Customers First, Product Second: Don’t be the startup that builds amazingly complex products that no one’s going to use. Build a product that solves real problem. You should start to see results within one to three months of development.
Startups have such a glamorous reputation. Companies like Facebook, Instagram, Youtube, Uber, and Airbnb once started as scrappy startups with huge dreams and huge obstacles.
Yet we of course know that most startups don’t end up as success stories. What does a founder or a founding team need to know to create a highly successful startup?
In this series, called “Five Things You Need To Create A Highly Successful Startup” we are talking to experienced and successful founders and business leaders who can share stories from their experience about what it takes to create a highly successful startup.
I had the pleasure of interviewing Andrew Chan, Co-Founder and CPO at AfterShip. AfterShip is a leading tracking platform for e-commerce businesses. Andrew has more than 10 years of SaaS product development experience. He manages product manager, sales, and marketing teams at AfterShip. Before starting AfterShip, he worked for Accenture as business analyst.
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
We founded AfterShip back in 2012 when I met with my other co-founder Teddy Chan at Startup Weekend Hong Kong, which is a 54-hour hackathon competition. We won the Hong Kong competition, and also later became the global winner. This enabled us to meet with our first angel investor in Singapore. We laugh about this because at the time, every other team focused on consumer-facing applications and social media concepts; we were the only team who focused on software. In fact, no one wanted to join us! SaaS (Software as a Service) is “boring” for many people (at least that what we guessed), but Teddy and I loved using software and always dreamed of building our own software.
What was the “Aha Moment” that led to the idea for your current company? Can you share that story with us?
Teddy was one of first eBay top sellers in Hong Kong back in 2010, selling MP3 players worldwide. He later opened his own store selling remote control toys. With his engineering background, he actually built an automated tracking system for his online store to reduce customer enquiries and improve satisfaction. This became a sort of prototype of AfterShip. For six years, many peers in the industry kept asking him about this software. He finally decided to pitch this idea in the startup competition (mentioned above) and I joined his team.
The “Aha” moment for Teddy was very practical. Once he launched his tracking system, he reduced customer enquiries by 50%! Here’s a video about Teddy’s creation of AfterShip: https://www.youtube.com/watch?v=DMZcVwy2K4s
Was there somebody in your life who inspired or helped you to start your journey with your business? Can you share a story with us?
For me, it’s definitely my dad, who inspired me to start my own business. My dad started his towel wholesale business by importing from mainland China and selling in Hong Kong. He began as a factory worker with no education or relevant background, and later grew his business to a level that supported our whole family. The business wasn’t big and I recall that at its peak time he had at most two employees (one being my mother!). I still recalled the time my elder brother and I went to the warehouse and helped pack shipments for the customers during the summer holidays. I learned from my dad that running a small business wasn’t an easy thing. Basically, you have to wear many hats as the boss by both planning, strategizing, and executing at the same time. If you don’t do your best every single day, you may fail the very next day. Most importantly, building a strong reputation among peers and customers is the key to success.
My dad didn’t use any software at all and I think that was one of the reasons he couldn’t scale to the next level. I think that’s what made me choose to build software to help businesses to scale rather than building yet another social media app. We really focus on live chat being available 24/7 regardless of what pricing plan you have subscribed to (even free users!). We hope to offer help to eCommerce businesses so that they can kickstart, grow, and scale their business from SMB to the enterprise level.
Sometimes when I am a bit exhausted from daily work, I will simply check customer reviews to remind myself of the reason we built AfterShip.
What do you think makes your company stand out? Can you share a story?
We have prioritized our product and development instead of sales and marketing from day 1. We started in 2012, and only grew our sales and marketing team in 2020 to a team of five people. Of course, we plan to hire many more, especially with the help of the 66M dollars in funding we recently received from Tiger Global (they are experts in the SaaS area as well).
