AngelCentral Learning Forum: Reacting to the Whirlwind Economy

Earlier in the month, We had a chat with two very established startup founders on their COVID-19 experience. We were amazed at how fast they implemented their business adjustments in view of the expected downturn.

Next, we have invited two other founders, Daniel Thong from Nimbus and Dorothy Yiu from EngageRocket to share their experiences in managing their businesses in the past few months.

Daniel runs a lean machine to provide facility support and cleaning services for offices. He had record bookings in the first few months when the year started, then circuit breaker came…

Dorothy just successfully closed their Series A in Feb this year, on the back of strong sales records in 2019. But does that mean things are smooth sailing now?

COVID-19 has attacked us in different ways. It threw daily business operations into a whirlwind. What have the different business owners done or put in place to keep things going? Or, is it easier to just give up? And what’s the right thing to do now regarding your teams? Check it out in the video!

Transcript of webinar

0:00  

Shao-Ning: Hi everyone, today I have invited Dorothy and Daniel to really talk about their life since February this year. So let’s start with a very quick introduction from yourselves. We are going to start with Dorothy please.

1:35  

Dorothy: Hi everyone, I’m Dorothy, I’m the co-founder of EngageRocket. We are a HR tech company born and bred here in Singapore. Primarily what we do is we collect and analyse employee feedback in real time throughout the employee journey from the first day, all the way to the last day. And the main thing is because you want to achieve two things – you want to help organisations enhance their talent management practices in order to achieve a higher retention and better productivity.

2:11  

Daniel: Hi everyone, my name is Daniel. We’re a hybrid manpower and tech company, we make it easy for office managers to run their space by taking care of their cleaning, stock taking, buying of snacks, and handyman service. We employ primarily janitors and we use an app to help office managers run their office easily.

2:36  

Shao-Ning: Thank you. So, like I shared this now, when I invited these two founders to join a webinar, I asked for a really authentic and very genuine sharing. So, we start with Dorothy again. You just closed your series A in March, by then, COVID-19 was becoming very real. I think Wuhan was already shut down and in Southeast Asia, you see the waves coming in as well. So what were you feeling in the midst of closing it? I think you completed almost towards the end of March and in that whole process, in front of investors you got to look very “zai” and prudent but how were you feeling inside? Were you prepared for?

3:25  

Dorothy: First of all, we’re very, very grateful. I think we really closed Series A in the nick of time. If I can actually talk about the timeline, we signed all the closing documents in mid-March and then we actually got all the money in by the end of March and then Circuit Breaker happened in the first week of April. So it’s really like, if you think about the first quarter of 2020, it was crazy.

But I think in terms of feelings, we were generally okay. There wasn’t too much of a fear that our investors will go away as we signed a term sheet, end of the year, over Christmas and the new year period. I think, fundamentally, founder-investor relationship is a two way street. So, something that I think is very important is that as much as investors are choosing a startup they want to invest in, founders are also accepting the investors who are investing in them. 

I think we’ve been very privileged as all our investors share the same value, the same vision we believe in, what the company is trying to achieve. From that standpoint, I think we have a pretty high degree of confidence in the investors that came onboard EngageRocket. 

One thing I would be grateful for is that, the COVID-19 really exploded or became a more serious thing after Chinese New Year. In January, up until Chinese New Year, people are still like, it is more of a personal concern thing, it wasn’t a business or economy thing. It’s only after Chinese New Year that, you know, we start to see organisations implement BCP and we sell primarily to HR, so we got wind of it like quite early on, that this is starting to affect businesses. 

At that time, we are already highlighting all this, but thankfully for us, our lead investor in series A are pretty hands on so we are actually on calls with them, almost on a weekly basis. Come March when things become very serious, the main thing whenever we get the board on the call, the first thing is, Are we progressing? Can we close the round quickly so we can focus on really the business thing? We really appreciated it because, as founders, we cannot go and ask investors. So, they volunteered the information like, let’s close this and let’s focus on how we can ride through this, I think it’s something that founders would really appreciate.

5:59  

Shao-Ning: If I may just summarise the key takeaway I have from you is that it is a two way street. I think the past few weeks, especially the past two weeks, I’ve got a lot of calls from founders who say that the investors gave verbal commitment, and then when the whole thing went off the book, the investors say, we still believe in you, but this is just not the right time. 

Yeah, it’s quite unfortunate. Okay, If we could hear from Daniel, what was happening at your end during the same period of time. I know that you launched a new product in 2020 that was targeted more towards a B2C side and towards the end of 2019, you were preparing to really ramp up so you had a really good plan – good, big ambitious plans for 2020. So how was it going for you?

6:55  

Daniel: I think for us, we took a different path from EngageRocket. We closed a good round with AngelCentral and we were profitable in 2020. We were basically very bullish that you mentioned and we were growing between January to March. We’re growing like 20% in revenue every month and in January, like what Dorothy said, it is not full blown yet. We were still actively talking to all our customers. There were no signs that they intended to pause service due to the COVID-19 situation, and then we saw a growing demand in B2C, an area that we are familiar with. We wanted to launch a new product line there because we were profitable. 

