““My boss is asking me to fly again! Where can I find a hotel in such a short notice?!”
I am sure we frequently hear this from our peers. Last minute hotel booking is never pleasant and hotels will tend to charge higher price than usual. HotelQuickly aims to provide travellers a quick, affordable and hassle-less hotel booking experience. The free app is available for downloads in all major mobile platforms such as iOS, Android and BlackBerry
This month Entreprenuer’s insights, we spoke to Mr Tomas Laboutka, Co-Founder of HotelQuickly. He will share about his view on the technology landscape in South East Asia as well as his journey as a serial entrepreneur.
Technology has changed radically in Asia for the past decades. What trends do you see in the near future especially in South East Asian markets.
The rise of messaging apps in Asia is a main trend happening with the South East Asian markets. Chat apps are becoming bigger than Facebook and Twitter in some countries and most are aggressively seeking to gain a market share within the South East Asian market. We can expect more promotions and expansion of their services in the coming nears as they shift from merely being chat apps to messaging platforms that are relied on daily. Over the last couple of years, we have seen how social commerce have scaled new heights in Asia. We saw WeChat introducing a payment service and flash sales into the market. Even Alibaba launched their own Chat app. You will be seeing more brands and even HotelQuickly jumping aboard sales opportunities within these messaging apps.
We’ve also seen how technology have evolved from being online to mobile and now to “wearable technology”, particularly smart watches.
Tourism and hotel bookings are competitive market and they are pretty much dominated by large corporations. As a startup, how did you formulate strategies to beat the big boys in the market.
At HotelQuickly, we believe that competition helps nurture a business. Competition is healthy and makes for a more colourful market. Having a competitive advantage and clear means of differentiating ourself in the industry is key to our success. We have clearly differentiated ourself by being a mobile only app that allows users to book 3*-5* hotel rooms at the last minute through its well-curated list of discounted hotels. Furthermore, our prices are on average 28% cheaper than the cheapest online. We provide a guarantee that you won’t be able to find anything cheaper online and if you actually do, we’ll refund double the amount!
What are the challenges and opportunities for HotelQuickly in the next 3 years?
We are currently operating in 15 countries across the Asia-Pacific region. The markets are strongly interconnected but customer knowledge is an important key in all these markets. In order to offer a superior product, we need to fully understand our customers well and the different culture we operate in. What works in Hong Kong may not work in Singapore.
We have yet to venture into the bigger markets like China, India and Japan. There is a large share of last minute spontaneous travellers who are also smartphone holders in these markets and we hope to capture them when we enter the markets.
Unlike many of your competitors, HotelQuickly is very focused on mobile users. With increasing adoption of wearable devices, mobile phones makers are rolling out smart bands and watches to complement their devices. Expedia has developed apps for Apple Watch. What are your views on this?
We recently launched the HotelQuickly App on the Apple Watch. 40% of our customers use iPhones for their last-minute bookings. By launching the HotelQuickly app for Apple Watch, we are continuing to innovate the mobile travel segment in Asia Pacific and we are taking the hotel booking experience to the next level.
The new app offers a “handoff” feature that allows users to continue on their phone’s app where they left off on the Apple Watch. Other features includes simplifies navigation and check-in, alerts and the ability to manage booking reference efficiently. We have to continually innovate and adapt ourselves to the needs and wants of the users. The end-goal for HotelQuickly is ultimately to deliver a “superior user experience”.
Is HotelQuickly raising capital? If so, which funding stage is the company at right now?
In August 2013, HotelQuickly secured HKD 9m (USD 1.15m) in angel funding. Prominent investors included Koh Boon Hwee, former Chairman of Singtel and Chairman of Singapore Airlines and current board member of several private companies such as Singapore’s Temasek Holdings. A USD 4.5m Series A-1 round was raised in Spring 2014, bringing the total funds raised to date to USD 5.65m. The second round was led by GREE Inc., a global mobile social company from Japan, and co-invested by William E. Heinecke, Chairman and CEO of Minor International.
As an entrepreneur yourself, what are the attributes you think that any entrepreneur should possess?
