Starting Up In Singapore (Part I) – Product/Market Fit
I previously 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.
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:
1. 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 etc.
2. 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 etc.
3. 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, Stickery, Bubble Motion etc
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?
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 etc.
ii. 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, Stickery etc.
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 etc.
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 Starting up in Singapore.
Jeffrey Paine is the founder and executive director of Battle Ventures & Founder Institute Singapore. Jeffrey has a background in venture capital, technology, film and is always interested in issues in entrepreneurship, ideas that dominate, cool films and dramas. He has co-founded 2 technology startups that will be spinning out of Battle Ventures. He can be reached on the twitter @jpaine.