If you are reading this blog post, I assume you are considering to join Founder Institute or you know me personally, or through a friend of mine. By the time I’m writing this, I have finished the whole program at Founder Institute Kuala Lumpur and waiting for the graduation day. I really hope that this post can help you in whatever way. There are also interesting topics here if you are starting a startup / an internet company.
How it all started
In end of March 2015, I stumbled upon a problem in Indonesia. I couldn’t find a convenient way for high school graduates to find Universities or other higher education institutions online. There is no proper education portal at all, which usually exists in most developed countries. I continued to do more research. It was frustrating when I found out that only 30% of Indonesian high school graduates further their study at higher education institution. Of course, there are a lot of reasons why the number is really low, such as financial limitations, etc. However, one of the reasons is because it is extremely difficult to find the 3,000 institutions in Indonesia (Yes, 3,000), at least 2,500 of them can’t be found online.
I decided I want to create the first proper Indonesian education portal. I believe in the power of internet and information. I believe that when people are connected to valuable information, they can get new opportunities that once could not be found.
Joining Founder Institute
I finished my last internship in mid of April 2015. I had this strong belief but I didn’t know what to do next to make this idea happen. I am an optimist and a pessimist at the same time. I knew that this idea is something important to create, I can change lives. But I do know that in order to make this solution sustainable, I need to build a business out of it. And of course, I must have sufficient knowledge and expertise to build an internet company (I am a food technology fresh graduate, with background in business since I was 17. I will share about it in future posts).
I was doing a lot of research about which incubator or accelerator to join as a startup founder.
I found this article that made me confident that Founder Institute is the right one for me:
Sedangkan mentor adalah sosok yang berdedikasi untuk membantu murid mereka dalam mencapai kesuksesan berbisnis atau hal apapun lainnya. Contoh incubator yang berdedikasi penuh menurut Kevin adalah Founder Institute dimana entrepreneur yang bergabung di sana memang diberikan pembelajaran yang mendalam, tugas, mentorship, dan juga dipersiapkan untuk pitching ke investor. “Beginilah seharusnya suatu incubator itu berjalan,” tegas Kevin.
Kevin Osmond, the Founder of Printerous (An Indonesian startup), concluded that Founder Institute has dedicated mentors that would really help all the founders / entrepreneurs, which is exactly how an incubator should be run.
Initially, I applied to Founder Institute at Silicon Valley and I was accepted. After some thoughts and discussions, I decided to join Founder Institute Kuala Lumpur instead. It was one of the best decisions I made in 2015.
Here are the 5 most important things I have learnt throughout Founder Institute program and starting a startup:
1. Listen to your customers, but don’t do exactly as they say.
Every entrepreneur I met is persistent with his or her own ideas. It is definitely a good thing. If we don’t believe in our idea enough, why start a company? However, it is very important to ask the right question and listen to our customers.
At Founder Institute, we need to really validate the problems our company wants to solve early on. We need to conduct face-to-face interviews and surveys to a lot of potential customers to really understand what are the real problems that need to be solved.
This gets more interesting when we are building a two-sided marketplace, something like: Uber, Airbnb, Alibaba, etc. We need to validate the problems that exist in both sides: Uber (drivers and passengers), Airbnb (room owners and travellers), Alibaba (manufacturers and traders). The company I’m building is called Uniklik, which is solving the difficulties for high school students to find the right University for themselves. I needed to validate the problems that students and Universities have. I interviewed both students and University admission representatives to further understand what their needs and wants are. It was amazing to truly understand how Uniklik could help them. Here are the things to consider before starting a marketplace startup.
Here is the interesting part, we shouldn’t ask exactly what solution they need. Sometimes customers don’t really know what solution they want, but they usually know what problems they don’t want. We need to understand their problems really well, put ourselves in their shoes, and build something we would love to use if we were them. Here is a guide to conduct an effective customer development interview.
2. Business is all about people, people, people.
Whether we are starting a restaurant, a factory, an e-commerce, an internet company, or other businesses, it is all about the people. Here is the deal, entrepreneurs that choose to start an internet companies are efficient and effective, with a little bit of positive laziness (want to achieve big things with as little effort as possible). Well, I choose to start an internet / software company because it is very scalable (But it has a lot of risks, a lot of startups fail before product/market fit happens). In a very short explanation: the higher the revenue, the lower the cost per customer. What I really love about an internet company is: I can scale my solution to help a lot of people with relatively lower costs compared to other ways, such as setting shops / offices everywhere in Indonesia. As startup entrepreneurs, we need to always remember to include people factor in our scalable business model. For entrepreneurs that love automation and scalability, it sounds really slow and “unscalable” to manually get users, get customers, recruit team members, etc. However, it is part of the process in building a business. We just need to go out there and talk to people. It is all about solving people’s problem, bringing the right people to work in the team, getting advice and investment from the people who believe in the vision. Paul Graham (Y Combinator) wrote a great essay about it.
