Please introduce your company, MyCloud Fulfillment.
MyCloud Fulfillment is a logistics technology startup, the company uses technology to address problems and challenges that the logistics industry faces. The company’s mission is to help aid vendors with their supply chain and logistics as well as to support their growth sustainably.
MyCloud Fulfillment provides a number of services; firstly the product aspect of their business allows vendors to store their products with the company who will then check, store, pack, and send out the products as required by the vendors. The second service that the company provides is a service that automates the selling process for the vendors. The service allows for vendors to be able to receive orders through a number of different channels (e.g. Lazada, Shopee, Instagram), process them, and update their inventory automatically. The third service that the company provides is a data service, where vendors are able to receive analytics and useful information on the performance of their products and how they can adjust their offerings and processes to increase efficiency and profitability.
MyCloud Fulfillment has just received investments from 4 investors for its Series A fundraising round, could you describe what has changed in the company and what your plans are now that you have more capital?
A change that Mr.Nithi described after receiving the funds was that; prior to this fundraising round, he and those in the company were constantly worried about when the funds would run out and how long they would last with the current fund. However, now that the company has raised capital, the worry of funds running out had gone away but was replaced with another challenge, which was that some components and people within the company could not adapt quick enough to the sudden increase in capital and were not able to effectively plan the spending these new funds to grow the company. To address this issue, Mr.Nithi says that he had to bring on a new strategy officer to help train and help employees who were struggling to adapt to how the company had changed and were stuck with the previous mindset of having very little funds to work with. Developing a new mindset for these employees would mean that they were able to set longer-term goals and plan their tasks around the newer and larger budget which would lead to a more effective utilization of the new capital.
As for Mr.Nithi’s plans, he aims to use the investments he has received from this fundraising round to reward and motivate the existing team by increasing payroll and recruiting new management at the executive level such as a new Chief Security Officer (CSO) and a new Chief Technology Officer (CTO). The funds will also be used to further develop the current structure, software and systems that are in place allowing them to develop more advanced and efficient business processes which will in turn lead to better products and services for its clients.
What are some of the factors that you think investors consider when they are deciding whether or not to invest in a startup?
Mr.Nithi first states that one of the factors that will influence an investor’s decision on whether or not to invest is what the money will be spent on and how much money will be spent in each area as it’ll make it clear to the investor what the company is aiming to do. An example given by Mr.Nithi is that if the company plans to spend a lot on advertising or marketing its products to customers then it is clear to the investor that the goal is to increase sales and the customer base. On the other hand, if the company were going to be spending the funds on R&D, then it would be clear that the company plans to better or further develop their product and services.
Secondly, is the company’s ability to scale its operations, in other words, will the company be able to handle the increased workload that comes with an increase in demand for its products and services? Mr.Nithi says that during the Covid-19 crisis, MyCloud Fulfillment has been seeing a 2x increase in the demand for its products and services every month. For the company, they are able to handle this level of growth but if it were to be 4x increase in demand every month then they would not be able to handle it says Mr.Nithi.
The final factor that Mr.Nithi describes is the ability for the company to execute your plans with the least amount of problems and errors arising, whether it be in growing and maintaining its customer base, expanding its operations, or recruiting new talent. The company must be able to show that they are able to execute their plans and processes as flawlessly as possible.
How do you think MyCloud Fulfillment has benefitted from the rapid growth of the E-Commerce industry during the Covid-19 Crisis and what challenges has come with it?
The Covid-19 crisis has caused the e-commerce industry to boom as a result of the lockdown forcing the population to make a majority of their purchases on online platforms. This has meant that MyCloud Fulfillment has seen a sudden increase in the demand for their services as vendors need more help with the logistics process. Though the increase in demand and the sudden expansion of the industry has overall been good for the company, Mr.Nithi says that there were definitely a lot of challenges that have had to be overcome as well.
The greater demand for the company’s services means that the company suddenly has over 2x the amount of vendor’s products to store, package, deliver, and organize. This has lead to the warehouses and storage spaces belonging to MyCloud Fulfillment being overcrowded and as a result means that the company was in desperate need to expand their facilities incredibly quickly. Mr.Nithi stated that “even if we hired 100 or even 1,000 more people, there it would not solve the issue that we were having because what we needed was not the manpower but the facilities to support the increased volume of products that we were taking on”.
