Lesser Funding from MOSTI - Bad News for Technopreneur for the Year of Tiger
BOOTSTRAP OR DIE. Its time to tighten your belts Technopreneurs, funds are limited for the year 2010. According to source theStar inTech, 2010 Budget for Grant has been cut by RM 1 Billion, leaving RM 2.7 Bil to be handed to deserving applicants. The worst news for my company, is that the eContent fund has been dry out, where animation companies like us are most needed with such fund for content development. However, surprisingly I am not feeling sad nor depress with such news. The reasons is because I have shifted my mindset previously on reducing the dependency on government grants. Apart from that, we are in discussion with broadcasters, although the response is slow, but we had a good feeling that there will be projects coming in this year after Chinese New Year.
So, Start-ups, in such tough times what will you do to prevent from extinction?
- Pre-Sales works for all sectors – You need not have a perfect end product to sell. Take a home delivery service offering gourmet meals as an example. A bootstrapper will not waste a cent on making meals that nobody wants, instead, he/she will first compile an interesting menu, then goes into the market to get their interest and get orders first with just only the well presented menu. Another word, sell your ideas in the air, get the money, and developed. the upside for pre-sales is where you get a confirmed sales, and you need not waste a single cent on something nobody wants. the downside is, you need extra effort to convince your clients with just an idea or an unfinished product.
- Cutting Down Cost the creative way – There is always another way. Creative imagination is needed to face all obstacles. For examples, instead of printing hardcopies of glossy colour brochures, you can utilized the internet to spam the market. Share your office, share your phone bills, utilized 2nd hand furniture and computers. Employing the Art of Barter,create a win win situation for all parties. You need to loose some to gain some. Every lawyer tells you that contracts must cover all possible circumstances and they charge you at a fly high cost, but you have forgotten that there is no point in suing a bootstrap business because we don’t have money to give anyone. An astute way of avoiding hefty professional fees is to invite your key contacts joining your advisory boards.
- Getting alternatives Financing – If you had a rich father, lure him into the business ~ lol (without his control). Banks seldom borrows to a bootstrap business, the alternatives ways can only be friends and family or governments and clients. Getting your first line of credit can take time and patients, but please provide an “excite” to the creditors, is best with a confirmed Sales Contract on-hand. Or ask your clients to advance your payments for you to kick-start.
- Managing that Precious Cash – Create your cash flow forecast, plan your cost, and reduce any possible unnecessary expenses. Some research and negotiation with different vendors/suppliers/services provider is needed to understand your cost in-order for you to plan your cash flow. Employ progressive payments and advance payment and spend less. Motivate and maximized your staff capabilities. (If you don’t have money for meals, eat bread and cheese everyday to get you fuel up, joking.)
- Marketing on Shoestring – Ignore on Market Research and Advertising on the start. You can think of a FREE Model to assist your marketing objectives. Pick a clear cut message and promote your differentiation and take advantage of today’s technology with internet marketing. Put in clear strategy and avoid to be blown in all directions.
- Focused Directions and Vision – Small companies tends to diversify too much in all areas in-order to survived. Taking our animation company which focused on cartoons development as example, why not we take up some advertising jobs or graphic design job in-order to sustain the company. My answer will be NO. In my own opinion, being too diversify with different areas makes your company looks unprofessional, and worst, it may even get your company to no where because you do not have a clear objectives and directions for your company. I prefer to focused on 1 area, and be the best of that area.
Please do share with me if you had any other ways to bootstrap a business. Businesses have to help each other to ride through the tough times.
The emotional roller-coaster
The ups and down were extreme within the past few months. Things seems great one moment and hopeless the next. One day you may think of being the next Google, and the next, you may be pondering how to let our loved ones know of our utter failure; and on and on. The hard part is the low, at this rough days, how long can I keep myself motivated, and how low is low? and this lows can get you crazy one day.
Almost 2 months back, we thought we had went through the first round of RM100,000 ICON Grant, the next thing you know, they had an internal structure changed, and the announcement had hold back. It was so down for me where our cash flow has been so tight. Finally today, Good news knock into my mailbox, long waited 2 months and finally i get to progress to the next stage of ICON application. So, to keep myself motivated for the past 2 month, I urge for sales contract from broadcasters. However, the broadcaster are the big boys that is not easily contacted, and is not when you want to see them, they will see you immediately. so the down and low emotion is where you need to wait, and wait, and wait and wait. All you wait is for just an opportunity. The waiting process is what torturing for start ups where you know cash flow doesn’t allowed you to wait too long. Once you had the chance to meet up with the big boys, your emotion is back high sky rocket, Yes, this is the moment for us.
