The Lessons I Learned from Starting a New Business
In 2017, I reached out to 2 of my friends to discuss my idea of starting a new business. That’s the year after I just completed the military service. The feeling of getting freedom is awesome and every part of the world just seems so beautiful. With this momentum seeping into my heart, this drove me to start this crazy but later figured out the bitter journey. To this point, you could know we didn’t succeed in making it work. However, every journey has its meaning and always has something to learn if we’re willing to face it and think.
Therefore, I would like to take this opportunity to share what I learned from this journey. This will be divided into 3 parts to discuss, the first one is about the introduction of our final business model and the second one is about the lessons I learned. Last but not least is about my overall reflection on this whole journey and the reason why we decided to end this.
Our business model starts from the vision of “Provide a service to touch people’s heart and further motivate people to take action to make this world better”. Based on this framework, we think the model could be the O2O, which is through the online service as the media to trigger people’s offline action in the real world. In the beginning, our initial idea is to create the content with the story linked with our daily life and design some activities with the reward inside the story as the way to motivate the participants to take action in their life. Nonetheless, the team’s composition is only engineers and a business analyst. That said, we don’t have the strength in producing good content. After many rounds of user tests and prototype modification, then we have the new business model as the following chart:
Basically, the initiators can launch the activity by asking the participants to take a photo of the specific topic, setting the number of how many photos should be taken and the promise when the goal is achieved. And once the goal is achieved, then the initiators should fulfill the promise and the participants can rate the initiator when verifying the promise made by the initiator. About the way of generating the revenue, what I could think at that moment is the Ad. That means when the business-based initiators want to gain more exposure to the public, then they need to pay.
The following is the demo video of our prototype. (The initiators inside the video are not real)
Though this journey is bumpy, this also gives me some lessons. Here I would list 3 lessons I learned.
- Demand-driven rather than vision-driven
One of the mistakes I’ve made is that I start this business out of the vision. That doesn’t mean vision is bad, but what really drives the business work is the service that can resolve the customer’s pain point. If the business model is constrained by the framework of this vision, it may take more time to find the right product or service that meet customers’ need.
The better approach might be to start it by understanding what the customers need and even better if we’re the customers of our product or the service.
2. The team’s devotion should be 100%
Another weakness we have is that I’m the only one among the team fully devoted to making this work. That really holds back the whole product development. As we know, it’s difficult to make a business model work even the team is fully devoted to it, not to mention the opposite case.
3. The know-how to make the business model work
The final business model we set is actually like the chicken-egg problem. The activities that can attract the participants are usually the ones with big promises. However, that means these usually can be launched by the initiators with enough resources. In the other words, we have to find the big companies to support us to launch the activity. But at the same time, if we want to persuade the big companies to support us, then we need enough participants to attract them. In addition, negotiation with big companies usually takes time and effort. Without the experience in doing this, personal network, and the other resources, this just makes it hard to see the silver lining.
When seeing back this journey, it’s like riding the roller coaster. There can be days filled with hope and joy, especially when the new ideas become the real features in the prototype, but also days filled with despair and distress, especially after the prototype is tested by the users. However, I have to say the prototype test by the users are quite important, though the truth is always cruel, this really gives many precious feedbacks.
After many rounds of user tests in this journey, I would summarize the 3 most important factors to a product’s success.
The value created by the product should really be the one customers need.
The business model should be technically feasible. And the team also needs enough engineering capacity to develop the product as this is the key to efficient iterative product development.
- cash flow
If the product can really resolve the customer’s pain point and is technically feasible, but can’t generate the positive cash flow, then nothing is going to work in the end.
In the end, the reason I decided to put a halt to this journey is that the development of the whole product is too slow. I can’t say the final business model is really impossible but without the team’s hundred devotion and experience or the resource in this field, I think it’s a wise decision to do so.
I hope this sharing could give something to people with a passion to start a new business. May everyone’s passion could be turned into the value the customers need in the future. 🙂