Do you know if your startup is ready for international growth?

It is virtually every startup’s goal to go global, but doing so entails a multitude of challenges. Before you decide to expand your business internationally, you need to ascertain that your business is ready for it.

How do you know if your business is prepared for the challenges of operating on an international level? What are the indicators to watch out for? The following are three essential details you need to know.

Inherently global nature of business

Having a business that can be operated internationally without requiring major investments or capital, extensive market studies, and product changes.

Some businesses already meant to go global from the get-go. These are startups that can serve customers as they don’t have the logistical and operational requirements that most other businesses need to deal with, in order to be able to serve clients in various foreign markets. In particular, they exhibit the following characteristics:

• Being able to conduct most business activities online
• Not much difference in serving local and global customers
• No need for establishing a clear local market presence or business network
• No necessity for putting up physical bases of operations in the new target markets abroad
• Offering a product that does not require major modification to be viable in other parts of the world

One good example of a business that exhibits the aforementioned attributes is online content creation: publishing articles, videos, and other content on the web for monetisation. In addition to attracting direct advertisers, neither requires the establishment of a solid local business presence.

The business can be conducted online for the most part. The employees can be web-based with teleworkers hired in different countries. Hence, take advantage of their localised viewpoints and expertise in developing content deemed suitable in their respective regions.

Also Read: Will the gig economy in Asia sustain its growth?

Another excellent example is the business of selling or monetising mobile apps or software in general. These apps don’t have a physical presence and can be sold to users online through the official Android or iOS app stores and through websites and online ads.

All transactions can be undertaken online even with the freemium model

Wherein apps are offered for free but users are given the option to buy items or upgrades within the app.

In these startup businesses, there’s no significant difference in offering the products locally or internationally. It would even be counterproductive to limit the sales to local customers. Additionally, the products have potential demand in various locations worldwide. They don’t need to undergo major changes to be useful to international customers. Except maybe when it comes to the language.

Localisation may be needed to make products more appealing to target customers in certain foreign markets. This is not going to be a major problem though, as it’s not difficult to find localisation solution providers. You can even find companies that provide global marketing services to help with the promotion of the products in different markets. You just have to make sure that you are choosing a reputable and experienced language service provider to handle the localisation of your products and marketing campaign.

Other startup businesses that can be operated internationally right from the start

This includes service-based ones such as those that offer search engine optimisation (SEO), web development, creative work, marketing, digital asset sales, accounting or bookkeeping, and online publishing services.

There are also niche stores that can be started as an international operation with most of the transactions conducted online. A store that offers salt-powered (no traditional battery or power source) LED emergency lights, for example, can easily find customers abroad. Typical online stores that sell the usual items being sold online. They may also be able to find customers in foreign markets, but not with the same chances of success as those of niche stores.

Also Read: iWEECARE adds US$2.4M its coffers to accelerate growth of its remote wearable thermometer

And of course, in case you forget the obvious, export/import businesses are international in nature right from the start. It would be totally illogical for an export business to be locally-bound.

Find out if you have enough funds, expertise, experience, and skilled people to sustain a venture into the international market.

If your business does not possess the characteristics mentioned above …

You need to establish your business locally first before you can plan for global expansion. The main reason for this is to have enough resources.

Resources here, by the way, don’t only refer to money. Indeed, funding is vital in pursuing an international expansion, but it’s not the only resource you need.

You also have to accumulate adequate experience and insights into how the business would work in other markets by conducting market research; they can achieve it by operating the business locally for a good amount of time. As the business gains experience and insights, when doing business on an international scale, their employees (human resources) could also be ready for advanced roles.

There are no standards as to how much cash, liquid assets, expertise required, or employee skills a business should have to say that it is ready to go global.

Abundance of resources

One study by Crane found that more than 50 per cent of SaaS companies averaged more than US$10 million in revenues before they decided to expand to foreign markets, and it took them around 5.5 years on average before pursuing a new market. These details rarely apply to other businesses, though.

