Don’t expect managers to teach themselves, and make sure to hold them to high (and strict) standards

This article was originally published at matteosutto.com on January 27

I joined iPrice in the summer of 2016. At the time,it was a very promising regional affiliate player with an encouraging initial traction and around 1 million monthly users.

I left at the end of last year, after a terrific journey which saw us becoming the leading meta-search e-commerce aggregator in Southeast Asia. We grew our userbase to over 15 million monthly users, closed two rounds of funding from some of the best VCs in the region and grew our headcount to more than 150 employees from all around the world (>30 nationalities).

During those three years, as part of iPrice Leadership team, I spent the majority of my time finding ways to maximise managerial leverage and increase our organisational output. Above all, we created and maintained highly productive teams as our organisation faced rapid growth.

In other words, I was learning and practicing the art and science of effective management.

Reflecting on my experience, I’ve decided to write down the most important management lessons I have learned during my journey. The hope is to provide some valuable insights to managers and leadership teams in other scaling organisations, especially in the region.

I’ve split the learnings in five different sections: Hiring, Promoting, Communication, Relationships and Performance Management.

Hiring

Front-load your People Investment

Laszlo Bock, (former) VP of People Operations at Google

“At Google, we front-load our people investment. This means the majority of our time and money spent on people is invested in attracting, assessing, and cultivating new hires. We spend more than twice as much on recruiting, as a percentage of our people budget, as an average company. If we are better able to select up front, that means we have less work to do with them once they are hired”

It all starts with hiring.

The moment you fully realise this fact,  consider making a few fundamental adjustments to internal hiring practices.

First, hire more slowly. Never, ever, compromise quality over speed. Even when it seems like it is taking too much time, and especially if you are hiring managers (more on that below). The cumulative amount of time you will spend fixing your bad hiring decisions will almost always be of an order of magnitude higher than your initial time investment.

Second, invest enough time in writing a truly articulated and inspiring job description (JD). Assuming the company branding is not on the same level of Google or Go-Jek, it is important to put in the work to differentiate the company from the competition and inspire top applicants.

The best candidates always pay attention to a well written job description.

Most of the best candidates I have interviewed referred to the job description as one of the major factors that convinced them to apply. Despite this empirical evidence, few companies get it right.

Third, add written screening questions to each of your openings. This is important for three main reasons:

1. It is the fastest way to screen out candidates and therefore minimise time spent interviewing.
2. Again and again, I found the quality of the answers to be among the most correlated factors in determining whether the candidate is truly a top talent.
3. It motivates the best candidates to apply (self-selecting them). Instead of becoming a burden in preventing the busiest and most talented candidates to invest time in the application process, it reinforces their interest in the company.

Beyond the above tips, at iPrice we started to gradually implement some of the hiring and interviewing process used internally by Google, resulting in a substantial improvement in the quality of our hiring.

Two books have been particularly valuable in giving us an inside look of some of the most valuable Google hiring practices:

• Work Rules!: Insights from Inside Google That Will Transform How You Live and Lead by Laszlo Bock
• How Google Works by Eric Schmidt and Jonathan Rosenberg

From structuring a collegial interview process, to building candidates ‘packet’ or making internal hiring calibration, there are plenty of actionable practices that can be adopted into an organisation.

Hiring Managers

When hiring managers, your focus should be in assessing their ability to manage people. Simple in theory, hard to execute in practice.

Assessing how smart a future manager is or her strategical savviness is relatively easier. Assessing her ability to truly manage people effectively is way trickier.

Especially with senior managers, past performance is typically the best indicator of future performance. Therefore, how to assess ‘past performance’ when it comes to managing people?

The biggest and most recurrent mistake when hiring managers is to confuse the quantity of people managed in the past vs. the quality/effectiveness in managing them. That is, assuming that since the person managed lots of people in the past, she must know how to manage them effectively.

Therefore, don’t rely too much on questions such as “How many people did you manage in the past?”

Below, some of questions that I found to be much more effective to ask when assessing new managers:

• “Tell me an example of person you are particularly proud of having hired and coached during your career? What make you so proud about it?”
• “What are you doing today as a manager that you weren’t doing 5 years ago?”
• “How do you structure your 1:1s? Which topics do you cover, with which frequency, etc”
• “Have you ever promoted someone in your team from individual contributor to manager? If so, which reading material did you recommend her?
• “If you had to spend only 1h per week with your newly promoted manager, what would you spend your time teaching her?”
• “When managing a new team, what are the first things you do in your first 30 days?”

I also recommend you to ask your candidates to share with you one or more examples of performance evaluations they did in the past for their direct reports.

Regardless of how poorly structured the performance evaluation process was in their previous companies, when a manager truly cares about her people (which is among the most important pre-requisite for being a good manager), you can see it from how she has written her performance evaluation in the past.

Promoting

The speed at which fast growing startups typically require their junior staff to take on managerial roles can often create big organisational frictions, increasing employees churn and ultimately slowing down the growth of the company. Think of it as ‘organisational debt’ (not unlike technical debt).

When it comes to promotions, there are typically three types of bad promotions to avoid:

1. Promoting individual contributors (ICs) who don’t have any desire in managing other people
2. Promoting ICs who think they can manage people, but in reality don’t want to put in the effort to become good at management
3. Promoting ICs who want to manage people and are willing to put the efforts to learn, but are left alone in figuring it out by themselves

The first case of bad promotion is the easiest one to avoid. With transparent and frequent conversations, it should be obvious whether managing people is something a person wants.

The second case of bad promotion is trickier. Many ICs can be seduced by the prospect of managing other people as the only (or fastest) way to progress in their careers. To reduce such instances, establish company wide and separate career tracks for both ICs and Managers.

See below an example of dual career track we implemented at iPrice:

Besides this, to further reduce the risk of promoting ICs to a managerial position they are not ready for, try the following:

• Have them manage one or more interns
• Have them onboard and train new team members

Expect to be surprised by how much useful information comes from just observing the potential manager perform the two above activities.

