Startup Metrics: Is CAC Outdated?

More often than not, one of the big questions venture investors would ask entrepreneurs is “What is your customer acquisition cost (CAC)?” It’s a valid question, you want to make sure that the unit economics of the business works so that it can eventually become a sustainable, profitable venture. This is usually measured by the ratio CLTV/CAC (customer lifetime value on CAC). It tells us for a dollar of cost I throw into customer acquisition, what is my “return on investment”. To make their business more viable, most entrepreneurs would focus on reducing CAC, which is the easy way out (considering all you need to do is to increase conversion and ROAS).

Recently, I was reading an article that Jason Bornstein written for his firm’s blog (see reference), and it struck a chord in my heart. A contrarian view of “YOUR CAC DOESN’T MATTER”. I was at first shocked, but then I realized what’s he’s saying: The brands of the next decade will win with loyalty, not acquisition.

How do we inspire brand loyalty? For me, I always believe in giving my customers the best service I can ever provide. I always believe in overdelivering. If I promised my customer that I will give 100% of my effort, I give 150% of my effort. Always wow them at every turn, make them impressed and want to come back for more. It’s like taking drugs (not that I have taken any), get them addicted to your awesome customer service and alignment, and they will keep coming back for more.

Being a B2B startup founder previously, I have always learnt the importance of Monthly/Quarterly/Annual Recurring Revenues (usually I use quarterly to get a better picture). QRR has been one of our key metrics we track closely. However, I realized that this is always correlated with our QRC – Quarterly Recurring Customers. This metric tells me exactly how many of my clients are satisfied and coming back for more. It allows me to do a more qualitative analysis on my business when I go back to them and understand what went well, and more importantly, how we can improve. Same thing, when I speak to clients who churn, I am able to discern the reasons why we can’t meet expectations and work towards that. I have always worked towards keeping my churn rate below 15%. It is something I strongly believe in (QRR can always scale much faster with QRC rather than acquiring new clients).

So next time, when you are looking at your business, do spend time looking at your QRC and churn rate. This will be one of the best tactics to scale your business exponentially.



Explaining Convertible Notes – Keep It Simple

Recently, I have had a number of friends who asked me about how convertible notes usually work. Thought I will explain how convertible notes work (or at least the usual ones).

There are three key items in any convertible note (or in usual convertible notes):

  1. Valuation Cap. This is the maximum valuation you will invest into the company at.
  2. Discount. This is to compensate earlier investors for investing at an earlier stage of the company with less traction. Therefore, earlier investors will have a paper gain on the investment should there be a next round raised. Typical discount rates range from 10 to 30%, with the most common being a 20% discount.
  3. Coupon Rate. Similar to any bond you purchase out in the market, some convertible notes have a coupon rate attached to them. This is usually acting either as accrued interest, or as an interest that will be paid to investors at conversion. This may not be offered for all convertible notes though (though if offered, it usually ranges from 6 to 15%).

Now comes the tricky part: conversion. How do you determine the price you are converting at. I like to simplify it as follows:

  1. Calculate the amount invested into the company (including any interest that you are earning which will be accrued and converted to shares).
  2. Calculate the number of shares you will receive on each situation.
  3. Pick the one that is more favorable to you.

I have summarized the calculation methods in the diagram below.

Hope this helps.



On Vision

Vision: the ability to think about or plan the future with imagination or wisdom.

Professor Google

Such a simple yet profound concept.

I remember my mentor asking me back in the day: What is your vision?

Back in 2011 when I first started my digital marketing agency (which eventually evolved to cloud computing – a complete 179 degrees turn – 1 degree for the fact that both are in tech), I was looking at becoming the best digital marketing agency around the world. Such an abstract concept, no wonder it didn’t materialize… Eventually, we had to pivot…

When we were forced to pivot to the cloud computing space in 2014, I took 2 months to clarify the company’s new vision: To serve the small and medium enterprises around the world and reduce their inefficiencies, by coming out with the product that reduces errors from double entries. We will be at the top of mind for our customers when it comes to admin services and streamlining operations. It was so clear that my team (very thankful for them) and I were able to penetrate Malaysia and Thailand without raising any money within the span of 26 months. We then started to strengthen our roots there and made sure that our customers were well-served, and that was so important for our success that we managed to get acquired by a US-based company.

I respect entrepreneurs who have the guts to make pivots when things didn’t go well.

