Customer acquisition is the life of any business, and different verticals have their own approach to it. When it comes to customer acquisition for B2B companies, there are several myths circulating in the business community. For example, as addressed in this research by Aberdeen Group, B2B companies are believed to have a longer sales cycle.

But how many of these are true?

To get a better understanding of the customer acquisition process for B2B companies, e27 speaks to Brendan O’Shaughnessy, Chief Commercial Officer at ViSenze.

Founded in Singapore, the company provides visual AI services for other companies, particularly those in the retail sector. The services that they offer include visual search engine recommendations and photo tagging; their list of clients include major fashion brands and even five leading smartphone manufacturers Huawei, Samsung, LG, Vivo and Oppo.

“Over the last two to three years, they have integrated our visual search technology into their phones’ operating system,” O’Shaughnessy explains.

With that, after eight years of operations, Visenze processes 350 million product visuals globally every month through its services and manage over 400 million product shoots for a thousand global retailers. It has also partnered with companies such as AWS, which O’Shaughnessy says has enabled them to focus on its core technology development.

In this article, O’Shaughnessy shares the key elements of customer acquisition for B2B companies, based on Visenze’s experience in the field. These learnings are divided into key four points:

• Principles of customer acquisition
• Getting the customers onboard
• Remaining challenges in B2B customer acquisition
• Customer acquisition in a time of crisis

Also Read: Rakuten leads US$10.5M Series B in AI startup ViSenze

Principles of customer acquisition

O’Shaughnessy begins his explanation by stating that in principle, there is certainly a difference in customer acquisition approach for B2B and B2C companies.

To explain how customer acquisition is like for B2C companies, he gives an example of a digital media company. To gain customers, they are likely to introduce a subscription that enables customers to gain access to content for a price, for a particular period of time. There will also be a strong paid marketing approach for these companies to reach their target customers.

“One of the biggest differentiators is the content proposition. It’s really critical for them to get it right because, ultimately, consumers will only pay for those subscriptions if they like the content they carry,” O’Shaughnessy points out.

He adds that while B2C companies tend to have lightweight to zero cost activation, many of these companies also have a minimum subscription term of just one month.

“It’s still a big consideration on the approach you take for reaching and acquiring those users. ‘We spend so much on attracting this amount to one month.’ It will cost you money. So there’s a risk assessment that has to be factored into your strategy at every step of process, acquisition and activation,” O’Shaughnessy concludes.

Meanwhile, with B2B companies, there are factors beyond content that need to be considered: From the different stakeholders involved in the process, the integration with other available services, data security, to even budget approval.

“It could lead to a requirement for trials, competitive evaluation and testing, and ultimately, price negotiation,” O’Shaughnessy says, adding that Visenze’s role in their clients’ business is more like a “component”.

Also Read: Will smartphones become the mall of the future?

“We are the component that supports a function. We are not building an app for them. We’re not creating catalogue or managing interface UX. As components, we have to fit within their strategy. We have to fit within their ecosystem. We have to fit their business priorities. So, you know, part of our customer acquisition strategy, we really have to consider specific messaging,” he continues.

He also adds that for this kind of approach, in addition to having sales and marketing teams, a B2B company might also need to have a pre-sales and customer success support team.

Other principles that B2B companies need to keep in mind is timing and a global mindset.

“If we join a conversation too late, we might miss the boat. If we join too early, we may have a much longer sales cycle and that costs us resources and time,” O’Shaughnessy says, indirectly explaining the “longer sales cycle” myth.

Getting the customers onboard

So now that we have understood the key principles that Visenze is implementing in their customer acquisition approach, how about the practices? How do they onboard a new client into their service?

It starts with content marketing and outreach to specific individuals through various online and offline channels. When they are engaging with a prospective client, Visenze team will try to focus on what these clients need –not only today but also in the upcoming years. At this stage, it is important for them to show successful case studies to convince potential clients that they would not be the first to try this technology, that there are others who have proven its efficacy.

Once they managed to go through that process, Visenze is going to set up a trial account for the potential client –a stage that O’Shaughnessy dubs as “really critical” as it enables them to see how Visenze technology works with their data.

“When we are setting up a trial, we allow them to sort of play in the sandpit. We stay in touch with them throughout the process to make sure that we’re engaged in that. When we get past that point, it’s a question of, ‘Okay, how do we take this forward? What is the strategic fit?’”

Also Read: Moving from an MNC to a startup, what the leap really means

In some cases, some field trials might even be needed.

“Our policy is that field trials can run from one to three months. But we increasingly see one month trial being the preferred option, which is great because we can also demonstrate real business impact in just within that period,” O’Shaughnessy says.

He gives two examples of inbound and outbound leads that the company has pursued. The first company was a US-based major global brand who responded to a white paper published by Visenze’s marketing company. This led to a sales engagement process that lasted for months before they were able to confirm for a paid proof-of-concept.