March was our peak and then that all came crashing down on 3rd April when Prime Minister Lee announced that most non-essential workspaces are to be closed due to the circuit breaker. So on that same weekend, 4th to 5th April, customers started to call us to say that because the offices are closed, they would like to basically pause any facilities spend or maintenance spend; asking us for pro-rating, all in one weekend. It all happened very fast from our point of view. Of course, we’ve been surveying customers but I think what Dorothy said was absolutely spot on in the sense that it became a full blown crisis in March and April when people started to pause things. So yeah, just on a weekend, it was clear that our revenues are going to take a hit.

8:34  

Shao-Ning: it’s literally overnight? As in you see it coming and it just hits you?

8:39  

Daniel: We see it coming and double checked our customers and they said, don’t worry, don’t worry. You still worry but you move on. The numbers are good, you’re profitable, you plough on and then it really did happened. When the tsunami hits then you start to react – which is a very aptly named webinar, reacting right? You’re really reacting to this.

9:05  

Shao-Ning: Just to have a sense of percentage. When you say it hit, did it hit you and affect your topline by 50%? 80-90%?

9:17  

Daniel: From January to March we were growing 20% per month. We are doing, 6 digits, so we are in the middle 6 digit numbers monthly. Then it was clear over the weekend that it was like going to be a 50% decline in revenue when we took stock of all the calls and the numbers we were tallying, it was about 50% decline, which is very significant.

9:40  

Shao-Ning: Dorothy, are you comfortable to share?

9:43  

Dorothy: For us, it is a bit different. We’re not profitable yet and I think we saw a bit earlier just because each contract that we signed. We are B2B, so each contract we signed is like five digits. When we’re talking to HR, I think like by the end of February, we already got a lot of comments, like our entire pipeline was just like on hold. Many HRs were just saying, “Yeah not now, I’m busy with BCP, I talk to you later about this. 

So like, we had a pretty strong pipeline, coming off a strong 2019 into 2020. End of January, you make the excuse that people are coming back from the holidays and then Chinese New Year is coming soon. By end of February, it was getting a bit strange. Last year February, we did well and then this year February, everyone was just like, we are very busy with BCP. At the same time, we are also getting a lot of pushback on our renewals because we are a B2B SaaS business, so it’s both new contracts and renewals. 

By the time March hits us, we were monitoring very, very closely. So I think mid-March or by first, second week of March, my co-founder and I are already talking about, let’s relook at the revenue numbers, let’s redo our projections and see what measures we need to put in place in terms of both boosting revenue and also cutting cost. The end of March came and then we looked at Q1 numbers, it was confirmed that it isn’t good. We set very aggressive targets for ourselves this year and from a new sales perspective, we were barely making 10% of what we were targeting for Q1. From a renewal perspective, we were expecting 100% renewal and that was based on a 90% renewal last year so we’re expecting a hundred percent this year looking at all accounts, but I think we only managed to finally secure about 40% revenue retention for existing customers in Q1. At that point of time, it was like, this is real, this is like going to affect our business for sure. We need to start thinking about like what are we going to do? One of the very first things we did was, besides cost cutting of course, how can we leverage on COVID-19? Take it as an opportunity to actually get even more business? So that’s something that we also looked into.

12:16  

Shao-Ning: Actually, you give me a very good linkage to my next question. When the customers were telling you about BCP, and then you’re thinking about cost cutting, what is the drastic stuff that you guys have to do?

12:31  

Dorothy: By the end of March, we haven’t really introduced anything drastic yet. We begin to cut it all. We all started 2020 with like a lot of growth in mind, and like what Daniel said, all of that, we’ll need to throw it out of the window. So like all the new hires that we were planning to make, we immediately stopped – like, don’t even talk about expanding the team. Circuit breaker came starting first week of April, but towards the end March, I think things escalated very, very quickly, because it exploded into Europe and then went into the US and then it became a really global economic crisis thing. 

At that time, I remember that the first week of April, we announced to the entire company a few things, we didn’t have to cut anyone thankfully, because we have always hired very lean so we never really hired excess capacity and earlier in the year, we already let go of two poor performers, but then poor performers you should always be letting go, regardless of COVID-19 or not. We didn’t have to cut people but immediately the first week we announced that we are freezing hiring, which means that there are people who resigned and actually the role is empty, for example our empty product manager role, we’re not going to be filling it for the time being. Then we’re cutting software and we are slashing our marketing budget, to the disappointment of my marketing manager, and we are cutting all freelancers that we’re using. So sometimes we use freelancers to help us out when we have a time crunch, we cut everything now. It wasn’t very drastic, but we did that. 

