After seven years of helping more than 200 Singapore early stage tech startups with their tech product development, our team has seen lots of issues that can trigger Oh-Sh*t moments.

Below are the most common struggles that many early stage tech startups face with their new tech product development.

While these struggles are most commonly seen among early stage tech startups, they sometimes (can still) happen in more mature startups. If your startup is developing or planning to develop a tech product, watch out for the three most common mistakes early stage tech startups make below.

Over-development

Often, founders, especially first-timers, spend too much time perfecting their products: they want to have all the great features in the first release, no bugs, and every design to be aesthetically perfect. However, what you think your customers need is likely to differ from what they really need. Worse, your customers often do not know what they really need until they actually have their hands on your product.

All these factors make the usefulness of all your white-board scrabbles and customer surveys very limited. So why bother wasting all your money and time developing what your customers do not need? For most startups, the cost of under-development is usually much lower than of over-development. Instead, you should:

• Develop only essential functions
• Release to the market as soon as possible to test the market
• Iterate according to actual user behaviours

Once you have launched your product to the market, you will have the best insights into what your customers really need and how much they are willing to pay. If we can point to a single most important factor that our successful clients have in common, it is speed.

Also Read: A multi-disciplinary approach to product development requires collaboration

Communication friction between business and tech

Expectations are the root of all heartache. Most tech people are not experts in communication and thus expectation management. This is not a big issue for more mature startups that can afford to hire product managers.

However, for early stage tech startups, to save money, CEOs tend to play the role of Product Managers as well.

Also Read: A multi-disciplinary approach to product development requires collaboration

Sales-driven, these CEOs often have unrealistic deadlines for tech people. Without any formal document to record all the specification and agreement, the writing of which is usually a job every business or tech person abhors, friction usually occurs when a feature is not as per the CEO “says” or deadlines are missed. Even if deadlines are met, software engineers may be forced to go for shortcuts, sacrificing the code quality that may backfire later on, hard.

Software engineers do it all

If you hung around job portals as much as we do, you would be unsurprised to see job posts that essentially go like this: looking for a software engineer who can design, code, test, write architecture documents, swim, dance, climb mountains, etcetera.

If we follow the 80:20 rule, 80 per cent of the time of software engineers should be spent on coding. But in reality, software engineers are usually forced to support customers, attend sales meetings, test their products, etcetera.

But wait, are software engineers supposed to test their products? Trust me, they will test but if you are really serious about getting a quality product, you should get dedicated testers and technical leads because if software engineers saw issues in their codes, they already fixed those issues, right?

So founders, please repeat this mantra three times so that we will not commit this sin again: “Software engineers are supposed to code only. Software engineers are supposed to code only. Software engineers are supposed to code only.”

In a nutshell

Many may find the above issues laughing stocks and other people’s problems. However, those issues are probably closer to home than many may think. Even more mature startups who are aware of the above issues tend to overlook them until it is too late.

Resonate with the above struggles? Share your story so that other founders can learn from your stories, too.

–

Register for our next webinar: Meet the VC: Vertex Ventures

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

The post 3 mistakes early stage startups in Singapore make in product development appeared first on e27.

William Bao Bean, who holds over 20 years of experience in investing and is currently the general partner of SOSV, has said that COVID-19 will be the driving factor behind both a recession and a tremendous change in customers’ habits.

As the pandemic strikes the economy, there has been a general discussion of a potential recession hitting nations.

In Southeast Asia, Singapore was the first country confirmed to be in a recession last quarter, according to a Bloomberg report. Meanwhile, Indonesia’s finance minister Sri Mulyani Indrawati has predicted a four to five per cent decrease in the country’s GDP in the third quarter, leading it to a potential recession.

“There are two things to take note of. First, that people need to understand we’re heading into an economic downturn. The second thing is that this type of shock is quite special because it’s driving an equally massive change in habits,” Bean says in an interview with e27.

“Stay at home is driving the adoption of digital [platforms] extremely quickly. So on the one side, it’s an economic apocalypse, but on the other side, people are focussed on the change of habits,” he continues.

While balancing these two directions can be tough, there is plenty of good news on the ground.

Also Read: Morning News Roundup: SOSV’s mobile-only accelerator MOX reveals 10 startups from 8th cohort

Good businesses are still trading at a premium price. The fact that many investors continue to fund startups such as Ula, Tiin Tiin, and TurtleTree indicating that some companies are not cracking under uncertainty.

