There are a lot of successful startup examples out there for us to learn about. They have a lot of similarities and those are the keys to success. First of all, they all have a clear target market and they know what their target audience needs. Secondly, they have a well-developed revenue model. Furthermore, they have a great team to keep working on the product or service. Last but not least, they know who their competitors are and how to differentiate their products from others’.
Because we are working on a carpooling service mobile app, I got a lot of insights about this industry from the podcast How I Built This: Lyft. At the beginning, the founders of Lyft were just targeting college students and they put on customs to pass out the flyers to promote their service. The co-founder of the Lyft, John Zimmer said they had to call and visit about 100 universities and pitch their ideas. They also connected their mobile app with Facebook so that college students may make connections through ride sharing. They could do the ratings and leave comments to make the service more reliable in college campus.
Zimmer also mentioned about the development of people’s behavior in terms of the use of transportation. Nowadays, people are spending too much money on their cars, however, their cars are parked most of the time. It’s kind of waste of resources. Therefore, the founders noticed the issue and try to change people’s behavior to share their rides with others and make some money in the meantime by using the app.
The Lyft charges passengers based on the distance and time of the trip and they will take 20 to 25 percent revenue cut of each trip as their main revenue source. We’re also considering this as our revenue model.
The most challenging task the founders faced was dealing with the governments. As more and more people were using the Lyft, multiple cities and states governments questioned the safety of using the carpooling service. So the founders had to ask for meetings with government officials to explain how the background check works to ensure public safety and what will be the benefits of this service for the city or state.
In terms of how Lyft differentiates itself from Uber, Zimmer said Lyft provides reliable carpooling services at best possible price. More importantly, they are focusing on enhancing the experience for drivers so that the drivers will make the service better and passengers get treated better. So I think Lyft is transforming itself from a commodity product to a differentiated product gradually.
In conclusion, the biggest take-away for me is that Lyft is trying to build a brand new transportation culture which focuses on the design around people, not the transportation tools themselves. Their goal is to make their service bigger than transportation. Overall, I think Lyft is a great role model for us to learn because we’re really similar in various kinds of aspects. In a word, we are aimed to create a campus ride-sharing service targeted at MSU students to build a culture beyond carpooling and strengthen the closeness of our community because We Are Together (WAT).