The first week of April, the first week of Circuit Breaker was like, everyone’s just reacting to it. We re-looked at our projection again and asked ourselves, can we do something to cut even further or to protect our runway? We just raised and we don’t want to take that for granted. So in the second week, we announced further measures. We told all our employees that not only are we freezing hiring, but because first and foremost, we want to protect all of our existing employees’ rights and their livelihood. So, we are also retracting signed offers. Earlier in the year, we have actually recruited people and have a signed offer but just that they haven’t joined us yet as they are serving notice. We will be rescinding the offer letters. It’s very unfortunate because some of them has actually already resigned from their previous job. But we are doing that because fundamentally, I think we want to protect our own staff first, and then we’re cutting variable pay. So that was another drastic measure we made – no bonuses, no comms component, all out of the window except for sales – we have to keep comms else no motivation to do sales. We also called up all our interns who were due to come in this summer, during their summer break, and basically said, no internship unless you’re willing to accept no pay, which some of them thankfully did. So that was the last round.

So that was the second week, then this week is the third week right. We didn’t introduce anything this week. But what we did is we wanted to have some sort of rhythm because I think for employees, it’s very scary to not know? Just waiting everyday for you to announce something new. So what we told them is that, expect to hear from us every two weeks from now on. So last week we said, every two weeks give you an update. If there’s no update, there’s no update. But the cadence that we’ll be updating you in terms of the company situation will be every two weeks until this whole thing is over. 

16:12  

Shao-Ning: I think the key learning from there is actually making communication very clear so that they know, good news, bad news, this is a time that’s going to come so that, for the rest of the week, we basically have peace of mind. Actually it is just all on the staff side. I just thought of one more question for Daniel actually, more than 60% of your hire, you mentioned actually are your cleaning crew? And most of them, their economic circumstances are very different from us. They are definitely getting hit and the thing is in February, in March, they were all 100% and all fully deployed, they’re all working very hard. But then when this thing comes, they are the first group to take the brunt of the hit, so how was it? How did you manage it and how do you keep the morale of this group?

17:17  

Daniel: I think for us, people are the heart of my business model. When we saw the drastic cuts on 3rd to 4th April in revenue, we were very, very sensitive to low wage workers. We wanted to ascertain the facts on our runway, what it meant. I think for me the drastic thing I did,  was having measures in place. We hired this brilliant finance lead in January to put into place more efficiencies in our system to increase profit margins. The drastic thing we did after 3rd April was to accelerate very quickly all these conversations like Dorothy mentioned about, cutting non-essential subscriptions, having expenses processes and having a very detailed financial model that really tells you exactly what is our runway looking like with the worst case scenario happening, which is what we’ve modelled in. 

Actually, we modelled in two months of lockdown, hopefully not three, but we now have this model of worst case, best case, base case scenario. And then before we made a decision about HR. So within, I think that the drastic thing was what we were working towards for one month suddenly all happened within one week. Everybody was just focused on getting a very clear model, clear grasp of the exact number we need to have a 18 to 24 months runway to assess this impact. That was how we made the decision and then we assessed it and we realised that we actually didn’t have to take drastic firing. In fact, we didn’t fire anybody in our company but we had a kind of risk adjustment across the board. So HQ shared the load to prevent workers, low wage workers, on the ground from getting pay cuts because low wage workers are very sensitive to even $50 reduction in their salary. Whereas, middle management is less sensitive and more understanding of the situation. So we took that approach in how we thought about cost cutting.

19:37  

Shao-Ning: My next question actually is how are you doing personally? How are you sleeping? How are you coping?

19:51  

Daniel: I think for me, my tendency is that I’m very used to being very hands on. So for me to be locked up at home, not being able to personally go out there and talk to customers or get my hands dirty, it was very frustrating. To see the numbers that you see, it’s very frustrating. But I think learning to deal with these situations is to really just have the game plan you have, to stick to it. So for us, it’s really about like, we see the number now, we see the number we need to cut, we see the financing options that we need to pursue, we put ourselves in the best position to get those things or we see the product innovation that we need to do. We do that and then we know that it’s no longer in our control. We control what we can control and we just accept all these new things because the situation is very fluid. Like just yesterday we saw that as well. So we cannot also be too rigid in how we deal with this situation, I think it’s a lot to do with just having a clear grasp of the facts, like your financial planning and adjusting accordingly. As you get new information, I think that’s very useful for us.

21:17  

Dorothy: I think personally, we’re okay. I mean, I’m doing okay. I am grateful that I don’t have children yet, so I don’t have to deal with home based learning. But I mean, as founders, there really is a considerable amount of stress that is being added. Because not only are we worried about the life, survival of our company, because not forgetting it, we need to plan for not just surviving this period, we need to plan for recovery and then rallying up after that because for founders, we are always thinking about growth. Companies not just need to survive, we need to perform well. Now that we’re hit with COVID-19, how are we going to survive this, plus, recover and rally up after that? So that’s constantly on our minds. 

The other thing that keeps me up at night is really the livelihood of all the employees that we hire. Like what Daniel said, I think everyone, each one of them matters and I think firing, and it’s very easy to say right, but then some of them don’t make that much money. Like, we hire developers in Vietnam also right? And some of them, the whole family depends on that one pay cheque. So that keeps me up at night. As much as possible, what can we do to share the load? We did discuss that if things get worse, then we need to introduce a pay cut and management will probably have to set an example and do it first and maybe take a bigger portion. As a take one for the team kind of example being set and then share it across the board. So at least no one gets fired per say and you still have your livelihood intact. So those things are basically, I’m sure that there are some things on our minds like every single day, like how do we keep the business alive? How do we rally up sales after this? You know, reacting to all these new measures that are being introduced every…I mean, I want to say every week, but then I think every day something new happens. And then fundamentally the back of our heads is really like, livelihood of every single employee. 

