As entrepreneurs, all of us are deeply involved in the sales process. Many successful entrepreneurs believe that selling is the key skill to master. Whether it is convincing investors, or clients or internal staff, we are always selling the dream and the potential of our business. So what is required to sell well in a B2B environment? I have it distilled my 13 years experience to a few key points below :
1) Belief in your company and goal - I have an unshakable conviction that what my company offers works and that clients should buy it. This allows me to be authentic when pitching. Whether it is to investors, staff, cofounders or clients. And people can smell authenticity and confidence from a mile away. It helps tremendously with credibility building.
2) Belief in value i personally offer. I believe i add value to the people i interact with. This may sound very egoistical, but what it means is that i genuinely feel that their time is well spent on interacting with me. For a client, it is because i know my product and my industry well enough to add value to their business. For staff, it is because i can help them do their job better. And i realize that because of this belief, i am genuine when dealing with people and i do not come across as just trying to sell them something.
Another way to see this is that i try to always make win win partnerships. Since i add value, then it makes sense that everyone should spend time and work with me since it is to their benefit too.
3) Persistence. Ask any sales guy and they will tell you this matters a whole lot. Sometimes, it just takes that 1 more knock or call to get a client interested in a meeting. When do i give up? Only when there is a lower lying fruit to go after. If not, i dont give up. And even then, I will pass the lead on to someone else or work on it again some time later. Of course, i don't mean to blindly keep bugging people when i say this. Use your common sense.
4) Being intellectual. Who says sales jobs are for non-academically inclined people? We need to apply intellectual rigor to the sales process. Understand what the client needs are, what their industry is about, current issues and approach from that angle. This is especially important the higher up the corporate ladder we sell.
Better yet, don't just apply needs based consultative selling. Apply genuine insights from what we learned and use it to add value to the client. A good example is the difference between a super real estate agent and an average one. The former asks all the right profiling questions, knows all about the condo/market in question and applies it to find suitable buyers for the client. Even better, the former is able to recommend correct pricing and timing of sale due to insight on the market. We always hear about owners willing to pay more to get the right agent representing them. Why do you think this is so?
5) Selling as a Company. Sales is not just a sales person's job. It is the entire company's job. A client engages with not just our sales staff but also our finance, operations and customer service people. Sometimes, they interact with our marketing staff and even our tech people. So we need to make sure that all our staff have the right client centric mentally when providing service. And we can go further than that. Why not get non-sales staff to attend sales meetings with clients. Not only do they give an added dimension to the company, they also pique the clients interest and help us walk the talk that our company is client centric.
Many companies are already doing this. It is common for magazine publishers to have their editorial staff join in sales meetings to better understand advertiser need. Or for tech consultants to join sales on pre-sales client meetings to answer more technical questions and to understand what clients are looking for.
The spinoff benefits are many. Better sales/ops relationships, quicker product improvements, better client understanding, multiple touchpoints/relationships with clients etc.
Notice i did not talk about negotiation skills. I believe if we apply the above points well, clients will pay us what we want. Feel free to share your experiences in selling!
Thoughts on startup scene in South East Asia. While effort is made to be accurate in terms of numbers, i may sometimes get the data wrong. My purpose is to share what i know and what i have learned over the past 23 years. Feel free to leave comments or to email me. And if you are keen to learn more about Angel Investing pls visit https://www.angelcentral.co/investors/membership
Sunday, September 29, 2013
Sunday, September 15, 2013
Contribution to Singapore Conversation
I wrote this for Straits Times back in late 2012. Editor told me to that it covers too many topics and does not dig deep enough into any specific topic. She suggested that i instead write about my entrepreneurship journey. That is how this article came about!
But since this is my blog, i reproduce the old article here :)
My Vision for Singapore
Singapore in 2030 is an economically thriving, well educated, inclusive and compassionate
nation. We are a top tier global city well known for our strengths in areas like wealth
management & banking, system of governance, high density population living, transportation
hub, tourism, high technology industries etc.
Our population is confident with our diversity. We are multi-cultural, multi-religious and multiracial.
We live together in harmony and respect. We have a common set of values that drives
and unites us and this includes hard work and meritocracy tempered with egalitarian ideals,
tolerance of diversity underpinned by broad based education and a rootedness to our nation
and community built on a sense of common destiny and history.
While the vision is easy to articulate it is the details that matter. Below some specific areas
which I would like to see happen.
Egalitarian Society
We recognize that not all people are created equal, nor are they given equal opportunity due to
different genetic and environmental factors. We need to implement policies that ensure that
our less well to do citizens do not become a permanent underclass. We should be willing to
explore more subsidies for lower income healthcare, housing and education. We should revisit
our policy on the minimum wage, capital gain taxes and estate duties on the top 1%
periodically. We should also be willing to subsidize healthcare and education for the underclass.
The trick is in the balance. I do not advocate a welfare state or taxation system which
discourages enterprise and which erodes human drive. But we need to set a tracked metric to
monitor mobility between the income classes and to sometimes send a signal that Singapore is
a nation and not a corporation. For example, a modest 5-10% estate tax on estates values
above US$10M would give a good signal that we care about redistributing wealth as a principle
but it will not hurt the bulk of the people nor will it result in massive evasion since the rate is
low.