I accidentally saw my mum is having tears while i drive her back from her work today. I know that she has been suffering pressure from work and wanted to retired early. I was angry at myself for not being able to support her. And I told myself strongly that I will not fail and quit in any situation comes against me. This is not for me, but for my family. Very soon she will get to retire early. very soon as I promised.
Some memorable moments of being first time in Astro; and the impression for us on Astro working culture is definitely Fun and Entertaining.
Kre8tif – The last event I went for the year 2009
Back dated to 7-9 December 2009. MSC Malaysia kre8tif is the last event I attended in year 2009. Kre8tif Digital Conference, in the mission to showcase the best work from the Malaysian creative industry, and to invite many international industry experts to share their experiences, knowledge and ideas, for instance, Mr John Stevenson’s, the Director of KungFu Panda, gave a very insightful knowledge and experiences on the making of KungFu Panda. “Story is King”, the phrase denotes that the fundamental of a successful interesting animation lies within the story.
There is a clear cut motive that I intended for the event. My ultimate mission is to get at least 1 broadcasters contact or any potential investors so that we could sell our idea. I am not a natural born salesman, and i felt like Tom Cruise in “Mission Impossible”. of course the secondary missions will be understanding the industry’s future trends, competitors, technical knowledge and other information, etc.
However, while I was wandering around the event. Talking around, bullshitting around, throwing name cards (the ninja way). I had a very weird feelings walking up to competitors (specially the local’s one). for example, if i walk up to them, showing my name card, ask them how are they doing lately, seeking advice in the industry. Will they tell me the truth? So i tried on with one of the company, and I regret immediately, and I felt that I will never get the right answers. To me, I believed being sincere and truthful to the person i met is a kind of respect, however by showing my name card to the competitors, the information i get from them will be vastly filtered, so what’s the point of being sincere? Maybe I am too ingenuous to think that there is a day that we might had a chance to cooperate on a certain project. On the other hand, one of the most funny thing that I found out is, that some of the local companies, they complete their products first before selling it. Some gotten grant to developed a series of animations from MOSTI. but when I ask if they have secured any sales contract from the broadcasters, surprisingly the answer is ‘No’, and they told me the industry works that way. ???????!!!! WTF, I don’t believe!!! What if happens when the final product completed, and broadcasters do not like it? Anyway, they had the capital and resources. So is not up to me to judge. But I think I will do it in a different way.
Back to the mission. There is a session given by for broadcasters representative regarding on the industry. I feel lucky that the 3 largest local broadcasters has 2 turn up for the session, Mr. Zainir Aminullah executive director from Astro, Malaysia, Syafiq Al Fonse from RTM Malaysia, and lastly Tim Brooke-Hunt, Executive Head of Children’s Content for Australia’s ABC Television. I paid full attention to their talks, however, my mind keeps bothering me to “take their name cards”, “take it or you live hungry and miserable”~!!!! Right after the sessions ends. Oh gosh, people is like swarm of bees. I was just pancaked and squeezed out from the scene in seconds. I didn’t know they are even more hungrier people than me. However, I did manage to get their names cards, and we are in the process of setting appointments with Astro and RTM. Phewww~~~ Mission Accomplished.
Final conclusion, the event is a fun and awesome experience I never had before. I learnt a lot from the gurus, the competitors and the industry players.
For more information and the summary of the speakers presentation. follow this link: AnimationXpress
The “FREE” Model – Cheap but Intelligent
“FREE”, from the author of “The Long Tail”, Chris Anderson. The word FREE, sounds cheap, sheepish and stingy. However, I found it to be intelligent, brilliant and fascinating in the sense of business and marketing strategy. Long before this book was published, the word “FREE” has come to me while i am doing research for a business proposal. It is everywhere whether you realized it or not.