The third case of bad promotion can be avoided only if Senior Managers are willing to put the time and effort to provide the necessary guidance and training to their first time managers.

As the former CEO of Intel Andy Grove writes in his (highly recommended) Management bible:

“Training is the manager’s job. Training is the highest leverage activity a manager can do to increase the output of an organization.”

– Andrew S. Grove

Don’t expect first time managers to learn all by themselves. It won’t happen (fast enough).

I found a few areas to be the ones where guidance is most needed:

• How to hire – Don’t expect someone who has never drafted a job description nor interviewed someone to know how to do it. Review their job descriptions, share with them examples of questions to ask during the interview, sit with them during the initial calls to provide them feedback and teach them what great answers look like.
• How to run effective one-on-ones – Which topics to discuss, which inputs to expect from their direct reports, with which frequency, etc.
• How to write and deliver a performance evaluation – Review every single written performance evaluation until they get to the expected level of depth and quality. Run the first performance evaluation together with them, to provide feedback on their delivery
• How to handle performance management – This is probably the hardest one for any first time manager. Michael Brown, former UBER APAC Head, puts it best in a First Round Review article:

“I’ve learned that young managers tend to move too slowly to address underperformers on their teams. They hope something will change, and they want to avoid uncomfortable conversations — so they let low performance fester. More senior or experienced managers must recognize when this is happening and give their younger or less seasoned colleagues the push they need to proactively deal with these situation”

Last and probably most importantly, its important to also be a great manager. By being a great manager, any person on the team, once in a managerial position, will start to naturally imitate the behaviours and practices.

This is why management (both good and bad) is so contagious and can create so much leverage within an organisation.

Communication

Structure One-on-ones

Establish a company wide cadence for each of your managers’ one-on-ones and make them stick to it. Weekly is the most popular frequency and what we were doing at iPrice.

Once a manager starts having multiple people reporting to them, ask each of team members to set up the agenda of the discussion. Ideally, it will stick to a consistent format. Even better, ask them to send the topics of discussion ahead of the face-to-face meeting.

This will not only allow managers to make the most of their limited time, but will also allow them to focus on what matters the most to the team, thus empowering them.

Provide impromptu guidance

Don’t wait to schedule ad-hoc meetings to provide feedback to the team. Do it after each meeting with internal or external stakeholders (or after each email sent, if necessary).

Don’t wait for weekly or monthly alignments to share feedback. It will be much less effective.

Even worst, don’t wait for any quarterly/bi-annual/annual formal performance review to dump all of the feedback at the same time. Performance reviews should never come as a surprise to the recipient.

Praise Publicly, Criticise Privately

Public praise gives more weight to your appreciation, thus incentivising the person to do more of the same. It also provides an opportunity to reiterate the company values to the team(s) and to the entire company.

When it comes to criticism, any public display of it will most often have negative consequences. It makes it much harder for the receiver to accept it, due to the triggering of her/his natural defensive reaction. If it is necessary to criticise over email, just reply to the individual removing any other people in the email thread.

Care Personally

Try to build strong personal relationships with the individuals that make up the team. Without a connection, managers will face an uphill battle in their role.

The best way to build personal relationships is by showing genuinely care for people. There is no way around it and it is impossible to fake. It is essentially to genuinely and personally care for their personal and professional development.

By building such layer of personal care, bosses will be able to challenge the team directly without deteriorating the relationship. On the opposite, challenging them directly shows that their growth is important to the manager.

Kim Scott, visualises it best in her Radical Candor diagram (another highly recommended management book)

Build a safe pasture

In order to get the most out of the team, it is crucial to create an environment where people feel psychologically safe and secure under the leadership team. More specifically:

• Make it clear that they won’t be punished if they make a mistake
• Try to always be the first one to let them know the bad news, so they don’t get distracted by rumours
• Defend them from outside criticisms. Always take the blame while always give the credits to the team

Being able create such an environment can lead to unconditional loyalty from the team.

*For more on the topic, read The Way of the Shepherd

It’s OK to Micromanage

This will probably sound controversial, given the widespread belief that good management is mainly about ‘getting out of people’s way’ and ‘letting them do their job’. I found this to be an easy excuse typically used by lazy and/or bad managers.

To the opposite, a good manager is someone that will keep on challenging the team directly.

Micromanage each of the team members until they consistently perform at the high standards expected from them. Then, gradually let it go.

In practice, this means investing energy and time into things which often might seem trivial from the outside: correcting the emails they send or the terminology they use in their verbal communication. I found both activities to have extremely high ROI and leverage in the long-term.

At the end, it boils down to establishing a culture of high standards from the get go. Borrowing a favourite quote on the topic:

“A culture of high standards is protective of all the “invisible” but crucial work that goes on in every company. I’m talking about the work that no one sees. The work that gets done when no one is watching. In a high standards culture, doing that work well is its own reward – it’s part of what it means to be a professional”

– Jeff Bezos

Being a Public Figure

As a manager, especially if in a senior/leadership position and especially if working in a multi-cultural environment, actions outside the office (hours) matters.

The higher the seniority, the more people will start looking view the person as role-model; and not only inside the office.

It is just something that needs to be accepted.

Performance Management

It’s not what you Preach, but what you Tolerate – Jocko Willink

Especially in Asia / SEA, I found the bar for complacency and conflict-avoidance very high when dealing with performance management.

When having to make tough calls, a few principles can help address such situations with enough proactivity so to avoid creeping under performance.

First and foremost, a low performer is always, in 100 per cent of the cases, affecting the rest of the team and their morale. As a manager, when the under performance of an individual becomes noticeable, the rest of the team is already well aware of it (in well functioning and performing teams). Addressing underperfomers is a matter of respect to the other people on the team that are doing a great job.

Second, reject the claim that “someone is better than nobody”. Poor performers typically create more extra work for everyone else on the team (and their manager).

Third, it is possible to let someone go and still leave on good terms. Demonstrate to the person that it is not personal and that the judgment is only about their work. Reach out some weeks after they have started a new job to check how they are doing. More likely than not, they will express happiness about being in a new environment.

