What exactly is bad product-market fit? And how do you spot it?
We spoke with David Shim, Co-Founder, and CEO at Read AI, to find out. David took us through his journey founding businesses that solve problems.
He explored the answers to the questions above and so much more; including when to go free with a go-to-market strategy, the advantages of user interaction, and the power of pulling off the “product-decision bandaid.”
Here we’ve got highlights from the Q&A, but if you want to listen to the whole thing, simply click below and enjoy all the insights. 👇
Q: Tell us about Placed’s mission and how it started out
A: Placed’s mission really was to measure the physical world. More specifically, to measure where visits are actually occurring in the physical world. If you think about it from a website perspective, any good marketing person won’t launch anything without analytics.
When it comes to the physical world itself, there hasn’t always been analytics to determine how many people enter a physical location. How many people enter a Walmart or a BestBuy, for example.
We believed that bringing those analytics out to the forefront would actually drive more actionability based on how people move in the physical world. The approach was called ‘location analytics.’
We knew that privacy was key. And if we're going to build a long-standing business, we need to make sure that we can confidently go out and ask for data without being in breach of people’s privacy.
We decided we would pay people if they let us measure where they go in the physical world. At first, people thought that no one would ever go for that. But we found that people were happy to do so, provided it meant that they just had to install an app, there were no ads, and we didn’t do anything else than what we said we were going to do.
We built an app called Frequent Flyer to get more affluent travelers into the mix, and we built an app where people could make charitable donations. This gave us a different audience segment. We really were able to get millions of users opting in to share their location data, which made that even easier for companies to adopt our technology.
Q: We know that Snapchat acquired you. Do you see the hallmarks of that original company in how Snapchat acts and succeeds today?
A: We definitely see parts of it. I think when we split out Foursquare, the core of Placed left, but I like to think we had a residual effect. I think the residual effect was really in understanding that location is hard. If you're in any kind of city that has tall buildings, the GPS is gonna be super noisy.
I think we really helped Snapchat get accelerated in providing more accurate location data. But they also have an incredible product team.
Even before we came on board, they were building, focusing on maps, on location, and they were partnering with several different companies. We were able to come in and help them fine-tune it.
Q: Anything that you learned in terms of the cultural aspect of bringing three companies together that would change how you would do it again?
A: Make the hard decisions right off the bat, and then don’t kick the can down the street. Right after Placed and Foursquare combined, we waited on a couple of hard decisions to see if it would work out or not. We did this because the probability was that it wasn't going to work out.
In these cases, we should have made the decision earlier, but we didn't. In those instances, when you're making a hard decision, don't rip the bandaid halfway, rip it off completely. You're gonna pay for it later if you don’t rip it off right away. It’ll hurt even more
You need to focus on what your purpose is and be confident. There's always going to be some kind of negative backlash. People asked us why these two companies merged, and why there were layoffs. But the story spoke for itself and the numbers proved out. The growth returned. We made some mistakes and learned from them. That was a huge win for both companies
Q: What made you want to leave Foursquare and focus on Read? How well did your skills translate?
A: Leaving Foursquare was a hard decision because it was one of my big goals to be a winner in the location space. And I think Foursquare very clearly is the winner in the location space today.
That was hard to walk away from. We had built something profitable, that was growing from a revenue perspective, and all those things were great. And it's going to go public in the next couple of years, if not sooner. The question for me was, “Do I want to be in a public market?” I think that's a great thing to do, but that's not my one goal.
If I were to be CEO of a publicly-traded company, that's a win for me. But it’s just another step in the process. When you become CEO of a publicly-traded company, you have to kind of stick around a lot longer.
I'd been in the location space for 11 years, and I was ready for something new. The company was my baby, and I felt it was in a fantastic spot. And so I was comfortable making that move.
I started to become more interested in meetings and how to make meetings more efficient. COVID drove the hyper-acceleration of video conferencing. We had 10s of millions of daily active users pre COVID. So, let's assume you have 30 to 40 million daily active users pre COVID on Zoom, WebEx, Google, and Teams.
Fast forward to today, and half a billion people are using those four platforms every single day. Every single day, people are utilizing it and using it for multiple hours a day. That got me interested, especially from a product perspective.
From a product perspective, video conferencing is a really big market. Let’s say you have half a billion people using it for an hour a day. That's half a billion hours. Let's say that it's only worth $10 In terms of employee time, that's $5 billion a day.
I realized that it was a big market. Now, video conferencing is always going to get better; they're gonna add more features. But there are certain things that they won't do. They're focusing on the core product. They want to build a platform. You're seeing Zoom, WebEx, Microsoft, and Google building out platforms because they’re seeing the number of users on these solutions every day.
They want people to build on top of it and that got me interested. They're opening things up. They're making it possible to add applications on top of video conferences. What are the pain points in video conferencing? Half of all meetings are unproductive. They just don't matter. They're not great.
You find yourself asking, “should I even be in this meeting?” Then you turn off your screen, you turn off your camera, you go on mute. All those things come into play. The reason why I believe that virtual meetings are so bad is that we haven't necessarily learned the tribal knowledge of how to interact with one another through video conferencing.
We've had hundreds of 1000s of years of human interaction, but video conferencing is just so new. Everyone's still learning. With meeting invites being so easy to send, 90% are going to accept without even questioning whether they should be in the meeting. There was an opportunity there to make it more efficient and to make it more productive.