23:20 

Daniel: I think having those conversations about salary reduction were very hard for me. I think it’s less about personal, but more like having those conversations, I took it upon myself to have that one on one conversations as founder. Because it’s important that you make the decision and you do the process yourself. I don’t think any of my employees perform badly. You know, why should they deserve a pay cut, but it’s one of those conversations that you have to do when you look at the numbers. I’m thankful and I think employees will understand if your process was transparent. I think Dorothy mentioned a good point, which is clear communication of this whole situation, very transparent and your employees see where you come from and they totally can understand it. I think the last thing you want is to be on the news for something very cold and unprofessional, where you didn’t share your your process transparently and you tell people, it’s all fine when it’s not. I think that creates a very bad impression on you and your hiring in the future.

24:28  

Shao-Ning: I would like to actually ask because I know both of you actually have planned out stuff to prepare for the returns. I mean, even though now we just got extended another 4 weeks, maybe you can share a little bit about the PCP that you have and then Daniel, some of the plans that you have for the office measures that you come up with. So I think that to echo what you said just now, we need to bring the company back and we still need to bring the growth back all the more. I would say the first thing that people think about is cost management but you actually went a step further and think about how to kind of build revenue even though now is not the time to build it up. But at least how do you know, get ourselves ready for that. So maybe you can share a bit more on the PCP that you planned out and how is it doing?

25:21  

Dorothy: PCP is the People Continuity Package that we came up with. We actually brainstormed about this idea as early as the 1st, 2nd week of March right. Because the sales team is getting nervous about delay and delay in closing deals. HR keeps saying BCP, BCP, put on hold, put hold on. It was coming off a reaction of like, okay, we need to do things differently now that the times are a bit different. 

At the point we didn’t even imagine how serious this thing was going to get. But we were already starting to brainstorm – Okay, is there a new type of package we can introduce to an organisation, because we track employee sentiment at the end of the day and this kind of environment is crucial to track your employee sentiment given so much uncertainties, so many changes are happening. So what we did is, we came up with PCP, which is essentially a free package for all organisations to measure employee sentiment over the April to May period. Then circuit breaker was introduced, which was perfect timing for us because our questionnaire in terms of tracking the sentiment was really around work from home effectiveness, mental health, resilience, relationship at work, productivity, things like that. What we did is we even kind of push it one step further by leveraging on the very fact that we noticed there isn’t something like that yet in the market. So we wanted to do it very quickly. We literally turn it around and push it up within two weeks. 

Mid March onwards, we really just “chiong” all the way and in early April, we launched it. And the intention really was to make it a national effort. So we kind of ride on the whole #SGUnited angle, got SHRI, IHRP on board, to endorse us on this tool. The whole idea is really we want to help organisations ride through this, track your employee sentiment so that not only will you be able to get the data to help manage your employees during this time, but also to recover after because after this whole circuit breaker, they move back to offices, it is another change and they have to adjust to going back to the office. 

Actually just sharing some of the early data that we’ve collected, at least 50% or more would want to continue working from home, which is great! Interesting insights for organisations to prepare themselves because we will never know maybe this whole experience will actually even change the way we organise our workspaces and our processes in the future. So that’s what we did. And I think, a little bit in hindsight, it was also a move to kind of fight off competitors. We mainly compete with software companies from the States, not really local players. We think that this is a perfect opportunity to get in because it’s free. And we’ve launched it for one week now and just in one week, we have 300 over companies registered. And we’ve never seen this kind of registration, we never got into this kind of scale of companies before. But this exercise got us into that kind of scale, right? Which gives us a very strong head start because at the end of it, if we can actually manage to get all these people not only aware of us, but use our platform, then that increases our chances of converting them ultimately to a paying customer. That’s much better than, you know, in a business as usual context, fighting our competitors on one customer at a time basis. So, we are doing everything we can to hopefully make this PCP work. I mean, in the meantime, there’s no revenue because it’s free, but if you think strategically, what is the benefit we can get out of this? I think it’s tremendous.

29:14  

Shao-Ning: I think it’s a really good tool to shorten the distance with a customer and build up the goodwill that is building up and then the data you shared just now. Like more than 50% say that they want to continue working from home? I wonder whether they’re single and they don’t have HBL to worry about.

29:29  

Dorothy: We actually collect age data also and we will be putting up a national level report at the end of this.

29:36  

Shao-Ning: Thank you so much. Daniel, you want to share your plan?

