This is how Toss started | PO SESSION

Hello. This is Toss Team Leader Seung-Geon Lee. Today, we started the PO session with new content. I was wondering what to cover since it seemed like this would be the last topic we would cover, and then I came across one of our comments about Toss' struggles to start a business. I prepared the content with the content of how I grew up and how I created everything.

So this is Winning Strategy. It's about how to win. Those who want to live will die, and those who want to die will live. As you know, this is something that Admiral Yi Sun-sin said, but for a very long time, I was unable to grasp the depth of Admiral Yi Sun-sin's meaning.

So let me tell you how that story came about. There used to be an item like this. It's a service called Ulabla. The businessman and entrepreneur who came up with this dreamed, 'This will really change the world.' What kind of item is this? It is a kind of social network composed of screens like this. If you look in the middle here, you can see the two phones in the middle of the bottom, touching each other. If you press this screen button, it is a service that allows two users to verify that they met offline. Once you're authenticated like this, you can leave a feed about what you do when you meet up, and it's a kind of social network where you can see and enjoy what you and the people around you are doing. At the time, I think people thought that people would eventually hate the fact that they were increasingly communicating online rather than meeting offline through social networks or social media. And since offline meetings are the most fun, wouldn't it be fun if a service that preserved those memories appeared? That was the simple idea.

But this actually doesn't work very well. Users don't use it much after launching. The entrepreneur couldn't understand why it wasn't used much. This is such a great item, why wouldn't I use it? It seems like a really good and fun social network, but no one has used it for months, so I've finally come to a conclusion. 'Ah, the reason I don't use this is because it's not pretty.' 'After all, SNS has to be pretty.' At that time, there was a very famous SNS app called Path, which is now gone, and Path was famous for being very beautiful and flowing. So, we have grown a lot and now we think, 'Oh, if we do that too, it'll be like a pass' or 'If we make it really pretty, it'll work out well.' So you start creating these incredible designs, and you go beyond the slightly clumsy versions from the beginning and you end up creating these really sleek screens. At the time, this service had no users, but I think the design was definitely well done. Because at that time, I started getting calls from places like the Red Dot Award and they were saying they wanted to award me in Hong Kong, so I was really good at design. If you look at it now, you can see that it is very elegant and savvy, but the function is so perfect that I was worried that someone might copy it. Although there are less than a thousand users and it is not a large user base yet, I was really afraid that someone in the US would copy this, so I created a patent. Who wouldn't want to copy such a good item? If you look here, there's a patent for a user network management system based on offline meeting information between users, right? I am the inventor of this patent. Actually, this entrepreneur was me. Yes, everyone. This is my story. I was really worried that someone might actually follow this. Such a good item. So, we develop the patent for over a year. We felt it was crucial to document these offline encounters, so we developed a technology that allows phones to communicate with each other via ultrasonic waves to prevent false records of encounters. It's real technology. This is a technology that is still widely used today. It generates ultrasonic sounds inaudible to people through the speaker and microphone in a cell phone, and makes communication only possible when the cell phone is nearby. However, at the time, the performance of cell phones was not that good, so it was really difficult to make this successful. So it took a whole year. This patent is a real patent that is still on our patent list at Viva Republica. Yes. It's a very heartbreaking story, but they were so confident in their success that they even got a patent and designed it beautifully. But no one uses it. It was so amazing. Why not use this? I couldn't understand. 'No. It's probably because people don't know about it.' So they think, 'If we just let people know about it, it'll be a huge hit.' 'Let's advertise it.' And that's how they do it. This is me... There, standing there is a young man as thin as a piece of paper, very different from now. At that time, he had no money, so he entered a startup competition and had the opportunity to introduce himself to thousands of people for free. Naturally, he became known little by little, so this was bound to become viral growth. I made a lot of announcements while thinking like this. No one uses it... No one uses it, but if you just spread the word, it'll be a huge hit. I think I had this thought. But I still don't use it.