As an entrepreneur, courage is an important skill to have. When you have the courage, you are able to recognise certain risk and try to do what is possible to mitigate this risk while moving forward. It is important to overcome your fears and ensure that these fears do not keep you from reaching your highest potential. Being passionate about the business and having a clear vision of the end goals and working toward these goals are also important attributes to have.
A good entrepreneur should be able to sell ideas to the customers, investors and potential employees. You have to believe in your business and never waste time second guessing your idea. It is not worth the money and time on something that you can’t dedicate your whole heart to.
You are a seasoned entrepreneur. What advice will you give for our budding entrepreneurs or people who want to start a business?
To start a business, you need to be passionate about the industry and business you are operating in. You need to dedicate your whole heart to it because halfhearted attempts at starting a business will ultimately result in a business failure. You need to have clear vision and direction for the business. Businesses without constant direction can move from order to disorder if actions are not taken to push the business in the right direction.
It is rumored that every entrepreneur has their open set of checklist while evaluating a venture. As an entrepreneur, do you mind sharing yours with us?
As mobiles penetration is becoming more pervasive in APAC markets, HotelQuickly has attracted ventures who share a common vision of enhancing the way people live, work and travel, as well as their digital lifestyle. In return, we are looking for those who can accelerate our development, foster innovations in last-minute hotel booking and solving hoteliers’ unsold rooms.
Miss out previous Entrepreneur’s insights? Read Interview with Ralf Wenzel, foodpanda Co-founder here
Welcome back to Entrepreneur’s Insights! For those readers who are new to The Neo Dimension, we held interviews with entrepreneurs from all around the world. Through this interview, readers will hear from the entrepreneurs on the industry trends as well as their sharing on the startup journey.
Entrepreneur’s Insights is a bi-monthly interview written in Q&A format. This time we take the opportunity to interview Mr Ralf Wenzel from foodpanda
Ralf Wenzel is the co-founder and Chief Executive Officer of foodpanda group. Before, he held the position as the Group Chief Operating Officer at Skrill Holdings that operates the online payment system Skrill/Moneybookers. Prior to that, Ralf was the Senior Vice-President of Sales & Business Development at Jamba/Jamster. Ralf holds a degree in Computer Science from Berlin University.
Technology has changed radically for the past decade. Internet used to be a place where people search and exchange information. Now, it has become an inseparable part of our social life. What trend in the Internet market did you foresee in the year 2015?
We believe the past years were the years for desktop and 2015 will be even more the year of mobile. We are investing heavy amount of our time and resources on our mobile application as that’s where we believe the market is headed. Every company that can make it to his customer’s home screen on his smartphone is the one that will stay and for the rest the market will be very challenging. For a company focused on service and convenience, it really comes to life when all it takes a tab on your mobile be it wherever you are from stuck in traffic jam, at your desk in the office or sitting in your living room.
There are increasingly more and more competitors entering the food ordering business in both web and mobile sectors, how foodpanda is going to approach the market in order to stand out from the crowd?
foodpanda started in 2012 and has emerged to be the clear market leader in Singapore and most of its other markets. It’s a result of strong management, great user friendly product and commitment to customer as the king being a very service focused company. Our ambitions were always high to be the number one choice platform for the customers and we have grown and iterated reacting to our customer behavior.
Nonetheless, our biggest competitor is still the traditional telephone, the restaurant leaflets, the kitchen magnets. We are part of the internet revolution and want to switch food ordering from offline to online or directly to mobile. It is much more convenient and easier and faster through our app or website, than to call the restaurants via telephone and manually place your order.
foodpanda has been making acquisitions everywhere. Is this going to be strategy for expansion, especially in Asia?
With the recent selected acquisitions, adding to our already strong foodpanda businesses, we have consolidated our leading position in Asia. Moving on our focus is on making the customer experience an even happier one with faster delivery from only the best restaurants and more interesting features on our mobile and web application.
Why is foodpanda choosing to make acquisitions instead of other forms of expansion? What advantages does a business acquisition provide to foodpanda?
Our recent business acquisitions are very strategic and aimed at immediate gains for our customers and restaurants. With the acquisition of Roomservice and Koziness, Dial-a-dinner brands in Singapore, Hong Kong respectively, we have gained additional delivery resources and a team expert in operations. We are further empowering them with our automation and tracking tools to make it a more operationally efficient business ensuring improvement in the market overall and direct benefits for the end customer.
What are the criteria that foodpanda looks at when selecting target markets to focus on, and how do you identify the businesses you want to acquire?
We enter into markets where we see a big opportunity to offer customers convenience in getting their food delivered and at the same time restaurants a channel for incremental revenue. Food ordering always existed in these markets but primarily via phone orders and our role is to make it convenient and easy with a click of a button on mobile or web. For restaurants it offers them a channel for more marketing exposure online, more new customers and more revenue through the delivery orders.
What are the challenges or opportunities for foodpanda in the year 2015?
From where we started 3 years in Singapore as our first market, we are today one of the biggest choice platforms globally from Asia to Middle East, Africa to whole of Central Eastern Europe, and Latin America.
Our challenge would remain to get as many customers to go mobile and enjoy the real convenience over calling restaurants over phone. We will not stop to invest in our customer service and continuously improve our product and offerings.
What are the cultural difference or barriers dealing with restaurants in Asia than the ones in Europe?
In many countries in Asia we have realized how marketing for a single restaurant owner starts and stops at the very traditional channels such as flyering in his neighborhood, and we have to get them past their hesitance to adapt to the digital world where things are more targeted and much more efficient. For restaurants, foodpanda is much more than an online order marketplace. We are experts in online, as well as offline marketing and serve as an extremely strong marketing channel for our partners.
As an entrepreneur yourself, what are the attributes do you think that an entrepreneur should possess?
I believe an entrepreneur is one who sees a bigger purpose in life and wants to do something, create something that challenges the way people see, measure things and finds an interesting and better way to do so. One with strong passion to what he does, great amount of determination and willingness to persevere.
For the graduates, do you advocate the idea of starting up fresh out from the college?
I would go even a step further, one does not need to be a graduate to be an entrepreneur, four years at the university already offer a great platform to explore such an initiative. One big advice I will give is, there is no best idea that you need to commit your life to, all you need to start somewhere, some things that excites you.
It is rumored that every investor has his or her own set of checklist while evaluating a business venture. As an investor you, do you mind to share with us yours?
My checklist would be 1) market size 2) scope for expansion 3) similar players in the market/globally 4) current active customer base 5) revenue model/s 6) profitability target and very important 7) the team
Entrepreneur’s Insight: Q&A with YuuZoo’s CEO – Social Media Trend & Entrepreneurship
It is a rainy Friday morning. As I entered the YuuZoo office at Chye Sing Building, nobody seem to have noticed my arrival. Every single one of the workers I saw in the office, is either busy on the phone or engrossed in their team discussion. There is not a single soul lazing around in the office and I don’t see any sign that their activities will stop any time. I start to wonder “Is today Friday?”
The whole atmosphere is filled with enthusiasm and excitement. This is the dynamic environment of a startup! But, for all you know, YuuZoo is not an ordinary startup.
The Singapore-based YuuZoo (stock quote: AFC) is the world’s first company that introduces social e-commerce (or social commerce) to the market. With a market capitalization of more than SGD 250M, YuuZoo is also the first social media company listed as SGX mainboard in the history of Singapore’s stock market. In fact, 3 project managers working in the company have become millionaires after its listing.
I am really looking forward to the interview with Mr Thomas Zilliacus, CEO of YuuZoo. Before we start, just a little background of Mr Thomas.
Thomas Henrik Zilliacus (that’s his fullname) starts his career with Nokia in the 1980. In 1986, he was appointed as Nokia’s very first Head of Asia Pacific and relocated to Singapore. He was tasked to develop the Asia markets.
In the mid 90s, he left to become an entrepreneur and currently runs investment company Mobile FutureWorks, which advisors include former Nokia’s mobile phones CEO Jorma Nieminen and Ericsson’s former CEO Sven-Christer Nilsson.