By focusing on the product — a relatively boring topic to many people — we are able to improve our technology and build more advanced, useful features. Most importantly, we built our product team to the level where they handle more than just one product. The team can also take on requirements from both SMB and enterprise customers. We have seen so many SaaS companies choose to ignore SMB customers after getting money from enterprises, and we decided to take a different approach when building our software. While we listen to our enterprise requirements, we also make sure that new features can also address the needs of SMBs. While we have enterprise SLAs, we also make sure our customer support team can meet the needs of our free and SMB business users (e.g. adding 24/7 live chat).
How have you used your success to bring goodness to the world?
I think the best way a SaaS company can bring goodness into the world is really doing an excellent job of offering software that meets the real-world needs of customers. We provide value to customers by shipping quality features within short development cycles. We also ensure our pricing model always offers free plans to businesses who are just starting out. We’re always increasing our offerings rather than cutting features.
You are a successful business leader. Which three character traits do you think were most instrumental to your success? Can you please share a story or example for each?
Compared to Elon Mask, we are still far from successful haha!
- Humble: In Chinese we say, “When walking in the company of other people, there must be one I can learn something from.” The way we run our company is by staying humble and hungry in order to keep improving our products to meet the ever-changing needs of our customers. It doesn’t matter if it’s our customers, partners, or even competitors; there are so many things to learn from each of them.
Geeky: When I started my first job at Accenture as a business analyst in Singapore, my role was to help a major bank implement a new banking system. I spent my nights and weekends reading documentation of the system in order to know the system inside out. Essentially, I was “geeking out” over the system. This was pretty unusual for a businessperson when I look back on it. I believed if I were the user, I would not want someone oversell a solution, so I had to learn everything I could about it.
Focus: People have told us many times that shipment tracking is not worth improving. By focusing entirely on delivering customer value and top-tier tracking capabilities, we are able to establish ourselves as the market leader.
Often leaders are asked to share the best advice they received. But let’s reverse the question. Can you share a story about advice you’ve received that you now wish you never followed?
People can always change and learn.While we still give people chances to prove their abilities and to improve after failure, I realize there are certain things people can’t really change easily (e.g. personality, laziness).
Instead of just dragging on working with those people for long time, I learned to move on and let go. It is important not to waste each other’s time. The longer we keep a wrong person, the bigger their negative impact is on the rest of the team in terms of culture and morale.
How do we identify the wrong people? We work hard to notice if a co-founder or an employee always puts the needs of themselves before customers, teams, or the company itself. If we discover these red flags, that person may not be a good fit for our team.
Can you tell us a story about the hard times that you faced when you first started your journey?
At one time in the past, I was handling customer support and closing key accounts (i.e. stepping into a sales role) while also being a product manager. That was very difficult, and I was definitely burning the candle at both ends.
I also recall the time we launched our API product for developers, and we made it to TechCrunch. We were suddenly getting attention from many enterprises who liked our products and wanted to use the products. I was at that moment that I realized I had to get intimately involved in the sales process, which I wasn’t used to at the time. Through that experience, I learned the best ways to pitch clients, close deals, discuss pricing, and ensure proper customer service before closing deals. It was difficult, but completely necessary, to navigate that steep learning curve.
Where did you get the drive to continue even though things were so hard? What strategies or techniques did you use to help overcome those challenges?
It’s very important to work with the right co-founders. You want leadership who have each other’s backs and who challenge each other. Additionally, you must find a co-founder that boasts a different skillset but holds same core values as you. This way you mitigate each other’s weaknesses and complement each other’s strengths. This way, we see growth from each other and also lessen our weaknesses.
The journey of an entrepreneur is never easy, and is filled with challenges, failures, setbacks, as well as joys, thrills and celebrations. Can you share a few ideas or stories from your experience about how to successfully ride the emotional highs & lows of being a founder”?
My highs and lows are very subtle, meaning we don’t really get excited about the successes or the failures. When we recently raised 66M dollars in Series B funding, we viewed it as just a milestone in our startup journey. We celebrated but also moved on quickly by renewing our focus on the AfterShip product. It’s the same mindset when we face challenges. We don’t feel defeated. Instead, we feel motivated on finding a solution.
