It is an amazing look at how creative entrepreneurs can get when bootstrapping!
Simon’s Story is one about bootstrapping in China, failing fast, and (hopefully) learning faster
About the Entrepreneurs For Good Series
Through this series, we speak with Asia based entrepreneurs whose mission it is to bring solutions to the environmental, social, and economic challenges that are faced within the region to learn more about their vision, the opportunities they see, and challenges that they have had to overcome.
It is a series that we hope will not only engage and inspire you, but catalyze you and your organizations into action. To identify a challenge that is tangible, and build a business model (profit or non) that brings a solution to the market.
About Simon Vogel
When coming to Asia a couple of years ago, he wanted to open a restaurant but quickly realized that it would not be as easy as he thought. Instead of that, he launched a business in delivery food.
Follow Simon and Saucepan:
Driven by the belief that change begins with a single step, Richard Brubaker has spent the last 15 years in Asia working to engage, inspire, and equip those around him to take their first step. Acting as a catalyst to driving sustainability, Brubaker works with government, corporate, academic and non-profit stakeholders to bring together knowledge, teams, and tools that develop and execute their business case for sustainability.
SIMON VOGEL, SAUCEPAN
My name is Simon. I’m from Switzerland. Working here what we set up a company called Saucepan, which is a food delivery company. Been here in Shanghai from, lets say almost two year now.
Well, I, well basically me and my partner both came, we cant to Shanghai because we had like some family members here and definitely the markets is very interesting market to be part of nowadays. Previously, me, I was studying in a hospitality school in Switzerland and also I was working for sometimes for hotels, different 5-Star hotel brands.
WHY BECOME AN ENTREPRENEUER?
Well, to be honest, like I said like we were always like involved in a food in the food industry, in the food and beverage industry. Me coming closer to the thirty year, but the age 30 I was thinking like I need to do something which has more meaning. Well, looking at the market like Shanghai or China or if you take the big picture Asia, I think there is a lot of things you can do here in terms of foods. Especially delivering clean and trusted food to people’s home.
THE FIRST STEPS
To be honest, it was more that we didn’t had like a clear plan. I’d say like this because we came here with the idea of more opening a restaurant. So, we came here in 2014 and then we just realized it was like at the time where all the rents was getting higher and higher and it was just commenting suicide if we would have open a restaurant at least back then in the days. So, then more and more we were looking about what was existing in the markets and what we saw. How the consumer behavior. How they are like ordering delivery food delivery form time to time. We were saying okay, this could be like an interesting concept like to actually bring the food to people’s home.
Initially, we started with a three specific business model, which we completely failed. Then, we had to privates back in December last year and now we are like right on track on a food delivery ready-to-eat business.
THE FIRST CONSUMER
Well, we specifically targeted expat at the beginning because we were feeling much more comfortable with the expat markets. We were coming form what we both know this how I conduct the consumer behavior of an expat. However, more and more we were like working on our concept. More and more we were realizing that the locals were also interested in a healthy food delivery concept. So that’s how we realized that our concept would be both, as a market fit for both expats and locals.
So we started targeting the expat markets because we both, the two founders of this company are true expats and for us it was much more easier to tie it to stats with a consumers that we knew in the past. It was much more easier for us to target this clientele. However, more and more we were operating, we realized that Chinese, local customers were also interested in this concept. Now we feel that we have the right market fit for both locals and expats.
PILOTING AND PIVOTING
Well, I said we had like low capital to start with. We could not, this is also why we switch the concept initially not to go into a restaurant idea because rent wise was too expensive. So we were really looking about how we could save maximum amount of money. Initially we started from an apartment. Then we said okay, where can we find a place where we could operate. Then we checked a bit around the market and we saw ok, we could like here we’re in China. We could maybe rent out an apartment and really like renovate it and then operate from there. This is how we decided really like to inject money like step by step and first to see if the concept is working before like investing a higher amount of money.
For instance, with our initial plan it was more, how do you say? We could say the first five months we tested the product, we tested the market and it the way we say the initial, our initial idea, there was no real demand bind it. This is where it pushed us to pirate the business model in December and this is where we now are fully operational.
EXTENDING THE RUNWAY
I believe first, was the rent issue because running a food and beverage business you need a good location. We could not afford this at the beginning so this is why we initially started off in an apartment.
Second thing is definitely manpower. Manning represents a very high cost and this is where we initially had and still today, have hands on in operation and try to avoid, just like hiring a lot of people because we can do it ourselves. We need to be in operations.
