Nobody knows the consequences of having the wrong product, market or channel fit better than Ray Li.
Ray is the co-founder and CEO of Sene, a custom clothing startup he launched with his cousin Mark Zheng in 2019. Their path to success was painful, and Ray visited BREW 11 to share some of his hard-earned experiences with attendees.
“Finding product-market fit is the first major inflection point,” Ray says. “Either you have it, or you don’t. And if you don’t have it, your dreams — which you care so deeply about — are dead.”
Question Your Sacred Beliefs
Questioning everything you believe you know about your business is the first step to making sure you have the correct product-market-channel fit.
Before embarking on the path to entrepreneurship, most founders have been engaged professionals who achieved measurable success in their former fields. That’s why it’s so painful to be wrong, Ray says, but that pain is necessary to create a successful business.
“Question every assumption you have about your business, everything you hold sacred,” he says. “And that is actually going to unlock the growth you’ve always wanted.”
The first step to Sene’s current success felt rooted in failure. Ray and Mark closed the retail store where they first launched the brand by making custom suits.
After the store closed, the duo turned their attention to developing a beta of their artificial intelligence technology SmartFit — the same technology they use today to create custom athletic wear and denim clothing.
“It’s OK to be wrong,” Ray says. “I’m not giving up if my current idea isn’t perfect.”
Listen to the Data — Sometimes
When Ray and Mark closed their retail store in 2019 to focus on creating an AI beta tool, the data wasn’t on their side. At the time, 100% of their sales were from the store, and there was no proof e-commerce was the correct direction to take their business.
So why did they choose online sales?
“When we were honest with ourselves, we realized that the top line for the store was great, but the bottom line was terrible,” Ray says. “Sometimes, the thing that will unlock your business is something you might not be good at now, but you have to believe it can become really good.”
Ray says that product-market fit is a journey, not just a point in time. The COVID-19 pandemic is the perfect example of how circumstances in the business world can change quickly without much warning.
For Sene, the pandemic meant that acquisition costs for their best-selling product at the time — an athleisure travel suit — were rapidly increasing while demand for the product was decreasing. So the company began developing the line of custom denim products for which they are known today.
“The reality of business is that you are never really going to arrive,” Ray says. “There are always going to be unexpected challenges. You are going to have to keep adapting.”