How a manager handles the people that they let go will have a big impact on how the team perceives both the leader and the company. Don’t underestimate it.

Managers’ Performance

When it comes to the performance of managers, leadership needs to be much more strict. Bad bosses have huge negative consequences for the team and for the entire company. Always think about the damages a bad manager can have on the career of an individual.

How to evaluate the performance of a Manager?

First, start looking at a team as the by-product of the Manager. Jocko Willink, in Extreme Ownership, summarises it best : “There are no bad teams, only bad leaders”. It is a major red flag if the manager doesn’t fully own the performance of the team.

Second, leaders will encounter cases where the team is performing well from an overall output perspective, but the Manager is not performing up to expectation. The single most effective way to discover such cases is by starting regular, and recurrent, skip-level meetings with tbe team members. Establish it as a normal practice from the get go. This way it prevents the Manager from feeling threatened.

Third, there is typically a strong correlation between how well the performance reviews of a Manager are written and the performance of the Manager himself. Take a look at them as an additional performance proxy.

Finally, run team happiness surveys across the company.

How to proactively perform self-criticism as a Manager?

The survey mentioned above is typically a good tool. Another very insightful exercise we implemented at iPrice were quarterly bottom up reviews from the direct reports. Some example of questions we have been using:

• Value Creator – Her/his involvement in my activities maximize the impact of my work
• Availability – I get the right amount of support I need from her/him
• Communication – Communicate to me tasks clearly and concisely in verbal and written communications
• Problem Resolution – Able to quickly resolves issues/problems that I bring to him or questions/doubts I have
• Personal Growth – Allows me, by direct coaching or indirectly to keep learning at the speed I want (new or existing skills)
• Career Growth – Able to provide me with a clear career trajectory

Bringing it all together

Effective Management is among the most scalable and defensible assets a leadership team can build to increase the output of their organisation and support its growth.

As an individual, if there is motivation to become a better manager, start training. Anyone can achieve greatness and improve their own and the group’s performance and productivity, regardless of what is happening in the rest of the company.

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Thanks for reading! For any questions or thoughts, you can comment below or you can find me on Twitter .

The post What I learned about management from scaling one of Southeast’s Asia fastest growing Series B startups appeared first on e27.

Ascendas Reit will handle the development of the building that’s set to be done in 2020

Grab announces that it will begin the building of its new Singapore’s headquarters, managed by Ascendas Reit. The deal was signed by both Grab and Ascendas Funds Management (S) Limited, the Manager of Ascendas Real Estate Investment Trust (Ascendas Reit).

The building process will spend S$181.2 million (US$135 million), and it’s said to be done by fourth quarter of 2020. The building will be located within the one-north business park, and it will house all of Grab’s employees based in Singapore and its R&D centre.

Also Read: These 20 startups are joining the 4th batch of Plug and Play Indonesia

“We are delighted to announce this partnership with Grab. The long lease commitment of 11 years by Grab will provide Ascendas Reit with a stable income stream. This development takes our business and science park investments to S$3.8 billion (US$2.8 billion) and accounts for 34 per cent of our total portfolio value of S$11.3 billion (US$8.4 billion),” said William Tay, Chief Executive Office and Executive Director of Ascendas Funds Management (S) Limited.

The design of the building will provide Grab’s employees with a green and sustainable workplace environment such as recycled building materials and energy efficient low emissive glass façade to reduce solar heat gain. It will have greenery on the ground and mid-level sky terraces integrated with communal spaces and public pedestrian to promote social interactions and exchange of ideas.

In support of Singapore’s car-lite vision and to reduce carbon footprint, the headquarter will facilitate bicycle parking, lockers, and shower facilities.

“The increased capacity of our headquarters will enable us to create and hire for a thousand more exciting roles globally over the next 12 months,” said Ong Chin Yin, Head of People, Grab.

Also Read: Today’s top tech news, Jan 30: OYO to expand to Philippines; gini raises US$1.6M

The development is expected to achieve Green Mark GoldPlus certification from the Building and Construction Authority.

The location of the site is a one-minute drive away from the Ayer Rajah Expressway and a 10 minutes’ drive to the Central Business District.

The building will have an estimated gross floor area (GFA) of 42,310 sqm.
–

Image Credit: Grab

The post Grab to build a US$135M new headquarters in Singapore appeared first on e27.

Southeast Asia’s internet economy is still growing resolutely

One month in, the year kicked off with a flurry of activity and a particularly busy few weeks for the Vietnamese startup ecosystem.

This January, we saw 1,438 Southeast Asia startups created/updated on the e27 media platform. Of which, 41 startups raised/recorded more than US$1.58 billion across 19 industry verticals.

Since its emergence in 2016, Fintech still remains a strong theme in this region, amassing 10 deals totalling US$345.6 million in January. This number was twice as much as the runner-up (e-commerce). [Chart below]

Speaking of e-commerce, it is always important to remember that the sector is still king in Southeast Asia and growth does not seem to be slowing down. e27 recorded five deals valued at around US$57.5 million in January.

Healthtech scored rounded out the top-3 with three deals.

While most of the startup fundraising activity still revolves around the Seed and Series A stage, we are starting to see different large companies raise financing at such a rate that the alphabet-soup naming mechanisms become pointless. [Chart Below]

The biggest contributor to January’s deals was Go-Jek, confirming an initial US$920 million close for their Series F raised from Google, Tencent and JD.com.

On the other hand, KinerjaPay and Grab each secured US$200 million in a post-IPO equity round and a corporate round respectively.

 

A breakdown by country

Indonesia and Vietnam followed closely with 11 and nine deals respectively, while Vietnam and Malaysia and the Philippines scored an 8 collectively. On deal flow/fundraising activity, Singapore led the way with 14 deals recorded. [Chart Below]

e27 did not manage to capture any deals from the rest of Southeast Asia.

In terms of deal size/total amount raised, Indonesia amassed a total of US$1.21 billion, which is a staggering 77 per cent of the total amount captured for entire Southeast Asia this month.

