Engineers can imagine a new frontier and make it happen. Without them, low-noise earthquake-proof bullet trains that could hit 200 miles per hour will not be a reality since 1964.

We would still be vacuuming with clogged up vacuum bags and poor suction powers if James Dyson did not imagine bagless vacuum cleaners in 1991. Today, a SpaceX rocket launch can be 97 per cent cheaper than a Russian Soyuz ride in the ’60s, thanks to engineers who asked for rocket boosters that can be returned to Earth in a reusable condition.

It is evident that the power to realise the future lies in the hands of your team of engineers. It is thus imperative that leaders empower them to drive creative technology innovation in the business that they are operating.

Engineer, don’t code

At Funding Societies, we always encourage our engineers to ‘engineer, don’t code’. Engineers solve problems while coders implement solutions.

For technology innovation to happen, we need to involve engineers in the process of ideating solutions instead of simply asking them to follow through and execute. This means that we must consciously expose engineers to end-users and the market to deepen their understanding of the problem.

Problem-solving is not a mindset unique to engineers. It is also applicable to business persons in the firm. By having a solid understanding of the problem, we will be able to devise and continuously improve on strategic and targeted solutions that will propel the business forward.

Baby steps are the way forward

According to Boston Consulting Group, 70 per cent of large-scale digital initiatives fail primarily due to organisational inertia from deeply rooted behaviours. This is unsurprising as large-scale projects are daunting and filled with risks.

Taking such a large risk can do more harm than good, as employees may be reluctant to cancel and repeat failed attempts, translating to higher project abandonment rates. As much as leaders can push a new company culture of trying new ideas and being open to failure, employees will still likely be unsure of what to do and still be paralysed by the fear of failure. Trying to revamp the company culture overnight never works.

Instead, leaders can ease in with incremental risks. I’ve learnt from experience that the best foot forward is to take small steps. Your team will feel more comfortable with the manageable level of risk, speed, transparency, and uncertainty.

Also Read: Hiring a VP of Engineering if you’re an early stage startup: Dos and don’ts

Through risk management, you will be able to build a culture of innovation over time. If you fail, adjust and retry. This builds resilience.

People and culture are the two greatest assets in a firm. Leaders can guide their team towards small, measurable improvements to build both. This encourages a bias for action and reduces inertia. Baby steps are, ultimately, still progress.

At Funding Societies, we remind our engineers to set blocks of time for focused work. As leaders, we can facilitate this by limiting meetings and questioning the purpose and necessity of meetings.

The truth is that scheduling a bunch of meetings throughout the day can keep your team very aligned. Still, you are also disabling your engineers from contributing significantly and doing actual work. There is a fine balance between asynchronous and synchronous time to ensure that the team has pockets of time to do deep work.

(Many quick) baby steps are the (best) way forward

Scaling is scary and understandably so. According to Boston Consulting Group, complex platforms and ecosystems fail at a rate of 45 per cent during the scaling phase.

However, I find that when you take many baby steps quickly, each step is easier to take, and each fall is easier to recover from. The cumulative distance travelled will be further than if you took your own sweet time to take a wide stride every now and then. When you lose your footing, these vast strides will also give you a harder fall that is tougher to bounce back from.

The above illustrates the concept of rapid iteration, a term for problem-solving by quickly making a lot of changes. While you expose yourself to risks with each change, it also allows you to learn fast and multiply successes to make progress.

Success is a numbers game, celebrate failure

No firms want to fail, and you do not see Key Performance Indices (KPIs) promoting failure. However, this mindset should be changed.

Thomas J. Watson, the pioneer in the development of computing equipment for IBM, once said that “The way to succeed is to double your failure rate.” Success is a numbers game. The more times you try, the more times you succeed.

The longer you try, the less number of attempts you accumulate, and the lesser times you win. This is all simple mathematics.

To reduce the time for each try, the attempts themselves need to be on a small scale. As such, promoting small incremental changes works well in this model. Leaders can measure attempts, highlight learnings and correct them if they are on the wrong course.

Team members need to feel comfortable with failing regularly and quickly to achieve this. This means that leaders must shift away from blaming and celebrating failure and learning. This can sound contradictory, but it is necessary.

Funding Societies hold blameless post-mortem reviews after each failure incident to ensure that everybody learns from the mistakes made. During these reviews, we develop clear steps to improve processes and systems to prevent any recurrence of the incident.

At the end of the day, failure is never an individual’s fault and should be viewed as a learning opportunity. Leading companies like Google also make this approach of having blameless post-mortem reviews. Mphasis trainings batches of 10-20 people, both new and old employees, in “out-of-the-box” learning by encouraging them to ‘struggle’ with difficult problems and finding their solutions.

There is no such thing as a perfect system; every system can and will fail at some point. Engineers need to create, iterate, refine and sometimes even kill off software.

When errors happen, we need to retry or continue operating in a limited manner until the problem is resolved. This reduces risk through design and improves the system quickly, cost-effectively and dramatically over time.

However, how do we work with system failure? Leaders can set an appropriate error budget to quantify the amount of time your system can exhibit errors without any adverse business impact.

In Funding Societies, we make it a point to have a team of advisors continually decide and revise the error budget. Too small a budget and spend too much time on fault tolerance features instead of user features. Too big a budget, and you may lose users.

Engineers are a creative bunch who changed the world

Many people believe that the engineering mindset is purely rational and methodical. While it is logical and driven by reason, the mindset is creative.

Also Read: 5 productivity tools for busy startup founders to stay focused in 2022

Most engineers were drawn to the career due to a fascination with how things work. Since engineers can connect the dots and solve problems, they often think outside the box and visualise alternative solutions and scenarios.

Behind every innovative idea is an engineer. As society continues its rapid growth in technological advancements, engineers face problems they have never seen before. This is why training your team of engineers to think over and beyond is crucial.

3M, Google, and Facebook have all initiated programmes that allow employees to set aside time to work on creative side projects where they can fail safely. This led to post, Gmail, Google Maps, and AdSense, which continue to be staples in our day to day lives today.

At Funding Societies, we strive to create a space and time where engineers can be productive. After all, no creative work is done in a tight nine to five schedule.

On top of this, we also block time out for our engineers to do innovative work through hackathons and dedicated ‘spike’ tasks in sprints for research. This way, we encourage our engineers to build innovation skills as part of their job instead of adding on extra work.

In fact, these hackathons provide a fun platform for our engineers to build any project of their choice that is aligned with a broad theme such as ‘solving SME problems’. We support them throughout the ideation and iteration stages as well.

The hackathon outcomes are not limited to the honing of innovation and technical skill sets but also include feelings of solidarity through bonding amongst engineers across departments and numerous new and exciting ideas that add value to Funding Societies as a whole.

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Playdex, an online marketplace that allows gamers and guilds to rent gaming assets from NFT owners, has received US$2 million in seed funding.

Investors are PDAX, a leading cryptocurrency exchange in the Philippines, OrangeDAO, and Buko Ventures.

Tinder Co-Founder Justin Mateen, Magic Co-Founder Aaron Kemmer, CSVE Ventures Managing Partner Nina Teng, Yaw Yeo of XA Network, Lazada PH Chairman Ray Alimurung, and Wing Vasiksiri also participated.

The startup will use the capital to accelerate product development, scale its community, and integrate more games into the platform.

Also Read: NFTs: The good, the bad, and the future

Playdex was founded in the Philippines by Xendit senior software engineer and P2E guild founder Daniel Laborada; Coins.ph Founder and former CEO Ron Hose, Head of Operations and Marketing Thea Santos, and Engineering Lead Eduard Iskandarov; Bernadette Misa, a Yield Guild Games Manager and P2E guild founder; Luis Sia, Co-Founder of PayMongo; and Wesley Dela Cruz of the PayMongo Growth team.

Playdex is an easy-to-use platform for the skyrocketing blockchain gaming market. “On Playdex, metaverse gamers can play and earn immediately without buying expensive NFTs. Guilds (organised player groups) can now focus on training and scaling their communities, no longer burdened by the hefty financial costs of gaming assets. While NFT owners can earn from their assets passively,” said Co-Founder Hose.

“By creating a digital platform where NFT owners can upload their assets for guilds and gamers to rent, we unify previously fragmented and informal transactions and make them streamlined and seamless,” added CEO Laborada. “Playdex empowers more people to have easy access to NFT games and reap the economic benefits of blockchain gaming.”

Playdex enters a nascent industry rapidly gaining ground. Leaders in the segment include blockchain game developer Animoca, which has raised funds at a US$5 billion valuation. Epic Games, the creator of gaming’s cultural phenomenon Fortnite, with 250 million players, has raised US$2 billion.

Also Read: More than hype: 3 reasons why NFTs are here to stay

Additionally, with 80 per cent of the Philippines’s 110 million-strong population below 25-years old, and over one million daily active users playing blockchain games, the island country has become the greatest use case proving blockchain gaming’s ability to bring millions into crypto at a staggering speed and scale.

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Winter for tech startups is here. VCs are encouraging companies to extend their cash runway as much as possible.

Sequoia Capital also shared in a recent Founders’ All Hands that “Companies who move the quickest have the most runway and are most likely to avoid the death spiral.”

“Investors are underwriting your ability to produce free cash flow durably. To believe that, they need to see durable growth and improving profitability,” adds Sequoia Capital Partner Ravi Gupta in his recent note.

Many have turned to layoffs and hiring freezes. Over the past month, more than 80 tech firms have reported layoffs, according to the layoff tracker site Layoffs.fyi. This includes unicorn and publicly listed companies like Linkaja, Zenius, JD Indonesia, DataRobot, Netflix and Paypal.

Layoffs can damage employee morale and may even prompt high-performing employees to leave. What if we could pull other levers to drive down cost?

One of the key expenses leaders could look at is reducing cloud costs, especially since more than one in three organisations have cloud budget overruns of up to 40 per cent.

Thus, it is no surprise that cloud costs are one of the first things companies such as Coinbase and DoorDash are looking to cut. Technology leaders in Southeast Asia also share the same focus, with optimising cloud infrastructure cost is the top initiative by 75.23 per cent of our leaders here.

What are the challenges faced when controlling cloud costs?

Many businesses struggle to keep cloud costs under control, with 66 per cent of executives saying that cloud usage is “higher than initially planned this year”.

The first reason is due to the lack of visibility.

Also Read: 5 ways startups can effectively leverage cloud agreements to propel growth

In a recent 2022 Cloud Infrastructure report by Spot by NetApp, 70 per cent of technology leaders reported that they could not effectively monitor and optimise cloud costs.

This makes it difficult to control costs and predict sudden spikes. As usage patterns change, so do costs. Without a clear understanding of how usage patterns affect costs, predicting or controlling spending is difficult.

Thirdly, DevOps experts are a rare breed today, and many startups struggle to get the right talent on board. Several big tech firms have set up regional headquarters in Singapore and scaled up their tech hiring. Smaller tech firms have acutely felt the pinch in talent.

It’s estimated that by 2030, Asia Pacific will be short of the 47 million tech talents needed to meet growing demand. True enough, while 96 per cent of tech leaders say FinOps is important to cloud success, only 10 per cent were able to build a mature FinOps practice, according to Spot by NetApp’s 2022 Cloud Infrastructure Report.

With engineering talent being rare and also expensive, you want them to be building products that add value to the business and help you build a competitive edge instead of spending time managing complex IT infrastructure.

What can startups do to optimise their cloud costs?

The first step is to get visibility into your current consumption. It becomes difficult to make cost-related decisions when you can’t accurately view billing data or cloud spend data over time.

For a start, you need a proper dashboard. Tools that can automatically discover and map your infrastructure can help you get that full picture, not only showing information about instance counts and summary costs across all of your cloud accounts but also providing the ability to look at that information organised by tags, pods, clusters, services, and applications.

India’s leading BNPL startup, ZestMoney, reduced its EC2 spend by around 60-70 per cent with the help of Spot by NetApp.

Also Read: How cloud computing is helping startups navigate the new normal

Their first step was to dig into their cloud spend and get actionable insights with Spot by NetApp. They were able to automate the right-sizing of instances for cluster efficiency enabling significant cost savings.

“DevOps was being asked why infrastructure utilisation was at around 50 per cent for 100 per cent of the actual cloud spend. Cloud Analyzer allowed us to easily see our spending alongside clear, actionable insights to increase efficiency in our infrastructure and cut costs,” explained Ganesh Narasimhadevara, Director of DevSecOps and Platform Engineering.

With visibility, companies can then start to focus on optimisation. One of the common methods is to commit to reserved instances or Savings Plans for one year or three years in exchange for savings of as much as 75 per cent.

However, doing this manually often comes with many challenges.

Firstly, predicting and forecasting consumption is often difficult and not accurate. “The thing about cost reduction is you have to figure out how many resources you want to buy in advance, right?

“You have the concept of reserve instances, which made it very difficult. In our business, we go up and down, we scale up during sales periods, and our traffic is very unpredictable,” explains Ninjavan’s CTO Shaun Chong in a recent interview.

Another key challenge is the sheer amount of engineers’ effort and time to optimise cost. This tedious process requires them to identify the exact amount of CPU and memory needed for every container, pod, and deployment. Manual methods are also inefficient and error-prone, leading to troubleshooting that, in turn, affects application availability.

In a recent Forecasting & Scenario Planning Session for Sequoia portfolio companies’ founders, partners encouraged Founders to “build muscle” by doubling down on product innovation.

“The reason is, long term, the best product tends to win, and that is more true in an environment of scarcity than in an environment of abundance,” they explain.

With that in mind, you want your engineering team to focus on innovation that helps you build a competitive edge instead of spending time on tedious tasks.

Given these challenges, many technology leaders see the value of automating cloud optimisation. It is quickly becoming the tech industry’s new norm.

An automated cloud cost optimisation solution brings significant cost savings as it can fix many issues that contribute to high cloud costs. It instantly reacts to changes in applications’ demand and adjusts the resources to avoid cloud waste and over-provisioning.

At Spot by NetApp, we’ve helped many startups in Asia, including ZestMoney, Trax, PayMaya, and Practo, lower their cloud compute costs by 60-90 per cent.

One of them was Series A startup, SignalVine, which increased its EC2 savings by over 283 per cent. On top of that, they could eliminate internal efforts required to manage their Reserved Instances, freeing up valuable resources to help grow their business.

No one knows how long this downturn will last, but the common consensus is to extend your cash runway.

Also Read: How companies can nurture the next generation of tech talent today

“I have no idea if now will be the same, better, or worse than the 2000s crash. But bad times can last multiple years, and if you can make decisions now that extend your runway, that’s probably the right call,” shared VC and former Meta CTO Mike Schroepfer in a recent tweet.

Given these realities, startups want to avoid being asset-heavy, low-margin, and high burn. A key lever to pull which would make a huge impact on your balance sheet is to reduce cloud waste and optimise cloud cost.

When we act fast and plan well during downtimes, it can even help us acquire market share. As shared in Y Combinator’s letter, “Remember that many of your competitors will not plan well, maintain high burn, and only figure out they are screwed when they try to raise their next round. You can often pick up significant market share in an economic downturn by staying alive.”

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Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic.

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Super, a social commerce platform serving smaller towns and rural Indonesia, has closed a US$70 million oversubscribed Series C financing round led by global VC firm NEA.

Insignia Ventures Partners, SoftBank Ventures Asia, DST Global Partners, Amasia, B Capital, and TNB Aura participated. Bain Capital Chairman Stephen Pagliuca, Kleiner Perkins’s former General Partner Eric Feng’s Goldhouse, and Xendit CEO Moses Lo also joined the round.

This funding brings Super’s total capital raised to date to US$106 million. This includes an oversubscribed US$28 million Series B round led by SoftBank Ventures Asia in April 2021.

Also Read: YC-backed Super raises US$28M to grow its social commerce platform in Indonesia

“Indonesia’s tier-2, tier-3 cities, and rural area’s GDP per capita are 3-5 times lower than Jakarta, yet the cost of consumer goods is higher by 20-200 per cent. More than 30 per cent of Indonesia’s GDP came from East Java, Kalimantan, and East Indonesia,” said Co-Founder and CEO Steven Wongsoredjo. “Super is going after a huge untapped market; thus, we will deploy this investment to enable equitable access for people in Kalimantan, Bali, West Nusa Tenggara, East Nusa Tenggara, Maluku, and Papua over the next few years,

Wongsoredjo added that the startup would help more multinational and provincial FMCG suppliers tap into new markets in rural areas and empower more community leaders to optimise their income.

Founded in 2018, Super leverages a hyperlocal logistics platform to deliver consumer goods to agents within 24 hours of the order time. The company said it has partnered with thousands of community agents, such as individuals and warungs, to aggregate and distribute millions of US dollars’ worth of goods to their communities each month.

Super currently operates across 30 cities in East Java and South Sulawesi, mainly targeting the area with a GDP per capita (US$5,000 or lower).

The social commerce venture has launched two private-label brands. A portion of the capital will be used to develop other FMCG private-label brands in the next several years. In addition, it plans to launch cosmetics products, as the desire for this segment is rising across Indonesia.

Also Read: Leveraging social e-commerce to maximise your brand in China

As Super grows its products, services, and experiences continuously, it will launch a feature for community agents to track end-consumer transactions to help community agents offer better-tailored experiences for the end customers.

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Fostering innovation and engaging in strategic collaboration are both keys to sustaining the competitive advantage of businesses. In a conversation with e27, Morikawa Hakaru, Vice President and Head of Industry and Customer Advisory at SAP shares key insights on SAP’s strategy in scaling win-win partnerships with innovation partners as it has done through the years.

In this conversation, Morikawa-san shared SAP’s priorities in Asia, particularly on expanding its innovation footprint. SAP Labs Network is a network of SAP’s core research and development entities focused on developing and constantly improving key SAP solutions. Labs in Japan and Singapore have opened in 2020 and 2022 respectively, focusing on research and product development initiatives in digital supply chain and sustainability. “Japan is a country of manufacturing. It makes sense to focus our research functionality in Tokyo in this area to get the best practices in the country to incorporate into the supply chain of our products,” Morikawa explained.

Also read: How to build a business with scalability in Asia’s vibrant economy?

“The Singapore lab’s focus is on sustainability. Sustainability is one of the biggest topics globally. Southeast Asia will be one of the hardest-hit regions if we don’t handle this challenge from a global perspective. [If managed well], Southeast Asia can be the global frontrunner,” he added.

Fostering product innovation to build customer value

Connecting businesses to enable strategic collaborations as well as to respond to urgent needs by the times is a constant priority for SAP. The organisation has the Ariba network where many use cases of businesses who have partnered amid restrictions during COVID-19 were overcome. As an online business network for buyers and suppliers, it has allowed for a global discovery capability for buyers and sellers.