So, we developed something else over the next six months. This is the photo filter function. At the time, Instagram was doing so well that we thought that taking pretty pictures and recording them was an important need for people. So we thought, 'Oh, they're not using it because there's no photo function, so let's add a function to make the pictures pretty.' So we spent six months pouring our heart and soul into adding a filter function. Guys, this photo is actually still on my Instagram. I created a filter that applies to all photos taken on Ulabla, making them look really pretty. Because of this, we did a lot of research on calculating RGB values and making them look pretty. This is the hand of my co-founder who developed it at the time. Anyway, this is the first photo I took. I thought that since I added a filter function to the photo, it would be fine now. But it still doesn't work. I really couldn't understand it. That doesn't make sense. What? So what did we do? Have you given up? No. You said you shouldn't give up on your startup. He told me to do it until it worked. So, 'Ah...' I guess I need to create a viral function. So we create a viral feature. What this viral feature is, when people record their encounters on Ulabla, it automatically spreads to social media using the Open Graph API, which automatically posts the encounters on Facebook and Instagram. The inspiration for this is that at the time, when you posted a photo on Instagram, it was automatically posted to Facebook. Facebook opened up that API. So, there was a time when we created growth where people who said, 'This photo is pretty' on Facebook went to Instagram. We also used the same logic and made it so that if you leave a photo on Ulabla, it would be posted on Facebook or Instagram. But it still didn't work. I really couldn't understand it. By this time, it's already been a year and a half or two years since we first started, so we thought it might be because we weren't doing our marketing properly, so we made a lot of marketing plans. In this way, if you look at this large whiteboard in my house at the time, you can see that I had really detailed and detailed 1st, 2nd, and 3rd marketing plans, and it was just a huge whiteboard that was a mess. I did it to that extent, but I think I had already had a feeling about it by this time. Something is wrong with this. I think I was thinking, maybe not. Because at that time, I posted something on Instagram that was full of emotion, like, 'The starlight flows and scatters silently like the white snow on a dark night.' It was May 2012, right? What is this? Is it December from the song called 'Dark'? Is it December's 'dark'? Is this the dark 'December'? These are the lyrics of that song. I was very depressed.

Then, there was a senior who saw me at a startup competition and started to take good care of me. I felt it was a waste to even meet this person. If you're just thinking about quickly developing a product and making it more enjoyable for customers, why would you meet people outside? I was thinking about this, and this person came to the front of the company and asked to meet for 30 minutes. Just 30 minutes. I think this person had something he really wanted to tell me. I met this person and he asked me what I was doing these days, so I started explaining our items. It was just a matter of pressing a button, and then they said, 'Ulabla is like this.' and 'Isn't it great?' and this person was so respectful and said this to me in a very pleasant way. 'You're doing something really interesting.' 'But why do you use that?' 'When do you use it?' You said something like this, and it was something I'd heard a lot. At that time, many people said such things, but with the indomitable will of an entrepreneur, I didn't listen and went straight to the counter every day. I talked about certain logic that only existed in my head and passionately sang why I had to use this. But what this person said that day deeply pierced my heart. So you know. That no one needs this. It took two years. Like, 'No, this will be fine.' 'This is awesome.' 'Let's get a patent too.' No one can replicate it. 'It's because it lacks features.' I, who had been trying to make it work somehow through various features, finally realized after hearing this that it wasn't the case anymore. In this place. I'd like to share a little bit about how I felt at that time, but I think I knew. About a year ago? But I didn't want to face it. The truth. I was scared. In fact, I think it was because I lacked confidence and was afraid that I couldn't face the fact that this was a feature that no one actually used and that it wasn't needed. So I create hundreds of reasons why it will work, and when people ask questions, I answer them. And it's a story I made up, but because I answered it so many times, I ended up falling into it myself and thinking it was the truth, and I firmly believed it. 'Pretending to be strong and thinking things will be okay is strength.' 'You should always pretend to be okay before things are actually okay to make them work out.' I thought that this was strength. A truly skilled businessman is someone who can answer every question right away. I think that's what I thought. But rather, it was a weaker appearance. So, I pretend to be strong and keep trying to solve it somehow with a strong will. I thought pretending to be strong was a good thing. But those who want to live like that will eventually die like this. You will definitely die.

