Request for Startups
Jun 30, 2021 by Hsu Ken Ooi
There are a number of ideas or trends we’re particularly interested in. We thought it’d be helpful to be public about them in the hopes that it would (1) encourage founders working on these ideas to apply and (2) help people get started on ideas we think are interesting.
If you aren’t working on one of these ideas, you should still apply to Iterative. In the past, the the majority of the ideas we invest came from the founder and were not things that we had thought about in the past. We think that will continue to be the case.
Allow Anyone to Sell Anything
Anyone should be able to sell anything they want, online. Shopify and Stripe enabled anyone to create a store on the internet and take payments but that’s just the beginning. During COVID, we saw a bunch of side hustles and micro-businesses built on Instagram and take orders through WhatsApp. Neither of those products were built for this. We’d like to see a few things get built.
- Mobile First, Lightweight Shopify – Built specifically to receive traffic from Instagram on phones. Should be easy to setup, uncomplicated (no search, no discounts, etc.) and potentially drive people to WhatsApp to order.
- Order Management – Easy way to take, manage orders and receive payment through WhatsApp. In Singapore there’s PayNow, etc. but in other countries, payments isn’t as straightforward.
- Easy Logistics – Might be part of the order management system but there should be an easy way to schedule deliveries in batches (cost savings), from the lowest price logistics partner (automatically compare) and schedule.
This is just one instance of a stack that needs to be built for micro-businesses. We’re seeing similar stacks being built for digital artists (NFTs), writers (Substack), audio content creators (Clubhouse), etc. If you’re building tools to help people make money from what they love to do, we’d love to talk to you.
A few more specific ideas.
- Workforce Training via WhatsApp – If you run a factory, restaurant, warehouse, etc. there’s a lot of turnover in your workforce. Every day, there’s new people that need to get up to speed quickly. It’d be great if they could be trained before they arrive and over WhatsApp. WhatsApp is important because it’s unlikely they will download a completely new app just for this but everyone uses WhatsApp.
- Customer Service via WhatsApp – Most of the consumer companies we’ve invested in complain about getting overloaded with customer service messages on WhatsApp. What they want is Front for WhatsApp. Front does actually support WhatsApp but we’d like to see something built specifically for it.
- Airbnb for Food – I’ve thought about this for years. Some of the best food is made at home and there’s literally people all around me cooking every night. Would they make a little more and want to sell some if it was easy and lucrative? I guess this fits under Allow Anyone to Sell Anything.
The Financial System is Painfully Outdated
A few months ago, I needed monthly bank statements from longer than a year ago. I log into the bank’s website to find that it only has statements from the last 12 months online, I need to pay $20 per monthly statement longer than 12 months, it’ll take a week because they need to print them and mail them to me. I paid $120 to get 6 of my own bank statements mailed to me a week later. How is this is the state of our financial system in 2021?
This happens all over the financial system, and often it’s much more serious.
- Too Slow – Financial institutions aren’t keeping up with how quickly society is changing. For example, it’s difficult to get a loan as a freelancer or a part-timer because your pay is so unpredictable and there’s no pay stubs.
- Not Customer Centric – See my experience above. It’s so difficult to start a financial institution they can treat their customers terribly and we just have to take it.
- Not for Everyone – The financial system is still relatively inaccessible to large portions of the population (unbanked, underbanked, etc.). We won’t have social-economic mobility with giving everyone access to the financial system.
Here are a couple specific ideas we like.
- Easy KYC – Everyone doing KYC is mostly collecting the same information (name, passport verification, etc.) yet most companies are building it themselves and it isn’t great. There’s probably room for a company to be Stripe for KYC. Focus exclusively on getting the process and experience right for users and making it easy for companies to implement. Extra points if you can do it over WhatsApp.
- API for Escrow – Making any large purchases (property, etc.) requires you to send payment to an intermediary who then releases it when the deal has closed and charges you a few thousand (in the case of property). That’s insane! That can and should all be automated with software.
- On-Demand or Early Wage Access – A significant portion of the population lives pay check to pay check. Waiting until the end of the month to receive their pay check is often what causes them to borrow money from predatory lenders or worse. Ideally they should be able to either be paid in advance or at the end of every day.