In recent years, he attempted to buy out Nokia Mobile in order to steer the company towards Android OS. On the very day that Microsoft bought Nokia Mobile, he started a new mobile company Newkia with the intention to bring former Nokia employee to develop new phones running on Android platform.
** A quick note here. The below Q&A has been edited to ensure smooth reading for the readers. Rest assured! More than 90% of the text below follows the exact same wordings used by Mr Thomas.
Qns 1: Technology has changed radically for the past decade. Internet used to be a place where people search and exchange information. Now, it has became an inseparated part of our social life. Thanks to the social networking website. what change or trend in social media, globally, did you foresee in the year 2015?
Thomas: Well, I think there will be a number of new ideas coming up. If you look back over the last few years, it has been very much dominated by names that have been around for some time and you look further back into the history, you will see that always there have been names coming up and then disappearing and new names taking over. Now, everybody is talking about Facebook as something that will be there forever. I’m very much doubt it.
Facebook is going to see a downturn as well just like before Facebook, there was MySpace. MySpace was before Facebook seem as the name that would there forever. Now, nobody even talks about MySpace much less than uses it. So I think that we are right for a new way and that is again where YuuZoo is coming in with a concept that it’s new! So, I think that the market needs a constant reinvention and renewal of the offers that are interesting for consumers and I think in 2015, we will see new names and ideas coming into the markets.
Qns 2:. YuuZoo is the first Singapore-based social media company listed on the mainboard of Singapore Stock Exchange Securities Limited (SGX-ST). The unique business model of combining e-commerce and social networking platform for companies is what big companies like Facebook or Twitter could not do at least at the moment. With the rapid growth of mobile users globally, how YuuZoo is going to approach the market in order to stand out from the crowd?
Thomas: Our business model, as you said, is new and in many ways unique. I think if you go in and look at what our business model incorporates. You’ve already seen that our business models do stand out from the rest.
Number 1, nobody else is building a business based on franchise model. Franchise model is one that able us to offer consumers in each market a fully localized version of shopping mall that we’re building. If you look at our competitors, they all have a one-size-fits-all solutions. Facebook is Facebook Everywhere, Twitter is Twitter Everywhere, Amazon is Amazon Everywhere.
We are a different company in each market. The brand is always YuuZoo but the solution is always localized starting from design and language but even more importantly for the consumers, in the mix of what we’ve offered to the consumers; this is something that we can do under the franchise model. That’s one thing we are different.
The other thing where we stand out is that we combine under one single URL: Social Networking, E-commerce and Gaming. That is also something that others do not offer. It is either you are in social networking or you are in e-commerce or you are in gaming and I think consumers like the simplicity in whatever they do. That’s why shopping malls are successful. Because you go to big shopping mall, you find everything there from nice café to sit down to shops that you could buy. We are creating the same thing in the virtual environment.
Last but not least, everything that we’ve built is built for mobile optimization. We are device-agnostic but we are always building it with mobile users in mind and that means we are creating solutions for mobile users, where growth is by far the fastest, are optimized and that is again something unique.
Others don’t do that. Others are built for desktop uses and then there is a mobile version which in some cases, it is not that fantastic. Some have been doing quite well but there are many companies who have not created good mobile version of the desktop solutions.
Qns 3: What are the challenges or opportunities for Yuuzoo in this new wave of social media?
Thomas: The opportunities are almost endless because I think that if you look at social media; Facebook is doing it wrongly from the point of view of the companies. Companies cannot make any money on Facebook. They create a big following in their fan pages but they are creating, through their following, a big revenue stream on advertising that Facebook keeps for themselves.
For companies’ incentive to be on Facebook is very limited because they are basically giving money to Facebook. Amazon is doing it wrong in e-commerce because they are not adding the social element that become so important that people make their buying decision. People want to communicate with the other buyers and they want to see the experience of the other buyers.