Deng Xiaoping is a great man… He fought a great revolution. He saw the product of that revolution turn sour. He was fortunate to live long enough and he had the courage to say “NO! WE CHANGE COURSE! LET’S LEARN!”…That’s how we succeeded because we have open minds, common sense. A lot of analysis, careful weighing of the odds, make a firm decision, monitor it, implement it, modify as it goes wrong. ABANDON IF IT IS NO GOOD!

Lee Kuan Yew (Founding Prime Minister of Singapore)

Today, when you ask me about the vision of my esports & gaming tech VC, I will tell you:

We are a venture firm empowering the next generation of esports and gaming tech entrepreneurs that are hungry for success, resilient, radically open-minded, innovative and action-takers. We partner with them to create the best value for their clients and in the process ours, by giving them a platform to scale globally. We create win-win-win situations for our founders, LPs and team by creating the top decile returns. Entrepreneurs backing entrepreneurs.

Gamerforce Ventures – Our Vision

This has been “indoctrinated” into our team as they are onboarded because I strongly believe in the concept of vision alignment. Our visions should be aligned so that our business will flourish. If our visions aren’t aligned, we will eventually fall out.

This is a 300-year vision. I would like my companies to be able to continue growing over the many years to come. Having said that, I have one person to thank, Alvin. Alvin has clarified and gave me the confidence to make my 300-year vision a reality. Some people thought I was trying to be funny or joking, but this is as serious as it gets. 300 years later, when I am no longer around, my vision will be my legacy.

Is this masterclass for everyone? One thing I realized is that the word “legacy” itself carries a very solemn and heavy meaning. A legacy is a part of a person that lives on long after that person has passed have passed. A legacy also leaves behind the story of a person so they are not forgotten. Legacies are important path ways or the future to follow or to be guided by in order make better decisions in life. This is a huge undertaking. Here are my questions for those who would like to join Alvin’s Masterclass:

  1. Are you comfortable working as a freelancer or self-employed? If yes, please don’t go for it.
  2. Can you commit yourself to action after learning? If no, please don’t go for it.
  3. What is the vision you have? If you don’t have one, clarify it before going to his masterclass – or maybe you might get it clarified during the masterclass, I’m not sure.
  4. What is the legacy you want to leave behind for the world?


6000% ROI in the Market Over 9 Months?

Recently, a friend sent me a post from NUSWhispers claiming that he has managed to make 6000% returns on the US stock market (I think he’s likely buying a bunch of call options on things like Tesla, Zoom, Palantir etc.) over a period of 9 months.

I was quite surprised but on hindsight, I think there are a few lessons to be learnt here.

  1. I’m happy that you managed to make money from the stock markets and have overperformed most fund managers out there. Kudos to you.
  2. I’m wondering if you are able to consistently (that is the key word) generate above market (indexed by S&P500) returns in the market.
  3. I’m also wondering if you have hedged your risks. Remember that it is harder to make back your principal when you lose it than to make profits. Simple example as follows –
    You have a portfolio with NAV of $100k.
    (A) For you to make an additional $50k in the market, your ROI needs to be 50%.
    (B) If you lose 50% of your portfolio NAV, to recover the NAV (which requires you to generate $50k as well) would require 100%/50% – 100% = 100% ROI, which is harder to generate, simply because your baseline has been hammered down.
  4. Some people have said “What fundamental analysis? Just full on leverage on things like TLSA and PLTR and ZM.” My response to such comments is that you have failed to see the main point in investing. There is no use trying to time the market. It is better to invest in top quality companies at a fair price. No need to chase the hype. I generated almost 4x over 6 years (consistent 25% to 30% IRR) despite multiple market corrections because I bought into top quality companies. My question to you is “What if the company goes sideways? Do you have the ability to stomach your losses?”
  5. When buying a stock, you are not just buying a counter on the stock market that somehow has some trading activity going on. You are becoming a partner in the business. You need to think long term, not just speculate. Many of my friends have been burnt when they speculate. My advise is not to have more than 10% of your portfolio as “speculative funds”. This way, your risks and downside is well protected.
With that said, I would like to remind all investors of two important laws in investing:
  1. Never lose money
  2. Never forget rule no. 1.


