How we built a smooth-running engine, yet abruptly ran out of oil

The definitive story of that online payments company called Maesh

Michael Duyvesteijn
Mar 9 · 10 min read

It’s been about 6 weeks now since I decided to shut down Maesh.

There are many ways you can cope with an event like that, but I firmly decided to be proud and celebrate. That Thursday, my wife and I popped the bottle of champagne which we had kept chilled in the fridge for moments like these. Instead of cheering to landing Maesh’s Seed Round funding, we saluted to the finale of a magical ride. 🍾

I publicly shared the team’s and my achievements in a LinkedIn post. There was a heart-warming outpour of reactions, not just from close friends and family but also from total strangers to those with whom I’ve lost touch. Unbeknown to me they had all somehow been following the story of Maesh. Putting the announcement up, even turned out to be a blessing in disguise, as it allowed me to newly connect with a wide variety of operators in ASEAN’s startup space and especially its Fintech industry.

Now, one and half months later, I have taken my due time to reflect and jot down the short, yet definitive story of Maesh. How did this innovative online payments company come to a screeching halt? What can we learn from this?

Using the four steps of the diesel cycle, I’d like to take you along on my 21-month journey with Maesh and reveal to you how and why this smooth-running engine abruptly ran dry.

Stroke 1: Intake. Diesel (a) and oxygen (e) enter the combustion chamber.

Stroke 1: Intake (May 2019 — March 2020)

This is the first step of the four stroke diesel engine. It is where the right elements in the right proportions get brought in for a combustible mixture.

When I arrived in Singapore in May 2019, I was completely ignorant of ASEAN and Fintech in general. Back home in the Netherlands, I was somewhat dabbling with this new EU regulation called PSD2, which is Europe’s version of Open Banking. However, I was forced to give that up, as my wife had gotten a job in the Lion City. And as a loyal husband, the right thing to do is to come along. 😉

Being transplanted into Asia, I now started poking around in Singapore’s payments ecosystem instead. I remember getting very confused about the plethora of payment options. Especially, the products of the NETS banking consortium were very puzzling to me.

I have moved abroad a couple of times now in my life, so — being Dutch — I know I get home-sick because of two things:

  • 🚲 Not being able to bike every day
  • 🛍 Not being able to use iDEAL for online shopping

And the latter is what got me most frustrated: I identified there was an opportunity in the online payments space in Singapore. I just couldn’t wrap my head around why bank transfers weren’t commonplace in e-commerce.

That will also hopefully clarify to everyone what Maesh was actually trying to achieve:

Maesh MVP Live
Maesh MVP Live
Screen capture of Maesh’s PayNow QR solution live with its first customer.

Maesh wanted to make online bank transfers smooth for the consumer and easy to integrate for merchants. At the same time, this would significantly reduce costs for these Singaporean SMEs.

Imbued with this mission, I wrote the first lines of code in July 2019 and landed the first customer that went live in September. Maesh was going full steam ahead. 🚂

Learnings

Singapore, an island nation of 5.7 million people, was in hindsight not the right market to start with. 🇸🇬

Compared to the greater ASEAN (583 million people), it is too small, although in terms of GMV of its Internet economy, Singapore hits 10 times above its weight (US$9B in 2020 compared to US$105B for the ASEAN region).

Besides that, Singaporeans love their credit cards (they have 5 on average). Cashbacks and rewards are a favorite national pastime.

The banks also experience internal struggles between their cards and bank app teams, limiting support for the convenient Request to Pay through deeplinks (a redirect into the bank’s app on mobile, like what we did with OCBC’s Pay Anyone™). Plus, Singapore is also not very fast with adopting Open Banking, which is somewhat stifling innovation.

Regardless, I still strongly believe that account-to-account transfers will be the payment method of the future. 🚫💳 It’s just plain nonsense that we use a physical card with an extra middleman (the card networks, i.e. Visa) to purchase for things online.