Because of how other companies are doing it. There are endless opportunities for us to get both businesses as well as consumers to start to use YuuZoo; not necessary so that they will move away completely from Facebook, Amazon or others. Rather, they will start to use YuuZoo in addition to what they are doing because YuuZoo enables businesses to make money and enable consumers to do social e-commerce in a very targeted way
As regard to challenges, the main challenge is when you fail to design a product that consumers like. Technology is well known for creating things that are fantastic from the technology’s perspective but terrible from users’ perspective. In that sense, we are not driven by technology. We are driven by the market. We understand what the users are looking for. I believe design is a challenge but it is a one that we are managing quite well.
Qns 4: Industry players have foreseen that there will be more marketplace created on instant messaging platform. Line is a good example. Ads usually annoy users. What kind of opportunities you see in mobile advertising?
Thomas: I agree. Mobile advertising is something that in many case, has not been implemented in a consumer-friendly way. There are a lot of consumers are pretty unhappy with the way advertising is “pushed” in their face.
We have a patented-pending solution where we allow users/consumers to chose the sector of advertising that they receive. Let say that a Singapore user want to receive ads relating to real estate.
We are developing a calling app. When there is incoming call, you will lift up your mobile phone to see who is calling and the number is displayed on top of the screen. Underneath, there is space to display ads. So, we will deliver user the ads in sector he has chosen – real estate for example here.
You click on the ads that you have previously chosen and after you are done with your call. It will direct you to the advertiser’s page. By doing so, it does not interfere the way you use the phone. More importantly, such advertising, instead of annoying, helped the consumer as the information is more inline to his interest. In addition, it also helps the advertiser to deliver the ads to the specific consumers whom is of their interest.
In short, we are very much on the consumer’s side. I don’t see any point of “pushing” ads to the consumers who will get irritated by irrelevant ads and stop using the app. We will only deliver ads on the conditions that users have allowed it.
Qns 5: You have highlighted an interesting trend in the global aspect. What did you think about Singapore or South East Asia in general? How does South East Asiacompanies or brands positioned themselves to capitalize on this rising trend in social media?
I think, in general, SEA companies are a bit lagging behind US and Europe in terms of creative thinking. When I say so, I am also referring to the consumers in South East Asia. South East Asia do not understand the enormous power that social media has.
I have a good friend who built one of the world’s first web design company in the early 90s. He has told me how difficult in those days to convince the companies to have a corporate web page. 9 out of 10 has commented, ” Why we need a webpage?”, “who is going to be on internet?”, “This is complete rubbish!”
What my friend had experienced is a bit like what social media today. Companies are still thinking that such advertising approach is “only for kids” and “We don’t need to be on social media”. They do not understand how quickly people are switching over to social media and how influential that social media could affect buying decisions. I think that companies need to understand that social media is not something that they could ignore. Otherwise, they will left behind.
Qns 6: Let’s bring the discussion to Singapore, there is a recent incident disclosed by a renowned Singapore blogger on the “questionable practices” by a local social media marketing company. what is your view on this incident? What advice you would like to give to companies or brands which is new to social media marketing?
Thomas: Advertisers have to be very mindful and don’t appear to be too smart. It is not about who you are getting the message across. It is more about how to do so. When you annoy people, it is counter-productive. Consumers will not buy into these brands if they are annoy by the ads.
I had an experience with the Olympia game several years ago. VISA has bought an exclusive advertising rights. However, all purchases could only be done with VISA card. In other words, if you don’t have VISA card, you can’t buy anything even food for yourself. This approach annoys consumers by forcing them to use VISA card. Once you are there, it is too late to apply one. That’s to me a counter-productive advertising.
Qns 7: You have done many interviews in the past. There was once you highlighted about the difficulty of hiring candidates in Singapore. What exactly the key qualities or skills that you are looking for in the candidates?
Thomas: In Singapore, you can find very good people in executing the works. Singaporeans are very diligent and responsible workers. What’s lacking is the creative mind – the ability to think of out-of-the box solutions. In my opinion, that’s something that pretty much linked to educations.
In certain countries, the people are taught in a way that is exactly what the book has written. Other countries, people are encouraged to challenge what they are taught. In our business, we need both kinds of people. People who are very dependable but we also need creative people which I feel it’s lacking among Singaporean workers. I think we have spent quite some time in finding such people.
