If you founded Grab, would you find drivers or riders first?
Originally written in Chinese. Translated with AI, reviewed by Gary. Read the Chinese original →
If you were the founder of Grab, would your first job be finding more Grab users, or more Grab drivers?
I always thought both mattered, and you had to find a balance.
But recently it suddenly clicked: drivers matter more than users.
Why?
1. Demand doesn't appear out of nowhere
The need to get around is there every day. If 100 people in a city need a ride today, it won't suddenly become 1,000 tomorrow.
Even if fares were ten times cheaper, people wouldn't suddenly make ten times as many trips.
The same logic applies to e-commerce: people eat, get dressed and buy things every day.
An e-commerce platform doesn't create more demand out of thin air.
2. Supply decides the experience
What really changes a market is efficiency on the supply side.
- Only when Grab has enough drivers do users find it faster and more convenient, and switch from how they used to get around.
- Only when an e-commerce platform has enough sellers and enough products do buyers stay, instead of leaving after two searches turn up "out of stock".
In other words, in the cold-start stage, solve supply first and users will come.
3. The key to the balance point
Of course, if there's supply but no demand, drivers and sellers get no orders and leave right away.
So the right cold-start play is usually:
- Pile up supply first, so the platform has something to choose from;
- At the same time, guarantee a minimum level of demand, so the supply side has hope of getting orders.
This is a general rule of two-sided markets: food delivery signs restaurants first, e-commerce signs sellers first, ride-hailing signs drivers first.
4. The flip in the growth stage
Once there's enough supply, the logic flips:
- When e-commerce enters its growth stage, user scale decides GMV, and sellers naturally follow.
- Once Grab's driver supply is saturated, the focus shifts to educating users and converting more people from traditional ways of getting around.
Cold start is about supply, growth is about demand, and maturity is about keeping supply and demand in balance.
Don't stop at "balance"
In the early days of a startup, you can't stop at the idea that "supply and demand need to be balanced".
In most two-sided markets, solve supply first and you get the experience; with the experience, demand comes in; only then do you talk about balance.