This article was originally posted on www.lebnet.us.
Andre Haddad left Beirut in 1989 because his parent’s house was bombed during the war. Twenty nine years later, he is a successful entrepreneur and CEO of Turo, a peer-to-peer car sharing platform featuring 350,000 registered vehicles and 100 million signups. How it all began?
On September 10, Haddad opened up about his success and lessons learned during a panel on peer economy, organized by LebNet and TechWadi. Around 100 people gathered in Cambria Gallery in San Francisco to listen to his talk about Turo achieving product/market fit, scaling, and dealing with challenges.
The session was moderated by Rony Chammas, the founder and chief product officer of Peerspace, a peer-to-peer marketplace for booking spaces for events, meetings, and film shootings in San Francisco.
From Idea Creation to Market Fit
Haddad laid the foundation of his success already in his childhood. During the bombing of his hometown, his entire music collection was destroyed. When he moved with his family to France, he started buying music records and vinyl discs from eBay at bargain prices and have them shipped from the US. One day, he came up with an idea to create a similar concept in his country of residence to avoid the trouble with shipping. This is how he launched his first startup iBazar, which was acquired by eBay in 2001.
“That was my first step into the internet world and building something from scratch. During those times it was challenging to know whether it’s a good or bad idea,” said Haddad.
After taking on executive roles at Shopping.com and eBay, Haddad returned to the startup scene in 2011 and joined Turo (previously RelayRides) to solve another important issue.
Step #1: Solve Your Own Problems, Then Solve the Problems of Others
As an owner of multiple vehicles, Andre faced one specific problem — his cars weren’t being driven enough to stay in a good running condition. That's why he became passionate about Turo’s value proposition that allows users to rent and lease cars from other individuals.
“I felt that I was solving a problem, something I would be interested in addressing as a consumer. It’s good to have a personal connection with the problem because you spend many years in your life to build it and pay for it , and you go through lots of ups and down. If there’s no personal attachment to the problem, it will be much harder to succeed in the product/market fit and be persuasive enough to encourage others to join you,” he advised the audience.
That first step in the product/market fit did not require data tracking and analysis, but trusting your gut. Once entrepreneurs identify a real market need, they should shift their focus towards metrics and data.
Step #2: Be Obsessed about Conversions
Conversion rate tracks how many people that downloaded the application became real customers. A high organic conversion rate is a clear sign that the product is a good fit. Once entrepreneurs reach that phase, they should start thinking about scaling.
Step #3: Spend Money on User Acquisition
According to Haddad, Turo has around 10 million signups, 350,000 registered vehicles and 6 million booked days. Yet, he believes his business is still in the early stage. "It’s not Airbnb and Uber,” that's why the team keeps looking at the number of downloads and bookings and spending more money on growing their traffic.
“When you have high conversion rates then you know there’s a strong probability people will download and use the app. So you start spending more money on acquiring new users,” he explained. Today, the team measures the money spent on ads to track how quickly each paid customer generates revenues, in other terms ROI.
“Turo's investors know that we’re going to spend will be on marketing expenses. Even now, eBay spends 30 percent of its revenue on marketing,” he clarified.
The main takeaway? “You move away with just product/market fit and conversion towards creating a balance between free and paid traffic and how much are customers generating. Business management becomes more complex, metrics become less simple and cover a variety of things.”
Step #4: Become More Disciplined
To figure out product/market fit, you need to have a lot of passion and creativity. But to figure out scaling, you also need a lot of discipline, data measurement tool and team management. Haddad believes that entrepreneurs have to start hiring people who are more skilled than themselves and to figure out ways to keep them motivated. “How do you bring people who don’t have the similar passion you have for the product you built, but empower them to run the business?”
Like for many entrepreneurs, Haddad's journey was bumpy. “The car business is a $80 billion market. There’s a high demand for cars but what wasn’t clear back in 2011, is whether anyone would be willing to share their cars,” he said about the early beginnings. The first time he gave his Porsche keys to a stranger, he was a bit frustrated but decided to go with his gut.
“Throw yourself into something you are really passionate about and be engaged in the problem you are solving. It’s hard to have a long-term commitment during the ups and downs if there’s no real connection, if it’s not part of your life.”