Ask any founder with an exit or two (or more) under their belt what the hardest part of early-stage startup life is, and most will say the same four words: Finding product-market fit.
Even when a founder has overcome the hurdle of finding and proving product-market fit is identified, they are often tempted to divert focus from their core market and experiment in another seemingly relevant area.
Nick Mirisis, the CEO of K-12 and collegiate digital ticketing and event management software platform Hometown, has a term for this common temptation: peanut butter spreading. Among other reasons, Mirisis' ability to resist peanut butter spread, and, in fact, reversing it at Hometown, is a major reason the edtech software provider has come to stake out enviable territory in its segment.
Under Mirisis' leadership, Hometown's journey to achieving product-market fit illustrates how a strategic focus on core strengths and a keen understanding of market demands can effectively facilitate this critical business milestone.
Many startups and founders struggle to break even due to a misalignment between their product and market needs. This struggle often stems from a deep-seated attachment to their original vision, with little to no room for product adaptation. While founders rightfully take pride in their creations, this emotional investment can sometimes hinder their ability to tailor and evolve their products in response to changing market demands and customer preferences.
The key to success, as encapsulated by Nick Mirisis of Hometown, lies in striking a balance between maintaining the core essence of the product and being flexible enough to adjust to the dynamic business landscape.
"If you're proud of the value you've built, you should be rewarded. But, at some point, you need to understand the elasticity of what someone is paying for," Mirisis said.
When Mirisis took the helm at Hometown, the company had already established a solid foothold in its primary market. However, in an ambitious bid for growth, it had begun to explore adjacent markets beyond education.
"Hometown had achieved significant success and then tested some of these ancillary markets that were outside of education but didn't then also make the same product investments to cater to these segments, such as fairs and festivals," Mirisis said.
Recognizing the potential pitfalls of this "peanut butter spread" approach, Mirisis initiated a comprehensive reevaluation of Hometown's strategy. He emphasizes three principles that guided this reevaluation process: identifying core competencies, aligning with market needs, and effectively allocating resources.
Mirisis and his team at Hometown first worked to understand where their business truly excelled and where customers relied on their products the most. Once these competencies were identified, the team reassessed the evolving challenges faced by their primary users—athletic directors, activity managers, and arts administrators.
After analyzing these challenges, Mirisis had his team focus on directing their product and engineering efforts to solve specific problems within the education sector rather than attempting to cater to every possible external market.
While the process of refocusing their efforts seemed thoroughly built out under Mirisis' leadership, its execution was not without its challenges. Mirisis had to confront the sunk cost fallacy head-on, encouraging his team to reassess past decisions without fear of blame.
"We are now taking a pause... let's look at this through very clear eyes," he said, advocating for a forward-thinking approach that prioritized future success over past commitments.
In an attempt to strategically pivot their business, Hometown adopted a more structured approach to exploring new markets and opportunities. Mirisis advocated for a "startup within a startup" mentality, suggesting the formation of small, focused teams to validate assumptions before committing significant resources to new ventures. This method allows companies to experiment and learn without derailing their core product vision and roadmap.
The CEO's approach to product-market fit extends beyond internal processes. Mirisis emphasizes the importance of reassessing the market regularly and staying attuned to changing consumer needs, specifically in light of significant events like the COVID-19 pandemic.
He also prioritizes data-driven decision-making, moving away from anecdotal evidence and towards quantifiable metrics to guide product decisions.
"When I joined Hometown, we lacked a structured framework for product and engineering decisions," Mirisis said.
This type of approach led to the haphazard development of Hometown's features without clear strategic alignment or measurable impact. To address this issue, Mirisis implemented a more rigorous, data-driven framework that quantifies user behavior and the true value of a feature. The framework evaluates these qualitative metrics through a quantitative approach by measuring how a feature impacts time savings, drives new bookings, reduces operational costs, increases gross revenue, or increases customer retention.
"By administering data-driven practices, we've been able to communicate more effectively with our customers about upcoming features and delivery timelines, enhancing transparency and trust," Mirisis said. "It's also significantly improved our ability to align our product roadmap with our overall business strategy and user needs."
Throughout this entire reassessment and restructuring process, Mirisis was laser-focused on team alignment. In a successful effort to align his team, he developed a comprehensive system to manage and prioritize product initiatives at Hometown, ultimately aligning communication between customers and internal teams.
Hometown established a Product Review Board, which meets monthly to evaluate and prioritize larger product initiatives.
"We've given the product and engineering board complete freedom on small or midsize initiatives," Mirisis said. "But anything classified as large requires the Product Review Board to do a prioritization exercise."
This process helps prevent the start-stop cycle that previously plagued their development, allowing the team to focus on specific features for dedicated periods.
"This allows us to communicate to customers and say, 'This is what's coming next quarter. We are actively working on it.' We know very clearly what the team is working on and we know what the delivery dates will be," Mirisis said.
By operating on an inclusive basis through what he calls the "Sherpa process," Mirisis not only redefined the Hometown product and engineering roadmap but also optimized the environment for communal and continuous discovery.
"This is supposed to be a collaborative ecosystem," Mirisis said.
Hometown has struck a crucial balance in maintaining and improving their product, enabling the company to stay agile in response to changing consumer requirements. As the SaaS provider continues to evolve and grow, Mirisis remains focused on the company's core mission in the education sector.
"More and more, schools are adopting solutions to digitize and simplify their operations across all facets," he said. "Management and revenue management tools for event programming are still very much ripe for disruption."
For other companies facing similar challenges, Mirisis' experience and Hometown's successful product-market fit offer valuable insights into navigating the complexities of a necessary business concept.
"Be fair in your pricing," Mirisis said. "Maintaining a consistent and fair pricing strategy, even as market conditions change. Find an appropriate balance between the profit for the company and the community you are serving."
As markets continue to shift and new opportunities emerge, maintaining a clear vision while remaining adaptable will be critical for companies seeking to thrive in an ever-changing environment. Hometown's journey under Mirisis's leadership serves as a blueprint for success in strategic growth strategies, particularly in the uniquely high-touch and relationship-centric segment of B2B tech in education.
The case of Nick Mirisis and Hometown demonstrates how strategic focus, data-driven decision-making, and a commitment to collaborative learning are essential for long-term success in today's competitive digital landscape.
