How Monoxer Took Aim at a New Market post Product-Market Fit

Written by the Universe Editorial Team

“Monoxer” is a learning platform for memory consolidation, widely used at schools, cram schools, and other educational sites. Monoxer, Inc. (Monoxer), the provider of the service bearing its company name, embarked on a challenge to expand its business furthermore by targeting a new segment of users–business persons working at companies.

Despite the market being completely new to Monoxer, the startup identified target companies and use cases, and executed PoCs with multiple companies in less than a year. How exactly did Monoxer achieve this outcome which we could even call their “second product-market fit (PMF)?” We sat down with Monoxer’s CEO Kotaro Takeuchi, Business Development member Ryuji Uchino, and Global Brain (GB)’s Kazumo Tachibana who supported this initiative.

We were skeptical about getting support from a VC firm

──Why did you decide to target business people?

Takeuchi：Many schools and cram schools are using “Monoxer” as a tool to support children’s learning processes. But it is not only children who have to memorize things for their studies. Business persons also find themselves in situations where they have to “memorize something” for in-house training sessions or promotion exams. We always saw a business opportunity there.

However, since we hadn’t conducted any internal PoCs with other companies,we were not perfectly confident whether it would work out. It was at that time we had an opportunity to discuss future plans with GB’s Value Up Team (VUT) who had been supporting us with marketing strategies targeting schools, and we decided to try testing our service targeting business persons.

──What expectations did you have toward VUT?

Takeuchi：I wasn’t directly involved when VUT supported us on a different initiative before, so excuse me for saying this, but I was skeptical about “what exactly they could do for us.”

But because I took it as our role to grow the business and felt we shouldn’t expect anything more from a VC than to put their money in, I didn’t have any dissatisfaction either.

VUT shared a list of proposals with us, which included an initiative to “conduct a PoC targeting business persons.” Since that was something we had been wanting to try ourselves, we decided to work together. However, again, I was personally skeptical about getting support from a VC firm, so my expectation was quite low. I was thinking “it would be good enough if we could get maybe 10 large-sized leads.”

Grasping market needs in a completely new market

──How did you test business persons’ needs?

Uchino：Since last May, we have been working with VUT’s Tachibana-san to analyze competitors’ services and build our hypothesis around “the most probable use case” for business persons. We also had customer meetings based on the list of companies that GB offered to introduce to us.

Tachibana：I joined almost all the customer meetings to explore what pain points “Monoxer” could solve for business persons with its value of “memory consolidation.” We discussed with people from various different departments and our discussions became tangled at times. It was literally trial and error.

Uchino：The turning point came in summer. A sales department of a large corporation that VUT had introduced to us told us they ”wanted to use ‘Monoxer’ to improve the sales reps’ capabilities.” Sales departments of other companies also reached out to us, and we found some companies who were open for PoCs. It was around this point in time we became more convinced that “sales departments could be a good fit for our service.”

That year, we conducted several PoCs with different companies from autumn to winter. We have ongoing discussions with some of those companies for full-scale implementation.

Tachibana：The top management team of that particular major corporation liked the service very much, and even went so far as to give orders internally to “implement ‘Monoxer’ as soon as possible.”

──You received very positive feedback. What exactly did they find attractive?

Uchino：One thing they clearly liked was that using “Monoxer” helps users to memorize sales scripts. Sales reps need to memorize their scripts to a certain extent. This fits very well with “Monoxer” which prides itself as a “learning tool that never lets you forget.”

Another big customer need we identified in sales organizations was to ”visualize whether a sales rep has actually memorized a script.” Any sales organization would conduct skill management including “measuring which sales level a sales rep has reached,” or “which product can be entrusted to a sales rep to propose to customers.” “Monoxer” can address this need because it records “what and how much a user has memorized.”

The functions and strengths of “Monoxer” offered to children matched with sales departments’ needs to “memorize sales scripts” and “manage sales reps’ skills.”

**──Negotiation is key to continuing PoCs given it takes up the customer’s resources. Why were you able to carry out your PoCs so smoothly? **

Uchino：We articulated the goals and ideal states that the customer truly wanted to achieve, and presented very clear and detailed views of how the PoC could play a role in achieving those objectives.

For example, if a customer says their goal is to “increase sales,” this is too vague. We dug deeper to clarify what the customer company wanted its sales reps to achieve, for example “acquire listening skills” or “become capable of grasping customer needs.” Then we presented “how the sales reps can memorize those things using ‘Monoxer.’” It’s important to explain in words the kind of future a PoC with ‘Monoxer’ can bring.

On a side note, for this PoC, we used the “Sales Exam*” used by Monoxer’s sales team. Takeuchi created this exam when he was working for Recruit and it breaks down the capabilities a sales rep must have into 42 skills.

