When I joined the eHotel.cz team more than 2 years ago, I thought it would be a piece of cake. Huge market. Product almost ready. We’re smart guys. That sounds like imminent success, doesn’t it? In reality, things work differently. I was horribly wrong.
#1: Lets get a tiny part of this huge market. It should be easy.
It should, but it is not. If you build a hot dog stand in front of a McDonalds, you probably get enough revenue to keep going. It does not work like this in competitive online markets. If your product is not a superstar or a great niche player, you get nothing.
The good thing is that we figured this out soon enough and starte working. Currently, we are already gaining market share.
#2: There is competition, but we’re smart guys, we’ll be ok
The competition is hard. Much, much harder than I ever expected. We need to play an A game in all the aspects to keep up: Product design, UX, SEO, Advertising etc.
Many authors and mentors discourage startups from entering competitive markets. For example Peter Thiel in his great book “Zero to One“. However, look at Uber, Tesla, Apple and the other superstars. They all entered a very competitive market and were able to transform it.
#3 If you can grow revenue, you can grow profit
No, you can’t. Getting evenue is easy. It is just a function of money your going to invest into your product and advertising. Getting profitable is a completely different game. This is the hard part.
#4 Online retail is great because you do not have to deal wih the customers
Oh God. Online bussines is a fiction. The barrier between online and offline business is gone. The website (online hotel booking engine in our case) is just a tip of an iceberg. There is a huge amount of customers request that cannot be handled automatically. People call you, e-mail you and you have to have a big enough team to deal with it. The good thing is, the better the product is, the less request we have to handle by hand. But still. The difference between an online booking site and a physical travel agency is much smaller than we thought.
#5 You can easily say what campaigns will work
If it was that easy, all hollywood movies would be blockbusters. Still, there are a lot of movies with millions invested and zero success. The same goes for advertising campaigns. It is impossible to predict what will people like and engage with. The only thing we can do is test many ideas in small batches.
#6 People will remember us and like us
Until you get big and famous, nobody gives a shit about your company. Nobody trusts you. Nobody remembers you. It is not possible to use the same marketing techniques like lovebrands use. If brands like Apple, Google or Uber say something, everyone listens. If a “no-name” company says something. Nobody listens. Until you build your brand name and authority, you’re nobody.