On the topic of transfers, I feel it is better to raise wages at the bottom end than to just give
more transfers which is akin to welfarism.
Politics
Singapore is a representative democracy. We have a dominant one party government and it has
served us well with some missteps along the way. I would want to see more communication
and engagement between the existing government, civil service and the people when it comes
to strategic issues and occasionally even for day to day implementations that affect many.
Some examples include foreign population numbers, housing policy etc.
I would love to see more diverse, talented and ethical individuals answer the call of politics. For
starters, the dominant party should make a serious attempt to woo talent from outside the
military, grassroots and civil service spheres. It is not about money, it is about having a vision
that inspires top talent. This will help prevent allegations of groupthink and perhaps even end
up revitalizing and changing the image of the ruling party. We should seriously consider why
our current political service is unable to match or beat the allure of a career with Google (Do No
Evil) when the results of political service has as much if not more impact on people than Google
does.
Population
For Singapore to be a thriving city, we need a strong domestic economy. While current
sentiment is for population to be capped, we should be broad-minded enough to periodically
review this number and make adjustments as infrastructure and new technologies become
available. I see a large population possible in Singapore if we are creative in our land-use and if
we are able to build a harmonious consensus for high density living. The ability to adapt and
thrive in a high density environment can even be exported worldwide.
We have an ageing population. Let us make sure our healthcare, transport and housing sectors
are upgraded to adjust to our increasing number of older citizens. But let us not also underestimate
the value of our elderly. This is the same population which has brought Singapore
from 3rd to 1st world. I believe strongly that my parent’s generation will continue to add great
value to Singapore as business advisors, family care-takers, capital owners, evangelizing tourists
and more!
Immigration should be used sparingly as a complementary policy to encouraging child birth and
not as a replacement policy. Singaporeans will happily have more children if they believe that
Singapore is a great place for rearing children and that Singapore is not a stressful place to live
in. We need to educate a population that believes in itself, that is confident and that knows
how to maintain a good work life balance. This brings me to the most important area to we
need to work at.
Education
Our future is in our people. We need to ensure that each Singaporean is trained to think
critically as a citizen and individual. Our education system has to be fine tuned constantly to
move with the times. Independence and creativity has to be encouraged even if means we have
mavericks pushing our social boundaries often. I would much rather prefer a noisy marketplace
with competing ideas than an apathetic nation of complainers.
For our national discourse to be effective, the learning of philosophy, national history and
economics are actually rather critical subjects which are omitted in our schools. They should be
mandatory learning at secondary level and up. Do away with early streaming of children if
possible and expose them equally to all subjects. Do a detailed and transparent study tracking
GEP/Top student career outcomes and evaluate with a critical eye. If something needs to give
way, then let it be our obsession with ever better academic grades. Seriously, I do not for one
moment think the current generation of straight A students are any wiser or smarter than the
generations before. They just study a lot more.
A thinking population with a well rounded education in the social sciences, arts and sciences is
our best bet against any future economic, social or political challenges Singapore may face.
Economy
We need more local champions whether government owned or private citizen owned. We need
our Nestles, IKEAs and Asus. This can only happen if a sufficient number of top talent in
Singapore choose entrepreneurship as a career. SPRING , ACE and all the other initiatives are on
the right track. We must continue to encourage entrepreneurship and continue to fund coinvestment
schemes until a critical mass is achieved in multiple industries.
There is a fundamental difference between an MNC who is here because of tax benefits and
infrastructure and a locally owned MNC or SME who is here because the owner is Singaporean.
The latter will stay through thick and thin as the decision making includes emotional ties. The
former will leave when the going gets too tough and profits go down. A good litmus test will be
the current manpower policy shifts. As a local business owner, I understand the need to raise
productivity and hire more locals. I too want to pay locals at the bottom more. They are my
fellow Singaporeans.
Community
We need to have an integrated and harmonious society. Current laws on racial or religious
speech, housing quotas should remain. But the solution lies not with rules, laws, harsh
punishment and enforcement. We need more integration of our peoples.
National Service is the great leveler and nation builder. I am a strong advocate to continue NS
for our young men just purely on this basis alone. Perhaps we can consider a similar but shorter
1 or half year stint for our young women too. SAP schools should have a quota of non-Chinese
in them so that racial integration starts in those key formative years. Having gone through a
SAP school, I think this is one area which if implemented will create even more well-rounded
students.
Summary
The Singapore I envision is a confident, compassionate and top tier nation. We build on our
strengths and play a valuable role on the world stage disproportionate to our population size.
Our people lead fulfilling lives in the spheres of work they choose and our children and elderly
are well looked after. For this to happen, I strongly believe the points I raised need to be
looked into. Not everyone will agree and I hope opponents to my views will add their voice and
reasons to this discussion.
