One of the key goals of the Kiwi Landing Pad is to pass on information from other successful entrepreneurs, as we aim to build an ecosystem that nurtures startups.
Late last year we started the Kiwi Founder Series. Aiming to capture and build on the momentum of the Sales & Marketing Jams held in New Zealand every 6 months. We wanted to continue the conversation, bringing awesome people who are ‘doing it’ in a simple ‘crowdcast format’ that gives you a direct line to targeted knowledge without taking too much time from your busy day.
The first of these crowdcasts we hosted Cameron Priest – Co Founder and CEO of TradeGecko. A live replay of the webinar can be watched here. This post is an adaption on key points made in the Webinar.
Based in Singapore, TradeGecko have more than 90 employees, thousands of customers in more than 100 countries and have successfully raised more than $8.5m USD (roughly $12m NZD). TradeGecko is a SaaS solution that helps businesses manage their inventory.
The three co-founders (Cameron Priest, Bradley Priest & Carl Thompson) of TradeGecko originally moved to Singapore to start in the JDFI Incubator which is structured much like Y-Combinator (in Silicon Valley). The key benefits of moving to Singapore for TradeGecko included government support, proximity to large markets and the ability to get away from all of the distractions at home. Raising funding in Singapore is also substantially easier with Cameron finding raising money in Auckland “pretty much impossible, especially at the time when I was 24”, whereas the funding culture in Singapore “is very similar to the valley in the regard that VCs are thinking of investing in you, so we found that fundraising was relatively easy”.
Singapore gives enormous support to startups with extensive government buy-in (the government itself is actually a net tech exporter, advising other governments on how to use the latest technologies).
Similar to investors in The Valley, Singapore attracts investors who are interested in you, making it substantially easier to raise Angel Investment and Seed Rounds than it otherwise would be in New Zealand. The initial seed round of $815,000 (Singaporean dollars) that TradeGecko raised happened when the company had roughly ten customers (including family and friends).
Raising Funds in Singapore
TradeGecko has raised all funding so far through investors the founders met during the JFDI Incubator. Before starting the process of raising a Series A you need roughly $1m in revenue. TradeGecko reached this milestone at the end of 2014 and expects to raise a much larger round part way through 2016.
Raising a Seed Round in Singapore can happen in a matter of weeks if you are already well networked and familiar with the investor community in the country, although it’s worth budgeting it to take 3 months or so if you are new to the region.
Marketing in Asia
South East Asia is an enormous potential market, with more than 650 million people in the immediate area (excluding China & India). While Singapore doesn’t have a great domestic market, it is substantially closer to global markets than New Zealand.
While Asia is both home to an enormous population and an exploding middle class, it does have it’s fair share of difficulties – with Cameron recommending startups take Peter Thiel’s advice and focus on owning a monopoly in a small niche, rather than trying to be something for everyone.
As is common in Asia, businesses are still driven heavily by relationships, while the consumer market is characterised by rapid adoption of apps, with consumers skipping entire generations of technology to move directly to the latest and greatest (e.g. from no bank to completely online banking, or skipping landlines in favour of mobile phones completely).
The most important thing is having boots on the ground, and actually living in the markets. The reality of life in Asia is that it’s much more nuanced than what can be found through internet research.
Mistakes TradeGecko Made
1: Having a vision but no strategy – having a vision is important, but a strategy is also essential.
2: Not letting bad employees go fast enough (if you don’t know, you already know)
3: Giving up too much control of the company – dual class share structures let you retain control while giving up equity.
4: Not hiring senior people early on enough (basically as soon as you reach product-market fit)
Changes at scale
When you pass 45 staff there is a culture shift within a company – you need to start saying to people “if you do x, y & z this is what your career is going to look like”. This is even more important if your team works remotely. TradeGecko have a relatively structured approach to meetings, with Cameron focusing on ‘meeting cadence’ with regularly scheduled meetings (for example an all hands Friday morning standup).
It is very difficult to find people who have done what you want to do – not many people have built a SaaS business that has revenues of more than $100 million a year outside of the obvious ones in Silicon Valley.
Vesting structure of TradeGecko
- Everyone is on a four year vesting schedule
- The three co-founders have equal shares of the company
- Senior team members negotiate for equity
- Everyone else gets a percentage of their annual salary in stock against the value of the company on the day they started.
- No equity in the first year, then monthly equity grants for four years.
One of the most important things for entrepreneurs to define is a clear picture of what they want their lifestyle to look like. While Silicon Valley is the mecca for startups in the world, it’s also incredibly expensive. Singapore is an excellent place for Kiwi entrepreneurs to launch a global business and is worth considering, especially for businesses that want to launch in the Asia-Pacific region and take advantage of the enormous emerging middle class.
Watch the video here: