Ridehailing app venture  —  78 lessons learned

These are some of the lessons I learned while researching, raising investment, setting up, managing, and handing over EasyRide, Mongolia’s leading ridehailing app venture:

A. BUSINESS MODEL & MARKETING

• Little or no competition could mean the market is not ready.
• Draft business models, but decide only after you understand the users. Establish a simple pricing system.
• There is always a sales funnel. Draw it, understand it, and optimise based on it!
• Don’t do any marketing for which you can’t measure ROI (i.e. you can’t know if it worked or not).
• When you list benefits, think how each of them could be used as ammunition against the business.
• Wherever you are, whatever you do, think about how you can efficiently market the service in that context.
• Don’t shy away from researching and copying (and improving, where possible) what competitors are doing. Keep an eye on similar players in other markets as well.
• There is one situation where you can work with competitors: where the sum of your efforts can achieve better results in educating the market.
• Have different marketing goals for each social platform.
• Every single page or account you manage has to lead viewers to installing the app (Google Play, App Store). Same goes for about half the things you post. Raising awareness is good, getting people down the funnel is better.
• Don’t optimise for views, clicks, installs or even new accounts. Optimise holistically for whatever action generates income for the business.
• Low user acquisition cost (UAC) means nothing if you don’t focus on encouraging recurrence. Consider measuring Customer Lifetime Value.
• When you change things based on users’ feedback, make sure to communicate that (on both an individual and on a community level).

B. PRODUCT & TECHNICAL

• In different markets, you might need different solutions to the same problem. Build the product tailor-made to local culture and expectations.
• Unless there’s high competition, develop for one platform (Android or iOS) only. Add the second platform after achieving product-market fit.
• When considering a new feature, a good rule of thumb is to ask: is any other (relevant) app in the world doing this? If the answer is no, then don’t do it.
• Don’t develop any features that you don’t plan to start using immediately.
• Before publishing any additional features, show it to someone who has never seen the app.
• Test the app extensively. When the update is urgently needed to fix major current issues, perform at least a smoke test before publishing.
• Even and especially after launch or update, have the technical team ready to step in immediately for additional bug fixing and/or optimising.
• Expect the need for technical development for at least 6 months after launch. If the venture is growing steadily, plan for continuous development.
• Use video analytics to see where users get stuck and think of ways to help move them forward.
• Have non-savvy people use the app and think out loud. Take notes and work on making the user journey easier to go through.
• Think how you can introduce gamification in the app. Design rewards correctly and don’t make major changes more than once per trimester.
• The app has to make users feel good about themselves and the decisions they make.
• Even if the team is really small, it might be worth having a full time UX analyst and/or mystery client.

C. COMMUNICATION & CUSTOMER EXPERIENCE

• Before you even launch, draw the map of all user touchpoints and be ready to deliver great UX (including customer support).
• Tone of voice is an important component of communication. Choose one that best represents the brand and stick to it.
• There should be a public communication guide that all employees read and acknowledge.
• Train customer service representatives to never assume or promise anything. Listening and understanding is more important than replying.
• Safety and confidentiality should be at everyone’s top of mind. No matter what we do, we’re in the business of keeping people safe.
• Show users how to use the app (live demo, how-to tutorial, in-app walkthrough etc).
• What is the ideal user journey and how do we encourage that?
• Recurrence is crucial. Ask yourself / customers: why would they use the service again after a first experience?
• In terms of user experience (online and offline), what can go wrong and how can we mitigate that?
• Unless there is little competition, you don’t get a second chance with dissapointed users.
• Find ways to stay engaged with users through direct communication channels (phone call, SMS, email, push notifications).
• Don’t message users more than twice a month. Stay mindful and relevant.
• Understand that growth will mean losing some service quality. Determine what is acceptable and what is unacceptable for the brand and business.