“We worked very, very closely with them through our market pre-sales team. We also pulled in support from our product and data science team in Singapore. So, after an extended period that included a real-world test in multiple markets and competitive AB testing against one of our prime competitors (who were an incumbent in that account), we were selected … We signed a long term agreement,” O’Shaughnessy elaborated.

Another example involves a Europe-based brand with a local innovation team in Singapore. The company reached out to Visenze, asking to be helped with a “very complex” visual recognition problem for a mass consumer product.

According to O’Shaughnessy, this case was “interesting” as they almost did not win the contract.

“But the project was interesting to us … so we decided to proceed. We ended up conducting a one-month POC for free. We put the contract aside and said, ‘Look, we’ll just do it. Let’s see where we get to.’ We were also against the other two vendors,” he says, adding they eventually secured a partnership with the company.

Remaining challenges in B2B customer acquisition

When asked about that one aspect of B2B customer acquisition that continues to become a challenge, O’Shaughnessy firmly answers lead generation.

“Marketing plays a key role in this … our messaging, positioning, and supporting that outreach effort. [It also helps in] creating that inbound interest to a company like us, identifying target prospects, and researching solutions fit,” he points out.

Visenze’s marketing team will come up with a certain list of target clients in a particular market; a process that requires them to undertake research and analysis to build an understanding on how to best approach the prospects.

Also Read: ViSenze raises US$20M Series C funding round co-led by Gobi Partners, Sonae IM

“What we’re doing on a centralised basis of a sales campaign or marketing positioning [is that] we make sure they got the right messaging collateral that they can tap into and utilise … to support them in terms of best practice, activities that can help them create awareness mark that they can leverage and tap into,” O’Shaughnessy says.

“For any business, keeping that top-funnel out of a very healthy level and keeping that cycling through is really critical, because if you don’t have that, you’re limited in terms of the day-to-day sales activities. You can actually undertake the progress you can make. So, I wouldn’t say we’ve solved it, but we’re continuously evolving ways to deal with it and optimise our lead generation challenge,” he further explains.

Customer acquisition in a challenging time

It is no longer a secret that the COVID-19 pandemic is affecting the retail sector widely –a situation that also impacted a visual search platform such as Visenze. When dealing with a crisis of this level, the company believes that there is no option but to refocus.

“We changed our priorities, we changed our approach, and we faced it head-on,” O’Shaughnessy stresses. “So we took three major decisions back in Q2 when it became clear that COVID-19 was going to have a massive impact for an extended period of time.”

There are three steps that Visenze is taking to deal with it:

1. Over-communicate with team members across time-zones

“We were running three daily calls from HQ with our sales teams in different regions. And we felt that was important because sales teams are not used to staying at home … but they’re used to customer contact and team contact. And when you when that’s taken away, it’s it can have a big impact, particularly when you’re disconnected from your sources.”

“It did make a difference in team morale.”

2. Prioritise customer retention

“I’m glad to say that to shift the priority from acquisition –which was just almost impossible– to retention meant that we didn’t lose any major client despite the impact on their businesses.”

3. Take the opportunity to make a change

“[The changes brought by the pandemic] allowed us to reflect and look at our strategy and market offering, and we decided that there were changes we had to make. And we wanted to make it now, as good as any time to make. So we looked at how we could redefine a market offering to better position for a longer term business strategy.”

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Image Credit: Visenze

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Indonesia’s home-grown ride-hailing giant gojek today announced that it has raised US$150 million from Telkomsel, a leading network service provider and subsidiary of Telkom Indonesia and Singtel.

This strategic investment takes place about six months after gojek received a financing round from Facebook and PayPal.

The collaboration marks an expansion of the two tech giants’ multi-year partnership that has offered affordable data packages to gojek driver-partners since 2018.

Also Read: Google, JD.com, Tencent confirm leads in GOJEK Series F fundraising

The joining of forces is also aimed at providing “greater convenience and benefits” such as innovative product offerings and cost savings through joint promotions and product bundles.

The two giants will also collaborate on growing Indonesia’s digital lifestyle sector and increasing the advertising technology solutions available to merchants of all sizes.

In addition, they will work together to implement professional training programmes for Telkomsel employees and share best practices in an effort to boost the country’s technology talent pool.

This agreement is also part of Telkomsel’s journey to strengthen its three digital pillars: digital connectivity, digital platform and digital services.

“By working together, we hope to help Indonesia become a true digital powerhouse in Southeast Asia and bring the benefits of the digital economy to millions more consumers, driver-partners and small businesses,” said gojek co-CEO Andre Soelistyo.

In his view, in a fast-growing, mobile-first market, collaborations like this one are crucial for supercharging the digital economy as great things can only be achieved if the region’s leading technology companies pool their resources and work together to accelerate development.

Also Read: gojek to let go of 430 employees as it shutters GoLife, GoFood Festivals

Telkomsel President Director, Setyanto Hantoro, commented: “We believe that working with gojek and its extensive ecosystem will accelerate Telkomsel’s growth as a digital telco and our efforts to build an inclusive and sustainable digital ecosystem, which is particularly crucial amid the pandemic and beyond. This spirit of collaboration will continue to be our guiding force as we seek to bring the benefits of digital technology in every aspect of life, to all levels of Indonesian society.”