My Final Words As A Student of DraperU (Fundamentals of Entrepreneurship October 2020)

Dear Fellow DraperU Heroes,
This is it! Graduation from here and the start of a new journey. Thank you for all the inspiration that you have given me over the past 2 weeks (it has been great even though I sleep at 2-3 am and wake up around 7 am).
We all overcame many challenges, from the pressure cooker 48 hours of the Herothon, to the pitch yesterday to Tim and the DraperU Team. You have inspired me to think even bigger and work on more Big Hairy Audacious Ambitious Goals. You inspired me to be fearless and keep standing up again after being slammed down over and over again. If traditional universities were like this, I bet almost everywhere will be springing up with entrepreneurs who are willing to challenge the status quo.
A big shout-out to the DraperU Team, Tim, Fatih, Asra, Andy, and all the speakers and mentors, thank you for serving us and providing us such a conducive and open environment for us to learn. I’m so glad I had the opportunity to learn from all of you and build this relationship further. I’m sure our paths will cross again, hopefully, sooner than later.
To my fellow batchmates, we have accomplished something that not many could have done so. We made the commitment to join this program and today, I’m sure these 2 weeks are definitely worth way more than what we paid for. I’m so glad that we are now having some collaboration opportunities being discussed even between us as students of this cohort, something that I have never seen in traditional colleges (at least here in Singapore).
The journey ahead will be tough, and it will only get tougher. But I’m sure that with your mental resilience and fortitude, you will be able to advance and overcome all the adversities standing in your way. Always remember that we will be here for each other, and we will all stand by the creed that we have taken unto ourselves. This is not the end of a journey but the start of another. With friendships forged and values aligned, I’m sure you will go on to accomplish great things and build a rainbow for our world tomorrow.
Always remember what we stood for, the challengers of the status quo, the ones who will stand up and create the future, the ones with the vision and fearlessness to go out and win people over by treating them well and treating ourselves well. You have proven to be stronger than what you think you are, and I’m sure you will only get stronger with the support and challenges down the road that will test your mettle. As Jack Ma said “today is a stormy day, tomorrow will have a storm that is even worse, but the day after tomorrow will be the day we see a rainbow.” I’m sure you will survive and thrive during the storms ahead and emerge victorious to see the rainbow.
I shall not hold you back on your journeys to change the world for the better, and I look forward to helping you in any way I can in the future. All the very best in your endeavors and I look forward to hearing your success stories.
For one last time as students of this batch, For Honor And Glory!

[Company Feature] Kronikare Develops iThermo Together with iHIS

AI-powered temperature screening solution being trialed in Singapore

iThermo reduces the need for manual temperature screening, and provides prompts where secondary checks can be carried out for feverish persons identified by the solution.

Integrated Health Information Systems (IHiS), the national HIT agency in Singapore, has partnered with local healthcare AI startup KroniKare to pilot iThermo – an AI-powered temperature screening solution that screens and identifies those having or showing symptoms of fever. iThermo is currently being piloted at IHiS headquarters in Serangoon North and St. Andrews Community Hospital (SACH) from 10 and 11 February onwards respectively in “live” operational environments.


With the growing threat of the COVID-19 (which was recently renamed by the WHO, formerly known as 2019-nCOV), Singapore has officially raised its ‘Disease Outbreak Response System Condition’ (DORSCON) alert level from yellow to orange on 7 February. The DORSCON orange status means that the COVID-19 disease spread in the country is severe but contained. As of 13 February, there are 58 confirmed cases of the disease. As part of the DORSCON orange status, temperature screening and monitoring becomes mandatory for most public spaces.

iThermo reduces the need for manual temperature screening, and provides prompts where secondary checks can be carried out for feverish persons identified by the solution. With iThermo, less time is taken to conduct manual screening and it also reduces the exposure risks to viruses of frontline medical staff.


iThermo uses a smart phone fitted with thermal and 3D laser cameras. The AI application processes and analyzes the images from the smartphone camera (which captures facial features) and maps them to images from the thermal camera (which measures temperature) as well as the laser camera (which measures distance).

The Smart Health solution utilizing AI is able to recognize human facial features from thermal images to measure the forehead temperature, including individuals wearing spectacles, surgical masks, hats and other headgear, even when they are walking. The solution can carry out this function for up to 5000 persons in a day.

The solution also incorporates distance analysis and compensation (as temperature measurements reduce with distance). It can measure temperatures accurately up to a distance of three meters from the camera (a feature not found in other similar range solutions).

Critically, the AI solution can also provide status reports and real-time updates via the dashboard with rate of traffic and how many febrile persons were identified. The dashboard can be connected to multiple cameras at different locations, and enable remote monitoring of the status at different sites.


