Jumpstart Issue 29: Back to Basics by Jumpstart Magazine: The Entrepreneur's Magazine

www.jumpstartmag.com

The Entrepreneur’s Magazine

Issue 29

April 2020

Anatomy of an Almost− Unicorn Charting Zilingo’s meteoric growth from pre-seed to global titan p. 50

Why mobile gaming is about to win big Rental, resale, and the fashion industry New challengers in the search engine space Transforming urban life through farming Teletherapy to expand access to mental health treatment

Zilingo Co-Founders Ankiti Bose & Dhruv Kapoor

EDITOR’S LETTER

think it’s safe to say that 2020 is not turning out the way that any of us expected. The last time I wrote to you, I was brimming with enthusiasm about globalization and its potential to bring the world closer together in the next decade. How innocent those words seem today. As we impatiently watch the consequences of the COVID-19 pandemic unfold, businesses around the world are adapting and recalibrating. The optimist in me believes that, through each Zoom call and face mask-toface mask meeting, positive changes will happen. For now, all we can do is press on and wait for better days from the safety of our homes. For us, business-as-usual means sending another issue your way. This ‘Back to Basics’ issue is a bit different. We’re covering innovation from another perspective: disruption through execution. Some of the startups we interviewed may not harness deeptech, but they are spearheading change through a new take on a traditional business model. In our cover story, we interview the co-founders of Zilingo–a soon-to-be ‘unicorn’ that is digitizing the ecommerce supply chain for small vendors and factories throughout Southeast Asia. Although the company launched with the simple idea of connecting independent merchants to consumers, it has since become a launchpad for small business owners to grow and thrive, elevating the lives of those working in the region’s informal economy. In this issue, we also dive into the reinvention of consignment and rental in the retail space, how urban farming is transforming cities, uncharted territory for mobile gaming, why ‘Googling’ may become a thing of the past, and the power of teletherapy. Last, but definitely not least, I’m excited to announce that Jumpstart Media welcomed Relena Sei as its new Chief Executive Officer in March. Jumpstart Media’s previous CEO, James Kwan, will assume the role of Executive Chairperson. We’re looking forward to entering this new era of Jumpstart with you, and thank you for your ongoing support. We wish everyone a happy and healthy Spring.

A NOTE FROM OUR CEO Relena Sei

am honored to be a part of the Jumpstart family. It’s only been two months since I joined, but I can feel the passion in our office as we prepare to launch Jumpstart Media to new heights. I am proud of our magazine, which our team has worked diligently to develop into the great product it is today. However, Jumpstart is not limited to being just a media platform, as we are also a leading startup ecosystem-builder. Over the next few months, we will be announcing exciting new initiatives geared toward supporting startups in this competitive and ever-changing landscape. Lastly, I welcome any stories and feedback from our community, both good and bad. I believe it is essential to listen to our readers, especially if they care enough about us to share their thoughts. We truly consider you a part of our team and integral to our success. I will remain accessible anytime by email at [relena@jumpstartmag.com]. We will build on our ongoing efforts to connect and develop the startup ecosystem globally–from Hong Kong.

CHIEF EXECUTIVE OFFICER

Relena Sei

EXECUTIVE CHAIRPERSON

James Kwan

EDITOR IN CHIEF

Min Chen

EDITORIAL ASSOCIATE

Nayantara Bhat

DIRECTOR OF OPERATIONS FOUNDER / ADVISOR ADVISORS

Min Chen Editor in Chief Have thoughts about this issue? We’ d love to hear from you. Email us at [editors@jumpstartmag.com] and include your full name and email address. Please note that letters to the editor may be edited for length and clarity.

Anita Chan

Yana Robbins

Joseph Chow, Carman Chan, Shitiz Jain, Leo Ku,

Derek Kwik, Jeanne Lim, Prem Samtani JOURNALISTS IN RESIDENCE

Monika Ghosh, Jordan Lee,

Sharon Lewis, Daneesh Shahar SPECIAL THANKS

Jasmine Chan, Kelly Cho, Anagha Nair

COVER PHOTOGRAPHY

Zilingo

Copyright © 2020 Jumpstart Media Ltd. The contents of the magazine are fully protected by copyright and nothing may be reprinted without permission. The publisher and editors accept no responsibility in respect to any products, goods or services that may be advertised or referred to in this issue or for any errors, omissions, or mistakes in any such advertisements or references. The mention of any specific companies or products in articles or advertisements does not imply that they are endorsed or recommended by this magazine or its publisher in preference to others of a similar nature which are not mentioned or advertised. Published articles do not necessarily represent the views or opinions of Jumpstart Magazine. April 2020

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N o. 2 9

ZILINGO

A pr i l 2 0 2 0

Anatomy of An Almost-Unicorn Charting Zilingoâ&#x20AC;&#x2122;s meteoric growth from pre-seed to global titan

RET YKLE / JENNA LOUISE POTTER (MIDDLE)

Cover Story

ECOSYS TE M S

T RE N D S

Introduction to the Korean Startup Ecosystem

The Fast Rise of Slow Fashion

New Challengers in the Search Engine Space April 2020

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FEATURES

P41

S TA RT U P T O O L KI T

Understanding Design Thinking Exploring the approach through relevant case studies E CO SYS T E MS

A Spotlight on MENA Tech Maturity and a mindset shift are transforming the region’s startup ecosystem T RE N D S

Green Living Starts from the Top Fertilizing a sustainable lifestyle through urban farming T RE N D S

P58

A Golden Age for Power Ups Eight years A.C.C. (After Candy Crush), the mobile gaming industry is ready to win big T RE N D S

Transitioning to the Subscription Model This popular revenue model may not be for everyone F O U N D E R S T O RI E S

Match and Listen Transforming mental health treatment in Australia with Lysn Founder Dr. Jonathan King GUEST COLUMNS

P62

A Stream of Influence By ASHLEY GALINA DUDARENOK

Why China’s KOL market isn’t slowing down anytime soon 16

New Skies for the Photography Industry By EVGENY TCHEBOTAREV

Bringing magic into photo editing using AI CONVERSATION STARTERS

Apped Up In You Interesting findings about your mobile gaming, dating, and shopping life LIFESTYLE P O D CA S T RE V I E W

Moonface created by James Kim BOOK REVIEW

How to Get Filthy Rich in Rising Asia by Mohsin Hamid ET CETERA ONE LAST QUESTION

What is one life hack that you swear by?

April 2020

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CONTRIBUTORS

PHILIP BAHOSHY

N AYA N TA R A B H AT

L I N A B O D E S TA D

STEVE BRUCE

Philip is the Founder and CEO of MAGNiTT, the largest investment data platform for the MENA startup ecosystem. Raised in the UK with Iraqi origins, he obtained an MBA from INSEAD in 2013 and a BSc in Economics from the London School of Economics. magnitt.com Read his feature on page 41.

Nayantara is Jumpstartâ&#x20AC;&#x2122;s Editorial Associate. She is passionate about gender equality and good food, and loves to read and write about new and unusual applications of technology. She has lived in India, Indonesia, and New Zealand before moving to Hong Kong. nayantara@jumpstartmag.com Read her feature on page 50.

Lina is a licensed psychologist based in Sweden and is one of the first in the country to specialize in UX research. She is the Founder and CEO of Crimson Vale Consulting, a startup that develops apps to gamify and simplify everyday family life. Lina has a life-long love of tech. linkedin.com/in/linabodestad Read her feature on page 87.

Steve is a Hong Kong-based independent LinkedIn trainer and marketing consultant for small and medium sized-enterprises. With over 30 years of experience, he helps senior executives, business owners, and corporate teams to present themselves powerfully on LinkedIn. sbconsulting.com.hk Read his feature on page 33.

S T E V E C E R VA N T E S

JASMINE CHAN

K I M MY WA C H A N

K E L LY C H O

Steve is an Associate Professor in the Department of International Trade at Konkuk University in Seoul, Korea. He has held several media and think-tank positions throughout Asia. Professor Cervantes is highly active in the Korean media scene and often shares his expertise. ucla6767@gmail.com Read his feature on page 36.

Jasmine is an Editorial Assistant at Jumpstart. Born in Melbourne and raised in Hong Kong, she is studying Linguistics at the University of Hong Kong. Jasmine is passionate about art, Broadway, and cultural exploration. She loves visiting art exhibitions or belting out her favorite songs. jasmine@jumpstartmag.com Read her feature on page 58.

Kimmy is a Professor in the Department of Marketing at Hong Kong Baptist University School of Business. Her research specializations are in Services Marketing and Customer Relationship Management, for which she has published numerous studies. hkbu.edu.hk Read her feature on page 23.

Kelly is an Editorial Assistant at Jumpstart. She studies English Literature and Translation at The University of Hong Kong. She is also passionate about music and theater. In her spare time, she enjoys playing violin, and attending concerts and exhibitions around Hong Kong. kelly@jumpstartmag.com Read her review on poge 91.

J A R E D H AW

D E E PA K A M AT H

L O U I S A L AU

SHIRLEY XUENI LI

Jared manages EPower Corp, a global contract manufacturing company that develops and manufactures consumer electronics. He has worked with some of the leading innovators in the world to transition their products from development to production. epowercorp.com Read his feature on page 35.

Deepa has over 30 years of experience as a designer and creative team manager. She is the founder of Amplify, a Hong Kong-based design studio. Deepa has a Masters in Visual Communication and is a LUMA-certified Design Thinking Practitioner. amplifyhk.com Read her feature on page 26.

Louisa is HelloReporterâ&#x20AC;&#x2122;s PR and Content Manager and a leader in strategic brand building, corporate and media relations, digital marketing campaigns, and event management. She is passionate about creating and shaping business narratives for startups and SMEs. helloreporter.io Read her feature on page 29.

Shirley is an Assistant Professor in the Department of Marketing at Hong Kong Baptist University School of Business. Her research interests span Consumer Behavior, Digital Marketing, Sales and Services Marketing, and Customer-Employee Interaction. hkbu.edu.hk Read her feature on page 23.

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CONTRIBUTORS

ANAG HA NAIR

WILL ROSS

DANEESH SHAHAR

P L AT O WA I

Anagha is an Editorial Intern at Jumpstart. Originally from India, she is a first year student studying Journalism at The University of Hong Kong. Anagha is passionate about new experiences and traveling the world, and hopes to become a backpack journalist in the future. anagha@jumpstartmag.com Read her feature on page 79.

Will is the Head of Digital Channels and Experience for Citibank Hong Kong, overseeing digital channels and their integration with customer experience. He has 20 years of experience in VC, corporate and investment banking, and digital business development. citibank.com Read his feature on page 24.

Daneesh is a senior at New York University Stern School of Business, studying Quantitative Economics and Computing and Data Science. Heâ&#x20AC;&#x2122;s fascinated by the crowdsourcing model in shaping wide-scale employment, and the role tech plays in driving the esports industry. daneesh@jumpstartmagazine.com Read his feature on page 70.

Plato is General Manager at SHOPLINE HK, a global smart commerce enabler. Prior to SHOPLINE, he worked at Lehman Brothers and Nomura Holdings. With extensive experience in the startup scene, Plato regularly writes for The Stand News and StartUpBeat. shopline.hk Read his feature on page 30.

Do you want to write for Jumpstart? BENJA MIN

Get in touch with us at [editors@jumpstartmag.com] to learn more about how you can become a contributor.

WONG

Benjamin is the Co-founder and CEO of TranSwap, a company that provides businesses with a platform to seamlessly manage and execute payments globally. His industry knowledge and well-rounded business perspective has led him to found several startups over the years. transwap.com Read his feature on page 32.

Please include at least one writing sample in your email.

JULY 9, 2020

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LIFESTYLE TECH CONFERENCE STARTMEUPHK FESTIVAL 2020

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A Stream of Influence

merce with them. When we talk about China’s Internet economy, the role of KOLs can’t be ignored.

Why China’s KOL market isn’t slowing down anytime soon

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he standard retail cycle (i.e., demand to influencer content to purchases) has been upended to become influencer content followed by consumer demand, and then purchases. The supply chain formed by KOL ecommerce allows for pre-ordering to eliminate excess stock. When it’s their own product line, influencers will work closely with manufacturers to make sure extra stock can be ordered if there’s demand. This chain eliminates intermediary retailers who were necessary to reach customers in the past. KOLs who have product lines are also in the unique position of promoting products for competitors, putting many brands in the awkward position of having to rely on the competition to promote their product. New influencers or those who don’t have product lines can turn to another trend: MCNs.

By ASHLEY GALINA DUDARENOK

hina’s key opinion leader (KOL) market has been one of the fastest-growing and most durable economic phenomena in recent years. Ruhan Holding, a Chinese firm that specializes in KOL-driven ecommerce, found that the country’s influencers drove US$4 billion in sales in 2018. China is also known for the outsized role that its influencers play in consumer behavior. According to CCTV, 83% of young consumers’ purchasing decisions are highly influenced by KOL recommendations, while 38% of consumers feel the same in the U.S. In the UK, the number is only 32%. Judging by the sheer number of potential followers in the world’s most populous country, it’s easy to see how powerful the KOL economy is compared to other countries. For example, Huiyi Zhuanyong Xiaomajia, a comedy and pet blogger on Weibo (China’s answer to Twitter), has 41 million followers, and the average engagement (i.e., likes, shares, and comments) for one of his posts is around 10,000. He is con-

How KOLs disrupted retail

sidered a small- to medium-sized influencer in China. Let that sink in. Li Jiaqi is the top live streaming blogger and cosmetics salesperson on Taobao with 18.5 million followers [as of February 2020]. He gets more than ten million views for his daily streams. Viya is also a Taobao live streaming seller who showcases items ranging from skincare to cereal. She has 15.3 million followers, and her regular live streams get more than 12 million views per stream. The two consistently sell tens or hundreds of millions of Renminbi worth of products. To compare, Bill Gates has 48.9 million Twitter followers, Robert Downey Jr. has 42.6 million Instagram followers, and Lady Gaga has 39.4 million Instagram followers. These public figures are all internationally-known, whereas Chinese KOLs are only known within China and among a small number of Chinese expats. The pace of digitization in the country means that its modern celebrities and influencers went straight to the web without skipping a beat and brought ecom-

Multi-channel networks (MCNs) are changing the game CNs are agencies that create core content for platforms and train professional KOLs. They are bringing a

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nese KOLs, given their proximity to the world’s largest manufacturing hubs and sophisticated supply chains.

Increased platform competition aobao’s dominant position in live streaming ecommerce may not last for long, and platform competition may soon replace MCN competition as the key to winning traffic. JD.com, Weipinhui, and Pinduoduo are all planning to enter the ecommerce live stream market. Even video apps, such as Douyin and Kuaishou, are filled with KOLs selling products during live streams. Taobao occupies much of the mindshare in first and second-tier cities, so the new players will likely start from the sinking market (third- and fourth-tier cities and below) and then slowly occupy the first and second-tier cities.

Journey to the West everal Chinese YouTube accounts have gained success in recent years. Li Ziqi showcases an idealized and cinematic portrayal of rural life in China, which has captivated viewers around the world. Her channel currently has around nine million subscribers and more than a billion views. Another YouTube channel by a quirky blogger, who goes by Ms. Yeah in English, has garnered 8.3 million subscribers and almost two billion views for her odd hacks and unusual takes on office life in China. With domestic channels highly saturated and competitive, these KOLs are showing that going international on YouTube may be the way forward.

S certain level of standardization and consolidation to what has become a broad and fragmented market. More and more platforms are also launching their own internal MCN support programs. Xiaohongshu, or RED, announced its MCN plan in November 2019, stating its intention to create ten super KOL accounts with RMB 1 billion in backing. KOLs–supported by vast amounts of traffic–share consumer demand and feedback with ecommerce platforms, suppliers, brands, and MCNs to form a supply chain that can quickly adapt and iterate.