Qns 8: For our graduates, do you advocate the idea of starting up immediately after fresh out from school?
Thomas: I think that’s a great idea. There are 2 ways to see this. One way is that you enter an established company and you learn before you start your own. However, by doing so, you lose time.
That’s also a danger when you do that, you become so comfortable with the safe corporate environment.
Being entreprenuer is risky. Your risk appetite declines with age. The longer you stay in the corporate environment, you are more reluctant to start up. From that point of view, to go straight to your own business immediately fresh out from school is, in many ways, a good idea as long you can tight up with partners and investors who have experience in areas that you are venturing in.
That are challenges in starting up especially so for fresh graduate without experience. However, I think there could be overcame. There are many VC and angel investors who are willing to help, not just by providing money, but also their expertise to the young entrepreneurs.
Qns 9: It is known that every investor has their own set of checklist while evaluating a business venture. As an investor yourself, do you mind to share with us yours?
To me, it is pretty much depending on the personalities of the entrepreneur. Education background is certainly not one of the areas that I am looking at. He could be a guy with no education but possesses good entrepreneurial personalities. However, I would like to emphasize that there are good entrepreneurs with good education background as well.
Hence, I will go in-depth in understanding the personalities of the entrepreneur and how he derives and approaches his business idea; not just building of the business but also, at the same time, how he is going to manage it. There are often a need to change track during the course of building the business.
When you are building a business, it is about ideas and creativity. Once you have reached a stage of managing it, it is much so about control and processes to sustain the business. In that aspects, it requires a change of management meaning different people to run the business.
I will not be impressed by people who show me fantastic idea or belief. So what it is a great idea? I don’t think people should be ashamed if they do not have a formal education. If they have good idea and right frame of mind, they could be extremely successful. Look at Mark Zuckerberg, he is a dropout from university so are many other successful entrepreneurs.
Not enough? See Q&A with Mr Ralf Wenzel (co-founder of foodpanda) here
The current crisis has wiped out the global market confidence but not the ambitions of the entrepreneurs.
And the Association of Small and Medium Enterprises (ASME) and the Rotary Club are aiming to recognise those who have succeeded this year despite the many obstacles.
The Entrepreneur of the Year Award is now into its 21st year. It seeks to honour successful entrepreneurs who have been able to recognise opportunities, take appropriate actions and accept the associated risks. Past winners include homegrown firms like Charles and Keith, Breadtalk and Qian Hu.
What are the qualifying requirements?
The Candidate must be an entrepreneur who has been in business for at least three years, and has demonstrated outstanding entrepreneurial qualities in growing and developing the business.
The Candidate must be a Singapore Citizen or Permanent Resident, who is above 21 years of age.
The Candidate’s company must have a minimum 30% local equity.
If the Candidate owns between 10% and 30% of the Company’s shares, he/she has to be nominated by the Board of Directors.
Total fixed production assets of the Candidate’s company should not exceed S$30 million. Total number of employees must not exceed 400 if the Candidate’s business belongs to the service industry.
The Candidate’s company must neither be a listed company nor a subsidiary of a listed company.
The Candidate’s company must hold at least three years of audited books of accounts, which must be submitted for evaluation.
Global market slumped like a freefall but innovation will never stop. Entrepreneurs will continue to innovate and invent interesting products and services. Give yourself a chance to indulge in the air of entrepreneurism at NTU Business Plan Competition(NTU BPC) this coming Friday, 9 Jan 2009.
NTU BPC – 08CreativeLab is a campus-wide competition very much in line with Singapore’s effort to promote and develop a strong technology entrepreneurship environment leading to a vibrant and thriving sector of high growth technology-oriented companies. Spearheaded by Nanyang Technopreneurship Center (NTC) and designed to encourage the growth of entrepreneurship through education and competition, NTU BPC provides a platform in which participants present new innovative business concepts to venture capitalists, entrepreneurs, business leaders and angel investors.
Through the various learning initiatives and training engagements with business communities, participants are strongly encouraged to go beyond “paper play” and to start up ventures based on their business plans.
This year’s competition which began in May attracted a total of 294 NTU students or 67 teams. During the first round of judging, we narrowed this down to 18 teams. 8 teams from the Semi Final have advanced into the Grand Final of 08CreativeLab.
Our judges from the preliminary and semi-final rounds have short-listed 8 finalist-teams for this Grand Final, where each team is expected to perform an elevator pitch on their business, followed by a venture capital fair where each team will set up a booth to showcase their business idea to be evaluated by a panel of distinguished judges consisting of venture capitalists, business angels, successful entrepreneurs, eminent corporate business leaders, intellectual property owners, solicitors, government officials, and etc.
COMPANIES receiving venture capital backing are generally better at corporate governance when they list on the stock exchange than those that have not gone down the venture capital path, according to a study by the Australian School of Business.
Based on 11 years of research by Associate Professor Jo-Ann Suchard in association with the Australian Private Equity and Venture Capital Association, the study examined corporate governance at companies that had gone through an initial public offering.
It finds that listed companies with VC-backed boards have more independent directors and a higher percentage of independent directors with industry experience than non-VC companies that have gone to an IPO.
“It is established in international markets that venture capitalists add value through various types of activities beyond just giving money,” Suchard says.
Her research shows VC-backed firms have more independent directors. “These were not just non-executives, but directors who didn’t have any prior or existing relationship with the company, so they weren’t lawyers or bankers or accountants who had a prior working relationship,” she says.
Suchard says VCs use their networks to bring in specialist independent directors to help run companies, and therefore provide better corporate governance, which should help protect shareholder interests and contribute to better performance over time.
Luceille Outhred, chief executive of South Australian technology innovation group Digislide Holdings, says having VC backing has definitely helped her company achieve stronger corporate governance.
“We’ve gone through seed capital raising and angel raising, and each time we’ve gone through a different stage, as a natural consequence of the business growing but also as a necessity for raising additional capital at a higher level, our policies and procedures have tightened up,” she says.
“We always had a goal of listing on the ASX or the New York Stock Exchange, or Nasdaq, so we have constantly been upgrading our policies and our procedures, both operational and governance.
“Digislide has received about $12 million in venture capital funding and we would be in a position to lodge with ASIC for an ASX-listed company if we choose to do so, because all our policies are at the highest level and the implementation is at the highest level.”
Dr Katherine Woodthorpe, chief executive of the Australian Private Equity and Venture Capital Association, says VC-backed companies are used to working with a board, whereas many other companies that list for the first time have not previously done so.
“A lot of companies think they don’t need a board in the earlier stages of being a company and so people are just not used to having a board,” Woodthorpe says.
“It is difficult, however, finding independent directors, particularly people who are interested in working with smaller technology companies, which are perceived as having higher risk.”
Ivan Kaye, director of BSI Australia, which provides venture capital funding through its Australian Distributed Incubator arm, says a condition of putting money into a company is that they move towards having the right structures in place.
“There are generally independent or non-executive board members put on by the VC.
“As a result of that, the shift from a private company to listing is smaller than with a company that hasn’t had VC backing.”
Mike Hershorn, director of Four Hats Capital, manager of the Nanyang Innovation Fund, says one of the first things to improve in the field of corporate governance is a company’s financial reporting.
“That’s really the first step, because if the board doesn’t have accurate financial reports it can’t work well to improve the company.”
* Companies with venture capital backing tend to have better corporate governance
* Independent directors have a stronger presence on the board
* The right governance structures are often a condition of VC funding
It is a beautiful Wednesday morning. Shen has invited Jeremy, Ridzuan and me for a coffee session at Geek Terminal. Each and every one of us chatted about anything under the sun. The most surprising thing we got to know from Jeremy is that Nokia had involved in many businesses in Finland. Nokia is a giant conglomerate someone like TATA in India. They used to sell car tires specifically designed for winter. (They had already sold their tires businesses. See link here)
So who are these entrepreneurs?