Singapore and Vietnam each totalled US$253.86 million and US$113.5 million respectively. These figures did not include the 15/41 deals which remained undisclosed.

 

Jan 2019 a stellar month for Vietnam

And all this does not take into account the undisclosed seed round raised by TheBank.vn as well as the Series C round raised by Tima. If we revisit the same table after removing the outliers (read: unicorns), January 2019 was a stellar month for Vietnam, ranking third in deal flow/fundraising activity and second in deal size/total amount raised. [Chart Below]

Also Read: Startup of the Month, January: Vietnamese e-wallet service MoMo

This sentiment is also echoed by the e27 community, who recently voted MoMo as the January’s best startup. The company won because it managed to raise a Series C funding round Southeast Asian startup that reaches a significant milestone in that month.

Do you believe in superstition?

While Southeast Asia is known for its US$200-billion-worth digital opportunity, it is also a region with 11 countries and 660 million people representing a diversity of cultures.

Each culture has its own superstitions, which might affect the way founders choose to announce their fundraising milestone.

For those who subscribe to a notion of (in)auspicious hours or (un)lucky days, here’s an interesting stat for you.

Last month, fundraising announcements on e27 happened mostly on Mondays, with Tuesdays being the least popular. e27 refrains from publishing any fundraising news over the weekends as it will not do justice to the celebratory two-day-occasion when everyone is away from their laptop and industry news grind. [Chart below]

 

Whether the strategy is riding the popularity wave or emerging brazenly on a quiet and slow news day, it is also kind of fun to zoom out to determine the time of the month that is best for an announcement.

Announcements generally peak in the first week, whereas during the 2nd and 4th weeks, announcements tend to die down [Chart Below].

 

With this in mind, you can better plan your communication strategy; which date/weeks to submit your press releases to writers@e27.co.

A disclaimer, and an open invitation for community & collaboration

Is this report accurate?

Definitely not a hundred per cent.

e27 data is heavily reliant on inbound participation and we are well aware that there are startups and stakeholders that have no engagement with our platform at all.

Also Read: Google, JD.com, Tencent confirm leads in GOJEK Series F fundraising

Nevertheless, we are excited by its vast potential and the endless possibilities.

This publication is not a one-off, but a follow-up from the launch of e27’s Southeast Asia Startup Ecosystem Report 2018, as a continuous effort to improve visibility and transparency in Southeast Asia’s tech startup ecosystem.

To make sense of Southeast Asia’s growth and complexity, this project also presents an opportunity for us to develop a stronger sense of community.

This is an open invitation for the #e27community to continue engaging our platform proactively, as we continue serving our mission — to empower entrepreneurs to build and grow their business.

We are also in conversation with active stakeholders and various governments for collaboration and partnerships so that subsequent publications will be more valuable and impactful for the region’s tech startup ecosystem.

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Photo by Thijs Degenkamp on Unsplash

The post Vietnam stars in January as e27 data tracks US$1.5B in deals appeared first on e27.

The last week of January saw many great moves from some of the biggest tech startups in Indonesia, including Grab, Traveloka, and Telkomsel’s Tcash

Bukalapak launches R&D centre, bike-sharing service in Bandung – Press Release

On February 1, Indonesian e-commerce startup Bukalapak with Bandung Institute of Technology (ITB) officially launched the Bukalapak-ITB Artificial Intelligence & Cloud Computing Innovation Center, a research laboratory for Indonesian students, lecturers, and researchers to focus on AI and cloud computing projects.

The R&D centre will be located at ITB campus in Bandung, West Java.

Students who have worked on projects at the R&D centre will have the opportunity to work in Bukalapak following graduation.

“Our greatest challenge at the moment is finding tech talents in the AI sector that is able to contribute for Indonesia. Bukalapak is working together with ITB in building the first AI research laboratory in Indonesia to help empower local talents in building their capacity,” Bukalapak Founder and CEO Achmad Zaky said in a press statement.

In addition to launching the R&D centre, the company also introduced its dockless bike-sharing service BukaBike. Operating since January 7 at ITB campus, the BukaBike service provides 25 bicycles that are available for students and lecturers for free.

To use the bike-sharing service, users only have to download and use the Bukalapak mobile app.

Grab appoints Neneng Goenadi as Managing Director – DailySocial

Also on February 1, Grab Indonesia named Neneng Goenadi as its new Managing Director.

She will replace Ridzki Kramadibrata who is now holding the position of President of Grab Indonesia.

As Managing Director, Goenadi will be in charge of improving and developing corporate services, particularly in the transportation sector.

Meanwhile, as President, Kramadibrata will focus on bridging the relationship between the company and the government, as well as arranging security and social impact strategy.

Prior to her appointment, Goenadi was the Country Managing Director of Accenture Indonesia.

Also Read: Happened in Indonesia: Tokopedia launches new app, Sikumis raises follow-on funding

Tcash rebrands to LinkAja – DailySocial

Telkomsel’s e-wallet app Tcash is set to rebrand to LinkAja starting on February 21.

LinkAja is a state-owned fintech company that is the result of a joint venture between telco operator Telkom, oil and gas company Pertamina, as well as four major banks Bank Mandiri, BRI, BNI, dan BTN.

The joint venture was set up as part of an effort to compete in Indonesia’s increasingly competitive cashless payment sector. It has also been rumoured to work with WeChat Pay and Alipay, and will be led by Tcash CEO Danu Wicaksana.

Tcash users will be automatically converted into LinkAja users starting on February 21.

Traveloka opens R&D centre in Bangalore – DailySocial

Indonesian traveltech giant Traveloka opened its new R&D centre in Bangalore, India, on January 28.

The R&D centre will be the company’s second one after the one it operates in Singapore, marking its first expansion outside of Southeast Asia.

Prior to this, outside of Indonesia, Traveloka already has presence in Thailand, Malaysia, Singapore, Vietnam, and the Philippines.

During the launch event, Traveloka Bangalore VP Engineering Prashant Verma stated that in the new centre, the team will work to prepare platforms and products which capable to provide experience and engagement for Traveloka users.