What can we expect in the future? Expansion and diversification ccording to an iResearch survey, the number of online celebrities with more than 100,000 fans increased by 51% from 2017 to 2018. As of April 2018, the total number of Chinese KOL fans reached 588 million, up 25% from 2017 (iResearch). With this expansion comes new types of content and new ways to consume it, such as using VR to enable customers to view a product from all angles before making a purchase. KOLs will also become

more effective in targeting consumers with the use of data analysis and other tools.

Social responsibility is gaining importance ore and more influencers are using their enormous platforms to do good. Li Jiaqi did a special live stream on the eve of Chinese New Year; instead of selling, he asked viewers to make donations to Wuhan after the coronavirus outbreak, raising a total of RMB 71.4 million.

Key opinion consumers (KOCs) and private traffic rands know they can’t rely on independent KOLs for everything. Many brands are building in-house KOCs to review and promote new products and discounts, and manage customer relations. They openly work for the brands, which followers see as another way for companies to diversify their promotional efforts.

KOL brands will continue to excel ore and more influencers will work to build brand and product lines once they attain a certain level of popularity. This process is particularly easy for Chi-

ABOUT THE AUTHOR

Ashley is a renowned China marketing expert, entrepreneur, speaker, vlogger and bestselling author. In 2019, she was recognized as a LinkedIn Top Voice in Marketing in 2019 and an Asia-Pacific Top 25 Innovator. She is the founder of two companies: China-focused social media agency Alarice and China digital marketing consultancy and training company ChoZan. chozan.co

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The Next Great Entertainment Revolution Next generation games will be unlike anything we have seen before By WING LEE

aming has transformed from a ‘geeky’ activity into a dominant force in entertainment. With one in three people considering themselves a gamer, it’s safe to say the industry is reaching new heights (Newzoo). What makes the gaming experience unique is that it extends beyond the players. The fans who follow competitive gaming, or esports, have turned it into a global form of entertainment, as more people watch esports than HBO, Netflix, and ESPN combined (Roundhill Investments). Gaming as a spectator sport is massively appealing, whether for a kid who’s chasing their esports athlete dream, a gamer who loves to socialize with fellow players, or a casual fan who watches live streams on YouTube. Changes of this magnitude are rare in entertainment. Traditional sporting content on television has dominated home entertainment for the last few decades. The new era of esports-related content and live streaming will likely be an enduring trend, given the increasing pace of digitization. Next-generation games in the new decade will be unlike anything we have seen before, reshaping the way people interact with and consume content. A game may just become the next big social network, for one. Popular shooter game Fortnite is already drawing comparisons to Facebook. Millions of people play the game in teams, and even when gamers are not actively playing, they chat and watch others play. The next Marvel universe may very well stem from the gaming industry. Action-adventure game Red Dead Redemption II had the largest opening weekend for game sales in the history of entertainment, topping Hollywood’s weekend box office record set by Avengers: Infinity War. Players are devoting thousands of hours to interacting with characters and stories, as MMORPGs (massively-multiplayer online role-playing game) are designed as massive worlds for players to explore. This highly-engaged fan base provides excellent opportunities to build the next big movie franchise or lifestyle brand targeting millennials and Generation Z consumers. U.S.based esports organization 100 Thieves has invested heavily in its clothing brand, and many more are sure to follow suit. Technology will also open up more ways for gamers to engage in their favorite activity. Currently, platform segmentation across P.C., mobile, and console makes it hard for friends to play with and against each other if they are on different platforms. But tools like Unreal Engine will enable developers to build cross-platform games. Multiplayer experiences will also be enhanced, leading to more player acquisition and engagement. Gaming and esports are creating a culturally visible community of passionate gamers and fans. The fans, often affluent and digitally-savvy, will become a highly sought after consumer pool for corporations and brands. We can look forward to a massive wave of commercial opportunities across the world, and the most immersive, imaginative, and entertaining gaming experience yet.

ABOUT THE AUTHOR

Wing is an entrepreneur and investor who invests in startups across the education, esports, and tech sectors. He is a former investment banker with more than ten years of experience in corporate finance and debt capital markets across London, Singapore and Hong Kong. winglee@wnjventures.com

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A Different Type of Innovation Focusing on product and community above all By YEELING CHANG

e see a ton of coverage these days about tech startups, often neglecting to discuss other new businesses that have been established in recent years. These businesses may not be selling a product or service with groundbreaking technology that changes our lives, but they impact us in subtle and meaningful ways. I can think of three companies here that encompass these values.

A friendly match hereâ&#x20AC;&#x2122;s nothing new about headhunting, but Taipei-based R&S Careers, co-founded by Sabina Huang, is offering a human-centric approach. Going beyond matching, the company helps job seekers by organizing monthly workshops around upskilling, conducting mock interviews, reviewing their resumes, and hosting networking events. Positioning and personal branding is certainly something that Huang understands based on her experience at AKAD Group, an MBA consulting firm. Like top-tier universities, employers look for highly-mobile and adaptable talents. One can argue that headhunting can potentially be automated, as we have seen on platforms such as LinkedIn Jobs. But the human touch is more effective in identifying suitable talent and developing a deep understanding of individual industries and company cultures.

Going back to brick and mortar rom the days of streetside stalls to Amazon Prime, we have been obsessed with shopping for millennia. Although ecommerce has put countless retail giants out of business, more and more small business owners are taking back the brick and mortar model and making it their own. A personal favorite of mine is Perk by Kate, a feminine lingerie brand that uses comfortable fabrics. Founded in Singapore in 2012, it started as an online business, but the company moved into a beautiful shophouse unit last year. As much as shopping online provides a variety of benefits to both the customer and operator, for founder Kate Low, a physical store means having more opportunities for interaction with her customers. In doing so, sheâ&#x20AC;&#x2122;s able to form long-term relationships with her customers and journey through life with them. For instance, if a new mother needs nursing lingerie, but is unable to find time for a fitting, the store will send items to her home, and the customer can keep what fits. The retailer-customer relationship is reciprocal, as the benefits of being able to see, feel, and try on the products have led to higher sales conversions.

New region, new produce arrow & Hope, based in Marlow, England, planted their first vines in 2010. Its first commercial harvest was in 2013, which was released for sale in 2016. Founders Henry Laithwaite and his wife Kaye started the venture when it became clear that climate change was making England a suitable place for producing sparkling wines. With the same chalky soil as Champagne, England now has the same climate as the region did 100 years ago. Given the increasing temperatures, the grapes can now ripen within a suitable time frame. The co-founders recognized that the greatest asset a winery has is soil, so Harrow & Hope steers clear of herbicides and only uses organic nutrition. He believes the vines should be healthy and balanced to produce the best flavors.

hese three companies use tech tools to run their business and understand their target audience, but what sets them apart is having an intimate, human understanding of their customers. They may reside in traditional industries, but their value rests in other elements: education, empowerment, and sustainability.

Perk by Kateâ&#x20AC;&#x2122;s brick and mortar location opened in Singapore last year after seven years of online operations. Photo courtesy of Perk by Kate.

ABOUT THE AUTHOR

YeeLing is Content Director at CAREhER, the only bilingual platform that takes a comprehensive approach to personal and professional development for women. CAREhER offers personal branding and coaching, and resources for learning, such as interviews with successful women. She is also an entrepreneur with over 12 years of experience in the F&B industry. careher.net

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Don’t Compare Your Beginning to Someone Else’s Middle Focus on what you’re doing and not on what the world is doing By STEPHEN MOORE

he availability of online content in the modern age has led us to become obsessed with what everyone else is doing and achieving in their lives–and to destructive effect. Teenagers are spending up to nine hours a day consuming media, with some checking their social media up to 100 times a day (Common Sense Media). Research by behavioral scientist Clarissa Silva found that 60% of people using social media reported that it negatively impacts their self-esteem. In the startup space, this phenomenon has become a toxic problem that is crippling far too many entrepreneurs. Social media has changed the way we evaluate our accomplishments. We’re holding ourselves to the unachievable standards of the hugely successful public figures and business leaders we follow. I’ve been guilty of doing so, spending too long looking at competitors and idolizing those further ahead in their professional lives than me. It took me a long time to realize that those two situations, one of somebody figuring out how to start a business from scratch and somebody who has ‘made it’ already, are not comparable. 14

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We’ve forgotten that the people who we put on a pedestal are way further down the line than us. Most of these founders you compare yourself to have likely experienced all the struggles you’re going through: money issues, the endless grind, and failure. What you see is the end product, which resulted from years of hard work and kind fortune. We sit and wonder why our one-yearold business hasn’t taken off yet, and turn to the Internet to tell us how to change the situation, only to be met with an endless sea of content. The result is feeling overwhelmed by the milestones we’ve yet to hit and strategies we’ve yet to try. Constantly seeking validation is detrimental to self-worth. Not being able to meet the unrealistic expectaions we set for ourselves can only lead to disappointment. We then throw in the towel far too early and join in the ‘90% of startups fail’ chant. The simple fact is that spending time on others’ lives is taking away time spent working on our own. Without focus, you will achieve nothing, feel even less adequate compared to your peers, and continue down the vicious cycle. My advice is:

• • •

Stop trying to emulate famous people or what other entrepreneurs are doing. Stop putting yourself down because you haven’t met an arbitrary standard you set for yourself. Stop comparing your year one to others’ year twenty.

If we want to gain the most out of our entrepreneurial experience, then we need to be honest about what we are doing, how we are doing it, and who we are–behind it all. Entrepreneurs need to know that they’re not alone in sometimes feeling helpless, lost, and inadequate. Being honest about what we go through will better the conversation around startup life. Sharing the lessons, experiences, and mistakes we all make allows us to grow as founders.

ABOUT THE AUTHOR

Stephen is the Co-founder and Maker of Roots Furniture, a bespoke fabrication and fit out company. He is also a writer and his work has been featured in Business Insider and Thought Catalog. Stephen is Co-editor of the Post Grad Survival Guide and Medium’s Millennial Career and Life Publication. sjmblog.com

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Vindicating the Liberal Arts Major The best talent you’re not hiring By SHO DEWAN

istorically, Liberal Arts majors have had a bad reputation when it comes to their appeal in the job market. While unfair, this generalization has trickled into the way many recruiters hire, especially for tech companies. Which candidate do you think a startup would prefer for a Data Scientist role: a Mathematics or a Sociology graduate? It depends is the right answer, but most recruiters are trained to look out for the buzzwords and go with the straightforward choice. This practice may be acceptable in the short-term, but tech companies are potentially losing out on game-changers by going down this route. Yes, strong technical skills are great qualities, but they’re not the only ones that matter. The best candidates for long-term success are often dynamic in their skill sets and have varied backgrounds. What matters most for a growing startup are candi-

dates with the ability to think outside of the box and solve real, human problems. According to a recent LinkedIn report, the top three most in-demand soft skills for 2020 are creativity, persuasion, and collaboration (The Skills Companies Need Most in 2020—And How to Learn Them). And which backgrounds are typically most equipped with these skills from their studies? Liberal Arts. So how can startups best hire a great blend of talent for their organizations?

Focus on the skill sets, not on past titles t’s easy to judge candidates based on their schools, majors, and previous roles, but this approach is not ideal when you want to foster diversity. Instead, identify the essential skills the candidates would need to succeed in the role and then look

for them specifically. Referring back to the Data Scientist role, the ability to use analytical reasoning should be high on the priority list. As an interviewer, ask for examples of when the candidate showcased that skill. You’ll gain a much more in-depth understanding of the individual by doing so, such as what motivates them.

Hire for attitude ccording to Entrepreneur, “40 percent of all new hires fail because of issues with their attitude.” If given a choice between ability and attitude, go with attitude every time. Anyone can learn new skills, but it is much harder to convince candidates to feel excited for a company and its mission if they are missing that spark from day one.

Reward multi-skilled candidates ecruiters are sometimes so honed into identifying the few technical skills that they miss the talent sitting right in front of them. In today’s world, the best talents are no longer one-trick specialists, but well-rounded rockstars. Don’t detract star candidates from having multiple interests and skills–reward them for it.

ack in the day, most tech recruiters wouldn’t even look twice at the CV of a Liberal Arts major, but times have changed. The best companies know that a diverse talent pool is better for business. More startups are now finding great success in hiring talent from less traditional paths. The CEOs of Airbnb, Alibaba, and YouTube all hold humanities degrees, and your next great hire may have one, too.

ABOUT THE AUTHOR

Sho is the Founder of Workhap, a coaching and leadership training company in Hong Kong. Its mission is to make work a happier place for everyone. He helps ambitious job seekers find their ideal next role and partners with leading companies to teach leadership skills to managers. workhap.com

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Before and after photos using Skylum’s “AI Sky Replacement” technology. Photo courtesy of Skylum.

New Skies for the Photography Industry Bringing magic into photo editing using AI By EVGENY TCHEBOTAREV

t the end of 1999, with snow falling outside an apartment located in a quiet part of Moscow, a 14-year-old boy was patiently waiting in front of a boxy, beige monitor–the unblinking eye of the Photoshop 5.5 splash screen staring back at him. That boy was me. The technology did seem magical when we look back at these seemingly idyllic, retro-futuristic days. Hordes of futurists and filmmakers at the time were promising us flying cars and intergalactic travel by 2020. Instead, we put a powerful supercomputer in everyone’s pocket. When Steve Jobs showcased the game-changing iPhone to the world in 2007, entrepreneurs began scrambling to build apps for the new device that would conquer the hearts and minds of all. One of the most compelling areas of development was building various photo applications to empower photographers. After all, the quality of photography in a smartphone is one of the most crucial features of the device. Artificial intelligence (AI) is often misunderstood. There’s talk 16

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that sentient or ‘general’ AI will take over the world, but so far, the technology remains outside the grasp of even the brightest minds, best-funded startups, and largest corporations. Instead, the AI that is now present in every product, from calendar apps to voice assistants, is simply analgorithm that uncovers patterns through self-learning. It harnesses technology for good by training pieces of code for a precise application. With ever-increasing computational speeds and open source libraries, it is now feasible to implement any idea using algorithms. Engineers began looking at tasks that are repetitive, but take an enormous amount of time. In the photography industry, the most notable is portrait retouching. It often takes photographers anywhere from 15 minutes to one hour to retouch a photo. If you have to deliver 30 portraits to a client, the process becomes very monotonous, very quickly. The economies of scale simply aren’t present when creativity is involved. Now, algorithms are taking on the task. Engineers would ask professional photographers to provide them with before and after photos, such as retouching the skin. Then, tens of thousands of photos are fed into a machine learning system algorithm to achieve professional-looking results–all done entirely by a computer. After several rounds of retouching and human checks, the algorithm will be smart enough to get the marketing stamp of being an ‘AI.’ Engineers are also taking on other problems, such as recognizing faces or retouching specific areas–making the eyes sharper, eyebrows fuller, chin more chiseled, and so on. Each of these improvements requires an algorithm or a combination of different algorithms. This utilization of AI is good news for startups and photographers. Instead of creating a gold rush, where companies compete for dominance, hundreds of startups are releasing small but useful features for photographers to try out. And changes are happening fast, as these companies don’t have committees taking years to decide to do ‘AI stuff ’ like that of large corporations. My company developed a solution to a problem that all travel and landscape photographers face: not being able to control the weather. We introduced a feature that can ‘replace the sky’ with the click of a button–a task that would take a professional photographer up to an hour. It also allows everyone to enhance their travel photos. The photography industry has been making steps toward what I call ‘useful AI’ in the last two or three years. These are the baby steps, but 2020 will be the year that we see both cloud and on-device AI from companies, big and small. They will be powerful enough to be, in the words of legendary Arthur C. Clarke, “indistinguishable from magic.”

ABOUT THE AUTHOR

Evgeny founded 500px, a global photo-sharing marketplace, which raised over US$25 million from Andreessen Horowitz, ffVC, and CAA. The company was acquired by VCG in 2018. He is currently the Chief Growth Officer of Skylum. skylum.com

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GUEST COLUMNS

Female Entrepreneurs Offer a New Perspective on Competition Competition doesn’t always have to be cutthroat– sometimes, it can be collaborative

The interesting part is that the five female founders must collaborate to decide how to split the money; the rules: it can’t all go to one or be split evenly. What seems to be a terrifying social experiment instead offers insights into a new way of doing business in a changing world. When approaching competitors for collaboration, think about whether there is a way to vertically integrate or align on some other core value to aggregate your offering. This diverse new way of thinking offers opportunities to find the best use cases for the limited resources needed for the next generation of businesses– and is a direct result of having more female entrepreneurs and investors in the world today.