But since this is my blog, i reproduce the old article here :)
My Vision for Singapore
Singapore in 2030 is an economically thriving, well educated, inclusive and compassionate
nation. We are a top tier global city well known for our strengths in areas like wealth
management & banking, system of governance, high density population living, transportation
hub, tourism, high technology industries etc.
Our population is confident with our diversity. We are multi-cultural, multi-religious and multiracial.
We live together in harmony and respect. We have a common set of values that drives
and unites us and this includes hard work and meritocracy tempered with egalitarian ideals,
tolerance of diversity underpinned by broad based education and a rootedness to our nation
and community built on a sense of common destiny and history.
While the vision is easy to articulate it is the details that matter. Below some specific areas
which I would like to see happen.
Egalitarian Society
We recognize that not all people are created equal, nor are they given equal opportunity due to
different genetic and environmental factors. We need to implement policies that ensure that
our less well to do citizens do not become a permanent underclass. We should be willing to
explore more subsidies for lower income healthcare, housing and education. We should revisit
our policy on the minimum wage, capital gain taxes and estate duties on the top 1%
periodically. We should also be willing to subsidize healthcare and education for the underclass.
The trick is in the balance. I do not advocate a welfare state or taxation system which
discourages enterprise and which erodes human drive. But we need to set a tracked metric to
monitor mobility between the income classes and to sometimes send a signal that Singapore is
a nation and not a corporation. For example, a modest 5-10% estate tax on estates values
above US$10M would give a good signal that we care about redistributing wealth as a principle
but it will not hurt the bulk of the people nor will it result in massive evasion since the rate is
low.
On the topic of transfers, I feel it is better to raise wages at the bottom end than to just give
more transfers which is akin to welfarism.
Politics
Singapore is a representative democracy. We have a dominant one party government and it has
served us well with some missteps along the way. I would want to see more communication
and engagement between the existing government, civil service and the people when it comes
to strategic issues and occasionally even for day to day implementations that affect many.
Some examples include foreign population numbers, housing policy etc.
I would love to see more diverse, talented and ethical individuals answer the call of politics. For
starters, the dominant party should make a serious attempt to woo talent from outside the
military, grassroots and civil service spheres. It is not about money, it is about having a vision
that inspires top talent. This will help prevent allegations of groupthink and perhaps even end
up revitalizing and changing the image of the ruling party. We should seriously consider why
our current political service is unable to match or beat the allure of a career with Google (Do No
Evil) when the results of political service has as much if not more impact on people than Google
does.
Population
For Singapore to be a thriving city, we need a strong domestic economy. While current
sentiment is for population to be capped, we should be broad-minded enough to periodically
review this number and make adjustments as infrastructure and new technologies become
available. I see a large population possible in Singapore if we are creative in our land-use and if
we are able to build a harmonious consensus for high density living. The ability to adapt and
thrive in a high density environment can even be exported worldwide.
We have an ageing population. Let us make sure our healthcare, transport and housing sectors
are upgraded to adjust to our increasing number of older citizens. But let us not also underestimate
the value of our elderly. This is the same population which has brought Singapore
from 3rd to 1st world. I believe strongly that my parent’s generation will continue to add great
value to Singapore as business advisors, family care-takers, capital owners, evangelizing tourists
and more!
Immigration should be used sparingly as a complementary policy to encouraging child birth and
not as a replacement policy. Singaporeans will happily have more children if they believe that
Singapore is a great place for rearing children and that Singapore is not a stressful place to live
in. We need to educate a population that believes in itself, that is confident and that knows
how to maintain a good work life balance. This brings me to the most important area to we
need to work at.
Education
Our future is in our people. We need to ensure that each Singaporean is trained to think
critically as a citizen and individual. Our education system has to be fine tuned constantly to
move with the times. Independence and creativity has to be encouraged even if means we have
mavericks pushing our social boundaries often. I would much rather prefer a noisy marketplace
with competing ideas than an apathetic nation of complainers.
For our national discourse to be effective, the learning of philosophy, national history and
economics are actually rather critical subjects which are omitted in our schools. They should be
mandatory learning at secondary level and up. Do away with early streaming of children if
possible and expose them equally to all subjects. Do a detailed and transparent study tracking
GEP/Top student career outcomes and evaluate with a critical eye. If something needs to give
way, then let it be our obsession with ever better academic grades. Seriously, I do not for one
moment think the current generation of straight A students are any wiser or smarter than the
generations before. They just study a lot more.
A thinking population with a well rounded education in the social sciences, arts and sciences is
our best bet against any future economic, social or political challenges Singapore may face.
Economy
We need more local champions whether government owned or private citizen owned. We need
our Nestles, IKEAs and Asus. This can only happen if a sufficient number of top talent in
Singapore choose entrepreneurship as a career. SPRING , ACE and all the other initiatives are on
the right track. We must continue to encourage entrepreneurship and continue to fund coinvestment
schemes until a critical mass is achieved in multiple industries.
There is a fundamental difference between an MNC who is here because of tax benefits and
infrastructure and a locally owned MNC or SME who is here because the owner is Singaporean.