Established in 2010, gojek focussed on courier and motorcycle ride-hailing services in its early years, before launching the app in January 2015 in Indonesia. Since then, it has grown to become a super app in Southeast Asia, providing access to a wide range of services — from transportation and digital payments, to food delivery, logistics and many other on-demand services.

gojek now operates across main cities in five Southeast Asian countries.

As of June 2020, gojek’s app and its ecosystem have been downloaded 190 million times by users across the region.

As per Crunchbase, since inception, gojek has raised US$4.8 billion from 30 investors across 10 rounds. Its other investors include Google, Mitsubishi, Pegasus Tech Ventures, Tencent and Visa.

Over its 10 years of existence, it has also made 10 acquisitions, the latest deal being with WePay in September.

Telkomsel is a digital cellular operator in Indonesia and claims to be serving more than 170 million customers.

Also Read: Group CTO Ajey Gore leaves gojek

Over the last 25 years of serving the nation, Telkomsel has been consistently implementing the latest broadband technology, including being the first to trial 5G services in Indonesia.

Furthermore, Telkomsel continues to develop digital businesses such as mobile gaming, digital entertainment, digital advertising, digital lifestyle, mobile financial services, enterprise solutions, and Internet of Things to enable Indonesian society to continue discovering new ways of living.

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Image Credit: gojek

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StashAway expands to UAE

The story: Singaporean fintech startup StashAway has rolled out its digital wealth management platform in the United Arab Emirates.

Also Read: Digital wealth management startup StashAway raises US$16M Series C led by Square Peg

More about the story: This makes StashAway the first digital wealth manager to get an asset management license from the Dubai Financial Services Authority (DFSA) with retail endorsement.

“When we realised that the gap in wealth management options also exists in MENA, it was an obvious decision to expand our services, starting with earning our license in the DIFC,” commented Michele Ferrario, StashAway Co-founder and CEO.

About StashAway: Founded in 2016, the fintech startup offers investment and cash management portfolios for both retail and professional clients.

It claims it has users from more than 145 countries and of 174 nationalities and has seen its assets under management grow more than 4.3X in the last 12 months. It plans to build on this momentum with continuous product development over the next few months and years.

Safe Space raises US$250K seed round to improve mental health in workplaces

The story: Singapore-based B2B2C digital mental healthcare provider, Safe Space, has closed a seed round through equity crowdfunding platform, FundedHere.

Also Read: COVID-19 is taking a toll on mental wellness, but this startup wants to provide a Safe Space

More about the story: The funds will be used to further Safe Space’s mission in highlighting the importance of mental health in the workplace, and to expand to businesses across the APAC region in 2021.

“Workplace mental well-being will be one of our top priorities going into 2021. Safe Space’s vision is to make digital mental healthcare and education accessible and comprehensive to businesses of all sizes (from startups to MNCs). We’ve built comprehensive tools to cope with the mental health impact of COVID-19 and other challenges ahead,” said, Antoinette Patterson, Founder of Safe Space. 

About SafeSpace: The healthtech startup provides affordable access to quality offline and online mental health therapy care and preventive education. Since its launch in March 2019, Safe Space has grown its user-base by more than 3x and has connected more than 1,500 individuals to psychologists, psychotherapists and counsellors.

Lu International partners Kasikornbank to launch FinVest

The story: Lu International, the Singapore subsidiary of China-based personal financial services platform Lufax Holding, and Thailand-based Kasikornbank, announced the launch of FinVest, an online wealth management platform.

More about the story: The new digital investment platform aims to help retail investors in Thailand gain access to onshore and offshore investment products at a low minimum investment amount.

Kit Wong, CEO of Lu International, commented, “Digital technology is rapidly changing the way investors use financial services. They are increasingly using digital channels to purchase financial products and invest.”

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Image Credit: Photo by M. B. M. on Unsplash

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Krosslinker, a Singapore-based advanced materials maker, has secured US$1.25 million in a seed funding round, led by 500 Startups.

Seedscapital, Entrepreneur First and several unnamed angel investors also participated.

As per a press release, the funds raised will aid Krosslinker in the development of its patented technology to manufacture aerogels and conduct pilot trials with their customers. 

Aerogel is an advanced material that is light and resistant to heat and cold. It primarily functions as a thermally insulating material.

Also Read: E-pharmacy startup Gmedes raises funding led by 500 Startups, to boost G-MEDS service in the region

Founded in 2019 by a team of three scientists, Krosslinker develops technology that enables the advanced material to be produced faster, cheaper with low-energy consumption and reduced carbon footprint.

“This advanced material once considered expensive to commercialise can now be feasibly produced at a competitive cost with our disruptive manufacturing technology,” said Gayathri Natarajan, CEO and Co-founder of Krosslinker. 