For products that I am interested with, “Cheap people” like me are always never hesitate to take “FREE” and discounted products. And people with high egoistic and self-esteem person will never understand. However, these people did not realised that the Radios they are listening and the TV they are watching comes “FREE” as well. and with today’s informative world of internet, most content and services are provided “FREE” such as, email, news, blogs, dictionary, music, video, software whether is it from google, yahoo, youtube or etc.
FREE is never meant by entirely “FREE”. Is just that money is being subsidized and transferred from one product to another or from one person to another. For example, our local media broadcasters such as “TheSun” newspapers, RTM 1, 2 and TV3, NTV 7 and etc, are provided free to the public to read, watch and listen. So where does the revenues comes from? It is obvious that these broadcasters charges the advertisers at a very costly price. So in this sense, audiences are being subsidized by advertisers to watch free content. Same goes to Google search engine, YouTube and etc. Hence, whether is it a “buy one FREE one product”, or a “FREE trail” saloon, the intention is to gets consumers interested in the paid product. for example, Skype provide free phone calls to users, and you need to pay to call to cell phones.
Ideas can be generated within the “FREE” Model and it will be the future trend of businesses employs. For start-ups to employ such strategy will be a brilliant one. However, the tough part to employ such strategy is how you will be able to sustain the losing part to gain the interest of consumers with your paid products. Huge capital is needed.
A grant for Contents - MSC Malaysia ICON Grant (Unofficial Guide)
According to the source from greyreview.com (The Unofficial Guide to MSC Malaysia ICON Grant) and MSC Malaysia, our PM announced the establishment of the MSC Malaysia ICON grant programme, with the amount of RM12.86 million allocation (under the second economic stimulus plan), to spur the creation of local online contents to support Malaysian broadband strategy. We get to know the grant 2 months ago, where our company is recommended to apply for the following grant during our application of MSC Status, where our strategy and business models are align with the objective of the grant.
- Purpose of grant: Hooraay~~~ Malaysian will enjoy high speed broadband in the near future!! However, the authorities are afraid that the broadband penetration rate will still remain low after the implementation. Hence, the objective of this grant is to generate more local contents to encourage the nation broadband penetration. Hence, your proposal and business model must be able to align with their strategy in promoting broadband uptake in Malaysia. In actual, with or without the grant, with high speed broadband, i see a lot of opportunities ahead for businesses such as IPTV and etc.
- Amount of grant: RM100,000
- Duration: 8 months
- Application Flow: The application flow for ICON grant is rather different from PRE-SEED. For Pre-seed, after submission of application, you will need to present your ideas to the panels yourself. However, for ICON, after submission, you will be assigned with a representative from the ICON community, and you will present to your representative, and your representative will present on behalf of you to the panels. There is a possibility that you will also need to do the presentation yourself if the panels has doubts and they need further information or better understanding from you.
- Disbursement method: I hope I did not interpret this wrongly from MDEC. If I do, please do correct me. PRE-SEED disbursement will be given upfront by MDEC in quarterly basis. However, ICON will be rather different. The phases are structured in 2/3/3 format. which means 2 months + 3 months + 3 months = 8 months. If I did not interpret wrongly from the community, the first 2 months, 20% of the requested amount will be given upfront from MDEC, but the remaining quarter, you will need to fork out your money first, and claimed back as proposed. In another word, if you are requesting for max RM100k, you need to have extra RM40k to survived the first 5 months after 20k has been disbursed.
- Type of Programme Supported: Please read the following links = (ICONapps, ICONedu, ICONity, ICONex)
- Forms and Application: Please contact them via their email to obtain the forms and application.
- More details please contact them personally via their email. Please download the infopack
Lets talk about Pitching
I was brought up with Chinese education, my English is always broken. So, when comes to pitching, preparation and the flow of presentation is very much important to me. I attended a Startup Garage recently hosted by Entrepreneur.my. One of the session talks about pitching for MDeC pre-seed grant, conducted by one of the successful grant recipients, Mr. Keng Yew, from SocialWalk.com. I total agreed with what Keng Yew has presented, and I felt very insightful for new grant applicants (to download his slides, click here).
A few months back, I was helping a friend with their grant application, great business model with great proposal written. However, they failed due to poor presentations. A brief recipe of what you should be present:
- Problem – What is the current problems in the market which you found it as an opportunity ?
- Solution – The solutions to the problem. What can your system do?
- Product – The main features of your product that provides the solution.
