Having seen and heard over 2,000 pitches in the last year alone, we dare say that 90 per cent of startup founders struggle to clearly define their problem statement.

Deceptively simple, a well-defined problem will not only capture an investor’s (limited) attention but keep it throughout your presentation.

Fifty per cent of the success of your first pitch is in your problem statement. Why? It sets the tone of the pitch and helps us understand the market size, the need for the solution, and who’s paying.

In this blog post, we shed light first on how founders can avoid the common pitfalls of crafting a problem statement then of course, on what investors look out for in one.

If you’re from a B2B (enterprise) or deep tech startup, this article is for you. For B2C startups, while important, the problem statement is trumped by your vision statement and identifying a need with consumers.

Also Read: 3 legal problems online marketers could run into

Common pitfalls

Focusing on the solution, not the problem

We understand your enthusiasm when it comes to your solution, in fact, we love it! However, the most common mistake a startup can make in its early stages is to fall in love with their product and not the problem.

If there’s one thing we are sure of, is that the solution will change as it evolves for product-market fit, growth and scale. A well-defined problem isn’t just for investors, it will act as a guiding principle as the company grows later on as well.

Take one of Cocoon’s portfolio companies, Hapz for example. The problem: Events organisers are not able to monetise events and have low margins. When we first invested in the company, their solution was to sell extra tickets for events.

However, they quickly realised that just selling tickets was only a small part of the event organisers’ problem. By providing a single events management platform to organisers, Hapz is now able to use the data to improve the efficiency of running the entire event, of which one part is improving ticket sales.

Thus by pivoting the solution to better solve the problem they achieved product-market fit. Had they focused on their first solution and not the problem, the opportunity for something much bigger would have been missed.

Also Read: Hidden reasons why VCs reject your startup for investment

Multiple problems

We at Cocoon are constantly on the lookout for founders who dare to change the world. Being a startup founder is tough enough, so let’s focus on solving one problem at a time, especially at the seed stage.

The classic example is defining the problem statement for a marketplace. The usual pitch focuses on both sides of the marketplace, usually with a statement similar to “customers want to have access to all alternatives, merchants want to reach consumers cheaply” – win-win for all, right? Maybe eventually.

However, as a startup it’s important to understand who will be paying for your service; that is who your problem statement should be focused on. Will the consumers be paying for the service with a fee for everything that they are buying? Or will the merchants pay to be onboarded?

Buzzwords don’t get us excited

This mistake is often closely related to the first mistake. The problem statement should never include phrases like “artificial intelligence”, “net neutrality”, “actionable analytics”, “data mining”, you get what we mean.

Buzzwords are often related to the solution which will change and adapt over time. When this happens, you may find yourself with a really awesome product or solution that is searching for a problem.

Also Read: Using design sprints to solve COVID-19 business problems

Creating a problem

Which brings us to the next point – is your product a need, or a nice to have? Businesses are presented with a multitude of options, but with a limited share of wallet. Think about it this way – in times of a downturn, would your solution be the first or last to go? If it’s the latter, the problem you’re solving is not mission-critical and should be revisited.

A well-defined problem isn’t rocket science.

Solve one problem

Solutions can cater to multiple beneficiaries but focus on the one stakeholder that you are solving the problem for. This is your immediate market size and go-to-market strategy, which will vary from institution to merchant to conglomerate, the stakeholder paying for your product.

Once you focus on who’s paying, it’ll be easier to identify what the problem is for them. They will be the ones driving your revenue.

Pain points

This is a big one. You have to identify the biggest pain points of the people who have the problem and where the problem is rooted. Who controls the budget for the solution to the problem? The pain point has to be so significant that the stakeholders are willing to part with their limited budget to purchase your solution.

Keep it short

The problem statement should not be longer than two sentences. It should easily fit on one pitch deck slide.

Also Read: Dealing with fundraising problems? These three startups may have the answer

Defining a problem is not a problem

Now that you’ve crafted your problem statement, think about the following questions: Does this problem keep directors and executives up at night? Is this problem a topic of board meeting discussions? If you took away your solution, would the problem still exist?

If the answers are a confident yes, yes and yes, then you’re on the right track. If not, don’t be afraid to recreate and reiterate until you get it right.

With a good problem statement in tow, investors can now clearly understand and get excited about the opportunity the problem presents, with a strategic overview of your company and how we can value-add to accelerate your growth.

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Register for our next webinar: Meet the VC: Qualgro Partners

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.

