I’m not convinced my business has product market fit. I’m 4 years deep so I should probably have it, or feel like I’m inching closer to achieving it. According to some people I do have PMF, but the definition of what it is changes depending on who you ask.

Why don’t I think I have PMF?

I’m in the business of selling people something that they:

• don’t want to pay for
• statistically won’t have to use
• have negative feelings about

I’m not discrediting my entire business. I wholeheartedly believe every freelancer benefits from being insured on an aspirational level (it helps you to be a confident freelancer), but only a small percentage of customers will use their policy on a practical level (getting legal help).

This means all of the usual metrics you’d measure to define PMF—like how sticky your product is or how much it’s loved by customers—go out the window. You have to approach things differently in insurance.

I came across Lenny’s newsletter recently. One of his most popular newsletters was his list of pre and post-launch factors to gauge if you’ve achieved PMF. After working my way through the list—some of which I’ll share below—I’m still not convinced I have PMF… but I’m not entirely sure.

Pre-launch PMF factors

1. Visible excitement

You can guage if there’s excitement around your product if, upon discovering it, somebody muses ‘Where have you been all of my life?’.

Let’s be real. Insurance is a purchase most people begrudge. There’s a feeling that it’s something they’ll never have to use and they’re throwing money away. The only person that gets visibly excited about insurance is, well, me!

I thought we’d achieve product-market fit with our last product launch. Unlike other insurance products which are triggered by a client threatening legal action or trying to recover compensation, this product delivered value on a more consistent basis. It assisted you with the day-to-day headaches of running a business.

Client hasn’t paid? A solicitor will nudge them on your behalf. Contract dispute? Pick up the phone and speak to a legal expert about it. Delegating work to a sub-contractor? Here’s a consultancy contract vetted by a lawyer.

There was excitement when I started talking about this product with existing customers. I talked about it at a conference and somebody in the audience said “this sounds too good to be true”. All of this indicated I was on the right track, but that excitement never translated to sales. As we all know, people parting with their money is the biggest indicator of PMF.

I haven’t found the secret sauce that will get customers visibly excited, but it’s something I’m always exploring and I’m confident I will crack it.

Ashley’s PMF - 0 points

2. People are willing to pay for it now

Getting people to give you money before you have a product is a pre-launch signal of PMF.

Again, things work differently with insurance. We’re not selling a tangible product and you’re not buying a service you’re guaranteed to use (~5% of our customers will make an insurance claim).

Instead of people parting with money, With Jack’s pre-launch indication of interest was an email list. When I launched an earlier version I kept our positioning very broad—startups, agencies, freelancers. It was overwhelmingly freelancers that registered their interest.

Having somebody sign up to an email list doesn’t carry the same weight as them paying for something that hasn’t yet launched, but email lists still deliver value. My list helped me define my target audience and gave me a small number of people to use as a launchpad.

This was 7 years ago so I don’t know if the advice around using email lists to gauge interest has changed. I believe my list helped me get my first 25-50 customers so I’m going to give myself half a point for this.

Ashley’s PMF - 0.5 points

Post-launch PMF

3. Retention: Users stick around

In SaaS, anything below 5% is considered good for churn. Insurance is different (I’m going to be saying that a lot, aren’t I?).

According to Consumer Intelligence, a staggering 47% of customers don’t renew their insurance with their existing provider. With Jack’s churn is 13%. COVID-19 has impacted retention, but I’ve used pre-pandemic figures because it’s too early to tell if this is a blip or if COVID will have a lasting impact on churn.

Compared to SaaS 13% seems high, but when you measure it against other insurance providers it’s low. Exit surveys indicate most cancellations happen because the freelancer is returning to full-time employement—not because they’re unhappy with the product, service or price.

Comparing this metric to industry standards, I’m awarding myself a point.