1. Shen, Founder/ Managing Director of Jorbb.com
Jorbb.com is Singapore’s newest site created expressly for non-executive jobs, for individuals seeking freelance, contract, part-time and casual employment.
This innovative and uniquely interactive portal enables its users to not only post their resumes, but also photos, slideshows and video profiles.
2. Jeremy, Managing Director of Metaversum Asia Pte Ltd (Singapore)
Metaversum develops and operates the 3D online world Twinity. This visionary project mashes up the real with the virtual world. Members of the Twinity community enrich and expand their lives by integrating their real life into the virtual world. Twinity is set to launch this summer and is currently in private beta. Founded in July 2006, Metaversum is financed by leading venture capital firms and has offices in Berlin and Kiev.
Officially incorporated in early 2008 by 2 individuals, Widgeous is in the business of creating a web technology-based solution for solving the problem of having too many isolated channels of communication. Keeping to philosophy of keeping things simple, the company has built a platform which allows people to keep a centralised repository of their contact information. With that, others who wish the contact the individual can now do so simply by specifying the individual’s Widgeous ID. Widgeous then helps to decide the most efficient method for delivering the message.
The platform is also an open platform that allows application developers to build applications that fully utilize their cross-channel capabilities.
Feel lost in the job market? Lack of motivation? I believe these are some emotional struggles among young Singaporean. However in the midst of poor market condition, there always exist an opportunity. Successful entrepreneurs usually emerge during bad weather. Why not get yourself de-stressed and feel the air of entrepreneurialism with Global Entrepreneurship Week 2008?
Global Entrepreneurship Week (The Week) lasts from 17 to 23 Nov 2008. It is a celebration of innovation, entrepreneurship and creativity. The Week will bring together millions of young people across the globe through online and local activities and encourage them to think innovatively and unleash their ideas.
This is not an “All Talk, No Action” event. M.Y. FBI Holiday Camp, targeted at children (age 10-12), will required participants to think of creative ideas to sell their craft on 22nd November as a closing for the camp. All profits will go to a charity benefiting children which will be selected by the participants themselves.
Besides business educations for the young children, Youths-4 Charity Flea market is targeted at youths from Secondary Schools and ITE with a focus on social entrepreneurship. Youths-4 Charity Flea market is a competition. Each team will be required to produce items/ crafts for sale on the flea market. To make the competition more realistic, rental and interest will be imposed.
The Global Entrepreneurship Week 2008 is organised by ACE and NUS Enterprise. The sponsored review is provided by BLOG2u (http://blog2u.sg). If you wish to find out more information of the event, please visit the official site: http://www.entrepreneurshipweeksg.org
A follow-up of Ridzuan’s email – “Keep it going. Don’t lose heart!” It is pretty clear that the market is filled with pessimism especially of the poor performance in the US retail sector. The retail sales in US declined to 1.2% in the month of September. (Read article here). It is pretty obvious that export-driven Asia economies will be badly affected as the demand of US falls.
In Ridzuan’s email, I understand the anxiety faced by many startups in Singapore as funding activities will be greatly reduced due to the US subprime crisis. The market sentiment has been worsened when Singapore government has announced that Singapore has entered into a technical recession. A technical recession refers to 2 consecutive quarters of contraction. (Read article here)
For those who are involved in a high burn-rate technology early-stage startup, it is going to possess a really big problem in your venture as many PE/VC are reducing their positions instead of investing more on new ventures. In fact, big MNCs are taking the opportunities to look for “bargain” in the market. M&A will still remain strong despite the global meltdown but that only benefits private companies which have reached a certain scale (Read article here). For those startups that are still in the infant stage, better know how to control your spending. Only the Fittest Survive! If the company can pull through the bad weather, the market will definitely value it differently.
This blog post is not meant to discourage passionate people who are starting up. In fact, I admired people like Ridzuan and Kelvin for taking the path of an entrepreneur. Bad time doesn’t always mean problems. It possesses opportunities too. As mentioned by Ridzuan and Bernard, it is the best time to hire talented people since the big players have already reduced or froze hiring.
If you haven’t read Ridzuan’s email, you can access from here.