I started Vouch three years ago, leaving a comfortable government job to become an entrepreneur with the added pressures of a young family. Coming from an elite school and having done really well in my time in government, I was confident of success, even cocky.
Dreams of becoming the next Facebook, or selling the company for big money so I could retire before 35 drove me. Alas, leaping into the startup world was a humbling experience that quickly helped erase these delusions of grandeur.
Vouch’s first product was a platform that used big data to help retailers conduct targeted marketing online. Being a first-time founder, I made the mistake of building a product nobody wanted.
I had done surface-level market research, but little to no actual user studies on whether what I was building was something that retailers or consumers actually needed. After building out a substantial product with all the bells and whistles, every single retailer I approached turned me down.
My “build it and they will come” attitude had put us so far away from product-market fit that we didn’t even have a proper business to try to turn around.
We were dangerously low on cash – overconfidence and hubris had led me to hire an over-sized team of developers, thinking that we would capture the market in three months. It was gut-wrenching when I had to let the team go, knowing that they were paying the price for my poor decisions.
Yet I was unwilling to simply give up – so many people had built and sold companies, with the pedigree I had to be able to do so too. I was still largely driven by pride and the promise of financial reward. I knew that I had to learn from these mistakes, and started searching for new opportunities.
At that time, I noticed that there was a significant number of people selling consumer goods on Facebook in Southeast Asia, in particular, Malaysia, Thailand, and the Philippines. We had been experimenting with chat as a channel for reaching out to consumers as part of our first product, and it had proved promising.
So why not try using chat as a channel to sell?
After all, these sellers were already communicating with their buyers on Facebook Messenger. They were all annoyed at having to answer the same questions over and over again. They say there are no stupid questions, but they’re really are – most times, the answer to these questions were in their item descriptions, but potential buyers just didn’t bother to read.
The sellers also had trouble keeping track of inventory and sales; many were quite disorganised, or just didn’t have the time to properly log all sales.
They loved it and kept asking for more features, which I was only too happy to build, erroneously thinking that I had found product-market fit.
Eventually, when I tried charging for the product, only a small percentage of sellers converted into paying customers because their buyers were simply unaccustomed to be buying from a bot. I was unable to figure out how to solve this problem before running out of cash again. Second time around, I had built a product my customers wanted, but not what their customers wanted.
The second pivot
With the company bank account near zero, and my personal finances drained, it was a truly challenging period. This was also when we found out that my wife and I were expecting our third child.
Nevertheless, I decided to dig in and give it one more shot, taking the tech and platform that I’d built and hawking it to various companies. I was lucky to find some corporate customers who wanted to experiment with chatbots and started doing some projects for them, bringing in enough revenue to keep us afloat. I was also extremely fortunate to find angel investors who believed in me and who gave us some working capital.
Our real turning point came when the Singapore Tourism Board held its first Hotel Innovation Challenge, and we managed to find a really great partner in an international hotel chain to pilot using a chatbot to address service-related queries.
His team was really inspiring – they were willing to experiment and iterate with us, not minding that our product was not perfect. Thanks to the opportunity they gave us and hard work on both sides, we found that the ROI on this bot was exceptionally high – the hotel was deriving significant productivity savings, and guests that used the bot were getting accurate, instant answers to their questions, improving their experience. It was a win-win-win for all parties (guests, hotel, Vouch).
We were so convinced by this pilot that we decided to focus entirely on the hospitality industry. Thinking back, this particular experience also further moulded my motivations – I began to realise that we actually had a shot at changing how hotels operated and shape a much better guest experience.
Having lived frugally for the past year, I realised that money was no longer a strong motivator for me. Creating a valuable product for our users and changing the world (or hospitality industry), cliched as it sounds, was now my primary motivation.
Our next big challenge was to get even more guests to use our product. We were trying to change their usual behaviour of getting information from hotel staff, and changing people’s behaviour is always an uphill task.
Improving utility
I had recently joined Startup Station Singapore, now Facebook Startup Accelerator, a six-month startup support program for digital-based companies in Southeast Asia. As well as learning core business principles and tools, our team was also introduced to product and sales experts from Facebook, who would become mentors and dear friends, and would help to guide Vouch’s growth.
We defined one of our goals as getting more than 50 per cent of guests to use our digital concierge. One of my mentors – a product development specialist – suggested the simplest of techniques: observing the guest journey, finding the pain points, and leveraging these pain points to drive users to our product.
To get users to change their behaviour, we either needed to give an incentive, or solve a particularly painful problem, and since we didn’t have the money to incentivise guests, we needed to find their problems.
It was a simple suggestion, but exactly what I needed to hear. We started to focus on the most important situational uses where a chatbot can add value during a hotel stay, and equally important, where it could not take the place of a human or other more suitable products. What did guests hate about their hotel stays enough to push them to try something new? In what cases would guests prefer to self-service? Armed with answers to questions like these, we were able to tailor our value to guests and the leverage strategic entry points to really drive usage and further increase the value of our product to both hotels and guests.
A little advice can go a long way
Within six months of the advice from my mentors, Vouch increased its sales by more than five-fold, signing new hotel clients, delivering more services to hotel guests, and expanding into Indonesia. As a founder, it’s easy to get caught up in the day-to-day grind, and ignore the real questions and issues that need to be addressed in the company.
Candidly, I admit that oftentimes the reason why these issues aren’t addressed immediately is because of fear – fear of rejection, or of being wrong. Speaking to my mentors regularly often helps me realise when I’m behaving irrationally or skirting issues, and these talks have gone a long way to helping us reach where we are now.
Today Vouch is working to enter more markets, widen our product scope, garner different types of clients, and ultimately create a marketplace for concierge services. We also have a clearly defined, simple but highly effective, approach that guides our product development and sales outreach.
Most importantly for me, the experiences that I’ve been through these past three years have shaped my motivations in a way that I feel is more mature and better for the company. This change in heart has also helped to attract people that share the same goal of creating game-changing products, and these people are the key reason why we are where we are today.
Source: e27