*Ref. CEO Interview: The Strength and Nurturing Scheme of Monoxer’s Sales Team #2] (https://note.com/monoxer/n/n8f6e39dac02c) This article is currently in Japanese only.

Takeuchi：The Sales Exam includes basic skills like “you can look people in the eye when talking to them” and high-level skills like “you can speak slower than your customer” or “you can avoid using filler words like ah or um.”

Even if a sales team has a single source of truth for their sales materials, performance can vary if each sales reps’ skills vary. This is a common challenge faced by any sales organization which is why we were able to leverage for the PoC what we normally use ourselves.

What we can gain from “companies not interested in” our product

──What was the takeaway from this initiative and what value do you see in VUT?

Takeuchi：A big takeaway is we were able to confirm that “Monoxer” fits in with sales organizations. But more than that, I’m very glad to have worked with VUT because we had many chances at bat to test our product’s level of sophistication.

Customer meetings are commonly held with customers who are more or less interested in a product or a service. For us, that would be schools and cram schools who reach out to us.

But in reality, the overall number of customers who already have interest in “Monoxer” is limited. If we only talk with such customers, we will have less and less customers. At some point in time, we need to identify completely new customers to expand our business.

However, people who have no interest in “Monoxer” will not reach out to us nor will they join us for customer meetings. To expand the business, we need to propose “Monoxer” to people who do not see any need for it. But they won’t give us their time. This was the dilemma.

Given this state we were in, we were grateful that VUT gave us the opportunity to talk with companies that “VUT has connections with.” The company that supported this PoC met with us because of their relationship with GB to begin with, and they didn’t have any clear needs to use “Monoxer.”**Speaking with customers we normally do not get to speak with opened up new markets for “Monoxer.” **

The significance of GB’s introduction was not in “introducing numerous companies with clear needs” but in “offering a connection with one company that has hidden needs that can expand the potential of ‘Monoxer’.” The value they offered was not a value of quantity but of quality.

I would go even so far as to say that we feel far more grateful for this kind of introduction than being introduced to 100 companies in the educational field. We can reach out to companies with clear needs by ourselves, and we don’t need support from a venture capital firm to do so. If we had asked for “10 large-sized leads” which was our initial expectation, we probably wouldn’t have had this outcome.

──Uchino-san, you took care of the actual negotiations. Was it challenging to reach out to companies with no needs for your service?

Uchino：Franky speaking, almost all the meetings were difficult. But thinking the other way around, if we are able to identify needs with companies that are not interested in “Monoxer” now and move on to PoCs or even close deals, that means we will be capable of addressing any kind of customers going forward. Also, as a sales rep myself, I was able to hone my skills to win the sympathy of my customers and convey messages accurately, and now I have a higher sales conversion rate.

Tachibana：Working on the supporting side as a VUT member, I also had many learnings. I reaffirmed that by repeating customer meetings and refining our hypothesis, we can expand the customer base.

Uchino：Tachibana-san truly worked hard with us and he is my “Monoxer cohort.” He joined all our internal regular cadences and even our meetings with the leasing companies.

A service that is beneficial for both new and experienced sales reps

──I imagine you plan to expand ”Monoxer” even more beyond business persons. What is your prospect of the business going forward?

Takeuchi：A business case with a large corporation like this one will continue to be our North Star.

Targeting business persons, we are seeing enough opportunities for “Monoxer” in situations where memorizing is needed. For example, our service can be used for having store clerks memorize product data or taking promotion tests or certification exams.

But we plan to go one step further and explore how ”Monoxer” can be used in areas that might seem irrelevant to “memorizing.” We plan to increase customer lifetime value by proving that ”Monoxer” is useful for enhancing skills not only for new store clerks but also for seniors with five or 10 years of experience. We would like to offer ”deep successes” where users can experience a high level of growth that requires expertise skills and not just “quick wins” where you memorize something and say you’re done.

──What is VUT’s prospect?

Tachibana：If we succeed in having sales persons use “Monoxer,” the market will definitely expand. Since we have already started validating our hypothesis, VUT will continue to support Monoxer with sales and marketing to reach the North Star.

Also, although we are still brainstorming, we have plans to offer a sales support package using ”Monoxer” targeting startups and large corporations that we have connections with.

Through my work of supporting other startups, I feel that B2B startups especially tend to face hurdles in sales activities. If we could create a product or a service based on the support we offer to Monoxer and use that to help other startups with their sales activities, VUT will become a more multidimensional team. It would be even better if we could create a cycle where we generate new leads from there and hand them back to Monoxer.

Takeuchi：That sounds great. Some startups shut down their businesses due to lack of sales capabilities, but that is such a waste. I’m looking forward to working with VUT to expand “Monoxer” even more and to take up new challenges.