We like to start our events with a local Hong Kong entrepreneur sharing their startup journey to the audience, showing that building a successful company in HK is possible and can be achieved.
“I slept in my office for several months”
When we were organising the event, I was asked by my team if I knew of any entrepreneurs who would be a great fit to share their story. Daniel Lo, the Founder and CEO of GoGoChart, immediately came to mind.
I first met Daniel around 3 years ago, at an event in the exact same space in CoCoon. At the time, Daniel was a Director of an international trading company, earning a good salary, managing a large sales team.
Since then, and being inspired by one of the speakers at that event three years go, Daniel has been on a rollercoaster ride of ups and downs during his the entrepreneurial journey. Daniel knew he couldn’t be a ‘part-time’ entrepreneur, he knew he had to give it his all, so he quit his job, and jumped straight into the deep end, and tried to make something happen.
He found it difficult at first, especially building one of his first ideas – Fey-Fei. The idea was to build an app which helps mainland Chinese tourists find places to go and things to do in Hong Kong.
However, after Daniel had built the app, but wasn’t seeing any traction in the number of downloads, he realised that in the app building business, its not only enough to have a great app, but you also have to make sure that people can actually find your app, too!
So, Daniel started researching how apps could acquire new users, and after testing several different ideas with his CTO, he eventually found some strategies which worked.
After diving deep into this problem, he realised that helping apps acquire new users was actually a much bigger, and potentially more profitable problem to solve. He thought that providing this service to other apps could be a great opportunity to start a new business and pivot. Perhaps, he thought, he wasn’t great at building apps, but he could be great at helping market them.
Before he wasted any time creating a website, designing a logo, or getting business cards printed, he went straight to a potential client, a large gaming app publisher, and knocked on their door. He knew it was crucial to validate whether or not they would want to use his service and be a customer, before he pursued the idea any further.
The prospect ended up saying yes, and paid upfront for his service, and his app marketing business, GoGoChart, was born.
1. You can have a great product, but if no-one can find you, you won’t be a success
Daniel’s app idea provided value to its users, but the biggest problem he faced was that it was actually difficult to get his app in front of his ideal target users. Being immersed in digital marketing, I see this situation arise all the time. Entrepreneurs spend all of their time building a great product and expect to just create a website or upload their app, and start generating sales / downloads right away.
However, as early stage entrepreneurs soon realise, because the internet is such a crowded and competitive space, it’s extremely important to have a precise and carefully crafted marketing strategy, which enables you to acquire new customers at a lower cost, than your lifetime value of a customer. Without that, you don’t have a profitable business.
2. If your product isn’t generating traction, find out why, and don’t be scared to pivot
When Daniel first noticed that his app wasn’t generating much traction, he didn’t hide behind his computer screen, scared to face the reality that his idea wasn’t viable.
If Daniel wasn’t open-minded, and willing to face the fact that he might have to stop his app idea, he would never have found that the app marketing business had huge potential, and provided a better business opportunity.
3. Don’t waste time and money building the perfect product, before validating your idea, and seeing if people are willing to pay for it
After developing his first app marketing strategy, Daniel went straight to a potential target customer to validate the idea. By discussing his concept with the prospect, he learned what type of apps they wanted to promote, where their target users were, and how much they were willing to spend to acquire them.
Using this feedback, Daniel pre-sold his service to them and landed his first customer. Its critically important to start talking with your potential customers ASAP. Don’t be scared to get your idea rejected. Be brave and willing to face criticism head-on. Learn what your target customers really think about your product and how you can improve it.
How do they want the product / service structured? How much are they willing to pay for it? How often are they willing to pay for it? What would they improve?
Finding out these answers as soon as possible, will save you an incredible amount of time and money in the long run.
After gaining his first customer, running the campaign, and seeing success, Daniel knew that he couldn’t waste any time in getting his product out to the rest of the market, before the dynamics of the fast-changing app industry changed. So, he reinvested all of his money and profits back into the business to speed up its growth and even spent months sleeping in his office to reduce costs!
Two years later, his hard work and dedication has paid off, as Daniel’s built his team to over 30 people, and has now helped over 700 apps acquire over 400 million new users. It’s impressive growth which didn’t go unrecognised, as it caught the attention of Marketing Magazine, who awarded GoGoChart with ‘Fast Growing’ company of the year for 2016.