D. INVESTORS / PARTNERS, LEGAL & FINANCIAL

• When partnering, focus on assessing partners’ fit (values and expectations from the business), as well as building trust. Legal agreements can reduce risk of loss, but they won’t increase chance of success.
• Onboarding partners is just as important for the business’ success as is onboarding employees.
• Cap table (present and future/expected) is the single most important corporate document you can agree on with partners.
• Leave an auditable trail of every decision you made (alone, by vote, or in consensus; explicit or implicit). This trail should also include deliverables, milestones, and achievements.
• Unless agreed upon otherwise, all shareholders (no matter the equity owned) are entitled to the same level of access and involvement in the business.
• Show all shareholders the same level of attention and respect. You have the same responsability to all of them: to increase the value of the business and to deliver profit.
• As CEO/GM, you should always volunteer to take as much “heat” as possible — from employees, shareholders, clients, suppliers, competitors, or the general public. Learn to absorb or defuse the attacks against the interests of the organisation.
• It is never too early to reach out, engage with, and support public organisations (City Hall, police, schools, NGOs etc). To allow the CEO/GM to focus on core business, this should be initiated by the other partners.
• Every clause in every contract you make could potentially make or break the business. Make sure you understand implications by thinking about best/worst case scenarios. Never translate contracts or even individual clauses.
• Have someone (preferably outsider, experienced and trustworthy) monitor cashflow and expenses, permanently looking at ways to optimise spending. When you’re focused on core business, it’s easy to lose track of financials.
• If you’re not getting revenue and/or you’re not profitable, make business decisions considering the runway.
• Don’t let yourself get distracted by financing opportunities. If you need/want to look for investment, either delegate the responsability or pause operations and focus on it full time!
• Onboarding accountants and lawyers is something almost no business does. Do it and it will pay off (both in terms of costs and results).

E. TEAM & DEVELOPMENT

• When it comes to roles, start lean, but always have expansion in mind.
• Don’t try to lowball employees — you risk making them lose enthusiasm. Offer them a fair salary (and options), ideally more than market rate.
• Be mindful of the titles you give to the employees. Remember: it is always easier to promote than to demote.
• Office design and rules set the tone for the employees’ interactions and the efficiency of their work.
• If the employees come from different backgrounds, enable group cohesion by encouraging personal storytelling.
• Set clear responsabilities. Tasks can be delegated; responsabilities — cannot.
• Empower employees to make their own decisions. Make sure they understand you will always stand by their decision, even when you criticise it. Criticising should only be done when there is a lesson to be learned. To make it easier for employees to make decisions regarding resources, introduce spending caps.
• Everyone on the team has to constantly use the service. If they don’t do it out of their own initiative, understand why.
• Treat every employee equally and make them feel valued. Never gossip; never accept a culture of gossip!
• Encourage employees to compete with themselves, not with other team members. Assess individual progress more than progress relative to the group.
• Introduce and follow up on team performance reviews. In my opinion, these should be more self-oriented, not necessarily business-oriented.
• If you have to fire someone, explain the decision to both the person being fired and their team.
• If you’re running a distributed team, ensure everybody is properly onboarded and involved. The greater the geographical distance to the place of operations, the greater the mental distance from the business’ mission.

F. STRATEGY & OPERATIONS

• Business design is one of the most important things a CEO/GM can work on.
• Consider and plan for seasonality, weather, and other external factors.
• As early on as possible, establish and communicate contingency plans (i.e. “what do we do when the worst happens?”).
• Don’t set targets before starting the operations. Set assumptions and expected results based on those assumptions.
• Set KPIs based on strategy: reaching profitability as soon as possible or high growth & exit.
• For every repeating work, draft a procedure. Always follow procedures, but be ready to update them as often as needed.
• Any task that a manager does recurrently (e.g. operational reports) should be automated or delegated, so that the manager has more time to work on core business.
• Choose a discounts/subsidies system and stick to it for enough time in order to be able to analyse actual results versus expectations set.
• Don’t argue on things that won’t matter 6 months into the future.
• If you plan to ever expand internationally, raise investment, or get acquired, use English as the default language within the business.
• Whenever you outsource an activity (legal, financial, PR etc), ask for a reduced rate and include a success fee in the compensation plan.
• Reach out and promote businesses that could help the business. Don’t ask for anything in return; raising corporate awareness and building public support pays off in the long term.
• Never act on impulse. Unless it pertains to health or safety, nothing is urgent enough to not allow yourself enough time to come up with a thought-through response.

G. PERSONAL

• Take time to connect and maintain contact with like-minded people.
• Take time to look back on who has been a positive influence in your personal and professional development — and thank them.
• Take time to keep yourself up to date with the developments in your industry. You can’t allow yourself to be left behind.
• Take time to think about and write the lessons you’ve learned and to mentally prepare for bigger challenges. Always choose the harder path forward!

I originally posted this here: https://medium.com/@tudoriliescu/ridehailing-app-venture-78-lessons-learned-a41880e07c67