29:41  

Daniel: Same as Dorothy, we want high quality leads, so thinking ahead, given that you know, MOM has basically ruled out housekeeping as a viable thing to operate in this climate as well. Apart from doing disinfecting, cleaning with a new product line, we looked at BCP as well, and how we can charge higher value customers who want to do BCP and, for example, their outsource crew is the only common factor. So, we can up-sell them by having two different dedicated sets of crew doing BCP for them. 

Beyond BCP, I think office professionals day was in April, we were thinking of holding offline drinks events to celebrate the office professionals that run the office, but I think that that went down the drain and so I think right now, we look at a similar innovation to Dorothy by basically launching an online campaign to celebrate the office manager that runs your space thanklessly in the background, especially during this COVID-19 period. For us, to basically engage a wider demographic, but under business as usual like what Dorothy mentioned, it was always customer by customer right. 

Now, we probably see this opportunity to engage the wider community on just giving people recognition during this time – frontline workers or office maintenance and then build up that kind of association that you will probably want when business opens up, which is a premium or high end office facilities company that understands what it means to be in your shoes as office manager and to be able to offer you the value proposition that you didn’t have when you under invested in your facilities space, pre COVID-19 right. I think all these, like what Dorothy said, is not immediate revenue but something you can control during this period of time when businesses are inactive, to build up that kind of shorter sales cycle down the line.

31:44  

Shao-Ning: thank you very much. So, I would like to open up the questions to the floor virtually. We have about 30 people attending the session right now? We have 2 questions on the q&a. So for the rest of the audience, please ask the questions. So actually, for Dorothy and for Daniel’s background, I think we have about 50% of them are actually investors, 50% are founders. So the first question that we have from Chin Yeow is for Dorothy – From an employee’s morale perspective, wouldn’t it be better to take a deep job cut upfront so that the retained employees can have more confidence on their job security? So he gave an example, you cut based on zero revenue for the rest of the year?

32:32  

Dorothy: So as I shared, I think we didn’t have to get to the extent. Which is why we didn’t do it. We didn’t have to get to that point. Because not only the fact that we just raised but because we’ve always kind of operated very, very lean. Like our rent is only 2k a month for like 20 employees. 

But I agree with you, I do think that with my co-founder, we did discuss if there is need to be any measure taken. It’s like ripping off a band aid, right? Like, just introduce it quick and fast right at the front. So at the end, at least they know that okay, came already right, and they’re not expecting something more to come. I think the other thing that’s very important is really transparency and communication. Like I said, I think after we announced them, because we did it, we announced something in the first week of April, then we announced something on the second week of April. Even though from the very beginning, we’ve always said that your livelihood and your job security is our utmost concern. When we communicate to employees, we do realise that if we keep hitting them randomly every week without knowing when it’s the next time, it’s very difficult. So what we did is, the cadence moving on from here is every two weeks, we’ll give you an update. If there is nothing, we’ll say there’s nothing but there will be an update anyway, so they know the rhythm of when to expect. So in the meantime, like they can take a breather and not like something is going to hit me again.

33:55  

Shao-Ning: This second question we have is for Daniel. Asking that now that everyone is working remotely, considering the nature of your business and facilities management, what measures are you taking to allow your business to continue to function? It’s like what I was asking right, what you consider as essential service.

34:17  

Daniel: So the question is about given most of you are working at home, why are we doing to continue operating during this time? For us right now, we are very lucky that we see a spike in disinfecting cleaning. So, I think that has been the thing that has allowed us to use idle workers effectively, because offices with confirmed cases or suspected cases in the building etc still want a very high degree of accountability that something is being done. For that we have very specialised professional equipment, doing misting and certifying spaces is what has been done, has been something that we use right now to get by. 

I agree with Dorothy that, definitely this whole incident will change the way we think about work but I think that a lot of people still cannot wait to go back to the office right. And in fact, I think the change we will see, maybe we’ll start to maybe share space less and think about building their own space and I think that’s where we need to be involved in those kinds of conversations. 

Admittedly, this is obviously a big hit for us, so I think thinking of the engagement for a longer term pipeline is where we are looking at right now because literally, I think, from our point of view, MOM is not allowing housekeeping to be done. It’s not allowing non essential offices to open which would definitely create sales constraints. But I think the other point to make is that we’re very lucky as well that we select our clients well. When you have high quality clients, you actually have a majority of our customers understanding the realities that you face and they are still paying, still supporting even if they have a crew coming on a minimum basis. Actually, a majority of our customers are still paying full sums which is very something to be very thankful about. But it’s really to do with your customer selection. When you’re doing B2B, you have that power to do that, but when you do B2C then unfortunately, you kind of don’t have that kind of relationship with your customers. But B2B allows you to have these types of things, so you play to that where you have close relations with customers, you leverage on that in times of crisis and you support them well, I think it is a two way street. So definitely we’re lucky that we have good customers as well.

36:44  

Shao-Ning: The next question we have is from YH. He’s asking, are both of you considering taking out venture debt or SME loans to tide through the situation.

36:59  

Dorothy: If we didn’t get funding, I think we might have to resort to that. Probably? I mean, for us, we didn’t have to consider this because thankfully, we got a cash injection at the end of March. But if that didn’t come true, it’s like really any form to keep the business alive. 