Q: Walk us through Read's first product. What is it? What's the ultimate reason it exists?
A: Read is a meeting analytics dashboard. That's the technical term. But what does that mean? Imagine driving a car today, and you’re driving without a dashboard for 10-15 years. All of a sudden, the dashboard appears. The fact is, people are driving less than they are video conferencing now. So, if there's a dashboard for when you drive, we believe that there has to be a dashboard for when you meet online.
The idea here is that we can go in and tell you, objectively, how the meeting is going. Say you think you’re driving at 60 miles per hour, but the speedometer says you're going 90, you want to be able to know that so you don't get that speeding ticket.
What Read is here to do is establish the baseline. Our first Read dashboard is available for Zoom and WebEx. We want to be able to join the meeting, and start giving you some basic metrics. Let’s start with ‘talk time.’ Who's talking the most? Who's talking the least?
Then, we'll start to go into more advanced metrics like ‘meeting score.’ How's the meeting going overall? The idea here is like we can give you the temperature of how the call is going, then we break it down based on sentiment, as well as engagement.
What's the feeling, at present, as you're talking? Are people excited? Are they happy? Are they sad, disappointed, angry, etc? We want to be able to capture that in real-time. Also, are people paying attention? Are they looking at the screen? Are they looking away? Are they on their phones? Are they doing something else?
Those three things: meeting score, sentiment, and engagement, we want to show you that in real-time. Future iterations of the dashboard will be able to give you a nudge in the right direction. It’s not about telling you what to do; it’s more like a guide.
For example, we could nudge to tell someone that people are losing attention while you're talking about the methodology of the product. Ultimately, no one gets angry because it’s still your choice. If someone tells you up front that a meeting was not good, you might take personal offense.
But if an analytic solution tells you it wasn't a great meeting, you know that it’s probably right. And you’re able to highlight exactly where the dip occurred. Then you can try and mix it up a bit next time around, or even try to pay more attention to the analytics and try to make adjustments in real-time.
Q: Are there any learning you took from the past that influenced this product?
A: The key thing was privacy. Privacy was important at Placed and was critical at Snapchat with the disappearing snaps. We've taken the same approach at Read now. People have questions around you reading their emotions. It’s like Big Brother territory.
Also, what's going to happen with the data? Are you going to replay this and be embarrassed? Is it going to be authentic conversations? The way that we're handling this is by deleting the data automatically within 24 hours. The video and audio data is automatically deleted within 24 hours, only the metadata remains.
We're pushing our technology stack to do it even faster in real-time. Essentially, as the conversation gets scored, we’re getting rid of the audio and video data. And that's going to happen down the road.
But, from a privacy standpoint, it was important to make it clear to everyone that the data is not used for playback. The other thing I learned was, don’t wait for the perfect product before it goes out in the market.
At Placed, we did this and we spent too much time in a silo and not out in the market. Give people direct access to your solution, get feedback, and allow them to interact with it. The faster it’s out there, the faster you can improve it. Get it out there.
Q: How did you guys go into planning the strategy around driving usage?
A: One of the things we said off the bat was, let's hit the ground running. This is a big market. We believe that interactions can be better when it comes to video conferencing. Do you believe in that thesis? Okay, well then there’s an opportunity there.
We wanted to build a team quickly, and we didn’t want to try to scrimp and save until you get product-market fit. We wanted to go after the best people in the market. We were able to bring this incredible talent on board that we were able to scale up the business.
After we hired quickly, and after we started iterating, we started to get beta users early on. And we got feedback. Some of it was really positive, some of it was negative. Then we had opportunities to partner with Zoom and WebEx, and we launched in their app stores. Because we were so nimble, we were one of the first apps out there. We were able to move a lot faster than a lot of the big players.
Because we're a smaller team, we don't have legacy tech, so we can build on top of existing platforms very quickly. That was kind of a big win from an adoption standpoint.
Then we had to deal with the interaction problem. Interactions are hard. Interactions on the virtual platform are even harder. How do we make that easier for us? There's a study out there that says if you’re looking at someone this close in the physical world on a regular basis, you're either trying to date that person, or you're trying to fight that person.
Now, imagine doing that for 7 or 8 hours a day with all these people 5 or 10 inches from your face. That starts to stress you out. You might not know why you're stressed out, but it's your animalistic nature saying that this is stressful!
So, in that aspect, technology can make those conversations so much better. It can make them more productive. They can kind of put you at ease, knowing that someone's kind of watching your back and helping you through the right process.
Q: Since you decided to make it free to use at first, did investors give you a hard time over that?
A: They were very supportive. Education is our biggest challenge right now, and if we make it free, if we make it easily accessible, the education barrier is eliminated. Video conferencing wasn’t getting much traction until Zoom became completely free. It gave a lot of people a taste for video conferencing.
I’d imagine 80 to 90% of Zoom users don't pay for licenses, but if you still have that 10 to 20%. who are, considering how many people are using Zoom because it’s free initially, that's going to end up being quite a lot of people.
I think that was the right play. And I think we're in the same area, we're not trying to go after 100,000 users, we're trying to go after 10s of millions, hundreds of millions of users. I think being free today is going to pay immense benefits down the road.