Entrepreneurship falls into the gray area of art combined with technicality. It is fluid in a sense that you have a blank canvas to curate that billion dollar idea and strategize the next steps forward. Founders are the captain of their respective ships, determining how to navigate their companies, to materialize their ideas. Undoubtedly influenced by external circumstances such as market volatility and changes in consumer behaviors, entrepreneurs are then expected to have a system in place, to look at the technicalities of execution, scaling and extending the runway. With the economic winter storm looming in, we have combined great advice from our Endeavor mentors to remind our entrepreneurs of the basic principles of building your business, scaling sustainably and navigating through crisis.
Business Plan, Building culture & Marketing Strategies
1. Go back to your basic principles to build that next billion dollar idea
During one of the mentoring sessions, our Endeavor mentor Chari TVT (Former CFO of Axiata Group) shared about the importance of going back to basic principles - knowing your unique selling proposition (USP). Entrepreneurs should take time to think about customer’s pain points that can be solved and from here, understand the whole related market and customer’s behaviors. Understand the B2B and B2C elements in your business model and from there, choose which customer segment you want to focus on. Data collection is important to see the trends and where the demand is. From here, founders are able to analyze the data, choose what they want to focus on and capture more customers. “What is your USP? What makes you special? Why is it when customers see you, they completely choose you and no one else? Try to develop a USP that is so compelling that no one would ever go near you,” Chari shared, emphasizing the importance of customer segmentation, knowing the USP and utilizing datasets to retain and have returning customers.
2. Ensure that you build a solid business foundation first for exponential growth
Eric Cheng (Co-founder & Group CEO of Carsome) highlighted the importance of having a solid foundation in building a company before scaling. In his case, understanding the core mission of Carsome was important to amplify the company’s growth. He related this to the failure of his previous ventures where he thought far ahead but was aiming to reach it as quickly as possible. This led him to take shortcuts and not spend enough time focusing on details and different scenarios that could contribute to the building foundation of one’s company.
3. Do not underestimate the power of integrating culture into a company
Culture creation is a very deliberate process that founders take part in but you do not necessarily have control over the outcome. Founders can try and create a certain culture in a company but their actions do not equally translate to people behaving in the way you want them to. So why is culture so important? During one of our Thought Inspire Series, our Endeavor mentor, Gaurav Bhasin (Group Chief Strategy Officer and CEO Malaysia of Carousell Group) explained more on the importance of empowerment of culture. “Ultimately culture is judged based on not just what you do, but how people are reacting to it and what they are making of it,” Gaurav said. Culture gives an organization a sense of purpose, a way to act together in a group, distinguishing what is acceptable and not in an organization. It takes away the need to create archaic rules for everything, it empowers people to make decisions and to act in a way that they can make progress without having to abide by a rule book. When building a culture within the company, ensure that it is coming from the heart and start early. Once a company is well established, it will be challenging to change and reset the tone of the culture developed.
4. Be aware of marketing strategies - double down your efforts there
It is important for founders to be aware of effective marketing to optimize revenue. Dr. Grace Lee (Chief Financial Officer of AEON) noted the importance of identifying the key channels that customers use to discover a company’s brand to direct founders on where to double down efforts in enhancing brand awareness. Consider exploring more digital channels in order to convey a clear brand identity and customer loyalty.
5. Find the right investors - those who believe in your long-term vision
Having investors who believe in the company’s long-term vision and are able to give capital to build a business in which we can actually monetize and scale without looking at just short-term outcomes is key in leveraging one's business. Develop the right capital strategy and find the right investors who do not just believe in the short-term achievements but who are there for the long-term strategic vision, helping the company empower its journey forward. Endeavor mentor Gaurav Bhasin (Group Chief Strategy Officer and CEO Malaysia of Carousell Group) shared how being backed up by notable investors such as 500 startups, Secure Capital and Rakuten in early stages, who believed in their long-term goals, has undoubtedly contributed towards their success in growing the company. “The ability to attract these kinds of investors and to keep them on board from day one has played a massive contributory factor,” Gaurav said.