“Healthcare institutions and many businesses find it challenging to perform large scale temperature screening at speed. AI can help. The iThermo solution uses mobile phones with thermal and laser cameras, and an AI app to seamlessly detect people who may have fever, as they walk by. The app will generate an alert if a febrile person is detected. This reduces scanning fatigue, manpower and time. IHiS and Kronikare co-created the iThermo solution in two weeks. It is being piloted now and the results are encouraging. We have received enquiries from healthcare institutions and other sectors including retail and banking,” said Bruce Liang, Chief Executive Officer, IHiS, in a statement.

Hossein Nejati, CTO and Co-founder, Kronikare, said: “KroniKare has been working closely with IHiS to introduce the use of AI in healthcare through automatic processing of multi-spectral images for diagnostic purposes. Together with IHiS, we were able to very quickly re-purpose our device using the same hardware, but different software, to perform real-time temperature screening. Our co-development with IHiS has helped us to be agile and enabled us to swiftly develop this solution, deploy a proof-of-concept and pilot in such a short time to respond to a critical period such as this.”


To find out more about Kronikare and iThermo, please visit their website at

Disclaimer: The author is vested in the company featured in this article.

Starting Your Own Online Business

Today, the Dow-Jones Industrial Average has dropped 10% in one night. This led to many Asian markets falling further into crisis (STI dropped more than 5% to a 4 year low, ASX200 dropped 7%, Nikkei225 down by 8% and HK’s Hang Seng index down by 5% at the time of writing). The European markets are also taking a hit, with the FTSE100 index down by more than 10%. I was just looking at the stock market this morning and it was a bloodbath. I see that there is likely a recession that will be coming in soon.

Many people are coming out and ask me “How can I take control of my own life?”

My answer to them is to start an online business that requires some time to build up but will eventually produce passive income for them every single month. This way, it allows you to continue making money while not having the headache of losing your job. Just keep doing what you do on social media, but try to monetize it.

Now, how can you start your online business with little to no capital? I would suggest that you build your own credibility as an expert in your field, and that means having your own website.

I got my domain name and hosting from my current supplier, Namecheap, and I loved it. I have never regretted getting their service because it is so seamless. They even have G-Suite and all the tools you need for your business to grow so that you don’t have to worry about any upcoming recession. Remember, the best way to recession-proof yourself is to take life into your own hands, and it all starts with establishing yourself as an authority figure.

Namecheap is offering a very special deal this time, and I believe that it would help you generate cash flow during this COVID 19 period. Click on the link below to find out more!


HonestBee: The ASEAN Version of WeWork?

Recently, there have been many articles covering about HonestBee scandal. I would like to summarize the articles for you, based on my analysis.

On Feb 18, 2020, HB has created a new entity and the creditors are worried about the illiquidity of the new entity. It has already delayed payments of salaries of 150+ workers. Not a very good sign if you ask me. Seemingly, there doesn’t seem to be much recourse that could be taken at that time. A friend of mine even mentioned that he would just write off the exposure and quit and move on (for employees). Again, judge people by what they do not what they say. Actions speak way louder than words.

On March 2, 2020, more was revealed that they have even started moving their furniture out of their current premises from their “habitat”. Police was even called in to investigate why the company was moving their furniture out. Landlord and tenant having some big issues. It was even written in the company’s books that it has about $5m in furniture, fixtures and store equipment.

Just yesterday, they started laying off staff, and guess what, large conflict of interest. The company leased a shophouse unit“… from chief executive ONG lay Ann…” This sounds like a WeWork all over again…

This shows the importance of understanding the risk in startup/venture investing (as an angel investor). Key lesson: Don’t overexpose yourself too much in one company. 95% of businesses fail within 5 years of opening. Be very careful when you start doing venture investing. Don’t put all your eggs in one basket.


P.S. Thank God I have never invested in this…

Achtung! Panzer! – The Case for the Blitzkrieg in Business

Many times, we see many people comparing the business strategies employed by successful companies to tactics used in warfare. Recently, there has been a lot of debate over the blitzscaling tactics used in Silicon Valley over this tumultuous period in the history of entrepreneurship. We have seen the fall from grace of various highly-priced startups including WeWork, Uber, and Lyft. And yet, the same blitzscaling tactics have also built the technology giants around the world, including Facebook, Microsoft, LinkedIn, PayPal and SEA Ltd. This essay aims to discuss the usage of the blitzscaling tactics in business and aims to provide a clear view for entrepreneurs in terms of whether it would be the right strategy for them in business.