The decision to expand internationally, with regards to the level of resources available can’t be based on benchmarks or industry averages. The management has to evaluate everything prudently to decide if the business has enough to have reasonable chances of succeeding in the international market.

Also Read: Ecosystem Roundup: Should SEA startups jump the SPAC bandwagon?; SEA becomes centre for instant cross-border payments growth

High demand in foreign markets

Determine if there is a compelling demand for your products in new markets.

Sometimes, your business resources may not be the deciding factor in proceeding with business expansion. It could be the demand in foreign markets. Consider these:

• You may have an abundance of financial resources, skilled people, expertise, market intelligence, and other resources. But there is no demand for your products abroad.
• You may not have enough resources to enable a less-risky international expansion. But there is an immense demand for your products abroad.

In these cases, demand becomes a more important factor. If you don’t have enough resources, you can find ways to make up for it. You can accept additional investments, consider crowdfunding, or forge business partnerships. To gather the resources needed to pursue highly feasible opportunities abroad. You would be willing to take risks in the presence of persuasive potential rewards.

Conclusion

Essentially, the three ways in determining if a startup business is ready for the international market can be summarised by the following questions:

• Is your business inherently international in nature?
• Do you have enough resources to support the expansion?
• Is there a compelling demand for your products in the global market?

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The article first appeared on nfinitiv.

Image Credit: Erik Odiin on Unsplash

The post How to know if your startup is ready for growth appeared first on e27.

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How to know if your startup is ready for growth; If your business inherently international in nature, has enough resources to support the expansion, and there’s compelling demand for your products in the global market, then your startup is ready to grow international. e27

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It is without a doubt that the COVID-19 pandemic has caused businesses across all sectors to struggle to stay afloat. To make matters worse, Singapore is currently heading towards the worst recession since its independence with the Department of Statistics reporting a total of 18,786 business closures from January until May 2020.

With significant uncertainty of how the pandemic situation will evolve as we approach the end of the year, many are worried that the worst is yet to come.

For startups and SMEs, the matter becomes more serious as they are fighting tooth and nail to maintain positive cash flow by shifting to online platforms, pivoting to other business models, or temporarily shutting down operations to conserve resources. However, with no end to the economic uncertainty in sight, startup and SME owners continue to face a daunting question: How do I make the best decision to ensure business continuity?

Very often, startup and SME owners envision goals and make decisions to ensure the long-term survivability of their businesses, leading to eventual exponential and sustainable growth. However, within the startup and SME ecosystem, a business owner often holds multiple leadership roles, including that of a Chief Executive Officer (CEO) and overseeing the company’s financial infrastructure.

Between envisioning the company’s long-term strategy, ensuring smooth day-to-day operations and struggling to maintain positive cash flow, CEOs tend to find themselves feeling increasingly stretched. For instance, two of my clients -Zhi Zhong, CEO of Geniebook and Janan, CEO of Gobbler- have reported finding their attention divided and unable to find enough time within the workday for matters that truly needed their attention.

A CFO will help to relieve some of their duties and the insight provided is valuable in ensuring the accuracy of the business’ financials and accounts. Most investors are still looking to back promising enterprises despite a cost-cutting period. Therefore, the support and guidance of a virtual CFO will be able to maximise a company’s value and establish a sound reporting system that is crucial when communicating and pitching to investors.

Also Read: Funding Societies appoints GoBear co-founder Frank Stevenaar as CFO, promotes Ishan Agrawal to CTO

The role of a CFO during fundraising

Before embarking on a fundraising journey, it is important for business owners to first determine the most sustainable funding avenue necessary to ensure long-term business continuity. To achieve this, business owners must stress test the key operational drivers of their respective enterprises, thus enabling them to plan for various scenarios.

The next step involves drawing up a roadmap specific to the business and determining the funding requirements needed to implement the plan. When it is finally time to decide on a funding method, business owners should keep an open mind while exploring all avenues of financing while not losing sight of the purpose of the fundraising.

With the leadership of a CFO, these processes become faster, easier and less daunting, enabling business owners to focus their attention and efforts on other aspects of their business like day-to-day operations or product development.

More than that, a CFO is able to strategically dive deep into a company’s processes, understand what drives value for the organisation and use this information to develop a strategic direction for the company. This makes them much more than a finance admin or bookkeepers.

With this in mind, tapping into the experience of a CFO during the pre-funding stage will allow business owners to gain long-term insight into their business needs and priorities. This will result in a more accurate understanding of funding requirements and business valuation in order for companies to experience only the most successful fundraising.

After funding is secured

Once funding is secured, business owners must look to implement proper finance management to ensure that the resources obtained are utilised wisely and effectively. The role of a CFO at this stage is to develop a scalable finance function to ensure that the company’s economic engine continues to run smoothly and efficiently with the newly acquired funds.

After leading a company through a successful fundraising round, an experienced CFO can also create robust financial models unique to the needs of the business while managing the organisation’s finance talent pool. Financial models serve as perfect budgeting tools.

Also Read: When should your startup get a CFO?

More than that, business owners should look to the guidance and experience of a virtual CFO in leading their finance teams while striving to implement best practices like annual budget planning within the company’s processes. Eventually, with financial models to drive sustainable budgeting year on year, I am confident that business owners will be able to experience long-term growth.

Growing trend for virtual CFO

However, not every organisation requires a full-time CFO. Even if you can afford one, the workload is not sufficient to justify one. To illustrate this, one of my clients -Eric of iVideoSmart- felt that employing a full-time CFO for a startup of their size was overkill.

At the same time, however, the accurate tracking of key financial metrics is a must. That’s where the services of a virtual CFO fits this need like a glove and companies such as Paloe, which provide this service have been instrumental in creating robust and effective financial models while maintaining active involvement in all financial matters.

Ultimately, while modern-day CFOs retain the traditional responsibilities of accounting, number-crunching and budgeting, I believe that the ever-changing world has resulted in CFOs evolving to meet dynamic business needs.

In turn, while many businesses are concerned with getting through this economic storm, it is a good time for business owners to hire an experienced CFO when it comes to making the right fundraising decisions or managing the firm’s cash flow.

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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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Listed on the Swiss Stock Exchange (SIX), Achiko AG is known as a fintech company that provides user registration and payment services accessible for app developers. But as the COVID-19 pandemic continues to rage on, the company decides to take part in making a difference.

“We’re out to save the world. Like, really,” Achiko AG CEO & Director Steven Goh writes in a press statement.

In an interview with e27, Goh gives a further explanation about their move to the healthtech space, starting with the products and services that they are working on.

The first arm is Teman Sehat, an ecosystem platform that aims to assist governments and businesses in dealing with the COVID-19 impact through contact tracing services, combined with couponing and advertising. Goh likens the app to Swarm, which allows users to get rewards for checking in to places.

The second arm is a COVID-19 test kit code-named Gumnuts, the result of its collaboration with biotech company Regenacellx.sl. This solution is particularly suitable for developing economies, according to Achiko AG.

“Up until recently, testing has typically been delivered through two methodologies –the reverse transcription-polymerase chain reaction (RT-PCR) and the Antigen/Antibody– and two sampling methodologies –through nasal swab or blood sample … All rely on technologies that are 30 to 50 years old and suffer from either process limitations … or design issues,” the company says in a press statement.

Also Read: Accredify, SG Innovate partner to launch Digital Health Passport that will accelerate travel post-COVID-19

But using the DNA Aptamers as developed by Regenacellx.sl, Gumnuts is able to provide patients with a testing process that is “less intrusive than brushing teeth” and costs under US$0.25 per test.

“We are fast-tracking clinical trials and looking forward to having a commercially available product later this year,” says Goh.

The projects are currently being tested in the Indonesian city of Pekanbaru. The city was chosen due to its “nice statistical representation” of the Indonesian population profile.

“I am being reminded about the story of MPesa and Safaricom in Kenya. We hope that Pekanbaru in Indonesia becomes the MPesa of COVID-19,” he explains.

