Year Two (Part 2)

Continued from Year Two (Part 1)

Event 3:
During year two of my entrepreneurial venture, there were always thoughts of quitting. It was especially disheartening when a competitor gets funding and another competitor has huge financial backing. I always wondered then, “What chances do I have?”

It was during this time that a very good friend of mine, M, called from Kuala Lumpur to ask me some technical stuff about web design, hosting, e-commerce, database designs etc. As she was a very good friend, I volunteered that if she needs me to go Kuala Lumpur to sit-in some meetings she has with her vendors, I’ll be glad to oblige.

Weekends were important for my wife and I, due to our work schedules, like most couples, the only time we can spend together was during the weekends. However, during one of the weekends, I left my wife in Singapore and went to KL to help M. It was no big deal since it was only one weekend. I left on Friday and would be back on Sunday. The SIN-KL-SIN bus trip cost me about $80.

M and her business partners, P and K, put me up in a nice hotel. I met with some of their vendors and gave them my opinions on the vendors’ various proposal. I guess they trusted me and found my knowledge helpful, I was invited back to help them again.

The second trip was for one week. This time, I stayed with P and M in their rented apartment at a very classy area. I had also started to subscribe my mobile phone’s roaming service which I did not enable since I started my business. Yes, even the $10 per month subscription fee was worth saving. My finances was that tight.

During the second trip, I got to know P and K much better. I got along with K very well. He was a very patriotic Malaysian. Every time he drove by the Petronas Twin Towers, he’ll proudly proclaims, “World-class!”. K wasn’t pretentious nor was he trying to be a show-off. I could really feel his genuine enthusiasm of his country’s achievement. I had been working alone for too long. I missed the camaraderie of friends and colleagues. I was glad that M was in a team of friends instead of like me, working alone. P had a different character altogether. Compared to K, P was polished and refine while K was rougher on the edges. When K and P are together, you’ll think P was the boss due to the way he carried himself. P exudes extreme confidence (almost on the verge of being cocky) and you can tell that he was used to people listening to him. Surprisingly, K was the major shareholder and thus the CEO of the business set-up. P was the COO.

There was one night, P and M brought me to chill in Bangsar, a district in KL. It was very similar to the Holland Village in Singapore. The night scene was pretty exciting to me. Especially since I had not been to Holland V’s night scene. Bangsar had lots of beautiful people and cars. P was smoking cigars and we were drinking red wine at one of his regular pub. We were sitting at the outdoor area. It was a great place for people watching. The whole debonair lifestyle was very seductive to me – an unworldly geek who had not been exposed to the ways of the glamourous business world. I respected P. I thought he was a great and successful person. A part of me wished that I was in the team and I won’t feel so lonely anymore.

During my third trip, I stayed for two weeks. It was an especially difficult trip as my wife just missed sending me off at the bus depot as she was held up at work. She only arrived when the bus was already moving out of the depot. It was heart-breaking to see her disappointed face from the bus window.

I had to spend another $80 for the bus trip. For all the three trips, I was never paid back for the transportation expenses. Granted, my meals were paid for but the total $240 spent was still difficult for me. I had only a few thousand dollars left in my bank then. My income from my business was very little. In Singapore, there were many weeks when I don’t even spend more than $10 in a week. Even though I volunteered to help M, who was my good friend, but I was not obliged to help K and P. I didn’t tell M how I felt as I didn’t want to make things difficult for her, or put her in a spot.

During this trip, something happened too. P treated me differently. He treated me with less respect. He treated me like his employee instead of his guest. There was once when my advice and idea was totally brushed off. It was like my idea was a fly and he had simply swatted it away.

A few days before I was returning home, K and I were waiting in the car while P and M were running errands, K asked me what I thought of their offer to me, to be part of the team. He said it was only fair that I am part of the team as I’ve helped them for a while already and they hope that I’ll continue to help them. I told K that nothing was mentioned nor offered. K was surprised but quickly added maybe P had not found an opportune time to discuss with me yet.

On the day when I was about to go back to Singapore, P still had not broached the topic yet. Instead, he told me that he hoped that I can be back in 3 days time. I told him the earliest I can be back is one week later after I’ve settled my own business which is pending my attention. When it was about time for me to leave the apartment to catch my bus home, he wanted to pass me some work to do when I’m back in Singapore. He tried to burn the files into a CD but the burner was giving him some problem. He kept trying and time was running late. I told him I had to go  and suggested mailing the CD to me instead. He insisted that I should wait while he kept trying. I was exasperated. Time was trickling away and I was going to miss the bus. I was anxious and getting angry. Finally, when I was about to storm off, the CD was burnt successfully. He risked my missing of the bus home just because he didn’t want to mail me the CD?!! Fortuantely, I managed to catch the bus with just 5 minutes to spare.

