Ooosh Tech Lab’s Startup Incubation and VC Investment Thesis (South East Asia)

Ooosh Tech Lab’s portfolio companies presenting during our Oct 2021 Demo Day

While we can write a long list of industries we are interested in investing in (Web3, Future of Work, PropTech, LegalTech, FinTech, InsurTech…the list goes on) along with our visions for our future, we strongly believe that investing in startups (especially at such an early stage) goes beyond the idea itself. The decision really lies in the essence of the business — the mentality and quality of the founders.

By sharing our criteria, we hope to shed light on how we selectively handpick startups to join our portfolio. The same criteria also applies to startups that we choose to incubate. The only difference being, should a startup not be 100% ready for fundraising and require more business fundamental support or help finding their product-market fit, our incubation program is available to give them that 1-on-1 guidance to become investment-ready.

With that in mind, what qualities do we look for?

1. Business Sensibilities

This quality is hard to quantify but can be determined by how founders speak about their business.

• Do they understand the importance of balancing costs with productivity and revenue?
• Do they have concrete answers to our business questions?
• Do they have a good sense of how to engage stakeholders?
• Are they able to adequately manage expectations?

This soft skill is important in differentiating an investable startup from just a group of friends working on a side project together.

2. Time Management

While keeping track of finances is important, a startup founder must be cognizant that time is their most valuable resource.

• Are they able to stay focused?
• Do they have the sensibilities to quickly recognize when something isn’t working for them and when to pivot?
• Are they able to set milestones that truly move the dial on their business and execute them in a timely manner?

Showing us that they understand the value of growing sustainably over time by being able to quickly identify areas that are not working for them is key to managing a scalable business from all stakeholder angles (employees, investors, and customers).

3. Vertical Expertise

• Does the founder have work experience, education, or significant experience with this problem from the perspective of a potential customer?
• Are they able to understand the problem well enough to ideate a workable solution that customers would be willing to pay for?
• Do they have the connections to create an initial pool of customers to build their product?

Having domain expertise (or experience) heavily impacts whether or not the founder will be able to solve the problem they are focused on.

4. Focus

• Their vision may be hugely inspirational, but are they focused and able to manage their resources accordingly to get there?
• Do they have a clear roadmap?
• Have they identified ways that they can solve a smaller, more immediate portion of the larger vision in order to kickstart their business in a defensible, revenue-generating manner quickly in order to grow and scale?

A common problem some startup founders can run into is the death-loop of creating insignificant milestones that don’t move the dial on the business in order to avoid dealing with the bigger problem at hand. This can help support a dopamine high in the short-term, but will lead to a bigger startup crash in the longer-term.

5. Coachable

• Is the founder open and willing to listen to other perspectives?
• Are they able to take feedback and act upon it?
• Do they understand the importance of collaboration?
• Yet can they also balance accepting feedback while still making their own decisions at the end of the day in a conscious manner?
• Are they willing to listen and learn from others and their own mistakes?
• Is it easy to collaborate with the founder and work on solutions together?

It’s important for us to gauge during our conversations the ability to synergistically work together.

6. Practicality

• Do they fantasise about the startup journey, attributing it to lots of glory and success? Or are they serious about the problem they are trying to solve and are willing to put in the work to get there?
• Do they understand that times can and will get tough?
• During those times, are they able to make practical decisions to keep the business running?
• Are they able to strike a balance between vision, and practical business execution?

This last question is the differentiating factor behind founders that have the ability to make it in Asia (versus the West), which tends to focus more on business traction than idealistic opportunities.

7. Executional ability

• At the end of the day, have they shown growth?
• Are they able to set clear objectives and milestones and achieve them, or have good reasons for pivoting?
• Are they able to rally a team around them?
• Have they made significant traction?

Everyone has ideas. Execution is what differentiates a dreamer from an entrepreneur.

8. Can We Help Strategically

This is not necessarily attributed to the quality of the founder, but more a critical assessment of our own compatibility with the startup. Lots of amazing founders and opportunities cross our desk and we are not capable of helping everyone. If we don’t take a startup in, that doesn’t mean they don’t have potential — it just means we may not be the right fit. We invest in teams where we can understand what they are trying to achieve and see a way that we can help.

• The core questions we ask ourselves are, can we assess the business properly? Or can we bring in a domain expert to help us do so?
• Are we able to help them strategically through our experience or with our network to help build the business (aside from just capital injection)?

This may be the last thing we list but is fundamental to our selection process.

Bonus Trait:

9. Second-Time Entrepreneur

This trait isn’t necessary but can help mitigate some of the qualities we look for as listed above. Second-time entrepreneurs develop a more practical approach to startups and have a clearer sense of business sensibilities and time after previously trying to scale an idea from zero-to-one before. As a result, being a second-time entrepreneur can potentially help by adding quality experience to their approach to business.

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Some of these qualities can be trained (for example the focus quality), and thus can be mitigated during our incubation program. As a result, one could use this list as a qualitative metric for us to decide when a startup is ready for investment as well.

For other investors out there, what qualities do you look for in a startup? Please share your thoughts in the comments section.