From Startup to Scaleup: Lessons Learned From Scaling A B2C Product in Southeast Asia
In today’s time, Startup is no longer a term that’s jargon to many (thanks to the popular Korean series on Netflix!), and a lot of people opt to work with startup companies. There are even start-ups that grew and are beginning to scale up. One of which is Kumu- a Filipino video sharing and e-commerce social networking service owned and developed by Kumumedia Technologies, Inc.
In this session, we have invited Crystal Widjaja, former Chief of Staff and SVP of Growth at Gojek, who has recently joined the Filipino live-streaming and social entertainment platform startup– Kumu, as its Chief Product Officer.
Kumu amplifies Filipino creativity, community, and commencement. She is also currently an Entrepreneur-In-Residence at Reforge, an educational program for product and growth practitioners.
Through her personal journey as a Product Leader, and her experience in the Indonesian Unicorn Gojek, she was able to help in the transition from startup stage to scaleup and contributed to the changes that they needed to implement, especially from a product perspective, we will be discussing some of Crystal’s insights and lessons she has learned from leading and driving growth in a consumer-oriented enterprise.
The term startup refers to a company in the early stages of determining product-market fit, experimenting with customer segmentation, and working toward a positive contribution margin. Startups are founded by one or more entrepreneurs who want to develop a product or service where there’s high demand. These companies generally start with high costs and limited revenue, which is why they look for capital from a variety of sources. In starting a startup, one must have a great, unique idea. And then there’s market research- to determine how feasible the idea is and what the current marketplace looks like for your idea. After the market research, creating a business plan that outlines your company structure, goals, mission, values, and objectives, is the next step.
Scaleup, on the other hand, is the process of expanding an existing startup. The company has already validated its product within the marketplace and has proven that the unit economics are sustainable.
In the following, we will be tackling more on the startup to scaleup B2C products. The term business-to-consumer (B2C) refers to a business model or process where a company sells services or products directly to a consumer as the end-user. This business model usually involves a higher volume of clients but lower revenue per client with a shorter sales cycle.
What led Crystal to this B2C process of selling products and services?
Crystal grew up in San Jose, San Francisco, and was from a household that is not as tech-savvy as millennial parents are today. Spotting cars with pink mustaches made her curiosity arise. She often wonders what those are and why are people doing it with their cars. These pink mustaches, fuzzy pink to be exact, are based on Eyler’s designs for his CarStache company, which was acquired by Lyft (right after changing its name from Zimride). Crystal and her family’s means of transportation are the good ol’ fashioned taxicabs where you need to be out on the streets hailing to get a ride. But this online ride-matching service emerged in their ecosystem. You can simply download an app and order a taxi with just one swipe, you don’t have to fight tooth and nail with another passenger just to get a cab!
Just seeing the world emerge around her was enough to make her curious to do her research on what these companies are, what they are doing, and how they’re coming up with these extraordinary ideas. Crystal had the benefit of actually being a part of an investment bank that was really focused on the mobile slash wireless options of transactions, which aligned her career path to GoJek, then became an Executive Resident at Reforge, and now the CPO of Kumu.
From Startup to Scaleup
I have always been fascinated at how simple a product seems. Again, coming back to solving people’s problems and building something that people want. But how do you exactly do that?
Through her journey, she learned (and learned it the hard way) that there are clear sets of metrics that you need to know about and pay attention to if you want your company to succeed from startup to scaleup:
Retention
Organic Growth
Level of Engagement
Retention rate is the ratio of customers that return to using your product. This is very important to make your business sustainable. Organic Growth means how you acquire your customers, how do you keep them activated, and how do you keep them within your platform if you need to reach out to them again. Last but not least is the Level of Engagement. This third metric has different levels, it is never a 0–1 thing, which makes the B2C ecosystem more turbulent than passive.
One must be quick to pick-up a solution once a problem arises, quick to understand if something is a competitor or competitive, and how you respond to consumer’s changing needs, emerging markets, use cases, and how do you sequence these together.
When you transition from startup to scaleup, you would be presented with a number of things you should bring into consideration and thoroughly think of. You will be given tens, hundreds, thousands, even tenfold of problems when transitioning, and you have to come up with a solution for all of them. This might sound overwhelming; thus, you must know how to prioritize and manage them.
In the early stage of a startup company, you usually do not have enough data to work with to be able to discern trends and make a framework on what to do first. So, what should you do to gather this data? Well, Crystal highlighted the importance of B2C communication. Doing user research and communicating with users (at least five different users each week), would eventually give you a set of trends. And what ends up happening is you will start seeing the pattern. Because what data really gives us is specificity. Data would specifically tell us what part of the funnel are people having trouble with, what type of consumers are not using the app, why are they not using the app, etc. Communicating with our end-users would give us trends. And the more data points you get, the more accurate you would understand those trends.
Why do you have to see and understand these trends?
Understanding the trend would guide us in avoiding too much technical debt, too much infrastructure debt, organizational debt, and so on. Because once you’ve accessed the data and understood it, it would draw a complete picture of how our company is going. It would essentially present us with the critical problems that aroused or might arise. Then, you have to distinguish a burning fire (intense or critical problem) from something you need to stem the bleeding (a problem that might happen), so that you can move and work on the more important things. Again, you prioritize.
You must consider the product-market fit before caring too much about over-optimization. One of the strongest signals of product-market fit is when you have people complaining. Why? Because it means they want our product to be better. Better product equals better experience. Better experience equals a better number of active consumers. Another key point that you should remember is that, usually, customers do not clamor for more but for better.
The Overall Growth from Startup to Scaleup
Contrary to the transition stage where when given a million problems, you tend to come up with a solution for ALL of them. In the scaleup, everyone would still be doing a million things and still do not know everything. And it’s still okay. Why? It is because people who are okay with not knowing everything understand how to prioritize amongst the different things that are happening. They give more attention to the essential and crucial things. They know what to care about and what not to care about. And that is why prioritizing plays a significant role in a scaleup, and it is really important for the overall growth of your company.
How do you prioritize efficiently? Hearing discussions about effort versus impact is not new to us. Often than not, we tend to miss another factor that is as crucial– urgency. Considering only the first two factors, effort and impact, forgetting how urgent the matter is could bring a lot of problems. So to efficiently prioritize, make sure to consider effort, impact, AND urgency.
Although we aimed to specifically discuss how a startup company can become a scale-up company in this talk, we should also know that not all companies need to reach a scale-up experience. In fact, a lot of these startup companies fail because they were trying too hard to scale up instead of focusing on the core business and making it highly successful.
When scaling up, you must consider the right product-market fit expansion which categories make the most sense. Trying to expand to a new adjacent market and finding something that is growing, sustainable, and repeatable, and that not many competitors want to do, is something Crystal thinks is a valuable segment to look at. And we couldn’t agree more!
If you want to grow your business, usually the smartest way is to be the best at your particular segment…
Do you want to get involved in the Philippines’ Product Management community? Check out Product PH at Meetup or on Facebook to learn more.
