Month: January 2020

A few months after Singapore’s announced in June 2019 the guidelines for the new digital banks (Digital Full Bank and Digital Wholesale Bank) licences, Malaysia also made public the requirements for the digital bank licences in December 2019.

As per the guidelines, Malaysia will issue up to five licences. Licensed banks and Islamic banks may apply in a joint venture with new players. (Foreign companies can also apply, but preference will be accorded to the application, in which the controlling equity interest in the proposed digital bank resides with Malaysians.)

The digital banks in Malaysia are expected to kickstart in the first half of this year.

Also Read: Why Kubia is not in a rush to apply for Singapore’s digital bank license

According to fintech experts, a new digital bank licence will enable non-traditional financial services players to participate in areas where tech is the focus to be an enabler. Existing fintech players can look at maturing their product offerings and expand further with the new license. For those who are not in the fintech field today can look now enter with clear guidelines.

For the new digital banks, the unbanked and underbanked population (SMEs and individuals) are the key target market. With this population joining the digital economy, it will herald a new era in the fintech space.

But a moot question remains. How are the new banks going to affect the traditional brick-and-mortar banks? Will the customers ditch their existing banks for the new entrants, effectively making them redundant?

e27 spoke to a few fintech experts for their opinions.

“There is now a new space where the digital bank will serve in areas that the traditional banks do not necessarily want to serve. There is a collaborative opportunity here for both existing and new entrants to take the financial services industry to a new level,” said Jasmine N, former CEO of Razer Fintech, which has applied for a digital full-bank licence in Singapore.

However, there is always a possibility that traditional banks, which are averse to innovation, will disappear. “There is a danger that the new digital banks will replace the old ones. But I believe that the banks which work to meet their customers’ requirements will continue to change and transform,” she added.

Adrian Yap echoed Jasmine’s views, adding the introduction of new players into the digital banking landscape would give the much-needed fuel that that little flame needs.

“The new entrants backed with capital and talent without the shackles of legacy infrastructure will completely change the way we experience banking in the next couple of years. My gut feeling tells me that customers will be very willing to ditch their existing banks for the new entrants,” said Yap, CEO of MoneyMatch, a cross-border money transfer platform in Malaysia.

The new entrants will hit the ground running with more unique and innovative ways to provide financial services to customers, and existing banks will try to play catch-up with their modest attempts at digital banking, he added.

“I do see that banks eventually give up in this digital race and focusing solely on providing the pipes for fintech players and other new digital banks to process transactions. I see the role of banks evolving in the future by shrinking in functionality but not in its importance. Banks will always have a role to play in our ecosystem and economy just not the role that it is currently playing right now,” he observed.

His business partner and Co-founder of MoneyMatch Naysan Munusamy also believes the new era of digital-only banks will over a period transform the landscape. They will also force traditional banks to either evolve themselves or more likely trim their offerings to stay profitable and relevant in the new era.

“My caveat, though, is that this new era will take quite some time to take effect, several years at a minimum. In my opinion, people are over-simplifying what a bank does and trying to replicate several online services and offer them cheaper. The reality is that banks are very complex machines with a wide range of financial products providing banks with diverse ancillary income,” shared Munusamy, who is also Managing Partner at TH Capital

Elaborating further, he said most commercial banks make substantial profits on their treasury products and solutions which are often capital-intensive. New digital banks won’t be able to match them with their limited capital.

Additionally, the cost of regulatory compliance and putting in place robust risk management processes won’t come cheap. It makes the profitability target that the market regulator has made mandatory a strict criterion to fulfil, bearing in mind that major disruptors in most other industries are still bleeding money.

Also Read: Here are the 16 most influential fintech personalities in Malaysia

“Nonetheless, the opportunity remains very real but will take a while to really mature. But I feel traditional banks will be forced to go through a paradigm shift and possibly narrow down their financial services to profitable verticals with high capital requirements such as complex treasury products. And then they will work in collaboration with fintech startups to remain relevant,” he explained.

Varun Mittal, a fintech expert who has been tracking the Singapore and Malaysia digital bank landscape extensively, has a different view and said digital banks wouldn’t have much impact on traditional banks. “The entry of these new banks isn’t going to make anyone obsolete,” said the Global Emerging Markets FinTech Leader at EY.

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Image Credit: 123RF Stock Photos

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I realised 2019 was an important year for me, although I didn’t know this until about two weeks ago.

A successful entrepreneur whom I met at an event in Bahrain recently told me: “I can always start all over again,” as we were overlooking a golf course in the middle of the night. We were talking about what makes relationships work, what is essential in life, and our definition of success.

It all boiled down to two main things.

First and most important is trust. Trust in yourself and trust in others. It took me a while to understand why he was saying that he can start all over again. He was talking about how much trust he has in himself. If everything goes to shit tomorrow, I can always start over and build something new again.