- Demand – Show them the demand from the market. Tell them this is what the market wants. show them letter of interest.
I believe most of the you might have known of the above recipe. but what you have not notice which kengyew has pointed out, and I totally agreed with that. Things you should get notice for your presentation:
- Don’t put your panels to sleep nor giving them a headache:
- This is one of the mistakes that my friend did. The panels are listening to more than 20 presentation a day, they are tired, sleepy. So, Stop listing all the features that what your system can do.
- Example, you are pitching to built a Toilet bowl with a system that is able to analyse human health condition by examine the faeces (your stool).
- Hence, you do not list down every single feature of the toilet bowl from flush tank, design, flap seat, ass washer, can do this, can do that and bla bla bla bla bla etc. How boring was that!!!
- All you need is to find out your few main unique feature, and focus on that only. the rest, mention in brief.
- if you list down too many features, it looks more like a rojak system instead of a uniquely defined product, and may open up more problems and question for the panels to haunt you down.
- Tell Stories
- “Imagine, every morning when you are sitting on your toilet bowl, there is a nice sweet voice with background music, reporting on your health condition, advising you the amount of water you should drink, print and plan the type of food you should eat. Apart from that, if your ass get too numb, you get to comfort your ass with the massage system”,
- rather than …“The toilet bowl that we proposed will have voice reporting system, a built-in speaker, a printer that will list down the amount of water should drink and the food to consume. and also, a built-in X2131 latest model of massage system.”..ZZZzzzzz …. who cares about X2131 model.
- I am not a good story teller, that’s why I plan for my presentation with stories. Preparation is needed.
- Is all about Emotion:
- You don’t present like you have just gotten up from bed or your dog just died last night.
- You need to show PASSION and EXCITEMENTS. Give me the money or i will ….~!
Amber Chia - the role model for faulty startups
Malaysian Top model Amber Chia has now became the role model for all Malaysian startups. A lesson that should be learnt when dealing with businesses. According to the news in the recent papers (see: news 1, news 2), Amber ran into a business partnership with a friend that claim to possess a Franchising Agreement from Ford Model, an international model search franchise, to run a show based on Ford Supermodel of the World. Winners of the show would win US$50,000 (RM173,250) each, coupled with modelling contracts and stand a chance to compete in the Ford Supermodel of the World contest. The saddest thing is the business started off with a verbal agreement and Amber have no doubts on the Franchising agreement that her friend claimed to own. And these are the real facts that do always happens in the real world.
We humans tends to be over sentimental than rational when dealing with business. The moral that amber has taught everyone that no matter how close you are with your business partner, you will still need to take in consideration of self protection. Self protection is not meant by profiting only yourself, but is just to be un-harm, where risk are fairly shared and profits are fairly distribute. Coming back to the reality of life, Yes, the business world is cruel and complicated. Even blood brothers, relatives, siblings can betray each other, there is no doubt that your best friend will turn you over. Amber mistakes was not getting a confirmation from Ford Model from the very beginning before running into business and over trust a friend. Sometimes these kind of "sentimental relation risk" is needed to take, but we still can minimize the risk and to be extra cautious. I envied that Amber has the heart and ability to encourage, to train and nourish new young talented models from Malaysia, however, I guess, to protect and benefit others, first you will have to be strong enough to protect oneself.
The No Turning Back Point
It’s almost end of our funding period. Prototype has completed, and hence we were struggling to get Letter of Interest from various parties. Had been months meeting various audiences and potential clients and we were given good feedbacks from both sides. However, although feedbacks are good, now the only problem lies on our product price. The price mentioned by the clients didn’t manage to cover our product cost. And this is the most difficult challenges for us that we need to revamped our business model again. The cost of animations could be very high. 1 episode in 1 series can cost around RM40-60k. Given the feedbacks from clients and audiences, we knew that our product works. It just that how we can sell at a reasonable price and cover our cost and on top of that earn some money. So, we were now heading for MOSTI for a larger amount of fund for the upcoming months, however, MOSTI funds are ending this year. We are in progress developing a preview for pitching, and this only could be complete by end of October. and to get Letter of Interest within November, and hopefully submit my application on end of Nov. By then, I do not think that there will be any funding left over for us. I am frustrated now for not being able to help to built the preview but to do nothing until it is completed. Waiting, is mentally torturing me.
