The Business Wilderness podcast welcomed special guest Frederic Joye. Frederic is a Seed & Early Stage Startup Investor. He also is the Co-Founder & Founder of Arcanys Labs helping enterprises and startups build innovative software faster.
Mr Joye always wanted to build something of his own. So after gaining 6-7 years experience in a corporate environment, he left his native Switzerland to work with a friend in Hong Kong. He started two companies with one being Arcanys Labs, which takes up much of his time.
This was done in the Phillipines when he noticed that it would be a better place to setup this business. Founded in 2010, Arcanys Labs is a software development company. They have progressed now to investing in startups they really believe in, mainly through services. However, they also help with access to funding and linking your business to services it needs to get off the ground.
The business has been growing stronger than ever, particularly in the last 18 months with broad interest from many different sources. Their services have been well received, especially in relevant startup hubs such as Australia, New Zealand and South Asia.
Mr Joye warns of the perils of not having a tech co-founder or CTO in software based startups. This is a huge concern because of the impact it will have on your startup’s ability to seek investment. Investors will rarely invest in a software based company that doesn’t own it’s own software.
Along those lines, it is unwise to seek investment in this state because you lose all sense of leverage and equity when it comes to the negotiating table. By outsourcing all your software, you are essentially leaving your business in the hands of developer producing your product.
Evolution of Technology
Of late, there has been much talk of voice technology and it’s impact on the way consumers interact with technology. The typical trend in tech circles is to make technology that is more user friendly, as in essence it is about convenience.
Nonetheless, if we put our creative hats on and envision a potential future, it may look like a scene from a Sci-Fi movie. In future, we may reach a point where our interaction with technology may be only voice-based. Or, if you extend your creative echelons, it could be a mind-reading chip that is installed beforehand and eliminate the need for a user interface completely!
The only time they would need one, is when consuming content they want to engage with. Otherwise, the chip would just read your thoughts and produce the result you want without having to lift a pinkie.
Pitfalls of SaaS Startups
Back to planet earth now, some of the major issues Frederic sees startups coming across is in growth phases. Most founders have limited experience in building something as big as a business with all it’s constitutive elements.
Therefore, they are learning as they develop their idea and market it to the market they deem suitable. One of the major problems is that they are mis-managing their tech. As you can imagine, the entire business model revolves around the software you have made as a service. Any issues in this regard and you are speaking of a direct impact on the core of your business model.
In other circumstances, there is an issue with either businesses that have ideas that aren’t really market suited or great ideas that founders are unable, or too late, to market to the right audience. On many an occasion this manifests as a disconnect between the software’s ability to solve a real issue.
A noticeable trend is that Software as a Service (SaaS) startups are struggling and require support with validating ideas. There is often a disconnect between the company’s expectations and what the consumer base is really after. Hence, leaving many a startup to navigate their way to a market that isn’t receptive to their product.
We thank Mr Joyce for his awesome insight into all things SaaS startups and where they can improve.
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Listen to the full podcast below: