How Alpha Founders sees the Bangkok Startup Scene.
The leadership team at Rocket Internet continues to build satellites around the infamous Samwer brothers. Easy Taxi most recently popped up in Bangkok and is currently trying to educate taxi drivers about making more money. As with many Rocket Internet Startups though, management teams change rather quickly. Some good Thai based examples are Christian Mischler (Hotel Quickly) who was in charge of FoodPanda’s operations, and Carlos Herrera (CTO Binumi). They are not alone thought. Another management team jumped ship to form Alpha Founders, a Bangkok based incubator. Alpha Founders is led by former Lazada Thailand founder Johannes von Rohr.
Alpha Founders is currently working on two projects, askHanuman.com (re-launched on the October 3rd) an online comparison website for insurance and financial products, and Hansa LED which is providing LED B2B and B2C solutions to an international market.
We interviewed Johannes to discover how Alpha Founders combines the execution power of Rocket Internet with a sustainable business approach and a healthy business culture, what the incubator offers founders, what baseCAMP is about, and how they plan to provide investors with returns at low risk.
Is Alpha Founders an incubator or a company builder? Are you working on own ideas or are you looking for business concepts?
We are both a company builder and incubator. So far, we are building companies that are based on our ideas. That said, we also see local entrepreneurs come to us with exciting ideas or existing online companies in search for execution support, and sometimes we go and find entrepreneurs.
What are you offering entrepreneurs with good business ideas?
As an entrepreneur there is so much to learn– say you are building Lazada Thailand over again tomorrow; you have to learn buying, online and offline marketing, operations, content, warehouse, logistics, customer service, HR, raising capital, tech, and many, many other things and all this in days, weeks or a few months. No wonder that startups fail, despite having great people.
In our companies, we focus people on learning one thing at a time and that well.
In the case of building a fashion website, if you were one founder we would ask you to focus on buying, and then our CTO would take care of the shop, and our CMO would setup the marketing etc. Over time we would then build capabilities in the company so that they can run independently. But reducing those initial challenges entirely changes the risk profile of the company. This is the value add we bring to local teams and local founders.
Are you looking for people and what is baseCAMP?
We are searching for great people every day. In fact, we open up our office space close to MRT Lumpini station, so that great people can start working alongside our teams. That way, we get to know each other and entrepreneurs can experience the execution and culture of the teams at Alpha Founders live.
Our space currently fits 80 people, it is called baseCAMP. The name was given, because we provide a base for entrepreneurs. I think that initial challenges can be solved by just having the right experts around to get feedback from. It’s also more fun! We have turned the space in an open working and learning forum and partner with Bangkok Entrepreneurs to start delivering workshops and trainings. Eventually, we also see baseCAMP as the seed-ground for new Alpha Founders Startups.
What challenges do you face when building Startups in SEA?
Great companies stem from the right ideas and great people to execute them. That is the biggest problem most Startups face in Asia. Talent with experience in web companies is very scarce. The educational system does not create enough online marketers, operations experts, IT engineers and business developers to keep up with the rapid expansion of the ecosystem. Hence, we tend to train everyone up internally, hiring for strong attitude and less for experience.
Another issue is the slightly risk averse culture in Asia. Talented people have great options in risk-free careers and families encourage them to take this route. On the other hand, born entrepreneurs tend to join their own family business.
All in all, it takes a little bit longer to build great teams. Hence, company culture plays an immensely important role. Forming a “family spirit” is the key to retaining a happy, motivated, effective team. We encourage this by being very liberal when it comes to working hours and social activity. For example, we end the week with a big all hands meeting at the gaming area, with drinks, music, just winding down from the week, having a good time.
Where does the money come from?
Initially, we self-funded operations, focusing on building profitable, sustainable companies. Three months in, we raised our first round of capital from private investors in Asia and Europe and recently we closed a second round which carries the current ventures throughout 2014.
I think what investors like is that we tend to think structured about building companies and work very actively to reduce the risk profile. When we select business models, we start with a top down approach on macro and demographic trends. Then we look at an attractive space then see what makes fundamental sense and where we have the passion. The last part is key! We also require the business model to have existed offline for a long time ensuring that it is not a short term trend. We focus on building superior returns from the startup scene in South East Asia, for both local and international private investors.
What projects are you currently building?
We are working on four exciting business models at the moment. Two of them are funded, live and growing healthy. askHanuman.com is an online comparison website for insurance and financial products. The company started with car insurance (30+ companies to compare, lowest prices) and now expands to personal accident, travel insurances, credit cards and loans. Then, there is Hansa LED, addressing the global LED light industry. The company is building both B2C and B2B distribution channels in SEA and Europe, selling LED lights. We are also preparing for another two companies, which are in stealth at this stage. I leave it with the founders of the companies to decide on when to do PR.
What are your goals for the next year?
Our goal is to provide founders and employees a great place to work, with lots of fun and where hard work is valued. For investors our goal is to build a sustainable regional foot print of successful startups that produce great returns. First, we see regional expansion of the existing portfolio, moving from Thailand to neighboring SEA markets. Next, we will build entirely new business models in SEA.
What are your reasons for leaving Rocket Internet?
Rocket has been a great place to learn and we enjoyed the last years a lot. Building companies for Rocket teaches founders an array of skills, most importantly how to execute a plan well. At Rocket, speed was always of the essence, with creativity and individualized approach coming second place. We also realized the immense opportunities in South East Asia for web startups and the vast amount of business models currently untouched. Finally, we wanted to work independently on new business models that are smaller, yet more profitable, and faster to execute than standard E-Commerce verticals.