Warren Leow
We are kickstarting a new series for Southeast Asia’s startup founders to discuss their failures or unsuccessful projects and share their learnings and experiences with the community.
Warren Leow is a known face and one of the poster boys of Malaysia’s startup ecosystem. He is currently the group CEO of Inmagine Group. A London School of Economics graduate, he was the master brain behind the state-run Malaysian Global Innovation & Creativity Centre (MaGIC).
Like many other founders, Leow also has his share of failures.
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In August 2017, he started Amazing Fables, which published personalised content to inspire young kids via rich storytelling, vibrant visuals, positive values and exciting facts. However, the startup had to be shuttered for many reasons.
In this interview, he takes us through his entrepreneurial journey at Amazing Fables and the learnings he made:
Can you talk about the motivation behind Amazing Fables? Did you see a massive market for it when it started?
Amazing Fables was a custom children’s book company I started four years ago. Users could customise names and avatars and get a custom-printed book shipped worldwide. I had ten titles which I wrote myself, and I commissioned artwork and print-on-demand printers from four different countries covering different markets.
It was based on a similar company in the UK that scaled to millions of dollars in sales. The business model made sense on the surface: drop-shipping, zero inventory, scalable content, novelty factor, and word of mouth.
However, the unknown parameters were the actual logistics cost and the lack of repeatability of a ‘nice-to-have’ but ‘not-critical’ product.
Did you manage to sign up some early customers? What was their response to such a great idea?
Yes, they loved the books for the kids, as the customised books are great for storytelling and social bonding.
My best seller was a book for Muslim kids, and I had customers from Qatar, Saudi Arabia, Indonesia, and the UK! The most important thing was that they appreciated how our book taught positive values to kids and helped strengthen bonds between parents and kids via storytelling.
When did you get the first signs that Amazing Fables wouldn’t go a long way?
The first signs were the high acquisition cost from social media and Google Ads vs low lifetime value and lower-than-expected gross profit margins.
The company was breakeven on sales but needed a positive cashflow ROI on the first purchase to keep the engine chugging along for a bootstrapped company.
How many units did you manage to sell? And when did it occur to you that it was time to pull the curtain down on Amazing Fables?
Also Read: In Amazing Fables’s personalised storybook, your kid is the hero
We sold around 10,000 units.
When ROI was not 100 per cent at the first purchase, this didn’t allow cash to be reinvested on a compounding basis to grow it.
You were holding the role of the CEO of Inmagine while building Amazing Fables. Did it also divert your attention from Amazing Fables?
No, it was possible to run it automatically once things were on track. However, after I assumed a more prominent role in my day job, it was also a matter of choice on prioritisation, and I chose to focus on my role within Inmagine, where we operate 123RF, Pixlr, and Designs.ai.
How did your customers/potential react to your decision to bring the curtain down on AF?
Many would still reach out to me on WhatsApp and other media to order the books for their kids. Some still leave messages of thanks due to the wonderful artwork and the joy it brought to their kids.
What are your key learnings from this episode?
Four lessons from Amazing Fables and how I compared them to selling digital goods and software within Inmagine:
- Sell things with utility rather than nice-to-haves
- Sell things with repeat purchases and uses
- Sell things with high gross profit margins
- Sell things with low fulfilment cost
Given a chance, will you revive the business? Do you see a future for Amazing Fables?
Yes, I will revive it but only as a lifestyle business. However, it wasn’t the kind of large-scale autorunning business with strong passive cashflows I envisioned.
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