By SHAZIA KHAN

couple of months ago, I was asked to give a keynote speech on how to build a startup in a difficult emerging market successfully. While I carefully outlined the questions that we asked to embed ourselves in the market, claw our way to profitability, and build a company with steady revenue and growth, what seemed to resonate most with attendees was our unusual approach to competition. Many years ago, I read an important book about negotiation called Getting to Yes: Negotiating Agreement Without Giving In by Roger Fisher and William Ury. It recounts a story of two sisters fighting over an orange. By drilling down into what each needed and understanding that their needs were not mutually exclusive, the situation is amicably resolved. One sister required the orange rind to bake a cake, while the other just wanted to eat the orange. This anecdote reflects how I approach negotiating with the competition. If you can carefully identify each stakeholder and their motivations, then you can find opportunities to collaborate in ways that are mutually beneficial to both of you. I use this strategy time and time again with my own company. Instead of fighting competitors in a race to the bottom, we continually engage them to see if there are opportunities to work together. This strategy has also allowed us to collectively work toward the creation of a positive environment to grow our businesses by pushing for policy shifts that favor all of us. It was this approach that led to us acquiring our largest competitor in the market. It was a much better funded company, but was on the brink of collapse due to bloated management costs and lack of local distribution. Far from finding joy in its demise, we realized that its failure might send the wrong signal to investors, potentially giving them the idea that our market was unripe. Moreover, it would leave thousands of customers stranded and destroy confidence in our product and the ability of companies like ours to service them. Buying out our competitor for a reasonable price allowed its owners to recover some costs and pay employees. Further, its customers could continue to be served. We were able to significantly expand our customer base at an accelerated pace and in a much more cost-effective way than we could have done otherwise. Another example of collaboration over competition can be seen in our fundraising efforts. I was recently presented with an exciting opportunity. In an attempt to counter the very real struggle that female CEOs face in this endeavor (according to Pitchbook, only 2.8% of venture capital went to female founders in 2019), a progressive new debt fund was established specifically for female CEOs. The total fund of half a million U.S. dollars is to be split among five ventures, selected based on the businesses’ chance of survival and repayment.

ABOUT THE AUTHOR

Shazia is an environmental lawyer and off-grid energy expert. She co-founded EcoEnergy with Jeremy Higgs as a way to distribute solar electricity in Pakistan to the 65 million living offgrid. EcoEnergy was selected as one of SheEO’s Ventures, and received a SET Award for being one of the top 100 energy startups in the world. ecoenergyfinance.org

April 2020

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CONVERSATION STARTERS

Apped Up In You Interesting findings about your mobile gaming, dating, and shopping life

Mobile Gaming 56 percent

of game revenue comes from three genres: Puzzle, Skill and Chance, Strategy (EEDAR).

Around 150

6 pm to 10 pm

is the most popular time for mobile gaming (Newzoo).

marketing creatives work at big gaming companies (over 500 people) like Wargaming. They always have five to ten creatives at hand to provide fresh perspectives when ad performance drops (Apptopia).

Average Yearly Revenue of the Top Five Grossing Mobile Gaming Apps (MediaKix)

23 percent

of women in the mobile game industry feel they have equal opportunity, even though 52% of mobile gamers are women (Forbes). 20

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2.2 billion

people were mobile gamers in 2019 (MediaKix).

1.5

3.5 n = US$100,000,000

5.5

CONVERSATION STARTERS

Dating Apps 90 minutes

is the average time a user spends on Tinder daily. Women spend 8.5 minutes swiping in a single session, and men spend 7.2 minutes (New York Times).

1 million

messages were sent through Coffee Meets Bagel on ‘Dating Sunday’ (the first Sunday of the year) in 2019 (Business Insider).

US$8.92

is the average revenue per user for online dating (Statista).

51 percent

of people aged 18 and 24 consider online dating to be important to them (Think With Google).

21 percent

of Gen Z respondents believe that a text conversation can count as a date (Think With Google).

Online Shopping

60 percent

of respondents say they “always present themselves truthfully” on dating profiles (Statista).

75 percent

of online daters are under the age of 30, and 90% are under 40 (GlobalWebIndex).

66 percent

of the online dating pool [people aged 16 to 66] are men (GlobalwebIndex).

US$973 million

of online dating revenue is expected in the United States in 2020 (Statista).

45 percent

of U.S. ecommerce purchases will be from mobile devices in 2020 (Business Insider).

755 million

active users shop on Alibaba as of June 2019–more than the U.S. population (Investopedia).

75 percent

of online grocery shoppers say they are still using the first e-tailer they tried (Think With Google).

119,928,851

products are listed on Amazon as of April 2019 (Oberlo).

Pokemon Go! Fortnite Candy Crush Saga

2 out of 3

shoppers say online video has given them ideas and inspiration for their purchases (Think With Google).

65 percent

of shoppers look up price comparisons on their mobile device while in a physical store (Oberlo).

ROBLOX Toon Blast *Data as of December 2018.

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Should Your Startup Use Emojis as a Customer Communications Tool? By KIMMY WA CHAN and SHIRLEY XUENI LI

Using emojis can make you seem warmer, but less competent to customers

ustomer service is a critical part of startup success, but it often falls by the wayside when founders are bogged down by other tasks. When communicating with customers, setting the right tone from the outset goes a long way in building brand reputation and generating conversions. Today, we will look at a trending tool for customer service representatives: emojis. No longer just for chatting with family and friends, we see more and more businesses experimenting with emojis to connect and engage with customers on social media and ecommerce platforms. As this shift takes place, we find ourselves asking: what do consumers think of all this? To help answer this question, Hong Kong Baptist University School of Business recently conducted a study to explore how customers perceive brands that use emojis in customer service conversations. Here are the key findings that could significantly impact your startup’s success:

ccording to the study, customer service employees who use emoticons appear warmer, but also less competent. This perception applies to pictorial (e.g., ) and text-based (e.g., :) ) emojis, showing that the power of emojis is not purely driven by eye-catching graphics and colors.

Emoji perceptions depend on the customer’s personality ommunal-oriented customers (i.e., customers who enjoy friendlier relationships with brands) think customer service providers who use emojis are warmer, which makes them feel more satisfied with the service experience. On the other hand, exchange-oriented customers (i.e., customers who prefer purely transactional relationships with brands) will negatively

associate the use of emojis with the provided service.

Emojis make bad situations worse mojis do not resolve a customer’s negative feelings from unsatisfactory service; in fact, they only compound it. When service is failing to resolve a situation, all customers increasingly look for competence as opposed to warmth. In these situations, emoticon usage–no matter how cute or clever–by a customer service representative usually makes the situation even worse.

Emojis can secure conversions when the time is right hen a customer service employee goes the extra mile to address a customer’s needs (e.g., proactively providing extra care or knowledge) using messages with emojis, the study finds that customers are more likely to make the purchase.

Four tips for improving your customer communications: 1. Use emojis if you want your brand to appear warmer, but keep in mind that it likely won’t help your brand look more professional and competent. You need to find the right balance for your startup. 2. Understand your customer segments, then tailor your communication strategy. ‘The simpler, the better’ rings true when faced with exchange-oriented customers, as emoji use is not perceived positively. 3. Make sure you have a comprehensive customer service protocol in place that follows the entire customer journey. Being prepared to deal with a customer’s situation is always better than trying to use emojis to help salvage a relationship turned sour. 4. If your services are genuinely exceeding a customer’s expectations, try leveraging emojis in your communications to help drive conversion. You may be surprised by their effectiveness. ith these tips in mind, savvy startups can effectively enhance their customer communications with emojis without overstepping their boundaries. Kimmy is a Professor and Shirley is an Assistant Professor in the Department of Marketing at Hong Kong Baptist University School of Business.

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A Fresh Approach to Corporate-Startup Partnerships By WILL ROSS

un-dried startups, hung on the corporate procurement vine. Despite the best efforts of many, procurement has all too often been the result of attempts to foster corporate-startup partnerships. But why is it still the case when ‘digital transformation’ returns 555 million results on Google? It’s clear that customers are looking for new solutions that will allow them to live more smartly, and organizations are trying to meet their demands. Unfortunately, organizations, especially large ones, struggle with friction and inertia. Friction in a heavily-regulated industry like banking is due to the numerous stakeholders beyond a product’s users–like legal and compliance teams–whose concerns must be addressed. Inertia, on the other hand, characterizes a time when all software solutions were developed in-house. The combination of these two factors results in roadblocks on the aforementioned procurement vine, making working with large corporations a tedious and challenging process. Nevertheless, just like counting cards, there are ways to incrementally increase your chances of success even when playing by house rules. First, learn how to say ‘hello.’ There is no shortage of advice for founders on how 24

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to pitch, but in my experience, large organizations tend to make decisions out of insecurity rather than conviction. To galvanize your audience’s attention, do not flatter their strengths. Instead, demonstrate that you truly understand the specifics of their perceived weaknesses and how you are the best readily deployable solution. Without tapping into an organization’s insecurities, you will likely struggle to create any internal urgency to push for your product. Consider this the ‘dark side’ of product-market fit. Remember that this should be institution-specific–be sure not to pitch the same conclusion to other organizations in the industry. Second, focus on the magic words: readily deployable solution. In the banking sector, third-party solutions are increasingly accepted under the aegis of APIs, which have been easier for banks to embrace than solutions that still need development. In the same way that the Internet protocol suite standardization allowed for the scale-out of the web, APIs have eased the pathway to the adoption of third-party solutions. Resource allocation at any large institution is a brutally pragmatic process–liberally sprinkled with politics–that seeks to maximize the impact of every decision.

APIs are a good fit within this process, as they can be quickly integrated and standardized into the company framework. Anchor any timeline presented in your pitch to quick deployment via a bank’s API infrastructure. Incorporating these two strategies into a pitch enhances a corporate partner’s willingness and ability to play. It moves your solution out of the ‘nice to have’ bucket and transforms it into something that could impact this quarter’s business. The general lesson here is that quarter-on-quarter performance is at the core of any public company’s thinking. Capturing a dollar that they could be leaving on the table today is infinitely more actionable than an indefinite risk of disruption. The ultimate goal during your pitch is to make a successful result seem both credible and plausible. Let me end with a call for action to my fellow bankers. Success in startup partnerships is not about smiles set in social media stone at the end of a hackathon. It is 2020: we’re beyond that, and capable of so much more. There is only one measure of success that matters: deployment. Anything else is innovation theater. Will is the Head of Digital Channels and Experience for Citibank Hong Kong.

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Understanding Design Thinking Through Case Studies

UniCourt operates, these questions were reframed into broad, ‘How might we…’ challenges, which is the starting point of any design thinking engagement. The challenges were:

By DEEPA KAMATH

•

Developing user empathy and identifying problems in a SaaS solution

hange and innovation are messy yet essential processes. But human beings psychologically crave the security of structure, which is where design thinking comes in. It can be applied to any industry, taking into account unique ecosystems and the diverse needs of their stakeholders. In essence, design thinking is a problem-solving system. The discipline was shaped by the contributions of innumerable academics, designers, and thinkers from the 1960s onward. It was widely accepted that complex contemporary problems had no simple solutions, and had to be approached holistically and humanely. Simply put, this approach is the integration of designers’ creative processes and methodical business thinking. Looking at business systems in divergent and convergent ways results in powerful insights, irrespective of the scale or nature of the business, making this flexible methodology applicable to startups in many areas of their operations.

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angalore, South India | UniCourt, a software-as-a-service (SaaS) solution for accessing U.S. State and Federal court records, started as a project in California in 2011. Founders Prashant Shenoy and Josh Blandi bootstrapped UniCourt in 2012 with funding from family and friends. By 2018, the SaaS solution acquired a significant number of customers, but Shenoy still had many questions regarding its look and feel. For instance, how can a U.S. court records SaaS application based in South India hold its own against local competition? How can we keep the team motivated? Does the user experience (UX) clearly explain the problem it solves? Is the onboarding process smooth? Do users find what they are looking for right away? Are the SEO efforts effective enough for Google rankings? After assessing the ecosystem in which

•

How might we make Unicourt, a U.S. court case database application, more customer-friendly? How might we improve the UX of key UniCourt pages to increase conversion?

The first challenge was to get under the skin of a customer persona while using UniCourt. Personas were based on fictitious users in California, complete with names, genders, ages, and clearly defined professions. Each of the personas accessed UniCourt’s database for vastly different reasons, for example: • •

Rachel, aged 32, is a paralegal Tom, aged 40, is an architect and divorcee fighting a custody battle

Next, a simple exercise called ‘Affinity Clustering’ aggregated and ranked application features based on the complexity of implementation and their impact on users. This exercise made it easy to decide which of the mountains of user requests for solutions would be best to carry out. The session concluded with an ‘Importance-Difficulty Matrix’ to prioritize

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actionable points for UniCourt’s team. In the second challenge, an inexpensive but extremely effective testing procedure devised by IBM in the early 1990s called the ‘Thinking Aloud Protocol’ was used to evaluate UniCourt’s usability, taking user empathy a step further. Participants used the app and verbalized their thoughts at every stage of the interaction. Asking them to assume the personas enabled the UniCourt to experience first-hand the problems customers faced while using the app. Developers tend to concentrate on the technical or challenging business aspects of SaaS products. App development, scalability, lowering costs, and creating APIs for easy integration with other software are prioritized–and rightly so. The user interface is invariably visualized as a ‘skin’

and is something to be dealt with later. But customers are now spoiled for choice. The unique features of any SaaS solution have to be upfront and easy to understand. Otherwise, the application will be doomed in the saturated, hyper-competitive SaaS environment. By developing empathy with its users through a design thinking exercise, UniCourt realized that they had to get out of their developer mindset. The team learned that it’s critical to focus on specific customer needs in a detailed way, all the time.

Diverging and converging to define a non-profit’s road map

ong Kong, HKSAR | Lena Wong quit a high-pressure job in finance

to spend time with her daughters. Around her, she saw many other qualified women letting go of their careers when they became mothers. Lena felt strongly that fulfilling work and motherhood were not mutually exclusive. This belief led to the founding of Hong Kong Momtrepreneurs (HKM), a platform encouraging women to take up entrepreneurship by providing access to training and mentorship opportunities. Drawn by Lena’s energy and organizational acumen, a like-minded committee gathered around her. But the HKM Core Committee was at a crossroads, without a shared understanding of where the organization was headed and what to prioritize. The design thinking challenge was: How might we make Hong Kong Momtrepreneurs into an inspirational and unique organization providing lasting value to its members? The session kicked off with a customized ‘Creativity Matrix’ to stimulate ideas in line with organizational aims and stakeholder objectives. Collaboratively, many ideas were first generated, then ranked convergently–first for effectiveness and then for ease of implementation. HKM’s takeaways formed a clear visual roadmap of which ideas could be executed immediately, and which had value but needed time and organizational resources to succeed. HKM’s nine-member core group, who had met just a few times, arrived at a consensus on how to proceed– amicably, over wine and cheese, and without a single argument. “The design thinking session helped to think outside-the-box and to prioritize properly [...] and was done in an efficient manner which might otherwise take two or three more rounds of meetings,” says HKM founder Wong. here is no singular way to practice design thinking. The method cannot be explained or taught–it has to be experienced. Sessions are embedded in context, where the outcome depends on the participants’ commitment and how deep-rooted the problems being addressed are. Exercises are thoughtfully structured, taking into account human frailties and failings and working around them. Above all, design thinking is an act of hope. It enables truly collaborative decision-making and deliberate action, showing that it’s possible to change the status quo and make the world a better place. Deepa Kamath is the founder of Amplify, a Hong Kong-based design studio.