Although we were given good feedbacks from clients, but we knew the road in front is tough, we are left out with no more capital to spent, hanging in between. Looking at your friends and ex-colleague getting promoted with income raise, I have wonder why did I put myself in such situation, but I never regretted. I feel glad that I had a team that runs with me until now, and thankful for the support from my family from the beginning. Hence these only made me no choice but to continue to move forward even you knew the road is tough. I love pressure~!
Recommending HowStuffWorks.com (Must Read: for grant applicants)
Tech geek like me have not when for business schools, marketing nor finance classes. However, such information could be found over the Internet. There is this site called "HowStuffWorks" has started to become my favourite, introduced by my colleague, KC (it was his all time favourite), and I am now eagerly to introduced to all of you who are reading my blog. "HowStuffWorks" has almost everything on how something works, although it is not written in very detail, but it does benefits me in certain ways. for example, when someone proposed me an online Business, I will definitely look into this site for information, such as "How Creating an Online Business Works", crack into the online business giant such as ebay on "How eBay Works", learning the ebay way. Or, being the CEO of the company, I shall learnt the responsibility of CEO, then I read "How CEO Works". Hence, for business starters like you and me, we should read "Starting Business" in HowStuffWorks. The following list of links is essential for start ups and grant applicants to read:
- How Business Ideas Work - Grant applicant must read.
- How Business Plan Work - Grant applicant must read.
- How Start Up Capital Work
- How Does Venture Capital Work
- 10 Ways to Finance A New Business
- 10 Common Problems for New Businesses
- How Business Legal Structure Work
- How Marketing Plans Work
For those who are reading the my blog post on "Basic Tips and Guidelines for applying ICT Funding in Malaysia", the links above is a must read, specially the How Business Plan and Business Ideas Work.
Another lost talent from Malaysia - Pen Drive Founder Pua Khein-Seng
At the recent local newspaper, it has known that the founder of pendrive is a Malaysian. Yes, indeed, Malaysian is the one that invented the pendrive(a thumbdrive, usb flash memory, etc or whatever u named it), Mr Pua Khein-Seng, the pride and proud of an Malaysian Entrepreneur (click here for more info). I felt proud for the moment when I was reading the articles that how Pua made his way up when he started his company (PHISON ELECTRONIC CORP) in Taiwan while he was only 27. I googled around and search for his profile and I came out to a very ironic information (which i do not know how true it was), that Pua was a rejected student from the local university, and even though his proposal of his USB flash memory (pendrive) was also rejected by Malaysian authorities, and he was force to stay back in Taiwan to start his invention. a Malaysian Entrepreneur which was not in MALAYSIA.
Today, PenDrive or USB Flash memory, has revolutionize the era of floppy disk and storage in the world of computer. As an inventor, just only by receiving licensing revenues from different manufacturer would have made how many billions of dollars from around the world. However, the most ironic thing is this, it is claimed to be a “TAIWAN TECHNOLOGY” instead of “MALAYSIA TECHNOLOGY“. First of all, the technology is patented under a TAIWAN company, funded and invented in TAIWAN, hence, it is a TAIWAN TECHNOLOGY. This is just one “in your face” disgraced for MSC MALAYSIA, that has missed an opportunity to sparkle and polish Malaysian capabilities that all pendrive around the world is a MALAYSIA TECHNOLOGY. Apart from that, the millions and billions of dollars that has flown into the TAIWAN company which is worth RM4.1Billion, instead of a MALAYSIA company has really really sadden me off. Arggg…..I am so sad, so angry, the money, the pride, the proud~~ gosh, all gone to TAIWAN~! You can’t blame Pua. Now, whether is it for 1Malaysia, reporters has been running around to spot out entrepreneurs that has lost from malaysia, asking them, “Will you be coming back? do you still love your country? will you bring back your business?”, i think most will answered, yes, I love my country, i will be back. In terms of bringing back the business, hmmm, what will be the offer from the country? My business is well established out of malaysia, whats for the hassle to bringing it back?
I was wondering, if Pua managed to do this in Malaysia, will it be the same achievement as he has in Taiwan now? so? the pride, the proud or the shame?
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Life is interesting, its all about experimenting, trial and errors and self improvments. This blog is all about my personal experience. I am full with ideas, and i will achieve every one of them step by step.