Cracking User Segmentation in a Fragmented Market

After identifying the problem, Shir and the FIRMUS team launched a website, offering a high-level description of the value they were proposing. At this point they were still uncertain of the exact solution so they kept their vision vague and used the website to understand what the customers might want. The website gathered interest from many construction companies who shared their vision, so the FIRMUS team converted them into design partners in order to gather detailed insights on relevant challenges they were facing. Eventually, FIRMUS onboarded six design partners, all from a similar user segment - Project Executives and Preconstruction Managers from the top 400 in the US (mid to large-sized construction companies with 500M to 5B in annual revenues and 500 to 2000 employees). ​​The partners shared some common challenges and the team used this information to create an initial product.

When the FIRMUS team attempted to bring their product to the market, they struggled to identify the correct target audience because of all the varied feedback they got from Project Managers within their design partnerships. “We understood that we have a problem with the user persona because, when one Project Manager told us, that's amazing, that's exactly what I need and another would say, this is not helpful for us at all,” Shir said. She realized that in trying to satisfy everyone, she ended up with a product for no one. Their MVP was too general to provide enough value to a specific audience. 

Shir recognized that the market was very fragmented and that there was still much to understand about all the different segments. Once the problem was understood, the team at FIRMUS worked to map the market more accurately, they interviewed over 40 customers and prospects, understanding each specific job, responsibility, pains and needs.

The result was a multi-dimensional matrix in the form of a map of different market segments and their specific needs. “We created a formula that tells us, for example, a Project Manager in a Guaranteed Maximum Price (GMP) contract, in residential, working on a certain stage of the design, cares about X specific checks” Shir, said. In total they created seven different formulas and segments. Shir knew from past experience that creating a product for all of them would not be feasible nor draw in sufficient engagement. 

The FIRMUS team knew they were on the right track when they were able to talk to sub-segments within their target audience and tailor their message and offering to make the sales process more efficient and effective (resulting in signing the first substantial enterprise agreements and achieving a month of sale cycle from lead to agreement). Knowing how challenging it is to understand the fragmented construction industry, FIRMUS’ construction advisor commented after this research: "Well, you nailed it!". The FIRMUS team was now closer than ever to product market fit.

Shir went through a long process of four and a half years until she achieved product market fit. During this journey, she gained a lot of learnings, including: 

-   Be confident: 

Confidence is key when entering a new industry. Four years ago, Shir  was uncertain and relied on others to guide her. However, she mentioned that she recently made the shift to believing that even though she does not have a background in construction, she can still become an expert and provide valuable insights to those in the industry. To be successful, it's important to have confidence in yourself, ask the right questions, and use logical thinking skills.

-   User segmentation is the key to product market fit, especially in fragmented industries:  

Shir highlights the importance of finding the right user segment and prioritizing based on the scope you define. Not trying to solve the problems of every user was a game changer for her.

-   The art of interviewing users: 

Avoid leading questions. Before creating a structured approach, Shir would often find herself unconsciously putting words in the customer's mouths. This is a common trap when you don't have a clear set of questions to focus on without influencing the answers. However, when Shir was researching FIRMUS’ user persona and product market fit, not only did she used a clear set of questions, but she prepared a structure allowing design partners, customers, and prospects to draw their own maps of changing needs, stages, and processes. Creating a template for this map in advance, with several dropdown menus showing examples of possible answers, Shir was giving her prospects a framework which on the one hand, gave them the freedom to express themselves but on the other hand, kept them focused on what was important for FIRMUS to understand and encouraged them to think more deeply and come up with things they never thought about before having the opportunity to see their thoughts and processes mapped out this way. She would then take all of those maps offline, to find similarities, differences, or abnormalities and explain herself the differences with her own assumptions at first and then with another set of open questions to prospects, that can qualify or disqualify her assumptions.