Are you a Singapore Startup Founder?
Tony Hsieh, Zappos CEO said
“Chase the vision, not the money, the money will end up following you.”
We have over the years advised startups and unicorns and also been on the board of listed technology firms in Singapore and the greater SEA region and would love to share with startup founders some of the key learning lessons that we have gleamed over the years when working with Singapore startup founders.
Lesson #1 – Founder Team Formation
This is the first and most important thing that every VC would assess when they meet a Singapore startup founder team. A good Singapore startup team should have a founder team made up of a good mix of skills set. Each member of the founder team should have complimentary skills and not more than one of each skills set so there will be no duplication.
Lesson #2- Founder Team Equity
Founders should not divide founder equity based on equality but contribution in terms of time and money and effort to the startups. After the startup founders agree on equity, they should sign a founders agreement which should have a vesting schedule so that the remaining founders can have the benefit of the equity upside should one founder leaves the Singapore startup Company early
Lesson #3- Solving a large problem for a large market
We have seen some startups try to create solutions that only work for the Singapore market and surprise, such startups cannot scale. If possible try to get a co-founder who is familiar with one of the larger SEA markets and try to solve a large pain point for that market. Take Tokopedia for example, they tried to solve ecommerce for Indonesia.
Lesson #4 -Writing a business plan
Most startups founders are usually young and out of school and as result lack experience in tackling a market. We would suggest that if this is the case, then the startup founders should spend time writing a good business plan which can be validated by experienced entrepreneurs and advisers.
Lesson #5- Cost per user/ Cost Per Click
One key skill every digital startup needs to master is acquiring users online as cheap as possible. The metrics that most digital marketers would use is cost per user or cost per click. If you spend some time optimizing this single metric, your cost per user acquisition cost would drop and you would find that your funding runway will be much longer.
Lesson #6- Fund Raising the venture method way
A Singapore startup founder is fortunate that if he fun raises in Singapore, he would be able to make use of Singapore valuation in SGD and expand into the region using a SGD backed Singapore startup. A Singapore startup founder should spend time learning about the venture method of valuation and valuation of similar startups in the similar space in Singapore and the rest of the region. Learning this one skill would help a Singapore startup founder negotiate better terms with the VCs.
Lesson #7- Board of advisers
The larger well-funded startups typically have a good board of advisers helping them grow larger. For example, did you know that Bill Gates mother was on the board of IBM – a fact that most people did not know was one key contributing factor why IBM used Microsoft for their operating system.
Lesson #8 – Attracting VC Funding
A Singapore Startup founder should spend time reading up on similar business models of similar startups in China and the US so that the Singapore startup founder can determine the growth strategy for his startup and also the valuation basis for a similar startup in SEA. A Singapore startup founder should also spend time reading financial statements of technology companies that are listed overseas in the same space as the startup to learn more about global competitors and also to learn how to scale his startup larger. Once you learn what potential your small startup can scale to, you would be better placed to tell the story of growth to a VC to attract funding to your Singapore Startup.
We hope that these 8 key lessons would help you as you grow your Singapore startup towards Unicorn status.
Finally we leave you with a quote from Jack Ma in his last speech as CEO of Alibaba.com said
“A lot of people complain about yesterday. We have no power to change yesterday. But this very day, 30 years later, is what we can control and decide. Change yourself, take baby steps, and stay determined for ten years. I thank the times of change and everyone’s complaints. Because when everyone is complaining, that is your chance, an opportunity. It’s only in times of change that someone can be clear of what he has and wants, and what he needs to give up.”
About Raffles CPA
Raffles CPA is a leading global professional services firm headquartered in Singapore that serves global clients.
About Raffles CPA
Raffles CPA is a niche professional firm headquartered in Singapore with a relentless dedication to help global and local clients in solving their complex business problems in areas of corporate services, accounting, capital market, legal and compliance.
Subscribe to our newsletter!