6. Know your ‘whys’ of fundraising and is it always necessary?
During one of our mentoring session, our Endeavor Mentor, Loi Tuan Ee (Founder & Managing Director of The Holstein Milk Company, also known as FarmFresh) advised that founders should determine the purpose of fundraising - have a clear objective prior to a fundraising exercise, whether to add capacity to fulfill demand or expand to other markets, bearing in mind that timing is also an important element of the equation. Endeavor Board Member, Fadza Anuar (CEO and Co-founder of FashionValet) also advised our entrepreneurs during the mentoring session that if you are planning to raise funds either through debt financing or equity financing, ensure that there is a rationale in raising the funds and that you have a clear strategy.
7. Strategize how you are going to hook your investors in - your first pitch matters
As cliche as it sounds, if you fail to plan, you plan to fail. Pitching to investors is important, as our Endeavor mentor Dato Sharil Tarmizi (Senior Advisor of ASEAN Advisory) once advised that being able to deliver a convincing idea in a timely manner is a crucial skill to have. Look to sell your idea within the first 5 minutes and hook your investors because if the idea is not sold early on in your pitch, it is harder to get buy-in from investors. “You really have to start thinking on your feet, entrepreneurs need to take the chance that people give, not wait for a chance to be presented on a silver platter,” Sharil added. Lam Nguyen-Phuong (Former Senior Managing Partner, Co-founder and Co-head of the Private Markets division of Capital Group) advised our entrepreneurs to consider including elements of ESG and sustainability and how the company can provide a social impact, not just monetary returns when pitching to attract the attention of investors. Sometimes adding in your personal story and belief highlights the personality of the entrepreneur which gives added value to attract investors.
8. Know your investors & how to cater to them
Our Endeavor mentor, Chen Chow (Co-Founder of Fave), advised when pitching to venture capitals, entrepreneurs should emphasize on the company’s performances such as increase in sales and any expansion plans because sometimes the investors are less interested in dividend play and more focused on growth. Other than that, sharing challenges or issues to investors could be a potential approach in getting investors to be more engaged and invested in the company’s growth, especially investors who love problem solving.
Scaling Phase & Challenges
9. Have both feet on the ground when setting up new market and determine your metrics to scale successfully
Market entry is a whole different ball game, if not careful, companies might end up making the wrong move in their scaling journey. When entering a new market, have both feet on the ground, either with your own base or strategic partners. Being on the ground will enable you to assess and learn more about the market, give entrepreneurs access to the network and allow entrepreneurs to navigate regulatory challenges faster. Anthony Low (former Vice-President in Regional Management of NESTLE S.A. Group Worldwide HQ in Switzerland) advised entrepreneurs to prioritize which key locations to enter first and then focus on building on the “picture of success”. Identify how many pictures of success will be implemented in the first year of entry for the opportunity to double or triple sales. Key components on painting the picture of success would include guidelines in showcasing your product portfolio, merchandising, planograms, stock control, and quality checks. He advised entrepreneurs to focus on AVR - availability of products, visibility on shelves, and reachability with the highest sales SKUs and once this is established, ensure good communication with the sales team to achieve this.
10. Ask yourself whether market expansion is really necessary
Expanding regionally might be the next milestone for a company but before taking the first step for regional expansion, entrepreneurs should reflect and ask themselves whether it is something they actually want to do and if it is the right time to do it. “Are you ready to take the plunge?” HY Sia, Endeavor mentor (Founder and advisor of Tranglo) elaborated on this matter, emphasizing that entrepreneurs need to know whether expanding now is the right time for their company and if it is something they are mentally capable of doing. Have a vision of the future of their company and follow that roadmap that follows suit. When tackling the market, always have strategies for every target demographic but most importantly, maximize the revenue, target the low hanging fruits and take full advantage of the current market before considering expansion.
