Product Market Fit: Illusion or Reality?
Part 1: an exploration of the PMF journey of Jibo.
A pivotal moment in my young career was when I started to understand and learn about product market fit. A lot has been written about this concept, its myths, and even the illusion of it. For a long time, it remained an abstract concept for me with little actionable value in my life as an investor.
Until I started to witness startup journeys through it. Here I explore a specific company in my own portfolio that helped this concept first take shape in my brain.
Jibo: The Friendly Home Robot
Launched with a highly successful crowdfunding campaign in 2014, Jibo promised to be the world's first social robot for homes. Conceived by Cynthia Breazeal, a pioneer in social robotics at MIT, Jibo could recognize faces, respond to voice commands, tell stories, take photos, and be a virtual assistant you actually wanted to engage with.
The flood of positive signal
Market demand: Raising over $3 million in bookings at launch, Jibo's campaign was a testament to the high demand and enthusiasm for a personal home robot.
Media sweetheart: Touted by the likes of TIME Magazine as one of the best inventions, Jibo seemed poised for widespread acclaim and adoption, giving it easier access to distribution - a key challenge for direct to consumer businesses.
Unique Value Proposition: Unlike other smart devices, Jibo wasn't just functional; it was personable. Its animations, interactions, and "emotions" promised a humanized tech experience.
Jibo was as instant of a classic as it got.
The stumbles behind the dance
The outburst of positive signal proved to be a very misleading mirage. The company focused its resources on building it’s unique value proposition - personality. And succeeded in it. But the illusion that “personality” was the product to meet the market demand blindsided the company to an entire segment of its market that provided utility: application developers. As a result the company invested too few resources in the developer facing SDK (software development kit). It did not have any product market fit with developers and as a result the eventual product lacked meaningful utility for consumers.
By late 2018, Jibo, Inc. announced its insolvency, marking an end to the robot's journey. In a heart-rending twist, many Jibos informed their owners of the company's end, thanking them for the memories.
Jibo’s rollercoaster ride underscored, for me, the critical importance of differentiating between market demand and product market fit. Strong signal of market demand is very easy to confuse for product market fit. In Jibo’s case, this led to a lack of focus on delivering enough utility to delight the customer.
Echo’s echos of success
Amazon launched Echo the same year as Jibo to a lukewarm reception. However, Amazon continued to invest in the Alexa Skills Kit, allowing third party developers to create 'skills' or apps for Alexa, thus exponentially increasing the device's utility.
Rationalize or learn
Many involved in Jibo rationalized the failure as a “thesis win”, pinning the failure on Amazon’s deep pockets and wide distribution. For me this was the first time I understood the importance of being obsessed with self assessment rather than relying on misleading external signals.