Tsai experienced one of his most challenging moments when he had to shut down his takeaway platform TasteOut in 2019. He had envisioned that his product could become the next Deliveroo or Food Panda, but unfortunately, it closed down within nine months of founding.

“I went for a walk with my girlfriend and kept crying. I saved all the money from my first startup and banking experiences, and it was all gone within months,” he recalls.

The platform was based on a membership system similar to that used by some gyms, where customers pay a monthly fee to attend a certain number of classes and use their facilities. In the case of Tsai’s product, instead of offering fitness lessons, the application allowed users to get a set number of meals from nearby restaurants after paying a monthly fee. 

Looking back, Tsai attributes the failure to several factors, including a lack of a sustainable business model, overhiring and insufficient market research. “People get bored, even with 30 or 40 options. And if our advantage was that it was cheaper than buying meal by meal, we were always being compared to other cheaper options, so we never actually got the margin,” he explains.

Despite feeling crushed, Tsai made the tough decision to pivot. This meant discontinuing the project and laying off most of the employees. “It was very, very tough. But at the end of the day, you must accept the reality. I had to decide because I didn’t have enough capital to keep it running. I had to grow the company to a certain scale realistically but I couldn’t figure our way,” he says.

Read more: Why running a startup is like playing 3-D chess, says Reach52’s Edward Booty

When Tsai was building TasteOut, he often promoted his platform to restaurants in person. He thought back and realised that they received many orders through phone calls and WhatsApp messages. The owners also told him that rather than joining another application that takes new orders, they prefer a product that could help them consolidate those they receive from messaging platforms. 

So, Tsai came up with SleekFlow, a centralised platform that gathers customer inquiries from multiple channels. He decided to target the hotel industry because he noticed that travellers tend to use different messaging applications depending on their countries of origin. Together with the two remaining software engineers, the three-person team set out to build their next project.

Yet, Tsai quickly pivoted once more, shifting their targeted customer base from the hotel industry to retail. This time, his team has done it within a day. “When we tried to sell it at an expo, it was such a hard sell; either no one showed up, or those who promised to make a purchase never followed through. So, the next day, we replaced everything, such as leaflets and backdrop, and shifted our focus to retail. Then, we’ve received great results,” Tsai says. 

Following the relaunch of their brand, Tsai recalled that their first client from Malaysia couldn’t even use some basic features of their product. “The product was not ready, but the value it could deliver was so significant that the clients were willing to wait. We just had to improve it and fulfil that requirement,” he says.  

Embracing change has become a fundamental value for the company. “People get frustrated when there are changes, but you must embrace them. That’s why we’re evolving. It would be best if you promoted adaptability as a good sign instead of focusing on how something needs to be changed again,” he says. 

Read more: Starting up: How these entrepreneurs launched their ventures

The tech startup now has a clientele of over 5,000 businesses worldwide, including a prominent luxury fashion brand, and operates from offices in six markets, including Singapore, Malaysia and the UAE. 

Recently, the company closed a US$7 million A+ funding led by Atinum Investment, a South Korean-based venture capital firm, bringing the total to US$15 million. The goal for this round of funding is to expand further in R&D so they can develop advanced features, especially those powered by AI, and penetrate more markets, such as European countries like Germany. It is aiming to close a Series B fundraising next year.

As part of our series Recently Funded, Tsai, a Gen.T Leader of Tomorrow 2023, shares his fundraising experience and tips for building a tech startup with fellow entrepreneurs.

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What qualities do you look for in an investor?

Henson Tsai (HT): I look for investors who grasp and see the future of our products. It’s important to find individuals who deeply investigate our products, understand our mission and are passionate about our work. I also value investors who are open to listening and allowing our team to pursue our chosen direction.

While some investors focus solely on numbers and revenue tractions, I see an investor as a friend and partner, not just an analyst for our company. Ultimately, people are looking to make an impact. They want to support something that can make a lasting impact and generate long-term returns. Revenue and metrics are short-term indicators, but the product and mission truly set our company apart.

Can you share a valuable tip from an investor?

HT: Chibo Tang from Gobi Partners told me that when working on SleekFlow in the long run and investing in it, the goal isn’t just to turn $1 into $10. Instead, the aim is to invest $1,000 and get $2,000 in return. The ratio may be lower, but the impact created is more significant. He highlighted the importance of scaling, and it completely changed my perspective. I realised that I shouldn’t focus on making $2 or $3 daily but rather aim to make $2,000 or $2 million daily.

How did you prepare for the pitch?

HT: It’s a very long process. We are a structured company with a legal team, a finance team and people responsible for investor relationships, but ultimately, the investors trust the founders, who have clear goals. 

It’s very important not to start by telling our investors what we want to say but what they want to know about us and address their potential doubts instead. Many founders have many things in mind that they want to showcase, like how powerful their product is, but that may not be what the investors are interested in. So, you have to figure out their interests and lay out your presentation by covering them at the start.

How did you balance negotiating favourable terms while securing the capital you need?

HT: I would set some baselines with our team for how we want to proceed with the round and communicate these to investors early on. Once they understand our baselines, we can move forward. We shouldn’t get too caught up in minor details, such as specific terms and valuations, that I used to focus on. I’ve realised that the valuation is only relevant for that round. But the people you partner with will stay with you for a long time. It’s crucial to prioritise the people we work with over small terms.

Read more: Chibo Tang of Gobi Partners on AI, entrepreneurship, and the Greater Bay Area

Have you faced any obstacles in raising the recent funds?

HT: The market hasn’t been great compared to the last two years, making fundraising more challenging. Investors care about fundamental metrics, so we spent time changing our strategy and improving financially, such as cutting costs and focusing more on certain aspects. We stick to our forecasts, meet our milestones and show investors that we are accomplishing what we promised. For a company with great fundamental metrics, eventually, someone will want to invest in it. I focus on building a great company rather than fundraising itself. 

Anything you would have done differently in fundraising? 

HT: In the early days of SleekFlow, I wish I had raised more capital and focused more on engineering. The importance of engineers is often undervalued. Some people believe a project can be quickly built with little input from engineers, but prioritising product development is crucial for standing out. If not, you may spend more time fixing issues and go through a painful rebuilding process later. 

Do you have any other tips for tech startup founders and aspiring entrepreneurs?

HT: There is no better time than now to start a company. Many people have said that, and I totally agree. You begin and then figure it out. There are different methods and resources available. If you haven’t started before, you wouldn’t even have a path to figure it out.

Another piece of advice is to keep going. When starting your company, ensure that things are progressing so that you can gather more feedback and data points. You can adjust quickly. Don’t fear actions that might fail, as they provide valuable data points to learn and progress. I have taken rapid action many times, which is why I can find directions.

Meet more Gen.T Leaders of Tomorrow in Technology. 

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