So in the end he died. If you look at this person's train of thought, he's like, 'Oh, this is really going to work out. This is awesome.' He's incredibly optimistic. 'This is a great item. We can't do well.' That's how it always starts. 'Let's develop everything because it will work out well. Make it pretty.' 'It'll be good, so advertise a lot from the beginning.' 'Users aren't using it yet, but we just need to expose it to as many users as possible in this state.' They also advertised a lot. In a way, it starts with acquisition. But the numbers don't seem to go up. It's weird. Then there is something wrong, 'it's because of something small', 'the design is wrong'. The explanation is wrong. 'It lacks features.' and things like that. The typical reaction at this point is for the designer to say something like, 'Oh, this doesn't seem right. Could this be the reason?' But when an entrepreneur speaks so strongly, the designer responds, 'Okay... I understand.' If you implement functions like this, developers will also wonder, 'But why...what do I use this for?' and will not be able to understand the essence of the function and what development should be done. But just follow along. Because the entrepreneur is talking. But that won't work. So, you end up saying things like, 'That can't be true.' 'It must be because there are no developers and no marketing budget.' After going through all this, you meet the customer for the first time and hear their story. And then he faces the moment of truth from that customer and dies. How much did this cost? It took almost a year and a half. I spent a very precious 220 million won. I also hired eight other people to write it. Developers, designers, and all other team members have left. So that's how I found out. Ah, so success is more important than doing well like this. So, if there are difficult things that need to be said in order to succeed, you realize that you have to talk about them and correct each other, even if it is difficult. Everyone, you're probably creating splints with some splint content, and you're probably creating some features or something, but do you still think that it'll change any indicators? Are you thinking things like, 'This will work out' or 'This will ultimately change the fate of our company'? If so, how is this any different from me who failed before? Let me tell you the other side of the story. Since then, we've been using the Ghost Protocol and not going to work. Even if we were alone at the office, ideas wouldn't suddenly come to us. At that time, developers and everyone else started to travel around Seoul instead of going to work. So, you have a period of time where you come up with business ideas while observing people. At that time, about a hundred items came to mind. Here are all the items that were organized at that time. Here we have organized this on a Trello board. In the old days. If you look, you can see that there are preliminaries, finals, and prototypes. Then it was discarded. Waste storage facility. I did it next time, but it didn't work out well. Archive. This way, we can do a lot of experiments very quickly. You guys, try failing eight times in five years. If you fail eight times in five years, two things will happen. First of all, even if you fail, it doesn't have any psychological impact. Secondly, I don't think the next item will do well. I think the next item will be a dud too. Let's get lost quickly and move on quickly. It goes into this mode. As you can see here, there are items that didn't even make it through the preliminaries. Looking at the names of these items, there were items like 'Frictionless remittance and payment' and 'Easy remittance and payment'. I bought this item. No one could relate to this item. As far as I remember at that time. So, in order to bring this up to the main event, there had to be some basis for it, and in fact, the members voted and decided that the items they thought were good were brought up like this. What really happened was something like this. A dashboard where you can take photos of receipts and store them, check the progress of items such as cultural centers, department store course portals, and design resources all at once. What kind of item is this? If you look at it now, it's a product that's been around for a while now. But anyway, we prototyped it and launched it, but now it hasn't even passed the preliminary round. To get this through, my thinking at the time was that there was too little to develop and if the company got too bored, developers might leave. Because I really wanted to be busy, so I couldn't do nothing, so I just posted an ad on Facebook without any plan, even though I didn't have any product development or anything. I posted an ad on Facebook and spent 10,000 won in two days, got 35 likes, and was exposed to 6,000 people, with a click-through rate of about 0.4%. The advertisement I did at that time was 'Simple remittance.' 