Bootstrappers EP#04 with Lensy Co-founders: Be disciplined about money
When resources are scarce, startup founders, especially those bootstrapping, need to tighten purse strings, say Co-founders Vincent Teo and Ang Qian LingBy Elaine Huang 30 Apr, 2014
This is the last episode of the Bootstrappers series. Previously, we talked to Ian Tay from Pixaroll about finding users who would pay for your product, Kyaw Lin Oo from EventNook about working on side projects to boost your confidence, and Jerome Chan from Ideas Incubator and Petfie about following your heart.
Last but not least, let’s talk about the money. Bootstrapping is particularly difficult because founders need to survive on the little money that they have. For Vincent Teo and Ang Qian Ling, who used to work in advertising firms, having a budget is really important, especially when they have few resources. Here, e27 chats them up about being selective when it comes to new ideas, and the constant wonder if they could grow any faster if they have more money.
Hi, I’m Elaine Huang and you’re listening to Bootstrappers, a podcast all about entrepreneurs who chose the path of self-funding. In the studio today is Ang Qian Ling and Vincent Teo, Singaporean entrepreneurs who are also the Co-founders of Lensy. Hi!
Teo: Hi Elaine
So, what’s Lensy all about?
Teo: In a nutshell, Lensy is a community marketplace for photography enthusiasts. So what we do is we seek to champion the everyday photographer by giving anyone with a passion for photography an opportunity to feature and sell their photos to businesses that need stock photography.
Is it like Shutterstock?
Ang: Well, yes and no in a way because what we do is that we enable… we make it easy for everyone who has a passion in photography to upload and sell their photos. You don’t have to do this for a living. All you have to do is just to be interested and love photography, and you can then take your photos to Lensy and upload and sell, so it’s really, really easy for you to do that.
You mean it’s for amateur photographers and people who post on Instagram…
Teo: Let me just add on to what Ling has said. Essentially, what Shutterstock and the other stock libraries do is that you need to be commissioned or selected based on a past portfolio and history of what you’ve done — you need to submit it and they will QC and qualify who you are. What we stand for is that we want to democratise stock photography, especially in Asia; most of these stock libraries are based in the US and most of the Western countries. We wanted to democratise stock photography in Asia, so anyone with a passion for stock photography — anyone who can take photos — can submit their photos for sale. Obviously, we have our own moderation and QC process just to ensure quality, copyright and suitability and appropriateness of the photos that are submitted.
How did the two of you come up with the idea of Lensy?
Ang: Actually, the thing is that both of us came from advertising backgrounds. Inherently, it is to solve a problem we saw in advertising, which is the severe lack of Asian stock photography. You might have heard of this blog and it’s called the Overexposed Model.
The girl who’s used in all the different…
Ang: Coincidentally, the accounts that both of us have worked on have used her as well!
Both: And we’re from different agencies!
Ang: She’s a model that features herself in one of the other stock libraries. The thing is that a lot of clients have a lack of budget to shoot so they use her photo as stock for their brand. Because of this lack in model availability, everyone just uses this available model. That’s where you see the same person anywhere and everywhere, advertising for anything. That’s how the idea was born.
Teo: Just to add on to that, there’s another part to it. We’ve been in advertising for a while, too long actually, and there’s a shift between what traditional agencies and brands use stock photography to do, and what they use it to do now. There’s a lot more publishing and content marketing that is being done online, on social media, on blogs and on mobile. And there’s a lot of need for authentic and higher quality photos that are more unique in terms of something that isn’t really common in traditional stock libraries.
Teo: There is also a more frequent need for these since you publish more often to engage users, fans and customers. Traditional stock libraries have a few restrictions that made this less efficient. Things like high cost, complicated licenses — you have licenses that you could only use on specific medium or for specific durations — what we wanted to do is to tear these things down and make it really simple for brands to buy stock photography at a cost-efficient price, so that it is easy to use and break the boundaries and you can get unique photos without using similar stock photos.