Finding a way back into Old Normal

As the world rushes to develop and introduce COVID-19 vaccine to the public, Achiko AG decides to focus on developing and providing test kits as a solution to tackle the pandemic.

“We are excited about vaccines coming, but a vaccine is not a cure and not everyone will get one immediately. As Bill Gates said, it would be the end of 2021 where first world countries will be beyond the pandemic, and 2022 before many developing countries are,” Goh points out.

There is also the concern that vaccines will only be 40 to 60 per cent effective.

“If the theoretical herd immunity level is around 70 per cent and 30 per cent will not take a vaccine, and the effectiveness rate is, say, 50 per cent, then a vaccine may not get us there on its own,” Goh continues.

Also Read: What Myanmar’s proptech industry is doing to stay afloat despite COVID-19

“We believe that it is going to be a rough few years. It is going to take many solutions working at the same time. But together, we can get back to our Old Normal,” he stresses.

There is also another challenge: Finding that delicate balance between rigorous tracking and privacy protection, both for individuals and businesses. Places that have been labelled as a COVID-19 cluster may experience damage to their reputation as the public would be scared to visit them; a situation that can further worsen the economy.

Teman Sehat aims to do it differently by putting the focus on the individuals in performing contact tracing. It enables users to check-in to the places that they visit in exchange for coupons or even a small fee. Some places might require users to have a certificate that declares themselves as having been tested for COVID-19; this part ensures that only people who have been tested can enter the facility. The platform will also privately message users if they have been exposed to a COVID-19 case.

Apart from that, users that have been flagged for COVID-19 exposure or expired certificate will be required to undergo self-quarantine, being unable to check-in to places that require certification.

Empowering healthcare

With the upcoming launch of these healthtech products and services, what will happen to Achiko’s fintech services? Goh says that the company will continue to run its fintech projects. In fact, they are looking forward to launching new products such as savings and payday advance platforms.

“The company has used its fintech infrastructure to power the Teman Sehat platform, and we think that is the best driver of value to our shareholders at this time,” Goh explains.

Also Read: How to train a diverse and dispersed workforce during COVID-19 and beyond

Goh himself is already a familiar name in the Southeast Asian tech startup ecosystem. He was previously known as the co-founder of social entertainment platform Migme. In 2017, e27 published a report about Migme struggling to find new investors.

“Migme was an important part of my life. At its peak, I fell down a flight of steps and broke my back. It is my fault that I did not build a resilient organisation that would deliver results in my limitations. I tried to save it but could not,” Goh explains.

“It is still being settled and done professionally with PwC in Australia. I have moved on. Professionally, I am sure that book will close later this year,” he continues.

For Gumnuts, Achiko is looking forward to implementing the technology for a different kind of testing.

“DNA Aptamers, because of their design, might be stable in different environments and have a universe of new forms of testing. We are really excited about this,” Goh closes.

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Image Credit: Achiko AG

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COVID-19 has hit us hard. From transforming your home into a make-shift office, balancing personal and work lives, to mask-wearing and safe distancing measures in the workplace, everything about the way we work has changed.

After months of working from home, some organisations have announced permanent work from home policies for the rest of the year, while others begin to think about transitioning back to the office.

Despite the growing demand for and adoption of remote work, our research suggests the office is here to stay. We spoke to 25 business leaders and surveyed over 500 respondents across the Asia Pacific (APAC) and the ability of their company to continue to support flexible working arrangements, alongside a return to the office, was ranked by 99 per cent of respondents as ‘fairly important’.

Other top concerns include safety of the workspace and managerial support.

In balancing the return to the office with remote working, it is important to recognise and identify new work patterns and behaviours that your employees have already formed. This may mean that the office and its fundamental purpose will likely look radically different both in the short and long term.

So, how do employers tap into these insights to create future thinking workspaces that will stand the test of time?

Create dynamic and purposeful workspaces

This pandemic has served as a harsh reminder of the importance of building resilience into an organisation, which would allow companies to quickly adapt in periods of crisis and change. The idea of resilience also applies to the physical workspace.