“You want to position on companies that are prepared to, or at least, going to be in a position to do well during this very uncertain time,” Bean stresses.

He gives the example of VR technology which was on no one’s radar before COVID-19. But now VR headsets are selling out because people are bored and can’t go outside.

Bean’s 2020 industry predictions

Winners of the future will be very different from the winners of the past which, according to Bean, will mostly be driven by newly formed habits.

E-sports is expected to be “fricking huge,” he says.

“With an audience larger than the NBA, tennis and American football, it’s over half a billion people who watch these sports. Plus, you know, some people [prefer to] watching it, instead of playing it. Right now, a lot of sports are not airing and who is the beneficiary of [having] no sports on TV?” the investor points out.

Gaming has become one of the most common past times of entertainment and experts predict that the trend is here to stay.

Twitch, a leading live streaming platform for gamers, noted a viewership increase of 56 per cent this quarter compared to Q1 2020 while growing 60 per cent year over year. Facebook Gaming also saw a boost from the lockdown growing 75 per cent throughout Q1 until now.

Also Read: What gaming industry can teach the fashion industry amidst COVID-19

Aside from gaming, Bean also expects online education and online media to have a longevity period of growth.

This is mostly driven by the needs of parents and students who were forced to study from home during the circuit breaker measures implemented in Singapore, and similar approaches taken in other countries.

As with the case of e-sports, online media are also experiencing a surge in popularity as customers see their offline entertainment sources becoming limited.

Investing in the previously unreached

As predicted by many, the health tech sector is also experiencing growing popularity amidst the global health crisis, particularly for products or services that enable users to interact more safely and ease the burden of the healthcare system. One example of such platforms is telemedicine or telehealth, which enables distance consultation between doctors and patients.

According to this CNBC report, in the US, social distancing measures at doctor’s offices and hospitals could push telehealth interactions to one billion by the end of 2020. The case in Southeast Asia can be quite similar as telemedicine platforms claim rapid growth during the crisis.

Naturally, Bean’s biotech accelerator also expects to see growth in the health tech sector. Started in 2014, the US$3.2 billion-worth accelerator sees a “heavy focus” from investors on COVID-19-related health investments.

“We’re focused on investing, not only in the people who already have access to technology but also in the billions of users in emerging markets who are moving from offline to online,” Bean explains how they aim to do it.

Also Read: SOSV, 500 Startups invest US$2.55M seed round in deep tech startup SEPPURE

For them, this is the major trend that they want to focus on, particularly in markets such as South Asia, Southeast Asia, Middle East, Eastern Europe, South America, Latin America, and Africa.

–

Image Credit: SOSV

The post It’s going to be an economic apocalypse, William Bao Bean warns. But some industries are here to stay appeared first on e27.

Singapore-based StashAway, a digital wealth manager for both retail and accredited investors, has closed a US$16 million in Series C funding round, led by Australian VC firm Square Peg.

Burda Principal Investments (the growth capital arm of German media and tech company Hubert Burda Media) and existing investor Eight Roads Ventures also participated.

This takes StashAway’s total funding raised to date to US$36.4 million. This includes a US$12 million Series B round in July 2019, led by Eight Roads.

Also Read: ‘It’s gonna be an economic apocalypse but some industries are here to stay’: warns William Bao Bean

“This new round of financing further strengthens StashAway’s balance sheet position, bringing our paid-up capital to MYR 153.8 million (US$36.2 million). This latest round will enable us to accelerate product development to both broaden and deepen our wealth management offering for our clients in Singapore and Malaysia, as well as support new market entry,” said Michele Ferrario, Co-founder and CEO of StashAway.

StashAway was founded in 2016 and operates in Malaysia, besides Singapore. The company offers investment and cash management portfolios for both retail and accredited investors. It delivers automated, personalised portfolio management for each client’s individual portfolios.

The firm offers global growth-oriented investment portfolios targeting different levels of risk — yield-focused Income Portfolio, and straightforward cash management solution StashAway Simple.

StashAway claims its portfolios have generated annualised returns ranging from 11.1 per cent for its highest risk portfolio and 4.3 per cent for its lowest risk portfolio since its launched in July 2017.

Currently, StashAway employs 85 people across five countries.

