I’ve long been a subscriber of NUS Enterprise’s newsletter, as this part of the National University of Singapore plays a key role in the local tech ecosystem.
This startup, then Singapore’s most visited foodie site, was founded in 2008 and acquired in 2012 by Singtel, the local telco, for S$12m. The talk was introduced by Kris Leong, Vice-President at Walden International, an early backer of the startup.
HungryGoWhere first steps: a website? a book? a guided tour for foodies?
“When we began, we wrote a guidebook on the hidden eating places in Bangkok with friends, and wanted to sell it to tourists, so that was the plan. Back to Singapore, we all experienced the lack of search engine of food at night, as most shops close around 11, this is where it all started.
The journey was challenging, as none of us co-founders were really entrepreneurs. Just as in soccer team, you need strikers, defenders… we were all strategists. So we had a brilliant idea: put a directory of restaurants, insert ad banners of competitors on the page of each of them, and have restaurant owners pay to make them removed! But people would not know what internet was like back then in 2007-2008. A print advert is something you can touch, not a digital one.
We then pitched the idea as a magazine, so we printed the listings of the website and told the restaurants they could have their advert in this “book”! The first year revenues (not profit!) were $4000. Fake it until you make it, as they say! We did pitches. We were depleting our resources, so we did a lot of things. We launched food guided tours, $50 to visit $5 restaurant, but it’s painful to tie a lot of it of course.”
An entrepreneur mindset: focus on the positive, forget the noise, learn from the others
“Still, with a high failure rate for startups, it’s a bit like entering a casino, so people need to put themselves into this position. BUT the odds are not completely against you as in gambling, you can improve your chances of success. A lot of the journey is mental. People who launch business often say “today is the 1st day of the rest of my life” as startups are about learning, trying… Entrepreneurship is about failure, accepting it, having a lot of downsides.
Kin ones may not understand. When I founded the company, before the financial crisis, the bonus were at their maximum, you had to be tough to decide yourself for launching a startup. You have to ignore the noise, and focus on what you believe is right. I forgot the competition, if you watch it to much, it will demoralise you. You feel low, and you can not fight again, and it’s over ! I don’t look at what people think about me as well. You will have haters! Clients are similar, if they sign a package with HungryGoWhere, they WILL get 10s of negative reviews. What helps is not to listening until some stage. My grand parents did not understand also, so I told them I was selling computers!
Where I got a lot of inspiration from was entrepreneurs. There was no Blk71 at this time, but other entrepreneurs would help, share coffee, from traditional companies. They showed us what a CRM was, as well as sales teams, we got a lot of ideas then. Keeping the positive mindset is key, you need to read positive books and news, it’s more natural to lean towards negativity, to read about plane crashes, wars… Your positiveness will transfer on other people too. The reality about finishing line, it’s that you don’t know where it is, you need to keep running.
There’s always tipping points, a business like a startup is never s steady progression. Once you reach this tipping point, you will earn in one month more than you did in the first two years. We had loss for two years, and turned a profit in just one month. When you’re small, you can also last longer, you don’t have many costs. Before we joined Singtel, they were the enemy. They launched InSing, with quite a budget, hiring McKinsey people. But the one thing they cannot fight was our determination. It’s not a job for you, it’s your survival. Now I’ll take questions.
Q&A session with Wong Hoong An, founder of HungryGoWhere
How do you cope with the transition from a startup to Singtel?
Singtel started as a government entity, a lot of people have been there for decades, they’re very loyal and with an obsession for a certain way to do it. We are located in a different building. For Digital Life [the third part of Singtel after Consumer and Enterprise] they try to move things, the department has been cut off the bigger group, in a different place, so the culture is very different. We’re entrepreneurs, we find a way out in any context!
Did you want to quit HungryGoWhere at some point?
Yes, everyday you feel like you want to quit, even before you begin you want to quit already! It’s very normal. You have depressive times. The worst is when a client signs a contract, and retracts the day after, when your euphoria is so high. But you already know a lot of people have gone through this, so you try to find positive people. Hang around successful people will make you more successful.
What are the different revenue streams of HungryGoWhere?
We are moving away from advertising. F&B people are okay to buy a nice kitchen and good food, and they think it’s enough for to people to come, but it’s a pain for them to put $5 in advertising. We have more a transaction model. Why take money from a small pool when we can have a bigger pool (with smaller revenues from each unit). If I’m driving you traffic, then you should pay me, as I give you business.
Is a foodie site like HungryGoWhere a very Singapore thing, or can you take it globally?
It has been a real learning journey for me, even after joining Singtel, as the business went way faster. We just launched Malaysia, and we need a full Malaysian team, you can’t just change the content and the SEO, local people know better, the culture, the places. The head of sales is in KL, and he refers to me. He tells me how things work and what solutions he thinks of.