Was it always just the two of you? Did you hire anyone else? Did you have other co-founders?
Teo: It started with me and Ling. Actually, we had a group of friends. Ling and I used to work at the same advertising agency at one point in time, so we had a group of friends whom we worked very closely with. The idea started with me and Ling taking the step forward to do this and we’ve since left our advertising careers. When we first started, it was just the two of us working on the design, the idea, sort of developing the product but we’ve subsequently and very shortly, and quite fortunately, were able to bring in an ex-colleague and good friend of ours, who works as a developer and is our technical partner to help us develop the platform.
What were the reasons behind bootstrapping? There are a lot of grants and angel investors.
Teo: Maybe Ling might add on to this but the initial thing for me, and for us, is that we believed quite strongly in the lean startup methodology, which is to not create something that is perfect because you don’t really know if there’s product market fit — you have an idea, you have an interesting insight. It’s pretty similar to the methodology we used to work in advertising, but we wanted to do this in a very lean, bare bones way, push something out and we were prepared to fail and learn, and refine what we do.
Ang: Fail fast, learn fast.
Teo: Correct. That probably won’t sit well with investors and government grants. We wanted to do this initially, and because we wanted to do it that way, we didn’t actually need a lot of funding to get us started. It started from there. Obviously, it sort of moved to a longer duration. Subsequently, it’s not because we didn’t want to but we talked to a bunch of people about investments and felt that it took time away from what we wanted to focus on, which is to build something really good.
Ang: What it did was to detract us from our original core purpose and mission and that was to build a product that everyone loves, and hopefully, will love. If we get an investor in at an early stage, it will detract us from our mission and we don’t want to be in a situation where money and investors come before the consumer. To us, the consumer should always come first. We’ll center our efforts around that. Hopefully after that, the investors will come.
Teo: It’s not that we’re not looking for (investments); we will, at some point, look for external investments to help move this forward and expand but other than the time, it’s also the fact that although we had years of experience in advertising, we don’t have a track record in doing this. There was an issue in “valuating” this idea and saying, “How much is this idea worth? How much is Lensy worth?” We weren’t ready to give away a huge chunk of equity for a small investment. That was when we realised that we have to prove ourselves.
Ang: This is really putting money where our mouths are. In advertising, the best way to complain is to make things. That’s how it was, and that’s why bootstrapping was definitely one of the ways we could go about it.
Teo: In advertising, we always tell our clients, “This idea is risky, but you need to take a risk.” Like Ling said, it’s time to put our money where our mouths are. If you believe strongly about something, you would find a way to do it.
From what I know, the both of you are surviving on savings. You didn’t take any loans from…
Teo: We’re quite lucky. In advertising, we were planners and our skill-sets are quite transferrable, so we could work on a freelance basis. That’s how we’ve been working since we left, in order to sustain. I’ve been working for a while, so I have a bit of savings which we used to set this up. It’s back to what Ling said before — it’s about validating what we have and believing strongly and putting money where our mouths are. It’s also about having the freedom to really control the destiny of this idea rather than getting an investment and having someone tell us what we should be doing, especially at such an early stage.
One of the most important things startups need to think about is their burn rate, which is the amount of money a startup spends every month. So what was your initial burn rate when you first started the company?
Teo: We started late October and early November we started building it. We were still freelancing at that time to sustain. We launched it very early in December to a very small group of users — photographers, friends, friends of friends, to validate the idea. We’ve gone through multiple iterations since then to improve the product based on feedback and based on how people were actually using it. When we first started, we were burning, if you have to put a number to it, a couple of thousand dollars on certain things that were mandatory — servers, cloud hosting, certain marketing things that we had to print and do to get the word out, things like that.
Teo: But we kept cost to a minimum by being disciplined about how we use money. It’s a huge pivot from how we used to spend in advertising. Let’s do this and do that. We have to sit back and reflect, and make sure that we manage our cash really well. Because cash flow was very important to make sure that we could carry on. That discipline is really important for us.
