Success is always desired and is equally hard-earned. Global markets have already matured enough, and almost every economy is running on the principles of free-market and unhindered competition. Gone are the days when only domestic companies posed a challenge to already-established firms. Today, countries have thrown open their borders and reduced tariffs to such levels that foreign companies are finding it increasingly rewarding to set up shops elsewhere. Take China, for example – the country’s producers have disrupted the global supply chains by offering cheap alternatives, from toys to cellphones. They reinforce the notion that new business has to have a differential to thrive, or even survive, in the market. At such competitive times, we must discuss how some startups could safely sail through rough waters, defying odds ranging from lack of seed capital and skilled human resource, and make a name in the market.
The city-state of Singapore is at the heart of Southeast Asia’s startup community. Thanks to a liberal and smart government that has made enough provisions for funding small startups at crucial junctures and provided real tax incentives. Still, not all startups have thrived, and the reasons for failure are anything from lack of differentiation in the product offered to scaling up at a wrong time. Here, let us talk about some of the success stories in the city-state’s startup community and take some leaves out of their books to keep failure at bay. True, not every business faces the same set of challenges and opportunities. Still, a general overview can provide us with an immense understanding of how to lead a startup from inception to triumph.
Below list are few names that have either already become a force to reckon with or are treading the right path to become one.
A home rental portal, 99 Pte Ltd, was founded in 2014 and has grown into one of the most go-to places by home seekers. Based in Singapore, the company offers its services entirely over the internet and helps connect property owners with space seekers and also people who are ready to share the rented apartment as roommates. 99.co has integrated map services on its platform that makes it easier and quicker for the user to get desired search results.
The startup has raised close to USD 30 million in funding with seed rounds 1 and 2 coming as soon as in 2014 and 2015, respectively. In October 2019, 99.co received a Series C funding from REA Group, which is a leading online real estate advertising firm based in Australia. Having been in operation for more than five years and being continually supported by investors, 99.co did not achieve it all in a single day. What goes behind the success is not just smart algorithms that do much of the tasks for users but also effectively making use of such third-party platforms like Google Analytics and Vimeo.
The company that counts names like Sequoia Capital and Mindworks (Hong Kong) among its backers has also made timely acquisition moves, enabling it to ward off competition and bring synergy in operations. iProperty Singapore and UrbanIndo (an Indonesian real estate portal) are two such names that were acquired by 99.co in a strategic move in 2019 and 2018, respectively.
Lessons: Keeping the customer interest first will lead to referral business. Secondly, the timely acquisition of smaller rivals and related business entity is always rewarding.
A restaurant table booking platform, Chope, enables diners to make fast and real-time reservations in any of the partner restaurants. Based in Singapore, Chope was founded in the year 2011 and had ever since been adding new users to its website and mobile application. Chope offers its users a comprehensive view of all partner restaurants with the help of menus, prices, in-house editorials, and reviews. The company has expanded its area of operation beyond the borders of Singapore by helping users book restaurants in Hong Kong, Beijing, Shanghai, Bangkok, and other major cities in Southeast Asia.
With a total financial backing of more than USD 20 million, Chope counts Singapore Press Holdings and Openspace Ventures among its investors. As a strategic business move in 2016, Chope acquired an Indonesian-based restaurant reservation portal, MakanLuar. Although the company was not an instant success, the rise in the number of smartphone users and speed of internet services has turned Chope into a dominant market force. By offering diners a smooth and free reservation platform, Chope earns its revenues by charging restaurants.
Lessons: This must serve as guidance to aspirants who may get trapped in unproven futuristic products, leaving the already proven services, for example, food and travel, untapped. Technology has only recently penetrated the traditional businesses and hence, much need to explore before jumping to newer fields.
A FinTech company, founded by a former executive of India’s leading private bank, Yes Bank, Active.ai, helps customers and financial institutions and insurance companies to connect. The startup is headquartered in Singapore and received its Series A funding in November 2017 and then again in June 2019. By raising a total funding of more than USD 14 million, Active.ai is leapfrogging towards becoming a preferred communication platform between banks and their customers.
What went well for the company was a due recognition of the utility of artificial intelligence services. By using natural language processing, coupled with machine intelligence and other smart features, Active.ai enables institutions to connect with customers over voice and messaging services. Active.ai can be a severe disruptor in the market since chatbots are increasingly being adopted by many large companies to offer easy and fast customer service experience. By minimizing the human effort, Active.ai is enabling companies to assign employees better tasks than to handle repetitive customer queries.
By 2035, AI could create up to US$215 billion (S$293 billion) in gross value added across 11 key industries in Singapore. This is almost double the national economic growth rate, and will also boost labour productivity by more than 40 per cent.
– Mr Howie Lau, chief industry development officer of the Infocomm Media Development Authority’s (IMDA)
Lessons: Since the startup space is becoming overcrowded every passing day, new-age entrepreneurs have to think beyond e-commerce and other such services that are in excess today. Active.ai was founded to be an enabler in the financial technology space, and optimum use of artificial intelligence enabled the startup to shine within the crowd. Founder’s years of experience in the related field tells how critical it is to have requisite know-how of what you are planning to do.
ShopBack is a provider of discount coupons to online shoppers. It doesn’t, however, end here. The platform pays shoppers (cashback program) when they make purchases through ShopBack, Singapore’s largest e-commerce site. The idea sounds promising, isn’t it? And it has indeed paid well for the co-founders. Currently, they have more than eight million users and over 2000 merchant partners. Today, ShopBack has partnered with some of the biggest names in the community, including Amazon, Uber, and Alibaba. The services cut across various sectors, for example, Booking.com, Grab, Lazada, Shopee, Qoo10, and many more, can also avail of the cashback rewards from ShopBack.
The company has expanded much into Southeast Asia by adding users from Indonesia, Australia, Thailand, and other countries. Having raised more than USD 70 million from investors since its founding in 2014, ShopBack counts Softbank Ventures Asia and EDB Investments Pte. Ltd. among its backers. The success story of the firm also includes a timely acquisition of Seedly, a finance management platform in May 2018.
Tactical moves by ShopBack include a yearly shopping festival, ShopBack ShopFest, which helps bring all prominent shopping events at a single platform, thereby giving users a wider range of products to choose from. Tens of millions of purchases were made in 2018 through the shopping festival, and prizes worth hundreds of thousands of dollars were given to participating customers. All this helped elevate the profiles of co-founders, with inclusion of 2 of them in the coveted Forbes 30 under 30 Asia list of 2018.
Lessons: Preying on the greed of customers isn’t a bad business strategy provided one does it mindfully, creating win-win situation for both users and providers of such a service. Secondly, impactful marketing is the key to being visible in the already much-crowded space.
It’s time to bring in robots. A product design company, Zimplistic, has come up with an intelligent solution for homemakers and restaurants. The company was founded in Singapore by an Indian couple, and its landmark innovation, Rotimatic, is a robot that can turn flour into flatbreads. With the perfect integration of robotics and the Internet of Things, Rotimatic is a revolutionary product.
Zimplistic raised close to USD 50 million in funding from various backers, and the product Rotimatic has been launched in multiple countries, including the United Kingdom, Canada, and the Middle East. Indeed, the product is futuristic and brings the conventional manufacturing element to the startup.
Zimplistic boasts of as many as ten registered patents and three registered trademarks for their innovation and research and development. But the question is whether this product model is a sustainable business, where most of the Indian homemakers are already good at traditionally making roti. Also, there are many alternative readymade frozen roti available in the market at a much lower price. The startup has drawn enough criticism for being a ‘cash-burner.’
This carries a great risk because any bigger market player can offer a product with similar or better functionalities at more attractive price points, and the company will be severely affected.
-As per Prof Lawrence Loh of NUS
Lesson: Continuous product innovation and competitive pricing will keep the customer interested in the product and help the company garner a more significant market share and have a better competitive edge.
The startups listed above are not the only ones to have left an imprint on the Singaporean startup landscape. Notably, all those mentioned above are catering to a different set of users, and hence, the challenges faced by them cannot be identical. Nor can the strategy adopted by these to tide over impediments can be similar. But what comes out of this discussion is that one must strive to enter a business that can ease the problems faced by customers. All the startups mentioned above do this in some manner or another. From helping connect property owners with probable tenants and restaurants with diners to easing the pain in preparing food, all have targeted the right area.
Although there’s a lot to learn from the success stories within the Singaporean startup community, new-age entrepreneurs are to know that the ultimate aim of any business venture is to make a profit. The example of Rotimatic as a loss-maker and cash-burner is not an isolated case with many startups desperately looking for ways to turn their loss-making ventures into a valuable asset. Constant pressure from investors to narrow losses is disquieting the executives. Secondly, the temptation to get investors on board may sometime leave the founder/s with lesser value than what they could have fetched on later stages should their venture become a success in the long-run. Thirdly, not all acquisitions can be a game-changer, take, for example, India’s Flipkart’s stake sale to Walmart for USD 16 billion- many analysts are terming the deal as overly optimistic and severely risk-prone.
The micro aspects of these startups, for example, the quality of management and human resources, are also a crucial part in their success stories. A perfect leader as an entrepreneur, good business idea, sound business strategies, and flexibility to adjust to the changing times can increase the probability of success for any startup.