The traditional way of building a startup is the ‘garage’ way. In a nutshell, two or three friends go to a garage and start building a prototype sometimes with money from family and friends, and then later with the support of incubators and accelerators. Once the prototype has some traction and the startup has some clients and revenue,angels will be open to investing.

Further down the road, the startup may also be able to attract venture capital. There are certainly many different pathways for startups and angels, but this is the archetypical way.

However, this archetype is far from perfect. As I said in my earlier article, 92 per cent of startups fail in their first three years. The motivation to reduce this failure rate has spurred us at Nova to create something completely unique. Something that’s been designed to specifically address and nullify the biggest reasons for startup failure.

An unexpected challenge in creating a unique startup model, however, is that it can sometimes be difficult to articulate to potential partners (co-founders).

“Are you an incubator?” Erm. not really. “Ah, okay, so you’re an Accelerator.” Again, not quite, no. “An investment fund? Mentorship programme!?” Well, sort of, yes, but not exactly.

Whilst all of the previously mentioned programmes are widely used and understood by those in the tech startup space, we believe that those alone do not negate the risks for startup founders. So, not wanting to totally align ourselves with any of these terms, we created what we’re calling a co-foundery startup model.

Also Read: BukuWarung raises funding from Tinder co-founder, others as part of its Y-Combinator demo day

Something that combines elements of all of those, plus some additional features, in a manner that reduces the risk for both founder and investor.

The key differences that we’ve built into the co-foundery model to reduce startup risk are as follows:

Start early

In the co-foundery model, we specifically look to partner with startups at an early stage, often when founders have not much more than a good idea and a strong understanding of the problem their startup is trying to solve. This is because startups at this stage offer us the opportunity to mentor and build relationships with founders from their inception.

Here we can impart proven processes and methodologies early enough in their formation to avoid the common mistakes that lead to failure.

Our process always starts with mentorship from our experienced startup mentor team. This is completely free and is specifically geared toward developing startups by clarifying their business model, their unique value proposition, gaining a deeper understanding of the problem they’re attempting to solve.

We ensure that founders and their startups are ‘venture ready’ before putting them forward to pitch for their first investment.

No financial investment from founders

Typical investors don’t like to invest in startups early as it’s too risky. They want to know that you have a product, that you have a team and that you have customers. This can prove a catch-22 as founders don’t have any money to achieve these things.

Traditionally, most then resort to loans, personal savings, bootstrapping and generally incurring a lot of personal risk (and the associated stress) themselves.

Also Read: Meet Mentor For Hope, the startup mentorship programme that will donate 50K meals for those in need

If you are ‘lucky enough’ to get investment early from a traditional source (i.e. angels), they’ll be wanting you to put some of your own cash in and work full time on it to ensure they’re getting a return as quickly as possible. In the early stages of a startup’s life, this adds unnecessary pressure that negatively affects key decision making.

This is why in the co-foundery model we ask for zero financial input from founders. We believe that if founders have the motivation to start a startup to change their life and display the qualities and traits of a successful founder, this is enough. Furthermore, our previous investments prove this motivation is enough to make it work.

Experienced startup team

Two of the most common reasons for startup failure are hiring poorly and choosing the wrong cofounder. The co-foundery approach negates these by providing a proven and experienced startup team and co-founder from day one, without founders having to find or employ anyone.

The co-foundery teams are built specific to the startup, from a pool of 150+ employees covering marketing, sales, finance, designers, developers, consultants and so much more. They bring with them a vast depth of experience working on tech startups ready to be deployed on yours.

Additional benefits of having a team that works on tech startups day in day out are:

• The team doesn’t make the same mistakes that typical startups would
• Having a team with a track record of startup success makes it easier to access investment as and when required

Shared risk

This is not an agency for hire approach, there are tons of tech and software development businesses who will work on your startup, build the product and as long as they’re getting paid, they’re not particularly vested in whether what they’re building fails or succeeds.