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Image Credit: Bukalapak

The post Happened in Indonesia: Bukalapak launches R&D centre, bike-sharing service in Bandung appeared first on e27.

Southeast Asia is a region that has both the richest, and poorest, people in the world, Insurance offerings rarely are tailored to the specific person

This article was written by Keith Lim, the CEO of Hearti. If you would like to contribute, click here. 

Scoot has not had the best of times in recent months.  Lengthy consecutive flight delays in November and December have not only earned the airline the ire of thousands of passengers and their families but has also cast an uncomfortable spotlight on passenger rights when it comes to air travel; specifically, their rights to recompense and restitution.

The problem with compensatory models is that inconvenience is difficult to measure, and agreements on how much a passenger’s time is worth not only varies from carrier to carrier and person to person, but is also at best arbitrary, and at its worst, a downright insult to those affected.

Take for example, the 29-hour delay to flight TR869 on November 26. Based on the airline’s Guest Promise, all passengers were given accommodation and meals, but is it arguable that a person who had to take two extra days of leave as a result should be entitled to the same as a student travelling on vacation? From the airline’s perspective all is fair, but to those actually in the situation, the inequity is obvious.

This is where micro-insurance comes in.

The very principle of a consumer determining their own value of objects, time, and opportunity and apportioning monetary premiums accordingly is rooted in the fundamentals of financial inclusion. The reason why microinsurance has enjoyed a rapid surge across Southeast Asia in the last decade is precisely because traditional bundled insurance policies are also inherently unfair.

In the earlier example, the working adult would have logically purchased a travel policy, say AIG’s Travel Guard Classic plan for instance, and would have been entitled to claim up to US$1000 for flight delays.

However, at a premium of US$500 per annum, such an option is usually out of reach for the student on the same flight, and these passengers end up not simply not purchasing, which serves them well until the precise moment peril strikes.

This situation is a reflection of the 80 per cent under-represented by insurance policies – who will inevitably find themselves the most caught off-guard when a crisis hits.

Micro-insurance sits in between the domains of insurance and financial inclusion. While it is a relatively young sector, micro-insurance has experienced exponential growth due to the proliferation of technologies and an equally young customer base that makes this possible.

This growth is driven by the twin forces of geography and demographics. As an emerging market, most of Southeast Asia has come to quickly embrace technology, and its largely cash-driven economy now eschews traditional finance in favour of mobile payments and the like.

Also Read: Vietnam stars in January as e27 data tracks US$1.5B in deals

The population of Southeast Asia continues to grow, and as a result it is now one of the largest markets for insurance products due to sheer population size and to some extent, its advanced insurance regulations.

In a landscape study, over 500 insurance products were identified across the markets, with life insurance being the most ubiquitous at 48.5 per cent.

Yet while the number of people covered by micro-insurance policies is substantially higher in Southeast Asia, the total percentage of its population covered (18.1 per cent) is still smaller than the equivalents in Europe and the Americas, again owing to population density.

Hence, more needs to be done to increase representation. Additionally, Southeast Asia alone houses some of the world’s richest, and a lot of the world’s poorest – catering to both is a challenge for traditional finance and insurance models, which is why companies just simply exclude the latter, most of whom have no access to banking and financial services with which to service their insurance premiums anyway.

With mobile payments and other alternative finance methods gaining prominence and popularity, traditional insurance companies have themselves adapted their policies and updated their platforms.

While ten to twenty years ago it was common to see insurance salespersons approaching prospective clients in a mall and talking them through lengthy policies and contracts, most insurance products these days are sold online, through a website or even a mobile application.

Far from being a step backwards, it is actually a clear sign of a progressive march, even sprint, towards financial inclusion. As in the airline example, customers determine the value of their time, luggage, and various other components and purchase coverage for the specific items they want.

On a basic level, customers have much more choice as opposed to the old dichotomy of having insurance versus having no insurance.

In addition to being able to say, “I will only want to claim the basic minimum of daily compensation for flight delays, but I don’t want to pay extra for baggage coverage because I don’t have checked-in luggage”, customers are also able to do that on their mobile devices right before arriving at the airport. It is not only convenient, they also avoid paying a day’s more for premiums when it is not necessary to.

Also Read: The e27 Southeast Asia Startup Ecosystem Report 2018 is here

Since micro-insurance protects against “specific perils”, we see how it is fundamentally a key step towards financial inclusion across Southeast Asian markets.

Travel is one matter – statistically apart from life insurance, the top microinsurance policies in force are those for health (18.4 per cent), accident (21 per cent), property (1.5 per cent), and agriculture (14.9 per cent).

Evidently, there is not just a demand in specific sectors but also much room to grow still.

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The city is set for a major O2O event, and same-day e-commerce is right around the corner (maybe)

2018 was a whirlwind year for the e-commerce scene in Singapore, many startups expanded across SEA seamlessly and Alibaba continued its takeover of Lazada.

This week marks the start of a new Lunar Year, one that should continue the remarkable growth within the industry over the next few years. After all, Singapore has one of the highest internet penetration rate in Southeast Asia with 4.83 million online users. Its overseas purchase rate is second highest in Asia-Pacific.  

Whether it is retailers, manufacturers or consumers, if to stay ahead of the pack they need to be vigilant of these predicted trends for the rest of the year.

Online-offline shopping mall is the new omni-channel

Omni-channel retail — a type of experience that integrates shopping experiences across online and offline — seems to be an ongoing trend. The big event in Singapore will be Funan taking it up a notch by introducing an online-and-offline shopping mall, a first of its kind in Singapore. It will feature a true omni-channel experience that combines online, offline, data, and logistics.  

This trend will be beneficial for many e-tailers, as it does not only allow them to do more business but also increase consumer touch points. Funan aims to leverage e-commerce players through their omnichannel retail infrastructure empowered by their newest technology.   

Solution for same-day shipping is via crowdsourced delivery

From GrabFood to Honestbee, everyone has seen the food delivery scooters swerving through traffic to get to their destination as quickly as possible. Over the years, Singaporeans have learnt to embrace online food deliveries as it is not only convenient but also efficient.   

