A change in the flawed business model is what WeWork needs, not a change in leadership

With the ongoing buzz about the WeWork’s delayed IPO, questions are being raised about the company’s flawed business model and growing investor tensions.

Along with Adam Neumann stepping down from the role of CEO into the non-executive chairman, the company might be heading towards a serious catastrophe as pointed out by the evidence.

It ain’t worth 47 billion

The We Company had valued itself at US$47 billion after raising capital from the big fish Softbank.

But, as the company is getting closer towards listing itself in the stock market, the WSJ report has valued it at somewhere around the US$20 billion marks. Even those of you who are too lazy to do the math can see that it is less than half of the original valuation.

However, the problem runs much deeper than its valuation. Reports of losses of US$1.9 billion per year are rife with more losses predicted in 2020.

Compared to its main competitor IWG, a London-based company who seems to be cashing in on more profits and customers, the Silicon Valley-based company doesn’t seem to be not doing too well. IWG has had substantially more square footage and more customers, and has actually made a profit — yet its market cap is just eight per cent of what SoftBank’s latest funding round thinks WeWork is worth, according to Recode.

Also Read: What WeWork has taught me about people

Amidst recession

WeWork’s business model implies a real estate risk by leasing buildings to offer its clients flexible rents. While the tenants might trade down on WeWork’s funky workshops and events, the cost of these buildings remains fixed.

And in a recession-prone American economy, it might not be too sustainable after all.

WeWork is a hassle to SoftBank

The valuation will clearly affect the Japanese investment giant which along with its co-investors who had given nearly US$ 11 billion to the company, along with the US$1 billion they had committed through warrants, according to a Bloomberg report.

Zach Weinberg, the co-founder of Flatiron Health, which was acquired for US$ 2 billion last year warned against the perils of venture firms closing crazy deals at irrational prices. As he had said, the SoftBank-WeWork was one of the biggest in this league. It is not a healthy trend and what is happening to WeWork now is a resettling.

SoftBank is also currently the company’s highest external shareholder. While it might not be a massive loss overall compared to its assets, which include a US$122 billion investment in Alibaba as reported by Bloomberg, it will definitely affect how investors in the future view its potential.

The ripple effect

WeWork’s struggles at this point also direct towards a potential problem with the unicorn wave. It sees investors pumping cash into companies and startups with flabby financials, looking over the loopholes in business models.

In a past interview with e27, Mangrove Capital Partners CEO and Co-Founder Mark Tluszcz spoke of the “fake unicorn” phenomenon. Best known for his success in investing in Skype, the investor stresses that “many of these [billion dollars] companies will never get sold for the same price [they have raised funding in].”

He even went as far as likening it to celebrating victory at the World Cup “before even playing in the final.”

Also Read: WeWork Labs launches foodtech startup accelerator in Thailand

What happened to WeWork and other similar companies is definitely not the last of this wild phenomenon. The big question that we should ask ourselves is: How is this going to affect the tech ecosystem, particularly in Southeast Asia?

One angle that we choose is that investors, particularly those new to the tech scene, will be even more critical in eyeing a potential investor. Securing a unicorn status might have been the dream for many startups; we cannot deny that it is able to make a company looks great, speaking from a public relations perspective.

But the time is up. Founders need to learn to face reality and figure out creative ways to be sustainable.

This is especially important for the Southeast Asian coworking space scene. Recently, we have begun to see several consolidation moves, particularly in a big and competitive market such as Indonesia. Here, even household names such as Hubud has announced a merger with Dojo. We had also seen acquisitions even in cities outside of Java such as Medan.

This might sound worrying at a glance, but the more optimistic side of us sees many opportunities for growth.

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Image Credit: LiveKindly

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The programme is open to Singaporean startups keen to enter China

Entering the Chinese market is getting easier as Beijing loosens restrictions on foreign investment, especially for sectors including domestic shipping, gas and heating, construction and movie theatre operations, intelligent and green manufacturing, 5G, integrated circuit, cloud computing and vehicle component technology, and certain agriculture sectors.

However, the nuances in regulations, local entrepreneurial ecosystem, and funding mechanisms continue to befuddle foreign startups intent on capitalising on the many opportunities China’s vast market provides.

China’s rapid pace in the tech space has already resulted in the country becoming the global innovation leader in several key growth sectors: electric vehicles (half of global EV sales and US$8 billion in funding raised by Chinese EV startups in 2018), mobile payments (valued at US$5.5 trillion, 50 times that of the US market), and drone technology (Shenzhen-based DJI accounts for 70% of the world’s drones).