“Krosslinker’s aerogel innovation is solving an important challenge of protecting precious pharma products against temperature breaches during shipping,” said Vishal Harnal, Partner at 500 Startups. 

“We believe this packaging innovation comes at an opportune time when the stakes and costs of temp-sensitive commercial and clinical drugs, including potential COVID vaccines, are undergoing a dramatic increase,” he elaborated.

Millions of biopharma products such as blood, vaccines and patient samples must be maintained at specific chilled temperatures to preserve their efficacy during shipping.

As such, packaging is of the foremost importance. Ineffective insulation has resulted in losses amounting to US$35 billion within the biopharma industry.

Also Read: How technology and healthcare can work together in a post-pandemic world

These developed aerogels will be introduced in cold-chain biopharmaceutical packaging before being implemented in construction, reefer container and industrial sectors. 

Krosslinker’s fabrication process technology will serve as a collaborative platform to develop multiple aerogel products with a broad array of application-specific properties for various insulation applications. 

“We have been receiving interest for high-temperature industrial insulation application and automotive verticals to thermally insulate EV battery packs against thermal runaway and harsh cold weather conditions,” remarked Mahesh Sachithanadam, Director of Innovation & Engineering and Co-founder of Krosslinker.

Elmira Soghrati, CTO and Co-founder of Krosslinker added that global energy demand for heating and cooling systems is expected to rise. Therefore, she remarked thermal insulation would represent the new normal in energy conservation due to its efficiency and sustainability.

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Image Credit: Photo by Crystal Kwok on Unsplash

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Resellee, a social e-commerce platform based in the Philippines, announced today it has raised a US$1 million in seed financing from investors, including Mintech Enterprises and Hofan Capital.

The startup will utilise the money to grow its local operations and expand regionally in 2021.

“Resellee plans to deploy the proceeds of the fund on capital investments to further enhance its product development and innovation with new app features such as group buying, AI and microfinancing, among others. The new features will make it easier for our resellers and merchants to earn more income,” Founder and CEO Marc Concio said in a statement.

Also Read: WEBUY lands US$6M Series A to take its social e-commerce biz into Vietnam, Philippines

“The funds will also enhance our marketing efforts and supply chain innovation, specifically in agriculture as we want to dominate the online agriculture market to help our farmers and resellers as part of our vision,” he added.

Resellee was co-founded by Marc Concio, Glenn Quiro, Aaron Madolora, Jason dela Rosa and Lorraine Macapagal. The app allows any Filipino to buy and sell products to his/her network of friends on social media without having to buy products or inventory.

Its vision is to provide a sustainable and scalable zero-capital (locally dubbed as puhunan) online business to millions of Filipinos, who are unemployed, underemployed or seeking additional income, while at the same time helping merchants, small medium businesses and farmers sell their products online through thousands of resellers and buyers.

Resellee has adopted a model similar to Pinduoduo, one of China’s fastest-growing social e-commerce firms.

Also Read: How social media can hype up your e-commerce business

The company claims it has thousands of products and services on its platform — ranging from fashion and electronics, to fruits and vegetables. Its competitive advantage lies in the affordability of the products, as compared to conventional supermarkets and e-commerce sites, it claims.

Resellee also said it is able to keep its prices low through its direct partnership with farmers that enables resellers to obtain them at a fraction of the cost. These savings are further passed on to customers.

The e-commerce firm recently announced a partnership with Mercato Centrale to support and train vendors in Metro Manila in digitalising their offerings to stay relevant in a rapidly-growing digital economy.

It also partnered with Bounce Back PH to onboard over 58,000 merchants on its platform to provide them with an additional source of income during the pandemic.

Most recently, it inked a deal with One Halal Global Company, a consultancy that provides halal-related business advice for firms to leverage on the growing community halal within the region.

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Image Credit: Resellee

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Indonesian telemedicine “super app” Alodokter has raised an undisclosed amount in fresh capital led by MDI Ventures, the corporate venture capital of Telkom Group.

This is an extension of the US$33 million Series C raised in 2019 by Alodokter.

Former investors such as Sequis Life, Golden Gate Ventures, Heritas Capital and Hera Capital also joined this extension.

Also Read: Indonesia healthtech Halodoc raises US$65M funding from UOB Venture

Suci Arumsari, President Director of Alodokter, said: “This funding brings together Telkom Indonesia’s public service mission for Indonesians and Alodokter’s business approach to supporting general healthcare. We will utilise this funding to scale up our ability to deliver on the expectations of Indonesian users and enhance our digital health platform to be more robust, accessible and affordable.”

Created in 2014 by Nathanael Faibis and Suci Arumsari, Alodokter provides an end-to-end digital solution to patients including telemedicine, doctor booking, medical content and health insurance services.

The platform says it connects more than 30,000 doctors and 1500 hospitals and clinics with millions of Indonesian patients. It also arrays a wide array of services around telemedicine such as offline doctor booking, insurance services and digital healthcare content.