The latter will stay through thick and thin as the decision making includes emotional ties. The
former will leave when the going gets too tough and profits go down. A good litmus test will be
the current manpower policy shifts. As a local business owner, I understand the need to raise
productivity and hire more locals. I too want to pay locals at the bottom more. They are my
fellow Singaporeans.
Community
We need to have an integrated and harmonious society. Current laws on racial or religious
speech, housing quotas should remain. But the solution lies not with rules, laws, harsh
punishment and enforcement. We need more integration of our peoples.
National Service is the great leveler and nation builder. I am a strong advocate to continue NS
for our young men just purely on this basis alone. Perhaps we can consider a similar but shorter
1 or half year stint for our young women too. SAP schools should have a quota of non-Chinese
in them so that racial integration starts in those key formative years. Having gone through a
SAP school, I think this is one area which if implemented will create even more well-rounded
students.
Summary
The Singapore I envision is a confident, compassionate and top tier nation. We build on our
strengths and play a valuable role on the world stage disproportionate to our population size.
Our people lead fulfilling lives in the spheres of work they choose and our children and elderly
are well looked after. For this to happen, I strongly believe the points I raised need to be
looked into. Not everyone will agree and I hope opponents to my views will add their voice and
reasons to this discussion.
Friday, September 13, 2013
Ethics while running a business
My topic today is about Ethics and the various experiences I have witnessed that illustrates these points. I believe as entrepreneurs, we will encounter many circumstances which test us and it is up to us how we react. How we react will determine what kind of a person we are. I am a firm believer in living a good and moral life and in the innate goodness of man. When I die, all I achieve is worth nothing as I cannot bring it along. So i would want to die knowing i did right at best as I can.
For me, it also helps tremendously that my cofounder and life partner is even more clear on ethics than I am. So with us reinforcing each other, it helps a lot.
1) Overpayment. You will be surprised that some clients procurement will make mistakes and overpay us for an invoice. Figure can range from hundreds to $10K! Our policy is to always notify the client nicely and pay back.
2) Honoring our mistakes. You or your staff will sometimes make mistakes too and basically misquote to the client. My policy is to always come clean and admit it is a misquote. And we will try our best to either honor that misquote or at least give a sweetener to show that we know we made a boo boo.
I have been on the other receiving end of this before. I had an association who owed us money. And the Executive Director had the cheek to call us down and say that his manager (who had left) signed the contract and used the services without his knowledge. I told him that even if this was true, he still owed us the money (about $4000) since i had a manager's signature in black and white. This guy actually threatened me (back then 27-28 year old) and told me that he will not pay. In fact, if we do not back off, he will complain about us to his university contacts who were my partners.
I felt so bad at that time because i could not believe i was being threatened because his organization made a mistake. (and that is assuming he was not lying). Managed to resolve this by basically giving him face and accepting half payment and the other half in contra. And i think he agreed simply because i played on his ego. In front of his staff, i counterproposed and told him we are already giving in and he should not bully a startup. But i left the room with 2 thoughts.
First, i wrote off that man and never thought well of him subsequently. Anyone who does not honor their word and who tries to bully because they can does not deserve any respect from anyone.
Second, I resolved to never do that to another person. We will honor our word even if it costs us.
3) Conspiring to cheat. Early in my business, i had a potential acquirer who was running a decent sized executive search firm. Founder claimed to be a Goldman Sachs MD. At that time naive me thought that an MD was a big shot. Now i know it is just a middle ranking position in IB. Pays about US$600K a year all in. Its the partners that earn the real money. Anyway, this guy pretended to be all interested in investing in us and naive us believed him as he had a fancy car and office.
After a bit of discussion, this guy called us and said they will invest. My partner and i were so happy we bought an $800 spa espirit spa package as a reward. Next thing we knew, they wanted our jobportal functional specs and made copies of it. After that, we never heard from them and they later when chased, said change of mind. Couple of months later, they launched a job portal. Of course it died a few years later. It was run by his mistress.
This experience taught me to be a lot more careful about people. Luckily my line depends on execution and day to day effort. Not some incredible piece of IP. It also taught me that i will never want to do that to another person.
Nowadays i take extra care to always declare conflict of interests and to always make sure i am transparent in my dealings. Many times i have had people come to me for investments who are in my job portal or related space. I always take care to tell them not to reveal anything that is proprietary and to remind them that i run a job portal which may be a competitor to them.
4) Dishonest to investors/cofounders. I think trust between cofounders is most important. Even if intentions are the best, there are already sure to be areas of conflict over roles, compensation, alignment of interests etc. But it gets worse if cofounders consciously do something that affects the basic trust. For me, if someone is willing to work with me and embark on a major risk like a new business, then he or she deserves my trust and faith unless proven otherwise. And i will feel very betrayed if my cofounder does anything to betray that trust. In fact, i think if it happens, i will probably start to work out how to disengage the offending co-founder already.
For investors, i have heard and witnessed startups who are really selfish. They signed on an investor for a venture which requires them to work full time on it and by extension that means to put in their full 110% effort like any startup. However, with a bit of setback or perhaps out of greed, they start to create a business plan for another new venture and basically try to raise funds for that. I don't know if it is naivety or stupidity but which VC will fund a founder that is unable to focus and who is perfectly willing to screw their original set of investors? And word does get around in our industry. SG is really small.