Also Read: Office 2.0: designing data-driven workspaces

Now, more than ever, businesses need to consider their real estate differently, think beyond space, and plan for workplace strategies enabling flexibility to make the work environment as productive as possible as circumstances evolve.

Through our leadership interviews and employee surveys across APAC, we’ve found that while the majority of people and organisations have adapted well to remote work in the short term, a deeper appreciation for, and varied expectations of, working in the office has developed.

Time working remotely has highlighted how unplanned, organic social interactions in the office can be fundamental drivers for collaboration, creativity and culture. Our research shows this is something we deeply miss. In designing the workplaces of the future, organisations must create workspaces to facilitate these types of interactions that are not achieved remotely.

At a high level, this should involve a fundamental shift in the ratio of workspaces for most organisations to reduce the number of individual fixed desks in favour of more shared spaces for collaboration and high-activity social areas such as on-site cafes.

Design elements like open spaces, atriums, shared workspaces in common areas, staircases with seating, and outdoor workspaces can help create an environment that encourages people to work together by locating desirable amenities in diverse locations, and facilitating “casual collisions” throughout the workday to promote teamwork and increased collaboration.

By building resiliency into physical workspaces, organisations can create an agile workplace strategy that allows us to continuously learn, prepare, and adapt for the future.

Also Read: Workbean: Empowering the workplace in the time of COVID-19

Put people first

To put it simply: people are the heart of any organisation and the end-users of the spaces we design and work in. As organisations approach new ideas about workplace strategy it is imperative to keep employees’ needs at the heart.

Design with empathy

It was no surprise to learn through our research the foremost concern shared by both employees and leaders about returning to the office is ensuring health and safety. Beyond immediate and mandated measures to create a safe environment, ensuring that the office is a comfortable and stress-managed environment, is crucial.

Organisations should consider communicating these new ways of working in a way that reduces negative impact on the employee experience. For example, safe circulation through and around shared spaces can be addressed through playful graphics that reinforce social distancing guidelines with a sense of humour that help to create a positive and pleasant work environment.

Taking it one step further, colour psychology can be applied in the workplace to help designate behaviours to specific zones in the office without having to directly tell or remind.

Organisations may choose to implement a coloured wristband system where the use of colour and material choice can inform people of their personal safety space and communicate, in an intuitive manner, the norms of behaviour in different areas.

Focusing on employee well-being for workforce resilience

Given the uncertain environment we work in currently, employees face a mountain of concerns every day. Outlining and executing clear expectations in returning to the New Normal for their working lives is a crucial first step in easing these professional anxieties.

To help employees navigate changes to office layouts, workplace practices, and ways of working, organisations need to clearly communicate, train, and regularly remind staff on clear plans that address the who, what, when, where and how of their return to work strategies.

Also Read: What your workplace will look like in a post-COVID-19 world

Regular check-ins between managers and their team members will help organisations stay up to date on the concerns of employees in order to quickly address problem areas and ensure a smooth transition to new ways of work.

To further support employee well-being, organisations should look to provide access to mental health support and wellbeing programmes to help alleviate both personal and professional challenges.

Foster a culture of experimentation

With many companies globally undertaking a journey of workplace transformation at the same time, it may be tempting for organisations to plan their transformation around what other successful companies have done.

However, every company is unique, from the type of work they do, to the real estate they have to work with, and so there will be no one-size-fits-all solution to the future of the workplace.

To inform workplace strategy, thorough research to gather reliable data about what employees need and how they work best is required.

Based on the findings, companies should then pilot their workplace solutions in stages, for example, allocating one or two floors of a building to experiment with the changes before implementing them organisation-wide.

This creates agile workspaces to fulfil short to mid-term organisation goals and use each stage to learn and inform the next transformation.

Organisations will need to work diligently to quickly identify opportunities for change, test solutions, evaluate the results, and reiterate as needed to find the best strategy that brings out the best results for their business and people.