'A service that transfers money in 10 seconds.' It wasn't even a service name at the time, but they advertised it with just this descriptive phrase, and it got a really good click-through rate. Actually, when I did this item, what changed was that from the beginning, I thought, 'Wow, this is awesome. It's not that 'this will change the world', it's that 'this won't work anyway'. So let's just verify the core and quickly move on to the next item. Let's quickly confirm that this doesn't work either and move on. I think that was the thinking. So, before that, it took eight people 1 year and 4 months to do it, spending 200 million won. But I succeeded in verifying it by spending 10,000 won in two days. I ran the ad and there was no product or anything, but there was some response. This is what has changed. The time and cost of failure have been drastically reduced. Before that, we had really created the product and created the team and had it running properly, but now that we were going to fail anyway, we have reached a state where we can have the courage and be able to fail with much less time and money. So we verified it in two days. I just ran the ads by myself. But since the ad results are decent, even if not great, and the click-through rate is good, let's give it a try. It's been a while since I've been like this. That doesn't mean we suddenly created an app. I thought it was an item that wouldn't work anyway. So before creating an app, let's create a homepage first. Let's create a website and do a little fake test to make it look like we have a product. It was like this. This is the homepage I designed at that time. Isn't the design very cool and great? I think I had to buy a domain at that time and decide on a name. At that time, we were going to decide on Spike, and because it had a function to send money to contacts, we used Money Link, and then we used Viva Cash, and eventually we chose Toss, and that's how we got the current name Toss. If you look here, it says, 'Easy and safe account transfer service.' There is no function yet. On the right screen, there was a video about 30 seconds long that showed how the app worked and how money was transferred. By this time, we know that the product won't be ready anyway. This won't work anyway, so why make a product and then make an app, it'll take months. I think I had this thought. Here, I wrote down the guidelines for how live it is, how to color it, and how to remove the representative phone number, and gave them to the developer. There were no designers at that time. We didn't have much money, so I designed it like this, and when the developer saw it, he told me, 'Never do this design again.' But I was proud of that. I think we had a lot of ideas about this, and the past was not like when we went to the Red Dot Award to make it so pretty, but rather, we thought that if we made a really low-priced product like this, it could be done like this. So, since it's an item that won't work anyway, let's just roughly verify it. So, in the past, UX was, 'It's obvious that people won't use it because the design is bad.' Now, we know that, 'A good product doesn't have to be pretty, but it will still be good even if it gets less exposure.' Because when I launched that website, I got tens of thousands of visitors in one day, and it was the weekend. I remember that over the course of three days - Friday, Saturday, and Sunday - there were nearly 1,000 people who signed up to try this out via email. At that time, if you look here, there was a place on the homepage where you could enter your email address. At that time, in the five years we had been developing various products, I think it was the first time we had generated this much traffic without spending money or artificially pushing it. It's amazing that 1000 people came in just 3 days. That's actually the beginning of Toss. So I learned that a product that will do well doesn't have to be pretty. Another thing that has changed is that when something doesn't work, people say, 'This function isn't there, that function isn't there,' or 'If you put this in, everything will be fine,' but that's not true. Just implement one core hypothesis well, and if it works out well, great. If it doesn't, just move on to the next item. It's better to have a good core hypothesis and then add other features later. It's not like you can just throw in all the items that will make it better now. I came to know this idea. So, since it's an item that will do really well, the retention will be huge. Instead of just quietly advertising to users for three months and stuff, let's quietly collect retention data, so we're collecting retention data. This is the first time we are applying the retention cohort concept that I have been talking about for a while. So, if you look at the weekly reuse rate, the weekly reuse rate was around 30%. It was incredibly high, and it was a miraculous service with a monthly usage rate of almost 70%. I think it had a reuse rate similar to Instagram at the time. It was the only financial app with a rating of over 4 stars, had a retention rate of over 40%, and was growing at a rate of 1.4 times every week without doing anything. At that time, it grew 1.4 times every week, so I think it grew four or five times in a month. So we're collecting data for three months, and this is also something that's very different. I had a marketing plan and was trying to figure out how to get this out there, but instead of thinking, 'I have to do this,' or 'I have to do it according to the plan I made,' I found out by asking customers. Oh, what is it about this that makes you uncomfortable? Which one is better? And we don't just derive insights through data modeling or Excel modeling, and then release features that the team thinks about, that I think about, or that I wish existed, but rather features that customers want. You will have a completely different perspective. So, while I was developing this, I met the person who gave me enlightenment at that time. He came to visit the company, and he didn't come to visit the company, he came to visit nearby, and I explained to him what he was doing, and he said that we were going to fail again anyway, but since the indicators were coming out a little better, I wanted to give it a try. It's a remittance app, and it's an app that makes remittances very convenient. When I showed it to him like this, he said exactly this. 