5) Sweat the small stuff. It is easy to cheat your own company. All you need to do is to claim entertainment expenses that aren't strictly entertainment, or pay your personal mobile, petrol bills via the company. My stand is that this is fine if you own 100% of it since technically that is your own money. But if you have external investors or other cofounders who are not aware of this, then it is their money you are stealing. It is better for cofounder dynamics to be transparent and just work it in?
From investor angle, most investors will not sweat the small stuff and will not begrudge you some extra claims that are actually for personal use. We rely on your personal integrity and how you view things. Strictly speaking, the shareholder agreement will say that your annual compensation cannot exceed $XXK without their agreement and so you can declare such items to be part of your legal compensation. So do that.
6) Sales people who lie. Wow! I have seen so many examples of this. Basically it is quite common to hire sales staff who seem to view ethics as something that one can be creative about. You can create the best commission systems to tie reward to actual performance but there will be sales staff who will spend time and effort to game the system. And this includes outright conspiring with the client if they have a good enough relationship.
My philosophy in office is to accept no unethical behavior. If we can prove that you tried to cheat us, we will terminate on the spot without recourse and i will be happy to tell all subsequent background checking employers the reason for termination. I dont care how much money you bring in for the company. I strongly suggest readers do the same, life is too short to have to hang around cheaters.
I am sure you will encounter many more experiences that will test you. So try to do the right thing!
For me, it also helps tremendously that my cofounder and life partner is even more clear on ethics than I am. So with us reinforcing each other, it helps a lot.
1) Overpayment. You will be surprised that some clients procurement will make mistakes and overpay us for an invoice. Figure can range from hundreds to $10K! Our policy is to always notify the client nicely and pay back.
2) Honoring our mistakes. You or your staff will sometimes make mistakes too and basically misquote to the client. My policy is to always come clean and admit it is a misquote. And we will try our best to either honor that misquote or at least give a sweetener to show that we know we made a boo boo.
I have been on the other receiving end of this before. I had an association who owed us money. And the Executive Director had the cheek to call us down and say that his manager (who had left) signed the contract and used the services without his knowledge. I told him that even if this was true, he still owed us the money (about $4000) since i had a manager's signature in black and white. This guy actually threatened me (back then 27-28 year old) and told me that he will not pay. In fact, if we do not back off, he will complain about us to his university contacts who were my partners.
I felt so bad at that time because i could not believe i was being threatened because his organization made a mistake. (and that is assuming he was not lying). Managed to resolve this by basically giving him face and accepting half payment and the other half in contra. And i think he agreed simply because i played on his ego. In front of his staff, i counterproposed and told him we are already giving in and he should not bully a startup. But i left the room with 2 thoughts.
First, i wrote off that man and never thought well of him subsequently. Anyone who does not honor their word and who tries to bully because they can does not deserve any respect from anyone.
Second, I resolved to never do that to another person. We will honor our word even if it costs us.
3) Conspiring to cheat. Early in my business, i had a potential acquirer who was running a decent sized executive search firm. Founder claimed to be a Goldman Sachs MD. At that time naive me thought that an MD was a big shot. Now i know it is just a middle ranking position in IB. Pays about US$600K a year all in. Its the partners that earn the real money. Anyway, this guy pretended to be all interested in investing in us and naive us believed him as he had a fancy car and office.
After a bit of discussion, this guy called us and said they will invest. My partner and i were so happy we bought an $800 spa espirit spa package as a reward. Next thing we knew, they wanted our jobportal functional specs and made copies of it. After that, we never heard from them and they later when chased, said change of mind. Couple of months later, they launched a job portal. Of course it died a few years later. It was run by his mistress.
This experience taught me to be a lot more careful about people. Luckily my line depends on execution and day to day effort. Not some incredible piece of IP. It also taught me that i will never want to do that to another person.
Nowadays i take extra care to always declare conflict of interests and to always make sure i am transparent in my dealings. Many times i have had people come to me for investments who are in my job portal or related space. I always take care to tell them not to reveal anything that is proprietary and to remind them that i run a job portal which may be a competitor to them.
4) Dishonest to investors/cofounders. I think trust between cofounders is most important. Even if intentions are the best, there are already sure to be areas of conflict over roles, compensation, alignment of interests etc. But it gets worse if cofounders consciously do something that affects the basic trust. For me, if someone is willing to work with me and embark on a major risk like a new business, then he or she deserves my trust and faith unless proven otherwise. And i will feel very betrayed if my cofounder does anything to betray that trust. In fact, i think if it happens, i will probably start to work out how to disengage the offending co-founder already.
For investors, i have heard and witnessed startups who are really selfish. They signed on an investor for a venture which requires them to work full time on it and by extension that means to put in their full 110% effort like any startup. However, with a bit of setback or perhaps out of greed, they start to create a business plan for another new venture and basically try to raise funds for that. I don't know if it is naivety or stupidity but which VC will fund a founder that is unable to focus and who is perfectly willing to screw their original set of investors? And word does get around in our industry. SG is really small.