Also Read: 5 startups reveal their thoughts on why shared workspaces are a godsend

Although we have figured out how to work apart after months of remote working, the office is certainly not going to be a thing of the past. Our research and experience have shown there are elements of working together in an office that remote working simply cannot replicate.

Despite varying cultures, behaviours and government mandates, we strongly recommend working through a three-pronged approach: putting people before space, building nimble, purposeful workspaces and testing solutions prior to implementation.

By embracing this approach and developing solutions with greater care, organisations would be able to implement innovations that best suit their unique needs, building workspace resilience amidst an uncertain future.

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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.

Join our e27 Telegram group, or like the e27 Facebook page

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Despite, or thanks to, COVID-19, William Bao Bean, Managing director at SOSV’s Chinaccelerator and MOX (Mobile Only Accelerator) said their portfolio saw a 61 per cent increase in revenue from January to April.

Notable companies include the edutech rocketship Snapask, which recently closed a US$35 million Series B and is seeing tremendous growth during the past few months; and TravelFlan (which has raised US$7 million in Series A), which adapted their core AI products to lifestyle products to achieve US$1.2 million in revenue in July.

An advocate of lean teams and conserving cash, Bao Bean believe in “Cockroach profitability”. In our latest webinar, he shared his know-how on cash conservation and strive for profitability even amidst a pandemic.

Getting to know SOSV

• Although they are a global VC, they have focussed verticals such as biotech, food, agritech, cross-border internet, and SaaS.
• There are many  many VCs who are always looking for startups.
• SOSV is a VC-cum-accelerator with investments in over 1,000 startups. They annually invest in about 150 companies.
• They are all about traction first, fundraising second.
• Its important for any startup to have a “superpower” i.e. something they do better than everyone else. SOSV has MOX (Mobile only accelerator) which is an extension of their mobile app with 60 million active users monthly. MOX helps them offer easy and free consumer acquisition to their startups

Managing your cashflows

• As a startup the only cash you have control over is the one in your bank. Revenue and investor money are variable and you really can never guarantee when and how much will come in.
• Bao Bean advocates lean operations and stated that founders, co-founders should actually be in for the adrenaline and the equity and not the lure of monthly monetary compensations.
• Experiments or trying our new ideas is good but keep them light and fast-moving (watch the full video to learn about Bao Bean’s failures in the cartoon world).
• Try multiple things without spending too much time, money and resources. Once you identify what works, then build on it with greater resources.
• The only time one should raise funds, says Bao Bean, is when you can take a dollar and turn it into more than a dollar. Until then just stick to money from friends and family or cough it up yourself.
• If you are into something such as deep tech that needs higher development time, work to gain some traction first.
• Your aim should be to get to a point with your product that proves it can solve a real-world problem
• Startups should always be wary of getting into debt, especially in a world that is running high on burning-cash-for-growth trend.

Also Read: It is all about survival of the most adaptable, says PatSnap’s Jeffrey Tiong

• Carve time to regularly take stock of where you are, where you need to be, and what you are doing right/wrong. Bao Bean recommends twice a month.
• Focus is key at all times. Do not get lured by everything that is happening around you (such as others raising a lot of money). Stay centred!
• Unlike the big players, you have just one bullet and you have to shoot right as a startup. Make sure you are putting your best foot forward backed by data, customer success metrics, and the viability of the product
• Pandemic is, in fact, easy on startups. Most early stage companies didn’t have to deal with layoffs and it was also easier to pivot for those that could. Watch the full video to hear how SOSV’s portfolio company pivot from travel to make-up and actually becoming more profitable.

Resources

• Bao Bean highly recommends reading Measures of Success by Mark Graban
• Watch the full video recording to know how to avoid the mistake Jack Ma made

The post Why SOSV’s William Bao Bean thinks the pandemic is good for early stage startups appeared first on e27.

More and more businesses are waking up to the grim, post-COVID-19 economic reality. The current downturn is a black swan event, but it’s most certainly not unprecedented. Economies of almost all countries have declined; India’s shrunk by about 23.9 per cent, the UK by 21.7 per cent, and the US by 9.1 per cent.