With more than 27 million monthly active users on the platform, Alodokter is also set to launch new epharmacy services in the next few months.

Previously, Alodokter has raised seed funding in 2015 and US$2.5 million in Series A led by Golden Gate Ventures in 2016.

Also Read: Indonesian healthtech platform Alodokter raises US$33M in Series C funding

“..with the new, larger, funding we received from Telkom this year, we are also tasked to bring such innovative partnership to other state-owned enterprises, especially in such critical sectors like healthcare. With the rise of the adoption of telemedicine, and the leadership of Alodokter, we look forward to helping spread the impact of such solution throughout Indonesia,” said Donald Wihardja, CEO of MDI Ventures.

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Image Credit: Alodokter

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Home-grown startup Magorium has been announced the winner of Singapore’s waste-tech startup competition, WASTE 20/20, hosted by StartupX in partnership with Enterprise Singapore and The Incubation Network.

The startup has also won a prize money of approximately US$19,000.

Other finalists include Indian startup Ishitva Robotic Systems, which bagged the second place, along with UK-based data and analytics startup Topolytics.

Founded last year, Magorium converts plastic into polymers, which are then used to produce high-quality bitumen used for road construction.

Also Read: Startup of the Month, January: Singapore-based biotech startup TurtleTree

WASTE 20/20 is designed to identify waste-tech startups that are tackling challenges in the collection, management and treatment of food and plastic waste globally.

“WASTE 20/20 has demonstrated the need for us to do more to accelerate innovation in the waste space. We aim to bridge the innovation gap for the traditional waste sector and drive a collaborative approach between startups and waste incumbents to tackle the global waste problem. This is only the beginning, and we will continue to invest efforts to support innovation in the waste space in years to come,” said Durwin Ho, CEO of StartupX.

“The competition supports Singapore’s push in building a vibrant ecosystem to groom innovative startups. Particularly in the area of waste management, we see potential for more startups to introduce new and sustainable solutions that will enrich and uplift the capabilities of the sector,” added Yeoh Choon Jin, Director of Enterprise Singapore.

Also Read: The Alliance to End Plastic Waste, Plug and Play announce 11 finalists selected for their startup programme

This year, WASTE 20/20 saw a participation of 100 waste-tech startups applying from over 32 countries globally. Eight startups were shortlisted to pitch at the finals, with entries hailing from Singapore, India, Israel, the UK and  the US.

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Image Credit: WASTE 20/20

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It’s the pandemic, we are all stuck at home twiddling our thumbs, and everyone is anxiously looking for ways to make the best of their money — anything but holding it in cash — and fuelling massive expectations for hot new stocks.

For the fintech and startup world, all eyes turned to Ant Group, the most anticipated stock debut in a decade. Many believed it would have made them instant millionaires, and so many scrambled to borrow to get a place in the incredibly oversubscribed IPO.

Now, their hopes are gone. Instead, Ant joins an increasing list of highly anticipated startup exits that have had spectacular implosions, most notably WeWork.

But many others have simply seen a big pick-up after a much-hyped debut, then what follows is a pathetic fizzling out of investor interest, a subsequent decline in valuation, or an undiscovered incongruence with regulator requirements.

The philosophy in the startup world is often very “short-termy” with players prioritising huge glitzy exits within a few years, and not the long-term longevity of the firm.

This entire model depends on insiders hyping up the massive growth potential of the startup, and inculcating a fear of missive out (FOMO) mentality to outsiders — the belief that this IPO is the last chance to get in on a meteoric fortune making scheme.

Also Read: Busting the 5 popular myths surrounding startup exits

But this belief is propped up by key myths in the startup world. These myths are like shiny hollow marble pillars that can end up holding up unstable business models and rotting insides.

Myth 1: Growth is all that matters

This is by far the most pernicious myth that fuels startup mania. Grow or die. Grow at any cost. Grow even if it means being in the red for months, or even years.

Of course, the chief guru that demonstrated the efficacy of this model was Amazon, which did not report profits for years, preferring to pour money back into R&D as well as focusing on market share. This has paid off in dividends, and now Amazon is the undisputed master of the e-commerce world in the US.

But we have to remember that Amazon required massive reserves of capital to pull this off, operates in an industry that has significant network/economies of scale effects, and also enjoyed relative freedom from anti-trust actions/few viable competitors. This is not a game everyone can play, and not every industry can exist with one dominant player.

In the meantime, the core business model still matters. Margins matter. The problem of too many startups is that while they can pour money into trying to gain market share, too often they come in when other players are doing the very same thing.

Also Read: 5 things entrepreneurs need to know about running a business in the new normal

One only needs to look at the state of the e-wallet industry today. Massive subsidies to gain market share and customer eyeballs only to be supplanted in the following year by yet another player coming in with big pockets. It becomes a race to zero, a price war where what is won isn’t customer loyalty, but creates a consumer mentality of constant discount seeking.

We have to remember that growth is ultimately serviceable only if the business model itself is viable and can have long term sustainability.