37:23  

Daniel: I think it depends on the nature of the company. For us, we’re profitable, we have positive cash flow in the last six months, soI think the banks will be willing to lend. We received positive feedback from banks, and I think we have one firm offer coming soon with banks, but I will say that I think that many people here in startups and VCs, not many companies can get traditional bank loans if you’re not profitable and you don’t have like positive net asset. I think that’s something we went through so we know exactly what the banks are looking at, still very traditional. Probably don’t waste time if you don’t have that, they won’t entertain your application because that’s just how they behave. But we’re lucky in the sense that that’s what we could leverage on. And then I think if you are profitable and you have a six month of cash flow, the interest rates are very favourable right now, right. So that is kind of the thing that you can also do to keep the company afloat. So definitely, we are exploring SME loans.

38:28  

Shao-Ning: Probably Daniel hear this more from Der Shing and me, it’s always about AR management and cash flow management. One of the one of the key areas we need to keep reminding founders, startups are businesses, startups don’t live on different kinds of air, different kinds of oxygen. So cash flow is the bloodline for business. Loans is one way, financing is one way, but AR management is actually key. So actually for startups who actually have a big AR, this is actually time that you really need to look at how to structure and how to support yourself better. We have another question from James for Daniel, what are your initial plans for housekeeping and how has it changed since then? Why was it seen as a growth opportunity when it was so different from your call?

39:25  

Daniel: This is very cleaning specific but I think we saw a lot of organic growth coming in because people recognise our service quality. We have a good mastery of our supply chain and our professionalism and capabilities have grown as we are in this commercial sector for a long time and then we thought that you know, the housekeeping sector is still very much the chemicals and tools being used. I think it is not great and then we thought about providing a hotel like cleaning for households, right. That is kind of where we went in there. But of course during this COVID situation, just to stress everybody, housekeeping is actually not allowed anymore, especially if your housekeeper goes around different units. MOM has said to put a stop to this as well because for good reasons, they don’t want the potential spread of viruses via the chambermaids or housekeepers. 

In AR management, I also want to highlight that, what I probably missed out, is that this crisis was a good time for us to bring forward our AR because in the past, we used to bill customers at the end of the month and give 30 days credit or in fact, 60 days credit. But this crisis was a very good period of time to tell all our customers that we are changing the policy because we are paying our employees in full while you guys may or may not be paying us, we will be collecting and invoicing you first week of every month and it’s due in 30 days. We shortened it by 30 days which has been great for our cash flow management. Honestly, there was no pushback and I think, only because of this crisis, we get no pushback because people understand where you’re coming from. If we did that, prior to this crisis, it would be very unusual and people will just jump, how come we suddenly get invoices in the first week of the month  but now we’ve managed to adjust that and it’s been really good. Yeah, I think AR is very, very important.

41:20  

Shao-Ning: We are jumping back to my favourite topic on AR. To me, every situation is a learning opportunity, so it’s opportunistic for you to take this approach. I think that was actually, to make use of the situation to learn that. We have actually two more questions on the list. The next one is actually for Dorothy. I’m just going down the list because nobody is voting up so please, everybody vote up so that we know what are the questions that are more interesting for you. So for Dorothy – once the insights are generated from the PCP companies, what can companies do with insights to move forward and what role does EngageRocket play in moving forward together?

42:03  

Dorothy: That’s a very good question. I think in the PCP, we primarily help organisations gain insights into like six main areas – relationships at work, manager support, clear expectations, work from home effectiveness or productivity, mental health and the last one is organisational effectiveness. We get to see all the questions and how their employees are responding to it.

What we are also doing is we are preparing a resource centre that all the companies that is going through PCP will get access to and in this resource centre, we have already prepared materials for the individual employees, for managers, we need to support their employees working remotely and also lastly for HR or for organisation and for HR and for organisation, we are going beyond just giving you articles or guides. We’re actually pulling industry experts for a roundtable session that you can dial in on the webinar. I think it’s important to also hear from what other people in other countries are doing because they may have been doing this work from home, this quarantine thing longer than us.

We’re also pulling in like, organisational psychologists, people who can talk about behaviour. What can we do to help, you know, all employees in terms of their behavioural change element and at the end of it, the tool is meant to continue tracking because like I said, the free version, they get two cycles. But after that there’s still a lot of things to continue tracking because you have to move back to the organisation. Let’s not forget that in the background, there’s also a recession looming. There is a recession that is kind of here already that will continue to hit all of us. So it’s important for organisations to continue measuring the sentiment during this time and that’s where we will also come in and support.

 43:48  

Shao-Ning: We have one question from Nan. Please share the government support programme that your business is eligible for? Actually Nan, can you elaborate a bit further? What are you trying to find out? Because I would think that the government has made it quite transparent on what every company can enjoy and there’s an extension of the programme from yesterday’s announcement. So I’m not sure what you would like to find out.