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The Basics of Writing a Press Release

(who, what, when, where, and why). For example, if you are launching a new digital platform, you should include its name, date of release, a brief overview of key features, and explain how it will disrupt the industry. Explain everything in layman terms before getting into the technical specifics in the body of the article.

Body: Make it informative

By LOUISA LAU

nowing how to write a solid press release for your startup is the first step to effective media pitching. A press release is a formal and official announcement regarding something new or significant about your business. It should contain sufficient information, so journalists can understand your brand and consider publishing stories about the announcement. Press releases are an excellent tool for enhancing brand credibility and creating social proof. However, one cruel but true fact is that no one cares about your product. Journalists receive dozens, if not hundreds, of emails every day from PR teams. Each one claims to have the ‘next big thing’ that’s going to disrupt the industry. So, how can a press release be made more newsworthy? Here are some tips for writing an effective press release:

n the body of the press release, detailed information should be written in the inverted pyramid structure: the most important information at the top of the release, and the least important at the bottom. If you are launching an app, you can also consider listing the key features with visuals of user interfaces. It will not only help explain the app’s functions, but it will also demonstrate the user journey to arouse a journalist’s interest.

Include a tempting quote et quotes from key stakeholders in the company, such as founders and project leads. The chosen quote should shape your business narrative and describe why this new launch is significant to customers, making the press release sound more human.

Headline: What is the real ‘big thing?’ journalist will only spend three seconds screening each email title. Having a short and compelling headline is key to the success of your press release because you only have one line to work with. State the subject immediately: who are you and what’s the story? Use action verbs, appealing data, understandable language, and keep your headline short and straightforward.

Lead: Get to the point he first paragraph of your press release, also known as a lead, should summarize the main subject of your story. Include all the information about your new product, so that journalists can determine whether it’s worth digging deeper. Don’t beat around the bush–focus on answering the ‘five Ws’

Concluding your press release ummarize the essential information in the conclusion. It is also customary to add a few lines about the company’s plans, such as expansion and future product updates, to keep the audience attuned to subsequent news about your brand.

henever you’re writing a press release, ask yourself: What am I trying to achieve? Is getting exposure from top-tier media my goal? Or am I looking for new investors? It is crucial to identify your goal at the start and tailor your strategy. While digital marketing is gaining popularity among startups, traditional press releases can still be valuable when executed well. Having your brand featured by top-tier media is always an effective way to enhance brand awareness and credibility. Louisa is HelloReporter’s PR and Content Manager.

Addi ti onal ti p s Provide a fresh perspective and include exclusive insights on a relevant topic. Incorporate keywords to improve your search engine ranking. Always write in 3rd person point-of-view. Keep it short–two pages at the maximum. Add “For immediate release” at the top, and the company description and press contact at the bottom.

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Choosing the Right Ecommerce Platform for Your Store By PLATO WAI

ow more than ever, anything that is done offline can be done faster and more efficiently online–be it completing a course or finding a pair of limited edition sneakers. Against this backdrop, companies are scrambling to build an online presence. Whether you already have an offline store and getting online seems like the natural next step, or you’re keen to set up an ecommerce business to ride the wave of digitization, it’s essential to choose a platform that’s right for your business. With a myriad of platforms available, making a decision comes down to your unique needs. Get a good understanding of the features that different ecommerce platforms offer, weigh the pros and cons, and choose the right platform based on your requirements.

Setup and design ith a fully-featured ecommerce platform, you simply need to make an account and choose a package to get started. These platforms make it quick and easy to launch a store, and usually offer fixed-price packages that you can upgrade to access advanced features as you grow. If you want to start from scratch and design an online store with total flexibility, a developer can help you build a custom store. In such a case, be mindful of the fact that maintenance costs can add up quickly, and should be accounted for when budgeting.

Analytics and online to offline (O2O) integration ost ecommerce platforms offer some analytics, but the type and quality of data will vary. Basic metrics to optimize a store include those relating to web traffic, sales performance, and customer behavior, which should be available across most platforms. Advanced data such as comparison graphs or live views can make it easier for you to get an idea of a customer’s purchase journey, compare sales performance across periods, and identify top-selling products and categories. But not every platform will offer these features.

Payment and delivery options t’s important to consider a platform’s partnerships with major payment providers and logistics companies. Even though PayPal and major credit card providers are commonly available, we’ve seen a drastic increase in localized payment options, such as Venmo. Choosing a payment gateway based on the geographical distribution of your target audience can help customers save on international transaction and shipping fees. Connecting the operations of a physical store to an online store may also be relevant to your business. Ecommerce platforms that offer Point of Sale (PoS) solutions can help you manage and view data from an offline and online store in one centralized platform, providing a truly integrated O2O shopping experience.

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Marketing support and customer care arketing solutions go a long way toward reaching your target audience and attracting customers. Some platforms offer tools to create coupons, send automated emails and messages, and target users through partnerships with major social media platforms, which can reduce your social media marketing load. In terms of organic traffic, a platform with integrated SEO features–such as the ability to independently control page URLs, metadata, or a blog function–can do wonders to improve search engine rankings. While most platforms provide self-help resources and an online community to crowdsource tutorials and bug fixes, others go above and beyond, offering multilingual customer support and even consultants to help maximize sales. This support can be valuable for entrepreneurs delving into ecommerce for the first time.

o sum up, platforms are plentiful, and the possibilities within each are immense, so it all comes down to prioritizing your needs and narrowing down the list to find the right fit for your ecommerce startup. Plato is General Manager of SHOPLINE Hong Kong, a global smart commerce enabler.

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A Three-Step Guide to Finding the Right Co-Founder By BENJAMIN WONG

our values, vision, and mission need to be aligned from day one. My co-founder, Kien, and I both faced similar problems when we used traditional means to send money overseas, albeit in very different scenarios. These experiences meant that we both identified a problem that we hoped to solve. This alignment is crucial because, in the course of building the business, there will be times when you inevitably disagree and look at an issue from different perspectives. Having a shared vision will help you come to a consensus. Also, you will often have to trust each other to make decisions on behalf of the company, and having the same values will ensure that you would draw the same or at least a similar conclusion to that of your co-founder.

Work together first had the opportunity to work with Kien when his legal firm in Singapore was assigned to my previous company for a case. Through this relationship, I witnessed first-hand that he brings a unique, individualized approach to help businesses navigate regulatory and compliance issues. We also had strong working chemistry, which I knew would make it easy for us to partner together on a longer-term basis.

e often see friends set out to found businesses together. But what if the idea comes first, and you need someone to support you as you bring your startup to life? Finding a reliable co-founder took me a long time. I needed someone who could help me propel my business forward; more importantly, the individual and I needed good rapport and chemistry. In my decade of experience as an entrepreneur, I’ve seen businesses succeed and fail, and the reason usually goes back to leadership. So, suffice it to say, finding the right co-founder will play a massive role in the future of any startup. After months of searching, I’m glad to say that I found the right co-founder. I’ve distilled my experiences into three simple steps, and I hope these steps will help you find the right co-founder, too.

Identify complementary skill sets efore diving in, you need to create parameters and a general direction that will help simplify your search. Draw up a list of requirements that will serve as the co-founder’s job scope. Next, take a look at yourself and evaluate your skill set and experience. Examine your strengths and weaknesses, as you want your business partner’s strengths to balance your inadequacies.

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For example, my strength lies in enterprise-building; hence, I needed a business partner with a legal background and compliance expertise to fill the gap. Fintech– the industry I operate in–is nascent, but it is already heavily regulated. Although you shouldn’t write off a profile that you find interesting, having a job description in hand will allow you to cut through the noise and identify suitable candidates quickly.

Be aligned on values, vision, and mission

hree years later, I’m glad to say that I’ve made the right choice. We’ve laid a strong foundation for future growth and business expansion. This dynamic, I believe, is the greatest benefit of finding the right co-founder. Benjamin is the Co-founder of TranSwap, a global payments company.

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Building a Strong Personal Brand on LinkedIn By STEVE BRUCE

our personal brand matters more than ever in the digital age. After all, what people think of your brand is what they’ll likely say about you when you’re not in the room. Even in today’s ultra-connected world, a great business relationship is based on personal relationships. Your clients much prefer to do business with people they know, like, and trust, rather than a faceless organization. Companies like Apple, Tesla, and Virgin understand the power that a strong personal brand can add to their business. They all have charismatic frontmen who built enthusiastic followings to become the definition of success and innovation. According to a study by CareerBuilder, 50% of employers won’t hire candidates who lack an online presence, and 50% of consumers base their purchasing behavior on the strength of the company’s online presence. These numbers demonstrate why a strong personal brand can bolster professional success. LinkedIn has 645 million users–with two new users joining the platform every second–and there are over 2 million pieces of content posted every day. This reach makes the platform a perfect place to build your personal brand. If you type your name into Google, your LinkedIn profile will likely come up as the number one organic search result. These days, you can be sure that anyone who is going to do business with you will Google you. If you don’t show up, then you’ll lose credibility and influence.

Understand your audience irst, you need to form your personal brand based on the impression you want to give. Be authentic, while keeping in mind what your audience looks at when assessing your credibility:

• • • • •

You will need to develop well-informed opinions around their pain points, helping the audience understand what they can gain from working with you. To do so, you will need to understand: • • •

How do you act? How do you talk? How do you dress?

Whom you want to influence How you want them to perceive you What keeps them awake at night

tion to grow their business. •

Be consistent: Be clear about how you want to be perceived, and maintain a consistent tone of voice across all your posts. I suggest picking three things you want to be known for as an industry expert. The goal is to be known in a niche area of expertise and gain credibility for it.

•

Use LinkedIn Groups: There are over 2 million groups on LinkedIn. Users who are active in groups get four times more profile views. You will get more traffic on your profile if you are known for being engaged and responsive in the community.

Grow your audience •

Post every day: One post reaches 20% of your network, so posting four days a week will allow you to reach 60% of your network every month. Doing so will help you stay top-of-mind if and when your audience wants to learn more about you or your company.

•

Be interesting: The most effective way to draw people’s attention is when your posts add value to them, such as sharing insightful and actionable informa-

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Are you authentic? Are you consistent? Are you visible in your market? Are you considered an industry expert? Are you well connected?

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Engage with other users: Creating a natural conversation around your topics of industry expertise is a great way to build credibility. Always return likes and comments from anyone who has engaged with your posts, which is an easy and effective way to make fruitful connections. Steve is an independent LinkedIn trainer and SME marketing consultant based in Hong Kong. April 2020

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STARTUP TOOLKIT FEATURES

Tapping Into the Modern Factory Mindset By JARED HAW

n today’s fast-paced startup environment, founders typically leverage the services and knowledge of a few key partners to launch and grow their companies. For a product-based company, like a hardware startup, one underutilized partner is the manufacturing partner. This gap is most likely due to the differences in mindset between the two organizations. Factories are infamous for insisting on large, short-term purchase orders before agreeing to manufacture. This has made it difficult for early-stage hardware startups to grow: most startups don’t have the funds to place an acceptably large purchase order, and they may also be faced with other limitations, such as the product lacking market validation. Due to these constraints, startups prefer to build longterm relationships with partners who understand their limitations and believe in their potential. Until recently, manufacturers were unable or unwilling to grasp these nuances in the way startups work, making it challenging for startups to form partnerships with them. However, in recent years, contract manufacturers have started to see the value of working with startups. The mindset has shifted from providing the most competitive quote, to building up internal engineering teams and expanding supplier networks, giving clients end-toend manufacturing support . Nowadays, contract manufacturers with an evolved mindset will provide their clients with engineering support, supply chain consolidation, capital, project management, and more. They will also provide these services quickly, as they understand that if the client is successful, they will also be successful. One of the biggest challenges for a startup is to figure out how to transform a product from a prototype to something that can be made consistently over and over again. This is where the evolution of contract manufacturers really

shows. Previously, it was difficult to enjoy any extra services without a few million dollars worth of purchase orders. Nowadays, factories will analyze a startup’s product and potential. If it shows promise, the manufacturer may supply an engineer or even an engineering team. Another hidden but crucial consideration is whether the product is manufactured at a competitive rate. If the manufacturer supplies an engineering team, then they won’t just make a prototype functional, but will make it work within a set budget. They are, after all, the people who best understand the ins and outs of manufacturing costs. Managing the supply chain is also a common pain point for startup founders, as coordinating with electronics suppliers, plastics suppliers, and raw material suppliers is a daunting task. Also, how does one plan for all of these materials and sub-components to arrive at the assembly factory all within a specific time frame and all within the correct quality requirements? Unfortunately, startups must operate with all of this uncertainty. One advantage of leveraging an evolved contract manufacturer is using an advanced network of suppliers. What this means is that there is no longer a need to search for each individual supplier. Instead, it’s possible to use the suppliers working with the contract manufacturer. By placing one purchase order, the main supplier then becomes responsible for placing all the subsequent requests with each sub-supplier. The result of contract manufacturers’ effort to open themselves up is a big plus for startups and SMEs. The ability to use their services to improve a product will allow for a more streamlined approach, save on development cost, and enable the startup to allocate its resources to sales and marketing. Unfortunately, not all suppliers have been able to evolve their mentality. These manufacturers are most likely the ones who only close deals for commoditized products due to their pricing. Certain due diligence steps are needed to ensure that a manufacturer will be able to adhere to high standards and work closely with a design team to produce good results. However, once trust has been established and the same vision is shared, you’ll see a considerable improvement in your business. Jared manages EPower Corp, a global contract manufacturing company that develops and manufactures consumer electronic products. April 2020

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Introduction to the Korean Startup Ecosystem A thriving startup hub that’s coming into its own By STEVE CERVANTES

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orea’s startup ecosystem is showing the world that it is no longer solely a conglomerated economy, where a few global luminaries dominate the scene. The country has 11 unicorns and counting, ranking fifth globally behind the U.S., China, the United Kingdom, and India. No other startup ecosystem has reached the ten-unicorn threshold as quickly as Korea–if you consider that it began earnestly in 2013. That year, former President Geun-hye Park instituted the ‘creative economy’ policy as a surefire way to create jobs through government-driven startup development. The Korean chaebol (conglomerate) had started to run its course in terms of being the sole growth engine. In previous eras, the chaebol provided one of Asia’s highest standards of living. But outsourcing and automation have caused widespread early retirement and one of the OECD’s highest youth unemployment rates in recent years. Elected in 2017, President Moon Jaein’s administration set out to do much the same, aside from renaming the ‘creative economy’ to the ‘peace economy’ and exponentially raising funds from 1 to 4 billion U.S. dollars annually. Moon’s administration doubled down on its commitment toward growing and developing startups, where they would ultimately become an economic cornerstone. The creative and peace economies’ crowning achievements are providing ample seed funding for early-stage startups. There is no Asian or global comparison with regards to the amount of government funding; through its grants and other schemes, the government invested seven won for every won that private lending institutions invested. In a similar vein, peace economy policies sponsored government and private growth by organizing accelerators and incubators in co-working spaces. They have enabled Korea to become the undisputed per capita Asian leader in numbers—there are over 300 co-working spaces in Seoul alone and 170 incubators or accelerators nationwide. What’s more, the policies haven’t endowed only Korean startups with support. Foreign startups also enjoy vis-à-vis funding, subsidized co-working space use, and targeted acceleration programs for foreigners like the K-Startup Grand Challenge. The program accelerates 40 qualified foreign startups for 3.5 months, with the possibility of an additional 3.5 months based on the startup’s performance, which

ECOSYSTEMS FEATURES

President of South Korea, Moon Jae-in, at his inauguration ceremony on May 10, 2017 at The National Assembly, Seoul. Photo courtesy of Korea.net / Jeon Han.

Before 2013, most Koreans couldn’t conceptualize a startup because the country had a limited entrepreneurial tradition. Korea has since transformed from a staunchly conglomerated society into one that’s welcoming of innovation and startup culture.

is mostly determined on the outcome of a demo day competition. All 40 startups receive US$10,840 funding, and the 20 highest ranked receive another $10,840. The top four of the 20 receive prize money ranging from $6,000 (fourth place) to $100,000 (first place). Above all, Park and Moon’s administrations elevated public awareness around startups. Before 2013, most Koreans couldn’t conceptualize a startup because the country had a limited entrepreneurial tradition. Korea has since transformed from a staunchly conglomerated society into one that’s welcoming of innovation and startup culture.

