Patrick Grove's insights to building a successful startup
By Anushia Kandasivam November 23, 2016
- Advice and strategies for burgeoning entrepreneurs
- Finding your passion and perseverance are key to scaling Internet businesses
“WHEN I was in university, I started two businesses. I didn’t make any money whatsoever but I learned more from starting a business than I did in university,” said Catcha Group co-founder and CEO Patrick Grove of Catcha Group, speaking at USTART Malaysia 2016 on Nov 22.
Organised by University Malaya via its Centre for Innovation and Commercialisation, USTART Malaysia 2016 is a conference and networking platform for university startups, university technology managers, aspiring technopreneurs and collaborators within the innovation ecosystem.
As part of the conference, Grove delivered a keynote address about building and scaling Internet businesses, emphasising that the Southeast Asian market is primed for startups, with huge opportunities for digital entrepreneurs.
Using Malaysia as a big-picture example of success, Grove said that 40 years ago, the country was something of a startup – a new country with a new government, rules, enterprise and jobs – that today has come a long way.
“If you think that being involved in a startup is hard, you really need to think about the country we live in today and its growth into a thriving economy,” he said.
Grove went on to say that the odds of building a really successful tech company are, however, actually very small. Providing insights into his own entrepreneurial journey, Grove highlighted five key areas or attributes an entrepreneur should focus on or have to build a successful disruptive business.
“The very basic thing to do when you have an idea is to identify what the problem that you are trying to solve is,” said Grove. Following on from that is a step that some people overlook: finding out how many people have this problem and how many would use the solution you have come up with.
“The more people you solve a problem for, the bigger your business will become,” he said, citing online property listing iProperty, which he co-founded seven years ago, as an example. Grove and his team realised that more and more people in Southeast Asia either wanted to buy or rent a home and that their business would touch almost everyone in the region at some point in a three or four year cycle. iProperty was sold for US$534 million (RM2.25 billion) earlier this year.
Grove emphasised that passion is the most important attribute of an entrepreneur. Speaking about Apple’s Steve Jobs and Tesla’s Elon Musk, who he cites as two of the great digital entrepreneurs of the last decade, he points out that they never say that money is a key motivation for their creations.
“People who say ‘I want to make a lot of money’ actually end up not making a lot of money. It’s people who want to solve really big problems who make money as a side effect of solving those problems.”
According to Grove, passion trumps the business plan, as it is more important to think about what you are really passionate about – what business would you do if you did not get paid a salary.
Passion also influences investment; with passion, an entrepreneur can develop a good business plan, so top investors tend to look first for passion and then the business plan, he said.
“To build a great business you need a great team,” said Grove, mentioning Ali Baba as a prime example of this concept. Though the public face of the multi-billion dollar company is Jack Ma, there are 17 people in the founding team, who lived together for 12 months to start the business.
Grove shared three studies that revealed interesting statistics. The first is that an A team with a B-grade business plan will always beat a B team with an A-grade business plan. The second is that businesses with more than one founder always do better than those with sole founders.
“It’s like good cop and bad cop – someone is the ideas person and someone is the execution person, or someone is good with finance and another is good with products. It’s always better to bounce things off each other,” he said.
The last study revealed that that 90% of game-changing ideas happen outside the office, which means getting out and spending time with your co-founders and team.
“CEO really means Chief Pivot Officer,” said Grove, adding that every successful digital company today is very different from when they first started out. With the mindset that you should always be changing, growing and adapting, your business will evolve into into a ‘big beautiful company’, as Grove put it.
“Pivot means having the courage to experiment, the audacity to test and try again if it doesn’t work, the courage to take a chance and the ability to step out of your comfort zone and do things differently from everyone else.”
Entrepreneurs should always be willing to change and improve their product. Gmail, for example, ran beta versions for about three years, though it had close to 300 million people using it every day. “Accept that the product can change to be better and greater,” advised Grove.
Diversification is another hallmark of a successful business – keep pivoting and growing into different corners of the digital world.
“No great business was great on day one, year one or even year three. Every great business was a marathon, a rollercoaster journey of ups and downs, of pivots,” said Grove, quipping that he himself ran a business – iProperty - at a loss for eight years before it was listed on the stock exchange.
Grove quoted Jobs, who said that what separates successful entrepreneurs from those who are not successful is perseverance. To illustrate this point, Grove explained a game he plays with his businesses – counting how many people said ‘no’ to them until somebody said ‘yes’.
iProperty got 74 ‘nos’ before somebody said yes to investing in it. iFlix – Grove is a co-founder - had 115 rejections before somebody said yes.
“All you need is one person to say ‘yes’. Imagine if we had stopped after meeting 74. That 75th meeting was essentially worth RM2.25 billion. So accept that people are going to say ‘no’ and have the perseverance to keep pushing,” said Grove.
Enjoy the journey
Building and scaling a successful startup is a long and tumultuous journey, but it is important to have fun and enjoy it.
“I love the journey and the struggle. I love hearing ‘no’ and sharing with people,” he said. “Just some big, beautiful problem that you are passionate to solve and you work with rock star people. You may fail at first but keeping pushing, pivoting and trying to solve that problem.”