11. Strategize when scaling - recognize that it is a long-term process, establish baseline & ensure good communication
One of our Endeavor mentors, Azran Osman-Rani (CEO & Co-Founder of Naluri) shared during one of the mentoring sessions that scaling a venture is a multi-year journey. Therefore, entrepreneurs should start by establishing a baseline to provide clarity and allow comparison on the impact the company's solution is intending to achieve. At the scaleup stage, entrepreneurs should bear in mind that the larger the corporation the more frequent the inefficiencies in communications may occur, and thus entrepreneurs should focus on strengthening and streamlining communication and organization structure during their scaling journey. Loi Tuan Ee, (Founder & Managing Director of The Holstein Milk Company, also known as FarmFresh) also advised Endeavor entrepreneurs to understand the market first including measuring the risks and identifying the demands. Following this, have a proper strategy in place before scaling the business in new target markets.
12. When deciding on acquisition, think far ahead
There is no doubt that a lot has to be thought through before acquiring a company but Instead of looking at just profit, focus on the value strategic partnerships bring in building a business. Examples include better credibility, establishing future leads and possibly improving the track record of the company. When acquiring another company, apart from looking at the top line and bottom-line figures, do not neglect looking into the underlying costs such as merging of work culture and efficiencies.
13. Know your acquisition strategy
There are different elements of acquisition and knowing your acquisition strategy is vital in helping your company scale. Endeavor mentor, Gaurav Bhasin (Group Chief Strategy Officer and CEO Malaysia of Carousell Group) shared how his company’s acquisition strategy was pivoted into two phases especially during the pandemic. Founders should consider pivoting if needed to cater to the company’s needs at that point in time. Sharing his experience, Gaurav mentioned that there was a time when they were expanding to geographies and that was when some of the entities like Mudah.my and Cho Tot were bought, resulting in a much bigger footprint in Malaysia, Vietnam and Myanmar for Carousell. There is a point in time that his company was focusing on capability acquisition, trying to evolve their business models to cater to consumer’s needs and preference.
14. Have clarity of the skills sets required when hiring
As founders, you should be clear about the problem you are solving, the specific skill sets that you require to solve the problem and the talents that you require in your company to allow your team to work synergistically. Gaurav Bhasin (Group Chief Strategy Officer and CEO Malaysia of Carousell Group) once advised “if you're not clear about your problem, you cannot find the right solution,” emphasizing that spending time on the problem is much more important than the solution. Entrepreneurs should invest more time in the hiring brief including but not limited to who is conducting the interview, specific skills sets that your company is seeking and candidate’s competency in fulfilling the designated role. Another Endeavor mentor, Henry Goh (Executive Chairman & COO of Macrokiosk) mentioned that during the early stages, founders should consider looking into someone who can wear multiple hats - be it handling cold calling, onboarding and account management to maximize productivity.
15. Have the right hiring framework One of our Endeavor board members, Eric Cheng (Co-founder and Group CEO of Carsome) emphasized the importance of knowing the company’s hiring strategy. There are plenty of talents out there but it is important to note how you select the talents. Have the right framework in hiring taking into consideration the purpose of hiring, where we are at the climate now and apply the right way of strategizing it. Endeavor mentor Gaurav Bhasin (Group Chief Strategy Officer and CEO Malaysia of Carousell Group) also shared that having a rigorous hiring process was important for his company to hire the right person for his organization, providing the platform for them to succeed. He admitted that it has been a process to establish the right hiring method but doing so has been fruitful for his company and has helped in raising the bar in every cycle of hiring within the company.
16. Hire or groom people to do the job for you - do your job as a CEO & learn to let go
As the company grows, it is pertinent to upgrade and hire somebody else to help execute growth. When there is a need to upgrade. Our Endeavor mentor Lam Nguyen-Phuong (Former Senior Managing Partner, Co-founder and Co-head of the Private Markets division of Capital Group) advised during one of the mentoring sessions that when there is a need for a certain skill gap within the company then do not hesitate to fill these gaps. Entrepreneurs can look at two routes of finding the right talents - grooming talents from within or outsourcing them. Lim Kok Hing (CEO of iPay88), Endeavor mentor, advised to hire the right personnel who are able to support and reduce the burden of founders such as attending day to day operational matters, allowing founders more time to focus on other important aspects like strategizing and planning. Joe Khoo (Co-founder & CEO iStore iSend), our Pre-ISP track entrepreneur shared with us his experience during a roundtable session that in reality, it is not possible to hold onto tasks and try to micromanage everything as the company grows. Learn to do your job as the CEO - hire the right people who are able to do the job for you so it frees up your time to do more important things. Learn to let go and trust.
