I knew there was something wrong with the management and how we do things at Yabroad, but it was difficult for me to convince other people what we were doing and how we do things are not the best way to run a startup business. When I talk about pragmatism, people talk about visions and having a long-term goal; when I talk about experiments, people talk about previous experience; when I talk about planning and specific goals, people talk about execution. After reading “The lean startup” and “Running lean”, I’m more convinced about how a business should really operate.
The lean method is really about how to get things done efficiently, be it running a small project, or managing a international corporation. It’s about down-to-earth planning and taking advantage of resources efficiently. It’s a call for doing things that really matters. When proposing a new project, ask not if we think it’s cool, ask how we’re going to satisfy the end users. And the first step to go is really getting to know the actual users, what are the problems they find painful and how other products are approaching the problems, and why our proposal is better than the existing solutions.
We made a mistake at Yabroad that we think people are willing to come to China if we don’t charge them much. While our competitors are charging thousands of euros per application, we charge only a few hundred. But we didn’t see an exponential growth, the increase of applications was only negligible. We talked too much about disruptive innovation and thought lowering the price will piss out all our competitors and help us gain a portion of the market share rapidly. We were wrong.
The decision was made without much evidence to prove our assumption. Price is indeed an important factor when people want to visit a different country, but it’s not the deciding factor. Given the opportunity to visit North Korea or Iran, does it still matter if you want to pay thousands of euros or hundreds of euros? Our customers want security and reliability, lowering the price simply does not help, and let’s hope it doesn’t jeopardize customers’ trust in us.
We were not utilizing validated learning. In fact few of our decisions were made based on solid facts and validated results. Arrogant people often think they are the best in this world and they usually piss of everyone else and complain about “why everyone is against me?” Arrogant companies don’t get customers. What they do is not to satisfy customers, they just want to prove themselves correct.
The build-measure-learn loop should be continuous and iterate in fast pace. Build a minimum viable product and measure how successful it is and learn where it could be improved and improve the MVP and enter the next build-measure-learn loop. Validate minimal concepts at a time. Get the whole project running and receiving income before burning out what you have.
It’s true that starting up is really management — if you know where to put resources and man power, and keep track of the direction the business is running towards, you won’t be too wrong.