Never a seamless journey

lthough the Korean startup ecosystem has developed exponentially, there are numerous hurdles the country must overcome to develop into a larger, sustainable global player. First and foremost, startups often compete against government-sponsored chaebols and their subsidiaries, which are perhaps some of

the world’s most vertically integrated entities. The system differs from its American and Chinese counterparts, which actively incorporate startups. For instance, Apple and Xiaomi have acquired or are affiliated with over 100 domestic and foreign startups. Samsung Electronics’s paucity of startup acquisition, for example, is attributed to a rigid in-house research and development and supply chain mechanism. Save for Samsung Pay, the company isn’t competitive in intangible services (e.g., music streaming, content streaming, the apps, etc.), which inherently need multiple acquisitions or partnerships. Samsung Electronics instead promotes, incubates, and finances promising domestic and foreign startups through its internal incubator, NEXT. Yet, the company rarely acquires and has a limited association with participants following graduation. Despite the government’s proactive funding policies, private funding (i.e., venture capital, private equity, etc.) is a workin-progress, although progress is being made. At last count, there are more than April 2020

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300 financial institutions funding startups, where $5.5 billion was invested domestically in 2018, according to GEF Accelerator CEO Derik Kim. Nonetheless, “the highest proportion of funding goes to selected top tier startups,” says Jonathan Moore, the CIO of PowerPT, a leading local consultancy firm that organizes accelerators and pitch events. According to a government source, ten percent of startups receive 80% of funding. He goes on to add: “Foreign and domestic startups lacking connections or networks have difficulty getting private funding. [...] In all my years working in the Korean startup ecosystem, I haven’t heard of many privately funded foreign startups.” Thus, the government’s comprehensive funding initiatives essentially offset the private funding disparity between the ‘haves’ and ‘have-nots,’ which creates a win-win situation on the surface. However, government funding is unintentionally creating instances of moral hazard. “Without easily obtainable government grants, the vast majority of 30,000 startups would fail. [...] Korea’s government grants often prolong the inevitable: failure,” says Moore. Given the country’s limited private capital accessibility, some foreign start-

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ups only remain in Korea provided there is easy government money. Consequently, ‘grantrepreneurship’ has manifested in the ecosystem, where startups depend more on grants and less on product-market fit and growing their customer base.

Language barriers–fewer than 30% percent of founders are English speakers–and a lack of localization know-how are the primary obstacles for global expansion.

Moreover, aside from Korea’s 11 unicorns, few of its startups are global. Language barriers–fewer than 30% percent of founders are English speakers–and a lack of localization know-how are the primary obstacles for global expansion. Most who have gone global have had their burn rate exceed their runway before reaching product-market fit, and have failed. In much the same way that Korean startups failed abroad, their foreign counterparts have done the same in Korea. “Startups entering without spoken

Korean skills and Korean co-founders mostly fail,” says HireChance and Jobfindr Co-founder and CEO Craig La Touche. While it’s difficult for non-Korean speakers to enter the innovation space, given issues around communication, he believes that “if you have a competitive advantage as a foreigner and skilled in areas like edtech, foodtech, and trade then it’s possible to create a niche market in those fields.” A case in point is Shuttle Delivery, a bilingual food delivery platform that’s founded and led by expats. Less than a year after its founding in 2016, Shuttle Delivery was already in the black. The company exemplifies effective product-market fit and niche market creation. Prior to the company’s launch, much of Korea’s 2 million-strong expat community were prevented from ordering food due to language barriers. Finally, by any means possible, Korean and foreign startups need more collaboration. There’s a stark dichotomy between them. They often use different co-working spaces and incubators, participate in different events, and seldom collaborate on projects. More reciprocal and collaborative relations could help one another with language and localization while mitigating problems associated with global and Korean expansion.

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ECOSYSTEMS FEATURES

A Spotlight on MENA Tech

As startups grow and we hear more success stories, aspiring entrepreneurs are more and more inspired to start ventures of their own.

Maturity and a mindset shift are transforming the region’s startup ecosystem

Investment capital in the region has also hit an all-time high, even if we exclude the ‘mega-deals,’ namely investments in ecommerce platform Souq (acquired by Amazon), and ride-hailing app Careem (acquired by Uber). The number and size of investments led to a 7% year-over-year (YoY) increase in the average ticket size of startups in the region. Just to put it into perspective: 2009 saw US$15 million in funding (in five venture deals), while 2019 saw that amount reach $704 million. This news is encouraging, and startup founders are now more confident to raise larger rounds.

My response is always: all stages. While it is encouraging to see an increase in funding amounts, there still remains a disconnect in the demand and supply for capital in the region across all stages. As startups grow and we hear more success stories, aspiring entrepreneurs are more and more inspired to start ventures of their own. This cultural shift will culminate in two trends: (1) more startups will raise early-stage funding, and (2) more startups will successfully graduate to later rounds. In terms of numbers, 64 startups were able to raise later rounds compared to 57 in 2018 (MAGNiTT). Capital supply needs to match this demand, and many founders are turning to international investors to get there.

Supply versus demand

Emerging hubs

By PHILIP BAHOSHY

t has been fascinating being part of and tracking the Middle East and North Africa (MENA) startup ecosystem over the last four years. As we move into the new decade, the landscape has changed at such an accelerated pace that it’s been hard to keep up, according to MAGNiTT data and research. 2019 did not disappoint. The region saw its first unicorn exit, the highest number of investments to date, and increasing international investor interest.

Funding landscape

ENA-based startups are seeing more investment capital being deployed than ever before; 2019 marked another record year for the number of investments, which reached 564.

I have often been asked: Where is the funding gap for startups in the MENA region?

nnovation remains top of the agenda for governments across the region. In many

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Maturing ecosystem aturity is vital for the region to continue this upward trend. Last year saw clear signs that can act as catalysts for further growth. Those of us in the ecosystem are encouraged by Uber’s $3.1 billion acquisition of Careem early this year, as it marked the first unicorn exit for the region. This milestone was meaningful for many founders who looked for the light at the end of the tunnel. It also highlighted a takeaway for all founders: scale is the name of the game. It’s also important to note that mindset always matters. When growing a startup, it’s essential to look at capturing as big a pie as possible. Careem led the way, but we are seeing more examples as the ecosystem matures. Top funded regional startups include UAE’s Kitopi (foodtech), Kuwait’s Boutiqaat (ecommerce), and UAE’s PropertyFinder. We have also seen more investors–over 200–making investments in MENA-based startups than ever before, as well as more exits than any previous year. Moreover, mergers and acquisitions have led to a consolidation of industries. Needless to say, there is a growing international appetite for MENA-based startups as they continue to increase their footprint.

cases, we are seeing them put money where their mouth is. Abu Dhabi’s Hub71 was created to spur innovation in the capital of the United Arab Emirates with $250 million in funds to help regional and international startups scale in the region. Saudi Arabia has seen a policy shift and a 92% growth in the number of deals YoY (MAGNiTT). Multiple initiatives have eased startups’ ability to enter the country, access education, and scale within the Kingdom. Recently, the Public Investment Fund of Saudi Arabia announced a $1 billion fund to spur venture investments. Egypt, given its population size, remains a key hotbed of innovation. Many early-stage companies and founders are solving significant market issues that are local to them, with startups like Halan (tuk-tuk hailing app), Vezeeta (medical care scheduling platform), and Swvl (bus transportation network) raising large rounds of funding. Dubai, with its first-mover advantage, continues to assess how best to encourage and foster the startup ecosystem with new legislation and support, including golden visas for founders to help develop its evolving ecosystem. We also saw the announcement of the new Dubai Future District, which combines the free-trade Top: Photos and data courtesy of MAGNiTT, the largest investment data platform for the MENA startup ecosystem. 42

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zones of Dubai International Finance Centre, Dubai World Trade Centre, and Emirates Towers. This initiative also includes an AED1 billion (US$273M) fund to spur innovation and digital transformation.

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The Fast Rise of Slow Fashion Normalizing the fashion rental and resale markets in the age of conscious consumerism By MIN CHEN

n the not-so-distant past, the fashion industry was rather slow-moving. The long process of sourcing wool, weaving textiles, and hand-sewing garments made clothing a costly investment. While prices were driven down by the invention of the sewing machine during the Industrial Revolution and the 1960s counterculture movement–which inspired young people to use personal style as an avenue for self-expression–fast fashion wouldn’t reach its pinnacle until the late 1990s and 2000s. Democratizing access to the latest trends made high street leaders like Zara, H&M, and Topshop some of the industry’s most profitable companies. With a retail model characterized by the rapid turnover of cheaply-produced designs, fast fashion’s growth over the past two decades paralleled the rise of social media, where influencer culture has ingrained a ‘no-repeat’ attitude toward our sartorial choices. The byproduct of this model is the exploitation of cheap labor in developing countries and a heavily polluting manufacturing process–all to produce garments that are discarded after an average of seven to ten wears (Ellen MacArthur Foundation). Luxury fashion brands are also to blame for the industry’s wasteful ways, as many have been ousted for destroying millions of dollars worth of inventory–Louis Vuitton, Burberry, and Richemont, to name a few–for the sake of maintaining exclusivity through scarcity and preventing counterfeit activity. With the textile market on track to account for 25% of the global carbon budget by 2050, retailers and consumers alike are experiencing an awakening–of sorts. Although fast fashion is still projected to grow to US$44 billion by 2028–up from $35 billion in 2018–the circular economy movement is gaining momentum in tandem (Statista). Wardrobista launched as a rental destination for occasion wear, and now offers accessories as well. Dress by Alexander McQueen.Photo courtesy of Wardrobista.

Circular fashion is the concept that garment production should not harm human development and environmental ecosystems. It advocates the use of renewable materials, reducing supply chain wastage, and extending the life cycle of clothing through reuse. Reuse is arguably the most effective solution, as it doesn’t produce new materials and lowers the frequency of recycling, which can be a resource-intensive process in itself. Most importantly, the rental and resale markets have a relatively low barrier to entry, allowing the new retail models to evolve quickly and establish a footing in the age of the conscious consumer. To better understand how resale and rental platforms are disrupting retail, Jumpstart speaks with two startups that are making waves in the space: children’s apparel resale platform, Retykle, and luxury rental destination, Wardrobista. Not only do they reflect the evolution of consumer behavior, but they also point to how all segments of the fashion industry will soon follow suit to integrate resale and rental into their future.

Sparing is caring

uying consignment or secondhand is a tale as old as time, but the resale platforms of today are working to solve specific problems. Fashion industry veteran Sarah Garner came up with the idea for Retykle (‘recycle’ and ‘tyke’) after becoming a parent. “I’m most interested in solving this issue for the inherently temporary nature of children’s and maternity fashion, which is particularly wasteful when consumers often turn to disposable items instead of quality purchases,” says Garner. Being a purpose-driven company means that its values must also permeate into its operations and marketing strategies. The company encourages customers to return packaging for reuse, and shares content and organizes events to educate parents about how to live more sustainably, such as workshops teaching them April 2019

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Left: Retykle Founder Sarah Garner. Photo by Jenna Louise Potter. Right: Retykle offers secondhand and new designer fashion from over 2,000 brands. Photos by Jenna Louise Potter / Retykle.

how to use cloth diapers. Garner says that the company has grown organically through word-of-mouth since its founding in 2016, driven by a broad shift in consumer mindset. “The more we educate consumers about the perils of their decisions, the more they care and make purchase decisions which reflect their values,” says Garner. “People are becoming increasingly conscious and hyper-aware of how their purchases affect others and the Earth’s resources.” This shift also encouraged Elaine Fong and Joey Li to explore the potential of the rental model, and they founded Wardrobista in 2017. Fong witnessed the lack of transparency in the fashion industry firsthand, having worked in brand management and fashion merchandising. “I saw a lot of waste, starting from even the design stage. Consumers can only see what is on-shelf, but they are actually forgetting about what happens behindthe-scenes,” she says. Aside from the sustainability perspective, the co-founders note that the rental model is also more practical for today’s consumers for being space- and cost-saving, especially for urbanites. Shoppers are more price-conscious due to unfavorable 46

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market conditions and the rising price of luxury goods, where even those reporting six-figure incomes [in U.S. dollars] are looking for “discounts or alternative models of acquisition” (McKinsey & Company). Concurrently, ‘Kondomania’ has inculcated a ‘less is more’ outlook on consumer culture. On the other side of the coin, social media has also perpetuated the culture of overconsumption through accelerating the transience of fashion trends, in addition to setting impossibly high standards for curating a stylish personal brand. Fong says that consumers feel they “can’t really wear the same dress for all these important events over and over again” because of social media. It only takes opening Instagram to see all the new styles one’s missing out on, as opposed to waiting a month for the next issue of Vogue to arrive. According to a survey conducted in the U.K., one in three young women considers their clothes “old” after wearing them once or twice (McKinsey & Company). The two conflicting dynamics of wanting more without accumulating more have led to the rising popularity of resale and rental. Online resale grew 21 times faster than traditional retail from 2016 to 2019

(thredUP 2019 Resale Report), and the rental market is expected to expand at a compound annual growth rate (CAGR) of 9.4% between 2019 to 2025 (Grand View Research). For startups like Retykle and Wardrobista, tapping into such opportunities will entail adapting to shifting consumer needs and building trust in the new retail models.

A new definition of ownership

s Asia-based companies, Retykle and Wardrobista have had to craft their messaging to local audiences, who may not be as familiar with the resale and rental concept as Western consumers. Garner says that consignment or secondhand shopping is common and primarily

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The more we educate consumers about the perils of their decisions, the more they care and make purchase decisions which reflect their values. associated with prudence and practicality in North America and Europe, but is less of a cultural norm in Asia. Fong and Li have similarly observed that rental often correlates to a particular lifestyle in the West; consumers who rent are also likely to make other sustainability-related choices, such as adopting a plant-based diet or using sharing economy services. They note that “even in Asia,

there are several types of customers,” but generally, renting is more of a pragmatic decision for them. Regardless of perception, both companies believe that having a brick-and-mortar strategy is crucial for building trust for new retail models. Retykle opened a permanent store late last year in Hong Kong’s Wong Chuk Hang district after the success of its pop-ups across the city. “With over 80% of our shoppers having their first secondhand experience with us, we need to establish trust–not only is our product of great condition, but that it’s okay, in fact, to be proud of shopping secondhand,” says Garner. “Often, establishing that connection happens offline, and then our relationship continues online.” Wardrobista operates a showroom in

Causeway Bay, one of the world’s most expensive shopping areas, and organizes monthly pop-ups. Li says that while the company launched as an ecommerce platform, the team soon realized that “online and offline complement each other and help build [consumer] confidence and stickiness.” It was also at these pop-ups that customers asked about listing their own underutilized dresses on the platform. In 2018, the company introduced its ‘Share Your Dress’ program, where customers can list their dresses on the platform and earn 25% of the rental revenue. Having worked in several leading tech companies throughout her career, Li set out to customize a SaaS application to fit the company’s consignment model, allowing users to view the status of the dresses April 2020