Conclusion

It was going to be a long game in Singapore, by slowly capturing more and more of the checkouts through bank transfers. Ingrained user habits do not change overnight. I should’ve perhaps looked earlier at what market to start in and/or how to expand into other ASEAN countries.

Stroke 2: Compression. The piston drives the combustible mixture together.

Stroke 2: Compression (April 2020 — October 2020)

This is the second step of the four stroke diesel engine. It is where the piston puts pressure on the combustible mixture.

Up to this point, Maesh had been a one-man-show for 10 months. However, the moment the DBS API integration kicked in in March 2020, I decided to put the pedal to the metal. The product was now mature enough to rid itself of the label Minimum Viable Product as it was serving 3 active merchants. Plus, I could no longer handle things on my own.

By July, the team — affectionately called the Maesh Potatoes 🥔 — had grown to 6, including 2 full-time interns. And during that first COVID summer, we just kept hitting milestone after milestone and pushing the limits:

Maesh Active Merchants and Transactions, end of October 2020

Now, at the end of October, 33 merchants were actively transacting on our platform. We were also gearing up towards F10’s Demo Day, the graduation event that should culminate in significant investor attention. The logical next step was thus to leverage that moment and raise a US$450K Seed Round in December to further boost our growth.

What we didn’t realize then, was that our overnight success in June — the sudden spike in transactions because of Singapore’s Circuit Breaker, i.e. lockdown — would start to become a hard sell to investors. 📊

Learnings

I never ventured out to be the solo founder for my company. I tried plenty of Find-Your-Cofounder hacks but didn’t get lucky enough to stumble upon the right fit. Another downside if you will, is my generalistic nature, such that finding my startup soulmate was never blocking the engine from rotating. ⚙️

For my weaknesses — tech and sales — I planned on hiring up. I deemed tech most important, because — dealing with people’s money — reliability and security are your key selling points. An impeccable reputation is everything.

Limited by our shoestring budget, there was not a lot of leeway in terms of salaries, resulting in a relatively junior tech team. Next to that, the more senior developers who did join Maesh (and subsequently left), were not able to offload me in terms of running the daily standups and managing the team.

This meant that I had to compensate with my own time for a lack of tech leadership, which put incremental pressure on me. In turn, it cascaded in insufficient focus and delays in hiring a Head of Sales who would’ve been able to address the lagging number of transactions.

Conclusion

Without the guidance of developer heavyweights, we executed relentlessly on a clear vision for our product. Yet, I ended up spending lots of time still running the show in different aspects, not making me scalable. Attracting sales talent also happened too late because of tech recruitment slip-ups. It just didn’t set up the company for success in terms of having the right expertise and seniority in place.

Stroke 3: Power. The combustible mixture auto-ignites due to high pressure (and thus high temperature).

Stroke 3: Power (November 2020 — December 2020)

This is the third step of the four stroke diesel engine. It is where with the build up of heat, the combustible mixture ignites.

As a payments company, the business model entails low margins and high volumes. That means that getting to profitability may take longer than an average startup because you need to grow much larger.

To get to a vast number of transactions every day, you can take the slow route— by keeping your costs low and bootstrap the business — or you fire up the right elements to blitzscale and rev up the KPIs.

Maesh wanted to make an impact by changing the broken online payments space. For us, it was “Go big or go home”. Having already put a solid tech foundation of security and reliability in place, it now meant cranking up hiring efforts. For which we needed Venture Capital (VC). 💸

All the while running Maesh, we were fortunate to never have any problem with getting the attention from VCs:

  • 💬 VCs reached out to us to chat
  • 👨🏻‍🏫 We got introductions through our fantastic advisors/mentors
  • 🐝 The F10 program’s Demo Day created some buzz
Maesh Gross Transaction Volume, end of December 2020

In November and December of 2020, our numbers also started looking better. In the last month of the year, we recorded US$110K in Gross Transaction Volume (up 50% month-over-month) and totaled 55 active merchants.

Yet the VCs started dropping out of the fund-race one-by-one. They didn’t think we had enough defensibility moat against Stripe, we lacked bigger merchants, and our future revenue models seemed weak. Our seemingly perfect combustible mixture didn’t catch fire. 🔥 Why were we not able to wield the power we anticipated?

Learnings

Maesh had many meetings with top-tier VCs. I guess it made me confident, but also complacent. Call it VC starstruck.

Besides that, Maesh had already successfully raised one round, so somehow I was completely blindsided to the added value angel investors could still bring:

- 🎫 They participate in smaller tickets (US$25K-50K). We’d only need ~9 to fill our round

- 👼🏾 They have great connections for partners, merchants, banks, and other angel investors

The negative feedback from the VCs was also most of the time pertinent, but not unsolvable. We needed more time to figure things out on the fly and strengthen our value proposition.

It appears that we could’ve hedged ourselves better against the rejections and non-committance of VCs as angels typically have a bigger risk appetite. It was unfortunately too late in the game when I realized I had been putting too many eggs in the wrong basket.

Conclusion

I misjudged the fundraising process for our Seed Round. Not diversifying enough between VCs and angel investors — especially given our small US$450K round size — unnecessarily put a strain on the runway of the company.

Stroke 4: Exhaust. The combustion forces the effluent gases to expand. This causes the piston to go down and create “work”, while the æxhaust exits the combustion chamber.

Stroke 4: Exhaust (January 2021)

This is the fourth step of the four stroke diesel engine. It is where the ignition causes the exhaust to expand and continue the momentum of all the moving parts.

In January of this year, the time crunch became even more salient. We were not only starting to run out of money but by January 28, we had to apply for a license as a part of Singapore’s Payment Services Act. This was not a surprise at all; we were fully organized and prepared to apply by that date.

There was just one tricky requirement we couldn’t meet: Having a Singaporean or Permanent Resident be a part of the Maesh Board of Directors. We had hoped that through raising an external investment such a person would introduce themselves and check the box.

With the deadline looming inevitably, I decided to take a step back and zoom out. The characteristics of an entrepreneur are grit, resilience, and resourcefulness. Should I let this technicality crush the dream? Doesn’t he/she always find their way out like a true escape artist?

I realized I should instead look at it as a poker game of Texas Hold’Em. ♣️ Maesh had been dealt a great hand of cards — pocket Aces. But its outs started vanishing after the flop, the turn, and the river. Simply put: Maesh had exhausted all of its options. Sure, I could bluff and go all-in, but the odds were no longer in our favor. I decided we would wait for the next deal of cards.

The engine started sputtering.🛢

Epilogue

As we now know, the faltering engine was the beginning of the end. If there’s any part 2 to the story of Maesh, still remains to be seen, but —for the protagonists — it will undoubtedly plant the seeds for something bigger and better 🌱

This also being a eulogy of Maesh of sorts, I would like to take the opportunity here to thank some people who have all in their own way been part of this incredible journey:

  • 👰🏻‍♀️ My wife Celestia for her loving support during my mood swings
  • 👨🏽 My friend and advisor to the company, Santiago, for his unwavering loyalty and listening ear
  • 🦑 Our advisor Wouter and mentor Jakub for their candid feedback and networking tentacles
  • 🛒 The merchants of Maesh who believed in our mission and trusted us with their livelihoods
  • 🧧The early investors who hopped on the Maesh train. Destination unknown
  • 🖋 My friend Matthijs for gracefully signing the motley amount of formalities, while I was waiting for my EP approval
  • 🥔 And last of all, the potatoes who enabled the story of Maesh: Deep, Brennan, Aditya, Bryan, Giordan, Eduardo, Nanda, Diana, and Vincent

Many thanks! 🙏

Maesh

The cheapest online payment solution in Singapore

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