Economies globally have seen downturns earlier too, but how does history remember them, the Great Depression in the US, India’s 1990 balance of payment crisis, or the 1997 Asian financial crisis?

During the Great Depression, the US economy shrank by 50 per cent between 1929 and 1933, the 1997 Asian Financial Crisis setback economic growth in a number of ASEAN countries by nearly a decade. What are the lessons we can learn from the past are how can we mitigate the long-term economic impact of the current downturn?

It is evidently clear and well-documented that all financial crises result in large-scale human suffering, affecting both the rich and poor. Unemployment rate shoots up, businesses shutter, while vital sectors such as construction, retail, and agriculture suffer adversely.

Eventually, almost all economies recover,  major sectors get back on their feet. However, this doesn’t mean all companies within those sectors make it. Some organisations survive, some rediscover themselves, and a few new ones spring up to capture a big share of their sector or create a niche.

Whatever the future is, organisations reach there not merely by luck but through perseverance and in-depth planning. But one thing that precedes both is the mindset of its leaders which in turn decides the fate of the organisation. The two common paths during this crisis are survival or revival.

Also Read: Accredify, SGInnovate partner to launch Digital Health Passport that will accelerate travel post-COVID-19

Let’s take a look at these two options and explore why the current downturn could foster structural changes in the way businesses work. Great leaders often have a knack of reviving their organisation from the worst possible crisis, let’s look at their mindset and unique decision-making process.

Restructure or re-engineer? Adapting processes for efficiency

Businesses that merely try to survive see the economic downturn as an additional cost imposition. When work volumes come down, the easy, survival-oriented option is to restructure: cut the workforce, reduce hours, or to drop output levels. While this can help to offset the cost of the downturn in the short-term, the loss of capability profoundly impacts long-term business sustainability.

Process re-engineering provides businesses with an alternative approach that transforms the downturn into an opportunity. Rather than cutting output to keep costs down, businesses need to find more efficient and cost-effective ways to create products or to deliver services. Existing supply chains, especially those originating in East Asia, might be broken at present.

This creates an opportunity to tap into domestic lines of supply. Service-oriented businesses need to look at video and audio calling solutions to deliver value to customers in a cheaper and more flexible way than before.

Implementing a work-from-home policy will also enable continuity, particularly for businesses in the digital sector.

Vision and culture: where do you see these changes going?

COVID-19 and the economic downturn are also key inflexion points forcing businesses to do some serious thinking about who they are, in terms of business culture and vision. In the longterm, survival-oriented strategies only serve to highlight systematic issues with culture and vision.

Braver organisations willing to grapple with these questions will be able to align their continuity plans with a broader vision of who they are and what they’re doing. This can mean embracing digital solutions, not as stopgaps, but as core aspects of processes to follow post-COVID-19.

Also Read: Fintech company Achiko wants to help tackle COVID-19 with its new healthtech projects

It can also mean committing to social responsibility, taking care of the workforce and the local community at a time when help is needed.

Survival or revival? The choice is yours

All businesses have been substantially impacted by the pandemic and subsequent lockdowns. When it comes to long-term resilience and sustainability, the question of survival versus revival becomes key. Businesses that focus just on short-term survival might get through the initial situation.

However, they’ll be in a far worse position to compete when things settle down than those businesses that see the pandemic as an opportunity for revival and reinvention. The entire Asian economy, on the whole, has been facing headwinds well before the pandemic started.

This could well be a key inflexion point dependent on how businesses across the country choose to respond.

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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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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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Editor’s note: e27 aims to foster thought leadership by publishing contributions from the community. Become a thought leader in the community and share your opinions or ideas and earn a byline by submitting a post.

Join our e27 Telegram group, or like the e27 Facebook page

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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.

Join our e27 Telegram group, or like the e27 Facebook page

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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

 

 

 

 

 

 

 

 

 

 

 

The post Startup of the Month, October: Bangkok-based agritech startup Freshket appeared first on e27.