Building a product that can 'speak' for itself
by Venus Hew
04:45 AM May 17, 2012
SINGAPORE - Creative ideas are usually not a problem for start-ups; getting funding is.
So it was not without a lot of sweat and patience that local start-up PayWhere, the creator of social e-commerce tool TackThis!, is seeing results today.
TackThis! allows businesses to create an online store on social platforms such as Facebook, LiveJournal and blogs.
In the short time since the platform was launched in September last year, TackThis! has attracted 1,600 online retail merchants, a 789-per-cent increase in subscription from about eight months ago when users numbered about 180.
So impressive are the numbers that PayWhere's founders - a young trio comprising Mr Damian Chow, 27, and Mr Vincent Lau and Mr Dickson Choong, both 28 - in March convinced a second investor to provide S$600,000 to fund the company's expansion.
"We've just signed the term sheet with a tech venture capitalist, pending due diligence," said PayWhere's CEO Mr Choong.
The key to convincing an investor to support a firm, he said, is to build a strong, unique product that can "speak" for itself behind a team that embraces perseverance, patience and determination.
Mr Choong said that the company also benefited from a S$50,000 grant from SPRING Singapore's Young Entrepreneurs Scheme for Start-ups (YES! Start-ups) in September 2010.
The grant was a major catalyst in the development of TackThis! and boosted the company's total initial funding to about S$135,000.
A graduate from the National University of Singapore (NUS), Mr Choong said PayWhere, an incubatee of NUS Enterprise, also received tremendous help from the university.
Its first investor was an NUS adviser, who had pumped in about S$80,000.
"Our angel investor is actually one of the NUS advisers," he explained.
"We kept in contact even after we had our SPRING grant as she is a nice person and gave us good advice in starting our business. And one day, she offered to invest."
Now, with the latest injection of funding, PayWhere plans to increase its headcount to 16 employees from the current 10 and strengthen its marketing team.
Mr Choong said: "It takes a lot of patience to find the right investor. For us, it also means a company that is willing to support us in the long term, one with a solid marketing team, matching strategic values. So it is not all about the money."
One of the ways to meet potential investors and users is to participate in exhibitions.
Last year, PayWhere participated in events such as DEMO Asia, Innofest, Echelon and Startup Asia.
At the exhibitions, PayWhere requested for users to try its product so as to obtain feedback and improve the product.
It generally took about one to two weeks for potential investors to decide after the first meeting before they called for a second round of pitching.
But the process becomes easier with experience. And with a more established product this year, it only took a week for investors to say "yes" in the first rounds of pitching.
Mr Choong said it is important to have a development plan.
"It also depends on how long a start-up wants to wait for the next investor without any income at their end.
"But chances are, the valuation will also be higher when they come up with better products," he said.
About 85 per cent of PayWhere's users are local Singaporeans, with the rest mainly from Malaysia and Indonesia.
PayWhere said it is focusing on the local and South-east Asia markets at the moment.
With a booming e-commerce market expected in Singapore, online payment portal PayPal is forecasting the market will hit US$4.4 billion (S$5.6 billion) in 2015.
So not without reason, PayWhere expects a profit turnaround within two years.
The company is currently building a mobile app for TackThis! to be rolled out in August this year to catch up with the high smartphone usage among online shoppers.
The three men, who have known one another since their Pioneer Junior College days, have yet to draw any salary and mostly depend on savings and family support.
But they expect their fortunes to change soon.
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