Advance & Resistance
It was a dramatic as well as chaotic 6 months during the first half of 2020 for the whole TADA business.
I have never experienced such an unreasonable and stupid situation before, even when I was running my own start-up few years ago. I’ve gone through heaven and hell, and been exulted and blue several times a day only by external factors — the taxi industry and the government.
Having disposed of the whole mess behind so far, I’d like to share the short story of my last 6 months.
1.The court’s decision (Feb 19, 2020)
The Seoul court finally rules Tada not guilty of illegal transportation.
You can read the articles above for more details. This victory meant that it became finally possible to do a disruptive & innovative business (based on the current law though) in South Korea’s mobility landscape. Many people supported us and this was a great advance in South Korea’s start-up history.
By the way, I was holding a meeting with my colleagues when I heard this news. I knew it was about time to get the judgement, but I was trying not to pay attention to the news on purpose because it was out of my control anyway. Paying attention to that was not supposed to make any difference to the judgement, so I didn’t do so.
But please don’t get me wrong, this day was one of the happiest moment in my life. I’ll never forget this moment since VCNC successfully made a big change and impact to the whole society through TADA business.
2. A new law enacted (6 March, 2020)
After the short happy days, things drastically changed as National Assembly passed the law that prohibits TADA BASIC with the full support by MOLIT (the Ministry of Land, Infrastructure and Transport).
MOLIT had pushed hard the ride-sharing reform plan coupled with the new law. Problems with this plan is that you still do not know how many vehicles you can operate and how much fee you have to pay in order to do the type 1 ride-hailing business. Moreover, according to this plan, all the decisions are supposed to be made only by the government. So they have the power who to let live and who to kill.
If you can’t determine above numbers, you cannot make a business plan. If you cannot make a business plan, you will never be able to get funded by investors. Even if the government determines those numbers, and let’s say which are unrealistically too high, you won’t be able to make a profitable business either.
This is an extremely negative signal to entrepreneurs and investors because it makes people do only what it is allowed by laws. It showed that even though you made an excellent business which many people are fond of, brought an enhanced social welfare by providing a far-better service, and proved a way of innovation, if the legacy (the taxi business in this case) strongly opposed to this change, the administration power can simply kill it by legislation.
The ridiculous and stupid thing is that part of the government (The Ministry of SMEs and Startups) encourages entrepreneurship while another part (MOLIT) successfully choked the innovation by simply changing the law.
3. Survival afterwards (7 March 2020~ )
We decided to shut down TADA BASIC in early April. It was a hard and painful decision but we had to do so because not only the law but also COVID-19 has also started affecting the whole business performance.
I also had to restructure the team since BASIC was not sustainable anymore without external investment in the long term. It was designed to make profits after fully expanded (you know this is the nature of platform business), but the problem was that it was not right time. It was very painful to go through this period. Many colleagues left VCNC voluntarily but I had to keep a certain number of talented people for future businesses. This time was an extremely difficult challenge to my leadership.
Somehow I succeeded to complete those tasks, and today I’m working on a couple of new projects with them as there are still tons of things to disrupt in the mobility industry.
4. Lesson learned
It feels extremely frustrated to be judged by external legacies, not by our business achievement.
Shutting down TADA BASIC was ok (actually it was not ok, but what is gone is gone), but I really regret that I had not had enough time to build personal relationship with my colleagues. I thought empowerment and delegation were the key for good performance, but I realized that sometimes people need care from the top management.
I also learned that sometimes you do have to compromise with the external factors (in this case the government and taxi industry) for survival. This doesn’t mean that you have to be always obedient to them, but rather you should manage risks by building a healthy and equal relationship with them. I realized being in a constant conflict with a certain party doesn’t help the business at all in the long run.
