'Saturated Industry is a Myth' [Willy-Founding Partner of Capitale Ventures]

Has the startup space been saturated? What can I, as a startup do to differentiate myself in this space? In this blogpost, we have Willy to share with us his thoughts on industry saturation and his perspective on startup investment.

Willy is the Founding Partner of Capitale Ventures, and has been an entrepreneur all his life. He advises entrepreneurs on business model transformation and brings to the table comprehensive capital markets expertise, having identified, structured and executed various investment opportunities with alternative capital structures across Asia Pacific and North America.

1) Hi Willy, can you start off by sharing what got what interest you in this startup industry? Was it during your university days? 

Back in National University of Singapore, I was studying triple E (Engineering).

After graduation I was in the government sector for a few years before coming out to do my own business with 2 other partners. I guess the excitement and calling of the business world was calling out to me. I like talking to new entrepreneurs, the passion, the dream of course always makes me excited. I bring to the table marketing expertise, advising entrepreneurs on their business models.

I used to run a tech company which revolves around the 'GEEK' business, where I help physical business go online by helping them set up website. But I eventually sold the business. I find that starting a business is exciting not because it's exponentially up. It's exciting because there's up and down.

Being an advisor / angel investor is a way to experience the start-up journey again. Only that I’m not running my own start-up. As an advisor of start-up I wouldn't go to the point of saying 'avoid making the mistake' but I would say 'perhaps when you make the mistake it is best to think from another perspective.'

It is part of the journey to grow and feel alive. I share with friends around me. People are like banana. They are either green and growing or yellow and rotten.

2) Over the past years, there are significant number of technology incorporated startups emerging. What is your opinion/advise for them entering an industry that is already saturated?

First off, I want to address the word, 'Saturated'.

This is my personal belief. 'Saturation is a myth’ -Saturation occurs when the market is stagnant. But the market is dynamic and consumer preferences changes all the time. It is always about better way to do things and better ways to serve the consumer needs.

Take for example years ago when Xiaomi comes in when the market is already crowded with Apple & Samsung. But today, Xiaomi also carved the niche themselves, selling all sorts of technology stuff. In fact, it is becoming a tech supermarket!

Start-ups need to ask themselves, 'how well are they connected with their customer's needs? Are they able to deliver better,  faster and cheaper for the consumers.’ One thing that start-ups need to know is that technology is an enabler, not an end all. Thus, startups should go back to the fundamentals and look with a fresh set of eyes. Why does the market has a need and how you can meet it in that way. Perhaps the basic needs of humans does not change so much. But the approaches to solving the consumer needs can change. 

3) What metrics do you use when sourcing for start-ups? 

First of all, investor need to now what they are looking for? It is profitability & investability?

There is a difference between profitability & investability. Profitability is not the only metrics. Profitability is the eventuality.

To be investable, the business must be able to scale and start-up need to ask themselves whether they will be able to bring in the revenue for the company without a proportional increase in cost. Example, If you bring in x revenue with y cost , can they now bring in 3x revenue with 1.5 y cost? Revenue will be scalable, but the cost remains.

Also, do startup also have the business model to support the scalability part of it. Tech as mentioned is only an enabler. It is only consider technology incorporated. If incorporation of technology materially changes a business model and be able to assist in the scalability of a company, then it would be considered a tech-incorporated start up.

Other than that, the basic of what any other investor look out for would be the founding team. The founder should have some business sense, which is something I cannot list a fixed quality to it.

4) What are the 3 most important questions startups should ask themselves being able to commit to investment? 

Some of the question start-ups should think about would be: 

1.What information will make it interesting to investors?

2.Timing: what time and stage of the funding cycle would the start-up think of getting

funding?

3.What would I be doing with the funds? 

The co-founding team should already have some skin in the game. Founding team should question themselves, ‘is this start-up their only option? Or this is only a side job and they have other sidelines to cushion their fall, or is this start-up their only option?’.

We can see the solution fulfilling a market need and the start-up founders have already 'onboarded' paying customers. The credibility of the customers is a mark of the skill/level of salesmanship the founders have.

The team itself should be self-contained to deliver the milestone they say they would go ahead with once the money comes in.  A main job for a start-up is to make money from a business. As an investor, I want to see business development skill in the early phase of the start-up. Start-up need to know how to create a market, create products and find specific customers from the market.

'Your goals may be carved on a steel plate, but your plans must be written on the sand on the beach'. 

Your approach can change all the time, but the goal never change. Nicer way to put it, 'pivoting', moving from one failed idea to a new approach or moving to meet a real need you have only just discovered. It is important for start-up to know how to handle a shift in direction and be adapt to changes. 

To me I am very pragmatic. Investor invest to make money. But, as the same time, there is a certain degree of risk is to pay for some mistakes. Investors, having skin in the game is to pay some mistake.

5) What did you see in NAV that interest you to be an advisor of NUS Angel Ventures? 

I feel that the NAV team are very entrepreneurial. They does their research on potential investors, do thorough job in sourcing mentors and advisors.

As an alumni, I see the coming together of the start-up ecosystems. It is normally difficult for start-ups to raise money because of the challenge of finding investments of a matching risk profile. Of course, the landscape is changing.

I feel that NAV is a way to connect back to my Alma Mater. Being able to help aspiring start-ups, advising them in any area gives me the sense of satisfaction!

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Thank you Willy for taking time off to have this insightful sharing with us. We have come to the end of the session. Stay tuned for our next blogpost where we will be featuring more of NAV’s advisors & investors!

If you have any other follow up questions, do email your questions to nusangelventures@gmail.com

Watch the full video interview HERE

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