“If your solution does not work for a small local market, it’s highly unlikely that it will work globally”, Stephanie Sy, Founder & CEO of Thinking Machines said at the very first APAC EndeavHER event, held in commemoration of International Women’s Day. Focused on Scaling Strategies, this all-woman panel from the Endeavor APAC network consisted of two other incredible female founders; Van Vu, Founder and CEO of Elsa Corp and Helianti Hilman, Founder and Executive Chairperson of Javara.
In this ever so normal virtual setting moderated by Lan Anh Nguyen, Managing Director of Endeavor Vietnam, these exceptional women discussed it all - from becoming an entrepreneur to global mindsets to the various challenges associated with scaling a business. Inspirations to entrepreneurs, a large audience tuned in to see these three women delve into their experiences, victories and pearls of wisdom.
What are some important things to keep in mind about product-market fit?
Continuous evolution
Stephanie: “Product market fit is not static - you don’t find it once and then stop there - you have to continuously evolve your product as the market evolves arounds you, as customers and trends change”.
She focused on analysing her core market and expanding her company’s ability to offer evolving solutions. “Analysis without action doesn't do anything to change outcomes for anybody”, she said. Layer by layer, she gave companies what they needed - from machine learning to helping with data engineering and building data platforms. She continued to expand her company’s skill set and understanding which led to “building really good internal facing dashboards for the business users and really good API end-points and digital experiences to use machine learning that faces the consumers”.
According to Stephanie, asking these questions constantly can help you achieve product market-fit:
Who am I trying to help or serve?
How can I continuously change what I do to make their experiences better?
Echoing the idea that finding product-market fit is an ongoing journey where products need to keep changing to avoid becoming obsolete, Van Vu highlights three post-launch scenarios which may require a business model change:
People may like your product but may not stick around.
People may like your product but may not want to pay for it.
People may like your product and pay for it, but you can’t scale it to a global business.
Choosing a problem that is big enough
“I don’t think there is one moment where you realize you got your product-market fit and it is a done deal - I think the company constantly evolves”, Van Vu emphasizes the importance of choosing a problem that is big enough. “You have to understand whether the problem truly exists or if it's only happening to you. If the problem exists but it is still not big enough, there won’t be a large enough market for you to address or build a business around”.
The first step to finding a product-market fit is to assess potential customer reactions by providing them with a conceptual product, prior to launching. If the reactions are good, it gives you extra validation. However, negative reactions do not necessarily mean that the market does not exist either. Van Vu believes these reactions could become valuable data points to reach out and gather feedback.
Product innovation & unique selling points
“It’s much more straightforward when it comes to food - what we create now will probably still be around for another 100-200 years. A lot of the forgotten food or crops that we re-introduce to the market - unless we make it relevant to the market, there is no way to penetrate the market”. Helianti explains. Helianti finds her product-market fit by using product innovation and food technology to make sure the product fits with the market and consumers. She has also established a unique selling point for her products - organic & healthy products that are relevant with global diet challenges. As her company also revolves around social and ecological impact, she keeps her main focus on providing “good food, good health and good deeds”.
What are some things to consider when scaling a business?
Knowing when to transfer responsibility
Helianti illustrated how scaling a food company was quite different to scaling a tech company, “We have to scale the whole production process - the whole supply chain from the farm to the processing to distribution to retailing. So it requires a lot of physical operation”. This led her to realise that scaling required different operations and skill sets. With a flair and preference for the creative side of things, she stepped down as CEO in 2019 and instilled a board of directors comprising people with 30-35 years of experience. With this, she was able to shift her focus onto food creation and innovation.
Do your homework before approaching investors!
“Once you have a good product-market fit and a good product matrix, it is time to figure out the drivers in your business that will help you scale. Then only you approach investors”, Van Vu shared her thoughts on scaling. If you hit a roadblock with scaling, she advises to reflect on these questions:
Is there a problem with your business model?
Have you built the right products?
Have you found the right channel to invest in?
What are some of the biggest challenges in fundraising?
Incompetent business models (oh, and possibly being a woman too!)
Van Vu depicts that without a proper business model, there is simply no point in trying to fundraise as you would be wasting your own time and the investor’s resources. “It is also not a good use of investment on a societal level”, she added. But unfortunately other factors such as your credibility are taken into account too. “It is definitely harder for first-time founders and female founders”, she pointed out. Meeting the right investor and building a genuine relationship with them is another critical factor as “you don't just need money, you need the right money”. “Navigating the entire fundraising landscape is challenging, so having the right mentor is extremely valuable”, Van Vu said as she displayed gratitude towards Endeavor’s network.
Not having market references as a guide
Due to the unique nature of her products, Helianti utilised food product prototypes with strong profiles and in line with future trends, to gain shelf space from supermarket chains. The indication of contracts obtained from these supermarket chains was what she presented to her investors. The investors are more than willing if they recognize that there is a market for the product.
Finding the right investors
“The best kind of money is customers’ money - if somebody pays you for what you do and sees value in it, that is ultimate proof that you are doing something right”, Stephanie declared. She has noticed that customers are not only interested in what is available - they are interested in the company’s roadmap which leads to potential alignments between their needs and the company’s growth plans: “This sometimes leads to them committing to a long-term contract, or pre-paying me for something - I don’t have to give up equity or pay interest rates, but instead get to work directly with someone trustworthy”.
“If you are talking to investors who can’t empathize with you, who can’t see themselves in you, it’s harder for them to justify giving you higher valuations”, Stephanie conveyed, while highlighting the fact that the current investor pool in the tech field is greatly men-driven. She shared her excitement at recent additions of investors who have a wider range of experiences and thus, are more empathetic. Stephanie urges securing a mentor or angel if you are a first-time founder because there were many things she couldn't solely learn from books at the start of her journey.
Lastly, the panel concluded with a question on mindset: How important is a global mindset in a business?
Having started her company with the mission to address the global need for language learners, Van Vu knew she wanted to go global early on. “You have to build your culture with a global mindset and you have to build your products so it can cater to different countries with just a few changes”, she outlines small steps that could potentially save a lot of time in the future.
Helianti’s decision to go international came from two reasons; Indonesia’s organic product market was not big enough and there was no appreciation for local brands at the time. Her international venture succeeded because her business was in line with global trends such as organic food and sustainability. To sum up, it was the global mindset which eventually helped her build a reputation in domestic markets.
Echoing this, Stephanie also revealed that the Philippines domestic market opened up for her after she began receiving international awards.
The content of this article is summarised from the EndeavHER session organised by the APAC Endeavor offices: Endeavor Malaysia, Indonesia, Philippines, Vietnam & Japan. Endeavor is the world’s leading community of high-impact entrepreneurs. We dream big, scale up, and pay it forward. Follow us on our social media pages to get the latest news on upcoming events and key learnings.