Businesses from many countries utilised this given the situation over the past 2 years. In the wake of the pandemic surges, for example, temporary hospitals in Manhattan were able to speedily procure beds and other supplies through Ariba. With job displacements involved in the pandemic, as well as job demand surges in certain industry verticals like healthcare, SAP Fieldglass — a contingent workforce management software solution — has facilitated solving HR-related shortages in the healthcare field and served as a matching platform for those workers, connecting those who lost their jobs and matching them to those who have people shortages.

Also read: The future of infrastructure is in tech innovation

This became a very relevant solution for many businesses in Japan. In the endeavour to continuously improve health delivery processes, vaccine distribution, registration, helpdesk support, and the like, SAP Qualtrics has enabled various ministries of health globally to optimise experience management for its constituents by providing deep insights through advanced artificial intelligence and machine learning, thus enabling organisations to help close experience gaps and drive improved user experiences. This solution has also been effectively used by companies to learn how to support their employees better with the remote work setup. 

Other strategic collaborations that SAP has engaged startups with are those with Green Token, a tracking solution using blockchain and mass balance accounting principles, enabling customers to know that the raw materials in business products are sustainably sourced, child labour free and ethically traded. The GreenToken by SAP solution was sourced from the SAP One Billion Lives initiative, the company’s flagship social intrapreneurship programme that aims to improve 1 billion lives through a portfolio of sustainable, shared-value impact ventures. Another startup that was acquired by SAP in 2021 is Signavio, a solutions platform designed to help organisations transform their business processes at scale.

Building strategic collaborations to strengthen innovation

SAP boasts a track record of nurturing innovations over the decades. As a transactions management company, many large companies have built their functionalities over SAP ERP as the core transactions management platform.

With its APIs, innovative businesses can access opportunities and integrate with the business technology platform. As many large businesses already run on SAP, these innovative businesses have potential go-to-market access through this common ground. “SAP has the strongest sales force, and can help bring these businesses to potential customers. [We also] showcase innovations through our experience centres in Singapore, Tokyo, and India. [They can be linked to a] global network, and can open up [more opportunities for ] innovation vendors across regions, even in Germany or New York,” Morikawa-san elaborated.

Also read: oVice, a virtual office platform, uses innovative technology to redefine remote work

He added, “SAP has a stronghold in certain areas, especially in the field of solutions for white-collar workers in the office. [We look for innovation partners to enrich] out-of-office solutions for our clients, such as IoT solutions [for example] in retail shops and manufacturing premises. We are open to innovations via partnerships, enabling] big plays in areas that are not SAP’s area. Working with innovative startups delivers solutions faster, benefiting SAP clients and SAP itself. Furthermore, SAP can help [through its] expertise in understanding the enterprise market, and can provide assistance to tailor-fit solutions, and facilitate access to business decision-makers.”

“There is a usual notion that ERP is completed, not innovating and that it’s a closed platform. [We are] open to collaboration. As a platform where data originated, there is a rich insight to realise in building business processes, which is important whether you are running a large or small business. In the age of innovation, working with SAP makes a lot of sense.”

Join SAP’s roundtable discussions

SAP in partnership with e27 is organising an invitation-only virtual roundtable session to gain perspectives from general partners and limited partners of leading investment firms in Southeast Asia. In this session, the stakeholders will discuss the challenges and opportunities for VC firms, frontier market plays and strategies, as well as deep dives into the potential of the spotlight countries in the region. They will also discuss their methods in supporting the growth of companies in their investment portfolio and key opportunities in their strategic plans for the future.

This 14 July, SAP and e27 will be hosting The Rise of Digital: Accelerating Growth and Customer Obsession, a webinar that will help startups gain insights about managing their digital offerings to be more effective and customer-centric. To learn more about this programme, you can secure tickets from our official page.

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This article is produced by the e27 team, sponsored by SAP

We can share your story at e27, too. Engage the Southeast Asian tech ecosystem by bringing your story to the world. Visit us at e27.co/advertise to get started.

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