Although food deliveries can be easily delivered on the same day, e-commerce offering same-day shipping can be costly and might not work in the long run for small e-tailers. However, the future of same-day shipping will not be so bleak if crowdsourced delivery takes off, especially with the recent launch of Go-Jek.  

Just last September, various companies have taken steps to improve the efficiency of same-day delivery through a dedicated smartphone app that offers AI-driven recommendations to its delivery partners.

Mr. Toshiya Sato, VP of Co-Creation Business Group of Fujitsu Limited said,

“In light of the drastic expansion of sharing economy business models and the ongoing growth of e-commerce in recent years, we see crowdsourced delivery as a new business opportunity that will spread all over the world. In this field trial, we are very excited to collaborate with UrbanFox, which is one of the pioneers of crowdsourced delivery, and advanced research & development institute A Star and SMU. We anticipate that in the future Fujitsu will make significant contributions to logistics industry by improving productivity of crowdsourced delivery.” 

Deployment of enterprises from overseas

Singapore is an ideal country for e-commerce to flourish as it has one of the best data centre hubs in Asia Pacific. It is a gateway that connects Southeast Asia and Asia to the rest of the world and at the same time attracting oversea consumers and enterprises.  

Dan Thompson from 451 Research said, “Singapore’s ever-increasing undersea bandwidth and diversity of providers means that there are good options available to get just about anywhere an enterprise would need to reach via network communications, at decent rates.” 

Due to its competitive pricing, Thompson also added that there will be possible deployment of data centres in Singapore that will operate both workloads from Southeast Asia and China.  

Embracing niche markets

To continuously improve consumer’s experience, it is important for the e-commerce businesses to embrace niche markets. Currently, the biggest niche market in Singapore is the government sector. Nevertheless, this online marketplace should be improved in terms of usability and flexibility in terms of procurement processes.

Other than B2G, the e-commerce industry in Singapore should explore other niche markets to become more feasible commercially. One example would be United Nations initiative of selecting Arcadier as a marketplace for their non-communicable disease medicine and supplies that will be accessible to over 100 countries.

In the final year of the Lunar cycle, use these trends to drive strategy and stay ahead of the game.

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Photo by Fabian Blank on Unsplash

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Fenox plans to introduce and invest in top startup businesses for Sojitz through this fund

Fenox Venture Capital, a Silicon Valley fund with significant investments in Southeast Asia, has announced a partnership with Japanese trading company Sojitz Corporation to launch a US$30 million fund, which will be managed by the VC firm.

“We are very happy to announce that top Japanese trading company Sojitz just opened a US$30 million fund that will be managed by our Fenox VC team,” Fenox’s Founding Partner and CEO Anis Uzzaman announced in a Facebook post.

Sojitz’s goal is to target and invest in startups using Fenox’s global network. With seven direct branches and employees/partners in more than 40 countries today, Fenox plans to introduce and invest in top startup businesses for Sojitz through this fund. “This will hopefully help accelerate Sojitz’s business as well. Fenox team is fully committed to work with the Sojitz team,” he added.

Also Read: (Exclusive) Fenox VC enters Vietnam with investment in mobile wallet startup OnOnPay

Based in Tokyo, the Sojitz Group consists of approximately 400 subsidiaries and affiliates located in Japan and throughout the world, developing wide-ranging general trading company operations in a multitude of countries and regions. It is engaged in a wide range of businesses globally, including buying, selling, importing, and exporting goods, manufacturing and selling products, providing services, and planning and coordinating projects, in Japan and overseas.

The group also invests in various sectors and conducts financing activities. The broad range of sectors in which Sojitz operates includes those related to automobiles, plants, energy, mineral resources, chemicals, foodstuff resources, agricultural and forestry resources, consumer goods, and industrial parks.

Started in 2011, Fenox works with emerging technology companies across the world. Its 60-plus person team operates out of offices across eight different countries, including Japan, Indonesia, and South Korea, and offers a wide range of domain expertise. It invests between US$250,000 and US$10 million in companies across segments.

Fenox currently manages 18 funds across these markets, and has several multi-million dollar funds under management.

To date, Fenox has invested in close to 120 companies, including 99.co, TechInAsia, Alodokter, Ahlijasa, and Hijup.com, Pomelo Fashion and Moka POS.

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We asked Echelon’s insider and previous TOP100 finalists, and they answered

Counting weeks to Echelon Asia Summit 2019 this coming May, you may have heard about our TOP100 startup pitching competition (of course), the culmination of our two days event where new and promising startups get center stage. This year, it could be your ideas and your business that experience its own TOP100 journey, as e27’s mission of empowering startups in Southeast Asia gives you the chance of a lifetime.

As e27 always support aspiring startups in whatever stage they are in, this one should give you -the hopefuls- a sense of control. This one would be the cheat sheet of how you can increase your chances to make it into TOP100 Echelon this year.

The first one is from Ashleigh, one of our own and the person who belongs to the team that makes Echelon happens. So you can count on his tips to get the attention of the investors that will open the door for you.

Startups should prepare their pitch decks for a 3-minute pitch and prepare questions that investors would typically ask

There will be about five minutes long Q&A after presentation so you better come lock and loaded with any possible questions that would be raised. From inspiration, business model, revenue stream, margins, technical issues, to founders background, anything is possible. Leave no blind spots.

Be able to show what makes you THE startup above your competitors and bring your industry knowledge as well as your salesman skills

Two skills highlighted here by Ash. Your knowledge of the industry must include how many people will be using your solution and what pain points does it solve. Who are the competitors and how are you different from them. Sell it in a convincing way backed by numbers and tested markets.

Ash’s wise reminder: It’s not of the startup/founder that matters, it’s how much passion you have and how you are able to convince others that yours is a business worth investing in. If you don’t make it, ask why from the investors and learn from it. And if needed, pivot. Pivot fast.

