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Mom Loves Your App? She Better Not Be the Only One

Sam Shank, CEO and co-founder of HotelTonight
David Paul Morris | Bloomberg | Getty Images
Sam Shank, CEO and co-founder of HotelTonight

It's difficult to know early on if a product or new idea is working when a business doesn't have immediate traction. Most of the time, you will have limited data, so you've got to make a judgment call on product-market fit, based on subjective measurements.

Press mentions, social sharing, unsolicited praise from strangers, app store ratings and reviews, user-generated content and net promoter score are not easily quantifiable metrics, but important early indicators when judging product-market fit.

The division between promising and unpromising product is very fuzzy, but I've found there are some key "feelings" for determining when to pull the plug and when to be patient and pursue your idea.

It Doesn't Matter That Your Mother Loves Your App

I had a little known company that I started between my first company (TravelPost.com) and my second company (DealBase.com), called Your24. I created it for two reasons—first to see if I could build a start-up on an incredibly lean budget, and second, to experiment with new formats for user-generated travel content.

The site's concept was around viewing and posting one-day itineraries cluing others in to cool things to do in various destinations. For example, 24 hours in Paris for families, or 24 hours in Buenos Aires, Argentina, for backpackers.

I was successful at my first goal—launching a beautiful, full-featured community website with an investment of under $20,000 in six weeks of work. I thought Your24 was a great idea and my friends thought so too when I showed it to them (or at least they said they did).

But despite the praise, the site never got press mentions, or strong customer love, and thus lacked the product-market fit we needed to cost-effectively attract a strong community of users. It was hard to ignore the lavish praise from friends, but ultimately Your24's destiny was determined by unbiased users, and we disconnected the servers that summer.

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To get honest feedback on your product or idea, it's got to come organically, from people you don't already know. Surveying your friends is great in theory, but they're probably going to love what you show them, no matter if it's good or if it's bad. They simply want to be supportive and are highly biased to tell you what you want to hear.

You'll know you should persevere when a stranger stops you on the street or sends you an email to tell you how much they love your product, when positive feedback comes without prompting. If you've got that, it's time to step on the gas and grow your business as fast as you can.

A Passionate Following Merits Patience

In the early days of HotelTonight, we got a fair amount of buzz and positive feedback about the product, especially from the technology press. Users loved us too, writing glowing reviews in the App Store and emailing us veritable love letters.

Everything pointed to an amazing product-market fit except for one thing. No one was booking.

Going by strictly quantitative data, HotelTonight would have followed the same path as Your24, because the revenue was nearly absent. However this time around, our perseverance was fueled by the aforementioned qualitative measures, which were very strong and signaled what I like to call a "passion following."

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These measures gave us the confidence that the bookings would indeed come, if we were patient and obsessed with providing users with a great service every day. And I'm glad we stuck to our instincts and built HotelTonight into the successful company it is today.

—By Sam Shank, co-founder and CEO of HotelTonight.

HotelTonight is a last-minute hotel deal mobile application and a CNBC Disruptor 50 company.

Technology