Also Read: How e27 is going to lend a helping hand for the startup ecosystem during the COVID-19 crisis

This is set up differently, we don’t just want to build the idea and walk away. Instead, we partner with and are co-founders of our startups (hence the name co-foundery). We take equity rather than a standard rate per day for our services, this means that we’re as motivated as the founders for the startup to succeed, this is our startup too.

So, do all of these unique characteristics make the cofoundery model more effective? Our startup success rate is showing that starting a startup with this model your startup is over five times as likely to succeed.

At Nova, we are currently expanding the successful co-foundery model to Asia. We are looking for working professionals in Southeast Asia to co-found startups with us. If you are interested in our venture building philosophy, and the co-foundery approach sounds appealing, please apply to our Southeast Asia programme.

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An incredible amount of innovation has taken place in the palm of our hands. We now rely on smartphones for so many things; from tracking our fitness to saving memories and buying daily essentials. In fact, the ever-growing range of features and capabilities found on our smartphones has in many ways led the digital shift taking place across the world. 

Recent events have only served to further amplify this effect, with a recent study from Bain & Company finding that 30 per cent of consumers in Southeast Asia have increased their online spending in the last few months and contactless payment platforms have seen significant growth both in users and transaction volumes.

The study also found that consumers have been exploring what more they can do with their smartphones, with 77 per cent of respondents saying that they had tried a new app that they plan to continue using post-pandemic. 

While many small business owners are readily adopting these new digital habits in their personal lives, often they aren’t as quick to adopt the same digital mindset when it comes to running their business.

They assume that digitising their sales channels and back-office involves massive investments in infrastructure and personnel when in fact, it may be as simple as turning to their smartphones. 

Here are some quick and easy ways for business owners to bring their businesses into the digital era: 

Set shop online

Research from Blue Corona found that 90 per cent of consumers will check a business’s website before calling or emailing. Yet, many small businesses often don’t go beyond setting up a Facebook page for their business. 

While website development may seem daunting, many e-commerce apps have simplified the process of getting set up online. These services offer professional website templates that can be customised and set up in less than an hour. Some require as little as choosing a colour theme and layout and filling a number of information fields on the business. That information can be easily updated as it changes over time.

Also Read: How PI.EXCHANGE helps freelancers and small businesses have easier access to AI solutions

Connect with your customers

While print and out-of-home advertising can still be impactful, the cost of investing in those channels may be prohibitive for many small businesses. This is where social media plays an important role. 

To ensure success on popular channels such as Facebook and Instagram, make sure you have a steady stream of interesting visual content. You don’t need an expensive camera for this –your trusty smartphone is likely to offer great image quality for social media posts with much less fuss.

Manage your costs

Business technology gets a bad reputation for involving costly equipment and implementation. In fact, many cloud applications for business charge monthly subscriptions at different price points allowing business owners to pay as they go and add on services as required. A business is able to optimise its investment by tailoring its add ons for its specific requirements. 

Get paid faster

It may not seem like much when one small invoice is late, but many small invoices can add up to be a big problem for a small business, particularly a business that’s already operating on thin margins. Thankfully, technology such as automation and machine learning is being deployed to support small businesses in managing their invoices and to send out automatic payment reminders. Integrations with online payment providers also makes it easy for customers to pay.

Stay on top of business, anywhere

While many of us will not return to the office for some time, that doesn’t mean we can’t stay on top of business and consult with our employees and financial advisers with accurate and up-to-date data in front of us. Platforms such as Xero – which has integrations with an entire marketplace of apps – can provide real-time information.

Members of the team in different locations can input data that syncs automatically and everyone in the business can refer to that information through intuitive dashboards, even on a smartphone. 

In summary, the shift to digital communications and consumption in our personal lives should be mirrored in the way we run our businesses. Small business owners can start out by tapping on the one digital tool they already know and have: their smartphones.

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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.

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Every month, the team at e27 runs a monthly Startup of the Month poll where we pick the most outstanding startup to give it the extra attention that it deserves. Three startups are selected internally by taking into account idea, team, funding and founders. After which the e27 content team picks the winner.