Ashley’s PMF - 1.5 points

4. Surveys: Users say they’d be very disappointed if your product went away

I have a confession. I’ve never asked customers directly if they’d be disappointed if we went away. Maybe I should? With Jack’s NPS score (an impressive 87%) and reviews indicate customers are happy.

We ask people for reviews when they’ve made a claim because this is where the value lies. Asking what somebody thinks once they’ve signed up invites superficial comments like “fast checkout, cool sign-up”. This doesn’t feel as important as the experience somebody has when they use the practical element of their policy.

Whilst we do have glowing reviews, I believe we could be replaced by an alternative solution too easily. I don’t think we currently have enough to differentiate us, so I’m giving myself 0.5 point.

Customers love With Jack, but at this point it feels we can be replaced. That’s fragile.

Ashley’s PMF - 2 points

5. Exponential organic growth

We have not had exponential growth, but I’m not convinced many insurance companies do. In this industry I’d say rapid growth is an exception, not the rule. Lemonade was the exception.

Rocketship growth is replaced with slow burn growth (which I like). I’ve come to this conclusion based on my own experience, but also from looking at VC-backed competitors. They have hundreds of thousands of pounds to pump into marketing, yet none of them have managed to get a stronghold on their market.

This is one of the (many) reasons I’ve felt reluctant to raise money. Most of the funding available to insurtechs comes from outside the traditional insurance sector. If investors have the same expectations for growth from other sectors, that’s going to lead to problems.

Growth is organic, but it’s definitely not exponential so 0 points for this one.

Ashley’s PMF - 2 points

6. CAC < LTV

One of the definitions of PMF from Lenny’s newsletter is this:

“The value of each user is greater than the cost of bringing them into the product.” — Nikhyl Singhal

This is certainly true for me. I’ve spent very little on marketing over the years and instead have focused on organic growth. I’ve experimented with sponsoring podcasts (only from people who use With Jack so the message is sincere) and have recently hired someone to do SEO.

However, my goal has always been to double down on marketing once I get my binder. (Quick recap for those new here: my binder will mean I can quote and bind policies direct from With Jack’s website using the magic of technology, instead of manually processing everything as I’m currently doing).

Right now I’m spread pretty thin with over 1000 customers. I’m doing all customer support, admin and everything else myself. Because of this I’ve yet to double down on doing the work that brings customers to our website.

Once my binder is complete I will be experimenting with paid marketing, but being bootstrapped means I won’t pay more than the value of each user to acquire them (LTV is currently £112).

Ashley’s PMF - 3 points

7. Customers clamor for your product

To reiterate what I said at the start, insurance is a purchase that most people begrudge. I don’t know if that will ever change, but I believe there needs to be more education around how the products work and the value they bring.

Seeing first-hand the problems freelancers face and how we assist them (and insurance can sometimes be the difference between staying in business or not) I believe in what we’re selling. However, there’s a history of negative connotations surrounding insurance to battle with amongst other obstacles I’ve already mentioned.

Helping freelancers get paid, making legal help accessible… this is just some of the value the policy delivers. But the theory is that people don’t think what you offer is valuable if you throw it in for free. Maybe the issue is with bundling these features into an insurance policy, the name of the policies or how we position it. Maybe it’s all of those things.

I’ve said it before and I’ll say it again, there’s a missing piece of the puzzle and my job is to figure out what that is.

Customers are not clamouring for my product and, for as long as I work in insurance, I’m not sure that will change. We end on 3 points out of a possible 7.

Justin Kan says you don’t have PMF if:

• You aren’t growing
• You have high churn
• Your product is hard to sell
• Customers don’t seem to care that much

We are growing and churn is low, but the product is hard to sell and, well, it’s insurance… customers are indifferent until they have to use it.

Whichever defintion of PMF we use, it’s clear I’m hitting some of the metrics—just not all. My business has plenty of positives, but I think there’s one piece of the puzzle missing. That killer feature that gets customers visibly excited, makes us irreplacable and results in exponential growth is still waiting to be discovered.