Attracting talent and sourcing for funds are some of the biggest challenges startups face. In light of this, the Selangor Information Technology and E-Commerce Council (SITEC) invited successful Malaysian startups and entrepreneurs – Founder & CEO of Tapway, Lee Chee How, and Founder & CEO Jeffrey Yong of Flexiroam to share about their experiences on how they attract talent and source funds, as well as the story of their start-up journeys at the Startup Selangor workshop on July 24th, 2015.
SITEC is a key initiative by the Selangor State Government which aims to increase trade in the region through several thrusts, one of which is the Online100 programme which facilitates the move of brick & mortar SMEs towards e-Commerce by providing e-Commerce training and technical support.
Both entrepreneurs have underscored company culture building as a key strategy to attract and retain talent, especially since start-ups usually do not have sufficient funds to offer higher salaries, unlike MNCs.
Lee suggested to start-up entrepreneurs to focus on company values and bring in more fun elements to the working environment. “Company culture is quite important if you want a super team. Silicon Valley is all about building company culture and we are doing it slowly now,” he said.
“If you are looking for the right people, you also have to look into the right fit, not just in terms of their capabilities, as there might be people with great skills but who do not fit with the company culture,” he added.
Tapway is an ICT company which provides data analysis services for the retail industry.
Flexiroam, which currently has 25% of its staff comprised of nationals from 12 different countries, has its own unique strategy to attract talent. Yong says building a company culture in their case was about empowering staff, certainly an effective strategy for them to attract and retain talent.
Yong, who has more than 10 years of working experience in the telecommunications industry, decided to found Flexiroam four years ago. “It is always a dilemma when it comes to hiring people in the start-up phase as it means most of your expenses could go to paying salaries. I was afraid of hiring people due to a lot of bad experiences. It took me years to learn about hiring,” he said.
Yong used to hire interns before and hoped that they could share the workload. However, this ended up wasting a lot of time, as the interns had to be trained. The problem continued until he hired a human resource expert that inspired him of the point that hiring is about organisation development and building a company with culture is the key.
“I started investing money in organisation development to look at how we can have good people come into the organisation to work for the long run. We attended career fairs at several private universities and tried selling our company culture – we were doing something very different and crazy. We also played Nintendo Wii with students and we had the longest queue at the career fair,” Yong says.
Yong states Flexiroam made sure the interns who worked with the company would have different internship experiences, including empowering them to work on challenging jobs, training, giving them access to confidential information if necessary, and providing opportunities to attend exhibitions overseas. Yong believes that they would not have this level of exposure if they worked with other companies.
Momentum was gained after practicing the culture for two years. “The student association or student council of universities recommended our company as a “must go” company for internships as our culture is really outstanding. We have also been invited by few well-known local private universities for exhibitions, and from there, we have better talent joining us.”
“The momentum was on-going and we had the opportunity to work with an international organisation for a student exchange programme. Foreign students were sponsored by the international organisation to work in our company in Malaysia and they are really good talents who can perform better than local talents with three years of experience,” Yong said.
“When we have more foreign talents joining our company, it became a culture, and also gradually increased our strength. Therefore, whatever problem you are facing in your start-up phase, try to think differently because that could potentially be one of your strengths,” he stated.
Currently, Flexiroam has about 50 staff from different countries including Spain, Mexico, South Africa, China, Taiwan and others. The roaming service provider is listed in the Australian Stock Exchange with a valuation of about RM100 mil.
On fund-sourcing experiences, Tapway’s Lee said the company was not able to grow organically given its business model is technology driven in nature. And yet he also found it very challenging to find a long-term investor in Malaysia.
“We have pitched more than a hundred investment proposals but we are not in Silicon Valley. I see a lot of investors are looking for short-term gains, so we have a lot of difficulties finding the right investors,” Lee stated.
Nevertheless, Lee also pointed out that the industry is improving where Malaysia currently has organisations like the Malaysian Global Innovation & Creative Centre (MaGIC) which has a mission to bring investors closer to start-ups.
“Choosing the right investors is very important. Do not just go for it because the money is on the table. We should always find out what the investor’s motive is, what their goal for exits are and also other terms. I learned this the hard way, so you must be careful when it comes to sourcing funding,” Lee shared.
Flexiroam’s Yong believes a startup itself has to understand its own potential and sell to the investors. “You are selling your potential to investors and this is a process that you have to not give up.”
Flexiroam has recently raised RM25 million in funds from the stock market. Yong said: “When I proposed my valuation to 106 investors, all of them did not believe Flexiroam was worth that much as they felt that we are not an established brand, and our profit numbers were not convincing. But I believe the company has the valuation and if they do not believe, someone else will believe.”
“When I was getting the company to be listed in the stock exchange, some investors called me back and expressed their wish to invest in Flexiroam but it was too late. People will not believe until it has happened so you have to believe in yourself first, then only can things happen,” he concluded.
The Startup Selangor workshop is a monthly gathering for entrepreneurs, to enable young businessmen and women in exchanging and learning new information through courses within the community of the ever-changing internet.