Fast-growing startups have a lot to think about, survival being top of the list. Yet in the long term, the way a startup manages people is absolutely crucial for success. As Peter Drucker said, “Culture eats strategy for breakfast”. Creating a productive and healthy work environment where employees are empowered is the difference between an average and a great company.
From the traditional ‘Human Resources’ to the trendy ‘People Operations’, there have been many approaches to the art of managing people. Yet they all encompass the same basic elements, summarized as follows:
Startups change quickly, and HR is often slow to adapt. A rule of thumb is that for every tripling in headcount, the internal systems of a company need to change. A one-person startup is very different from a three-person startup, and a ten-person startup is yet again different. The goal is to have a balance between structure and flexibility - too many documents, forms and policies and everyone gets bogged down in bureaucracy - too few, and nobody knows what is going on.
With all that said, here are some beginner steps to get you started on your HR journey:
We’ve also curated a list of resources that EME has used internally to learn about HR. Note that some of the policies and regulations mentioned in the resources may only apply to specific countries; it’s always worth studying employment law in the country you operate in.
From HR to People Ops: When and Why To Start a People Team
This is the first in a series of startup guides that EME will be publishing on key business skills for startups.
Marketing - the process of making the customer journey clear and accessible - is perhaps the most important challenge an early-stage company needs to solve. As legendary management theorist Peter Drucker said,
Because the purpose of business is to create a customer, the business enterprise has two— and only two— basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.
We have seen many startups focusing more on product than customers, and expecting the business to grow itself. While this might work in some close-knit or cutting-edge industries, most startups need to develop and master this skill if they want to scale. This is particularly true in Myanmar, where large parts of the population are coming online for the first time.
Successful marketing isn’t just about spending money to boost Facebook posts. It’s about defining and executing a comprehensive plan to engage customers across different platforms over time. The chart from Marketing MO below shows just how many business areas are related to marketing, from pricing strategy to design, social media, CRM systems and sales management.
Companies that execute a successful marketing strategy can become global stars, almost overnight. For example, ONE Championship, an Asian sports media company founded in 2011, has become one of the biggest destinations for mixed martial arts (MMA) fans worldwide. By combining savvy social media use with high-quality live events and exclusive relationships with local stars, ONE Championship has quickly built a loyal fan base and enduring reputation - read this Forbes article for more of their story.
While all this may seem like a lot to tackle, here are a few key steps to get started on your marketing journey:
We’ve also curated the following set of resources that the EME team has personally used to learn about marketing. As with anything worthwhile, some of these resources require significant time and energy. Also note that some of the content is not free, although we will provide access for EME’s portfolio companies. Books are available from the EME Library - please ask for more.
Introduction to Digital Marketing
Strategic Marketing for the SME
Digital Marketing for Dummies
Facebook Ads & Facebook Marketing MASTERY 2019
Fundraising for an early-stage startup is hard. Entrepreneurs spend lots of time crafting their message, making decks, networking, pitching and responding to requests for further information, all the while building a product and growing a team. And after several months of hard work, entrepreneurs may end up with nothing for all that effort.
On the other side, investing in early-stage startups is also hard. Investors meet hundreds of startups per year, and only a small fraction of them will be alive in 5 years. There is little data and lots of uncertainty, and because VCs have investors too, they look for ways to minimize risk and maximize reward.
This combination of incentives often leads to a dysfunctional system, where startups and investors both play shotgun, entering into as many conversations as possible in the hopes that one may succeed. Investors may string startups along for many months without making clear decisions, while startups may start fundraising before they are prepared and ready.
The main divide to bridge therefore becomes one of communication and expectations. In this light, we have decided to publish our refreshed pipeline process, which aims to be as transparent and productive as possible. By highlighting all the stages and requirements, as well as the decision points, we hope to contribute some clarity on VC investment (or at least, our approach to VC investment).
As can be seen from the chart, the process is reasonably complex - the minimum time for an investment is 3 months, although realistically it can take up to 6 or 8 months. There are also five major decision points, with increasing levels of certainty in later stages of the process. Note that this investment process isn’t for everyone - startups select investors just as much as investors select startups, and if some are put off by the complexity, that’s a good indication that a future relationship wouldn’t have worked out. That said, at all times we take our role in the startup ecosystem seriously and will always coach good startups through the process and provide feedback if and when we stop the process.
Taking on institutional capital is a big commitment, but we hope our pipeline process is a positive first engagement, and a taste of the value we can bring to our portfolio companies. We are thorough in our selection just as we’re thorough in the support and mentorship we provide our portfolio. Receiving investment from EME is not the end of a process, but the start of a journey of support, guidance and collaboration that is 100% directed at scaling great startups.
Having a Singapore-registered holding company is fast becoming an industry standard among Myanmar and other Southeast Asian startups. At EME for example, we invest from our Singapore holding company into startups’ Singapore registered holding companies because Singapore offers efficient processes for company incorporation, share transfer, as well as tax benefits.
However, being registered under the Singapore Company Act comes with certain ongoing responsibilities, namely the filing of the Annual Return on a yearly basis after incorporation. The Annual Return is the electronic filing process to submit required information to Singapore’s Accounting and Corporate Regulatory Authority (ACRA). It includes:
Annual General Meeting
An AGM must be held once every calendar year. The deadline for an AGM is 15 months from the date of the last AGM. If the company is newly incorporated, it is allowed to hold an AGM within 18 months from the date of the incorporation.
Necessary topics for discussion at the Annual General Meeting include:
Up-to-Date Financial Statements
At the AGM, financial statements not older than 6 months have to be handed to the Board of Directors. The Financial statement must consist of the following documents:
The company needs to file the Annual Return within one month of holding the AGM. For Annual Filing, the company will usually need to file the financial statements in XBRL (Extensible Business Reporting Language) format, via Bizfile (ACRA's online business reporting system).
Since the Myanmar subsidiary company is most likely to be owned 99% by the Singapore holding company (now it can be 100% because the new 2018 Myanmar Companies Law does not require foreign companies in Myanmar to have a local director), the financial reports must be consolidated i.e the Financial Reports of both the Singapore and Myanmar entities.
This annual filing process can seem like a daunting process for entrepreneurs. As part of EME's incubation services, we help our portfolio companies to meet the compliances of both Singapore and Myanmar Company Acts. Maintaining regulatory compliance and gtting the books right is a must-do for startups with ambitions to scale.