Myth 2: It is all about the tech

In the startup industry, we tend to fetishise technological innovation over humbler innovations of a different business model or relationship with customers.

Undoubtedly, tech often enables new models or dynamics, but we must balance that with a broader view of innovation that takes into account talent, management, business models and partnerships.

In my experience, many firms may start out with a technological advantage, but due to an inability to retain talent, lack of foresight by management, or short-term views, they tend to lose out to firms with inferior tech but build gradually and catch up over time.

My advice when looking at these startups is to look beyond the tech. The tech is often the face of the company; look into its heart and mind.

Myth 3: Disruption is the name of the game

Run fast, break things, and mend them later. That’s the modus operandi of many startups who openly flaunt regulations, tempt the ire of the law, stick their nose up to traditional players, and are explicitly antagonistic to the “old way” of doing things.

Along with this is an emphasis on speed. Uber did this when it operated in multiple jurisdictions illegally (and then later in a grey area) and prioritised frictionless on-boarding of customers without requiring any know your customer (KYC).

Also Read: Ecosystem Roundup: Tiga Acquisition files for US$200M IPO in US; Deutsche Bank alumni are helping Masayoshi Son remake SoftBank

It has now been revealed that such policies in Brazil led to multiple murders of drivers where criminals posing as customers with fake registration details robbed them of cash. The US Department of Justice also previously pursued multiple investigations over Uber’s alleged bribery across Southeast Asia.

The truth is that being bull in a china shop only works when you don’t later have to come back to that very same shop and settle there. This is what has happened to many fintech and blockchain firms which have snubbed banks along the way, only to find that as they grow, banks often end up being the biggest potential customers for their services.

The key is not disrupting for the sake of disrupting — solving problems in a stagnant industry is important — but so is building a sustainable ecosystem of partners for the long term. 

At the end of the day, startups often have lacklustre post-exit options because of these myths that create a culture that ends up justifying short term plans and myopic views.

While those who make a quick buck off the exit may still profit, it ultimately hurts consumers and those genuinely interested in building the next big business.

As entrepreneurs and business leaders, we have to begin dismantling some of these myths and demand a more clear-eyed view of the realities. Then, maybe, instead of stumbling headfirst onto the platform, we can have graceful entrances onto the stage.

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Buy-now-pay-later (BNPL) didn’t take off in Singapore quite as quickly as it did elsewhere. The companies allowing people to spread their purchases out over instalments, such as Rely and hoolah, have only been around for a couple of years.

But with the recent economic shock from COVID-19 and a number of retailers leaving or shifting to online, there has been an immediate need for retailers to adopt new strategies. This has included pay later services.

What is it? Where is it?

BNPL can be thought of as a new type of credit. Acting as an intermediary, the BNPL companies allow consumers to make purchases with a retailer and then pay it off in instalments.

There are some differences between these instalment plans, but generally, the purchase is spread evenly across three or four instalments, with the funds being debited from the customer’s account.

The BNPL company assumes the risk of non-payment while the merchant pays a small per-transaction fee to offer the service.

BNPL has taken off around the world. Companies such as Klarna and Afterpay, two of the pioneers of BNPL, can be found in a number of countries across Europe, the UK, Australasia, and the US. 

Hesitant market?

In Singapore, access to credit is not an issue. A report from Wordpay found that credit cards account for 56 per cent of e-commerce sales in Singapore. Because of this, merchants were failing to see the value of BNPL. Why add other payment options when Singaporeans seemed so happy to pay with plastic?

Also Read: Buy now, pay later: The changing face of finance for a mobile generation

But markets such as Australia prove that love of plastic doesn’t mean there’s no room for an alternative. According to data from the country’s Reserve Bank, credit card usage was at its peak from 2015 to 2018, where over 15 million credit cards were in circulation. This was also when BNPL players started to gain a stronger foothold. 

As the country’s younger generations turn to these new ways to pay, credit cards have dropped to 13.9 million, the lowest point since April 2011. On the other side, BNPL usage is at its highest, with over five million Australians being customers of the two biggest companies, Zip and Afterpay. 

What’s happening in Australia is a great reminder that even though there is an existing solution, it doesn’t mean an alternative won’t be embraced. 

COVID-19 forces retailers’ hands

The pandemic has had a lasting impact on Singapore, retailers included. The Circuit Breaker, which lasted from April to the start of June, forced the closure of non-essential stores and put in place stay-at-home orders. 

The effect on the retail sector was quick. Spending dropped because of the effects of the pandemic on Singaporeans’ own financial situations and there were no tourists to be seen. Retail sales fell nearly 28 per cent in June.

This improved slightly in July where sales were down 8.5 per cent year on year. Some retailers such as BooksActually and Topshop announced their plans to move their operations online. 

But it became apparent an online presence wasn’t going to be enough for some retailers. Enter BNPL. 

A new solution for an old problem

It wasn’t only retailers that had faced hardship because of the pandemic. Consumers were under stay-at-home orders for months and the threat of infection kept many away from shopping in-person.