The winner for October is none other than Bangkok-based agritech startup Freshket which aims to enrich the lives of farmers by helping them sell their produce at a premium rate to restaurants and consumers.

Bangkok’s farmer distress

While most Southeast Asian countries are largely agricultural, Thailand is one of the countries where agriculture is given great importance. This is why it is popularly referred to as the “country’s backbone”.

Founder and CEO of Freshket, Ponglada Paniangwet, tells e27 in an interview that farmers make up one-third of the population in Thailand. While they are good at farming, they need extra help in logistics, packing and selling.

Because of this lack of knowledge, farmers usually have to go through middlemen who tend to propose a price which gives them little profits. These middlemen mark up the margin cost of the logistics and product and then deliver the produce to the market.

Paniangwet observed all these problems first hand while she was working as a fresh food supplier at a wholesale fresh market. She says that she experienced their plight while working with both farmers and buyers.

Also Read: Fertile ground for partnership: How agritech boom in SEA holds a promise for Latin America

“I learned that the whole supply chain process was very tedious and inefficient. So from that day on, I wanted to solve this problem and streamline the whole process of the fresh food supply chain.”

How Freshket solves the problem

To solve this problem, Freshket pulls together processing centres and suppliers by connecting them directly to farmers, who tend to rely on middlemen.

Since the operating costs of perishable goods are high, Freshket utilises a cluster model which means that they deliver multiple orders together at one go.

It also takes care of processing and logistics for farmers. The company has its warehouse centre where it cuts, trims and packs before sorting the orders and then delivers it to the restaurants. This is how the company takes care of logistics for the farmers.

Currently, Freshket has 30 farmers on its platform but Paniangwet has expressed that their goal is to upstream and go from 30 farmers to 150 farmers by the end of 2020.

Recently, the company also managed to raise US$3 million in a Series A funding round which was led by Singaporean VC Openspace Ventures, with participation from Thai PE firm ECG-Research and public-private joint venture Innospace.

Also Read: Freshket nets US$3M to bring together farmers and food processors to supply fresh produce in Thailand

Pivot, pivot and pivot

When Freshket launched in 2017, it was only meant to be a marketplace where suppliers and farmers could connect.

In the first model, suppliers were allowed to set their rates and make the delivery themselves. However, they noticed that this led to a problem in pricing and on-time delivery.

Just after a few months of the company’s launch, the team learned that their value proposition did not serve the customers because the ones most valued at that point were farmers.

Because there was so much control given to the farmers in terms of setting their price and making the delivery, this created a clash between the values of the buyer and the seller.

Paniangwet also stresses that this was one of the valuable lessons that she learnt in her early days of validating the product-market fit.

The team then pivoted the platform to not just be a marketplace but to become a full supply chain platform, where logistics and delivery were taken care of by the company.

The COVID-19 effect

But soon again in 2020, the company had to pivot again. The onset of COVID-19 has led many companies to revisit their business models and make necessary changes in their work process, and Freshket was not spared.

Also Read: COVID-19 triggers supply chain and logistics transformation, but there are gaps to fill: Marc Dragon of Reefknot Investments

On March 22, when the Thai government announced a lockdown, all restaurants temporarily shut down which created a problem since Freshket until then was B2B-focussed.

“So on March 23, we decided to open the platform to consumers and pivoted the model within 24 hours. We planned ahead in terms of the product and created smaller pack sizes for the consumer. And for the payment method, we usually give our restaurants credit terms but for the customer, we can’t. So we adjusted that on our programme,” she shares.

But the quick pivot came with its own set of challenges. “We faced some challenges, especially in customer service. Normally, we serve only restaurants and our team speaks the business language. But for the consumer, it’s more emotional, right?. And we received an overwhelming amount of calls,” she quips.

After the lockdown, the company says that the logistics costs have come down due to an increase in the average order value and the demand for Freshket has grown.