We are lucky to work with a group of geeks who like to focus on solving problems, which helps us to weather the emotional highs and lows.
Let’s imagine that a young founder comes to you and asks your advice about whether venture capital or bootstrapping is best for them? What would you advise them? Can you kindly share a few things a founder should look at to determine if fundraising or bootstrapping is the right choice?
I can give advice for B2B SaaS solutions specifically. I recommend bootstrapping, building a strong MVP, and pushing to get 1,000 paid customers with consistent inbound leads before talking to VCs. Getting VCs to come to you rather than you reaching out to them is key in this fundraising game.
Ok super. Here is the main question of our interview. Many startups are not successful, and some are very successful. From your experience or perspective, what are the main factors that distinguish successful startups from unsuccessful ones? What are your “Five Things You Need To Create A Highly Successful Startup”? If you can, please share a story or an example for each.
- Focus on Talents Rather Than Benefits: Tangible benefits (like money and free lunches) are simply overrated. The best benefit for employees is to hire better talent that keep raising the bars. Smart people like to work with other like-minded people who are intelligent.
- Customers First, Product Second: Don’t be the startup that builds amazingly complex products that no one’s going to use. Build a product that solves real problem. You should start to see results within one to three months of development.
- Start with Free Inbound Leads: If you only rely on paid traffic like 90% of your competitors, that’s not healthy at all for your business. We ensured that we were profitable since day 1 by generating healthy traffic through SEO and different app stores so that we didn’t need to burn money.
- Leverage on Global Resources: We built our support team in India and have seen great success with their work. Whether it is product, support, or sales, you should take advantage of the different talent pools in different countries.
- Solve a Niche Problem with High Demand and Few Competitors: We always see new startups trying to solve a big problem. However, these same startups did not calculate the effort required to solve said problem. Starting a company is like investing stock: you are investing your time and effort for a bigger return compared to working for someone. We found the pain points of shipment tracking and realized the high demand for such solutions. The market is so niche that no one wanted to touch it. We created the chance to grow and earned the attention from our potential customers that much better because we were ready and willing to fill that gap in the market.
What are the most common mistakes you have seen CEOs & founders make when they start a business? What can be done to avoid those errors?
One common mistake is working with the wrong co-founders to start your business. I think like any relationship, you need time to get to know each other before diving into a serious commitment. It is actually best if you can start out with a test period that involves launching an MVP first and onboarding roughly 100 customers within three months before you talk about whether you want to work with that person for 5 years… or forever!
Startup founders often work extremely long hours and it’s easy to burn the candle at both ends. What would you recommend to founders about how to best take care of their physical and mental wellness when starting a company?
Ah! If you can’t enjoy the extremely long hours and challenges, and need people’s help on this aspect, maybe you shouldn’t become a founder. Be honest with yourself about the lifestyle you want, and don’t force it. If you want a comfortable life and want to be a follower, be a follower. There’s nothing wrong with being honest about it, and you’ll save yourself so much pain down the road.
Nonetheless, for me, clearing my inbox to zero unread emails helps me stay focused on what I need to do. And exercising helps me stay fit and focused. Stay away from temptations like McDonalds!
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
If we can start a movement to help improve the B2B software development speed and quality, that would be quite awesome. We have seen many software companies that stopped innovating after signing up tons of enterprises. These companies have even given up on the SMB/SME market, which does not match our overall strategy.
We are blessed that some very prominent names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US with whom you would love to have a private breakfast or lunch, and why? He or she might just see this if we tag them.
Tobi Lutke (@tobi) for sure. Tobi started Shopify. He inspires us to create better software all the time. We are proud to be a Shopify partner and glad we can help many SMB and SMEs with Shopify.
How can our readers further follow your work online?
This was very inspiring. Thank you so much for the time you spent with this. We wish you continued success and good health!