Startups are a big thing these days. Simply flip open the papers and there will probably be an article about some new startup or a new app or a new company with a new round of funding.
But what are their success rates?
“99.99% of startups die.” says Isaac Tay, co-founder and VP for Talent & Special Projects at honestbee, a homegrown startup which purchases and delivers groceries to your home.
I recently attended a Young NTUC CROSSROADS event held at grocery delivery startup honestbee’s office and some of the questions that kept coming up were:
- Why did you guys start this company?
- How do I become a freelance runner (otherwise known as a “Bee”)?
- What are some of the challenges you face as a startup in Singapore?
- Are you guys even making money?
And the biggest question…
HOW DOES HONESTBEE MAKE money when you are selling things to consumers at the same retail price with no delivery fees?
Because every consumer also can count lor. Bees need pay, drivers need pay and their 200-over staff also need to be paid right?
No doubt every business’s objective is about making money (otherwise it will be called a charity) but Jonathan Low, Co-founder and VP of Engineering, explains otherwise.
honestbee says in its mission that they are all about creating and providing sustainable and profitable jobs for everyone.
To support the business, honestbee has a team of over 200 staff (Not including the freelance Bees) in 4 major cities. Despite this strength, honestbee is still growing their tech team. (Ahem, if you are looking for a career change, I think you have your answer.)
So, back to the million-dollar question.
How does honestbee make money?
It all boils down to economics. Through the usage of technology coupled with quality, efficient and reliable service that they hope to provide, the business should eventually generate sufficient orders to bring down each unit cost to be at a profitable margin.
And basic mathematics will then explain that a sustainable profit for every order will eventually lead to a collated profit for the entire business.
Is Singapore supportive of local startups?
Every entrepreneur worth his salt will take the effort to sniff out the various government grants, know the startup ecosystem and join the right networks to expand his business contacts.
There are plans by NTUC to help experienced Singaporeans who find themselves out of a job to join local startups.
Corporate startup accelerators are also becoming in vogue, with NTUC Income recently launching Income Future Starter (without taking ay equity!).
Startups are one of the best ways to develop the jobs of tomorrow for Singaporeans so we have more choices than just whatever is in the job market now.