The third thing which represents also high costs. If you don’t have an IT team. It definitely building up the website building up an app or building up a WeChat store. This is where we looked into our friends and family network. If there was not someone who could like assist us in building a website, which also we found.
I think these are three major expenses that we’re going on us. Definitely the personal expenses because we can’t like, how do you say? Give us a payroll at this early stage. So, making sure that we are outside work we are living on a very low profile and making sure that we can survive here without spending all the money from the company.
Since day one, we spend zero on the company marketing. The only cost we had in marketing was maybe was like for some like fairs that we took part of, but it was very, very little cost. The thing is we could, we don’t have, we didn’t have the budget for this marketing and we believe more in word-of-mouth. So, we believe that if we have a product which is, how do you say? Good enough, people will talk around this product and talk to their friends.
How we also managed to have a very low marketing cost was like doing like partnerships with already existing startups, existing company’s we have already renamed here. Food bloggers, everything that we can do where we are increasing our visibility, our brand image in the city.
LEVERAGING SOCIAL MEDIA
We don’t pay for influences. Again, I said, it’s more we are going to food bloggers. We would maybe pay them in foods like we are trying to do this strategy of influence the influences. Where food bloggers who would try our food and then write on a blog post about us. Or, for instance, now we recently also started with some brand ambassadors. Like people who are working out in the gym or working out as a yoga teacher that they can influence their class. The people who are joining them in their class. Otherwise, was mainly social media was managed by ourselves. You have like WeChat, which is very strong here. Posting, accepting friends, trying to get like a big network of friends. Let’s say posting on the asking people to post on their movements and so on and so forth.
BEST WAY TO INFLUENCE CONSUMERS
Yeah, basically it’s a mix. It’s like on a way its food porn in terms of food. So like attract the customers towards our foods, like showing them images of our food that we are doing.
Yeah, well hire the right team is definitely one of a very important factor. Then also yes, spend your money but wisely on marketing for instance. We didn’t have money and we achieved pre a successful milestone without spending any money into marketing. So I think you don’t need to get funding and suddenly like just spend all over marketing. You need really like to make like, I don’t know, smart investment in this kind of field.
Another thing would be like don’t spend all your money on like useless equipment, especially like in kitchen. You need a lot of equipment whereas it’s fridges or knives or whatsoever. So, better to choose like a more safe way to spend money and like really like see what you need, really need rather than just buying all kind of equipment. Packaging as well, for us was like a big waste of money at the beginning because we were testing the waters. We were testing our concept and we were just buying packaging right and left.
Finally, we found ourselves with, I don’t’ know, more than 2,000 boxes which we were not using. So definitely these are important things.
WHAT’S THE MISSION?
I think we are trying to change the future of food delivery. We really want that people have access to health foods, trusted meals with healthy meals using trusted ingredients. So we really want to disrupt this market of food delivery and fast foods by giving like products which are very like healthy for your body, but also like very using like clean ingredients. Like something that you can really trust.
So what are we, what we are trying to solve here and what we are, our mission really to disrupt this food delivery market. We want to give people access to clean food and healthy meals. So this is where we are trying to disrupt all this food delivery and fast food industry.
SCALING WITH LIMITED RESOURCES
Well, I think we have a pretty smart business concept where it’s pretty easy to scale because you can all like produce centrally and then dispatch in like further delivery units. You don’t need to control or build up a kitchen for each of your units. You just need to build up delivery hubs. If you go in cities and then just like build up a central kitchen and then be able to dispatch to the oldest units you can scale pretty fast in a short period of time.
CHINA. IT’S HUGE
I think China is a huge market. That’s what makes it so interesting. It’s so big and there’s so many people here. Which makes it like anyone, not any conept can be successful here. But it gives you a lot of room even if you have, even if it’s highly competitive market, it gives you enough room for you to get your customers and then operate your business.
Well, at the end of the day, we both, we don’t’ have a family so if we fail and now we will try to do something again. Maybe fail again and if we don’t have like something that, yeah that where we have to succeed in the first concept we are launching. I think is even if we proven with our old concept we failed fast, we modified the business model, we switched, we made a pilot and then we try it again.
This is what we are both strongly believe in. We will keep moving and keep trying until we have the right market fit and keep failing, that’s for sure.
I think you know, we were I think we were pretty frustrated at the beginning when we tried this initial concept. Because we believe in our, in one concept, but it was not what the market was asking for. So this is where we learned on actually you need to listen to what the market is demanding rather than listening to yourself and just think this could be a great concept.
For more interviews from the “Entrepreneurs for Good” series, check out the playlist here.
Stay tuned for more clips and full interviews in the coming weeks.