This confluence of factors results in a space that welcomes further innovation but also may be intimidating to foreign startups new to the Dragon Nation. Shanghai-based private accelerator and global innovation platform XNode bridges this market knowledge gap for global founders by plugging them into the ecosystem.

Tangible business impact

Since 2016, XNode has partnered with the Australian, Japanese, Korean, and Italian governments to accelerate startups within the Chinese ecosystem through their facilities in Shanghai. With a track record of raising more than US$152 million for participating startups, XNode is now extending its accelerator programme in a concentrated “Launchpad” format to Singaporean startups.

The zero-equity Launchpad programme will kick off on October 2019 with one week of workshops in Singapore, followed by two weeks of immersion in Shanghai and aims to help B2B technology startups set up, test-bed and commercialise their solutions, or co-innovate with partners in Shanghai through a series of highly customised activities. Startups will gain access to the Chinese market, including potential investors, partners, customers, talent resources, and plug startups into the entrepreneurial innovation ecosystem in Shanghai – with the possibility of raising funding from investors during demo day.

Designed to create tangible business impact, the Launchpad is tailored around four key aspects:
1. Preparation: Before startups’ arrival in Shanghai, XNode will get them China-ready through a series of customized workshops and remove administrative barriers.
2. Work: Startups will gain deep market knowledge in workshops and dedicated ecosystem meetings with leading suppliers/partners/customers towards finding product-market fit.
3. Decision: Startups will pitch their findings to investors on the last day of the programme and plan their path forward.
4. Scaling: Startups continue to have access to the XNode community — including global universities, VCs, incubators, government partners, and its alumni network — and receive ongoing support in the form of market knowledge, partnerships, and financing.

The Launchpad’s workshops include topics such as, “Business Model Localisation”, “Digitalisation in China”, “Legal Structure, Finance and IP”, “Technical Localisation”, “Growth Hacking”, “Business with WeChat”, and “Market Research”.

Meanwhile, XNode will organise tailor-made meetings based on startups’ goals and the results of workshops, by leveraging its local network towards opportunities in sales, partnerships, market validation, and fundraising. Participating startups will also benefit from one-on-one coaching sessions with XNode’s vast mentor network such as Jason Wang – Founder and CEO of Omnicharge, Inc., Ping Ping – Managing Director of Chengwei Ventures, and Vivian Shen – Asia GM of Student.com.

Chinese accelerator, global reach

Being a privately-run and managed accelerator in China driven on market input from business insiders is quite an anomaly in China. Despite its China roots and deep local insights, the XNode team takes a global approach both internally and externally — 30% of its staff are international, giving the accelerator a diverse makeup.

XNode runs 2 co-working spaces in Shanghai (Jing’an and Zhangjiang) and has offices in Tokyo, Eindhoven, and Singapore.

Interested Singapore startups can apply to participate in the China-Singapore Innovation Launchpad here by 30 September 2019.

For enquiries or more information, contact Clara Chen, Innovation Lead (clara.chen@thexnode.com) or Kevin Woerner, Senior Acceleration Manager (kevin.woerner@thexnode.com) at XNode.

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iSTOX and Thailand’s KKP will work together to make capital market trading more open, equitable, and transparent

Capital markets platform for issuance and trading of digitized securities, iSTOX, closed a Series A funding round of an undisclosed amount with lead investor Kiatnakin Phatra Financial Group (KKP), a prominent Thai Investment Bank. The deal carried out by Phatra Capital Plc., KKP’s capital markets arm.

Operating under the Monetary Authority of Singapore (MAS)’s FinTech Regulatory Sandbox, iSTOX is established and operated by ICHX Tech. They plan to launch its issuance of digitized securities by Q4 of 2019and begin trading them shortly after. With it’s flexible, affordable, and inclusive attributes; iSTOX offers non-conventional investment options that were previously inaccessible. It uses proprietary blockchain and smart contract technology and eliminates intermediaries, thus allowing for lower costs, greater transparency, more options for users.

Also read: Blockchain platform ICHX Tech grabs funding from Singapore Exchange, Heliconia

Kiatnakin Phatra Financial Group is Thailand’s leading investment bank with a strong corporate finance franchise and institutional & high-net-worth investor coverage. Aphinant Klewpatinond, CEO of Kiatnakin Phatra Financial Group and a newly appointed director of ICHX, said: “The digitization of securities will certainly be critical in re-intermediating the value chain and offering solutions not yet available in conventional capital markets. Through this collaboration, we will be able to offer more bespoke services to our clients from both a fundraising and investment perspective.”

