For SAAS in Southeast Asia, it’s Software AND a Service

“Why does New Leaf Ventures invest so much on implementation and training teams?”

There’s a lot of excitement about the Southeast Asian tech scene. A lot of it has to do with the publicity international tech companies such as Apple, Google, Facebook, Amazon, and the incredible growth of Alibaba from China, are making in general. In the enterprise scene, the promise of better and faster through technology is very much embraced around the world. Startups, multinationals, and companies in between understand that the benefits of technology in medium and long run outweigh the cost of time, money, and energy.

This is why we were intrigued by the initial difficulties we had bringing Software as a Service solutions to the Philippines. Shouldn’t the benefits be obvious enough that people would come lining up to sign-on? I can write a whole other article on that and the lessons we learned but I want to zoom in on one of them that I think explains both the challenge and the opportunity in South East Asia. Unlike in countries like the United States, Australia, and Canada which are very “Do-It-Yourself” because labor costs are high, Southeast Asian nations aren’t. We have other people do everything for us. Someone else cooks and cleans. Someone else drives. There’s a carpenter for things to fix around the house. There’s a painter for the, well, paint job. While we can go to a shop, buy the equipment, and do things ourselves, we don’t.

And we saw this with businesses. We would present a solution such as PayrollHero to the owner, he or she would get excited, exclaiming, “We need this!” Calls HR who isn’t too excited about adding more work and study to their already packed load (and we know HR is incredibly packed!), only to realize down the road that the efficiencies promised down the road are greatly dependent on a most important piece: the user, who, in many cases, isn’t as tech savvy as we need.

So this was our situation: We had a great product (PayrollHero), we had a willing owner who loved the idea of data-driven management, we had an overworked HR, and we had an end-user who didn’t know how to use the technology, in a country that isn’t DIY.

The picture today isn’t anywhere like it was. Since then we have gone on to sign some very big names, such as The Coffee Bean & Tea Leaf, Krispy Kreme, The California Pizza Kitchen, iHop, Family Mart, and the largest office furniture manufacturer in the region, ERGO, onto the system. But it wasn’t as simple as putting a bunch of ads and pointing them to our site.

We had to apply some lessons along the way. Here they are:

1. Have a good product – No matter where you are your product has to work. Every product or service evolves but your Minimum Viable Product (MVP) has to be able to deliver what’s promised, if not to its full extent, to a reasonably attractive level. This one is obvious. It should go without saying.

2. Start by defining your target market, but as you go, refine it, and always be qualifying – This means that you don’t take your initial assumptions as fixed. Question your assumptions, test them, and be honest about the results. Use these results to further define your targets. This will help you sharpen your spear so to speak.

3. Because testing and learning are so key to growing, understand your customers’ cultures not merely their companies – Both our business development teams and client success teams are constantly reminded to be “empathetic” towards target customers, a practice we picked up after a Learning Lunch with VC Nix Nolledo.

4. For Southeast Asia, it’s not Software As A Service. It’s Software AND A Service – It’s not as simple as building a reliable cloud-based solution that can scale virtually. You need a partner who can work with your users to scale them up as well, improving their knowledge and skills to maximize the technology. This is why companies such as PayrollHero and PipelineDeals partner with us, because they understand that a lot of education is needed not just to sell the product but to retain and even up-sell. Our client success teams partner with clients to implement the solution but, more importantly, do the tedious job of training the end-user to do a very specific thing: Hit Objectives Using the Software.

During a meeting with Walden Chu (president of CBTL Holdings) and Paul Santos (partner at Wavemaker VC), we saw the importance of a team dedicated to training departments and users even for cloud-based enterprise software and even for SMEs (who probably need it most). The problem with this is that having training and coaches and classes are not as scalable as code. This is why our technology partners work with us because our teams are already in place to do the time consuming work of training someone. We don’t mind. We actually enjoy it. We love the fact that we introduce awesome technology but we love it even more that we’re teaching them how to make the most out of it. Why give someone a Ferrari if they don’t know how to drive? Now if you were teaching someone how to drive a Ferrari, wouldn’t that mean you get to enjoy the ride too?

That’s how we see it, and that’s why we like being in South East Asia which requires its own locally contextualized innovation of being Software AND a Service.

 

David Bonifacio is the Managing Director of New Leaf Ventures.
Connect with David on LinkedIn

 

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About

David Bonifacio is the Direcor of Strategy for the CBTL Holdings Group, Managing Director of New Leaf Ventures, Managing Director of Elevation Partners, Managing Director of IDC Manpower Services, President of Issho Genki International, and advises businesses in South East Asia on matters of strategy, technology, and people development. David serves actively on the boards and committees of non-profit organizations including: Habitat for Humanity Philippines (housing) and CCT (microfinance). David pursues his creative interests through his blog dbonifacio.com

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