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in real-time and watch as passive income from each rental rolls in. “We are mixing the B2C [business-to-consumer] and B2B [business-to-business] model; it’s part of an evolution of the new digital world because customers can be sellers as well. Anyone could be a spokesperson and be a part of the company,” adds Li. Developing new tools will be a focus as the new retail models mature. Garner says that automation is the priority on the tech-side, as managing a large inventory of unique SKUs is a big challenge for resale platforms. “Any company operating within this space is iterating on its operations to increase the fluidity of product handling,” she adds. “Every week, we are tweaking and modifying our processes to handle more products faster.” Startups are not the only ones navigating the new retail frontier, as large retailers are now forced to adapt. This development comes as no surprise, as a survey from 2018 found that 72% of consumers prefer to buy from environmentally friendly brands–up 57% from 2013–and 60% would increase their loyalty to a brand with a recycling program (thredUP). In September last year, Banana Republic (owned by Gap Inc) launched an $85-a-month rental program, ‘Style Passport,’ where customers can purchase the items at any point. Similar subscriptions include Bloomingdale’s $149-a-month ‘My List’ service and Urban Outfitter’s ‘Nuuly,’ which costs $88-a-month. On the resale-side, H&M announced in April last

year that it will launch a pre-loved program for its line, Other Stories. Luxury e-tailer Farfetch recently introduced ‘Second Life,’ which enables customers to trade in their designer handbags for store credit. Although encouraging, such initiatives are sometimes branded as ‘greenwashing,’ or when companies make false claims about the environmental benefits of their products or practices. In August last year, H&M landed in hot water with Norwegian Consumer Authority for misleading consumers about its ‘Conscious’ collection. That said, those in the industry like Wardrobista believe that participation is always a promising sign. “It’s definitely a good thing that the big players are now tapping into the rental markets because it forces them to be more conscious as a whole,” says Fong. Looking ahead, new retail startups will have more solutions at their disposal to compete against market leaders, such as rental powerhouse Rent the Runway, and resale marketplaces TheRealReal, Vestiaire Collective, ThredUP, and Poshmark. Resale inventory management company, Yerdle, powers Nordstrom’s ‘See You Tomorrow’ program, which offers online and offline shopping experiences for its pre-loved apparel and accessories, and works with other brands including Patagonia and Eileen Fischer. Banana Republic and Bloomingdales have partnered with CaaStle, a company that offers tech and logistics support for rental supply chains, according to CNN. Such solutions will also have to cater to the hybridization of resale and rental;

Retykle and Wardrobista have both made moves to provide a holistic solution for shoppers. Customers who purchase an item from the former can sell it back once their child has outgrown it, and Wardrobista regularly holds sample sales for its inventory and items listed by its customers. Placing customer feedback at the forefront will continue to guide product diversification as the space evolves.

hile it’s clear that we’re far from entering the post-consumerism era, new retail models are proving to be a fruitful start. They serve as an indicator of our times, where sustainability and practicality now top the list in guiding purchasing behavior. For the founders of these companies, education remains essential to bring about real change. Garner believes that the fashion industry will only shift in earnest when consumers expect radical transparency from retailers, which can be achieved if the media and activists continue to uncover the truth about its wasteful ways. When asked about her aspirations, Garner says she hopes to “build a company that [her] kids will feel proud of and one that the community and [her] team members will feel proud to build together.” Fong also echoes the sentiment of legacy. “When I was a kid, I was always taught to not be wasteful, and that’s why I grew up to become the person I am now. So I think it’s an educational process–to think before you shop. Ownership is not the only solution.” Min is Jumpstart’s Editor in Chief.

We are mixing the B2C [business-to-consumer] and B2B [business-tobusiness] model; it’s part of an evolution of the new digital world because customers can be sellers as well. Anyone could be a spokesperson and be a part of the company.

Left: Wardrobista Co-founders Joey Li (left) and Elaine Fong (right). Right: Wardrobista holds monthly pop-ups across Hong Kong. Photos courtesy of Wardrobista. 48

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We found ourselves in places like Thailand, Jakarta, and Bangladesh, and really spent time staying with merchants, observing them, and doing things for them with the intention of helping them do better and not get left behind. ANKITI BOSE

Anatomy of an

Almost-Unicorn Charting Zilingoâ&#x20AC;&#x2122;s meteoric growth from pre-seed to global titan By NAYANTARA BHAT

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COVER STORY FEATURES

A garment factory in India that uses Zilingo’s solutions. Photo courtesy of Zilingo.

hen Ankiti Bose and Dhruv Kapoor first met at a house party in Bengaluru in 2015, they had no idea that they were starting down the path to building one of the most talked-about companies in the retail and fashion space. Bose, fresh from a visit to Thailand’s Chatuchak market, had seen a ripe opportunity in digitizing a vast offline marketplace, giving merchants better access to consumers. In addition, the platform would plug the holes in one of the world’s most unsustainable industries, reducing inefficiencies and waste by increasing transparency in the supply chain. “The fashion industry is one of the largest industries in the world. It’s 5% of the global GDP; everybody needs clothes. Yet, it is one of the most inefficient, undigitized, horribly polluting, unsustainable industries,” says Bose. As an analyst with international venture investor Sequoia Capital at the time, Bose was struck by the potential of a solution for clothing SMEs in Southeast Asia (SEA). At the house party, she spoke about it with Kapoor, who was a backend engineer at a mobile gaming company at the time. Within a few months, the first iteration of Zilingo’s platform was born. Zilingo has gone far and beyond the initial concept of providing digital tools for merchants. With over 30 different services available to merchants on the platform, including tools for sourcing, accessing raw materials, and financing, it’s evolved from simple sales tracking and inventory management, to an integrated suite of solutions built to cater to a small merchant’s every conceivable need. The consumer-facing side of the platform, ‘Zilingo Shopping,’ is still a focus, but choosing to hone in on the merchant-side proved to be strategic in more ways than one. In February 2019, Zilingo raised a US$226 million Series D led by Sequoia Capital India, valuing it at what sources close to the company say is around $970 million (Fortune). That said, Bose has made it clear that in her view, the ‘unicorn’ label is, perhaps, overrated. The company isn’t making a profit yet, but the B2B solutions bring in 80% of Zilingo’s revenue, April 2020

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setting it on a clear path to profitability. Zilingo’s growth from two people working a side hustle to almost 900 employees spread across 13 offices globally hasn’t come without hard work, risk-taking, and a healthy dose of right-placeright-time. It now serves over 75,000 merchants and 6,000 factories across 17 different countries. “I think a huge part of our story has been serendipity,” says Bose. “We found ourselves in places like Thailand, Jakarta, and Bangladesh, and really spent time staying with merchants, observing them, and doing things for them with the intention of helping them do better and not get left behind. And a lot of those decisions have been the right ones, propelling the company forward.”

F I RS T S T E P S

hruv Kapoor, Zilingo’s Co-founder and CTO, has played a pivotal role– largely behind the scenes– in building the tech stack and managing a tech team that now numbers almost 150. His passion for technol52

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ogy has been a constant since his college days, where his thesis project was a hardware-software system that simulated a solar panel. After graduating, Kapoor began working at Yahoo India. “I was part of the localization team, which would power Yahoo’s infrastructure for managing all of its 70 or 80 languages, and that experience came in handy when we started Zilingo,” he says. Meanwhile, Bose had joined Sequoia Capital India after a stint at McKinsey & Co. As an analyst, she was exposed to dozens of early-stage founders, some of whom were tackling the SEA market. This experience and knowledge would later help guide Zilingo’s development. “Both of us, in terms of our DNA, were the kind of people who would already be spending some of our weekends or some of our late nights researching things, reading up, writing code,” says Kapoor. Once Bose approached him with the idea for Zilingo, their curiosity and work ethic converged toward a new mutual objective. Within a month, it became clear that they had a massive opportunity on their hands, and they committed to running the company full-time. “We hadn’t even known each other for

a year. Sometimes when things feel right, there is merit in taking the plunge,” she says. Taking risks, constantly innovating, and staying three steps ahead of the competition soon began to define Zilingo’s strategic approach.

BUILDING A COLOS S US

igitizing a vast offline market is an enormous undertaking. In 2019, the ten ASEAN member countries, in addition to Japan, Korea, India, China, Australia, and New Zealand, accounted for $405 billion in textile exports–more than half the global total (McKinsey & Co.). Separately, the considerable number of small garment merchants across the region is part of an informal economy that employs 70 to 90% of the working population in most Asian countries (International Labour Organization). Not only would UX design and adoption be challenging given a target audience of users without any experience using business software, but the breadth of the envisioned platform would require a sig-

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nificant tech investment. Early on, Bose and Kapoor discovered that while markets in SEA lacked formal platforms for trading and payments, many merchants were making use of social media to fill the gap. “You have this incredible set of businesses, which didn’t really have access to a platform like Zilingo, but they were still used to using smartphones and 4G, and finding workarounds to get things done,” says Kapoor. “It proved to us that there was market opportunity, that there were people out there who were hungry to make things work, even on platforms that were extremely inefficient for them.” Observing the ways in which merchants were bending social media to their purposes–such as using image captions to announce sold out products–unearthed another key insight: the importance of consumer-centric UX design when building a solution for small merchants. To make the tech accessible to them, the design had to be as intuitive as Facebook or Instagram, while possessing the functionality of a business product. “Because it’s still a business product, it has to hide a lot of the functionality that users can then start to discover and access as they get more and more used to using the product,” says Kapoor. Ideally, he says, the UX designer has to innovate to the point where using the system is almost as easy as posting a photo on Instagram. Given the complexity of the product, poor design could have easily led to a high churn rate as users gave up on figuring out the platform. As Kapoor puts it, the company didn’t have a ‘silver bullet’ akin to Google Search that drove consumer adoption and loyalty. However, Zilingo’s trick to engineering stickiness was to focus on expanding the platform to be a one-stopshop for a small merchant’s every need. “When you’re building a platform for businesses, especially when you look at an SME, you have business owners who are very time-crunched because they need to get food on the table at the end of the day for themselves and their employees,” Kapoor says. Thus, the company had to ensure that users weren’t forced to use another website or solution to fulfill an aspect of their business. Over time, as more services were added, the insights gathered from user patterns created a feedback loop that was both fed to users as a value-add service and used by Zilingo to build new products. As soon as the scope of the platform became clear to the co-founders, it became imperative to develop proprietary tech-

You have this incredible set of businesses, which didn’t really have access to a platform like Zilingo, but they were still used to using smartphones and 4G, and finding workarounds to get things done. DHRUV KAPOOR

Left: A snapshot of a fabric mill in India that partners with Zilingo. Below: Zilingo Co-founder and CTO Dhruv Kapoor began his career at Yahoo India. Photos courtesy of Zilingo.

nology. In the first three months, Kapoor and several engineers worked to build out the initial functions of the platform from scratch, rather than utilizing APIs or relying on other vendors. Taking the time to build its own technology was invaluable when it came time to scale the company. In quick succession, Zilingo rolled out financing tools, expanded to Indonesia and Singapore, and added tools for sourcing from wholesalers and factories. In addition to internally building its core technology, which includes logistics and secure payments, Zilingo now helps factories optimize their production lines, and works to connect Asian textile producers with global brands. Some of Zilingo’s value-add services are facilitated by external partners, including human resource management software that has proved indispensable for factories.

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It’s this dedication to building products for the merchant that has positioned Zilingo as an ecommerce enabler, rather than one of the many online shopping platforms currently engaging in price wars across the region. “We kept adding services we felt our customers really needed–they were struggling, and we kept adding solutions, and the business just completely took off as a result of that,” says Bose.

U P WA R D M O B ILIT Y

or Bose and Kapoor, Zilingo’s phenomenal growth has naturally driven significant changes in their respective roles as CEO and CTO. Bose says that, in the early days, it was “[all] hands on deck, packing boxes, sometimes grabbing coffee for everybody else”–poles apart from her and Kapoor’s current responsibilities. “As the role changes, you evolve as a person, as a founder. I think what’s really important is to still have a startup mindset,” she says. “I was 23 when I started the company, and what makes me completely paranoid is that there’s another 23-yearold somewhere today who will beat us if we don’t keep reinventing and disrupting ourselves.” One recent development in Zilingo’s evolution was the acquisition of nCinga, a Sri Lankan startup with proprietary Internet of Things (IoT) and data analytics tech for optimizing factory processes. Its solution fit perfectly into Zilingo’s vision of improving the supply chain–a problem the company had yet to tackle. “They had identified this area which was so underinvested–there are very few entrepreneurs going after building software for factories,” says Kapoor. He adds that while some software for factory management exists, it’s usually designed for auto factories, which are significantly larger than most garment producers. Having worked together on an earlier partnership, the founders of both companies already had an understanding of each other’s work culture, and saw clear synergies in joining forces. Bose recounts that she and nCinga founder Imal Kalutotage decided that they would proceed with the merger based on whether the founders could get along well during a dinner together. Post-merger integration, she says, The factory floor of a garment manufacturing facility in Indonesia that uses Zilingo’s software. Photo courtesy of Zilingo. 54

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can really make or break companies more than anything else. “This has been a true test of whether we can grow fast and sometimes take inorganic paths to growth, and deal with a team with a different culture, background, and demographic than us,” Bose says. “So far, it’s been a very enriching experience.” nCinga’s team of around 40 people has now been fully integrated into Zilingo. The company is still based out of Sri Lanka, but Bose and Kapoor are encouraging knowledge-sharing through development team transfers from Bangalore to Colombo to work on what has affectionately been dubbed the ‘n-factory initiative.’ In 2019, Zilingo also capitalized on the market of U.S.-headquartered brands looking to relocate garment production to a SEA country like Cambodia or Bangladesh, where exports would be unaffected by the escalating U.S.-China trade war. Acting as a liaison between these brands and Zilingo’s local partners allowed the company to quickly scale outside the Asia-Pacific region. In October last year, Zilingo announced a planned $100 million investment into the U.S., to be put toward digitizing the sourcing process, as well as hiring sales and product staff to fill the two U.S. locations–in New York and Los Angeles–opened in Summer 2019. Zilingo’s U.S. expansion is part of a sweeping growth strategy that also includes plans for capturing new markets such as Australia and the Middle East.

FA I R & T RA N S PA RE NT

“

ack when we started, there was one thing common to our vision and mission that still stays true today, which was that we wanted to be very much merchant-focused,” says Kapoor. However, an unexpected benefit of the platform is the company’s ability to put user data toward countering some of the most pervasive problems in the textile industry, such as child labor and unsafe working conditions. “As we started spending more and more time in the industry, it was also becoming very obvious to us just how exploitative the industry was,” says Bose. “As we started expanding our B2B services in 2016 and 2017, it was very obvious that one of the key things to solve for, besides providing commerce tools, was along the lines of responsible manufacturing and April 2020

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I was 23 when I started the company, and what makes me completely paranoid is that thereâ&#x20AC;&#x2122;s another 23-year-old somewhere today who will beat us if we donâ&#x20AC;&#x2122;t keep reinventing and disrupting ourselves. ANKITI BOSE

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sustainability.” To put these objectives into motion, Zilingo implemented high standards for partner factories, checking everything from business registrations to labor certifications. As the relationship deepens, Zilingo will also conduct in-person visits. Certain metrics–unexplained jumps in volume, for example–also indicate whether a factory is engaging in activities like illegal or underpaid labor. In addition, the company is in the process of developing a ‘true Zilingo standard’ for any factories looking to subscribe to the platform. Bose has also been a vocal advocate for equality in the workplace and in leadership. Zilingo recently launched the SheWorkz initiative, which offers microcredit and mentorship to female entrepreneurs to get them back into the workforce. “I have seen my mom having to give up work because she had to take care of me as a child, and the household, and she has more degrees than me and my dad put Left: Zilingo Co-founder and CEO Ankiti Bose began her career at Sequoia Capital India. Above: A recycled yarn mill in Bangladesh that uses Zilingo’s technology. Photos courtesy of Zilingo.

together,” says Bose. “Not only is it unfair to her, but it’s also unfair to the household and the economy.” The key problem in SEA, she believes, is a lack of female and mentors role models in leadership positions. Her advice to aspiring female entrepreneurs is tied to the fact that in today’s world, it is still harder for women to achieve the same recognition and outcomes as men. “We sometimes hold ourselves back because of how guilty society makes us feel for choosing our ambitions and choosing our aspirations,” she said. “It’s important to be really, really good at what you do because the world is unfortunately still quite sexist, but it’s also important to not hold back on your ambition.”

EN GINEERING THE F U T U RE OF FAS HION

eyond new targets for Zilingo’s tech stack (of which there are plenty, including democratizing access to shipping by onboarding small-scale local logistics businesses), Zilingo’s thematic

focus on transparency in the supply chain will be a key focus of their growth strategy for the remainder of the year. McKinsey’s 2020 State of Fashion Report highlighted sustainability as one of ten key themes for the fashion industry this year. The report also found that textile production creates 6% of global greenhouse gas emissions, and is responsible for one-fifth of waterway pollution resulting from the use of industrial dyes and detergents. Information about the fashion industry’s wasteful ways has entered into the mainstream over the past several years, with an increasing amount of public discourse centered around shunning fast fashion and making better choices as consumers. Going forward in 2020, Zilingo is poised at the forefront of trying to solve this issue. “We’re a small player in a really big industry that is ripe for change,” says Bose. “I think we’re going to really stay focused on making the supply chain fair, transparent, and as sustainable as possible. We’re making baby steps, but hopefully we’ll start running and leaping towards that.” Nayantara is Jumpstart’s Editorial Associate. April 2020

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Green Living Starts from the Top Fertilizing a sustainable lifestyle through urban farming By JASMINE CHAN

ong Kong is a city of over 7 million residents with a population density of 17,311 people per square mile (World Population Review). It’s challenging to elevate residents’ quality of life when space is as scarce as it is, but urban farming is being presented as a solution by incorporating wellness and sustainable practices into city-dwelling. Andrew Tsui has always been passionate about social transformation and aimed to empower communities to adopt a greener lifestyle. In 2015, he co-founded Rooftop Republic, an impact business, with Michelle Hong and Pol Fabrega. They discovered that by nurturing a more intimate relationship with food and nature through the activity of farming, urbanites like Hongkongers would become more conscious about their consumption habits. The company also aspires to shape future cities to be more livable and inspire people to re-think the produce they’re consuming. Rooftop Republic works with

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architects, engineers, organic farmers, chefs, and nutritionists to develop and deliver urban farming solutions, converting more than 60 idle urban spaces into rooftop farms across Hong Kong since its founding. Jumpstart interviews Tsui to understand the company’s mission, the challenges it’s faced in advocating urban farming, and why innovating on a green economic model is the way forward for the movement.

From farm to circularity

sui was in real estate management before embarking on his social entrepreneurship journey. Working with architects, urban planners, and government officials led him to believe that building an economic infrastructure is the first and foremost criterion for changing people’s lives. “A lot of people have been talking about sustainability–how important and how urgent it is for us to change. But

without an economy around sustainability, it’s really hard to drive and sustain that,” he says. In 2017, Rooftop Republic was awarded the ‘Most Outstanding Social

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There are around 6 million square meters of rooftop that are potentially farmable in Hong Kong with good sunlight condition. We mobilized, and we are forming a tribe of people who come together and transform these idle places. Enterprise (Meritorious)’ and ‘Most Innovative Social Enterprise’ accolades at the Social Enterprise Awards Hong Kong. Although the company’s social mission is at the forefront of its operations, its co-founders have also created a revenue model that works alongside its efforts to build a circular economy. Tsui describes the company’s business model as “farming as a service.” Its clients include corporations, restaurants, schools, and local communities, and it provides farm design and installation services for urban farms as well as professional farm management. Though these services are

profit-driven, the company believes that such projects and partnerships will accelerate public understanding of urban farming, showcasing its potential to transform cities. The word ‘rooftop’ is an iconic representation of untapped urban sites. “There are around 6 million square meters of rooftop that are potentially farmable in Hong Kong with good accessibility and physical condition,” Tsui says. “We mobilized, and we are forming a tribe of people who come together and transform these idle places.”

Inside the city’s mindset

lthough the benefits of urban farming are clear, Tsui says that the cosmopolitan mindset of efficiency, which is deeply rooted in Hong Kong, is a notable challenge. “In the fast-paced urban lifestyle, time is money. People don’t allow time for Far left: Participants of the ‘Little Farmers Programme’ organized by Rooftop Republic at the Organic Rooftop Farm at Metroplaza L5 Skygarden. Photo Courtesy of Rooftop Republic. Left: Rooftop farm at the JLL-managed Bank of America Tower in Central district. Photo by Sarah Thrower / Rooftop Republic.

nature to take care of itself,” he says. Tsui calls the feverish desire for efficiency the “instant noodle lifestyle.” In the context of farming, it’s the attempt to expedite natural processes with science to reach a higher yield, such as using synthetic hormones and chemical fertilizers. He says that this mentality is difficult to reverse through campaigning and advocacy, as it’s aligned with people’s values. In this regard, the company goes against the grain. When selecting a suitable location for a rooftop farm, Tsui and his team strive to make the most of the natural environment, even if the conditions aren’t ideal. For instance, they don’t disregard spaces with insufficient sunlight, as the ultimate aim goes beyond efficiency. “Technically, we can use artificial lighting, other technologies, or even move it indoors. But still, we ask ourselves: How do we shape an inclusive environment for the wellbeing of our people?” he says. “It’s not just a space to produce food.” Tackling food waste is another focus for the company. Consumers are generally hypercritical of agriculture products, which generate a tremendous amount of food waste and pose another challenge to April 2020

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sustainable practices. “One-third of the food produced in the world don’t reach the end consumers because they are not perfect-looking or meet the expected shape,” says Tsui. “If there’s a little scar on it, you cannot sell it for a good price. They’re not even taken from the farm.” Unlike other urban farming companies, which strictly focus on food production or hydroponics, Rooftop Republic works to better food distribution in Hong Kong by donating a portion of its harvests to local food banks. “Today, in an abundant city like Hong Kong, we still have a million people who are living in poverty. But at the same time, other parts of the city are wasting so much of our food,” says Tsui. He adds that, with hands-on farming experiences, consumers are likely to become more receptive to eating “ugly food” and drive systemic change in the produce supply chain, such as waste reduction and supporting more local farmers.

Blooming a green generation

lthough it’s difficult to shift people’s mindsets, Tsui believes that innovation can enable change to

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occur at a faster pace. After five years of operation, Rooftop Republic has a clear direction in espousing the green movement through education, sharing the benefits of a circular economy that supports local food production, urban greening, and a sustainable lifestyle. Rooftop Republic Academy launched in March last year. The program caters to urban designers, retirees, students, and anyone urbanite who is interested in farming. Participants can gain hands-on farming experience and learn urban agriculture knowledge, such as the principles of organic farming, soil management, irrigation systems, and more. It also provides upskilling opportunities for marginalized communities. “Our purpose of existence is to create value for the 99%,” Tsui explains. “They share the commonality of being hopeless about having a green lifestyle–either they have no options where they live, the system does not allow them, or they feel like they don’t have the ability.” Tsui hopes Rooftop Republic Academy will become the Le Cordon Bleu or Shaolin Temple of urban farming talent, Rooftop Republic’s co-founders (left to right): Andrew Tsui, Michelle Hong and Pol Fàbrega Photo by Xaume Olleros / Rooftop Republic.

as it also provides structured courses for property and facilities management. By connecting with urban designers through farming, the company hopes to bring about a new normal, where urban farms will be as ubiquitous as gyms. “It is the cradle of empowering city people–specifically, one part of it is the professionals who are actually designing the future of our city,” Tsui says. “These are the people we actively engage with and share how they can engage urban green design in the future.”

y many accounts, Rooftop Republic’s push for urban agriculture is paying off. Matthew Pryor, Associate Professor and Head of the Landscape Architecture Division at the University of Hong Kong, estimates that there are around 1,500 farmers in the city. The number of farms has also increased consistently over the past decade and is showing no signs of slowing down. Looking ahead, Tsui hopes to continue to change how the public views urban farming, not only as a leisure activity or an alternative to traditional food production, but a vital component to urban life. The oasis may not be a mirage after all. Jasmine is Jumpstart’s Editorial Assistant.

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A Golden Age for Power-Ups Eight years A.C.C. (After Candy Crush), the mobile gaming industry is ready to win big By MIN CHEN 62

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hen Candy Crush Saga first launched in 2012, mobile gaming was more so an anecdote than a saga in the global games market, where it made up 18% of industry revenues (Statistica). Today, it’s the most valuable and fastest-growing gaming format compared to P.C. and consoles, accounting for 45% of gaming revenues worldwide in 2019 (Newzoo). Like any great epic, Candy Crush left a lasting legacy. It’s still generating more than US$1.7 million daily for its developer and publisher, King, as of February 2020 (Think Gaming). For many commuters, it’s still the activity-of-choice for just

the right amount of escapism. It also pioneered the freemium model, where users play for free and have the option to pay for add-ons. But Candy Crush’s most significant contribution was propelling mobile gaming into a dominant position in the games market through its explosive commercial success and cultural ubiquity alongside other industry-defining sensations, such as Angry Birds, Clash of Clans, Pokémon Go!, and Fortnite. These chart-toppers, together with the general rise of smartphone users, have turned casual gaming into serious business. Mobile gaming is still a relatively new industry, with Apple opening the App Store to developers in 2008–one year after

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When we first started six years ago, [VCs] just looked at download numbers, but they are very savvy now. Downloads don’t mean anything to them. They look at the revenue, which is always important, but even that’s not everything. the initial iPhone launch. The number of active gamers has increased exponentially since, growing from 1.5 to 2.5 billion between 2014 and 2019 (Newzoo). Mobile games are only second to social media and communication apps in terms of time spent in-app and accounted for 74% of consumer spending in-app in 2019 (App Annie). This spending totaled $68.5 billion in revenues last year, with a projected 10.2% YoY growth to reach $95.4 billion by 2022 (Newzoo). The accessibility of mobile gaming has pushed studios to create new experiences for new audiences. With more women and age groups entering the ‘gamer’ demographic, mobile gaming’s influence will only become more far-reaching in our digital lives. How developers adapt to these changes and apply the tools available to them, such as 5G and augmented reality (AR), will be up to the players to decide.

offices in Zhuhai, Vancouver, and Hong Kong headquarters, Twitchy Finger has won several industry awards since founding, including the 2018 Tencent Game Innovation Award, 2018 HKDA Global Design Award, and the 2016 Google Play ‘Best Independent Game’ Award. Its flagship game, Mini Legend, is a mid-core racing game that boasts over 8 million downloads in the App Store. Creating a profitable game is no small feat for young studios, as their resources pale in comparison to that of gaming giants. Development-time aside (it takes the Twitchy Finger team around four to six

months to develop a casual game), there’s no formula to success, and metrics can only take a studio so far when it comes to deciding on a genre to pursue. Like any creative medium, studios simply have to take risks until they release a hit. “Starting a mobile game company is tough. By 2015, we were developing our second mid-core game, and we were running low on money. We thought: This game is either going to make us or break us,” says Li. “We were lucky it did very well.” Twitchy Finger’s next release was a casual puzzle game with a comic art style–a stark contrast to what the studio was

Road to twitches

obile gaming first appeared on Edward Li’s radar in 2012 after a friend recommended that he play Candy Crush and Clash of Clans; he was intrigued after learning that the former had grossed over $1 billion in revenue. Surprised by their appeal, as he “grew up playing on P.C.s and consoles,” Li decided to look into the potential of the emerging gaming medium, having spent most of his career in music production. “I had a discussion with my co-founders, and we thought: There’s an opportunity. There aren’t a lot of studios in Hong Kong. The field is still very new, so this is something we can try to move into. That’s how Twitchy Finger started,” says Li. Together with Howard Lau and Anthony Kwan, Li co-founded a mobile game development and publishing studio in 2014. With over 30 employees across its

Top: A screenshot of Twitchy Finger’s newest game, Apex Racer. Right: Twitchy Finger Co-founder Edward Li. Photos courtesy of Twitchy Finger. April 2020

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known for, which raised a few eyebrows. To Li and his co-founders, it was necessary to “not always do the same things over and over again even if it’s a cash cow” because it keeps the team adaptable and creative. This decision also followed on the heels of a broader industry shift toward the reward video model within the freemium segment, as the studio used the game to test the monetization strategy in a new genre. The decline of paid games and pop-up ads were, interestingly, a result of consumers’ receptiveness to advertising in games, which prompted studios to explore new ways to capture their attention. A study by TapJoy found that 41% of consumers are likely to pay attention to advertisements placed in mobile games, versus 17% for general Internet ads and 15% for billboards. Studios can bring in recurring revenue and increase time-in-view by, for example, showing a video ad in exchange for lives, whereas paid games are a onetime purchase, and users may be turned off by frequent pop-up ads. Such revenue opportunities have led to a flurry of investments and acquisitions by VCs, financial institutions, and large gaming companies in the past few years. Ten-

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cent has been notably aggressive, obtaining stakes in Supercell, Pocket Gems, Glu Mobile, and Epic Games, to name a few. Goldman Sachs invested $200 million into hyper-casual mobile gaming studio, Voodoo, in 2018. Such trends have made investors much more discerning when it comes to dissecting industry metrics. “When we first started six years ago, [VCs] just looked at download numbers, but they are very savvy now. Downloads don’t mean anything to them. They look at the revenue, which is always important, but even that’s not everything,” says Li. He adds that retention rates, session lengths, average revenue per user, and lifetime value of the user are just some of the numbers that investors evaluate in the due diligence process. Li cites the example of Pictionary game Draw Something as a watershed moment for gaming investment. Its developer, Omgpop, was acquired by social gaming powerhouse Zynga for more than $180 million at the game’s peak in early 2012, after reaching 50 million downloads in only 50 days (The New York Times). But Omgpop’s valuation dropped to $95 million by the end of 2012–as Draw Some-

thing lacked an engaging, competitive factor to keep retention rates up–and it took years for Zynga to recover from the loss (The New York Times). While many acquisitions and partnerships are motivated by data sharing, large gaming companies are also after soft benefits, such as acquiring new talent or refreshing their company culture by working with an agile team. In 2017, Twitchy Finger entered a joint venture with Kingsoft, a Hong Kong-listed and Mainland China-operated software and Internet services company, as a way to inject more creativity and perspectives into its games division, Seasun Games.

It’s anyone’s game

onfidence in the future of mobile gaming is bolstered by advancements in hardware and software, new monetization models, and genre diversification. The application of AR, best epitomized by Pokémon Go!, is reinventing player experience and introducing new monetization opportunities. In addition to in-app purchases, the game uses a cost-per-visit model, which attracts players

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to a specific place through Pokémon placement and charges sponsored locations for each visitor. According to Dice, this model has brought in $75 to 250 million in revenue since 2016. Mobile gaming is also well within the disruptive reach of 5G, which will pave the way for cloud and on-demand gaming. Running games on remote servers and streaming them directly to a user’s device will not only enable faster loading speeds and undisrupted gameplay as users switch from one device to another, but it will also set a new standard for the mobile gaming experience. “Right now, all mobile games are limited by hardware. In general, we don’t worry about iOS devices because Apple has a well-optimized software-to-hardware integration. But on the Android side, it’s very fragmented,” says Li. “You have lower-end phones that are bare-bones; games run on it, but not well. So we still have to make a compromise for now.” Like countless other industries, the subscription model is taking mobile gaming by storm. Apple Arcade and Google Play Pass both offer a curated selection for $4.99-a-month. Subscribers can try new games ad-free and gain access to exclusive perks, while developers are able to enjoy recurring revenue. Subscriptions also have the potential to impact spending behavior, as consumers often perceive them as better value than standalone purchases. Currently, 2.8% of mobile gamers spend money on in-app purchases for freemium games (Newzoo), and only 10.3% of App Store games are paid (42 Matters), suggesting that user spending has much room to grow. Traditionally an activity occupied primarily by teenage boys and young adult men, the gaming market is now benefiting from an older and more female consumer base–much to the credit of mobile gaming’s accessibility and the general aging of gamers. Last year, the proportion of female mobile gamers reached the majority at 51%, and the average age of a mobile gamer was 36.3, according to the State of Mobile 2020 Report by App Annie. A study by Newzoo and Activision Blizzard Media also found that while female and older gamers prefer puzzle games, they are also branching out to the action and adventure, and competitive genres (Betting on Billions: Unlocking the Power of Mobile Gamers). Such findings will undoubtedly affect how studios approach development, but Li believes that the industry needs to do more.