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Indonesian ride-hailing giant gojek today named Facebook and PayPal as new investors in its latest funding round.

Existing investors Google and Tencent, who first made investments in the company in 2018, also made a comeback in this undisclosed funding round.

In a press statement, gojek stated that the participation of these global companies in their funding round is meant to support the company’s mission in supporting the growth of digital economy in Southeast Asia, particularly in payments and financial services.

It also stated that gojek is the first Indonesian company to raise an investment from Facebook. This investment is in line with the social media giant’s goal to “create opportunities” for businesses in Indonesia, particularly through its WhatsApp platform.

The investment will also see the integration of PayPal service onto the gojek platform. It will also enable access for GoPay users –gojek’s digital wallet service– to PayPal’s network of 25 million global merchants.

Also Read: Morning News Roundup: Fulldive partners gojek’s digital payment arm GoPay, launching its browser in Indonesia

“This is great validation that the world’s most innovative tech companies recognise the positive impact Gojek is making in Indonesia and the whole of Southeast Asia. By working together, we have the opportunity to achieve something truly unique as we aim to help more businesses to digitise and ensure that many millions more consumers are enjoying the benefits that the digital economy can bring,” said gojek Co-CEO Andre Soelistyo.

“The COVID-19 pandemic and its associated issues have served as a tough reminder that if our economies are to be more resilient, they must be underpinned by digital infrastructure that diversifies the ways in which people can live and transact. We see our role as a convener of global tech expertise, facilitating collaboration that will ultimately lead to a better future for everyone in our region,” he continued.

Prior to this announcement, Bloomberg reported that gojek raised US$1.2 billion to support the company in its effort to compete with fellow Southeast Asian ride-hailing giant Grab.

Starting off as a motorbike-based ride-hailing service, the company has branched into different services from different verticals within less than a decade.

It has also begun expanding beyond Indonesia in the recent years.

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Image Credit: gojek

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The travel and tourism industries experienced the hardest hit during the COVID-19 outbreak. As countries closed their border and airlines cut down on routes, the number of travellers drastically dropped, directly affecting businesses of various sizes in the sector.

In the past few months, e27 has covered startups in the travel and tourism sectors and how they are dealing with this difficult time. We have published about Vietnam-based tour packages platform Triip who introduced StayHome Heroes campaign.

We have also named capsule hotel platform Bobobox as Startup of The Month for their ability to secure a US$11.5 million funding round and survived through enforced quarantine measures in the country.

This time, we are looking into how Travelhorse, a Singapore-based startup, deals with the challenge at the very early days of its operations.

Incorporated in January, the team at Travelhorse was developing a platform to connect travellers with local shops and businesses to store their luggage, when COVID-19 was discovered in Singapore.

Also Read: [Updated] Thai travel tech startup Tourkrub to raise US$5M in Series B funding to support regional expansion plan

The outbreak continued to threaten, forcing the government to introduce a circuit breaker (CB) measure to handle the situation, which was implemented in April.

At this rate, travellers and tourists –the potential customers that they originally wanted to target– were barely existing in the country.

“Before the CB was announced, we already have a network of 35 jockeys across Singapore and Southeast Asia. We saw this COVID-19 situation in Singapore worsen in the sense of numbers, and also the direction of the government policy. So we thought about how we can create value by rallying up local initiatives through our jockeys and our network,” Travelhorse Founder & CEO Scott Koh explains to e27 over a call.

So the startup introduced an F&B Dash and logistics delivery service, which had begun operating by the time the CB officially started.

“The decision was strategic in many senses. [We aim] to create added value for existing jockeys, and to onboard more jockeys into our network,” Koh says.

Collaboration matters

The change seemed to work for the startup, especially since they were not alone in their work to support local F&B businesses.

Also Read: Roundup: Singapore ranks 16 in global startup ecosystems; Anthill invests in Indian travel-tech firm QuaQua

“When circuit breaker was introduced, Enterprise Singapore made an open call for F&B merchants [as they aim] to fund their delivery costs via partnership with three delivery giants: GrabFood, Deliveroo, and Foodpanda. They also made an open call for third party logistics to come and support this effort,” Koh says.

Travelhorse’s application for this programme was then approved.

Ever since then, the company has also expanded its logistic services to include packing and storage for students, professionals, or small business owners who have been displaced by the outbreak.

What is next?

The story of Travelhorse began when Koh struggled to find a convenient place to store his luggage when he arrived in Hong Kong in 2018 for a hackathon event. After dropping his luggage at a student hostel, he had to spend 4.5 hours to reach his destination as he had to take a reroute.