5) Sweat the small stuff. It is easy to cheat your own company. All you need to do is to claim entertainment expenses that aren't strictly entertainment, or pay your personal mobile, petrol bills via the company. My stand is that this is fine if you own 100% of it since technically that is your own money. But if you have external investors or other cofounders who are not aware of this, then it is their money you are stealing. It is better for cofounder dynamics to be transparent and just work it in?
From investor angle, most investors will not sweat the small stuff and will not begrudge you some extra claims that are actually for personal use. We rely on your personal integrity and how you view things. Strictly speaking, the shareholder agreement will say that your annual compensation cannot exceed $XXK without their agreement and so you can declare such items to be part of your legal compensation. So do that.
6) Sales people who lie. Wow! I have seen so many examples of this. Basically it is quite common to hire sales staff who seem to view ethics as something that one can be creative about. You can create the best commission systems to tie reward to actual performance but there will be sales staff who will spend time and effort to game the system. And this includes outright conspiring with the client if they have a good enough relationship.
My philosophy in office is to accept no unethical behavior. If we can prove that you tried to cheat us, we will terminate on the spot without recourse and i will be happy to tell all subsequent background checking employers the reason for termination. I dont care how much money you bring in for the company. I strongly suggest readers do the same, life is too short to have to hang around cheaters.
I am sure you will encounter many more experiences that will test you. So try to do the right thing!
Tuesday, September 10, 2013
Honing our bullshit meter
I am writing this post because i realize there is quite a lot of bs running around in our industry and in the business world in general. Many businessmen somehow seem to believe that they need to "talk big" and make their business sound bigger. Many reasons for this. Personal face thing, help them sell more, help them recruit people better etc. While i feel that some bs is needed especially for the latter 2 reasons, standing from the listener point of view, we need to hone our bullshit meter well. I think i have a decent BS detection system developed over the last decade. I share some thoughts here :
1) I cannot understand what they do. I believe i am a rather smart guy business/academic wise. So if i cannot understand what the business does and how it makes its money, chances are it is all BS and the speaker is being deliberately obscure to mask a lack of business model. No founder is that bad at explaining what their business does.
2) Evasive or muddled about details. When asked about headcount, sales numbers, location of office, dont give any detail but instead continue to talk big about what they do. Or they give some general statistic. For example, 1.99 shop lady used to have a headline i noticed that says she built a $30M in sales business. That sounds great! Except if you read the small print, it is $30M over lifetime of business! Online, i read an article about Mindvalley that does the same time. We all know $10M in sales in 1 year is impressive. $10M in sales since inception over 6 years is much less so.
3) Unbelievable or constantly updated Linkedin recommendations & updates etc. Anyone who is running or has run a growing business knows that we spend all our time figuring out how to grow more. So if someone is spending loads of time making themselves sound good on linkedin, i kind of feel they probably dont have much going on inside.
In fact, an extension of this is people who attend so many startup conferences. You should be spending time on your business to make money. Don't waste time meeting too many fellow startup entrepreneurs. It is like blind leading the blind. Talk to people who have succeeded in any business to get the right mindset and for industry knowledge to success stories from your industry.
4) Expenditure don't gel with claimed profile. Many examples of this.
Eg 1: Guy who claims to have exited 1,2,3 businesses and yet need to raise a 300k seed round. We need to get it straight.... if we transferred ownership of our internet business to another firm for 50k or 100k or even 200k, it is because our business failed. When we start Internet companies, the exit has to be at least 7 digits to even vaguely be called an exit. So rather than say I sold it off, I would respect the person who says the business failed and I managed to at least recover 100k for my investors through an asset sale. Then learn from the failure. Who are we fooling if not ourselves?
Eg 2: guy who claims business is doing very well but has little headcount, or need to raise capital, or somehow just seems to concerned with small things for the picture to be right. A general point from personal observation and I could be generalizing. But most people i know who really have made their money really do not sweat the small stuff.
5) name droppers. There are some people I meet who seem to know everyone! And they are hoping by association it makes them sound good. Yes, networking helps and if u do it well, can open some doors. But incessant name dropping just reeks of insecurity.
Readers do feel free to add your personal encounters. I am sure there are many. Bottom line, I hope fellow entrepreneurs can be more honest. You don't need to bullshit to succeed in business. You just need a great product, marketing and loads of paying clients on a profitable basis. Let your revenues and profits do the talking. If we look carefully at the real successes today, there are mostly below the radar. Food for thought.
1) I cannot understand what they do. I believe i am a rather smart guy business/academic wise. So if i cannot understand what the business does and how it makes its money, chances are it is all BS and the speaker is being deliberately obscure to mask a lack of business model. No founder is that bad at explaining what their business does.
2) Evasive or muddled about details. When asked about headcount, sales numbers, location of office, dont give any detail but instead continue to talk big about what they do. Or they give some general statistic. For example, 1.99 shop lady used to have a headline i noticed that says she built a $30M in sales business. That sounds great! Except if you read the small print, it is $30M over lifetime of business! Online, i read an article about Mindvalley that does the same time. We all know $10M in sales in 1 year is impressive. $10M in sales since inception over 6 years is much less so.
