an attractive new offering. Not neither.
People and markets are unpredictable at times. Even the strongest pitch deck coaches and startup theory knowledge won’t guarantee you a wildly profitable product/service. That being said, founders should continue to build products/services with discipline because more often than not, these theories and advice hold some truth to them.
We have to be open minded to how products/services are used. Sometimes they become viral and blitzscale from a purpose that differs to the original intent.
We have to challenge ourselves to not get “startup fatigue” which happens sometimes when we look at tons of pitch decks. Instead, we have to try our best to continue to maintain a “beginner’s mindset” when looking at each deck, seeing each individual innovation like a child would. Easier said than done.