Serving Essential Needs or Creating Demand?

Verification notes (2026-10-28): 1. Ctrip was founded in 1999 and Qunar in 2005; the two merged through a share swap in 2015. Sources: https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0419/9722564/sehk21040600248.pdf https://www.reuters.com/article/technology/china-online-travel-firm-ctrip-in-tie-up-with-rival-qunar-idUSKCN0SK15J/ 2. Based on comparisons with these sources, statements for which no reliable source could be found have been removed, and some wording has been revised to a traceable version (one change in total). ---- #Serving Essential Needs or Creating Demand? This is an enduring question in entrepreneurship, one I have discussed in several recent posts. My own preference is to confirm that demand genuinely exists before moving on to the business model, technology, product development, team building, fundraising, and so on. If there is no demand, doing those things first may ultimately mean twice the effort for half the result. I would also suggest asking what impact your venture would have on the world. If it ultimately failed, would the world—or, on a smaller scale, Taiwan—really be any different? If the venture is optional, its presence makes only a slight difference, people can carry on much the same without it, and alternatives abound, building that business will be hard. But if your venture can deliver something ten times better, rather than a 20% improvement or cost reduction, rapid adoption could still create demand. ---- “Essential needs”: “A startup must target existing market needs that are not being met. Do not imagine that you can create demand yourself.” Or: “Entrepreneurs lack the capabilities and resources to educate a market; that is generally a job for large companies. Entrepreneurs should look for existing pain points.” Yet demand can also be created. When is that possible? When your product delivers an experience so good that it represents a qualitative leap, demand can be created. For example, is “traveling to Mars” an essential need right now? Now imagine that, decades from now, Elon Musk makes traveling to Mars simple and safe, like taking a high-speed train today, and exceptionally cheap—perhaps comparable to the cost of an overseas trip today. Could that ignite demand for space travel among the upper-middle class? So, returning to our earlier point: when your product or service is exceptionally good and makes a qualitative leap, demand naturally emerges. ----- “Find unmet essential needs in the market rather than trying to educate the market and create demand yourself” versus “Demand can be created.” These two ideas sound somewhat contradictory. But are they really? The question is the level at which each idea understands the word “need.” Qunar founder Zhuang Chenchao later made a substantial return through the merger with Ctrip. A prodigy from an early age and a highly successful entrepreneur, Zhuang has always been exceptionally clear and precise in his thinking. At an internal talk, he once asked: “People now see Ctrip and Qunar as two companies competing neck and neck. But have you considered that Qunar was founded six years after Ctrip? Why could it pose such a major threat despite starting so much later?” Six years is almost a lifetime in the internet industry; two economic cycles may have passed in that time. Yet Qunar started six years after Ctrip and eventually stood on equal footing. Why? Zhuang explained it this way: “One fundamental mistake Ctrip made was miscalculating the size of its market. Why did it get market size wrong? Because it defined users’ needs incorrectly.” For a long time, Ctrip thought its market was “online travel,” or simply “online ticket booking” plus “online hotel booking.” But that positioning was wrong in two ways: First, “online travel” itself was then growing at 40%–50% a year. Suppose you had a 50% market share—already very high. Two years later, because the market had been growing so rapidly, even if you had grown too, the additional market capacity left open would be enormous. It could easily accommodate two, three, or even four more companies. That leaves room for potential competitors. Second, “online travel” is not a fundamental human need; it is not abstract enough. Consider why Ctrip did not develop a business like Airbnb. It saw “booking hotels online” as its primary market. But that is not the underlying human need. The underlying need is “having somewhere to stay when you are away from home.” Airbnb therefore said: do not stay in a hotel; stay in someone else’s home—it is cheaper and more fun. In doing so, it opened a new market. Zhuang ultimately summarized it this way: if you want to build something, remember two things: First, choose a relatively stable market as the ultimate arena for your company’s strategy. Do not choose a rapidly changing, fast-growing field as that ultimate arena. Pay attention to “ultimate”: at the startup stage, you can be intensely focused on a niche. But that brings us to the second point— Second, every so often—roughly every six months, for example—move your understanding of your business up one level of abstraction. What are you really doing? What very basic human need are you meeting? What other ways could you find to meet that need? In other words, for whatever you want to do, participate in, analyze, or invest in, what exactly is the need, and at what level should you understand it? ----- #得到 #張瀟雨經典商業案例課