Brief Background on the Blitzkrieg

The blitzkrieg [German for lightning (blitz) war (krieg)] was a strategy popularized by the German general Heinz Wilhelm Guderian (also known as the Father of the Blitzkrieg) in his book “Achtung! Panzer!”. It involves the deployment of concentrated forces led by tanks, followed by motorized infantry and supported by heavy artillery fire and air raids on the enemy. It has seen its success during World War II in the invasion of Belgium, the Netherlands, and France (falling in 46 days). The whole concept behind the blitzkrieg tactic was to prioritize speed and the element of surprise to catch the enemy off-guard, and then surround them and hit them hard before they can regroup and retaliate. As with many military strategies, this has developed into a business strategy for the growth of companies and businesses.

Using Blitzkrieg Tactics in Business

The popular book “Blitzscaling – The Lightning-Fast Path to Building Massively Valuable Companies” by Reid Hoffman and Chris Yeh has mentioned the success of many technology companies today can be advocated to blitzscaling, where the company takes their competitors by surprise through the push for increase in market share, prioritizing speed over efficiency and profitability (essentially employing the blitzkrieg tactics used by the Germans in World War II). The major thesis behind the use of such tactics was the leverage the network effects could bring to the company, eventually making them very sticky for their customers. This allows them to increase prices without losing too much market share, making them hugely profitable in the long term.

Essentially, the strategy involves burning more cash at the start to dominate markets before trying to turn a profit. The eventual goal for these companies may just be an exit to a competitor who wants the market share for themselves and find it too expensive to do it on their own, leading to a buyout. Alternatively, they may be looking at a strong IPO as an exit strategy as they have the networks.

There are certain requirements for this tactic to work for any company though. Firstly, the total addressable and serviceable addressable market sizes for this business must be large enough. This allows you to be able to capture a significant market size before your competitors catch up with you. Your target is to be the market leader at lightning speed and take them by surprise repeatedly. The whole idea is just like the lightning war fought by the Germans in World War II. Once the desired scale is achieved, processes to improve the company’s efficiency in terms of processes are then thought through, while not compromising growth too much. Some people call it being fast to market, while others call it uncontrolled growth. At the end of the day, it is, like any other tactic, a double-edged sword.

The Argument Against Blitzscaling

Those who oppose the concept of blitzscaling usually cover the sustainability of the tactic used. The blitzkrieg was never meant to be a sustainable tactic. It was a tactic to take the enemy by surprise and surround them before they have any time to react. The same goes for blitzscaling. You would want to capture as much market share as possible before competitors come in to try to get a slice of the pie. It was never meant to be sustainable. Comparing blitzscaling to growing companies for sustainability no matter the scale is like comparing the blitzkrieg to trench warfare.

Many investors “dedicate” WeWork’s fall from grace to the blitzscale strategy. The company decided that it was supposed to be working as a technology company with strong network effects. This has led to high levels of sales but also a very high burn rate. However, when you look into the company’s business model, it is a very asset-heavy business, with the need to rent or buy large amounts of real estate to function with sufficient economies of scale. This leads to high levels of capital expenditure, and hence the high costs involved. The cash flow from operations generated will not be enough to cover the capital expenditure, requiring the company to keep raising funds from investors without the actual ability to turn profitable after the lightning war.

The changes in attitude away from the blitzscaling can be seen by the most recent changes in Silicon Valley, who have turned against the priced unicorn game to a search for profitability even with low levels of scale. They are now turning towards the trench warfare in terms of the strategy used, whereby the startup uses a more defensive play to take profitability against size and scale. It may seem like the era of the blitzscale is over, but I feel that it is not the case, at least not in entirety.

Final Thoughts

At the end of the day, there is no right or wrong tactic in business. Ultimately, the sustainability of the startup venture will point towards profitability. How a startup achieves profitability is a question of the business model. As we have seen in World War II, the blitzkrieg is used as a measure to counter trench warfare and is in turn countered by the usage of strong mobile reserves for reinforcement.

If the company requires significant economies of scale to turn profitable and is characteristically asset-light, I would recommend that the blitzscale strategy be employed upon finding product-market fit is still crucial for the company’s success. However, in other cases, it would be best to keep the company from making the wrong decision and go for a more defensive play. More importantly, always remember that there is no perfect product and the key to success in business is to capture enough market share. This can only be done if you listen to your customers on what they need and want, rather than what you need and want. I always recommend doing pre-sales if possible (especially consumer software/technology products) to test out the market demand.

Reference Materials

If you would like to know where I got the information for this review, please check out the two books embedded in this post.