Also Read: We are on the way to the first 8 cities of Echelon Roadshow 2019

Next, we also spoke to the previous TOP100 of last year’s Echelon, William Suryawan, Co-founder of MyClinicalPro, a health tech startup based in Indonesia. William gave his side of the experience and what he and his startup did in order to secure a seat at TOP100.

Startups need to prepare a clear and visionary purpose of why they built their startup

William shared that once he was asked about his purpose in building MyClinicalPro and he couldn’t answer him well. Since the encounter, he got to think through his real purpose of building his startups, and it involves the solving element that brings value and tackles an ongoing problem that will have a significant impact to the nations.

“Well, long story short, after figuring out what the big purpose in building my startup was, I defined the long-term vision that was not only from one specific problem, but also from what we want to see how digital technology could improve the health, beauty, and wellness of Indonesia people,” he added.

Now ask yourself the same question and begin with a kickass why.

Bring a clear business model and uniqueness to the stage

“For me at that time, I needed to be able to breakdown the purpose of my startup with a clear statement of what problems I wanted to solve, how would I solve it, and the impact it has brought so far,” William recalled.

Also Read: Meet 15 of the top-notch investors who will be judging TOP100!

There’s a connection between a clear purpose of why you want to develop your startup and how will you improve your startup in the future that needs to be presented. This should be the basis of your business model.

In regards to uniqueness, William emphasised the importance of delivering the unique element of your company as your startup will be compared with others that offer similar products or services. “By the end of your explanation, the investors should be able to think that your startup is bringing something different and valuable enough for them to want to know more,” said William.

William’s wise reminder: You may have a long answer to each question because you are the founder and you know inside out about your startup. But aim to make your answers concise and clear to avoid distraction and undelivered message. You need to ensure the investors can discern your message precisely within the limited time provided by Echelon.

William then shared the questions he prepared to answer for the Q&A stage during his TOP100 moment:

• What problems are you trying to solve?
• What is your solution to the problems?
• What is the impact you have made so far?
• What is your business growth or traction so far?
• What is your revenue structure?
• What is your plan for your startup?
• How will you execute?
• Who will execute?
• What do you expect from the one who listens to you at this moment?

“Crucial thing to do during Q&A is to bring your partner to stage. You might not understand everything in detail and you never expect what question will be asked and how detailed it can get. Good teamwork also plays a role here,” said William.

Now with both sides have given their tips, it could really be your year!

William further added, “The good thing about TOP100 is that it can open your startup to new opportunities because the one who listens to you might be potential investors, strategic partners, or even big customers.”

This year’s TOP100 will be played differently as the pitching sessions will be private, meaning that the only audience is the investors.

The startups will also need to stick around (or come back) for the event in the evening called ‘Echelon Roadshow’ as that’s where the announcement of the startups that qualify for TOP100 at Echelon Asia Summit 2019 will be made.

If you haven’t registered, please do your startup a favor here.
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The post How does my startup make it into Echelon’s TOP100 this year? appeared first on e27.

The launch also kickstarts the plan to expand regionally in Southeast Asia

HiDoc, telehealth and video conferencing service that gives specialists access to patient health records, has been launched with the support by SGX-listed Singapore Medical Group. With its launch, HiDoc plans to introduce AI-based features that will increase the quality of follow-up healthcare and second opinion consultation.

HiDoc also plans to expand the network of 15 specialists into local GPS and to countries like Vietnam and Indonesia soon after completing the funding the company said it will raise in the second quarter.

Also Read: Today’s top tech news, Jan 30: OYO to expand to Philippines; gini raises US$1.6M

“We want to provide greater value where for example, a diabetic patient who has regular follow-ups with his or her endocrinologist can receive better and continuous management of care by using this platform. We believe continuous care reduces many medical complications, which is one of the reasons why we wanted to launch HiDoc. The platform will be a bridge between patients and specialists,” explained Dr. Christina Low, CEO, and Co-Founder of HiDoc.

HiDoc aims to deliver the diagnosis within 24 hours or instantly through video conferencing – seeking to improve the quality and efficiency of follow-up healthcare via its app on both iOS and Android mobile devices.

Using HiDoc, patients will be able to upload their health records and have access to healthcare services, especially for overseas patients who are considering treatment in Singapore.

Also Read: These 20 startups are joining the 4th batch of Plug and Play Indonesia

As a further service on behalf of patient’s convenience, HiDoc has partnered with DBS to allow patients to use DBS PayLah! for a more convenient payment process.

The firm has also secured the HIPAA (Health Insurance Portability and Accountability Act) Compliant and 256-bit SSL encryption.

HiDoc is said to be in the process of raising fresh round of funds.
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Image Credit: HiDoc

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Worry less on funds and focus on your business, with CVC’s help

The number of active Corporate Venture Capital (CVC) units in Southeast Asia (SEA) has increased by a considerable amount within the past few years.

Additionally, the new CVC units are more active which allows more deals to be made under its involvement.

This is in line with a global trend where big companies actively engage with startups as a strategy to stay competitive.

As the pace of innovation increases and industries face the struggle of keeping up, this strategy becomes more and more relevant.

For regional startups, this means that CVC is becoming an increasingly available source of capital.

Thus, any startup currently fundraising should take this into consideration.

Given that the growth of CVC in SEA is a relatively new phenomenon, many times there is often a lack of experience on both sides of the table — which could lead to misunderstandings.

In order to be prepared and increase the likelihood of success, here are five CVC must-knows for all startups.

Understanding the motivation of Corporate Venture units

Financial VC’s motivation for investing in startups is pretty straightforward – they are looking for a financial return.

Negotiating with financial VCs can be challenging, but when startups know their objective it becomes easier to find compromises and drive negotiations forward.

With CVC identifying their objective, it can be a bit more demanding.

On one end you have CV units that operate almost entirely as financial VC’s and have financial returns as their main goal.

On the other end, you have CVC units that aim to produce strategic value for the parent company. Their measure of success is how well their investments help to improve business in the parent company.

Most CVC funds have a mandate that incorporates both financial and strategic goals but it may be tricky to identify just how much weight they place on each of these goals.

To make things even trickier, a CVC unit can have a portfolio consisting of both strategic and financial investments.