What are some challenges you’re facing right now because of bootstrapping?
Teo: Like I said, the challenge for me — me and Ling talk about this quite regularly — is that we can’t do a lot of things. We have a lot of ideas. It’s about being really selective. Sometimes, you have to weigh the risk of doing one at the expense of trying out the other. That was the biggest thing for us. We couldn’t do all the things we thought we wanted to do and try out.
Teo: The second thing is that we always keep wondering if we could grow faster, if we have more money. That’s caught in the way between taking a bigger risk and hoping for faster returns versus trying it out. I think we’ve been moving along this scale and trying to find that nice point where we could actually test and try, and spend a bit more money. Obviously, we’ve put more of our money into the picture and try to do some of these things.
How do you generate revenue?
Ang: Basically, on our marketplace, every photo sells for S$10 (US$7.96); so we take half, and we give the photographer the other S$5 (3.97). It’s a 50/50 split.
Teo: Just to clarify, the money that we take is obviously used to manage the platform and all the other things we need to do. There’s also another model. Lensy has this thing called Lensy Task, so one of the things we want to do is to move stock photography into this Web 2.0 era, where if a brand or business can’t or aren’t able to find a photo, they’ll have to take a shoot, which costs money. The idea to be able to crowdsource photos that you need — not just from our community but also your fans — will be an interesting one. Lensy Task allows brands to be able to create a task, push it out to both, community and fans online and reward the winner. Everything else will be available for brands to buy after that. That is another model where we are working on the pricing strategy to monetise in a way. That’s the second way. It also helps because it’s not just about spending money for the shoot, it’s also about consuming the time to find the right photo.
If you think back to before you bootstrapped, before you left the agency, what are perceptions of bootstrapping that you found to be incorrect?
Teo: I think f0r me, everything in notion and theory sounds really good, and that’s always the case. For me, it was the duration and it’s not just a notion but also how I feel — the risk to take in terms of bootstrapping. When you say it, it’s always easy. We’ll put some money in and we’ll bootstrap this. When it comes to planning it out, and putting it in your own use case scenario, it becomes quite challenging after a while, when you realise that, well, it’s not as easy as reading all these articles and looking at people. Every case is different. You have people who say, “Oh, I put in 10 grand and I do this and I was able to launch this.” Every situation is different.
Ang: To sum it up, there’s always more to it than it seems. When we first started out, what happened was that we said, “Let’s try this out. Let’s give ourselves three months.” Three months turned into six months turned into nine months turned to about a year and we’re still at it. You might always cater to a timeline or a duration at the start but things always change, and that’s one thing that we have to be prepared for. Change is the only constant. Unfortunately, it stretches on and the way to go around it is really by changing ourselves and adapting ourselves to whatever comes our way.
Teo: Everybody says that the only constant is change, and you have to be ready for it but when you actually do it, that’s the kind of difference. Everything you planned for changes and you’re here, going, “Okay, what do we do right now?” There’s a really nice quote that I saw recently that sums this up about startups pivoting and changing. It’s by Mike Tyson: “Everybody has a plan until they get punched in the face.”
That’s all the questions we have today. Thank you so much, Ling and Vincent, for coming down, and sharing your experience!
Why don’t you let our listeners know where they can find you both on the internet?
Ang: You can find us on Lensy.com. You’re most welcome to upload all your photos, feature and sell them on our marketplace.
And you can find me Elaine Huang. I’m a correspondent with e27 — a platform for technology and innovation in Asia, but if you want to hit me up on Twitter or Facebook, my details are all in the description section below:
This Bootstrappers series is part of the Launchbyte podcast. You can check out the main show at launchbyte.com. We hope you’ve enjoyed reading/listening to this episode of Bootstrappers!
This is the last episode of this series and we hope that you’ve enjoyed the whole series. You’ll hear from us again! Bye!
All four episodes of e27/Launchbyte Bootstrappers series: