Acquiring your first 1000 users? Getting your first hire? Pitching to investors? We sat with Sajid Anam to talk about his start-up experience, and tips for aspiring entrepreneurs.
"We exited in an all-cash acquisition to the washing facility company"
Tell us about your first start-up - Spyn
Spyn is an on-demand technology venture offering dry-cleaning services to Londoner's, backed by Telefonica and Dominos. Think of Uber for dry-cleaning - Spyn picks up your dirty clothes, cleans them, and delivers them back in a day.
How did you get your first few users?
It all started with our friends, and they recommended other friends to try. We also spent some time in an incubator, so when people were networking and learning about what we do, they ended up liking the service and signed up too! It was mainly driven by word-of-mouth recommendation, which drove plenty of traffic to our website.
Who did the first batch of cleanings?
We engaged a washing facility to clean the laundry on a per-batch basis. Ensuring that payment was done up-front for every transaction, we became confident operating on a commission model with them.
How did you get your first hire?
The first person we hired was a full-time driver. He was from Africa, and found his profile while browsing a part-time employment website. My co-founders and I interviewed him and found that there was a good fit with the company, so we instantly hired him.
How did you expand your customer base?
As we were burning through cash, we realised that we had to expand our addressable market by exploring the B2B model and reaching out to corporations. At this point, we had known the owner of the washing facility (that we've engaged) for over 2 years, so he ended up connecting us to a few boutique hotels. And that kicked off out corporate portfolio.
What was the conclusion of Spyn?
We exited in an all-cash acquisition to the washing facility company, White Rose Laundries UK, whom we had a 2.5 year working relationship. They ended up buying the entire tech stack, and used Spyn as a cheaper mode of user acquisition for their existing business.
On that note of funding, could you share your experience pitching to investors?
"We always walked out with an investment, or got them as a mentor or a client"
I never did a pitch with a deck. We used to send cold-emails to potential investors, but 80% of the time it did not work out. But for all our in-person meetings, we always walked out with an investment, or got them as a mentor or a client. It’s always better meeting your potential investors in person, as it allows you to read the situation and position yourself better.
Ultimately, all funding/financing matters are based on relationships. I believe that founders have to be able to build strong relations, before talking about business. An interesting story about how I met with one of our investors. My then-girlfriend knew the Chief Marketing Officer of a big technology company, and he had difficulty organising an event. Somehow, I got roped in and ended up helping him to pool money and execute the event successfully. It was a purely unintentional meet-up. From there, things hit off well and he became a trusted friend. When he found out that I was launching my start-up, he jumped on the opportunity and gave us our first round of funding!
Moving on to your second start-up, could you share about The Create Labs?
It is a design-centric consulting firm focusing on digital products and experiences, with offices in India & Germany. We work with start-ups and companies on crafting their app/web interface, brand identity and communications.
How did you conclude The Create Labs?
An important thing for start-up founders, is knowing when to call it quits, and doing so responsibly. At one point, we looked at our cashflow and there were two options - either we keep working and burn through the cash, or walk away with at least a healthy sum of earnings for everyone. We chose the latter. So even before we closed it, we reached out to all our contacts, and made sure that all our employees had a job waiting for them.
You have transited in and out of start-ups and big corporations, how have these experiences shaped you?
When I made my decision to move to Grab, I wanted to make a real impact in society, and not just earn money. The mission of creating real value and generating real income for people across Southeast Asia truly resonated with me. As a company, we have Objectives and Key Results (OKRs) to achieve, but we still fight for what is best for our users. In the design team, we always prioritise user experience by understanding how we can serve them what they need, not what we want.
About my transitions from corporate to startup, it has all been about gut feeling. With Spyn, I spontaneously met the founders for lunch, and they decided to rope me in. Similarly, when I started The Create Labs, it was all about gut feeling. All these experiences helped me understand what I really wanted to pursue and focus my time on.
Top 3 advice for entrepreneurs?
1) Don't neglect the B2B market
Very often, most ideas come from thinking about serving the 2C market. But there is a lot of merit building products for the 2B market. Sales with them are more stable and longer term. Once you sign a 2B customer, it’s usually on a longer term basis, so you do not have to worry about the daily churn and acquisition of the 2C market.
Currently, there are many traditional B2B firm, take SAAS products for example - they have poor UX and it has remained stagnant for years. Being a nimble start-up, you will be well poised to move faster than many large corporations.
2) Profitability from day 1
When we started Spyn, we had to make sure that the business was profitable from day 1. From each transaction, users had to pay up-front, even before we provided the dry-cleaning service. As a start-up, try not to accrue too much debt, and quickly prove that the business has a sustainable and profitable path.
3) Make data-driven decisions
Everyone has their own opinions and beliefs, but data speaks for no one. Throughout my work, I have always relied on data to make informed decisions.
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