Also Read: Buy now, pay later: The changing face of finance for a mobile generation

The economy shrank 2.2 per cent during the first quarter of 2020 and employment also experienced its sharpest drop since the severe acute respiratory syndrome (SARS) outbreak in 2003. Consumers had less money to spend and it wasn’t as easy to spend it. 

However, the pandemic did lead shoppers online. A report from Nielsen found that 37 per cent of Singaporean consumers were shopping online more because of the outbreak and three in four planned to keep doing so even after restrictions were lifted. 

But old issues kept up for online shopping: abandoned carts. In an interview with The Startup Growth, Stuart Thornton, CEO and co-founder of BNPL hoolah, said this was something companies like his could solve. 

“hoolah helps solve this problem for merchants by allowing consumers to increase their personal affordability with a buy now and pay later payment option, enabling interest-free repayment in four equal instalments,” he said.

While it’s good this solution was available to help retailers following COVID-19, it was available before the pandemic. So why wait so long to embrace it? Businesses shouldn’t be afraid to partner with companies or offer new services, especially if it’s proven a success in other markets.

The consumer test

Retail tech solutions are great, but they’re nothing without shoppers’ tick of approval. A new report from Finder shows consumers have done just that.

An estimated 1.1 million people in Singapore have used BNPL, 38 per cent of Finder’s surveyed cohort. Interestingly, men are more likely to use BNPL than women, with 45 per cent of men saying they have used it compared to 32 per cent of women. 

While good for retailers, the survey also found 27 per cent of the 1,000+ surveyed had taken a financial hit because of a BNPL service. Nearly one-fifth of those surveyed (17 per cent) made an impulse purchase, while 15 per cent spent more than they would have if they weren’t using BNPL.

These are important concerns to keep in mind for retailers looking to adopt a BNPL solution as well as the BNPL companies themselves that are responsible for their customers.

Buy-now-pay-later is becoming increasingly popular in Singapore, but should it have taken a pandemic to see the new payment option rolled out widely? Consumers have embraced it and it offers a number of benefits to retailers.

However, businesses will need to continue to iterate and adapt this new payment technology as it increases in usage and Singapore adapts to the COVID-19 new normal.

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This article is published via a special e27 partnership with StackTrek – a company specialising in using algorithms and data to build and scale programming teams for tech companies. Each week, StackTrek Founder & CEO Billy Yuen talks with top executives about startups, culture, and tech hiring.

This week, Billy Yuen chats with Blake Irving, former CEO of GoDaddy.

How did you journey start at GoDaddy?

GoDaddy was primarily a US-based company. I wasn’t the original founder of the company; Bob Parson started it 20 years ago and I was offered the role almost five years ago. When I took the role, I flattened the platform and build a common user experience. I globalised and market the company internationally.

I would make the advertising square up with who we are, what we do, and who our customers are. For the last five years, we’ve been executing that plan. We’re now on 56 countries, localised in 56 countries; 50 different currencies, 29 languages. We’re doing business at 125 countries today.

More than half of our new customers come from international markets now. We found a very important niche and we’ve been able to double revenues in the last four years. We’ll double our revenues again in the next four years through organic win acquisition; and most of that growth will come from international markets, South America, Europe and Asia.

You are basically transforming this GoDaddy into a tech company. That’s kind of like a startup founder building a new venture. What’s the most difficult challenge you’ve faced so far after you took over the job?

When I took the role, GoDaddy wasn’t perceived as a technological company. It was perceived primarily as a marketing company. My goal coming in was actually build a technical platform that small businesses could use globally and I think the challenge came from executing that plan.

I had to pivot the company in the direction and hire employees that were good engineers. To do that, I had to open offices in various cities in the US and we also opened “customer cares”.

Also Read: It’s go time: American domain giant GoDaddy launches in 11 Asian markets

Customer care organisations are a very important part of our business and our go-to-market and so we opened organisations in Europe, Asia, and even South Africa. It took a lot of effort to pivot the company into a technological one but we were able to do that, thanks to our engineers who have a lot of horsepowers and are building the right products.

Under this new “tech startup” GoDaddy, the web builder is like your first big product. Tell me more about it.

The web-builder product actually is doing really well for us. You get a domain, you build a website, you go get e-mail—you look like you’re all up professional business. And with the website builder product, it allows us to let somebody go try out the tool, build the website and go, “Hey, that was pretty cool. Now, I’m gonna name it. Now, I’ll go get a domain.”

So, we just changed the on-ramp to do something that’s a little different than that. We had another on-ramp that we just created in North America that is called Smartline. Smartline is a second phone line for your cellphone. The context is like this: you’re building a website and you gotta put a phone number on it so people could call you but you don’t put your personal phone number on a website because it’s not safe—people could steal your identity.

So, Smartline is like having a second phone line on that website that customers can use to call you. That way, you can now discern whether the call is a personal matter or for business. It’s a cool feature and costs only US$4 a month and was soft-launched in the US.

