Designing a Product Inflection Point 😀

To recap, inflection points allow the startup to move from a small group of people who believe in it to a mass market amount of people who believe in it very quickly. Or, put another way, a secret shared by a small few becomes mass market consensus. In an inflection point, that shift happens VERY quickly. 

✅ Specifically, I have observed FIVE types of inflection points in startups: 

1. Market inflection point

2. Customer inflection point

3. Consensus inflection point

4. Product inflection point

5. Technology inflection point ✅

A market inflection point is when the market is of the same mind, but not of the same voice. The market unites around the voice. 

A customer inflection point occurs when a market actor with a disproportionate amount of influence on the market becomes a customer. The market unites around the influential customer. 

In a consensus inflection point, the market unites around the shareable asset and medium. 

In a product inflection point, the market unites around the ease of adopting the product.  

Product Inflection Point Context

A product inflection point occurs when the startup designs its business model and its product SO ON POINT for the given market that it is extremely easy for customers to rapidly adopt the product. The startup greases the wheels of scalability for itself. 

The Story of a Product Inflection Point

Let me tell you the first time that I recognized the concept of a Product Inflection Point. I observed it in a company that Tundra Angels invested in this year, a Milwaukee-based last-mile delivery startup called Returns on Demand. The co-founders, Dustin Conrad and Scott Allen, are incredible when it comes to product experience and business model design. 

Returns on Demand pitched to Tundra Angels this Summer 2023 and we had strong interest to move them into due diligence. As part of our due diligence process, we engage with Tundra Angels members in our group who are experts in that particular industry to do a deep dive. After one due diligence conversation with the founding team, I sought feedback as I typically do from each investor. One of our investors is strategic to the space and he is an executive at a well-known logistics company in Wisconsin. I got on the phone with this investor. Admittedly, I entered the call presuming that this investor might rip it up and say why it wouldn’t work because of their industry experience. But what happened surprised me. In this investor’s words, “Returns on Demand has architected their business model and product so that they have lowered the risk on almost all of the industry failure points. It’s absolutely brilliant.” What Returns on Demand had accomplished in their product and business model was so powerful that even a veteran of 20+ years in an industry was blown away.

In other words, their offering had reached a product inflection point that allowed for minimizing downside and calibrating upside. It’s a trade-off of those factors that has allowed Returns on Demand to grease the wheels of scalability in a perfect way. 

Without going into a sensitive level of detail into the strategy and tactics, I will share at a high level what Returns on Demand does three things very well which powers their inflection point:

1. Understand what the “atomic unit of value” is for the customer, and more importantly, what it isn’t.