Second, is impact. His comments showed me that he’s not obsessed with success, but that’s it’s more important to put his all into creating great things with people he trusts.

How is this important to you as a founder and to me as a venture capitalist? 2019 for me has been a pivotal year.

At 44 years, it never ceases to amaze me how much I still need to learn. I have used a personal mentor earlier in 2019 to work on insecurities, focus, and improving work structure.

In sports, I am used to working with a coach. It took a long time for me to decide to work with a business coach. In the end, I am glad I did.

Also Read: Today’s top tech news: Edtech firm Byju’s raises US$200M; Ovo hits 1B transactions in 2019

Working with a coach helped me learn to trust in my abilities and feel confident to voice my opinion. My coach showed me how to build my framework for decision-making and stick to my philosophy in difficult times.

My key takeaways from 2019 were:

Show up

We all know that feeling when you initially said ‘yes’ to a meeting or a dinner, but as it approaches, you’re dreading to go. Nothing wrong with that. It’s human nature. Instead of cancelling the meetup, just go.

You will create a habit of “showing up.” Showing up for me is making an appointment and sticking to it and being responsive. The most successful and busiest people I know always manage to respond fast to email or be on time for every meeting they attend.

When I ask how they handle this, the usual answer I get is that it is part of their work ethics to show up.

Be relentless

The meaning of relentless is unceasingly intense. It implies determination and focus (says Oxford and vocabulary.com). The year 2019 has been one of the busiest professionally; I also decided to join my second Ironman 70.3 in Hawaii and prepare for three Ironman 70.3 races in 2020.

I made a big mental switch in 2019. If I commit to anything, I commit 1,000 per cent, and I won’t let go until it’s finished, or I need to update my objectives. It’s intense, and to be honest, it’s quite exhausting as well, but the pleasure of making progress is more significant.

Relentlessness also forces you to focus more and say no to random disturbances.

Also Read: These later stage funding rounds of December are the perfect closure to the year 2019

Stick to your strategy

Days, when your plans don’t work out, are the toughest. Sometimes your day is full of wrong decisions and outcomes. You might get insecure about your approach or need outside validation that you’re still on the right track.

The easiest thing to do on those days is to throw everything overboard and start something new or give up and tell yourself it didn’t work out. The biggest favour you can do yourself is to stick to your original strategy (unless clear feedback and data tell you to tweak the plan).

Why is this so important? It takes time for a strategy to come to fruition. Beginning of the year, we launched a new project within our firm. Halfway through the year, it wasn’t easy to convince our stakeholders that the timing for this project was right, coming out of a busy 2018.

Towards the end of the year, the project gained strong momentum, giving the team new energy. I have seen it with this project, but looking back, I have seen this happen over and over again.

Give your strategy a chance, build a case for your strategy, work on the right arguments and gather data to support your choices. But most importantly, don’t let the first, second, and third disappointment catch you off guard.

Face issues head-on

The toughest habit to build is to get up in the morning and pick up the most complicated problem to solve first. It’s such an open door. As a founder, leaving urgent or complex issues outstanding can seriously hurt your business. In the back of our heads, we know this, but it’s tough to put it in practice.

Also Read: e27 community: 10 most popular contributions of 2019

Cleaning up a toxic environment in the team, a client issue that needs solving, or responding to shareholders’ questions. I have learned earlier this year; it doesn’t matter how complex the problem is, it matters which framework you use and your understanding of the urgency. Managing urgency is different for everyone, but one effective practice helped me.

Every morning I write down what my intended outcome for the day needs to be and what I need to do to get there. Let me be clear. The day never ends the way I planned it, but this simple writing exercise helps me to visualise the biggest challenges for the day.

For the framework, I use the structure I worked on with my coach.

For anything complex I need to solve or work on, I ask myself these questions:

• How do I extract value and deliver returns for my counterpart
• Is there alignment with our strategy and policies
• How do I slow down to generate long term growth
• What do I need to do, to protect the downside

Say no and be transparent about it

It remains difficult saying no when people ask for help. Mainly when you’re used to helping others out. The intention is not to speak to anyone that asks for help but to be more critical on me.

Anytime someone asks for help, I ask myself first if I can help, if I can honestly make time and if someone is better off with or without my help. In the past year, I have learned that giving direction and let others figure things out for themselves is stronger than blindly trying to help everyone.

It is as simple as saying: “have you tried this yet?” You don’t have to be everything to everyone.

Also Read: From coffee to dentistry: The top 10 funding news that rocked the Southeast Asian startup ecosystem in 2019

Check-in on health

Everyone will have their take on health. There is no one right away to approach it. I decided to stop drinking for the last three months of 2019. Why? I spend a significant amount of my professional time on an aeroplane.