Darius Liu, Co-Founder and Chief Strategy Officer of iSTOX, said: “iSTOX and KKP will also collaborate on market education and outreach initiatives to facilitate a better understanding of the benefits digitized assets can bring.” To further strengthen the digitized security ecosystem and offer ecosystem support, iSTOX has also forged new partnerships with global law firm Allen & Overy, leading audit firms PwC and Deloitte, and well-established corporate finance advisors SAC Capital and RHT Capital. iSTOX is also backed by Singapore Exchange (SGX) and Heliconia Capital Management.

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Also, IDEMIA to extend investment to the Asia Pacific, and Cleantech startup Eavor raises US$11M Series A round of funding

Malaysia investigates Singapore’s Grab monopoly allegation [The Business Times]

Malaysia reportedly has decided to conduct an anti-monopoly investigation into Singapore-based Grab Holdings Inc, after announcing the intention last year. This move reflects on the country’s effort to make it a business destination.

“It sends a signal to foreign investors wanting to enter Malaysia that it’s going to be a fair playing field without unfair advantages to favored companies because of political connections or other reasons,” said Alex Holmes, Asia economist at Capital Economics.

However, Malaysia Competition Commission chief executive officer Iskandar Ismail declined to elaborate on specific steps the commission takes.

Ismail further said the commission is looking into a few companies pitching for state contracts for possible bid-rigging practices after the country discovered a bid-rigging practice by eight companies forming cartels to manipulate bids on tenders involving information technology services in March.

Multiple complaints accusing Grab of monopolistic practices sparked the investigation, shortly after it bought Uber Technologies Inc.’s Southeast Asian operations.

IDEMIA broads platform’s capability with newly received APAC’s investment [Press Release]

IDEMIA, Singapore-headquartered Augmented Identity provider, announces that it has expanded investment into the Asia Pacific region, specifically inti Canberra and Sydney, Australia.

IDEMIA enables citizens and consumers alike to perform daily activities (such as pay, connect, and travel), in the physical as well as digital space with secured identities.

Also Read: How the son of a humble watch repairer became the owner of a multi-million dollar realty tech startup

IDEMIA’s ‘Gen 3.0’ platform is the one that is being expanded on the collaboration with strategic border customers in the Asia Pacific region. The Gen 3.0 platform is built on IDEMIA’s technology in contactless biometrics: a scalable and industrial biometric engine and on the move to contactless sensors for Face, Iris and Fingerprint recognition.

The growing organization is driven by the adaptation of the Gen 3.0 Border & Airport platform for the local market with a portfolio of solutions for a seamless traveller experience across the whole Border and Airport process.

The suite includes an innovative walkthrough eGate, designed for the free flow of passengers while guaranteeing they are seen, recognised, and cleared by authorities.

It also seeks to alleviate some of the pressures on authorities where most legitimate travellers will be processed in self-service and Officers will intervene by exception, being empowered by mobile-based business applications allowing Officers to operate while roaming the airport floor.

Trendlines’ venture fund Trendlines Agrifood raises US$22M investment from Temasek, Librae Holdings [The Business Times]

The startup incubator Trendlines Group has received conditional commitments of up to US$22 million for its new Singapore-based venture fund, Trendlines Agrifood.

The conditional investment commitments were made by Temasek and Librae Holdings, an entity related to UK business tycoon Vincent Tchenguiz, with an additional Southeast Asian investor, it said. Its wholly-owned subsidiary, Trendlines Agrifood Innovation Centre, will act as the fund’s manager.

The fund will invest in new, innovation-based agrifood tech companies in Singapore as well as foreign agrifood firms. It will set up its Asia-Pacific headquarters in Singapore.

Personal care company Wipro Consumer Care & Lighting launches venture fund, looking to invest in startups [Press Release]

Wipro Consumer Care and Lighting (Wipro Consumer Care), a Singapore-based multinational Personal Care company, launches venture fund, Wipro Consumer Care – Ventures, looking to invest in innovative consumer brand startups in Southeast Asia and India.

Wipro Consumer Care’s new initiative aims to establish partnerships with consumer businesses that have unique customer offerings and e-commerce expertise, enabling both businesses to leverage their respective strengths for growth

Wipro Consumer Care – Ventures aim to invest in new-age startups throughout Asia that adopt innovative approaches to digital and e-commerce to reach consumers. It said it will invest in businesses with strong entrepreneurial leadership and sound business models complementing its existing portfolio of brands in the personal care, skincare, home care, and lighting categories.