3) Unbelievable or constantly updated Linkedin recommendations & updates etc. Anyone who is running or has run a growing business knows that we spend all our time figuring out how to grow more. So if someone is spending loads of time making themselves sound good on linkedin, i kind of feel they probably dont have much going on inside.
In fact, an extension of this is people who attend so many startup conferences. You should be spending time on your business to make money. Don't waste time meeting too many fellow startup entrepreneurs. It is like blind leading the blind. Talk to people who have succeeded in any business to get the right mindset and for industry knowledge to success stories from your industry.
4) Expenditure don't gel with claimed profile. Many examples of this.
Eg 1: Guy who claims to have exited 1,2,3 businesses and yet need to raise a 300k seed round. We need to get it straight.... if we transferred ownership of our internet business to another firm for 50k or 100k or even 200k, it is because our business failed. When we start Internet companies, the exit has to be at least 7 digits to even vaguely be called an exit. So rather than say I sold it off, I would respect the person who says the business failed and I managed to at least recover 100k for my investors through an asset sale. Then learn from the failure. Who are we fooling if not ourselves?
Eg 2: guy who claims business is doing very well but has little headcount, or need to raise capital, or somehow just seems to concerned with small things for the picture to be right. A general point from personal observation and I could be generalizing. But most people i know who really have made their money really do not sweat the small stuff.
5) name droppers. There are some people I meet who seem to know everyone! And they are hoping by association it makes them sound good. Yes, networking helps and if u do it well, can open some doors. But incessant name dropping just reeks of insecurity.
Readers do feel free to add your personal encounters. I am sure there are many. Bottom line, I hope fellow entrepreneurs can be more honest. You don't need to bullshit to succeed in business. You just need a great product, marketing and loads of paying clients on a profitable basis. Let your revenues and profits do the talking. If we look carefully at the real successes today, there are mostly below the radar. Food for thought.
Sunday, September 1, 2013
Breaking News - SG linked startup Viki acquired..
Viki has been acquired for 200M by Rakuten apparently.
This is great news for our industry as it is the first 9 digit
acquisition and not investment. I met the CEO Razmig once at a Jungle
Ventures and he was a smart guy.
And best of all Viki is a classic example of a platform play that can scale globally! Hopefully of the guys who made millions, some are SG funds and SG investors/founders. Then they can set aside some $$ and brains to give back to SG eco-system.
And best of all Viki is a classic example of a platform play that can scale globally! Hopefully of the guys who made millions, some are SG funds and SG investors/founders. Then they can set aside some $$ and brains to give back to SG eco-system.
Case Study on deal that did not work - SHOWNEARBY
For every success, there will be at least 10 failures alongside. I remember when we first started a job portal, there were easily 20 others in the market. Names like RecruitAsia, JobPilot, FutureStep, JobCulture, Jobhunter etc. All gone by 2004/05.
So i thought it will be fun to read about a company that was founded in 2007, got a lot of publicity and got a nice cash injection of S$3.5M from a listed company no less in 2010 but failed and was sold away by the same listco early 2013 for just $1. I say failed because site looks like no activity since 2011 and founder clearly moved on already.
So here is the story from outside. I like this type of forensic work and i hope that readers will do their own and learn from these numbers and experiences.
1) Founder - Shownearby founded by Douglas Gan whom i met once and only impression i have is that he is energetic and enjoys the whole entrepreneurship thing. Don't know him well enough to comment more. Maybe readers can add comments. You can read what i excerpted from GYP 2011 annual report :
"Douglas is an entrepreneur with over 10 years of dot-com experience across South East Asia. He is currently Chief Executive Officer of ShowNearby, a location-based services company incorporated in November 2007. Douglas started his dot-com journey when he was 16, expanding his first web hosting business across South East Asia and Europe. Five years later, he sold the business to Skydio which was acquired by Webvisions Group. In 2002, Douglas started a popular online youth community, OhGenki.com, which spanned Singapore, Malaysia, Thailand, Indonesia, Philippines, China, Taiwan and Hong Kong. OhGenki.com was sold to StreetDirectory in 2007. Douglas was also a consultant for dot-com businesses such as GARENA, PropertyGuru, HungryGoWhere, Skydio and StreetDirectory. Douglas graduated from Ngee Ann Polytechnic with a Diploma in IT."
So if someone wants to work with him, should ask Steve, Forrest or Dennis from the various companies he mentioned what he actually did for them. All are good success stories. I am not sure about skydio, they are a smallish acquisition for webvisions. I am also sure GYP will not have much to say too since shownearby failed for them.
2) Business model - Location based directory. Wanted to cover everything. That is how i met Douglas, he wanted to have our jobs as part of his data pool. I guess idea is to monetize the resultant traffic from being a central point of discovery and search.
