When every year comes to an end I have to sit down and think about how the year has gone so far.
What have I gained and learned? What can I take with me into the next year?
After speaking with entrepreneurs and compiling stories on their business trips, I can say I understood a thing or two.
2020 opened my eyes, from companies that have grown successfully to companies that have said it's finished. It was mostly a year of survival, not a year of great gains.
With this I have summarized my personal insights from writing about startups and companies.
Digitization produces winners and losers
Photo credit: The Spoon
The rise of smart apps like GTRIIP or Habitap could potentially eliminate the need for front desk or guest service staff.
GTRIIP allows you to check into hotels with a selfie, while Habitap is a smart living app that allows you to perform various functions, e.g. B. booking facilities or visitor management.
Using artificial intelligence or robots has always been one thing, but with Covid-19 it was more important than before to minimize human contact.
We saw a surge in Kopi robots with Crown Coffee and recently with the RATIO robot café and lounge. We have also seen the increasing use of room service robots in hotels like YOTEL as they embrace overnight accommodation.
Would baristas and service staff no longer be in demand?
With these successful implementations, manual tasks are increasingly being overtaken by machines (winners) and more people could lose their jobs (losers).
Making losses is normal
Photo credit: Carousell / Sea Limited
Carousell online marketplace, celebrating its eighth year in 2020, recently became Singapore's newest unicorn following its merger with Telenor's 701Search.
The deal raised Carousell's valuation to $ 850 million (S $ 1.16 billion), but it will still be unprofitable.
11-year-old Sea Group boasted of its status as "the only publicly traded Southeast Asian Internet company in the US," with a net loss of over $ 944 million in 2018.
Although the Singapore-based startup had revenue of over $ 1.2 billion in Q2 2020, the company hasn't reported a profitable quarter since it went public in 2017 when it grossed $ 884 million.
The only segment that made a profit so far was the Garena gaming business.
Grab, on the other hand, is a company that actually talks about getting its finances out of the red.
Co-founder and CEO Anthony Tan told CNBC that the eight-year-old company is currently profitable in some markets and plans to do so in more markets in 2020.
These examples show that startups have a tendency to pump in money to grow the business in the early stages.
They are investing back in their business by hiring new employees or expanding their product or service offerings.
It's okay to fail
Photo credit: Medium / RB Capital
Entrepreneurs fail all the time – just ask one and they will tell you.
For one thing, the Chinese tech giant and the world's most valuable startup, Bytedance, wasn't an overnight success.
There have been many tries and mistakes, losses and victories for its founder – Zhang Yiming – to get to where he is today.
When he founded Bytedance in his four-bedroom apartment in Beijing in 2012, it was his fifth attempt at entrepreneurship.
Meanwhile, Singapore's real estate mogul Kishin RK has a proven track record, but there was one project he looked back on with regret.
At the age of 29, he made a $ 1 billion (S $ 1.4 billion) offer to 42 Marriott hotels (totaling over 8,000 rooms) in the UK, which was put up for sale by the Royal Bank of Scotland.
The offer secured him a place among the three best bidders. However, Kishin withdrew the offer and lost to the Abu Dhabi Investment Authority.
Had RB Capital been successful with the acquisition, the UK hotels could have been combined with the group's hotels in Singapore and he would have been one of the largest hotel owners here.
Still, he calls it his "most successful failure".
These examples show us that successful entrepreneurs learn from their mistakes and avoid similar mistakes.
And if you're in the startup space, you've most likely heard "fail quick" to learn and make quick changes to find a product / market fit.
What you need to know about scaling and diversifying
Photo credit: Foodservice Equipment Resorts
Jimmy Soh, founder of F&B group Tenderfresh, said that consistency in food quality is a challenge. For this reason, in 2018 he invested in a 25,000 square meter central kitchen system with automation machines.
He also knew he couldn't just sell fried chicken, so he started a variety of food concepts from the Tenderbest Makcik Tuckshop, which sold nostalgic tuckshop dishes, to the Hawker restaurant, Hawkerman.
For the boutique PC brand Aftershock they decided to diversify and in 2018 they founded several new companies such as PRISM + and Omnidesk to sell monitors and high tables.
This shows us that as the F&B business scales, it needs to control food quality and decrease reliance on labor.
Additionally, we can't rely on a single type of product to keep business going and we need to diversify to have multiple sources of income.
Identify a loophole and fix it
Photo credit: The Investor / Grain
The founders of igloohome are big fans of Airbnb but found it problematic and frustrating when they had to hand over keys to their guests, especially when they checked in at odd times.
Even when they were Airbnb guests, they found it a problem getting the keys from the host. So they came up with the idea of developing their own intelligent locks.
Before the founders opened the online restaurant Grain, they asked the same question every day: "What are we eating today?"
They felt that eating every day should be as simple as a few taps on your phone – not a brain-cracking math question.
That's why they created Grain, a technology-enabled “full-stack” model that works with its own team of chefs and delivery fleets to offer health-conscious, flavor-conscious, everyday meals.
Successful entrepreneurs identify a common pain point or problem and try to resolve it.
When they hit a pain point, there's a good chance there are similar consumers who have the same problem – which opens a market for it.
Be prepared for bootstrap
Photo credit: Immunoscape and Foreword Coffee Roaster
The founders of Foreword Coffee Roasters made their way through the early stages when they opened their kiosk at the National University of Singapore.
Their first source of external funding didn't come until they received the Singapore Center for Social Enterprise (raiSE) Youth Venture for Good Grant.
After receiving more grants from other organizations, they were able to open full-fledged outlets.
After its conception in 2017, the team of the biotech company ImmunoScape booted itself in the first 18 months.
They slept in inexpensive hotels and homes every time they were out on business.
They tracked project payments daily and eventually took out a loan for a personal guarantee when their combined contribution was almost exhausted while actively searching for funds to top up our account.
They had to gather resources from all of the co-founders to fund the startup round when they started the company.
In the early stages of business, you can stick to your day job and build your startup on weekday evenings and weekends.
When you're self-funding a startup, you wear multiple hats from HR to marketing, product development to finance and business development.
If you are planning on bootstrapping, make sure you have a plan so that you can manage your money wisely.
Lack of funding is normal
Photo credit: Getty / Drinkaid
As the company name suggests, Bytedance products relate to data. Founder Zhang Yiming's vision was to share relevant content with users using recommendations generated by artificial intelligence.
However, that vision was not shared by most venture capitalists, and he was unable to secure funding until Susquehanna International Group agreed to invest in the startup – a $ 5 million Series A funding.
Drinkaid's founder Ryan Foo said they faced a lack of funds and skills, which he sees as common problems startup founders encounter.
Instead of letting that stop them, they saw it as an opportunity to acquire the skills needed to develop and grow the business all on their own.
They show that it takes work in the beginning to convince someone to invest in you. However, that doesn't mean you should give up.
Be patient. At some point someone will fund your business idea if it's a good one.
You are expected to learn everything and be confused
Shopavision App / Photo credits: Portfolio Mag.
As a new technology product / platform, Singapore's first live streaming app Shopavision encountered difficulties while researching and developing its system.
There are hardly any plugins or examples on the market. Payment integration with partners has not gone smoothly as livestream trading is an unprecedented new model in Singapore.
For the Drinkaid founders, none of them knew anything about product or website design, so they spent about three months learning the basics and another month or two putting what they'd learned into practice.
By the time they started the company, they were able to create a website from scratch and create product models – just by watching free materials on YouTube.
In the early stages, you would try to cut expenses like hiring professionals.
Most entrepreneurs would wear multiple hats from HR to marketing to accounting as often as possible. This is because hiring employees or buying software is more expensive.
Do you have what it takes to run your own business?
Most business founders and founders will say that the business journey never goes smoothly.
But do you ever regret your efforts? Probably not.
When you start your own business, you have the freedom and control over the course of your life and can manage it in the way you want, rather than working for the whims of others.
Owning your own business means being your own boss, deciding when to work, how to work, and what to work on.
However, you also need to take personal responsibility for mistakes.
Getting a job and getting a salary is easier, but these company founders will likely tell you that they don't regret starting out on their own because starting your own business is always more rewarding.
Selected image source: HardwareZone MY / AFP / Sea Limited / Grab / Singapore Franchise Asia / Sg Magazine