Navigating the Company Through the Winter Storm - On Market Outlook
Red flags such as the falling stock market and rising interest rates as well as the cooling of venture capital markets all point towards the looming economic winter and prediction for market recovery this time might take longer with unclear duration.
17. Be transparent with your team and brace for winter
One of our board of directors, Afzal Abdul Rahim (Commander in Chief of TIME dotCom) shared with the Endeavor Malaysia community on how to best navigate through the upcoming global recession. “We know how we got here, but the question is how are we going to ride the storm - assuming we are unable to raise the rounds.” He mentioned three important points to think about. Firstly is to face the inevitable and plan for the worst. Think of possible scenarios of not being able to secure funding, not being able to increase and hit targeted revenue and any binary issues that will cause any shortage in supplies and affect production. Afzal also mentioned that every employee needs to share the responsibility and be a part of generating the solutions to help the company get through this, start over communicating, increase frequency of measuring business indicators and monitor the weekly trends. “Cost and financial transparency is key to getting through this, throughout all levels. Though it may be very uncomfortable for founders, transparency generates a collective empathy, gains trust and this will affect the sentiments and morale healthily.”
18. Keep dreaming big - it is what makes you stand out more
During Endeavor’s recent session about fundraising in recession, Jamaludin Bujang (Managing director of Gobi Partners) was asked whether entrepreneurs should give up on trying to fund their big idea considering the current economic climate. Jamaludin advised that founders should always continue with their big ideas because these are what the venture capitalists (VCs) are looking for. Taufiq Iskandar (Chief Investment Officer Penjana Kapital) added that limited partnerships (LPs) usually prefer to invest in entrepreneurs with big ideas because these are the differentiators that allow entrepreneurs to stand out. VC’s are looking for candidates to deploy funds - leverage has shifted from the entrepreneur to VCs. You may want to scale down and look at better cost management but big ideas should never stop.
19. Communicate with your investors about your capital needs and structure
Taufiq Iskandar (CEO of Penjana Kapital) during the same session highlighted the importance of communicating with your investors. Look at your capital needs and capital structure and consider how you can extend the runway. Have key communications with existing investors while looking at an optimal capital structure such as revenue-based financing. Raja Hamzah (Co-Founder and Co-Managing Partner of RHL Ventures) also during the session advised entrepreneurs to take a step back, have a strategic thinking session, plotting a runway together with VCs.The baseline is to extend the runway and make sure you have a key MVP, be realistic with the valuations and not be greedy with it.
20. Remember why you started - mindset matters
Last but certainly not least, an entrepreneur’s mindset plays an important role in how you develop the resilience and the grit to problem solve. Everyone’s entrepreneurial journey is different, and what matters more is how you handle the crisis that comes your way, how you navigate your company out of that s-curve and which lens you chose to put on when being faced with entrepreneurship challenges. Do you view everything as negative or do you face roadblocks head on - finding ways to best navigate your company through it. Sharil Tarmizi (Senior Advisor at ASEAN Advisory) once advised entrepreneurs that you must always recognize that the organization that you are building is bigger than you, always remember to stay true to yourself. With multiple past failures in the past, Eric Cheng (Co-founder & Group CEO of Carsome) emphasized the importance of passion and remembering your initial purpose, how being passionate about what you do is the first prerequisite towards building your empire as it creates a cascade effect of having determination and perseverance in reaching the end goal. “I have experienced some of the lowest lows in my life. I told myself to not be afraid of failing again because it's just a phase. What’s more important is who is going to be there for you when you are in this phase, is there going to be anyone around you who still continues to believe in your abilities, capabilities and to want to be on the same team as you? To me, that's how I want to build a business, that’s how I want to build my team, and I want to be associated with people of similar mindsets.”