Test and subsequently focus.

Test and subsequently focus.

Entrepreneurs we interviewed emphasized the importance of testing and focusing on the most key important channel for business development and allocating adequate resources between to develop the channel. In China, the median time for company inception to closure is 2.9 years – hence our interviewees understand the need to continuously grow and gain market traction or otherwise risk the fate of exit. One of our interviewees explained that he did a survey on the death rates of technological firms in China. He concluded that less than 10% of firms fail because the technology fail. Most of the time, it is caused by lack of technology adoption. The Archilles heel of most companies do not reside in product development but customer development, which most companies fail to develop in parallel.

On resource allocation to test the market, Tao Zhang explains that it is difficult to name an exact allocated percentage as the whole business comprises of a mix and match of each elements. “For example, web statistics plays a very important role for us to understand the surfing pattern of consumers and is indicative of the likes and dislikes of our consumers. We have also allocated a forum which allows members to express their appreciation which is indicative of which feature is popular amongst our users.” “Through these different methods, we are able to better understand our consumers. Observing our local and overseas competitors also provides key insight to improving our business operations. For example businesses like Tudou or Youtube with a similar business model allows us to identify some good practices which could be adopted into our system.”

Winning move: Do not neglect customer development. Utilise tools (e.g. forum, web statistics) and monitor your competitors to glean market insights.