Blurb from the author: We recently received a message that Offpeak has stopped operating. That's why we turned to co-founder Lau to find out what went wrong. He was brave enough to explain it in detail (and we are grateful for that). Hopefully the lessons learned are the ones that startups in similar positions could benefit from.
Offpeak was a Malaysian online platform and app that started in 2014 that allows you to make restaurant bookings and secure discounts.
In our last real interview with them in 2016, they had expanded to three other countries: Singapore, Thailand and Vietnam.
They had more than 2,600 partner restaurants in 4 countries and had previously received funding from Cradle Fund, Gobi Partners and YJ Capital (Yahoo Japan's VC arm).
But now they're closed
We have discontinued Offpeak's activities in all four countries and contacted the co-founder
Lau for an insight into the reasons for this.
Success determined early
What Offpeak was aiming for
The task was to build a product whose value proposition satisfied both the offer and the provider
like restaurants) and demand (guests) of the market.
“We felt that we could
Create a platform that restaurants can use to make the dynamic pricing model easier
In contrast to the traditional 1 menu and 1 price at any time of the day we
Felt was out of date because the demand curve differs drastically from hour to hour
an hour every day, ”Lau said to Vulcan Post.
In short, they wanted
to help a generally fragmented and imperfect age-old F&B industry
Helping consumers find the best food and restaurants to have an affordable one
The initial force
The acceptance on both the supply and the demand side showed a
Lau recalled that product market adjustment (PMF) was somewhat strong.
Beyond that they were
can demonstrate high gross profit margins at an early stage of business
to a small sample size. However, it was ultimately not enough to secure
Subsequent financing to further expand the business.
Then the financing came
Winter ”, a point at which startups (especially early phases) were found
It is almost impossible to get funding.
Offpeak was already having problems
between balancing high growth (and ironing out operational inefficiencies)
later) or reaching operational efficiency (with exponential loss)
At that point she
then he had no choice but to pursue the latter, although he initially sought the former.
"Unfortunately it was
unsuccessful because we weren't big enough to use the network
Still affect the economies of scale to demonstrate operational scalability ”.
When Offpeak was silent
active, they had semi-direct competitors that they were known as fave and
But that was not the case
worrying because Lau and the team felt that they were all trying to educate the
Market. In this sense, they were even an advantage.
However, what changed the landscape before Offpeak was finished was the rise of digital payment platforms like GrabPay and WeChat Pay, which fueled their growth by subsidizing promotions that restaurants themselves previously promoted to Offpeak.
"While we always wanted to
Get started with digital payments in partnership with these payments
We weren't ready for platforms because of the previous side business when they arrived
Adjustment (better operational efficiency), ”complained Lau.
This was the point at which Offpeak knew that their business could no longer be maintained. Despite the catalyst of positive industrial changes in the form of digital payment platforms, the team was unable to benefit from it both financially and in terms of size.
Make it worse
Offpeak tried to collect Series B funds when the "funding winter" arrived and
VCs became more risk averse, although they were impressed by their high growth
Rate, the VCs wanted them to show higher sales to accompany theirs
"In our early stage,
we could only demonstrate one or the other, but not both at the same time
Time. I personally felt that the unfortunate timing of the financing winter has proven to be
be our downfall, ”said Lau.
When I asked if she
had ever thought about a pivot point before it was completely shut down, he replied
There was no obvious "better" business model to focus on, and it wasn't
the way of gambling to change, to change, hoping to strike
He felt that their PMF
was pretty solid and they just needed more scaling to finally demonstrate
There is always a snack
With so many
Restaurant partners in some countries, I wondered what to take
consider before shutting down.
“Fortunately, we were
Low CapEx model and we have kept no money from our partners. Diners paid for it
Restaurants directly and we just made the transactions easier, ”said Lau.
Dictionary time: Capital expenditures (CapEx) are funds that are used by a company to acquire, improve and maintain physical assets such as real estate, buildings, industrial plants, technologies or equipment. It is any type of expense that a company capitalizes or shows as an investment in its balance sheet and not as an expense in its income statement.
"When we closed, we did
received a lot of messages expressing sympathy, but we have not closed it
Companies that leave a hole in accounts payable. "
Think about what
You could have done better, Lau said: “Either grow faster or wind up more
Capital or pursuit of operational profitability from the start. Mix them
either, or changing the strategies before we were ready, was too challenging
On a personal level,
He said that he had learned a lot about shareholder management and building
MVPs who recognize PMF at a deeper level, determine and perform operations
Scalability and better use of good timing (in terms of how they
increased their series B too late).
“As for the F&B
Business, the landscape is changing drastically, in terms of digital payments, procurement
Platforms etc. ”Lau watched.
So here was his
Farewell tips: “I believe that restaurants should concentrate on their core business (provision
good food and excellent service) and partnering with digital payments. "
Bottom line: Laus Sharing was humble, and for someone like me who doesn't run a startup and never intends to, it assured me that I'm making the right choice. I'm just not able to handle all of the uncertainties in the business, but Lau has already worked with the hospitality startup LiveIn. We wish him and the rest of the off-peak team all the best for their new endeavors!
- Here you can read what we wrote earlier about Offpeak.
Selected image source: Offpeak