As one of the successful tech startup, Buzzebees, CRM Privilege platform that combines consumer’s behavior in today world include social media, point collection, and online shopping, into effective business model, creating loyal program and E-Commerce for several leading brands; PTT, Samsung, and KBank which result in 300% revenue increase in recent years. “Prachachat Business” got a great opportunity to interview “Nattida Sanguansin”, Managing Director of Buzzebees Limited Company and one of the founders with a lot of experience in IT industry over 10 years prior to becoming a tech startup.
Becoming a Tech Startup
From the past 10 years, I’ve stepped into IT industry by founding iConcepts Company, we’ve developed the fingerprint system for security purpose which become one of the 8 companies in the world developed biometric fingerprint detection system, certified by FBI. Each year, our revenue is impressive having both Thai and international customers. It can say that our business is successful.
The turning point began by meeting up with my foreign friend who got the doctoral degree from UC Berkeley (University of California, Berkeley). This one sold the tech startup founded 10 years ago at valued of 3,000,000,000 Baht. Knowing this, I thought like my effort putting on developing the fingerprint system was in vain, our revenue is not even close 3,000,000,000 Baht. That’s when I thought no, we could be more than that, we need more passion and leverage our ambition to reach that point. We also foreseen that the outsource model will soon die and in Fortune 500, there is no outsource company at all. Tech startup will be transaction based, that’s why we have to adapt our business. Being a tech company, it’s vital for us to be a leader. In that period, social media mobile became a popular trend so we make our team learn and understand this upcoming trend, to find an efficient model for sustaining business. We decided to develop CRM for organizations, enabling consumers to download apps and redeem rewards. It had been taking around 1 year and a half before we unveiled the platform in December 2012.
- From developing CRM applications, approximately 60% of the total revenue 2. Deals, rewards acquisition and shipping premium rewards to customers 3. Online survey service and online advertising unveiled last year, the revenue is increasing to 12% now.
Due to the challenge of E-Commerce world, we have to sell our services by these 3 approaches because even if E-Commerce is very popular, it’s likely for business owners to be in the red since the management cost is soaring in competitive markets. Not only small businesses facing hard time but also the large organization like Amazon. You have to wait for economies of scale in order to get profits. Additionally, we’re going to implement E-Wallet to align with the platform for organizations. It enables users to pay their money along with redeem points to get rewards.
High competition in E-Wallet Market
There’s less competition selling to corporate clients. We always prepare to release E-Wallet under our own brand to organizations instantly if needed. Several organizations have seen the opportunity to attract more customers by using privileges. Our model saves us from investing a lot of money in marketing. It’s brands’ responsibility to promote themselves since it would be a very difficult task for us to promote brands to users. Those competitors in similar segment have spent their budgets in marketing at around 30-40 million Baht, to keep users coming back to their application.
Consider this a Core Strategy
Absolutely, we only choose the market we can win over the competitors. If it was a saturated market with giant companies ready to spread their tons of budgets there, we would lose before even starting. However, we’re confident about our IT ability, 100 million Baht will be invested each year and our revenue has been increasing tremendously from 1 million Baht in 2013 to 50 million Baht in 2014, and for the last year, we closed the deal at 150 million Baht. Our goal this year will be 390 million Baht.
Amortize All Startup Costs Within 2 years
After two years, we are in the red no more and for the third year, we amortized all startup costs. Now we don’t have competitors in both Thai and International markets as our platform is end-to-end solution with 15 million users. As a consequence, we will have at least 2 new corporate clients each month. The worse economy, the more CRM is needed since it costs more than 26 times to find new customers than retain ones.
Popularity Decreased in Apps
Depending on the app type, game app will retain its popularity up to 3 months since people will get bored eventually. On the other hand, the number of people using mobile banking apps has always been increasing approximately 40-50%, similar to mother and child app, more and more users use it since there will always be a mother. Likewise for those apps providing special privileges, it will always be popular because everyone loves free products.
Our challenge is to develop an app that can become a part of customers’ everyday life. We’ve set our goal to have people make online transaction via Buzzebees more than other apps. Deal Acquisition must be about delivery, supermarket, coffee, and align with consumers’ behavior for each country, for example, there’s only one chain store brand in Africa which is KFC. All of these are what we have to research.
Go International Market
Wherever our brand partners go, we’ll go. Now we have partners in 6 countries including Laos, Cambodia, Africa, Ghana, Cameroon, and Côte d’Ivoire. Our clients are corporate brands dominating market and we can get benefits from this advantage either. It’s the reason why we can understand markets in each country from clients’ data. Still, we have to get our business settled in our country first.
Today, we have 80% revenue in Thailand and are going quite well in ASEAN country. We’re also striving to go forward to Indonesia and Philippines markets which we haven’t had partners there before. Still, we believe users there will open their mind for our platform as much as users in Thailand. Now, We’re recruiting teams in those 2 countries before starting a direct sale to our target leading brands in various industries include retail business, telecommunication, insurance, and financial institute, they are all willing to invest to retain their customer base eventually.
Advice For New Tech Startups
New gen business owners succeeded running business are only 1 in a million. The must know things include financial management, human resource management and technology, your ideas must be very creative. Having experiences in IT industry would be an advantage too. Don’t rely on VC, you have to work really hard to come up with a business model that can close competitors’ door while sustaining your revenue. Besides, it’s vital to observe everything as a startup, you have to learn new lessons every day. Most importantly, before investing, you have to understand a market trend first. There’re 95% of startups that failed, so being a successful business startup requires a lot of efforts.
Potential to Enter IPO
We’ve planned to enter IPO in the next 4 years, but still considering which country to choose. Actually, we can enter IPO now, but we want to make sure our stock is blue chip, that is when people buy our stocks, they will get real profits. We expect that the value of our company will be 100 million dollars, if not, we wouldn’t like to enter. Though, Buzzebees model is a startup, it’s somewhat a real sector since it’s CRM Platform, it’s not what people will forget easily.
The Next Release
We don’t need to wait for IPO to start our new ideas, that’s why we always have new services on Buzzebees platform and ensure all features are connected. Our main feature, privileges for users will be expanded to survey online and E-Wallet.
We have a lot of fresh ideas in our hands so there’s no need for us to set any goals for the product launching each year. However, the lack of developing team is still a challenge, we’re waiting for new staffs from Vietnam and unlimited recruiting if they pass our set standards and have “Buzzebees” vision which is “Busy bee” that will always work hard to achieve the goal.