Meanwhile, I want to ask the two of you. We surveyed the audience over the past couple of weeks and we asked them what other topics actually most concern you during this period of time so cost cutting is one usually addressed and then more of the second one. The second highest frequency topic that we get is actually co-founder management. Co-founder management itself is already a tricky topic in good days. So on bad days, it apparently is even more so. I’m wondering whether you could share your take on this and whether you have any new insights because of the situation.

45:39  

Dorothy: For me, I worked with my co founder for like coming 10 years, I lost count but I think it’s 10 years. I think 10 years was last year so maybe it’s 11 years now. To be honest, we have already fought all the fights that we can fight and we have gone through so much together that this actually COVID-19 is just yet another thing that we’re going through together. Having the history of working together, and that relationship built is helpful for me. But this is really very much my experience. It didn’t come easy. I think fundamentally, we, over the years worked through a lot of hurdles to get to where we are today. I think one important lesson is, you know, never take the friendship for granted, take the relationship for granted. I think it’s like any marriage, right? I call him my work husband sometimes, but it’s really like, you know, mutual respect, mutual trust. Then when there’s disagreement, which by the way, as a co founder, I welcome disagreement because that’s the whole point of why you have a co-founder, to someone who have differing views from you. If both of you think the same way and have the same capabilities and, you know, what’s the value add of having a co founder? 

I enjoy the fact that my co founder is completely different from me. The way we think, the way we work, our strengths, our weaknesses are different. While I welcome disagreement, sometimes in the past, we used to disagree and then we just move on and just get busy with life. And then we forget to kind of close the loop again, which is something I think I’ve learned to maintain or manage my co-founder. Especially times like this, right, where you have to make decisions very, very fast.

If there’s any disagreement, really just close the loop, and not let it fester into anything more because I cannot count the number of times where he exploded at me and I exploded at him because of past disagreement that we thought was done. So I think making sure that you know, it’s like any argument between a couple, like close the loop like are we good? We are good? Okay, let’s move on. It’s something that is very, very important, but often neglected.

47:57  

Daniel: They say you really have business partner problems only on two occasions – When your company makes a lot of money or your company makes no money. It’s why you get this question a lot. I think for me , what we do is,  we do once a week catch ups, quite regular, quite regularly and irrespective of how busy we are. We really made the effort to do one on ones. Usually, it’s not just about work, we talked about life, we also make the effort to speak very directly, openly. I think the same as Dorothy right? 

One thing that we conscientiously try to do is just to give benefit of doubt. I think a lot of times there is a lot of misunderstanding that can happen if you assume the worst in people, I try to assume the best in them. Afterall, you chose them to be a co-founder, you’ve got to just trust that they are not there to get you. I think that really helps.  I think when you look at a certain action, I try to make sure that it comes with the best of intention and try to clarify where it comes from. 

The other thing I try to do is I’m a super random guy like during this remote work period, I bought them Ben and Jerry’s ice cream, I just delivered to them, just little things like that, to let them know like, I’m thinking of you during this period of time. I hope you’re coping well. So I think these types of little gestures are things that you conscientiously do to show that you don’t take the relationship for granted. I think that goes a long way. I think when people know you’re sincere, and it goes a long way right? And they know that you don’t mean anything personally, just try to get things done. 

49:42  

Shao-Ning: What I’m hearing actually is very much of both personal and business relationship, but you got to treat it in a very professional way. I was just talking to Der Shing. Being a founder and running a business is actually a very personal commitment. At the same time, you need to be professional at all levels to all your stakeholders – your investors, your employee, your customers, to everyone. It’s actually a very personal commitment to get things done. There are times you actually can’t help it but you will take certain things in a very personal way. So it’s really hard to do that and communication is actually very tricky. So when you say work husband, my actual husband is actually my work partner, you know, that kind of challenge, but it’s a constant effort. And I really like what you say, it takes time, 10 years, and I think Daniel actually knows your partner also three, four years? It’s not something that happens overnight, your form, storm and performance, you need to give it time and you actually need to reflect on yourself as well. 

Nan actually got back and said that the actual question she is trying to ask is if there’s any additional programmes specific to the startup community during this period of time. I’m not sure whether you know this, but my take on this actually is, the government has done a lot of things to help startups. But in terms of category, there’s no category labelling for startups. So all the grants and help are actually across the board towards all industries and specific verticals would have additional support, maybe the tourism group, maybe some of the retail group, but not for start-ups as a segment itself. If you’re looking for those help, probably you should look under SME support?

Der Shing, Teck Moh, do you have any take on this one?

52:20  

Der Shing: Not much comment from me with regards to all the startup support programmes.

52:32  

Shao-Ning: We actually have another five minutes. Anybody any more questions?

52:41  

Teck Moh: My sense is just, there’s a lot of VCs and Angel groups who try to create a kind of support for founders, startups. We’ve just done whatever we can do with AngelCentral. Just go to our AngelCentral.co/covid19, you can find our support programme, we are trying as much as we can to support founders, even if founders just want an hour to talk to us, we’re opening up our time. Just Google, there are a lot of support groups who are trying to help founders.

