Day: February 23, 2020

The novel coronavirus –now named COVID-19– that surfaced a few weeks ago has now seen cases in several countries around the world. The fear over the spread of the new coronavirus has led millions of people in China to remain at home.

Given China’s role in the global supply chain, businesses both in China and abroad have felt the impact of this unfortunate event. The situation has put pressure on some of the more obvious sectors such as retail, travel and tourism, hospitality as well as the service industry.

But the question is: are all industries negatively impacted by the outbreak? And what trends will surface from this?

Gamification

As unfortunate as this global catastrophe is, some sectors seem to have been benefitting from the recent outbreak. As recent data has shown, the gaming and streaming industries have been some of the major beneficiaries. As most people in China in the past few weeks found themselves restricted indoors, gaming and video streaming apps popularity further rose. The most popular among them being Tencent’s Honor of Kings.

According to Japanese investment company Nomura, the mobile game that has around 60-70 million daily active users on average surpassed 100 million DAU over the Chinese New Year Holidays. Another one of Tencent’s popular titles, Game for Peace, generated revenue between US$28.7 million to US$71.5 million on the eve of the Chinese New Year alone, as reported by securities firm Sinolink Securities.

The fact that some video game publishers including the likes of NetEase, Tencent Games, and Kingsoft extended the promotions on their games until February 10 goes to show that the significant impact the outbreak has had on their bottom lines and their desire to retain these users. Given that schools and universities across the country will remain closed until the end of the month, we can expect this momentum to continue.

Also Read: Keep calm and remain communicative: Startup founders share how they cope with coronavirus crisis

Remote rules

In addition, even though several educational institutions and companies have closed down, there still remain several more who have begun teaching and working remotely, giving a push to remote office apps such as Alibaba’s DingTalk, Tencent’s WeChat Work, ByteDance’s Lark and Huawei’s WeLink.

Though one of the most technologically advanced countries in the world, if not the most, China has so far lagged much of the world in permitting telecommuting till now. But as data suggests, this may be fast-changing.

According to a statement published on Weibo, employees from more than 10 million corporations began working from home on DingTalk, with the number of users on the app exceeding a whopping 200 million users on February 3 as reported by 36Kr.

Earlier this week, DingTalk announced that more than 50 million students and 600,000 teachers used the live-streaming feature on DingTalk to hold online classes.

In order to keep up with the competition, WeChat Work, the enterprise communication app from Tencent also released a set of new features aimed at facilitating remote work including online meetings for up to 300 people and live streaming.

Remote office apps such as Slack and Microsoft Teams have been highly successful in the west. In China, since telecommuting or remote work has not really been popular so far, we have not seen any significant numbers coming in from Chinese remote office apps until now.

Also Read: Coronavirus is driving the world into an economic slump. How to cope up?

The world’s largest work-from-home experiment currently going on in China has the potential to drive the use of such applications further.

E-commerce boom

China already leads the world in terms of e-commerce but given the current state, Chinese online sellers are also on the more generous side of the aisle with regards to the impact they have felt. As more people are stuck at home in China waiting out the outbreak, delivery and e-commerce companies have seen a surge in contactless delivery and online grocery shopping.

As reported on CNBC, a delivery guy for JD.com who would deliver about 140 to 150 packages per apartment complex on a typical day previously, now delivers more than 200 packages a day at present. JD’s sales of fresh products increased by more than 300 per cent compared to the 10 days of Chinese New Year from the previous year, selling 15,000 tons of fresh products.

Furthermore, its affiliate Dada, which delivers for Walmart and other grocery chains, also reported a quadrupling in its sales compared to the previous year. And while it can be argued that rising sales could be a result of maturity in online grocery shopping from YOY basis, it is very likely that the current crisis has brought more users to these online platforms.

In the midst of the crises, what we are currently witnessing is a new way technology is being used in China like never before with some of China’s biggest tech companies leading the way.

Live streaming and online teaching existed but not at the scale it is being used now or potentially in the days to come. Remote work apps existed but only now have companies started leveraging them.

Chinese kids being homeschooled through live streaming has suddenly opened up an entirely new possibility in online education that was so far used only to supplement offline teaching. Furthermore, more people buying fresh produce and groceries online would further highlight the significance of the New Retail (Retail 2.0) concept popularised by Alibaba in China.

