How Did The Christmas Tree Find Product-Market Fit?
When it comes to not wasting opportunities and adding momentum to the product development, it's important to ask the tough question of "Do we have product-market fit?" A lot of companies have product market fit today, but as the market changes and the world evolves, they might not have it in the future.
This common occurrence can be seen with the evolution of real and artificial Christmas trees! A hundred years ago, the majority of the North American population were putting up real, evergreen trees. But today, 84% use artificial trees, according to data from the American Christmas Tree Association, while only 16% use live trees.
At different points in history, the market shifted between real and artificial trees; as the artificial tree hit product-market fit, there began a shift away from real Christmas trees. What led to this evolutionary market shift towards the artificial Christmas tree? When did the market change? And, where is it going in the future? Let’s find out!
Tinkering in the Drunken Walk Stage
Real Christmas trees began to show market demand after German settlers introduced the Christmas tree tradition to North America in the 1850s. By the 1870s, there was an increase in popularity of putting up real Christmas trees, and thus the demand for them spiked. This began the cycle of the drunken walk stage for the companies who began selling trees.
In the early stages of a company, you’re still identifying where you are on your product journey. You are going through this tinkering of value generation where your simple proof of concept (POC) brought a lot of value to your first customers; then, as you add more complex features, your product fails over and over again to meet the customer’s needs.
This occurs because you misunderstood your market! These multiple ups and downs are part of entrepreneurial life, and means you’re in the ‘drunken walk' stage. Just like someone who had a bit too much to drink, you tinker up and down as you’re growing your knowledge of the market and what value the customers really want. The more value you create for them, the fewer engineering resources you waste and the faster you can achieve profitability, aka hitting product-market fit!
The Christmas tree also went through this tinkering stage until it became the product we know today.
After the tradition of putting up evergreen trees for Christmas spread all over the world, it began showing a detrimental impact on deforestation, which was especially prominent in Germany. This sparked the tinkering stage and led to the development of the first-edition of the artificial Christmas tree made out of green-dyed goose feathers in the 1880s.
Feather trees became popular in America in the 1920s when the tradition was brought over by German immigrants. These trees were made from goose, turkey, ostrich, and swan feathers. This beginning of artificial Christmas trees was followed by many variations with newer features based on the consumer’s value. Customers began to find artificial trees more convenient and have greater advantages than real ones as they didn’t have the hassle of trekking through snowy woods to chop down a real tree. Artificial trees also wouldn’t shed needles at the end of the season, so there was less clean up requires.
The end of World War 2 in the 1930s, however, changed the market. Feather trees tinkered downwards as they fell out of fashion; Newer, artificial trees, however, tinkered upwards and became more popular with the increase in availability of new materials, which allowed for mass production to the newly optimistic consumers. The American company, Addis Housewares Company, created the first artificial tree made out of the same bristles used for their toilet brush product. These bristle brush trees are very similar to the artificial trees produced today. These trees hit more of what the market valued (the natural look) as the bristled resembled closer to real evergreen trees.
Fun Fact: During the war, real trees were harder to come by. Many of these artificial trees were sent to London as there was no access to real trees for the holidays after the city was bombed.
In the 1950s, though, the market changed again; this time was towards silver aluminum pine trees, which became all the rage. Manufacturers at this time also introduced a revolving light under the aluminum tree that was able to change colours and create different reflections off of the tree.
The end of the 1960s and the beginning of the 1970s saw the market move away from the unnatural Christmas tree craze as people started to question the true meaning of Christmas without a real Christmas tree. Real Christmas trees, according to the market at this time, represented heart and character - the true spirit of the season - and no artificial evergreen will ever do it justice. This led to a decrease in artificial Christmas trees.
By the turn of the millennium in the early 2000s, the land in the United States for producing natural trees grew to 350,000 acres to meet the growing demand for real trees and ensure enough trees could be purchased for the holidays. Growers started to plant one to three seedlings for every tree harvested, with approximately 350 million Christmas trees.
Since then, however, there has been a decline away from real trees and an increase in artificial ones. The tinkering stage has come to a halt and product-market fit has finally been reached!
With the increase of more advanced technology, the artificial Christmas trees that were experimented with throughout the 1900s have become updated and ‘modernized’ with new features that add to customer value. They began to be wireless with colour-changing styles, synchronized music, and LED lights—all of which made for easy assembly and eliminated the need to connect each light string manually.
Nowadays, we have so many options to choose from many different types of artificial trees, such as life-like trees to more fanciful ones in every colour, and from trees with fake snow to pre-lit ones. They are also more cost-effective now than real trees. Consumers would rather purchase one, fake tree to be used for 10 years than have to buy a real tree every year. In 2018, the average price for a 6-7 foot real tree was $75. Although artificial trees cost more than real ones, artificial trees are still valued because they are saving costs in the long run as you buy one tree to last many years.
As the artificial Christmas tree has finally hit product-market fit, the traditional, good ol’ evergreen tree is facing extinction.
A lot of facts indicate the market will shift again toward real Christmas trees in the coming years. As more people discuss the near-extinction of real Christmas trees and learn about the negative environmental impacts of these products, the prediction is the market will shift away from artificial trees and go back towards real ones. A 2009 study found that artificial trees "contribute 3 times more to climate change than real ones purchased yearly". Real trees are the more sustainable product instead of the artificial ones.
Also, the trend of real Christmas trees is becoming more favourable to new families as they want to keep the tradition alive and have authentic experiences. The tree industry is hoping that as newer adults have children, they will want to create those holiday experiences with their offspring.
There are some problems that are arising as a result of the first shift back to real trees: there isn't enough being grown, the growers are reaching retirement age and no one is willing to fill their roles. Growing evergreen trees is a difficult, physical, year-round job, with no expected return on investment for 6 to 8 years, as it takes time for the trees to grow to proper size to sell. It’s also not where young entrepreneurs want to expend their time, money and energy. The hope is there will still be farmers to produce them and trees to purchase…
What we can learn from the Christmas tree is, with enough pivoting, you can hit your product-market fit!
There are times when the market will shift, the customers’ expectations will shift, the industry will change or the competition will just come in and take a large market share from you. All of these scenarios occurred during the evolution of the artificial Christmas tree. However, when they do occur, the main goal for a business is to keep pivoting! As we’ve outlined with the Christmas tree, every market is always changing; so, it's important to constantly question whether or not your strategic baseline remains relevant as an organization. You might have to change your company strategies and tactics in order to reach product-market fit.
Article written by Jessica Scandaliato. Thanks to Paul Ortchanian and Jessica Scandaliato for reading drafts and overseeing aspects of its publication. Also, if you have any feedback or criticism about this article, feel free to shoot us an email at email@example.com.
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