The only solution for this problem that MyCould Fulfillment faced was to open new facilities within a much smaller time frame. Previously, it took the company around a month to set up new facilities for storing and managing its clients’ products, but currently, with such a rapid increase in the demand for the service, the company was forced to have to speed up their process and open up these facilities in around a week. Mr.Nithi says that the first time they opened up new facilities within a week was one of the biggest challenges that they had faced in terms of expanding the business. However, after overcoming this challenge, they will now always be able to expand their facilities in such a short time as they have improved the foundation of the process thus making it much easier and more efficient than before.
Now that you describe the challenges that you have faced internally within the company, what are some external challenges that you have faced/are facing and how have you/plan to overcome them?
It is clear that the logistics and e-commerce industries have benefited from the Covid-19 crisis massively as consumers have shifted to shopping on online platforms rather than through traditional brick and mortar stores. As the two industries grow, the market will undoubtedly have an increase in the number of players, which means that companies from large corporations to startups within the industry will have more competitors. Because of the increasing competition, prices are becoming more competitive as clients and consumers have a much larger number of options to choose from. Mr.Nithi states that “with the market developing in the way that it is, companies in the industries will experience an increase in customers but a decrease in profit margin per customer”.
In this market, Mr.Nithi says that he and his company have to find ways to attract and maintain clients. The company had to reduce prices and decrease costs, identify and focus on the values that differentiate them from the competition, and care for their customers to the best of their ability by providing quality services to their clients which will in turn build customer loyalty. Mr.Nithi stated that in terms of direct competition, he is relatively confident that there are not many companies that offer services which are as customizable and at the same quality as MyCloud Fulfillment’s services. Furthermore, because the company is a neutral logistics company, it is not tied to a particular e-commerce channel such as Shopee or Lazada and therefore are more attractive to clients.
Something that is important for Mr.Nithi is to make sure that, despite the growth of the company and the market, MyCloud Fulfillment maintains focus on and sticks to the values that it started off with and that keep clients with the company. Mr.Nithi emphasizes the importance of being able to maintain the standard and quality of their services to their clients while still staying competitive within the market. He says that he still continues to provide services to clients which are no longer profitable in order to ensure that they are as satisfied with the company as possible and stay with the company. Mr.Nithi has chosen not to focus on gaining new customers as fast as possible, but to prioritize the quality of the services and to attract new customers through that aspect instead. This has caused some issues with investors who may want the company to increase the customer base as fast as possible and become as profitable as possible. This issue has taught Mr.Nithi that he must look for investors who share the same vision and goals for the company as he does, or else there will always be problems between the company and the investors.
What are your long-term goals for the company and how do you plan to achieve them?
Mr.Nithi’s exit plan for the startup is that; within the next 5-10 years he hopes to be acquired by a company that shares the same vision of values as he does. He hopes that by partnering with various other logistics companies in other countries which are also looking to be acquired, he is able to increase his chances of being acquired. Another potential exit strategy for MyCloud Fulfillment is to do an IPO and enter the market as a publicly traded company. As e-commerce and logistics are industries that are expected to grow far into the future, it has a lot of interest from investors and therefore would allow for MyCloud to be given a high valuation.
Mr.Nithi’s plan to achieve the goals mentioned above is to firstly strengthen the company’s position within Thailand as a provider of logistics solutions then further expand into foreign markets. Expanding to foreign countries would mean that he is able to further help his clients with selling and delivering their products as well as giving the company a larger competitive advantage. Mr.Nithi aims to have over 30 facilities all over SouthEast Asia within the next 5 years.
Do you have any advice for startups during these times of uncertainty?
The first piece of advice that Mr.Nithi gives is that startups must consider how they are going to make their service and product worth it and valued by the customer and clients while at the same time making the transaction worth it and of value to the company as well. Secondly, Mr.Nithi stresses the importance of investing funds in the right areas and making sure that the company makes the right decisions with clients, employees, systems, and structures in order to build long-term relationships with clients and sustainable revenue streams. Finally, Mr.Nithi advises that the startup should be as transparent as they can about their values so that the company’s goals are aligned with that of the clients, employees, and investors.
This article is a part of the ST Marketplace project by NIA
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