Also read: Keep calm and remain communicative: Startup founders share how they cope with coronavirus crisis

The coronavirus has undoubtedly changed the way of life for many people all over the country, altering consumption pattern among other things and providing a boost for the tech industry. Crisis brings risk but also brings opportunity.

Several tech companies in China have managed to seize this opportunity so far and as this health risk prolongs further, the need to innovate will grow further.

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Trax, a retail tech unicorn with a valuation of US$1.4 billion, announced today that it has acquired Qopius, a Europe-based image recognition company that has raised close to US$1.8 million.

The company refused to comment on the terms of the deal.

Trax CEO Joel Bar-El said that Qopius’ expertise in digitising supermarket shelves across Europe and phenomenal talent line-up make it a strategic fit for Trax. Trax offers vision and analytics solutions for retail whereas Qopius provides AI-based in-store technology solutions. Both companies are focussed on digital retailing services.

Bar-El expressed that the key to success in retail lies in technology to support employees.

“This means capturing critical shelf data in real-time to enable employees to fix merchandising and availability issues faster than ever before,” he said.

Also Read: Trax secures US$100M in Series D to become Singapores second unicorn

“Qopius’s mission is to transform brick-and-mortar into a data-driven and frictionless operation while empowering store employees to focus on providing the best customer experience. We are thrilled to join Trax. Together with the reach and resources of the Trax group of companies, we will deliver scalable, easy-to-deploy digitisation solutions to improve the health of every shelf, which will revolutionise how shopping is done today,” said Qopius co-founder Roy Moussa.

Other recent acquisitions by Trax included LenzTech in China (June 2019), Shopkick in the US (June 2019) and Planorama in Europe (July 2019) as reported by DealstreetAsia.

The company’s lead investors are Warburg Pincus, and private equity firms such as BlackRock, GIC and Boyu Capital.

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Image Credit: Trax

 

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The Boy Who Harnessed the Wind is is a 2019 British drama film written, directed by, and starring Chiwetel Ejiofor in his feature directorial debut.

Based on the heartwarming true story of William Kamkwamba who gained fame in his country when he built a wind turbine to save his family from a severe drought that devastated his village killing many. 

His wit, ingenuity, perseverance is something we as startup founders can learn from.

Learn how when not to take no for an answer

The film is an inspirational true-story film based on a memoir by the Malawian engineer William Kamkwamba. As a teenager, he built a wind turbine for his famine-stricken town in Malawi, helping to power small appliances and eventually irrigate crops.

William needed parts from his father’s bicycle to build a full-sized windmill!

In rural South Eastern Africa and many parts of the world, where basic transport infrastructure is lacking, a bicycle makes a big difference between spending a full day walking into town and back –or riding for a few hours ride.

His father thought William was up to one of his crazy ideas again and refused to give up the bicycle as parts for the windmill. He scolded William very harshly, tears streamed down his eyes but he didn’t give up and he tried again soon after.

Also Read: Why successful startups often have a pair of founders

As founders, we are not invulnerable to rejections. It hurts. I have been many a time as a result of getting rejected. At such time I did not want to spend time with my family, instead chose to brood in my room replaying over and over in my mind what I could have done better, how could I have answered a question better. 

It’s understandable, we are only humans. William is but a kid and many didn’t want to take him seriously, just like we are – a small startup.

But we must all be like William and wipe away the tears and stand up to try again.

MVP

He believed he could build a windmill to drive a water pump and water the village land. He first tested the idea by making a small one to power a radio. After this, many in his village were encouraged and decided to assist him in building a full-size windmill.

Many times, startup founders hit an epiphany and start thinking they found something that might make them the next Google or Facebook. However, it is important to perform tests to prove that the concept works and building an MVP is one of the many ways we can use to gauge if something is viable before we start to enroll the entire village and sink valuable time and money into something that may not work.

Educate yourself

When his parents could no longer afford to pay his school fees, he was disappointed but did not let that stop him from getting the knowledge he needed to build the windmill. He found a way to get into the library –despite not being a student at the school– and poured over books on magnets and how to build a dynamo. 

There’s a saying, “leaders are readers.” We as founders do not always have to be from prestigious universities, but we must be resourceful enough to know where and how to get the knowledge we need to successfully build what we are building and the hunger to always explore.

Support from family

We often say it takes a village to raise a child.

