Never underestimate the power of localising your product or operations to each market

November 2015, I get an application for a co-founder position from a small Chinese Malaysian chap, Pei, an Imperial College and UCL grad, and a straight A student. I liked him, so I hired him.

I run a venture builder, LaunchPad, so Pei gets cracking by bouncing business ideas. He eventually starts work on one — a restaurant menu on your phone, Menyoo.

Menyoo seems a bit too obvious, a bit too good to be true. But early signs are good, so Pei brings in two more co-founders. There’s Nicholas, a guy that knows how to sell ice to Eskimos. And Aku, an old buddy of mine, who works remotely from London as CTO.

As weeks go by we realise that getting users to engage with our product is extremely challenging — we realise that the problem we’re solving isn’t acute enough.

Key takeaway: “You need to be solving an acute enough a problem, a problem that is compelling enough for consumers to not only pay, but go out of the way to use.”

However, within Menyoo we are developing a loyalty app, and its engagement is far higher. We start mulling pivoting to a loyalty app, but Pei reckons a simple substitute to a physical loyalty card won’t cut it. We’ll need to monetise customer data to make this work. So, we run a test with one of our retailers.

We send 354 SMSs to customers that haven’t returned to the retailer for more than 60 days. Cost of SMSs – RM35.40 (US$8.26). Customers back due to SMSs: 16. Total revenue generated for the retailer: RM460 (US$107.39). Ka-ching.

We do a few more trials and then we pivot. Menyoo is dead. Long live Mulah. The way Mulah works is simple. Over-the-counter retailers stick an iPad next to the counter, customers can tap in their mobile number to claim loyalty rewards.

Key takeaway: “Stay lean, keep moving, keep learning, keep pivoting.”

In July 2016 we are beta testing the app with a handful of retailers and we get some bad news. We find out that a gorilla is coming to town … and he’s teamed up with King Kong.

Zap, from the Philippines, has a similar model as ours, except they don’t have an app. Launched in 2013, they had grown to 500 outlets in the Philippines. Called BIG Zap in Malaysia, they’re ready to take out Malaysia … and they’re backed by AirAsia.

Now when the news hits me, my immediate thoughts were not exactly positive, but I knew we needed to out-innovate this gorilla. We have to play to our advantage — we’re smaller, more nimble, we’ve got passion.

Nicholas suggests we allow retailers to send out push notifications to customers’ phone via our app so they have a direct connection to their loyal customers for free — something that BIG Zap couldn’t emulate as they don’t have an app. A month later, retailers on trial are loving it.

We have our first encounter with BIG Zap when Nicholas approaches a Korean restaurant. They are about to sign up to BIG Zap, but he nips the deal because they are so impressed with our new messaging system.

Key takeaway: “Don’t go head to head against a much bigger competitor. You have to use your agility and your passion to your advantage.”

But BIG Zap are still moving too fast. For every retailer we sign, their much larger sales team is signing three. We need to grow the sales team but experienced sales people don’t want to join us when they know we are competing against an AirAsia JV.

Pei can see us failing. So the poor guy turns to philosophy. He says we need to adhere to Sun Tzu’s proverb – “Know thyself, and know thy enemies.” I was like, “whatever, you do your Chinese stuff, show me some results.” Pei gets the team to start stalking BIG Zap, Triad style.

Key takeaway: “When the chips are down, you need to hustle even harder.”

Nicholas starts calling each of their merchants, targeting the less satisfied ones, and converting them over. We also approaching retailers BIG Zap have visited. As we are the second company approaching them it gives them confidence in the concept, so the conversion rates are high.

At this point we figure BIG Zap are actually helping us close a lot of our sales.

Key takeaway: “Know thyself, and know thy enemy.”

I’m loving Pei and Nicholas’ hustle. But despite all these successes we still have a serious problem that could bring down the entire company — we’re struggling to get customers to engage with the iPads. Nicholas goes to some of BIG Zap’s retailers to find out how they have nailed this — they haven’t!? But how could Zap have grown to 500 outlets in the Philippines if customers were not engaging with their product?

Nicholas eventually figured it out. Malaysian retail outlets often have poorly trained foreign staff, unlike outlets in the Philippines. Filipinos’ work ethic is just incredible. The foreign-staff in Malaysia aren’t introducing our product well enough.

So we focus on training, and a month later we’re getting literally 9 times as many customers engaging with our iPads.Finally, we’ve got the product/market fit and are begin to scale.

Key takeaway: “Never underestimate the power of localising your product or operations to each market.”

Seemingly unable to adapt to the local market, recently BIG Zap announced they will be exiting Malaysia.

Now that’s the power of hustle combined with on-the-ground local knowledge — running circles around a foreign-led gorilla.

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Source: e27