How much control do you have when comes the time to sell to Singtel (being backed by Walden, for instance)?
We had control, the founders had the bulk of it. Luckily, we did not have fights about money. We are a very unanimous group and team, solutions are always agreed on by everyone. I’m a very self-minded, another founder is more user-focused. If 3/4 did say yes, we had a go.
For me, the sale was the good decision. To grow bigger with investors, we would have to dilute more, and Singtel was offering a lot for marketing and make it possible. Our shareholder agreement was pretty clear. We had a whole list of rules to comply with, even symbolically.
I finished my 2-year bond one month ago. The negotiation with Singtel was very fast, it took one month, may a bit more. It was a couple of meetings. Everybody has to agree, and it’s a lot of give and take as well. Bigger acquisitions can take long time ok… but in the end, for all the stakeholders, it’s still a gamble.
Originally, Singtel was more looking for a series B, but we all saw there were more synergies to work together. We also knew our guys began to be tired, so being in a group like Singtel offered everyone to do something else, in Big Data, or in other parts of the company. If you’re just invested in, the investor don’t have as much incentive to have you do the best you can. If they buy you fully, they want it more strongly.
How did you manage the technical side?
We screwed up! We had a small budget, and when you outsource development with a low budget, it takes 6 months to do it, which is a huge cost in terms of opportunity. This opportunity cost is everything. We hired someone after that, a fresh graduate, and started again from scratch. In the dot-com space, people move very quickly, so you need to have someone who code near you. Vietnam is a lot cheaper, but having a guy with you, even more costly, you can have daily updates.
What was the Singapore startup ecosystem like back in 2007-2008, how do you see its evolution?
When we first started… wait even us were not pioneers. Singapore Brides were here 5 years before. We did not have startup grants, or MDA [the Media Development Authority, a key supporter of media startups], there was nothing! So you had to have a business that work, and if it didn’t, there was no back-up plan. Now you have a place where you can talk, you have coworking spaces, a lot of help.
At the time, dot-com startups were not considered really interesting. When we try to raise initial funding, a few VC told us “social media is a bad word”, it was back in 2007-08, before the boom of Facebook and Twitter. It was a pain to raise money. We had a lot of press coverage, as the field of dot-com was less crowded, it was really perceived as bold and we had sort of easily to get a feature story on the Straits Times. Our co-founder was Cambridge-educated, PhD, with lots of job opportunities, so we really milked his CV to make our story of crazy guys launching a startup!
How did you launch new features on HungrygoWhere
A lot of startups don’t make it because they don’t change enough. We were quite open-minded and had third-parties to review and provide ideas, so we launched new features, changed the platform. We organised free dinners with users to get their feedback. Even if the feedback is contradictory, with some reviewer being very dominant, you still have matter to decide over.
Who did you learn from?
People you learn a lot from change with time. In the early days, the founders from Singapore Brides and JobFactory did teach me a lot. I also discussed with older, more traditional business builders who had sold for huge numbers in the semi-conductor industry. They would help me to know what actually meant the words from VCs, investors, and other stakeholders. I also talked a lot to people who did not succeed to learn why they did fail and how to avoid it possibly.
Key takeaways from HungryGoWhere story: of acquisitions, startup ecosystems and passion
That’s it for the story of HungryGoWhere, as shared generously by one of its co-founder! The key takeaways in our opinion of ecosystem travellers are:
- Raising a money or selling a startup is two very different things… and Wong Hoong An’s opinion on the possible dilution of capital with new investors vs. the synergies an acquisition may offer are quite interesting. It may seem less sexy to sell to Singtel than raise a bigger series B, but… think again.
- The ecosystem is not needed. Ok, this is a provocation, but you get it. In the same way that Hong-Kong startup scene today have little support from the government and need to be profitable and efficient rapidly, it’s fascinating to see how success was possible in the early days without any support, in an almost counter-intuitive time to launch a company. Of course, a bigger, more supportive ecosystem has other advantages, from education of larger crowds to entrepreneurship to a cultural change in society. Still, Wong Hoong An talked a lot of how survival makes you decide and innovate faster.
- Passion drives entrepreneurs, who can then make money, not the other way round. The “tech cofounder” of HungryGoWhere was still reading “Computer Science for Dummies” when they launched. The three friends just enjoyed eating and wanted to solve their problem. Passion is key to resist to fear, down times, and keep going.
We’ll be attending the next Kopi Chat of NUS Enterprise for sure, as it’s a gold mine of personal stories from founders and people who made it through hard work, will, and also some random luck and encounters.