Cleantech startup Eavor receives US$11M Series A round of funding from Vickers Venture Partners [Press Release]

Vickers Venture Partners today announced their investment in Eavor, a solution provider in the geothermal based in Canada. The investment is Vickers’ first-ever in a Canadian startup and closes Eavor’s US$11 million Series A investment round.

The company said the funds will be used to pursue Eavor’s growing pipeline of commercial opportunities around the world.

Also Read: PropertyGuru raises US$144M from KKR

Eavor is a viable form of green, scalable, and baseload power, which aims to be a significant global energy source without the intermittency issues of traditional renewable power systems.

Eavor-Loop, the company’s solution, is a new means of extracting power from the earth’s natural geological temperature gradient. Eavor-Loop makes a traditional niche energy
source, geothermal energy, scalable by removing the need for volcanic-type temperature and permeable aquifers.

2019 PropertyGuru Myanmar Property Awards makes iMyanmarHouse.com its official partner [Press Release]

The PropertyGuru Asia Property Awards 2019 is extending its partnership with Myanmar’s property website, iMyanmarHouse.com, in an effort to solidify its foothold in one of Southeast Asia’s frontier markets.

It chooses iMyanmarHouse.com as the Official Portal Partner of the 2019 PropertyGuru Myanmar Property Awards. The fifth edition of the awards will be held on October 18 at The Sule Shangri-La Hotel in Yangon, the event’s official hotel.

PropertyGuru’s partnership with iMyanmarHouse.com allows the award-giving body to add more value and visibility to those developers and projects judged to be worthy international accolades. iMyanmarHouse.com will facilitate the exemplary, commendable developers, and projects in the Asia Property Awards, which embodies the appeal of Myanmar real estate.

As part of the partnership with iMyanmarHouse.com, winners of the PropertyGuru Myanmar Property Awards will be showcased in a special online section—providing a reference for property seekers and investors alike.
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A closer look at customer service — the lifeblood of any business-to-consumer (B2C) model — and why we need to develop it more than ever

The service sectors in Southeast Asia are experiencing a major sprint, with transportation and e-commerce leading the charge. This is largely due to the high adoption rate of digital technologies by ASEAN consumers, having collectively penetrated nearly every aspect of daily life with 60% of the entire region’s population under 35 years old digitally glued in and willing to try new online services all the time.

According to a 2018 report by Pricewaterhouse Coopers, ASEAN has 200 million digital consumers, rising 50 percent in just one year — and showing no signs of stopping. Both the e-commerce market in Southeast Asia and mobile commerce have seen a significant increase, with 89 percent of ASEAN internet users using a smartphone as their primary device, aided by the expansion of 3G and 4G networks contributing to the popularity of mobile commerce.

Some countries in the region have established themselves as hubs for startup ecosystems such as Singapore and Malaysia. Others, on the other hand, are beginning to catch up.

As such, businesses have the opportunity to reach 647.45 million people in the ASEAN region, so striving to give SMEs and startups that chance makes plenty of business sense. SMEs comprise 96% of firms in ASEAN member states, according to a report by US-ASEAN Business Alliance for Competitive SMEs in 2015.

What about the customer?

However, in such a competitive environment, customer service often takes a backseat. In larger enterprises and companies, it is often given primacy, but SMEs and startups would often rather spend their money on other business needs. But customer service is the lifeblood that sustains any business-to-consumer (B2C) model and needs to be given an important seat.

Reliability and efficiency is truly key to providing good customer service and retaining customer satisfaction.

Given the many distinctions and complexities enshrined in what makes for good customer service, here, we tackle the tools out there that make the process of building and sustaining those relationships easier.

Customer service as a general concept is experiencing many big changes. According to Gartner, 85% of consumer interactions are expected to be “non-human” by 2020, which means that artificial intelligence and the Internet of Things (IoT) are becoming more common in customer experiences. Chatbots and self-search functions are also seeing a rise in popularity, and will become capable of creating personal customer engagements.

Understanding the importance of customer service

But before jumping right onto the AI bandwagon, it is imperative that we understand what the principles of great customer service are, and how businesses can create a satisfactory customer experience. Doing so helps people have an easier time, and is absolutely critical if a business wants to compete in any industry.

Research by Gartner has found that 89% of companies are expected to compete mostly on the basis of customer experience. Poor customer experiences can lead to serious consequences and majorly impact bottom lines. US Small Business Administration reports that 68% of customers leave because they are unhappy with the service they received. Or worst, unhappy customers may pose damaging risks to businesses by virtue of poor feedback.

1.) Listening to your customer:

Customers are often vocal about how they believe a product or service can be improved. Informing the customer that their complaint has been heard, and making relevant changes wherever possible will give customers the confidence that businesses are actively meeting their needs.