The importance of having multiple support roles enable a startup to flourish. That said, it doesn’t necessarily have to come from a co-founder.

Also Read: Finding the right co-founder is worth the trek

Your family’s understanding is equally important for you during this journey as starting up could mean time and financial resources being allocated to building this new business. Their understanding could elevate a lot of stress off you. 

When William’s father refused to give up his bike for the windmill, it was his mother’s conviction in him that persuaded his father to. When the father knows they have to start to ration their food, he got the family to vote, which meal of the day they should be eating and which to skip.

I too might not be able to continue in this journey without the support of my family and my wonderful girlfriend who have been understanding of the fact that its no overseas holidays for us for the next couple of years, not being able to help out financially at home that much, believing in me and that I am fighting hard each day. So learn to share with your loved ones and prep them for what is required of you and how it might affect them.

I hope this article inspired and taught you something, just like the movie did for me. Now founders lets go out and harness the wind.

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These days, everyone wants to be an entrepreneur, pitching their latest and greatest new idea, and looking for someone to give them money. Angel investors, like me, have long figured out that asking to see the prototype is a quick way to separate the ‘wannabes’ from serious players. Talk is cheap, but entrepreneurs who show you a working model of their idea know how to execute.

In reality, it does not take a huge investment of money and time to build a prototype today. If it is hardware, look for one of the ‘makerspaces’ such as ProtoStripes, with all the tools you need to prototype almost anything yourself. Software products and apps can be quickly wire-framed with free tools such as MockFlow, or even Microsoft Powerpoint to lay out the key screens.

Here are six results that you can achieve by building a prototype, which are really the reasons that investors and partners will give you a whole new level of credibility as they evaluate your startup for potential funding:

1. Something you can touch and feel helps validate the opportunity. When you wave your arms and describe your future product, everyone sees what they want to see, and it looks great. With a realistic prototype, you can get more accurate feedback from customers on their real need and what they might pay, before you invest millions on the final product.

2. Quantify the implementation challenges. Many ideas I hear sound great, but I have no idea if they can be implemented. Building a prototype at least allows both of us to ask the right questions. Visions and theory are notoriously hard to implement. A prototype has to be real enough to be convincing, without looking like science fiction.

3. Give yourself time to pivot without dire consequences. It does not matter how certain you are of your solution, it is probably not quite right. Every entrepreneur has to deal with the realities of constant change in today’s market, and it’s much easier to pivot the pre-production prototype than to dispose of unsellable inventory.

Also Read: Didi Chuxing speeds up autonomous driving project as prototype cars hit the road

4. Show investors that you are committed, and past the idea stage. Without a prototype, most professional investors will not take you seriously. In reality, the process of designing, building, and validating a prototype does dramatically reduce the risk, and allows everyone to hone in on the real costs of going into production.

5. Reduce the time to production and rollout. For both software and hardware technology, multiple iterations are usually required to achieve production quality and performance. Time is money, and may be your primary competitive advantage. Do not spend your whole development budget, before finding that you need another iteration.

6. Support early negotiation with vendors and distribution channels. A three-dimensional prototype is always better than just a documented specification when negotiating contracts for manufacturing, support, and marketing. As a startup, you need all the leverage you can get.

If you are not comfortable or skilled enough to build a prototype yourself, it is time to find and engage a co-founder who has the interest and background to at least manage the work. You should never outsource the management of your core technology. At worst, maybe you can find a trusted friend to guide you, or a nearby university with expert professors and the proper tools.

Of course, there are many commercial resources available on the internet, including the Thomas Registry, which is an online database of 500,000 specialty manufacturers, distributors, and prototype developers, across every state and country. There are also a wealth of invention support sites, such as InventorSpot and IntellectualVentures.

Unfortunately, working with any of these outside services is hard to manage, risky in results, and some have developed a reputation for taking advantage of unsuspecting entrepreneurs. The amount of money you spend on their services is never an indication of potential success. There is no magic formula for success while inventing. Proceed with your wits about you.

Overall, building a prototype is still a great way to bring your idea to life, for yourself, your team, investors, and future customers. Your target cost expectation should be one-tenth of the total commercialisation cost, with the assumption that it will be throw-away. Even still, I cannot think of a better way to validate your solution early, and get credibility with the people who count.

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The article was first published on nfinitiv.

Image Credit: bruce mars on Unsplash

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