For instance, an investment can even start out as a strategic investment but shift to a financial investment if it turns out the fit with the parent company is not as good as initially anticipated.

This can make it challenging for startups to know exactly what objectives the CVC unit has.

Hence, it is important to spend some time learning about the CVC unit’s position prior to investing and garner approval and opinions from the parent company.

Financial vs strategic investors

A financial investor has no desire to run the companies they invest in.

Sure, they might sit on the board and help with strategic decisions or even offer help with things like recruitment or accounting. However, the day-to-day running of the company is left to the founder(s).

This is different for strategic investors.

They invest in companies where they see synergies with their parent company. So, they may want a say in how to develop the product, which customers to pursue, which geographies to target, etcetera.

Some entrepreneurs may get surprised and suspicious when a potential investor has very specific opinions about things like this.

However, they should keep in mind that a strategic investor does this in order to make it easier for the startup to be integrated with the parent company through a partnership or acquisition later.

In other words: they are guiding the startup to build the product or service that has the most value to their parent company.

There is nothing wrong with this. But, the startup has to manage this relationship carefully so that they listen to the input while avoiding building something that is so specialized there is only one potential acquirer.

If the startup manages to balance the requests from the CVC with their overall strategies, this will be a win-win for both parties.

Aligning business collaboration goals

In addition to funding, many CVCs provide their investments with the opportunity to partner with their parent company.

The parent company could become a pilot customer or they could enter into a partnership on sales or marketing — basically any form of collaboration.

Partnering with a large company is a big validation for the startup which makes it a major part of their consideration when taking an investment from a CVC.

Misalignment of expectations around how quickly and how comprehensive a partnership will be is one of the most frequent issues that surface in the relationship between startups, CVCs and their parent company.

Many startups make the assumption that because the CVC is willing to invest a lot of money into their company then surely they will also provide the other help with the startup needs.

Also Read: Why e-commerce companies should go hybrid

It is also natural to leave most of this discussion until after the parties have agreed on the investment.

As a result, both parties might have contrasting expectations on how the business partnership should play out when they agree on the investment.

Startups are used to getting things done really quickly.

In fact, a lot of startups subscribe to the popular idea of a lean startup.

Simply put, this idea states that you should get your product in front of customers as early as possible so that you can learn what customers think and start improving.

For a startup, this approach makes sense given limited funds and having to quickly make as much of an impact as they can in order to raise the next round of funding.

Failing to do so means they go out of business.

Basically, a startup has everything to gain and very little to lose by launching early.

A big company has a different approach to this since they already have customers and revenues. Launching new products or services too early will almost certainly result in frustrated customers and complaints.

Because of this, big companies usually require rigorous testing and planning before anything new is introduced to their customers.

This is almost the exact opposite approach to what startups have.

In order to bridge this gap and give the partnership the best possible chances of success, both sides should come together to outline their shared expectations.

This should happen in tandem with investment discussions.

Understanding the CVCs investment process

Ideally, the investment process for a CVC should not take more time than a financial VC.

Given that CVCs compete with financial VCs for deals, they cannot afford to linger on important things.

CVC units often rely on the parent company for support in various non-core areas like legal or finance.

Unfortunately, this sometimes means that things take more time.

Also Read: “General awareness about entrepreneurship in Malaysia needs to go beyond selling food at stalls”

For example, the CVCs finances could be handled by the parent company’s finance department. These are the people that have a 60-90 days processing time on a regular invoice.

An investment is a non-standard transfer of a significant amount which might even trigger additional safety procedures like the personal signature of the finance manager or CEO (who happens to be on a two week holiday when your investment is being processed).

These kinds of delay can cause a lot of frustration with startups that are in a hurry to complete the investment and can’t understand why things are taking so long.

To avoid it, or at least prepare for it, startups should ask the CVC about their investment process.

They should clarify the internal steps the CVC needs to take in order to decide on the investment, complete the paperwork and transfer funds.

If any one of these steps seems to take an unnecessarily long time, startups should raise the issue early and ask if there is any way the CVC can expedite this.

End game scenarios

Say a CVC invested in your startup because it had strategic value for the parent company.

The intentions on both sides were for the parent company to acquire your startup when the product and market mature in a couple of years’ time.

Everything looked good. But then something changed.

Perhaps your product didn’t perform as well as they had hoped.

Perhaps the parent company changed their focus and is no longer interested in the market your startup serve.

For some reason, the acquisition is not happening. Now what?

For a CVC with a financial focus, one potential acquirer falling away should just be a bump in the road, even if it happens to be their parent company.

They would still want to assist you in finding other potential acquirers in order to maximize their return.

For a strategic CVC, it might be a little different.

If their overarching goal is to provide value for the parent company and your company no longer does that, then your startup would fail to achieve their goal.

So where does that leave you?

Ideally, they should be able to give you examples of investments where the collaboration did not go as planned, but how they helped the startup to find a good solution anyway.

Final thoughts

When reading this, it may be easy to think that raising funds from a CVC unit is a lot more of a hassle than a financial VC.

It is true that you have to put in more effort during the negotiation phase to get to know your CVC investor but it is only because a CVC might bring a lot more value to the table than a financial VC.

So to wrap this up, I would just like to mention five short reasons why you might want to invest that extra time to get a CVC investor:

1. They understand your business and its industry better than any financial VC.
2. They can offer access to network and resources that can be more valuable than the investment itself.
3. They might see fewer risks and more value in your company if it aligns with the interests of the parent company, leading to a higher valuation.
4. They are usually more patient than financial VCs because they do not have LP and a fixed fund life.
5. They can offer a route to acquisition so that founders have to worry less about fundraising and can focus more on building their business.

The advantages CVCs offer makes it patently clear that its recent emergence in SEA beckons exciting new opportunities for regional startups.

CVC might not be the right path for all startups, but for many, it is definitely something to consider.

Founders who understand how CVCs operate will be much more likely to identify the right CVC partner and have a successful collaboration.

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This article was first published at www.cvcinsight.com

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