Combined with long working hours, my desire to stay fit, triathlons, family life (two kids), and spending time with friends, I felt I needed to change something before I wore my body and mind out. Quitting with alcohol seemed like a quick win, and after 2.5 months, it has indeed made me feel much better.

During the day, I feel much sharper, and it’s easier to focus. I also sleep a lot better; more hours and feel rested. Not drinking helped me recover faster after my runs or a long-haul flight. There is, however, a downside, though. Socially it’s not entirely accepted not to imbibe. In the last few months, I have had to explain myself for not drinking. Or people try to convince you to have a drink and not be such a weakling. The best I’ve heard is: “One drink doesn’t make much difference.” It makes all the difference to me; I am not about to break this promise to myself.

This was from 2019, and I hope my lessons help you give some insights for 2020.

We’re at the end of this millennium’s teens, how will you start the new decade?

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Despite all the hype surrounding Bitcoin and its promised overhaul of the current financial system, it would appear it has died before having its intended impact.

Silicon Valley, the pulsing heart and hub of global tech innovation, has lost its crypto buzz, mostly due to the digital currency’s lack of mainstream application in the real world.

It makes sense: Facebook and Uber have thrived because of their ability to be adopted wholeheartedly by the average person, while the notion of cryptocurrency still reeks of insider trading, security risk, and underground tech geek talk.

People still doubt whether a digital application, the very idea of which is difficult for the average Joe to understand, is to be trusted with something as valuable as one’s hard-earned money.

Who is to know where the money will go, or how much it will all be worth in 20 years’ time? Despite the fact that the very notion of crypto is premised entirely on it having the most high-level security in the world, the recent mysterious disappearances and deaths of those holding the keys to peoples’ digital wallets have people questioning whether it really is the safest place to keep their digital assets.

Cryptocurrency, or crypto – for those who have lain dormant for the past five odd years – is a digital asset designed to work as a medium of exchange. It uses cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets.

Also Read: The call of crypto: why Bitcoin points to need for investment startups in Asia Pacific

Bitcoin is very often confused or used interchangeably with other monikers – typically, crypto or blockchain – albeit incorrectly, as is quite common with other new asset classes that fall under the umbrella of “cryptocurrency”, Bitcoin to cryptocurrency is what the US dollar is to currency – it is just one type of cryptocurrency.

Each bitcoin is a computer file that is stored in a ‘digital wallet’ app on a device such as a smartphone or a computer. People can send Bitcoins (or even portions of one bitcoin) to your digital wallet, and you can send bitcoins to other people as digital payment for an asset.

Every single transaction conducted via this digital realm is recorded in a public list that we refer to as ‘the blockchain’.

There you have it, the 101 in crypto and Bitcoin. But it may well be too late because apparently, it’s all over before it began.

Or is it?

This week, Iran downed a Ukranian passenger plane, believing it to be a US aircraft, in retaliation for a US airstrike that killed Iranian commander Qasem Soleimani.

Tehran also reacted to the death with missile strikes on Iraqi bases housing US troops. As tension between the two countries intensified, peaked, and fell, so too did the value of Bitcoin. The currency climbed higher to almost US$8,500 – almost 10 per cent higher than it was the day before – after news reports of Iran’s missile attack on US-led forces in Iraq, before falling back to less than US$8,000 following President Trump’s White House speech that suggested the situation was less volatile than it really was.

The sharp movement of the cryptocurrency’s value has rekindled a long-standing debate: does crypto become a safe-haven asset, like gold, in times of increased geopolitical and economic turmoil, or will it forever be a fringe tool used for cybercrime?

Also Read: Today’s top tech news: Uber reveals “super app” plan, Bitcoin falls below US$8K

And is this what will ensure its longevity and survival over the coming turbulent years?

What is interesting to note is that while bitcoin surged in value following the airstrike, US stocks fell as investors grew worried that the conflict between the two nations might escalate into a prolonged and damaging third war. That being said, US stocks shortly returned and even grew the following night, suggesting that the market was opting to “shrug off” the escalating war. S&P actually powered to a new all-time high in the wake of the attack.

Jens Nordvig, CEO of Exante Data, said of the correlation between the market and rising tensions, “I think the lesson from the last couple of years is it’s quite dangerous to get trapped in these risk-aversion news cycles because they don’t tend to last very long.”

Does this, then, mean that the growth in the value of Bitcoin immediately following the international incident was a mere one-off? That soon investors will realise the market only moves due to widespread panic, and that all it takes is the psyche trip that President Trump took investors on when suggesting nothing too dire would anytime soon happen in the Middle East?

Oil prices surge whenever anything of potential consequence happens in the Middle East. US stocks fall whenever something happens that could disrupt the global flow of trade into the world’s largest economy.

Is crypto simply much of the same? A financial asset that is regulated just as much by geopolitical events by any other?

Greg Cipolaro, co-founder of Digital Asset Research, says that Bitcoin, ultimately, is a hedge against inflation. “Acts of violence and war can create inflation and have demonstrated that in the past … so heightened violence now could portend higher demand for Bitcoin.”

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Editor’s note: e27 aims to foster thought leadership by publishing contributions from the community. Become a thought leader in the community and share your opinions or ideas and earn a byline by submitting a post.

Join our e27 Telegram group, or like the e27 Facebook page.

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The new digital bank licences proposed by the Singapore government is the talk of the town nowadays. Almost 21 companies/consortia from across the globe, including Ant Financial, Grab and Singtel, and Razer, have applied for a licence — but only up to five licences (two digital full-banks (DFBs) and three digital wholesale banks (DWBs) — will be issued in total.

For the uninitiated, a digital bank licence will allow entities, including non-bank players, to conduct digital banking businesses in the city-state.

As the enthusiasm is getting high in the city-state, Malaysia is also playing catchup, with its government issuing guidelines for new digital bank licences. Although there are a few similarities between the guidelines issued by the two countries, some experts feel that Malaysia’s digital bank guidelines are unique from the perspective of achieving a balance between innovation and level playing field.

“Compared to Singapore, Malaysia has ensured that new digital banks can access ATM networks and cheque infrastructure, acknowledging that some parts of the economy with unmet and unserved needs will still need access to these while using digital banks. That the advent of digital banks won’t magically make cash vanish with their launch is an undeniable truth,” said Varun Mittal, Global Fintech Leader at EY.

Also Read: Will the new digital banks sound the death knell for traditional banks?

Regarding foreign participation, Malaysia has clearly articulated the preference for local “equity” control, thereby ending debate about headquarter location and subjective definitions of management, operating and board control.

“Clarity on preference for year five as the breakeven mark is also a welcome step to ensure applicants can develop and evaluate their plans internally,” added Mittal, who has been tracking the Singapore and Malaysia digital bank landscape extensively.

Below is a document prepared by Mittal comparing the licence guidelines issued by the two countries:

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Image Credit: 123RF Stock Photos

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Fuckup Nights, a movement where entrepreneurs share stories of their failures, is getting immensely popular globally. Audiences are drawn to seeing entrepreneurs speak openly about their challenges–and what they learn from it.

The failure-turned-to-success story of serial entrepreneur Leza Klenk is a perfect embodiment of this spirit.

Before she founded Spendless Group, Klenk was a mother of three with no degree, skills, or personal networks to rely on. But that did not stop her from launching a million-dollar company that is now worth double the size of her first failed venture –a hairclip company, Bebebows, which went bankrupt in 2014.

Spendless Group comes from the concept of “spending less”. The firm aims to empower individuals –with limited tech or retail skills– to earn money or gain skills by working remotely.

The company has branched out to three major units: Spendless Cosmetics, Spendless Academy and Spendless Creative Studio. As a founder, Klenk has also disclosed plans to launch a joint venture with a legal tech firm, to offer legal services at minimal costs.

In an exclusive interview with e27, Klenk shares some of the lessons she learned along the way.

Also Read: Creativity meets entrepreneurship: Why it is the next big thing Singapore needs to thrive

Kill the ego

Admitting that you are not smart enough can sometimes be a big blow to your self-esteem, but it can also be the first step towards learning.

During the interview, Klenk candidly declares that she does not think that she was smart enough, which is why she had failed. “I knew the reason why I failed was that I did not know enough about people’s behaviour,” she says.

Coming from a background where she was unable to afford a degree, Klenk says that she had little knowledge about the industry, fundraising, and legal aspect of setting up a company. So it was crucial for her to gain better insights using unconventional methods.

She promised herself after the bankruptcy that 2015 would be the year when she would invest primarily in learning. To get there, Klenk decided to go on a lunch spree to learn the ins-and-outs of each person’s expertise within their specialised fields.

“I didn’t have a degree, so I decide to learn from the people who have it,” she quips.

Learn from the best

So, how did Klenk manage to convince top-level working professionals to share their knowledge with a stranger?

Also Read: How to choose a coworking space for your startup

The entrepreneur reveals that she would go to networking events and pick a diversified group of people to connect to every week.

“I decided to ask out different people from different areas of the industry for lunch, close to their workplaces. I was very strategic about how, when, and where I asked them,” she elaborates.

“People also generally tend to comply more when you make it more about them and less about you,” she adds.

With this newfound thirst for knowledge and tenacity, it was not difficult for Klenk to reach her goal. In no time, she gained a firsthand perspective on the industry and human behaviour in general.

She also stresses the fact that it is not easy to do this as it requires the “utmost patience.”

What investors want

When raising capital, as a founder with no “proper” background in business, can investors be biased towards one’s background?

According to Klenk, the key to winning investors is to assure them of your intelligence and tact despite your background. “Investors need to be convinced that you’re smart,” she quotes.

“Here are some of the ways they come to this judgement: Through the way you dress and your conversations,” she explains.

This does not necessarily mean that one has to wear fancy clothes while pitching their product, Klenk stresses. But it leans more towards being “neatly” dressed, as neatness reflects a mindset that is structured and organised.

Also Read: Turkish pricing intelligence startup Prisync to double down on APAC growth initiatives with US$1M funding

Investors are also interested in the kind of conversations that interests the founder. This reflects their attitude towards the industry. If they are someone who is simply fixated on their product, it shows that they have a closed mindset.

Therefore, it is crucial for entrepreneurs to keep up with the changing trends and have ample amount of information not just about what they do, but what and why everyone else in their industry is doing.

Paving her way through bankruptcy, employee boycott and raising funds, Klenk proves that entrepreneurship is a series of endless possibilities if only hurdles are seen as opportunities and not excuses.

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Image Credit: Leza Klenk

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East Ventures announces that it has invested an undisclosed amount of pre-series A into motorcycle e-commerce Moladin. The round is joined by new investor CyberAgent Capital and several other angel investors.

Moladin said it will use the fresh fund to accelerate its existing products scaleup, build new features such as new car sales category and auto mortgage loans, as well as expansion to new cities.

Mario Tanamas, COO of Moladin explained, “Since its inception, Moladin continues to improve its products and innovate to answer the needs of all Indonesian motorists. This is in line with Moladin’s vision to become a one-stop automotive platform and an inseparable part of Indonesian motorists’ lifestyle.”

Moladin was founded in 2017, starting off by providing a platform for Indonesian consumers to purchase new motorbikes online. Their platform allows customers to transact and complete their purchase in one platform, getting information about motorcycles and bikes, provides an online directory for bikers to find the nearest servicing workshop, and communities to exchange reviews on spare parts and apparel.

In May 2019, the company starts to open its platform for used motorbikes. The featured, the company claims, immediately drew over 8,000 listings with a third of it quickly sold in less than seven months.

Also Read: Indonesia’s motorcycle buying platform Moladin raises US$1.2M to grow regionally

The company also started facilitating automotive mortgage loans in December 2019, and since then has disbursed about US$60,000 in loan amounts.

It’s been reported that by 2025, the Indonesian government plans to increase motorcycle production up to 10 million units a year, signaling how integral motorbike as a part of Indonesian people’s lives is.

“The industry itself is still run traditionally where people have to physically visit different dealerships just to get the specific type or model of the motorcycle they want. We are confident that Moladin can revolutionise the way people shop for motorcycles and becomes the number one all-in-one platform for all motorcycle-things related,” explained Nobuaki Kitagawa, Managing Director of CyberAgent Capital.

In July 2018, Moladin raised US$1.2 million in funding from East Ventures, Malaysia-based Berjaya Group, and Singapore-based Ethos Partners to expand its team and grow regionally.
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theAsianparent, Southeast Asian community platform for parenting, has welcomed the former General Manager of Mumbrella Asia, Dean Carroll, to lead its Events and Intellectual Property (IP) Division in the Southeast Asia region.

theAsianparent claimed that it has recorded nearly 30 million users monthly. The company’s vision is to help parents towards 100 million healthy pregnancies and families.

Carroll comes on board to diversify the business into experiential marketing and offline spaces for theAsianparent’s community of parents. Carroll was most recently the General Manager of media and marketing trade press site Mumbrella Asia, where he launched a series of events and led the team to win various awards regionally.

On his appointment as Head of Events & IP, Carroll said, “It was a no-brainer for me to join theAsianparent team. theAsianparent is already the market leader in the parenting category regionally, and the opportunity to scale up its experiential marketing offerings across the Southeast Asia region truly excites me.”

“With a baby on the way, I hope my insights from being a father will give me diverse perspectives for my work, while theAsianparent community concurrently helps me become a better father,” he added.

Also Read: theAsianparent.com raises “8-figure US dollars” in Series C to expand in Asia, Africa

theAsianparent has an existing footprint in the events marketplace, putting on activations for clients on a regular basis as well as its signature Baby Bashes and Chief Household Officer (CHO) Mums conferences. Going forward, it said to envision more business-to-consumer (B2C) and business-to-business (B2B) events on a larger scale, alongside a new awards series.

“While it is important for us to drive capitalisation efforts, it is equally important that we meet the needs of our strong and close-knit parenting community. With Dean, we hope to build greater offline presence with our community and provide them with what they need to have healthy pregnancies and families, while simultaneously giving our clients and partners the opportunity to reach greater audiences and forge stronger brand connections with parents and their families,” said Susana Tsui, CEO of Media at theAsianparent.

Last year, theAsianparent raised an eight-figure sum from investors such as Fosun International, JD.com, and Mirae Asset-Naver New Growth Fund, to expand to other continents such as Africa and Asia.

theAsianparent is the flagship brand of multinational tech and digital publishing company Tickled Media Pte. Ltd., which focusses on content and community platforms. Currently, theAsianparent is available in 11 languages in 12 countries.

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Founders with amazing ideas paired with amazing vision can make a real impact.

But getting that seed of an idea off the ground requires a tremendous amount of planning and working capital — capital to market your concept, pay legal fees, finance production, and manufacturing, fund developers, hire employees and get your product or solution out there in front of interested customers.

But where to begin?

You’ll first need to determine the business and capital structure of your startup, given this is something that will help in attracting interest from investors. To do so, establish key players in your management team. Define how they’ll be incentivised, i.e. with a portion of ownership in the company and/or cash compensation, and how business ownership will be allocated.

Then decide whether you’ll need to safeguard personal assets under an established corporation or legal business structure. Additional considerations might be needed if you plan to go public in the near future, such as the number of shareholders and stock option plans.

The next thing you’ll want to do is crunch numbers, asking yourself: “How will we carry our business forward?” To get where you need to go, you’ll need working capital. And to acquire working capital, some startups opt to bootstrap their organization by tapping into their savings or their network of friends and family.

Bootstrapping, though, doesn’t always offer the most realistic path to success nor does it deliver the level of backing most start-ups need to bring a new brand into profitability. It might also strain or even break some of your most important relationships. Those who are serious about success will still need serious investors as backing.

Also Read: 10 tips that will help launch your startup fast

To garner investor backing, you’ll need market research. This provides the groundwork and statistics to prove that an investment in your business is a good one and that it’s backed by an idea with the likelihood of becoming successful. Ask yourself if your idea is reputable and if or how those investors will be repaid.

Is your concept unique and, if so, what’s the actual market potential? Who will buy your product or solution, and how many customers could you ultimately reach? Also, demonstrate that you have founders with the expertise to support this objective. Outline your business and your business model, showing investors how profitable you could make them.

Finally, to become this profitable, how much funding would be required? This is perhaps one of the most challenging questions to answer because there are no real figures on which to base business projections. But as you develop them, be realistic about forecasts around cost and return.

As opposed to hoping you’ll woo investors by painting a rosy picture, try cutting sales projections in half and doubling expenses. Underestimating capital requirements just to attract funding could potentially put you in the red down the road. You’re always better off inviting more than you need to avoid going back to investors later.

Through planning and research take time, it can help you in building the strongest foundation for success going forward. Answer questions proactively and support plans with research and proof to demonstrate your startup’s ultimate potential for success.

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Editor’s note: e27 aims to foster thought leadership by publishing contributions from the community. Become a thought leader in the community and share your opinions or ideas and earn a byline by submitting a post.

Join our e27 Telegram group, or like the e27 Facebook page.

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I started Vouch three years ago, leaving a comfortable government job to become an entrepreneur with the added pressures of a young family. Coming from an elite school and having done really well in my time in government, I was confident of success, even cocky.

Dreams of becoming the next Facebook, or selling the company for big money so I could retire before 35 drove me. Alas, leaping into the startup world was a humbling experience that quickly helped erase these delusions of grandeur.

Vouch’s first product was a platform that used big data to help retailers conduct targeted marketing online. Being a first-time founder, I made the mistake of building a product nobody wanted.

I had done surface-level market research, but little to no actual user studies on whether what I was building was something that retailers or consumers actually needed. After building out a substantial product with all the bells and whistles, every single retailer I approached turned me down.

All of a sudden I was a year in, and I had little to show for it.

My “build it and they will come” attitude had put us so far away from product-market fit that we didn’t even have a proper business to try to turn around.

Also Read: Creativity meets entrepreneurship: Why it is the next big thing Singapore needs to thrive

We were dangerously low on cash – overconfidence and hubris had led me to hire an over-sized team of developers, thinking that we would capture the market in three months. It was gut-wrenching when I had to let the team go, knowing that they were paying the price for my poor decisions.

Yet I was unwilling to simply give up – so many people had built and sold companies, with the pedigree I had to be able to do so too. I was still largely driven by pride and the promise of financial reward. I knew that I had to learn from these mistakes, and started searching for new opportunities.

The pivot

At that time, I noticed that there was a significant number of people selling consumer goods on Facebook in Southeast Asia, in particular, Malaysia, Thailand, and the Philippines. We had been experimenting with chat as a channel for reaching out to consumers as part of our first product, and it had proved promising.

So why not try using chat as a channel to sell?