Can visit their web site and see the milestones as declared by them.
http://www.shownearby.com/press/milestones/
I have long learned to always read such milestones and what many entrepreneurs say with a lot of skepticism. There are entrepreneurs who believe in bullshitting their way to success (there is some article running around saying that now), i personally subscribe to the low key and let your profits and revenue do the talking model. Keeps me a lot more grounded especially when I realize just how big other businesses are in the non-internet space. There is a very thin line between required promotion and confidence and outright bullshit for the sake of personal ego and looking good. But that is another story which I will definitely write about.
Does model make sense? Location based obviously has some merit but I think trying to be the discovery starting point is a lot harder and the position is kind of dominated by streetdirectory and google maps. But even these two, I tend not to use them for discovery as opposed to directions and location search.
3) July 2010, managed to get Global Yellow Pages to invest 3.5M for 53.15% stake valuing them at 6.6M or so. It was subscription for new shares and so Douglas did not actually exit in any meaningful way. But valuation was good for SNB. In 2011, SNB only contributed 204K in revenue for 9 months and contributed to a loss of 600K! Valuation easily 20+ times sales but of course it is an investment valuation and not an exit. I wonder what GYP was thinking when they invested.... granted they became controlling shareholder and maybe can make sure the money is spent properly. They must have really believed in the team and potential market.
Readers need to really understand the difference between new share subscription and vendor sale. The former is investment for company to grow, the latter is exit. Latter only happens when your company has realized value or your story really damn fantastic.
Investment in your company is just that, it is investing cash to help you realize the 3 or 5 year P&L plan that you projected to investors. It can be subscription of new shares, it can be convertible loan, all achieve the same effect. So see it as just start of your startup journey and not the end ! It is definitely not an exit and not time to any spend or take your eye off the ball.
Why did GYP do it? Obvious for them, they are a business under siege for years as their directory services dwindle to nothingness thanks to the internet. Amazingly it takes so long! So they have been wanting to enter online spaces to replace those revenues. But strangely almost none of their online products work.... that is another story by itself i am sure. But to their credit, they did buy eFusion solution which at least is profitable and now have gone into F&B and Tours...
4) Anyway back to main story. fast forward to 2012, just a short 2 years later, SNB has flopped. Douglas is no longer listed in the annual reports as management. What happened? We can only guess or if we can grab Stanley who is a seasoned media magazine entrepreneur who now owns a large stake in GYP, he will tell us. My guess? Grossly mismatched expectations. To enter at valuation 6.6M, GYP expected a lot which clearly was not realized. 3.5M is a lot of money to manage and the vision and team must be strong to execute it well.
Douglas is now running a beautybox site i believe. Best of luck to him. At least he is truly quite a committed entrepreneur - never gives up!
Side note : GYP recently had a share placement to raise $7+M. So that 3.5M is really not small change to them. it mattered and perhaps was quite wasted. I would love to buy Stanley a lunch though and figure out what happened not just for SNB but their entire internet strategy. Maybe I can help... Who knows..
3) July 2010, managed to get Global Yellow Pages to invest 3.5M for 53.15% stake valuing them at 6.6M or so. It was subscription for new shares and so Douglas did not actually exit in any meaningful way. But valuation was good for SNB. In 2011, SNB only contributed 204K in revenue for 9 months and contributed to a loss of 600K! Valuation easily 20+ times sales but of course it is an investment valuation and not an exit. I wonder what GYP was thinking when they invested.... granted they became controlling shareholder and maybe can make sure the money is spent properly. They must have really believed in the team and potential market.
Readers need to really understand the difference between new share subscription and vendor sale. The former is investment for company to grow, the latter is exit. Latter only happens when your company has realized value or your story really damn fantastic.
Investment in your company is just that, it is investing cash to help you realize the 3 or 5 year P&L plan that you projected to investors. It can be subscription of new shares, it can be convertible loan, all achieve the same effect. So see it as just start of your startup journey and not the end ! It is definitely not an exit and not time to any spend or take your eye off the ball.
Why did GYP do it? Obvious for them, they are a business under siege for years as their directory services dwindle to nothingness thanks to the internet. Amazingly it takes so long! So they have been wanting to enter online spaces to replace those revenues. But strangely almost none of their online products work.... that is another story by itself i am sure. But to their credit, they did buy eFusion solution which at least is profitable and now have gone into F&B and Tours...
4) Anyway back to main story. fast forward to 2012, just a short 2 years later, SNB has flopped. Douglas is no longer listed in the annual reports as management. What happened? We can only guess or if we can grab Stanley who is a seasoned media magazine entrepreneur who now owns a large stake in GYP, he will tell us. My guess? Grossly mismatched expectations. To enter at valuation 6.6M, GYP expected a lot which clearly was not realized. 3.5M is a lot of money to manage and the vision and team must be strong to execute it well.
Douglas is now running a beautybox site i believe. Best of luck to him. At least he is truly quite a committed entrepreneur - never gives up!
Side note : GYP recently had a share placement to raise $7+M. So that 3.5M is really not small change to them. it mattered and perhaps was quite wasted. I would love to buy Stanley a lunch though and figure out what happened not just for SNB but their entire internet strategy. Maybe I can help... Who knows..