[stephenkhoo]

Being obsessive and taking failure in your stride. -- ST ILLUSTRATION: LUIS MISTADES

By Lim Der Shing, for The Straits Times
IN THE 12-year journey since my co-founder and I started JobsCentral Group during the dotcom crash of 2000, I have gathered some key learning experiences which I would like to share.
It was a tough time in 2000 as nobody wanted to fund us. I can still recall our first sale of $9 and our monthly salary of $500 for the first nine months. By 2001, our job portal business had found a niche in campus recruitment. By 2004, we made over $1 million in sales. Other co-founders with complementary skills also joined us in those early years.
In 2005, we made a major decision to expand back into the job portal business. Using our five years of campus recruitment experience, we expanded quickly. By 2010, we were one of the largest locally owned dotcoms with over a million jobseekers and 10,000 employers using our services. In 2011, the top job portal business in the United States, CareerBuilder, acquired us for the price of a small listed company.
Today, my team and I still run the regional business. We all give back to the start-up community as angel investors and by sharing our experiences as mentors.
Value of being obsessive
I HAVE lost count of the times I have obsessed over some minor detail, whether it is watching out for competitor advertisements, or vexing over a small feature bug or even just checking the site every 30 minutes to ensure applications are working fine. I have found that being obsessive ensures success. The various short- and long-term problems and issues percolate in my mind all day long.
Most successful entrepreneurs are also street-smart, curious, very competitive and take failure in their stride. Being well-educated helps too. This is especially important when scaling beyond 100 staff, and business school type principles and work process issues become relevant.
Most successful entrepreneurs are driven to build an empire and simply like to win. A very wealthy entrepreneur once let slip to me that there are about 50 families ahead of him in net worth in Singapore. I laughed at the time, but net worth is how many entrepreneurs keep score.
There many potential entrepreneurs in Singapore with such traits. We are a highly competitive, well-educated society and are famous for being willing to work hard. We just need more success stories where entrepreneurs of varying educational and economic backgrounds succeed spectacularly. With such role models, a safe and well-paid job with a MNC will seem less and less attractive.
Teamwork & transparency
MY TEAM works well together. We have clearly defined roles and the team is willing to report to one person. Each member of the team is better than me in what they do and frequently, all that is needed from me is to get out of the way. What works is to be totally transparent in how each person is paid and also when it comes to the company's accounts.
Managing a team of talented owner managers requires me to manage my emotions. There have been many incidents where I swallowed my pride or put aside anger or disappointment in order to ensure the best decision was made for the business. It gets easier with time but it is still very much a challenge.
That is why some entrepreneurs choose to do it alone and just pay professionals to do the key functional jobs. You can always remove a professional manager but it is much harder if that person is also a significant shareholder.
Most start-ups today are a team. A team still makes the most sense especially if you intend to raise funds. New start-ups need to have a clear idea of roles. They should decide on the leader and their pay, and sign a joint shareholders' agreement to spell out these details and contingencies.
Fund raising
BACK in 2000, we were fresh graduates with no money or experience and nobody wanted to fund us. We grew organically with $100,000 from savings, family and friends. We built a habit to be always cashflow positive and to grow at our own pace. We focused on clients and their needs. Fortunately for us, it worked out well.
The Silicon Valley model is to raise funds via angel investors. Once the product has traction, the company will raise further funds via venture capital firms (VCs). This model works well if the business is scalable and can grow revenues rapidly. However, there are not many that can meet the rapid growth and large market criteria for raising VC funds.
There are many options nowadays for raising capital up to $600,000, thanks to the plethora of co-funding schemes from the Media Development Authority (MDA), Spring Singapore, Action Community for Entrepreneurship (Ace) and National Research Foundation (NRF). A good skilled team with a viable business model should be able to find funding up to this level.
What is missing is the initial, Series A funding round of $1 million to $5 million. But this is a consequence of our market rather than something requiring the government to step in. Entrepreneurs should use their "angel" round of funding and grow to justify their next round. It will often mean breaking even or being profitable in Singapore, and expanding into an overseas market. Either way, they need to grow to an eight-digit valuation to justify a VC round. We do not want to waste taxpayers' money funding $1 million to $5 million investments which cannot scale to the required exit size.
Going overseas
WE ARE a conservative bunch of entrepreneurs. We expanded overseas only in 2009, when we were profitable in Singapore with sufficient management resources. We expanded into Indonesia last year and will enter more Asean markets.
Today, many start-ups feel a need to go global from day one. They believe having a regional story is of utmost importance. This is true especially if the start-up is trying to raise money. However, it is best to have firmed up home market processes and basic business model first, to ensure the business does not end up failing in both home and foreign markets.
Wooed by suitors
WE HAD four possible buyers between 2003 and 2008. None of them worked out in the end. I found the valuations offered by Asian firms quite poor compared to Western suitors. We were offered valuations that ranged from five to 10 times price-earnings ratio (P/E) even though we were growing 40 per cent a year.
It is best not to plan to be acquired. Before we were cold- called by our current shareholder, we had already decided to just hunker down and build the best possible business. As we were profitable, there was little pressure to sell or raise more capital.
Today, while there is definitely more merger and acquisition activity in the region, entrepreneurs should always look for clients first before looking for buyers.
We need more highly profitable local outfits and highly scalable regional and global outfits. Both will be sought after by different types of global buyers. The exits will be eight-, nine- or even 10-digit sums. The founders who exit can then become role models and investors for other start-ups.
Nurturing entrepreneurs
I STRONGLY feel that entrepreneurship needs to be nurtured and considered as a career path for Singaporeans, for both top students and school dropouts. By starting a business, my team generated a 100 new, well-paid, high-productivity jobs for Singapore. We helped thousands of employers improve their recruitment process. We are now helping to spur the digital start-up community via our angel investments and mentoring. Imagine if there are thousands more such stories in all industries doing the same.
The various schemes by Ace, Spring, MDA and NRF are on the right track. We need to help local SMEs as much as possible.
While most of us may never make the same revenue as an MNC, some of us will do well and the long-term rewards will be substantial. A Singaporean-owned company will stay in Singapore through thick and thin in a way that an MNC will never do. SMEs may expand and sell overseas but the profits will be repatriated and spent via their Singaporean shareholders.
Mentors & government help
NOT only do we need to meet the right person, and ask the right questions, but we must also be at the right stage of development and frame of mind to benefit from help that is available. I have learnt the most when speaking to fellow entrepreneurs who run similar- sized or larger companies, who have bought and sold companies and shared their personal experiences. Talking to professional managers helps when I have a specific functional problem, such as accountants and lawyers during our acquisition process.
New entrepreneurs should go for the many government grants and funding offered to digital start-ups. But even if you fail to get a grant, you still need to have a good plan to succeed. In fact, if we look at recent eight- and nine- digit exits and investments like PropertyGuru, Reebonz, Beeconomic, JobsCentral and Hungrygowhere, none of these had any government funding.
Entrepreneurs should always blame ourselves if anything goes wrong. I cannot stress this enough. Only when we see ourselves as the root of all our business problems can we act to overcome them.
The writer is CEO of JobsCentral Group