What I learnt launching a Sequoia-backed Series C startup in Taiwan [edited]
I was the Country Launcher for Circles.Life and wanted to share some of the lessons learnt while launching a new market.
In 2019, when I joined, Circles.life was already backed by Sequoia and shortly after, Founder’s Fund joined the next round. The company was a digital telco looking to disrupt the stodgy telco industry that hadn’t innovated in decades. It successfully did so in Singapore and was looking to do the same in Taiwan and Australia
Disclaimer
The following are opinions are my own and the spirit of this essay is to share the broader learnings with the community. I’ve also stuck to public information.
My top takeaways are:
A new market means finding Product Market Fit all over again
Startups don’t get respect in Southeast Asia(by SEA talent)
Hiring too fast erodes culture
Local teams need autonomy
Keep the startup culture alive
Over-communicate (not equal to holding endless meetings)
Founders must go native
This analysis will be from a consumer startup point of view and based off my personal experience. Would love to hear more from people who have worked on market entry from the standpoint of a fast growing startup.
A New Market means finding Product Market Fit all over again
When Circles.life first launched in the Singapore market, the competition that they faced was ripe for disruption, prices were high while the offering was insipid. It didn’t take much to offer a product that was 10X better than the competition, which Circles did, in great style with a brand that clearly stood out from the competition. 20/20 - 20SGD for 20GB while I was paying 40SGD for 5GB with M1.
When they entered the Taiwan market, the incumbents had already disrupted themselves, it was a market where for ~20USD one could have unlimited data. One of the cheapest unlimited plans in the world, and as an MVNO, they were in no position to improve the data quality as the business model was not to own any infrastructure. This made it very challenging to break away from the competition
[edited]After recently taking a look at the their website (April 2021), I noticed that their pricing is cheaper than the competition and their app store ratings are the highest amongst the telcos in Taiwan. Would be good to see the results in a year’s time
What you should do:
Take your learnings from existing market(s), determine what are the similarities and differences in the markets and form a new hypothesis. Test your hypothesis in the new market before scaling up.
Startups don’t get respect in Southeast Asia (by SEA talent)
Hiring in Southeast Asia can be difficult because startups still do not get the respect from potential hires. Just because it was easy to find a decent engineer in the Bay Area or English speaking staff in Singapore, expecting the same elsewhere will end in a lot of frustration. It wasn’t till recently that in places like China and Singapore, joining a fast growing startup was considered a good career move.
One problem I faced while hiring my middle management in Taiwan was that it was a market where being a startup was viewed more with suspicion rather than getting onboard the next rocketship. I had interviews cancelled when they found out that it was going to be in a co-working space (permanent office being set up at the time), despite my attempts to convince, pointing out that a company investing millions of dollars into setting up operations and working with one of the country’s largest companies wasn’t going to close down in a matter of months, the optics mattered more than I thought.
What you should do
Scout the market ahead of time (1-3 months), establish the market rates, quality of talent for each position, local hiring practices and work culture. Come up with a plan to fill the positions within a timeline. Plan for the bare minimum you need and scale up as needed. Most importantly, adjust your expectations to the reality of the market.
The locals know the secrets of the land
The hardest thing for founders to do is let strangers take care of their baby. However, it is imperative that the local team is given the autonomy to execute. You hire a local team because they understand the local markets on an instinctive level and can make decisions with better context. Micromanaging the team is counter-productive to this
What I’ve noticed and learnt is that teams that are like mini startups that are given the freedom to make mistakes and learn while moving like a startup tend to out-perform teams that are micro-managed. This is the reason why startups can beat big companies, because you’re often not competing against say Microsoft or Nike, but a department within the behemoth that might not have the resources that you imagine that they might have, but still have to go through the bureaucracy. So while you’re a startup, move fast while you can!
What you should do:
Be stringent with hiring, trust the team, set targets, monitor and make adjustments to the team if they don’t deliver.
Communication
In a 10 person startup, communication is as straightforward as speaking directly to the person across the table from you and everyone is peripherally aware of what everyone else is doing as the person is probably sitting right beside you.
In a 50 person startup, without the right systems in place, you may find inefficiencies creeping in like double work occurring because you have no idea that someone else has already started work on the very same task that you’re working on or information is just taking a little longer to cascade
In a 150 person startup, you start not knowing everyone’s name and the chances for different teams and departments working in silos increases exponentially
What you should do
Keep teams small, keep the startup culture alive. Jeff Bezo’s 2 pizza rule makes a lot of sense. If 2 pizzas can’t feed the attendees of the meeting, you have too many people (5-8 people), and by extension, if your teams are too big, communication and office politics start to come into play.
Over-communicate through status updates digitally, do not fall into the temptation of holding endless meetings.
Founders go native
Shopee beat Lazada in no small part because of their hyper-localised approach, and this understanding was developed as their CEO Chris Feng was spending a good amount of the year in Indonesia, while the competition’s CEO flew into Singapore once a month.
What you should do
Send one of the founders to the new market, not necessarily to be the new country manager, but so that the founding team has a deeper insight to the local market which will only make them better to report to from the local team’s perspective.
In Conclusion
New market entry is never easy, but if keep to the following, you will greatly increase your chances of success:
Take your learnings from existing market(s), determine what are the similarities and differences in the markets and form a new hypothesis. Test your hypothesis in the new market before scaling up.
Scout the market ahead of time (1-3 months), establish the market rates, quality of talent for each position, local hiring practices and work culture. Come up with a plan to fill the positions within a timeline. Plan for the bare minimum you need and scale up as needed. Most importantly, adjust your expectations to the reality of the market.
Be stringent with hiring, trust the team, set targets, monitor and make adjustments to the team if they don’t deliver.
Over-communicate through status updates digitally, do not fall into the temptation of holding endless meetings.
Send one of the founders to the new market, not necessarily to be the new country manager, but so that the founding team has a deeper insight to the local market which will only make them better to report to from the local team’s perspective.
I have an interest in all things tech but with a particular interest in Social, The Creator Economy, and the Metaverse. If you’re working in the space or starting something new, I’d love to chat, my email is zishuang.cheng@gmail.com
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