We’re seeing more and more women coming into the field, and they’re providing insights and ideas that a lot of male programmers and game designers just don’t have. There’s always been a lack of gender balance but it’s good that this is starting to change. “We’re seeing more and more women coming into the field, and they’re providing insights and ideas that a lot of male programmers and game designers just don’t have. There’s always been a lack of gender balance, but it’s good that this is starting to change,” says Li. “For our Vancouver studio, we’re half-and-half for gender representation, which is rare.”

t’s evident that, as we enter the golden age of mobile gaming, its presence will be seamlessly integrated with our dayto-day. With this growth comes opportunities to make the activity more inclusive and solve problems that plague us, big or small. Whether it’s the gamification of

anxiety treatment or getting us from A to B, tactical engagement in our digital lives will not only be prevalent, but expected. Hardware and software advancements have shone an even more promising light on its trajectory, but growth is not without its caveats. The industry is facing criticism for using psychologically-manipulative tactics to draw users into addictive play, creating appealing sensory stimuli and dopamine-charged rewards. This narrative has played out again and again in the gaming world, so only time will tell if studios’ efforts to address such concerns will be sufficient. For now, the industry and the gamers will be focused on getting to the next level. April 2020

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expensive and unethical practices, branding based on wealth–and instead, chose values-based branding and no physical retail location at all. Things appear to be coming full circle now. Direct-to-consumer (D2C) glasses brand Warby Parker introduced the Warby Parker Class Trip–a yellow school bus outfitted as a showroom that drove around the United States–in 2012, following up with their first permanent retail location in 2013. Cosmetics brand Glossier and luggage brand Away opened their first permanent locations in 2016. In 2019, there were over 1,700 brick-and-mortar stores under the umbrella of digital brands, with another 850 expected to come into being by 2023 (Forbes). One of the primary drivers behind this phenomenon, according to Jasmine Bina– Founder and CEO of branding strategy firm Concept Bureau–is that digital brands are in search of a new demographic of consumers. They’re trying to attract the later adopters, who are perhaps more accustomed to the traditional, try-beforeyou-buy retail experience. “They can go in, and they can experience the ethos and idea behind a brand without having to take that risk online and then decide if they want to buy the product,” says Bina. Tellingly, the words Bina uses–‘ethos’ and ‘idea’–provide a glimpse into the calculated world of D2C branding that few consumers ever get to see for themselves.

A crowded ecommerce marketplace

The Bricks and Mortar of Branding Unpacking the how and why of digital-first luxury brands opening physical retail locations By NAYANTARA BHAT

Warby Parker now has over 120 retail locations throughout the U.S. and Canada. Photo courtesy of Warby Parker.

ith the rise of Shopify and the founding of glossy digital brands like Away, Casper, and Recess, retail is no longer restricted to a physical shopping experience. These luxury digital-native brands built up loyal online followings through innovative branding strategies, convincing consumers to put their trust in products they had never touched before. Ecommerce became the final word in retail, and brands created new ways to reach consumers digitally. The success of digital-native brands not only proved their viability, but the ability to inspire cult-like followings–setting a new standard for luxury goods. Like traditional luxury, such products came at a somewhat inflated price tag. However, these brands stayed clear of the hallmarks of luxury–imposing heritage buildings,

igital native brands have often turned to unorthodox methods of accessing consumers out of necessity. Warby Parker, for instance, has a tryat-home policy that gives buyers the option to try out glasses and return them. When its waiting list exploded with new users, the company tested its first showroom in Co-founder Neil Blumenthal’s dining room. Similarly, Heidi Zak, Co-founder and Co-CEO of lingerie brand ThirdLove, was pushed toward brick and mortar by the rising costs and lower efficiency of Instagram advertising. “A few bad players that took advantage of the Facebook ad ecosystem kind of ruined ad prices for everybody. But that’s how most D2C was built,” says Bina. In the early days, she adds, such brands were pumped full of venture capital and able to use it to aggressively market to users, drowning out all competitors. April 2020

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The user has gotten more sophisticated. The ad landscape has gotten more competitive. The barriers to entry for all these industries have gotten super, super low. Branding in the millennial age

However, there were two flaws in that plan: firstly, investors weren’t accustomed to putting capital into consumer goods companies. They gave these companies tech valuations, pressuring them to reach impossible growth rates. Secondly, being louder than the competition simply isn’t sustainable as a branding strategy. “The user has gotten more sophisticated. The ad landscape has gotten more competitive. The barriers to entry for all these industries have gotten super, super low,” Bina says. Also, the dream exit strategy–acquisition by one of the big incumbents like Kimberly-Clark or Unilever–soon became out of the question as the incumbents’ corporate innovation departments began launching their own buzzy startups to disrupt themselves before a startup could get to it. “It was a model that was easy to copy. So there’s really nothing inherently advantageous about D2C anymore–it’s just another option for figuring out how to Top: Jasmine Bina is the founder and CEO of Concept Bureau, a leading branding agency that works with growth-stage startups, millennialfacing brands, and companies entering the U.S. market. Photo courtesy of Concept Bureau. 68

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launch your company and go to market,” says Bina. With obsolescence staring these brands in the face, it came time to return to the old way of doing things and open brickand-mortar stores–but with the millennial-driven mindset that’s quintessential to today’s upcoming brands.

hen viewed through a millennial lens, traditional luxury has almost become a bit of a has-been. Where fur coats and expensive champagne were once the status symbols for sophistication and taste, the implied classism and rampantly wasteful practices have turned consumers off these brands. Now, it’s responsible production and aspirational values that matter to big-spending consumer groups–pushing them to make purchases from brands that echo this mindset. “When you feel like you’re buying this larger narrative, you’re willing to pay a little bit of a higher premium, because when you wear those products or carry those products, you’re kind of signaling to the world that those are the values and ideals that you hold,” says Bina. In large part, launching brick-andmortar stores is more of an ode to a company’s ethos than its product, Bina says. “There are plenty of places where they don’t stock too much product, and that’s on purpose–they don’t really see the store as a place to sell a product, they see it as

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selling the brand,” she says. This strategy is what gave U.S. consumers the Casper Dreamery, a luxurious concept store from mattress startup Casper, where visitors can book 45-minute nap sessions on Casper mattresses before enjoying a cup of coffee and getting back to work. Recess, which sells beverages infused with marijuana-based compound cannabidiol (CBD), opened a location in 2019 designed to replicate the calming influence of the brand’s products. “In this space, I want you to feel like you are walking into Instagram […] or walking into a billboard,” Recess Founder and CEO Ben Witte told CNBC in a 2019 interview. Designed unlike anyone’s expectation of a retail store, these spaces are undeniably made for social media. Visitors who explore, take photographs, and share them on Instagram, provide a loop of organic attention that keeps feeding into itself. “It kind of makes you wonder–what’s the real product here?” says Bina. “You can drink a bottle of Recess, and you’ll feel calmer and more creative and inspired according to them [...], or you can go to the Recess store and have an experience where you might leave feeling those same things. And you don’t have to necessarily buy a product, but you’ve experienced the brands in a meaningful way.”

The risks and rewards

n cases like these, the numbers usually tell a compelling story, but many of these brands don’t publicly release revenue figures. However, Gartner’s L2 Intelligence Report: Death and Pure Play Retail noted that retail stores could provide a significant boost to a company’s online traffic. Having a physical location is beneficial both in terms of Google rankings and credibility to the target audience. The relationship between cost and revenue becomes more complicated when it’s a digital native brand going brick and mortar, especially when the brand in question isn’t even really using the space to move product. For D2C brands, it’s all about using physical space to complement the brand and build a greater understanding of their customers. Opening retail spaces also allows brands to interact directly with customers, engaging with them more deeply to collect contextual data on their buying habits. However, considering that these stores aren’t entirely built for sales, the risks of investing in brick-and-mortar become

apparent in many situations. For instance, the outbreak of COVID19 has dramatically reduced foot traffic to retail stores, diluting the beneficial branding impact they offer. Additionally, after building a considerable amount of brand equity online, any events that run counter to these values–for instance, the late-2019 Verge article that exposed toxic work culture at Away–can immediately tarnish the brand’s image. Ultimately, the ‘customer journey’ is an all-important process that is essential to get right–giving consumers a special connection or tribe-like feeling of belonging

with the brand. “I don’t think you have journeys and retail like you do when it comes to D2C brands and their stores,” says Bina. “They really want you to leave somewhat of a changed person, even if just a tiny bit.” Some might argue that the cool calculation put into optimizing retail stores for customers takes some of the shine out of these unique customer experiences. Still, digital brands have learned how to add a new dimension to their sales process. As consumers, it’s up to us to decide whether we want to subscribe to it. Nayantara is Jumpstart’s Editorial Associate. April 2020

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Transitioning to the Subscription Model This popular revenue model may not be for everyone By DANEESH SHAHAR

ubscriptions have become synonymous with how we consume products and engage with services. Nowadays, it seems almost impossible to listen to music, watch movies, or shop online without being attached to a monthly subscription plan. The perpetual exchange of value and the ability to cancel anytime helps us avoid the stinging feeling of dropping large sums of money for things like software licenses. Endless libraries (think Netflix and Spotify), 24/7 customer support, constant software updates, and algorithmic curation all feed into the appeal of subscriptions. For companies, this business model presents an opportunity to strengthen their profitability forecasts, cultivate deeper relationships with their consumers, and collect data to uncover said consumers’ engagement habits. According to an October 2019 report published by subscription software provider Zuora, subscription business revenues grew around five times faster than S&P 500 companies in the first half of the year (18.2% vs 3.6%). Given the tremendous revenue potential, it comes as no surprise that many companies have recently initiated plans to transition all or part of their revenue streams to the subscription model. For instance, industry rumors suggest that Apple may introduce an iPhone subscription plan, bundled with services like Apple Music and Apple TV+. However, many companies attempting this transition fail to recognize the key steps to creating a successful subscription-based business–including assessing product-market fit, and deploying effective change management. In such instances, the pivot alienates their consumer base and ultimately threatens their existence.

The perks of subscription

he subscription model took the form of gym memberships, grocery chain loyalty programs, and DVD-

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by-mail services before developing into software-as-a-service (SaaS) and subscription ecommerce boxes. Customer relationship management software company, Salesforce, pioneered the SaaS model through its founding in 1999. Riding on the rise of broadband Internet and mobile technology in its early

years, Salesforce has now cemented itself as the industry leader. But unlike companies that transition to a subscription model later, Salesforce began as a SaaS company, avoiding the negative effects of a pivot. By nature, subscriptions provide a degree of certainty in a company’s projected profit and loss statement. They provide upfront boosts in cash flow at the start of every renewal period, which typically translate into a stable financial position for the rest of the month or quarter. The model not only has a robust effect on a company’s financials, but is also monetarily beneficial for consumers. Subscriptions help financially constrained businesses avoid the substantial upfront costs of software licenses and IT hardware, such as servers. Adobe is the poster child for how to

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The benefits of the subscription model– robust cash flows, increased profitability, higher customer retention–can only be achieved if employees and management are equipped with the right mindset to create supporting systems and procedures. successfully transition to the subscription model. The company released a monthly subscription plan for its creative software

suite in 2012. Surprisingly, a year later, overwhelmingly positive reception of the new pricing model prompted Adobe to cease selling licences for the entire suite. Enterprise and individual users overwhelmingly preferred to pay in smaller monthly installments of $50, rather than an upfront $2,500 to purchase the license to Adobe’s master collection. Consumers also benefited from regular software updates, which gave them the perception that they could regularly gain new value from the software–this, in turn, encouraged retention by preventing the product from feeling stale. Additionally, a subscription also allowed the company to more strategically leverage its engineering talent, who previously had to wait to launch products that they had been developing for extended periods of time as part

of the company’s year-long release cycle. On the data-side, continual updates via the subscription model unlock an entirely new channel for its collection and analysis. Ecommerce companies looking to transition to subscriptions can analyze actions like return rates, cancellations, and plan upgrades or downgrades. The analysis of consumer data can then inform price adjustments, return policies, and other changes in a gradual bid to constantly improve the subscription experience.

Challenges ahead

umping on the subscription bandwagon without examining your product-market fit can be damaging to your business. According to a 2018 McKinsey report on consumer goods subscription services, a consumer will not hesitate to cancel their subscription if they feel that it doesn’t deliver a satisfactory experience. The deciding factor can vary between the level of convenience, personalization, or value, depending on the type of consumer good. A clothing subscription service that delivers new clothes every month on time, but does not provide the service of personalized curation, would have a high churn rate if their target audience values personalization over convenience. Failed attempts to transition to subscription-based models can largely be attributed to poor change management. A subscription business requires finance, sales, and product teams to reassess priorities and redefine milestones. For example, salespeople now have to understand that the first transaction with a new customer is the beginning of a potentially long relationship, rather than the end of a sales process. The benefits of the subscription model–robust cash flows, increased profitability, higher customer retention–can only be achieved if employees and management are equipped with the right mindset to create supporting systems and procedures. Besides these factors, there are external considerations that need to be assessed before transitioning and maintaining a subscription model. For instance, Zuora’s Subscription Economy Index estimated that media and publishing have the highest churn rates of 37.1% and 28.2%, respectively, over a seven-year period. When it comes to streaming services, it is likely that a combination of intense competition between the major players (Netflix, Amazon Prime Video, HBO) and new entrants April 2020

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US$57 million in 2011 to $2.6 billion in 2016. The entrance of major players like Walmart Beauty Box and Unilever’s $1 billion acquisition of Dollar Shave Club (razor subscription), helped legitimize subscriptions boxes as a viable business. Nike’s Adventure Club, a service that ships children’s shoes on a monthly, bi-monthly, or quarterly basis, is a recent addition to the slew of brands experimenting with ecommerce subscriptions. The service addresses the problem of having to constantly buy new shoes for children because of how fast they grow out of them. Here, the power of the subscription model lies in its ability to capitalize on recurring behavior. Nike’s Adventure Club eliminates the friction of having to repeatedly buy new kids’ shoes, and also works to instill loyalty in their youngest users. The launch of the service may hint at a future Nike plan to introduce subscriptions for other users with recurring purchase behaviors, such as marathon runners.

Will subscriptions take over everything?

to the industry (Disney+, ApplyTV+) will keep the churn rate high. The meteoric rise and fall of subscription meal-kit service Blue Apron can be attributed to a myriad of reasons, including logistical challenges, poor product-market fit, and major players disrupting the grocery space (e.g., Amazon’s acquisition of Whole Foods). The company’s inflated marketing costs and high

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churn rate (72% of users cancelled their Blue Apron subscriptions within the first six months) signalled they were never able to fully convince new customers of the value of their service. Blue Apron has plummeted from its peak valuation of $2 billion to its current market cap of $36 million (as of March 2020). Despite these challenges, the subscription ecommerce industry ballooned from

For many of us, it’s difficult to imagine our media consumption or goods delivery taking any other form than a subscription. Discretionary monthly spending has become so ubiquitous that we’ve now opted into delivery services that regularly supply us with toothbrushes, makeup, and cooking ingredients. But is the subscription model practical for all service industries, and does it make sense for more companies to transition? Zuora CEO Tien Tzuo certainly thinks so. In a Stanford Graduate School of Business interview, when asked about what other industries he expects to embrace the subscription model next, he answered: “There are already subscription-based companies in real estate, education, finance, and pet care. The reality is, ownership is dead; now it’s really about access as the new imperative.” His strong opinions coincide with the rising prominence of the sharing economy and the trend of access over ownership, though there is skepticism about whether sharing behavior will translate well in industries where strong ownership incentives exist. Only time will tell whether the subscription model will take over more of our lives–in all likelihood, we have set ourselves on the path to using everything available, and owning nothing at all. Daneesh is Jumpstart’s Journalist in Residence.

Jumpstart Issue 29: Back to Basics

Articles inside

Introduction to the Korean Startup Ecosystem

Vindicating the Liberal Arts Major