On my way back, I was thinking on the bus. The whole experience left a very bad aftertaste. I felt cheap and used. P totally had no respect of me as a human being. I was also confused why the offer was never discussed with me. Did he hope that I’ll continue to help them as free labour? There weren’t many more $80 I could come out of my own pocket. I also had my own business to run even though it wasn’t successful yet. Even though my idea was less ambitious and has a much lesser chance of success, at least it was still mine. I made my decision on my trip back.

When I reached home, I sent an e-mail to them and told them I quit!

Epilogue: Even though a part of me had wanted to be part of the team, to be part of a camaraderie, but the whole experience let me realise that it is always better to work on your own dream than being part of someone’s else dream. It is just not the same. After this incident, I was determined to see my own idea through, whether it succeeds or fails. At least it was my own idea, my own dream. I also learnt that a true man is not measured by his wealth but the true worth of his character.

P.S. I’ve since made peace with both M and P.

Year Two (Part 1)

Storm

Storm by Daniel R Thompson on Flickr.

Year two was pretty similar to year one in many ways. The prospects still didn’t look promising. More competitors joined in the fray. I was still drinking non-chilled bottled water just to save 10 cents. I was still eating cheap meals or plain bread when I can’t stand the hunger. However, there were three events that I believe altered the course of my entrepreneurial life.

Event 1:
I made friend with a contact’s brother, P. He was an insurance agent but was always looking for better business opportunities. I guess my business intrigued him. He had expressed interest in my business so we met up. During our meeting, I told him honestly that it had been difficult for me to get clients. I showed him my business model and told him the selling price of my product. He told me as my concept and product was new, I needed to relate my product to its most similar existing product. Also, he asked me to raise my price based on the similar product. Before I met P, I was marketing my product in a totally different angle (website design and hosting). After I met P, I was essentially still selling the same thing but repackaged my product and was promoting it to the potential clients from a new angle (advertising) which they can relate to and understand. Because of that, I was able to raise the selling price of my product to 3 times the original selling price but it was 50% cheaper than then comparable product (print advertising).

Initially, I was very skeptical. How could I sell my product at the new price when I had tremendous difficulty selling when it was 300% cheaper?!

P also taught me to use Powerpoint for presentation. When I was working as an engineer, I hated powerpoint presentations. I thought powerpoint presentations were very pretentious, ‘wayang‘ and a total waste of time. I thought it was something the suits dreamt up to make themselves look busy. :p

Anyway, P gave me a few pointers regarding the preparation of my presentations. It needs to contain facts and figures like market potential, what my product can do for them, how it compares to current similar products, advantage of my product compared to the similar but non-online products.

P verbally indicated interest in becoming a partner of my business and he promised to join me when I meet potential clients. In the end, P only joined me in one meeting and he just quietly disappeared from my business venture after that. I guessed he figured that my business was not going to be profitable and he has thus lost interest. I didn’t call him. If he was no longer interested, there wasn’t any reason for me to pursue the matter with him. Lesson learnt: No one is more interested in your own business other than yourself.

However, unknown to me at that time. It was fortunate that he recommended that I increase my selling price by 3 times. If not, I would have to sell to 3 times the current number of clients that I have to generate the current level of revenue. Assuming that I’ve 33% market share now, it means I would need to have nearly 100% of the market to have the same revenue which is impossible. If I didn’t increase the price to the current rate, my business model would not have been sustainable.

The powerpoint presentations also helped. It made my presentation a lot more coherent and the clients were able understand more. It was a lot more convincing than before since I’ve included data and facts. This had helped to clinch some deals for me. There were still very little confirmed clients but it was a mark and definite improvement.

Note: This event has made me realised, many years later, that selling cheap is not the only strategy. In fact, competing by price alone is one of the worst marketing strategy.

Event 2:
Met KL, an ex-hostel mate from university. At that time, I still wasn’t sure if I should adopt the new (increased!) pricing strategy. I shared with him my uncertainty. Then he told me about his own entrepreneurial experience. He told me there was a time when his business was going to cease as his company has introduced a totally new web service to the Internet for free. The web service was so popular that it constantly ate up their bandwidth. It was so popular that users from all over the world were using it. When the monthly fix amount of bandwidth he and his business partners bought from the Internet Service Providers (ISPs) were used up, they had to pay more to increase their bandwidth. However, as soon as they bought more, the bandwidth was used up again and their website will be inaccessible. They also realise that it was impossible for them to keep using their own savings to pay for the bandwidth. Their savings were limited. They finally decided that the web service would no longer be free. Subscription fee would be required. They realise that all the users may abandon them and stop using their service. To continue providing their service for free, it means a definite end to their business; but the alternative, even though it may end their business, at least there exist a fighting chance. Based on this bleak scenario, the obvious choice was to choose the path that offers a slim hope, no matter how small.

They were surprised that many users were actually willing to pay for their unique web service. Not only did it help to avert the financial crisis, they became highly profitable! Just do the maths, they have users from the world, and they charge a subscription fee, estimate their revenue. 🙂

After hearing that, the decision became obvious to me too.

To this day, KL and I are still in constant contact. We’ve shared many business experiences and remain firm friends.