Case Study: Eze Relied On Fast Product Iteration To Reach Their Product-Market Fit Goals

Learn how Josh Nzewi and David Iya quickly turned customer feedback into loved product features.

Dec 15, 2020

Author’s Note: I apologize again for this coming out so late today. It’s been a really hectic and challenging time at my full-time job (software engineering at an aerospace firm), so I’ve had to give 100% focus to that. Also, I just want to note that I have been getting your feedback on these Case Studies, and will make sure to incorporate those changes in the next edition. Thank you all for your patience and for sticking with me and F2F so far. I’m thankful to have such a loyal readership.

Executive Summary:

Problem: Establishing Trust Between Buyers And Sellers
There is a lack of trust between buyers and sellers of secondhand smartphones.
Market: Network Effects Grow Secondhand Smartphone Sales
The secondhand smartphone exchange growth is driven by network effects from trusted buyers and sellers.
Solution: Experiencing Friction From Manual Sales Showed Them What Their Product Needed To Fix
Eze solved the friction and trust issues between buyers and sellers with specific features on their exchange platform.
Team: Making Decisions Around A Rigorous ‘Pros And Cons’ System
The two cofounders had a robust ‘pro and cons’ decision-making system to make the best choices as they built Eze.
Takeaway: Rapid Assumption Testing Accelerates PMF
Test your assumptions rapidly and objectively to reach PMF fast.

I got the chance to speak with Joshua Nzewi and David Iya, cofounders of Eze, a B2B commodities exchange for used smartphones. The mission of the company is to make used smartphones accessible to those that need them. They launched the company in January 2020 after trading over $8 million worth of used smartphones within 2 years, during which they experienced the inefficiencies in the market first hand.

Eze’s Founders File: Building with a Global Remote Team

Eze cofounders (from left to right): Josh Nwezi (left) and David Iya (right).

Problem: Establishing Trust Between Buyers And Sellers

What are the key problems you’ve had to solve on your journey to product-market fit?

This market is plagued with several complexities that make it difficult to navigate. The first issue we had to solve (and still are trying to perfect) is trust. Since high-value goods are being traded that can easily be resold, there are many bad actors. Every person in this market is weary to begin business with someone new, especially if you don’t have a reputation or a mutual contact to confirm your legitimacy. The second biggest hurdle, being a marketplace, was figuring out the chicken or the egg problem. We had to convince both sides of the market to come onto the platform to interact with each other.

Why are these problems important to solve for creating the best solution for your customer?

For our platform to generate data necessary to show transparency in the market, we needed businesses to be transacting on it. The more transactions that we facilitated, the more valuable our platform became to users. Users would only come onto the platform if they trusted the platform itself and saw a higher value in using the platform than trading by traditional means.

After attending a mobile device trading conference, we wrote down all the problems we had heard from traders. We separated the issues based on who those problems would be the most likely to affect. Once we had finalized what that looked like, we reached out to companies within our network that met the criteria of the different buckets we had created. We asked these companies if these same issues were a problem for them and to identify just how widespread they were in the industry. Getting a sense of the number of companies affected by these issues gave us an understanding of which ones to target first.

Market: Network Effects Grow Secondhand Smartphone Sales

Once you identified the critical problems to solve, what led you to realize there was a huge market opportunity to be unlocked by doing so?

We knew there was a large market opportunity before we started the platform, but as we grew, our eyes were truly opened to the vastness of it. Luckily for us, this market is driven by network effects. When one business owner finds a reputable trader, they recommend them to others. Businesses loved how we approached the market and the transparency we designed the platform around, so they introduced us to other participants.

There are most likely several segments of the market you could choose to attack first. What section of the total customer base did you focus on first to establish product-market fit, and why?

We targeted iPhones first as we had years of experience trading them, and they are the most highly sought after devices in the secondary market. iPhones are seen as status symbols in many developing countries. We have heard of stories of individuals saving up for months to purchase a used iPhone 6. We believed that if we established product-market fit with iPhones, it would be easily transferable to other electronics.

Luckily for us, we had been operating the market for quite some time before launching our platform. We had a solid base of companies we had already done business with to perform customer research on. But when that wasn’t enough, we would post these same questions in forums where we knew traders would frequent. It was easy to gauge which problems were felt the deepest by the number of responses we would get from traders.

Solution: Experiencing Friction From Manual Sales Showed Them What Their Product Needed To Fix

How did you build your solution to maximize its relevance with the customer and ensure product-market fit?

We built the platform catering to both sellers and buyers. Sellers want to maximize their throughput (buying and selling as many devices as possible), and buyers want quality devices from trusted sellers. We make the process of procuring and selling devices much easier and risk-free by offering an escrow system and automating the matching making process and shipping.

What are the things you did that don’t scale to better shape your product development?

We made a lot of manual sales to jumpstart the marketplace. By this, we meant we were reaching out to buyers and sellers by phone, WhatsApp, etc. getting their orders and fulfilling them by buying the devices from sellers. We had to do a ton of nitty-gritty work, such as inspecting the phones ourselves verifying sellers, and making sure we didn’t get scammed by our buyers. Essentially, we had to navigate the market just like any other participant to find ways to make it more efficient for all parties involved.

Our main tactic was processing lots of feedback and iterating repeatedly. We first identified which problems to solve first; then, we would survey potential users on the approach we took to fix it. We relied heavily on their preferences and to fine-tune our product.

Team: Making Decisions Around A Rigorous ‘Pros And Cons’ System

How did you handle conflicts between you and your cofounder when making product decisions at critical junctures to arrive at product-market fit?

David and I developed our pros and cons system and weighed out each of our ideals' potential benefits and pitfalls. By being able to zoom out and see the full picture of what outcomes could happen based on our decisions, we could agree on the best route to take the company forward.

What key qualities did you look for in key early hires to increase your chances of discovering product-market fit, and how did you prioritize what types of hires you needed to make first?

When we first started the company, we didn’t have much money, so we could not hire highly experienced individuals. What we were most interested in was passion and will to learn and improve. Over the last year, the team has grown tremendously by the obstacles we have overcome while building and maintaining the platform. We make it a point to share helpful articles about avoiding burnout, prioritizing work, individual learning, and improving communication, all of which have helped us improve how we work with one another.

As things got busier, we knew we would have to sacrifice many activities that we would do in the past. This meant working through weekends and lots of late-night work sessions. When this wasn’t enough, we had to fire ourselves from roles in the company and hire staff to take those over for us. We didn’t have to motivate our team. They saw that the company was growing due to their efforts, which caused them to want to contribute more. It was a compounding effect that’s resulted in buy-in and ownership for Eze.

Takeaway: Rapid Assumption Testing Accelerates PMF

What are the key lessons you have learned so far from your journey to achieve product-market fit?

Move fast and break things. Almost no one is ever right the first time around on how to solve a business problem. It usually takes several iterations before things start working or even work at all. The fastest way to achieve product-market fit is to test your assumptions quickly and unapologetically. Once you find something that works, double down on it until it either works or breaks down. If it breaks down, start from the beginning again.

What’s the hardest problem you’re facing now after solving the prior one(s)?

Firing ourselves from jobs and delegating tasks to members of the team. It’s hard for us as founders to give up our work streams to employees, but it is necessary to scale it.

Three Cool Founders You Should Know About:

Nzewi & Iya: Here are three founders you should check out next!

Sam Udotong, Founder of Fireflies: Fireflies.ai is an AI that joins calls/meetings and automatically takes bullet point notes.
Tommaso Tomba, Founder of Moons: Moons helps people get the smile they've always wanted at a price they can afford.
Ty Griffin, Founder of The Mercer Club: The Mercer Club is the leading online rental marketplace for luxury clothing.

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