- Multi-Country Payroll Manager – Almost all companies in Southeast Asia that reach a certain size will expand into another country. That means having 2 separate payrolls, typically run by 2 different people in each country. There should be software that does this automatically across any number of countries in Southeast Asia. There’s probably an entire class of products waiting to be built that make cross-border businesses easier to run (see COVID Changed the World).
- Payments Collection for B2B Businesses – A few startups we’ve invested in have cash flow problems because their customers don’t pay them on time. They could chase them but that takes a lot of time and it’s not their core competency. Someone should make it their core competency and solve it through software. Companies often give discounts to get clients to pay faster. That means they will pay a company to get faster payments too.
There are so many ideas here! I didn’t even touch the crypto-related ideas we’re excited about.
There’s still so many industries not taking advantage of software. Think about shipping before Flexport, small stores in India before Khatabook, etc. Founders building software for industries no one is thinking is one of our favorite types of investments. The more ignored, less sexy, the better.
The best way to find these types of ideas is to talk to people you know who are not in tech. Ask them what their biggest problems are, what they do now and what they don’t like about it. Even better if you partner with someone from that industry to start the company.
A few examples of these types of ideas.
- On-Demand Construction Supplies – Getting supplies for a construction site is still very manual. Suppliers rarely have a website and if they do, it’s not updated with how much stock they have. Most orders are done through WhatsApp and you message them to get updates on your orders. There’s probably room for a company to aggregate all of the suppliers, have an aggregated list of supplies and take orders on their behalf.
- Online Pharmacies – Going to a physical pharmacy to receive your prescriptions, especially for chronic medication, makes no sense. It should be delivered to your door either on-demand or on a recurring basis. This is especially true for seniors who are the most likely to need medication on a regular basis and often the least able to visit a physical pharmacy.
- Borderless Software Phones – I moved to Singapore from San Francisco but kept a lot of US accounts open (PayPal, bank accounts, etc.). That’s been challenging because they often require me to enter a US phone number and occasionally text it to verify it’s me. I tried using Google Phone but it doesn’t work internally. I’ve thought about coding up my own Twilio project to forward me text messages from a US number but I’m sure there’s a better way. As more people become mobile, these types of things will happen more.
Celebrity Culture is Just Getting Started
People are dismissive of celebrities and influencers as either a fad or the end of civilization. I believe it’s just getting started. Think about it, a celebrity became President of the United States of America and almost won again. Rihanna and Kendall Jenner both made more money starting a business to capitalize on their following than anything that made them famous. We see it in venture capital too. Investors are trying to become influencers (Garry Tan, Justin Kan, etc.) and celebrities are becoming investors (Kevin Durant, Jay-Z, etc.).
It turns out, if you have access to a large group of people that listens to you, that’s valuable. Given that, there will be more demand for products that help (1) build your following and (2) monetize your following. For (1), you could argue the Instagram’s and TikTok’s of the world have captured most of the value but don’t forget all the tools that help produce the content. The large influencers have teams of people helping them produce content. For (2), it started with paid sponsorships and increasingly celebrities are starting their own companies but only at the highest levels of fame. What about influencers and micro-influencers? How do they effectively monetize smaller followings?
COVID Accelerated Adoption
There’s a few trends COVID has accelerated. What otherwise would have taken a decade, seems to be happening now.
- Remote Work – If physical location no longer matters there’s all sorts of 2nd order effects. If a company can hire from anywhere, how do they find candidates from anywhere? How should interviews change? How do you do payroll across multiple countries? How do you onboard and build relationships with new employees you’ll never meet? What happens to all that office space? The list is endless.
- Education – Before COVID, one of our companies offered online classes and received a handful of sign-ups. After COVID, they offered the same class and received 100+ sign ups in the first few weeks. People’s attitude towards online learning has changed. It’s underrated how important that is. If people can effectively learn online, that makes learning (both the cost and reach) more accessible to so many more people. Now we need to do our job and build tools, courses, etc. that make online learning effective. Hint: Zoom is not the answer.
- Buying Online – Online retail penetration in Southeast Asia is roughly 5%. In China it’s 32% and in the US it’s 19.5%. There’s still a long way to go in Southeast Asia. Imagine when it’s 25% or 50%? What’s everything that needs to be built (logistics, payments, etc.) to get there? When it is ubiquitous, what kind of new stores will appear?