53:23  

Shao-Ning: Addressing the community in the virtual room here. The reason why we are doing this, it’s actually because I think my key intention is just to let you know that it’s really a very tricky time and you are not alone in this. When we do this sharing, the idea is to learn from each other’s experience. Learn from each other’s ups and downs. The key thing is, push through this period, survive this period then you are a winner already. Because if you don’t keep the lights on during this period of time and you just give up, you don’t have the next phase. But everybody has different circumstances, but the idea is to support each other and let’s push it forward. 

54:11  

Der Shing: I must agree with Ning because we were talking to another founder. And I realised that the past 8, 9 years, a lot of us have been conditioned to keep thinking about growing and then when’s the next round coming? All that is irrelevant if you don’t survive until the next round, or you don’t make it until you have an option to think about what’s next. So I think the immediate priority should be to triage, make sure that you have enough cash to survive. Depending on your industry, some industries you may not expect any funding for the next 12 to 18 months or even 20 months. Really just try to make sure you survive this period.

54:55  

Shao-Ning: During the COVID-19 chat that Teck Moh mentioned right? I had two calls with two founders who actually asked this question. I thought the framework is actually quite interesting. They asked that during this period of time, I still have some cash, I don’t have a lot left but I have cash. Since nobody’s investing, should I just double down and spend my money and try to push for my growth during this time? I can see a smile on both of your faces. Maybe you can share what’s your take to this?

55:31  

Daniel: I mean in this crisis, there’s opportunities for good deals floating around. So those people who have hot cash, I think are going to be in for a good bargain?

55:46  

Shao-Ning: These are founders with cash and they are thinking they want to double down since nobody’s pushing for growth, I want to push for growth.

55:58  

Daniel: When we’re thinking about financing, we are also thinking of putting our own money in and still are thinking of putting our own money in. If you’re in a very comfortable position and you’re convinced by your business, then I would say, why not? I think I still remain very bullish about business and I think investors also want a founder that will put their own money where their mouth is, and I think it’s a good time to double down and put more money in if you have the ability to do so. If you don’t, then, you know, I think you still need financing then yes, rely on the whole ecosystem, but personally, I was thinking of it and I see this in the grand scheme of things as we have been growing very fast. We think what we’re doing is an essential service, factually speaking, it won’t go away, it’s just whether you can tide through the short run.

57:01  

Dorothy: As in, the founder has like his or her own cash to double down or you mean like cash in the company?

57:07  

Shao-Ning: It is money in the company.

57:09  

Dorothy: Yeah that’s what I thought, like money in the company, not like double down like the runway they have on growth.

57:14  

Shao-Ning: They wanted to double down their runway to boost on growth.

57:17  

Dorothy: My personal take is like it depends on how much a gamble this is? Like the founder’s job is very difficult, right? Because you’re always trying to balance between being prudent and also being opportunistic, as opportunistic as possible. I think you have to really assess how real the opportunities are for the growth that you’re talking about and the certainty involved. 

While founders, we naturally are already risk takers. And there’s a certain amount of risk we should all be willing to take. I think there’s also a line to be drawn of where it’s being opportunistic and being reckless. But it’s very hard to say where that line is because it depends on the business, depends on founders, depends on everything. Another thing I’ll caution against is also, I think there’s a certain degree of emotional attachment that may be involved if you bear on too much risk, right? Because it’s like, I must make it happen. 

I am always very conscious that between me and my co-founder, we’re like, you know, we’re very, very deliberate, we’re careful, but at the same time opportunistic, because the last thing we want to do is like, let’s just double down and then when you get into a situation where you cannot lose this. Sometimes it affects your judgement call, the decisions that you make and you’re talking about your entire company, not just yourself. I mean, you want to do it for just your own personal life, it’s up to you. But if you’re talking about dragging along the livelihood of your employees, your investors, I think it depends on where that line is and you need to clearly define that it doesn’t cross over to the reckless side. 

58:56  

Shao-Ning: I think what Daniel was trying to share is actually he’s very bullish, and he’s willing to commit his own personal resources to make sure that business goes forward. But Dorothy brought another point, actually being responsible and at this juncture, you need to keep the lights on. Because if you double down now, and you cannot see the lights on in 6 to 12 months, then it’s actually very tricky. 

I’m actually more on the cautious side, for me personally. That’s why we were actually having that conversation about, you know, how do we go past 24 months and in our previous webinar, for those people who attended, you realise that I think Jeff and Henry both are talking about 24 to 36 months. For them actually, they actually see the COVID waves because they are in 8 to 12 different markets. They see it coming at different paces, at different junctures. 

Okay and I’m conscious of time. It is about 5:04 now. Thank you so much for your time. And I know Dorothy is busy with the sales calls. And Daniel is busy with working out with all your support managers and making sure that the crews are working on the ground. So thanks so much for taking your time with us today and everybody else thanks for coming today. Take care. Bye bye.

At AngelCentral, we have put together a list of resources: https://www.angelcentral.co/covid19 (some from our own efforts, some from the ecosystem players), to help the startup community push through this tricky period! If you have any resources to add, please email us at support@angelcentral.co!

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