In the end, the company eventually managed to make a successful pivot despite the few hurdles. It will stick selling orders to consumers and will apply its cluster model to people’s villages or condominiums.

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Image Credit: Freshket

 

 

 

 

 

 

 

 

 

 

 

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Mediaload, a Cambodia-based digital media company, has secured an undisclosed sum in Series A funding round from True Digital Group (TDG), a digital arm of Thai telco True Corporation.

The startup, which also has operations in Myanmar, will use the funding to enhance its content offering on its platform and expand into new regions.

Also Read: Tech investment in September: Baby unicorn, vertical gardening, and an alternative path for liquidity and exits

“With this strategic investment, we will be able to leverage our content offerings in our existing markets and expand to other markets in the region,” said Vichet In, CEO of Mediaload.

Founded by siblings Vichet, Vichea and Visal In, Mediaload runs Khmerload in Cambodia and Myanmarload in Myanmar. It offers millennial-focused content on a wide range of topics, including entertainment and sports, and claims to have eight million unique users per month with 20 million social media followers.

The startup has previously received US$200,000 in seed funding from 500 Startups.

Also Read: iMedia buys controlling stake in Goody25’s Malaysian parent

Mediaload’s parent Groupin operates e-commerce startup Little Digital in Cambodia, which in 2019 raised US$5 million in Series A from PE firm Belt Road Capital Management.

Also Read: Malaysian digital media group REV Asia to acquire iMEDIA for US$9.6M

TDG currently operates in Thailand, Indonesia, the Philippines, and Vietnam with a roadmap to expand further across South Asia, leveraging the economies of scale of digital platforms.

According to Statista, the value of the online media market in Southeast Asia in 2019 was US$14.3 billion. Indonesia had the highest online media market value from selected countries, of which the online media market value was US$3.5 billion.

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Image Credit: Mediaload

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Singapore-based Augmenteed, which provides an online process management platform to industrial companies to “quickly” deploy automated and optimised procedures, is in discussions to raise US$450,000 in its first external investment.

“We are currently in talks with seed-stage VC firms, angels and family offices based primarily in Southeast Asia,” Augmenteed Co-founder Patni told e27. “We are targeting seed-stage investors focusing on B2B enterprise SaaS and industrial tech.”

The capital will be raised via convertible notes.

Augmenteed expects to close this round in the next couple of months.

Also Read: Is now the time to start investing in augmented and virtual reality?

Patni said that capital being raised will be deployed to hire developers in Singapore. “Our second area of the capital deployment is business development. Although this is somewhat constrained by COVID-19 as most trade shows have been cancelled or made virtual, we know a well-defined and aggressive sales pipeline will help us attain the targeted growth.”

Augmenteed was founded in 2019 by serial entrepreneurs Erwan Bodescot (Founder and CEO) and Patni (Co-founder and Chief Commercial Officer).

Bodescot is former entrepreneur at Antler and has earlier founded Pixel Patrol, an app development studio. Patni has previously co-founded Naturma and has in the past held the role of Singapore Country Manager at RISE.

Started in April 2019, Augmenteed has developed a solution that can digitise workflows and up-skill local technicians with remote assistance and Augmented Reality (AR) capabilities.

The platform is based on the proprietary Standard Operating Procedure (SOP) App Builder that allows workflow digitisation without coding.

“We help companies optimise and automate their processes, guide technicians in real-time with remote experts, and train technicians more efficiently with AR solutions,” Patni explained.

Also Read: Move over VR: XR in sports is the future

A SaaS company, Augmenteed allows companies sign up, choose a template, select the features they need and pay on a per user per month basis. “If required, we can also bundle the hardware as often, our clients are new to the technology and require guidance in choosing the right smart device for their use case,” he said.

Augmenteed already has a paying client in Singapore. It is now looking to expand to other countries and currently are in discussions with potential clients in South Korea, Hong Kong, Japan and Germany.

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Image Credit: Augmenteed

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