Last but not least: Always do it for the people, then it is a risk worth taking. Internet companies are too risky if it doesn’t contribute to a good life. There are still a lot of other ways to make a fortune.
3. Be humble and confident at the same time. Ask the right question.
In the process of starting a startup, we will face doubts and fears: “If this is a good idea, why would nobody do it?” or “Why would they pay for this solution?” and a lot of other questions in our head. 🙂
This is normal, why? Most of the times, we are doing something that nobody did before, at least not in our country. At this point, what we can do is just be humble and confident at the same time. Ask the right questions to the right people.
Throughout my journey at Founder Institute, I always remind myself why I started. I always remember what I believe in so that I am confident on the path I’m taking. When in doubt, I always admit what I don’t know and be humble. I would talk to potential customers and mentors to further validate whether our team is developing the right product and solution.
For Uniklik’s revenue model, we spent a lot of times talking to different Universities. They have different ways in doing things and Uniklik has to find a revenue model that would be suitable with all of them generally. I also spent a lot of times discussing with mentors about closing deals with customers and also in recruiting the right team members. Going back to number 2, it is again all about the people.
Be humble and confident. Ask the right question to the right people. It’s okay to admit that we do not know everything.
4. Survival is everything. Growth is next.
A business must be sustainable. And the only way to do that is by having a solid revenue model and good revenue streams. There are often times when we focus too much on the product. When starting a company, we need to look at the business as a whole. We must ensure that there will be sufficient cash flow to sustain the company, to pay the bills, to pay salaries, etc.
This is my personal opinion, may or may not be valid depending on your business: I think to start an internet company in South East Asia, it is very important to ensure that we have clear revenue streams from day one. The investors around here are different with the US, they are more risk averse. They need to really know exactly when they can get their investment back. Investors in US are different, they are more willing to invest in really innovative ideas, think about Facebook’s early days. If Facebook were started in South East Asia, how would it have been? I think startups in South East Asia should focus on how to survive even without any early investors, and then focus on growth when survival is not an issue anymore. I am a fan of tech companies that generated cash flow from day one, one of my favourites is GitHub. The first venture capital they raised was $100 million.
We should validate our Business Model Canvas with customers as soon as possible. Most business plans do not survive first meetings with customers. True story!
5. Ideas are NOT cheap. Traction is King.
I met a lot of people who always say that ideas are cheap and they complain about people that are secretive about their ideas. They also said that it is all about execution. Well, execution matters, but ideas are not cheap. The value of an idea increases when it meets capable people. Nobody can truly own an idea, but the right people can extract value out of it.
Some ideas are brilliant, some ideas are not. Idea has value. Its value can be derived by executing really well. In the old days, a lot of people gained their fortune by extracting value from gold or other natural resources mines that they found and control. Those people were secretive. They built their foundation and wealth before anybody else discovered the same mines. The same concept exists in today’s world. Think about it, an interesting book to read is “Zero To One” by Peter Thiel.
Ideas should be shared and developed together with the people who care about you. They will help you and support you, even better, join your team! However, sharing ideas to the wrong people or potential competitors prematurely could be dangerous. Your information that you shared could possibly be the threat for your own business, especially when it is still very young and fragile. Because yes, some people can execute better than you.
Truth to be said, nothing can really be hidden when our product and solution are online. So how to protect the business and ensure that our company can survive? The only barrier to entry is traction. (Updated with additional thoughts: We can actually build other barriers to entry, depending on the available resources, location, and situation: technological feasibility, market readiness, talent availability, political influence, etc. I think Alibaba would not be so successful if China allowed Amazon and eBay grew in their country. Drop me an email if you have any thoughts! )
Traction is King. When your company has gained enough traction, it is particularly difficult for other competitors to enter the market. Think about GrabTaxi in Malaysia, who established their presence and other Apps couldn’t seem to compete. Read a little bit about it here.
A lot of the things I shared in this post are based on my own opinion. It might not be applicable to the business you are building. Keep in touch! Reach me at firstname.lastname@example.org