Building the best possible platform to help Hong Kong startups
David Chang is the Managing Partner of Mindworks Ventures. They were formed three years ago and now have 14 portfolio companies. David has immense passion and an obvious strong commitment to helping Hong Kong startups finally become a big player on a global scale. And by helping to build Betatron, he believes that we’re creating the perfect platform for any startup to become a global success, especially due to the strong foundation, knowledge, experience, and connections, the five founding partners (IC Studio, Mindworks Ventures, Vectr Ventures, CoCoon Ignite Ventures, & Aria Group) bring to the table.
Which industries should Hong Kong entrepreneurs be focusing on?
Yes, Hong Kong is a global financial hub, so inevitably Fin-tech is a great industry to focus on. And yes, Hong Kong is located close to Shenzhen, so an ‘Internet of Things’ idea could be a great option.
But, Roland made a great point, which stayed in my mind long after the event. He emphasised, that other Hong Kong factors should be taken into consideration when thinking about the answer to this question, as its a city filled with a melting pot of unique circumstances and situations.
Hong Kong is very densely populated, and because of this we have many environmental, energy, pollution, and wastage problems, which are right in front of us every day. These are problems which are perfect and desperately needed to be solved in Hong Kong, right now. And once you find the solution, you can roll the idea out to other densely populated cities around the world, too.
Don’t just look at Hong Kong’s location, but look at the city’s characteristics
David added that Hong Kong is a perfect place to validate your startup idea, and then once you know that you’ve solved a problem, you can then start to scale it out to other countries and regions close-by, such as China, Taiwan, or South East Asia.
But, he pointed out, when you get to this stage, its very hard to do it all on your own. You need experts, connections, and a strong network around you to help you to scale into these other places. Especially as each one has their own unique pitfalls and obstacles you need to overcome, such as government regulations, language barriers, and cultural differences.
What type of companies do you look to invest in?
The first question David tries to answer, when he’s analysing the investment potential of a company is “can it be a billion dollar idea?”. People often say their idea is going to be the biggest in Hong Kong, but, he says, that’s potentially thinking too small. He recommends for you to look globally, and ensure that you’re actually solving a worldwide problem. Does your company have the potential to be a big player and acquire customers overseas, too?
Another important factor which David analyses is the company’s revenue model. Does it have paying customers? Do they pay a one-off fee or is it subscription based? When do they pay – monthly / weekly / yearly? How much do they pay? Do they have other potential revenue streams? These are all questions he looks into.
As David and Mindworks focus more on Series A type investments, the companies they invest in generally need to have answered these kind of revenue questions. However, if you’re dealing with an earlier, seed stage investor, like Roland and CoCoon Ignite Ventures, not having your revenue model solved is not necessarily a major concern for them.
This is because, Roland says, the most important factor to consider when you’re investing in early stage companies is whether or not you’re actually solving a problem. Because of the nature of an early stage company, its likely that your solution to the problem you’re solving will adapt and change over time. Therefore, not having a ‘solved’ revenue model is not necessarily a problem.
What type of founders do you look to invest in?
“We only have 3 months… dive in, work hard, and let’s build something amazing together”
Betatron’s programme is only three months long. It’s not a very long time, so intense commitment is expected from both the startups we accept and the mentors involved. We expect you to work hard, embrace change, accept constructive criticism (which is tough for all of us at times) and work together to build some amazing companies.
Roland raised an important point, that sometimes we tend to glorify a startup getting funded in Hong Kong, as if it’s a ‘badge of honour’. But in fact, he says, it doesn’t really matter if you’ve raised money or not. What really matters is what you’re going to do with it. How are you going to allocate it? Can you become profitable? Can you make a return for your investors?
Hong Kong’s first unicorn?
Why is Betatron different to the other accelerator programmes available?
Firstly, the founders and mentors of Betatron are not paid, they only make money if the startups accepted become a success. Secondly, there’s no large corporation behind Betatron, backing it for exposure or to promote ‘innovation’. Serious investors are behind it, with the sole focus of giving you and your company the maximum possible chance for success.A lot of times, when a startup graduates from an accelerator, that’s the end of their relationship. However, with Betatron, it’s only just the beginning, as all of the founders of Betatron have the capacity to write a bigger cheque, and further fund the growth of your startup, if needed. We’re there for the long term, not only for the three-month period!
Do you have a startup? Do you think it could be a global success? If so, Betatron could be the perfect fit for you. Are you willing to give it your all for three months and work harder than you’ve ever worked before? Are you willing to face rejection and figure out if your idea is actually viable?
If you can answer yes to all of these questions, you should seriously think about applying.
Applications close on 25th November. Click here to apply.