Starting up in Singapore – Part 1 (Product/Market Fit)

{Pertually in beta}

The next series of posts is a work in progress. I will try to document things I have seen thus far in the startup ecosystem here in Singapore and perhaps just perhaps provide a rough guide for first time entrepreneurs when they start out. Some areas I will be covering include (please feel free to send me comments or feedback below so I can refine it better, it is by no means final):

Part 1 – Product/Market Fit

Market (Hyperlocal, Regional vs Global from Day One)
Product (Sales vs Product Orientation <> Enterprise, Consumer facing, vs B2B2C)

Part 2 – Talent Assembly

Part 3 – Product Development / MVP

Part 4 – Growth Hacking

Part 5 – Ecosystem Status

Part 6 – Startup Matrix (A tracking sheet on Singapore based startups and how they started out versus success/failure)

In my previous post, I touched upon the Passion/Product Fit of an aspiring entrepreneur. Once the answer is found, the entrepreneur needs to do serious research on the market he/she will be addressing. This is by no means easy.

Product/Market Fit

People say, the important part of a Startup is its Team. To me, the Market is the most important followed closely by the Team who can execute, navigate and conquer that market.

The first logical step when you are based in Singapore is to start in a market you are most comfortable in conquering. It is logical and sometimes it is the right choice starting from Singapore, sometimes not. There are three market categories that startups from Singapore are likely to address:

Hyperlocal (HD1) (with Regional ambition) – Startups in this category start off in their home markets (i.e. Singapore) where if you become No.1 or 2 player in the market, the business will be cash flow positive and growing at a reasonable amount. The startup will then look outwards in the region to expand into, either organically or via a partnership, joint venture or acquisition. [Tip: Once proven locally, it is easier to raise capital if the markets in the region are ready and able for you to enter] E.G. PROPERTYGURU, HUNGRYGOWHERE…
Regional from day one (RD1) - Startups in this category knows that the Singapore market is inherently small and need to be in larger markets in order to sustain itself. The business may either start in Singapore and quickly venture outwards OR it starts in a larger regional market e.g. Indonesia from day one. As a startup in Asia, the top 2 markets to start from are China, and India. However, they tend to be extremely difficult to navigate especially if you do not have a cofounder from and/or experience in that country. Hence, a Singaporean founder will find it easier to execute in the 3rd key market that is the MENASSEA region (Middle East, North Africa and South/Southeast Asia). MENASSEA includes countries below. [Tip: It will take longer than expected to be proven because markets are fragmented and we (as Singaporeans being from a developed nation trying to do business in developing countries where language and cultures are varied is a challenge. It is harder to raise capital, you need to execute fast and choose the largest market with highest achievable revenue potential as your beach head market] E.G. BUZZCITY, MIG33, TMGAMER, IMPULSEFLYER, REEBONZ…
Global from day one (GD1) – Startups in this category have the know how, mindset, confidence and product differentiation to address the global market from day one. In this case, I urge founders to start in the US first (i.e. SF Bay Area or NYC where the ecosystems are stronger). Before you go, make sure your product or service has a stronger value proposition that the incumbents. Some founders go GD1 whilst still based in Singapore, some make their move to the US to be closer to their users/customers. [Tip: Do not use Singapore as a test bed if your product is something extremely unique or if you are GD1, go to the US right away. The Singapore market is not a true representation of the larger US market] E.G. VIKI, ROOMORAMA, RAZER, TENCUBE, STICKERYAPP, BUBBLE MOTION…

Product

You are either a sales or product oriented startup company when you first start. Why is this important? Knowing your exact orientation fo your business allows you to plan your resourcing strategy effectively (especially product and business development). How do you know what are you?

ENTERPRISE <> If you sell to businesses and/or has proportionately more sales/business development people in your company you are a Sales Oriented Company. Most if not all Enterprise companies are sales oriented. [Finding: Sales Oriented companies tend to start and do well regionally and not globally] E.G. BRANDTOLOGY, STREAM MEDIA (MOVEND), FLIGHTOFFICE, IDENTIFI…
CONSUMER FACING B2C <> If you are consumer facing, you tend to have more engineers than sales/business development people in your company, you are also a Product Oriented Company [Finding: Product Oriented companies tend to do better if one of the cofounders are technical] E.G. VIKI, ATTICTV, STICKERYAPP
B2B2C <> If you need to partner with other businesses to reach customers/users who are consumers. For e.g. platforms, market places, aggregators, advertising networks…, chances are you are a B2B2C company. E.G. REEBONZ, BUZZCITY, GROUPON SINGAPORE…

Before you start your dream company, you need to know where you fit, product/market wise, and where you are likely going to go. Yes, most startups’ directions change but prior to spending your first dollar or make your first hire you do need to know where you are now and what path you are going to take. Once you are relatively certain, you need to formulate a team to help get your company there. This will addressed in the next post (Part 2) of the series Startup up in Singapore.

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http://www.anticsstudios.com/ Erik Posthuma

Great post Jeffrey. Concerning the market I think option 2, let alone 3 are tough ones.

A big part of leading a start up is focus. And if it’s your first go at it, it’s going to be really tough to maintain a focused product when spreading yourself to thin in the region. All the different countries will have and appear to have different needs. You’re going to spend a lot of time trying to figure out the differences between the markets when you should actually be focussing on your product.

If you go global right away. Think of all the advantages the Silicon Valley guys have. They have a large relitavely homogenous market in which they can launch first. They have a stronger VC and entrepreneur support network. And a larger pool of talent. Try beating that.

I’m not saying it can’ be done. It’s just tough.

I like the first route. Hyperlocal with regional and global ambition. Entrepreneurs need to get to market quick. Itterate and itterate in the market with real customers. Then once there is a semblance of product market fit. Expand. Once you get traction in the region you have a solid product with real market traction (in Singapore) as well as the hint of market traction across the region (or globally). If you are able to explain how your product can adapt and thrive in the different markets, it makes for a much more attractive buy in.

I look forward to your post on the team. I think that’s a real big nut to be cracked in the region.

vcvc

Thanks for your comments. It is hard for options 2 & 3 unless you absolutely have the full package which most teams don’t but I’d say go crazy once in a while, but do so smartly.

Isouweine

Nice Post. Bubble Motion and Viki should be in regional category though I think. They are really Asia focused businesses and are located in SG precisely b/c their users are in Asia.

vcvc

I agree somewhat with you on Viki but I am sure they have global ambitions from day one. Bubble definitely started regional with a mind to clobber their competitor in the US. It is amazing how companies evolve.

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