The luggage storage platform was then developed to help travellers reduce their travelling load, enabling them to explore the destination with ease and convenience.

When the interview happened, the company was still in wait-and-see mode regarding the future. But when asked specifically about the fate of the luggage storage service, Koh says that they intend to continue on developing it.

“In fact, we are still working on the development effort to create that platform. Moving forward, it will be our main business model,” he says.

When asked about how the startup deals with uncertainties and arising challenges, Koh stresses the importance of open communications and being responsive to changes.

“We are a team of five members and we aim to be very open in communications, and [to make decisions] based on the current situation,” he says.

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Image Credit: Travelhorse

 

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In recent months we have seen healthcare systems in many parts of the developing world coming under immense pressure as they struggle to control the spread of COVID-19.

However, even before the current novel coronavirus pandemic, existing brick-and-mortar healthcare systems in much of Asia were struggling to cope with demand from ageing and increasingly health-conscious populations.

As we look ahead into the new decade, we can confidently predict that new digital technologies will transform the healthcare industry-disrupting traditional business models, enabling a more preventative approach and bridging the infrastructure gap by enabling people to see their doctor from the relative comfort of their own home.

Digital technology in healthcare

In most parts of Asia, digital technology is shaping the region’s healthcare industry through – what can best be described as – a digital revolution. It’s a revolution because it is being led not by large companies or government, but from the bottom up, by the region’s entrepreneurs who have founded a wave of innovative digital health startups.

In Singapore, the government’s commitment to digital innovation and adoption, coupled with strong internet connectivity and high mobile and smartphone penetration has given our digital entrepreneurs a significant headstart in comparison to those from other parts of Asia.

In January 2020, Singapore Parliament passed the Healthcare Services Bill giving authorities the ability to license, and therefore implement, new models of healthcare such as telemedicine. This follows other pioneering initiatives such as the Ministry of Health’s creation of a “regulatory sandbox” – the Licensing Experimentation and Adaptation Programme – and a strong framework of supporting guidelines such as the National Telemedicine Guidelines and Singapore Medical Council’s Ethical Code and Ethical Guidelines within which innovation has been allowed to thrive.

Also Read: This startup wants to bridge the ‘missing link’ in Indonesian health tech scene

Singapore is ASEAN’s sandbox for digital innovation

Singapore is estimated to be home to around nine per cent of Asia’s healthtech startups, the largest number after China and India. The growth of the sector in Singapore has also been impressive with the number of startups rising from 45 in 2012 to 174 in 2018, and the proportion of those raising Series A and B funding rounds increasing steadily as the sector has matured.

Furthermore, Singapore’s start-ups are among the most innovative in the region and are often developing healthcare solutions that address the unique needs of Asian people.

From using blockchain to improve the certification of halal products, to applying artificial intelligence to diagnose and manage diabetes, or digital platforms, apps and wearable devices using local languages to help people in traditionally underserved rural communities manage their health and wellbeing.

However, no matter how innovative an entrepreneur is, they are unlikely to successfully commercialise their product without money. Raising investment is extremely hard for any start-up and this can be compounded by the complexity of the healthcare sector.

Yet for experienced and skilful investors willing to consider smaller deal sizes, early-stage digital health companies can offer the potential for high-multiples and this has been recognised by Singapore’s investment community.

In 2018, Singapore attracted US$105 million into its health-tech startups, or 24 per cent of total investment, excluding China and India. Big names such as Sequoia Capital, MassMutual Ventures SEA, Heritas Venture Fund, Venturecraft, and Wavemaker Partners have all begun to make significant plays.

Also Read: Beyond the hospital: Challenges and opportunities in Indonesian healthtech scene

Singapore’s public healthcare system has also stepped-up and is pioneering the use of innovative patient-centric digital solutions through partnerships with the private sector. For example, the Singapore startup Holmusk recently announced a partnership with National Heart Centre Singapore to use its machine learning and data analytics technologies to improve care for patients with coronary artery disease.

Over the last 12-months many of Singapore’s largest public health groups, such as SingHealth and National Health Group, have been involved in similar private-sector collaborations.

To complete Singapore’s digital health ecosystem, our large healthcare companies need to be willing to take risks and act more like the tech giants of Silicon-Valley by supporting digital entrepreneurs through partnerships, licensing deals, and even seed investments.

Some large multinationals, such as Johnson & Johnson and Novartis, have been quick to recognise the innovation emerging from Singapore and inked partnership deals with our leading health-tech startups, such as Bioformis – the developer of software-based therapeutics to treat heart and lung diseases – and Ark Bio Holding – the medtech enterprise focused on early cancer detection.

But challenges remain…

Yet even in Singapore challenges remain, and entrepreneurs must carefully consider the best commercialisation pathway to bring their new digital healthcare product or service to market.

Firstly, they must devise a viable revenue model that answers the key questions of ‘who will pay’ and ‘how will they pay’, not just in their home territory of Singapore, but across the region’s different healthcare systems if they are to scale. These revenue models can be broadly categorised as B2C or B2B.

Also Read: The Story of You with Homage Co-founder and CEO Gillian Tee

Startups such as Homage – the developer of a digital platform that matches caregivers with those needing home-care support – provides its product directly to the elderly and their families. While others, like Bioformis, offer their innovation to pharmaceutical companies or healthcare providers that apply the technology and use it with their own customers or patients.

Secondly, each healthcare market in Asia is at a different stage of development, each with its own regulatory systems governing data privacy and cybersecurity. For a Singapore startup, navigating this complex web of rules and regulation requires a significant investment of money and time and is enough to give an entrepreneur a headache, one that needs its own healthcare innovation to cure.

In early 2019, Homage raised a double-digit Series B equity financing round led by EV Growth to fund the expansion of its caregiving service into other parts of Southeast Asia. Homage has expanded successfully and today offers a network of more than 1,000 professional caregivers in Singapore and Malaysia.

Other companies, typically those applying a B2B model, have chosen to partner with a local player or a large multinational already familiar with the eccentricities of different Asian markets to ease their expansion. For example, in November 2019 Bioformis announced a partnership with Novartis to apply its digital therapeutics to treat patients recovering from heart failure in six countries across Southeast Asia, rapidly scaling the start-up’s exposure to patients across the region.

Collaboration is key

Singapore is home to a vibrant and talented community of entrepreneurs building successful and innovative digital healthcare businesses that are among the best in the business. Their innovations offer the potential to transform Asia’s brick and mortar healthcare systems and in so doing improve the health of thousands of Singaporeans and millions across Asia.

Also Read: Same same, but different: How local foodtech startups are driving Singapore’s public health goals

However, for these businesses to thrive, Singapore must support its start-ups by fostering a symbiotic digital healthcare ecosystem.

It is now time for all industry stakeholders – including large healthcare companies, investors and the public healthcare system, to get behind Singapore’s digital entrepreneurs and, in so doing, help to ensure the country retains its position at the forefront Asia’s health-tech transformation.

The views expressed herein are those of the author and not necessarily the views of FTI Consulting, Inc., its management, its subsidiaries, its affiliates, or its other professionals.

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Register for our next webinar: Meet the VC: Qualgro Partners

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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Launching e27 Pro a few months ago, we wanted to achieve one particular goal: to empower the startup ecosystem by helping companies solve the challenges that keep them from reaching their goals.

After careful study, we learned that one of the key areas that startups struggle with is fundraising. This is why with e27 Pro, we decided to help address challenges in the fundraising space particularly by providing startups with better visibility on our platform.

As many of you may know, e27 manages one of the largest startup databases in the region. Given the network of startups and investors we have accumulated over the years, we believe we are in the best position to help startups attract investors and hopefully take the next big step in their fundraising journeys.

e27 Pro Fundraising Highlight

Scrolling down the e27 homepage, you can find below the articles a section dedicated entirely for fundraising startups. This section displays a list of startups from all over Southeast Asia looking for potential funding.

Included in the list are crucial information about the startups such as the country they are headquartered in, their verticals, their official websites, and the funding they are currently raising.

Also Read: How e27 Pro helps startups remain in view of APAC key investors

With the e27 Pro Fundraising Highlight, startups stand to gain the unique opportunity of being featured prominently in our platform. This enables them to stand out from the diverse startup ecosystem, and attract investors looking for new businesses to fund.

How to be included in the Fundraising Highlight

The e27 Pro Fundraising Highlight is an exclusive feature for pro membership. Upon signing up for Pro, all you have to do is create or update your existing startup profile, and indicate if you’re currently fundraising. From there, you can indicate the amount you are trying to raise, and what funding round you are raising.

It’s that simple!

Join e27 Pro

Interested in taking the next step? Be a part of the community and sign up for an e27 Pro membership today! You may visit here for more details.

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