Also Read: Fostering a dynamic business culture through digital change

According to Raj Dugar, Managing Partner (India & Southeast Asia) at Eight Roads, “The strong customer value proposition and StashAway’s stellar execution has been demonstrated by its rapid growth. Its AUM has grown over 4.3X in the last year alone in an extremely volatile market.”

—

Image Credit: StashAway

The post Digital wealth management startup StashAway raises US$16M Series C led by Square Peg appeared first on e27.

She Loves Tech’s Annual Global Startup Competition, which is said to be the world’s startup competition for women and technology, is returning for the sixth time this year with fully online competition and conference.

Despite the pandemic, the organiser stated that the competition will expand yet again due to overwhelming response. It will be held virtually for startups in over 30 countries across North and South America, Africa, Europe, Asia and Australia.

It counted institutions such as ATAST, Circle, Girls in Tech Macau, Gobi Partners, Hatch, Kerala Startup Mission, Longyan, NCSF, QBO, Yazamiyot, Raintree, Tanggram, Techcode, Turtle Venture, Unlimited, and Women In Tech HK as organising partners and Asian Development Bank Ventures as Official Impact Partner.

“One of the things we’re most excited about is that going fully online gives us a great opportunity to reach a wider audience and help even more entrepreneurs than we ever could have,” She Loves Tech co-founders Leanne Robers, Rhea See, and Virginia Tan said in a press statement.

The competition is searching for startups that filled the following criteria:

1. Early stage startups
The startups should be seeking for angel, seed, or Series A funding round of under US$5 million with at least a minimum viable product (MVP).

2. Gender lens
The startups should fulfil one of the following gender lens: Having a female founder, a majority of female users/consumers, and a tech that impacts women’s life positively.

Also Read: Intelligent energy management startup wins She Loves Tech Singapore 2019

For Singapore-based startups, the registration deadline will close on August 7 while the competition will be held on August 26. For details on other countries’ deadlines and competition dates, please refer to this site.

The competition gives the world’s most promising women-led or women-impact startups mentorship and guidance to grow and scale their business and showcases them to a global audience of top investors and influencers from the tech community.

Previous ambassadors, mentors, judges and speakers include Tim Draper (Founder, Draper University), Ankiti Bose (CEO, Zilingo), Arielle Zuckerberg (Partner, Coatue Management), Jane Sun (CEO, CTrip), and Lesly Goh (Former CTO, World Bank).

From the previous years, alumni startups of the programme have gone on to raise over US$100 million in aggregate funding from some of the world’s top investors, including Sequoia Capital, Vertex Ventures, Wavemaker, Microsoft and Amazon.

The She Loves Tech conference itself has gathered more than 3,000 delegates (with 67 per cent of them being women) from at least 30 countries within the last five years. It consisted of keynote speeches, pitches, panels, and breakout session.

—

Image Credit: She Loves Tech

The post She Loves Tech returns for the 6th time as a fully online event appeared first on e27.

The news of Indonesian firm Sorabel’s (erstwhile Sale Stock) plans to shut down by the end of this month sent shockwaves across Southeast Asia’s startup ecosystem — more so because the VCs-backed fashion e-commerce startup was believed to be going strong after its rebranding sometime last year.

Sorabel, which has so far secured about US$27 million in four rounds from the likes of Gobi Partners, Golden Equator, Open Space Ventures, and InnoVen Capital, was on the verge of raising a new massive funding round when it decided to pull the curtain down.

COVID-19 hit the business but it was not the only reason behind the decision.

Also Read: ‘It’s going to be an economic apocalypse but some industries are here to stay’: warns William Bao Bean warns

e27 talked to Jeffrey Yuwono, Co-founder of the 6-year-old company, to know what made them to take the extreme step.

Excerpts from the interview:

Q: Sorabel was being led by an experienced team, was going strong until the end of 2019, had a good amount of venture capital, and was close to raising a new round of funding. What went wrong all of a sudden?

Indeed, Sorabel was going strong, and the strategy was to make sure our Series C raise is followed and leveraged strong, post-rebranding growth.

From the rebrand in February 2019, our revenue grew 2.5x by December but it took until the end of Q3 2019 to build that momentum.

In Q4, the revenue was growing between 10 per cent and 20 per cent monthly, and the company was generating positive margins after marketing costs, clearly demonstrating the brand’s strength.

However, this also meant that the window for closing the next round of financing would be March/April 2020 — the period, it turned out, when COVID-19 would hit the hardest.