'Oh, it smells like money. It'll be good.' He says this. I knew it right then. This could really be a hit. Because I thought it wouldn't continue. Try failing for 5 years. Even if success is right in front of you, you don't know it. But because I kept maintaining that conservative, humble, and negative perspective, I started to think that it would be better to meet the customers first. If you look at the flow of this psychology, it is completely different from before. 'This won't work either.' 'It won't work anyway.' 'Let's stop doing this and that and just develop the core hypothesis.' 'And don't make the design of a product that won't work pretty. Because it's annoying. Because I'm going to throw it away anyway.' 'It won't work, so don't tell users until you're sure it's working.' 'Even if you tell, let's just tell the bare minimum so they can see the retention data.' In a way, when you develop, you want to tell people around you, 'I do this.' I didn't do that. Rather, it seems like he was more humble and quiet. But when the team meets the customer, the product is a mess. And listen to the story. 'Wow, this smells like money. It seems like it will work out.' So, even though the product isn't good, we met the customer first. Instead of meeting customers after the product was ready like before, we listened to the customers first and then decided that since the numbers were good, we should start making improvements little by little. When I talk about this, the team's interesting reaction is, 'I know what you're developing.' 'You don't have to explain it to me.' 'I know what you're trying to do, so I'll design it myself.' So, even without a clear explanation, the designers already feel it very clearly. What are you trying to solve? So the design comes out very naturally and doesn't require much explanation. Regarding the function, 'They say this function is needed. If we say something like, 'Let's try it out,' the developers will think, 'Ah, I know what to do even without an explanation.' The development is completed in one or two weeks. Very quickly. No explanation needed. Because it's clear what you're trying to do. The reaction was completely different. If you, the makers, are having trouble understanding the concept, you can assume that the feature is 100% doomed. How can you explain and sell a feature that even your internal team members don't understand to external people? Such a function cannot succeed. Never. This is a very important indicator for me. I don't know what you guys think. But it still keeps growing. But no. 'This is going to fail too.' 'It's going to fail eventually.' 'Let's take a more conservative approach.' But since things are going well now, let's spend more on developers and marketing. In some ways, this is a completely different way of thinking than before. So, if you look at the thoughts of the person who wanted to die, you know that it would happen someday. You will succeed someday. Because I keep doing it. Because I've been running without giving up for 5 or 6 years now. But I think I wanted to be careful that it wouldn't be the end. That it will be a success. At that time, even among team members, we didn't hesitate to say things like, 'This won't work,' or 'It won't work out in the end.' But no one thought of leaving because of that. In fact, I think it was us who were the ones who said it couldn't be done that made us feel cooler and prouder. We don't care if it's not a huge success. I don't think so. In fact, many teams lack confidence, so they act strong and say things like, 'We're going to do really well.' or 'Hey, look at this.' I think I was able to continue to be negative because I had confidence. In a way, I think the team learned that the humility to say that something won't work out is true strength. I think I made the team members who wanted to succeed realize that the environment itself where failure was normal was normal, saying things like, 'This is going to fail,' 'And our lives are going to be really hard from now on,' and 'It's going to take two or three years.' Those people may have been demotivated at the time, but in fact, when you look at it over the next six months or a year, it seems like talking like this in the beginning actually gave them more confidence and courage. My team members and I have come to deeply realize that success depends on having that mindset and not hesitating to engage in such negative communication. Fail fast, give up fast. I realized that the flexible mindset of thinking that if something fails, it won't work and moving on is actually the best thing for my team members. At the time, I was ashamed and afraid that people would look at me like, 'Why can't I find the right answer?' or 'Why am I so incompetent?' But I think I realized that, rather than accepting those things courageously and sharing my weaknesses, this is the kind of leader my team members want and expect the most. If you compare these two thoughts, there is one that says, 'This will really work out well,' and another that says, 'No, this won't work either,' and another that says, 'This will work out well, so let's develop this and that.' But no, it won't work, so let's test just one really core hypothesis. You can talk about things like this, and don't develop many plans for products that won't work. Don't waste design on it. Don't waste design on it. I think it was done like this. Toss's first logo was a design developed by an outsourced company that cost 400,000 won. At that time, the design was black, not blue. The first version of Toss took eight hours to send money. So, it was a function that was sent three times a day. If you send money at twelve or one o'clock, it will be sent at four o'clock in the afternoon. It wasn't a real-time transfer, with transfers occurring every eight hours. But the remittance process was very convenient. Why did you do that? At that time, we were unable to link our finances due to various difficult financial regulations and such, so I had to send money every eight hours through internet banking. Even though we did that, we still got that huge reuse rate. I really made it that roughly. It wasn't even linked to the computer. But since it is used a lot even though it is sent every 8 hours, let's make it a real-time function. I think it evolved in this way: Let's try it again like this. I think I even thought it was a waste to spend months trying to link such a real-time network because I really didn't think it would work. But it still worked. But on the other hand, the Ulabla team that we saw earlier was going to do well, so we were advertising hard and exposing them to as many maintainers as possible, whereas this team was going to fail, so we were thinking that we should absolutely not let users know about it. The product is not that great, but we meet the customers first. So we listen to our customers and hear their reactions first. But they still maintain a negative attitude and approach it like, 'Let's just improve little by little just in case.' Here, they say, 'No, just do a better design.' 'There's something wrong with the UX writing.' That's because the functionality is lacking.' This is how we end up testing things that are not core hypotheses. On the other hand, this is something that users create by themselves based on what they want. The left side is actually making a lot of what the team wants. The conclusion is the same. 'That can't be true. We need more developers and marketing budgets,' but I want to point out that the mentality itself is completely different. This is actually our company's winning strategy. Winning strategies may seem like they're all about being strong, being tough, and being obsessed with success, but in reality, winning is about humility. And I learned that it comes from acknowledging your own weaknesses. So, it seems to me that success begins when you have the courage to truly not fear the defeat that failure brings. Even if they do the same item, I think whether a team succeeds or fails depends on whether they have this mentality or not. In fact, I tell this story to POs who join Toss every week, every month. But you still can't accept it. There were cases in Toss yesterday and even now where the fear of failure and the sense of defeat that failure brings are so terrifying that they develop various functions and create various hypotheses, but the core hypothesis that they were originally trying to test has been abandoned for a month. I think this is really difficult to do. The world is truly fair, if you can just do this, you will succeed. If you have the courage to overcome failure, people's gaze, and all of that, you will succeed. Success is so easy. More than I thought. But I couldn't do this. The world is so fair. I feel like success only comes to those who can do this. So I think it would be good for you all to think about it. The quote I made from this is, 'Those who want to live will die, and those who want to die will live.' This is a winning strategy that I really want to share with you. Let's all repeat it together. To all of you watching YouTube right now, it doesn't matter whether you're watching from your seat, whether it's a bus, a taxi, or even lying in bed. I will repeat it from now on. If I do it, then let's start! Those who want to live will die, and those who want to die will live. Yes, please don't forget this and think about it when developing your product. That's all I wanted to say today. This is how we will conclude the PO session today. However, there are many questions ahead, and it seems that various discussions are taking place through this video as I had hoped. I'm so happy that what I was so positively anticipating has come to pass, but it seems like this discussion is happening even without me, so I'll gather all the questions you left before and the questions you left in this video today and hold a Q&A session next time. And before I go, I have one thing to tell you. So, everyone, why am I doing this? I'm doing this because of hiring. If you go to toss.im/career, you can see 300 open positions across the Toss team. The Toss team now has almost 2,000 members, so there is so much to do and so much more to do in the future. So, I'm looking for a comrade who can share the camaraderie of sweat and tears, while also discussing this winning mentality and going through psychological training to gain the courage to accept failure. So, if you are interested in exploring Antarctica with us, please come here toss.im/career and apply. Thank you. See you at the next Q&A session.