MyRepublic is an internet service provider in Singapore that provides high-speed fibre optic web connections for consumers and enterprises. It celebrated its one year anniversary last week and its numbers look sexy. I met the founders to find out more.
After its first year of operation, it has a team of 32 full time staff, 450 resellers of their services, around 10,000 paying subscribers, more than five million Singapore dollars in revenue, and is expected to be profitable by May this year. These are very good stats for a new startup.
Singapore has three telcos: SingTel, Starhub and M1, who own the lion’s share of the market. They are the main providers for mobile, cable TV, and internet services in Singapore. Startups who intend to compete with these telcos, which make billions in profit each year, would normally be courting doom battling telecos with huge marketing budgets and extensive distribution channels.
The window of opportunity
In 2006, the Singaporean government launched the ‘Intelligent Nation 2015’ master plan. Part of this plan is to upgrade the national network infrastructure to ultra high-speed fibre broadband network throughout Singapore. This National Broadband Network (NBN) initiative presented a window of opportunity for new entrants to the traditionally telco-monopolized internet services provider (ISP) business. MyRepublic founders saw this and pounced.
KC Lai, co-founder of MyRepublic, tells us:
In the past, when operators want to start up in the infrastructure business, they needed one billion dollars. Without one billion, you can forget about it. With the NBN initiatives, the government paid the one billion to get the infrastructure up.
MyRepublic has three co-founders, Greg Mittman, Malcolm Rodrigues, and KC Lai. All of them were senior management executives working in or with telecoms and handled NBN projects in their respective jobs. They understood the initiative very well. The other early employees of MyRepublic are also made up of people with strong background in the telecoms.
MyRepublic focuses on providing the NBNs infrastructure to consumers. Their products include this fibre internet connection with speeds up to 150 MBps and also Teleport, an over-the-top video streamer that allows consumers to stream popular US dramas and other content that’s usually geo-restricted to other countries. Currently, consumers need to subscribe to telcos for a TV set-top box to watch these dramas.
Malcolm Rodrigues explains:
We are fortunate that this NBN opportunity exists. We are in the right place and right time to be a part of it. Now, many Singaporeans are switching to fibre. There’s a pent-up frustration that people have [with their ISPs]. For years, they switch from Starhub to Singtel and Singtel to Starhub looking for something better and not finding it. Now there is fibre which is so much better, so much faster and clearer. It’s an easy sale.
The hardest part
The team shared that getting funding to start MyRepublic were among the toughest moments in their startup journey so far. After that, it was smooth sailing.
Greg Mittman chimes in:
In the very beginning, we decided among the three of us that we really wanted to do this. No other people were doing it. We were very passionate about it. We were all experts in our management team, we were nice people and we knew what we were doing. But there was a problem about funding in Singapore: We didn’t have a dollar. We spoke to Institutional investors, banks, government agencies and we found that there wasn’t any availability of capital in Singapore.
Malcolm explains the challenge with banks:
For all that Singapore has done, when you talk to government, you want to start up a small/medium-sized business, they say we will give you a hundred to two hundred grand. That’s fine when you want to start up a small mom-and-pop company, but when you want to do this, we are looking for three million dollars. The banks say your idea is good, your team is fantastic, we will love to fund it, but there is a Monetary Authority of Singapore regulation saying that we can’t lend money to you unless you are three years old. This is really bizarre. There is a disconnection between the intent of the Singaporean government and the banks. If you want a hundred grand, you can easily get it but if you want half a million or more, it’s nearly impossible unless you’ve got a couple of rich friends. So we need many rich friends.
Somebody suggested to do a friends and family approach. We talked to people we knew and we were lucky Singapore has a lot of rich people. There are bankers and corporate real estate owners who are tired of what they are doing, and wanted something new.
To date, My Republic has raised ten million dollars from forty angels in Singapore within one year to get MyRepublic going.
The startup culture
In my opinion, the MyRepublic team is smart in picking the right battles to fight against the giant telcos.They went for the new initiatives out of NBNs that the giant telcos are slow or reluctant to work on. And in terms of administrative, distribution, and marketing, MyRepublic adopted unconventional methods to get things done with low costs.
Three prominent things that impressed me when I learnt more about their business concept through the interview:
Marketing and Distribution: Instead of running expensive TV and newspaper ads and retail outlets in major shopping malls, MyRepublic used an ‘insurance sales’ style of marketing and distribution model. They recruited partners and trained them about the fibre network and the technical aspects of the business. Subsequently, these partners will go out to sell to their own personal contacts and also do roadshows to get more customers. These cut down the fixed overheads of the company and it pays these partners on a per-acquisition basis.
KC Lai notes:
Why did we embark on this strategy? Because we don’t have the funds like the big three who can go out every weekend and spend $200,000 on advertising.
Lean operating model: With a team of 32 staff, MyRepublic are able to effectively handle work that thousands are doing in big operators. They did this by pushing all its IT infrastructure, such as service provisioning, network monitoring, and billing and into a cloud-basedd platform.
KC Lai tells us that the startup bought its billing platform for only 60 grand – a fraction of what the major telcos pay for such back-end infrastructure. With such unconventional go -to-market strategy and using the thin operating model, it can compete with the giants.
Company culture: MyRepublic co-founders shared that they are determined to set up a tightly-knit company where employees feel they own part of the company. So they set up an employee stock option plan where everyone owns stock options for the company.
Greg Mittman adds:
When we go to meetings, everyone will pound their fist on the table and say, “This is our company and we are going to be bold, we are going to get it right, damn it”. It creates an attitude of ownership and we function like a family-owned business. We are one family.
Aside from Singapore’s NBN initiatives, the startup explains that a few other countries, like Australia, New Zealand and Malaysia, are also in process of building this network. MyRepublic is looking into these three countries for future expansion plans. With a good product, a strongly bonded team, and a smart go-to-market strategy, I think this startup will grow to become one of the big boys in the near future.