From a capital perspective, despite the uncertainty, the company did procure several offers, including a term-sheet pulled at the last minute as uncertainty reached new levels in late March.

It is important to keep in mind that these are investors from outside of Indonesia, who were unable to travel to the country to simply verify that the physical operations existed — that is a lot of risk to ask any investor to accept in any circumstances, let alone the economic uncertainty of March and April of 2020 (or even now).

This meant that as COVID-19 hit, the company’s cash reserves were already depleted.

Then from a sales perspective, Sorabel’s positioning could only have been worse if it were an offline retailer.

We sell fashion, a luxury item all about representing oneself to the outer world when people weren’t even allowed to go outside.

We target the mass middle and middle-low income market, and these were the people losing their jobs and worrying if their next pay-check would be their last.

In other words, the last thing the company’s core market wanted to do was buy fashion.

Thus, COVID-19 struck during the most vulnerable point in our funding strategy and devastated our core customer base.

Q: Do you think the management failed to anticipate the impact of the pandemic? Shouldn’t you have taken steps such as pivoting and cost cutting to salvage the business?

The facts say quite the opposite, as the company was already implementing cost reduction measures even before the onset of COVID-19. By March, we had already cut core opex by 20 per cent and marketing costs by 80 per cent, in part as a pre-arranged strategy to reach profitability by Q1 of 2021, and in-part as a defensive move in anticipation of worsening economic conditions related to the pandemic.

Once COVID-19 hit, in addition to further cuts that slashed opex in half, the company moved aggressively to find new sources of revenues:

• We began selling masks (so popular that our first batch sold out in seven hours), but unfortunately margins on masks were simply too small and the supply of materials too limited;
• We tried to sell medical PPE kits and even had a buyer overseas ready to purchase. However, it was prevented by law from exporting and could not find ready buyers domestically.

Q: But as per some news reports, Sorabel became breakeven in 2018 and was on its way to become profitable?

Sorabel was never break-even, nor was it even on its way to break-even before the brand change.

In fact, the unit economics were the core rationale for the brand change: only by improving the brand and its image could the company command enough margin on its goods to be profitable (indeed, the achievement of positive margins in Q4 2019 is proof that the brand change strategy was working, albeit too late).

Simply put, COVID-19 crashed squarely through the company’s fundraising window, choking off the flow of funds when it was most vulnerable.

Arguably, Sorabel could have pursued a more defensive strategy (lower operating leverage in the form of trading fixed for variable costs) but it was too late to do that in 2020, and frankly the evidence shows that demand from April-June 2020 wouldn’t sustain such a strategy anyway.

Q: Despite being an e-commerce firm, why did Sorabel fail to take advantage of the pandemic (like most of its peers)? Many fashion e-commerce firms are still going strong in the region…

Frankly, I strongly disagree with the premise of this question: fashion e-commerce firms and most other “non-essential” e-commerce firms have found it tough going during COVID-19.

COVID-19 was a boon to innovative startups focused on bringing essentials to e-commerce such as Sayurbox and Tanihub with groceries or Halodoc with healthcare, or even Carsome with financing through second-hand vehicle sales.

Unfortunately, fashion is not an essential, particularly when everybody is in lockdown. In fashion, the impact ranged generally between a 50 per cent and 70 per cent drop in revenue (particularly devastating as it occurred during the Ramadan sales season), with only those companies more focused on the upper end of the market spared.

Also at issue was the ability pivot. As discussed earlier, the company tried to pivot to masks and PPE, but it takes cash pivot. Some fashion e-commerce companies had strong cash reserves heading into COVID-19, but Sorabel did not.

Q: What do you think a typical fashion e-commerce startup should do at the time of an unprecedented crisis like this to salvage the business and save jobs?

COVID-19 is a global pandemic and a force majeure: by definition it is difficult to predict, and its effects difficult too. Even larger companies with deep cash reserves had to lay off 40-60 per cent of their headcount, but in this is probably the real commercial lesson.

Also Read: Does profit matter more than impact?

Companies, especially startups, need to blend their fundraising/cash reserve strategy with both market risks and business model risks. The greater a company’s burn from fixed cash expenses, the more cash the company needs to have in reserve to survive a severe economic downturn, and thus the longer cash runway the company needs to build and protect.

—

Image Credit: 123rf.com

The post Could Sorabel have been saved? Co-founder Jeffrey Yuwono speaks out appeared first on e27.