After all, these sellers were already communicating with their buyers on Facebook Messenger. They were all annoyed at having to answer the same questions over and over again. They say there are no stupid questions, but they’re really are – most times, the answer to these questions were in their item descriptions, but potential buyers just didn’t bother to read.

The sellers also had trouble keeping track of inventory and sales; many were quite disorganised, or just didn’t have the time to properly log all sales.

Also Read: Bank BRI-Investree partnership earmarks US$143M to support creative entrepreneurs in Indonesia

Seeing an opportunity, I set to work, building an app that helped these sellers utilise chatbots to automatically answer commonly asked questions and manage inventory. I kept going back to these sellers to get feedback and eventually convinced some of them to deploy a minimum viable product (MVP) on their Facebook page.

They loved it and kept asking for more features, which I was only too happy to build, erroneously thinking that I had found product-market fit.

Eventually, when I tried charging for the product, only a small percentage of sellers converted into paying customers because their buyers were simply unaccustomed to be buying from a bot. I was unable to figure out how to solve this problem before running out of cash again. Second time around, I had built a product my customers wanted, but not what their customers wanted.

The second pivot

With the company bank account near zero, and my personal finances drained, it was a truly challenging period. This was also when we found out that my wife and I were expecting our third child.

Also Read: How the world’s most successful founders approach failure

Nevertheless, I decided to dig in and give it one more shot, taking the tech and platform that I’d built and hawking it to various companies. I was lucky to find some corporate customers who wanted to experiment with chatbots and started doing some projects for them, bringing in enough revenue to keep us afloat. I was also extremely fortunate to find angel investors who believed in me and who gave us some working capital.

Our real turning point came when the Singapore Tourism Board held its first Hotel Innovation Challenge, and we managed to find a really great partner in an international hotel chain to pilot using a chatbot to address service-related queries.

His team was really inspiring – they were willing to experiment and iterate with us, not minding that our product was not perfect. Thanks to the opportunity they gave us and hard work on both sides, we found that the ROI on this bot was exceptionally high – the hotel was deriving significant productivity savings, and guests that used the bot were getting accurate, instant answers to their questions, improving their experience. It was a win-win-win for all parties (guests, hotel, Vouch).

We were so convinced by this pilot that we decided to focus entirely on the hospitality industry. Thinking back, this particular experience also further moulded my motivations – I began to realise that we actually had a shot at changing how hotels operated and shape a much better guest experience.

Having lived frugally for the past year, I realised that money was no longer a strong motivator for me. Creating a valuable product for our users and changing the world (or hospitality industry), cliched as it sounds, was now my primary motivation.

Our next big challenge was to get even more guests to use our product. We were trying to change their usual behaviour of getting information from hotel staff, and changing people’s behaviour is always an uphill task.

Also Read: How entrepreneurs can use stress to their advantage

Improving utility

I had recently joined Startup Station Singapore, now Facebook Startup Accelerator, a six-month startup support program for digital-based companies in Southeast Asia. As well as learning core business principles and tools, our team was also introduced to product and sales experts from Facebook, who would become mentors and dear friends, and would help to guide Vouch’s growth.

We defined one of our goals as getting more than 50 per cent of guests to use our digital concierge. One of my mentors – a product development specialist – suggested the simplest of techniques: observing the guest journey, finding the pain points, and leveraging these pain points to drive users to our product.

To get users to change their behaviour, we either needed to give an incentive, or solve a particularly painful problem, and since we didn’t have the money to incentivise guests, we needed to find their problems.

Also Read: The importance of failure: 7 reasons why it makes us better entrepreneurs

It was a simple suggestion, but exactly what I needed to hear. We started to focus on the most important situational uses where a chatbot can add value during a hotel stay, and equally important, where it could not take the place of a human or other more suitable products. What did guests hate about their hotel stays enough to push them to try something new? In what cases would guests prefer to self-service? Armed with answers to questions like these, we were able to tailor our value to guests and the leverage strategic entry points to really drive usage and further increase the value of our product to both hotels and guests.

A little advice can go a long way 

Within six months of the advice from my mentors, Vouch increased its sales by more than five-fold, signing new hotel clients, delivering more services to hotel guests, and expanding into Indonesia. As a founder, it’s easy to get caught up in the day-to-day grind, and ignore the real questions and issues that need to be addressed in the company.

Candidly, I admit that oftentimes the reason why these issues aren’t addressed immediately is because of fear – fear of rejection, or of being wrong. Speaking to my mentors regularly often helps me realise when I’m behaving irrationally or skirting issues, and these talks have gone a long way to helping us reach where we are now.

Today Vouch is working to enter more markets, widen our product scope, garner different types of clients, and ultimately create a marketplace for concierge services. We also have a clearly defined, simple but highly effective, approach that guides our product development and sales outreach.