Many tech startups are doing the freemium subscription model and it seems like you guys are going that direction as well.

Clearly, the market’s going in that direction and even our competitors are going with the website first and then the domain. It actually makes sense because there’s a cohort that wants to try the tool first before they buy it.

Also Read: From sales-led to product-led: PatSnap founder shares how COVID-19 shifted their growth strategy

Now, we put a 30-day free trial in place so customers can try the tool, build a site, and goof around with it. What’s even cooler about it is that it can even be built entirely using a mobile phone and has a full-fidelity website in your PC.

It feels like you’re actually building a tech startup now from scratch, even though GoDaddy has been around 20 years and you have resources. Is there anything that you actually do differently in hindsight? 

When I first came into the company, what would usually happen is the marketing team would get the engineers to build something or some new features to sell so that they can advertise it. We don’t do that anymore. What we do now is we build a product that has a solid product strategy.

We plan it, we launch it, we line up marketing behind it, and then we iterate like crazy on that product using agile technology capability. And from there, we just continuously shift. The web-builder product has a new feature every week on at least 1,500 verticals and we’re just starting to get deeper and expanded.

In a different perspective, I think we already had a great care organisation and a brilliant marketing organisation but the tech organisation was mostly underdeveloped.

By putting in place a strategy that allowed us to invest in developing technology, we’ve built up the product’s capability—making it scalable, high-performance, very reliable, and had the right features. Spending time doing that for three to four years and then building marketing on top of it has been a strategy pivot but we’ve executed it well.

We are now focusing on getting the absolute best product outcome for our customers.

Those terms: agile, pivot, shipping weekly iterations … you really sound like a startup founder. Let’s shift to the big picture, what are the three technological trends that you’re paying attention to right now?

I think the public cloud is becoming a huge thing. We’re actually using some of the technology from AWS or Google cloud or Azure and using it to our advantage. So if we’re gonna go deploy in India, we can get as close to the customers as possible through deploying somebody else’s cloud infrastructure.

Also Read: 51M Indian SMBs, less than 1M websites: GoDaddy wants to change this

Technically, that’s important in building products using React on mobile phones. React is the language used in Facebook and it’s powerful. That’s why we’ve pivoted our developers to use it majorly for our UX and our mobile devices. It makes it easier to go negative.

We’re already starting to do a lot of engagement now on mobile phones and tablets using React and this is the first design point for now. It’s no longer about getting something from the PC and pour it over to a mobile device; when my teams are coming in and having a demo with a new product, it should be on their mobile phones.

People often talk about startups disrupting industries and uprooting incumbent but we also see how startup innovations benefit corporations. What’s the impact of startup innovation on GoDaddy?

We’ve acquired some startups such as WP and Scurry. It was a security company for WordPress and other websites. We have partnered with companies as well such as Microsoft, who’s a big partner of ours and who we’ve delivered millions of seats to with their Office 365.

We wrote their installation process and making it much simpler for Solopreneur. We both partner and acquire startups.

Hiring is a big challenge for startups. Everybody is competing for talents and you are in tech company going up against the likes of Google, Facebook, etc. How do you persuade people to choose GoDaddy?

We’re actually hiring from companies that you think we wouldn’t be able to compete with for employment. We actually have people who are leaving those companies and coming to us because we’re smaller and, therefore, faster. We’re not bureaucratic and we get stuff done quickly.

Our engineering team is under a thousand people in total so that gives you more ability to affect the company and the software than it does if you’re working on your dangling dialogue box on a product that exists for a hundred thousand developers in a company.

Also Read: AWS technical evangelist Ian Massingham shares how Amazon hires developers

How do you guys pitch to these developers when you’re trying to hire them?

Actually, when we lose a recruit to either Google or Microsoft and even Facebook sometimes, we’re also winning recruits that have offers from the same companies. The reason why these people come to us instead of going to one of those bigger companies is what I’ve described earlier. It’s a small company so your codes going to matter to everybody in the company, even the CEO.

I actually show up to every new employee orientation, do an hour-long pitch to meet everybody, have dinner with them that night, and just, get to know everybody. That isn’t the experience that you’re gonna have at Google, Facebook or Microsoft. They’re just too big; they can’t scale to that size. That’s the benefit of us being small and being able to grow the way we’ve been growing and engineers love it.

I want learn a little bit more about your culture. Since you’ve pivoted into a tech startup, do you run hackathons within the company?

Yes, we do hackathons, even multiple big hackathons with prizes that I’ve judged. We also do stand-ups from the agile process on Fridays. We don’t usually do it at every sprint but like, in every other sprint, we have teams come in and show off their stuff.

Everybody runs on two-week sprints now and they’re not all coordinated to end at the same time. But when we get together, we view virtual hackathons and then real hackathons. In virtual hackathons, we assume that everybody does work and they present it to the entire company. It’s actually pretty fun.

—

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

Image Credit: Billy Yuen

The post Blake Irving, former CEO of GoDaddy, shares his startup way of running a public company appeared first on e27.