One of the most important aspect of building a company is the ability to distribute the product being sold to the right customer segment. And to build a (Singapore) $100 million web business in Southeast Asia, you will fundamentally need to know who to target.
Inspired & adapted from Christoph Janz of Point Nine Capital (Blog) article, we replicated it out for Southeast Asia context. The author took the customer segment approach to defining how to hit the $100m mark.
- Elephant: 1,000 enterprise customers paying you $100k+ per year each; or
- Rhinoceros: 10,000 medium-sized companies paying you $10k+ per year each; or
- Tiger: 100,000 small businesses paying you $1k+ per year each; or
- Orang Utan: 1 million consumers paying you $100+ per year each (or, in the case of eCommerce businesses, 1 million customers generating $100+ in contribution margin per year each); or
- Mosquitoes: 10 million active consumers who you monetize at $10+ per year each by selling ads.
Image Source: Author
ARPU: Average Revenue Per User
You can find the author’s follow-up article here where he speaks about 3 more ways to hit $100m
Whilst Boris Wertz of Version One wrote “The only 2 ways to build a $100m business” (Link), where the approach is focused on business model, i.e. High LTV per user and/or scaling through strong viral and/or network effects.
The above has contextually been focused on SaaS Businesses. To some extent, e-commerce businesses could fit in.
Moving back to the above graph, here are a couple of Southeast Asian based companies who might fit in as example. (We apologies for any inaccuracy in advance)
- iflix is the Netflix of Southeast Asia. Classifying them as a Mosquitoes for the sake of the representation although they do have a solid business!
- Lazada is a major e-commerce player in SEA region with over $1 billion in GMV in 2015. They would be classified as Orang Utan here.
- Hoiio provides cloud communication apps to businesses on a subscription and usage based business model. It is definitely a Tiger.
- Tradegecko is an Inventory and Order Management Software for businesses. It could be classified as a Tiger (mostly) or even Rhinoceros.
Harder to discover where the Elephants are hiding ;)