Most importantly for me, the experiences that I’ve been through these past three years have shaped my motivations in a way that I feel is more mature and better for the company. This change in heart has also helped to attract people that share the same goal of creating game-changing products, and these people are the key reason why we are where we are today.

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Social networks are one of the most effective tools to promote and attract clients. It is not only big brands that achieve success in social media space. Even small companies and startups unlock their potential, forming a target audience in their niche. But success and profit come only to those who were able to properly organise work in social networks and form the demand for a product or service before the official launch of the business.

Despite the prospects and huge interest in social networks as a direct channel of communication with potential clients, not all owners of small and medium businesses have understood the intricacies of working with them. As a result – lack of clients, sales and complete disappointment in Social Media Marketing (SMM).

The main problem of many small companies and beginning businessmen is a haphazard approach to advancement and actions at random. To get a cool result, you need to structure the work in social networks or clearly form the requirements for the contractor. So how do entrepreneurs organise work with social media, so that even with a minimum budget to get good results?

It is important to understand that business in social networks should work for a single purpose – to bring their owner’s income. It is not possible to earn money and build a loyal audience in social media for free. Like any other advertising tool, social networks require investments, strategies and other resources. However, learning how to use their potential, as well as the possibility of targeted advertising, you will understand that it costs you money.

If your team has an intelligent designer, copywriter or SMM-specialist – great. If not, think about whether you can give your social media communities enough time on a daily basis to prepare and publish a couple of really cool posts, communicate with clients and fully promote themselves?

Also Read: What you need to know about social media tech in Southeast Asia

A quality SMM requires a lot of time, skills and money to be spent on:

– Writing a unique fascinating text, adapting the material to each social network, creating a content plan and schedule of publications;

– finding or processing images in graphic editors, taking photos, and working with video content;

– setting up targeted advertising, moderating ads, finding new ways to reduce the cost of the target action;

– communicating with subscribers, encouraging involvement and increasing their loyalty;

– reading fresh material on thematic resources, case studies and testing new tools.

Are you ready for this? If not, it is better to have a great SMM team that will back you up.

It is also necessary to calculate what budget you can lay down for targeted advertising campaigns. Keep in mind that social networks are not the same as they used to be. Today it is not enough simply to attract subscribers to the community in one way or another. You still need to make sure that they see your publications in their daily news feed.

For example, the Facebook algorithm works so that your posts will only see a small percentage of your subscribers. That is, no matter how great your material is, only 50-150 of your 1,000 subscribers will see it. And in order to get it to the feed to everyone, you need to promote each publication by paid methods.

Also Read: 6 effortless ways to grow your small business through social media

By the way, Instagram has also taken up the implementation of a similar algorithm of news distribution.

Determine your goals: what do you expect from social networks?

Do you want to attract as many customers as possible within 24 hours? Focus on advertising campaigns that guarantee fast results.

If your goal is long-term prospects and growth, then develop a community whose members will gradually become your clients for a long time. It may take a long time before you build trust in your target audience for a service or brand. However, the social media community is doing its best to meet these challenges.

Make a portrait of the customer. In detail!

Without a detailed portrait of your target audience, setting up your advertising campaign will be simply inefficient. So even if you contact a specialist in promotion in social networks, do not limit yourself to the typical “m / w, 20-60”. Think about where geographically your clients live, what kind of education and range of interests they have, how much they earn, what kind of car they drive, where they rest, what kind of entertainment they prefer to eat, etc. This is the case when there are no many details.

Decide on the channels

Facebook, Instagram, YouTube, and TikTok are the four most effective platforms for today. To determine which of them you are on the way, again, ask yourself, which one of them is the most used by your target audience, explore the activities of competitors, look at cases from your industry.

To put it simply, the picture is roughly the same:

• Facebook can be used to help those who target advanced youth, travellers, businessmen, top managers and any other intelligent audience with good-paying capacity. And if you work in B2B segment, Facebook is a must.
• TikTok suits you if you are interested in young and active clients who need Spanchbob cases for iPhone, Korean cosmetics, clothing from China, Converse sneakers on the super discount and handmade. However, as this social media website is fairly new, not everyone understands how to promote their product there. Here’s a great tutorial on how to kick start your account.
• Instagram is what you need if you love and can take many “delicious”, beautiful photos. Fashion, restaurants, travel – you just have to be present on this site!
• YouTube is for those who have something to say or show to the clients. You can use it, for example, for product reviews, expert opinions, or post-training materials on your topic. Having charisma and a good camera is necessary.

It is not worth putting your efforts into all the channels of communication with the customer. It is better to concentrate on a couple of sites that suit you best.

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Editor’s note: e27 aims to foster thought leadership by publishing contributions from the community. Become a thought leader in the community and share your opinions or ideas and earn a byline by submitting a post.

Join our e27 Telegram group, or like the e27 Facebook page.

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