2.) Speed:

Response time has the highest impact on both customer satisfaction and dissatisfaction. The most common gripe one will probably make about customer service is being put on hold for hours on end, and even hung up on. Being quick and efficient when a customer is waiting for a response will provide a more satisfactory experience.

3.) Accessibility/Availability:

Customers value being able to get a problem fixed with as little fuss as possible, so giving them alternative outlets for solutions offers swift resolutions that allow people to get on with their days.

Meet the platform that covers all bases

Covering every base of customer service can seem overwhelming and intimidating, especially for an SME or a startup. But OpsCentral by Innovax Systems can provide businesses with the expertise and tools necessary to create a stellar customer experience.

Innovax Systems is an award-winning contact centre suite based in Singapore and Malaysia, and is the leading provider of systems development and integration of end-to-end solutions and web-based applications. Some of their customers include Verizon, Singtel, YTL Power Seraya, Del, Singapore Cancer Society, ViewQwest, and KPMG.

At a glance, here are the four major products that make up OpsCentral:

All of OpsCentral products provide reporting and analysis to give companies the best chance at doing better for their customers. They aim to create a more productive and efficient customer service, and empower contact centres to manage and administer all aspects of their operations at any time, with zero downtime and no on-site engineers required.

Why OpsCentral is especially effective in ASEAN service industry

45% of the ASEAN region is made up of millennials, people who are extremely tech-savvy and keen on innovation. This means that businesses need to embrace technological advances in the customer service industry, alongside more traditional methods. Mobile-friendly service options such as chatbots and self-service functions are key. OpsCentral can help businesses bridge the gap between traditional methods and new technology to provide a more well-rounded service.

According to Zendesks’ Customer Experience Trends Report 2019, customer service in Southeast Asia is generally quite low in terms of satisfaction, with Indonesia scoring the lowest in the region. However, customer expectations are getting higher as we move towards a more digitally-focused business environment. More transactions are being performed online and more services are offered over the Internet, rendering a more digitally inclined customer service experience.

A collaborative platform that helps businesses manage customer data across multiple channels, devices, and requests from a single touch-point creates a more seamless customer service.  OpsCentral is exactly this platform, being able to give businesses the tools necessary to improve their customer support and products.

Businesses can use OpsCentral products in a flexible manner. All OpsCentral products work independently, allowing businesses to address individual needs no matter what size the company is. They also offer integrated suites for businesses who need a more 360-degree approach to customer support, since every product works together seamlessly.

The integrated suites come in three tiers that cover the requirements of any business at any point in growth — whether it’s startups looking to set up a new call centre to handle its transactions, or an SME that is experiencing rapid growth.

1.) The Essential package for each offering gives businesses 2 to 5 seats, and they get all the features necessary to start building up an efficient and professional call centre such as Call Scripting, Call Recording, Real-Time Statistics, Skill-Based Routing, and Reports.

2.) The Professional package offers more advanced features for scaling businesses, with up to 49 seats. These include all Essential tier features, with Predictive Dialer, API for CRM integration, Fibre Connectivity, 99.8% Uptime SLA and others.

3.) The Enterprise package covers 50 seats and above and includes all Essential and Professional tier features, as well as 24/7 technical support from Innovax.

Immediately, small companies can fully utilise OpsCentral’s features to improve both their product and their customer support in tandem. Businesses that currently use OpsCentral have said that the solution significantly improves the quality of customer experiences, attesting to how Innovax is a reliable and stable company that responds to what a business needs with experience and intuition.

Innovax is built on unparalleled expertise in the customer care and service space. President and Director Patrick Tan founded Innovax Systems in 1998, having previously worked in the marketing and M&A areas of building and oil & gas industries. Innovax Chairman Mark Narita has worked with major Japanese corporations including Nissan and Toshiba, before starting his own software and consulting firm, ISD-Japan. Alex Koh, the company’s Chief Technology Officer, is fueled with a passion for research and development and is constantly looking to update older products to ensure they are relevant to today’s businesses.

Innovax’s continuous innovation is well-suited for businesses that need to keep up with the changing digital landscape to meet customer expectations, which are rising year after year.

Having a scalable platform like OpsCentral takes care of this, lifting a huge weight off a business’ shoulders, and giving them the opportunity to focus on improving and innovating their products and services, without sacrificing customer happiness.

Innovax’s OpsCentral aims to keep businesses thriving in the customer service space by providing solutions to changing needs on a rolling basis.

Find out more about OpsCentral pricing, terms, and engagement by contacting them. Visit their site or call +65 6701 1888.

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