When Carsome was announced as the first Malaysia-based unicorn in July 2021, the local startup community was thrilled by its success. It seemed to have a domino effect as not long after, Malaysia found 2 more unicorns in edotco, a telco infrastructure services company, and AirAsia Digital, the budget airline’s digital arm.
In a Wild Digital SEA 2021 conference, Carsome’s co-founder and CEO, Eric Cheng was invited to speak about the startup’s journey and what led to it joining the unicorn club.
Managing Partner from 500 Global, Khailee Ng, also joined in to pitch his perspective on how Carsome was able to gain the trust of investors by sticking to a few value propositions.
It starts with being obsessed about solving customer pain points
The advice is as old as time: an entrepreneur has to know what pain points are faced by customers. Solutions should then be built around these problems in a way that satisfies and meets customers’ expectations.
Eric shared that Carsome mainly got started because it wanted to lower the amount of friction that came with buying and selling used cars in Malaysia. It was a laborious process that required both the customer and trader to be on-site to evaluate and inspect the car.
Challenges also arose when a customer had little to no knowledge on how to gauge a used car’s value. And even when a customer has gained enough confidence to make the purchase, the car may perform differently once it’s actually being driven.
With plenty of distrust in the process, Eric attempted to solve these issues with tech and data.
Being one of the pioneers in the Malaysian industry, Carsome had to build its own large data sets to analyse and determine the right price for a car based on its age, build, brand, model, and colour. Though it took much time and effort, having a strong data foundation ensured transparency for customers, which greatly helped as the company expanded overseas.
Hence, when an entrepreneur believes in providing a product that’s exactly what customers want, coupled with good service, being data-driven can help optimise processes as volume grows.
But even with their current solutions, Eric feels like they’re still not doing enough. There are many more challenges to tackle in order to satisfy customers, and staying obsessed with solving these pain points means the Carsome team is keeping their ears and eyes open to what’s going on and developing solutions for these issues.
Impacting not just customers, but your own people
Khailee noted that out of the 21 SEA companies backed by 500 Global back in 2014, 6 of them are now unicorns, Carsome included. Some similarities shared by these unicorns are their use of data-centric systems and prioritisation of ESG metrics in addition to being financially driven.
Editor’s Update: The above paragraph has been edited for better clarity based on supplementary information shared by 500 Global’s team.
Did you know: ESG is an evaluation of a firm’s collective conscientiousness for social and environmental factors. Environmental criteria consider a company’s energy use, waste, pollution, natural resource conservation, and treatment of animals. Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights.Investopedia
Eric shared that one of Carsome’s foundational beliefs lies in building a positive company culture. One thing that binds the team of 2,500 together is sharing the belief of providing good services to their customers. For example, the team is engrossed with maintaining a high net promoter score (NPS) for Carsome.
Simply put, the NPS is a customer loyalty and satisfaction measurement taken from asking customers how likely they are to recommend your product or service to others on a scale of 0-10.
To achieve a favourable result, companies must first support their internal teams. They should not just showcase a front of wanting to satisfy customers and keep them happy without first ensuring their own staff are supported and content.
It’s a value similar to what luxury coworking space Colony upholds, with CEO Timothy Tiah once telling Vulcan Post, “Our belief is that if we take care of our employees, our employees will take care of our customers and our customers will then take care of our shareholders.”
Doing so will require staff members to understand their purpose in the company, and the leaders must support them well along the way. Once that’s settled, the teams can work more efficiently towards a shared vision together.
Giving more than you take
In prioritising the company’s internal culture, entrepreneurs looking to support their staff will find ways to provide added value to them. It’s something we’ve seen done before in writing about startups, such as an entrepreneur who started a new business just to keep her staff from a failing venture.
Giving back is a sentiment shared by Carsome’s leads too, who noticed that the car trading industry came to a halt during the lockdowns as customers weren’t looking to buy cars as much.
With the extra time on hand, Eric decided it would be beneficial to train up the company’s staff through Carsome Academy. Launched to the public in 2021, the institution is now a training centre offering Malaysian youths technical education and guaranteed career opportunities.
The course is fully refundable upon a graduate’s successful placement and tenure with Carsome. Study loans are also available for students who wish to further their studies there.
This points to a value proposition put forward by the company that attempts to benefit the communities around them while building their brand financially and acquiring customers. It’s also a more tangible effort of giving back long-term compared to one-off CSR efforts for branding and marketing purposes. As they say, show, don’t tell.
These were the 3 main methods Carsome used to build an enduring company, and it’s likely that what was shared will resonate with many other entrepreneurs who’ve built solutions out of a passion for solving customer pain points.
At the end of the day, many would agree that creating a lasting startup isn’t about chasing large valuations and getting recognised through awards or similar, but making a positive impact on customers’ lives while ensuring one’s own team benefits and grows too.
Being a unicorn is the validation we need that shows what we’ve done in the market matters, but it was never a goal in the beginning, being a unicorn. We see it as something that would come by along the way, but fundamentally more important for us is how to we continue to solve pain points in the market as we see it.Eric Cheng, co-founder and CEO of Carsome.
- Check out Carsome’s unicorn journey that we covered in more detail here.
- You can read more on what we’ve written about Wild Digital SEA here.