Kinobi x NUS Investment Banking Club Webinar

Kinobi Team

Kinobi was invited to share on the topic of “Investment Banking in Southeast Asia during Covid-19” recently last Friday at NUS Investment Banking Club (IBC) Welcome Virtual Tea Session.

Slides for Investment Banking in Southeast Asia during Covid-19

Benjamin Wong, CEO & Co-founder of Kinobi, shared a summary of how Investment Banking (IB) has been impacted during this Covid-19, with an overview of the macro market here in Southeast Asia (SEA).

1. SEA M&A transactions slowed down by 12.5% y-o-y to US$29bn in H1 2020
  • Similar to US and Global Mergers & Acquisition (M&A) deals, SEA M&A closed deals are also down
  • M&A closed deal flow was down 12.5% y-o-y to US$29bn in H1 2020 across 149 deals
  • Singapore remained the largest M&A market, with ~US$12bn deals done
  • Largest deals in H1 2020:
    • CP Group US$10.6bn deal for Tesco TH and MY (Thailand)
    • CapitaLand Mall Trust (SG based REIT) merger with CapitaLand Commercial Trust for US$8bn (Singapore)
  • The top 5 IB banks in SEA by revenue – CS, DBS, UBS, HSBC, JPM (not only M&A, but also ECM and DCM, etc.)
  • The top 5 IB banks in MY and SG by revenue – DBS, CS, UOB, HSBC, OCBC (not only M&A, but also ECM and DCM, etc.)
2. Fall in closed deals is mainly due to mismatch in pricing
  • Reason for fall in closed deals is due to
    • 1) Mismatch in pricing between buyers and sellers – buyers find it too expensive; sellers find it too cheap
    • 2) Lack of financing (senior loans mainly) especially in India with non-banking financial companies (NBFCs) balance sheet impacted
  • In Private Equity, ~2/3 of deals were re-negotiated and delayed due to pricing concerns
3. Sectors with digital strategies or impacted by digital push are favoured and continue to increase in value
  • Slicing and dicing by sectors, we find that those strategies which are impacted by the digital push are favoured
    • Healthcare – telemedicine (can’t go out of the house; buy medicine online and deliver through last mile logistics)
    • Education – edtech and re-skilling, as more face unemployment and desire to re-skill (Duolingo, Skillshare, etc.)
    • Industrials
      • E-commerce, delivery (as consumers can’t purchase at retail, and get comfortable purchasing online and delivered to their doorstep; e.g. Grabfood, Shopee, Taobao)
      • Data centers, data (rise in gaming and use of social media due to increase in disposable time without the need to travel – rise of data center real estate strategies and cap rate compressions)
  • However, some sectors are also negatively impacted – retail & hospitality (as more purchase online); and also brands that don’t have digital strategies or social media presence to build strong branding
4. The loss of revenue and downward pressure on valuation multiples explains the buyers giving low-ball offers and deals not closing
  • We explore the mismatch in pricing – which is the reason why some buyers would give low-ball offers
    • 1) Loss of revenue for ~3-6 months means a loss of 25%-50% of annual revenue. This translates to even lower annual EBITDA (unless they layoff workers to reduce OPEX)
    • 2) Downward pressure on multiples (EV/EBITDA etc.)
  • Thus, we have to understand the concept of market valuation:
    • Enterprise Value (EV) = Revenue * EV/Revenue, or
    • EV = EBITDA * EV/EBITDA
  • With 1) Lower EBITDA and 2) Lower EV/EBITDA, this leads to a lower EV (valuation) as a whole
  • Thus, this explains the low-ball offers given by many buyers. However, sellers are unwilling to sell at this because they believe that the market may bounce back in the next year, and are just minimising cash burn or injecting new capital to wait this out

2 scholarships for our Kinobi platform offered to NUS students!

Speak to our Kinobi representative to see how we can help you find out your dream career.

What do our scholarships include?

  1. Full sponsorship of our standard program for our Kinobi Pathways
  2. One free monthly mentor clinic session

1. How can Kinobi help you?

  • What Gen Z cares about is finding a job that fits their aspirations
  • Kinobi equips students with the tools, skill and networks for their dream careers

2. Why Kinobi?

3. Access to Mentor Marketplace

  • Cross-cultural perspective – which is important in Asia
  • 6 countries: Singapore, Indonesia, India, Thailand, Philippines, Australia
  • 4 pathways: Investment Banking, Management Consulting, Venture Capital, Business Technology
Speak to our Kinobi representative to see how we can help you find out your dream career.

Please direct any questions to hello@hellomrkinobi.com if you have questions 🙂

Kinobi x The Young SEAkers – Strategic Partnership

18 August 2020

Kinobi is excited to form a strategic partnership with The Young SEAkers (“TYS”), as we combine our synergies to reach out to youths in ASEAN.

This strategic partnership will allow both Kinobi and TYS to tap on each other’s networks and resources to further each other’s aims, increasing access and opportunities for education, training and employment of the youths in ASEAN for them to succeed in the labour market in ASEAN.

Benjamin Wong, Founder of Kinobi, “We believe that ASEAN is on the cusp of breaking out into its golden age, with increasing focus on infrastructure and startup investments. This sets the platform for providing the needed infrastructure to build an educated labour force, combined with the demand and promise of better jobs for the future. Both supply and demand forces provide an opportunity for us to fill that need and unite ASEAN – leading it into the golden age.”

Calvin Wee, Co-founder of TYS, “The Young SEAkers is extremely excited to partner with Kinobi, helping our members to translate their cross cultural knowledge and understanding through our programmes into practical and tangible outcomes for their careers in the ASEAN-China region!”

About us:

Kinobi is a digital mentoring platform, headquartered in Singapore, that provides education, access to network and branding for people to attain their dream careers. Kinobi is currently operating in five countries across Asia – Singapore, Indonesia, India, Thailand and Philippines, through its two products, Pathways and Mentoring Programs.

https://hellomrkinobi.com/

TYS is an organization headquartered in Singapore that aims to nurture a community of youths who are well-exposed and equipped with soft skills in the ASEAN-China economic region. TYS seeks to achieve this through helping its members develop cross-border competency and soft skills via intercultural exchanges and education programmes.

https://www.facebook.com/TheYoungSEAkers

INTRO TO VENTURE CAPITAL – Article #3 Ecommerce in Southeast Asia

Benjamin Fong, Business Development

In this series, I will cover short and simple thoughts on the Venture Capital (VC) industry from the perspective of someone new to it, to get you from 0 to 1.

For this article, the team is looking into the ecommerce scene in Southeast Asia.

1. E-commerce in SEA boasts the fastest market growth in the world, particularly in homegrown e-commerce platforms like Tokopedia and Shopee, due to rising internet penetration and high e-commerce adoption rates.

According to a Statista report, Thailand, Malaysia, Vietnam, Singapore, Indonesia and Philippines were within the top 10 countries displaying the highest year-on-year growth in total spend from 2017 to 2018, with the global top performer Thailand displaying a 25% increase in e-commerce spend in 2018.

This strong growth could be due to the existing foundation of high internet usage in digitally developed countries like Singapore and Brunei, with reports showing penetration rates of 95% and 85% respectively. Additionally, the exponential increase in digital penetration in other SEA countries like Indonesia with 20% internet penetration growth from 2017 to 2019 has seen the number of SEA internet users exceed that of North America and Europe with 483 million unique users in 2019.

Beyond the accessibility of such platforms to SEA consumers, the preferences of SEA consumers are also highly aligned with e-commerce, with e-commerce adoption rates in SEA (83%) exceeding the global average of 75% and SEA’s largest population Indonesia reporting the highest rates of online shopping across a global survey conducted by GlobalWebIndex.

2. There are mainly two types of e-commerce, business to consumer(B2C), such as Lazada, Shopee, Zalora and consumer to consumer(C2C), such as Carousell, eBay and Kaidee.

While some B2C e-commerce firms operate purely as a fashion retailer like Zalora and Love Bonito, others like Shopee and Lazada operate as a marketplace for online retailers, providing ecommerce capabilities like a website, delivery services, etc. to businesses, even facilitating C2C sales. Whereas C2C operate by allowing customers to sell goods and services to other customers, utilizing the C2C platform to facilitate their business’ marketing, logistics and transaction needs.

For B2C firms like Lazada, Shopee, they mainly rely on commissions from sellers on their sites as well as ad revenue to boost their revenue. On the other hand, C2C firms like eBay also similarly take a cut from the transactions made on their platform but newer C2C models like Carousell and OLX diverge from this traditional monetization strategy, instead opting to leverage on their user base to garner ad revenue, as well as the use of premium in-platform services like Carousell’s Bump.

3. How do industry entrants like Love Bonito, Zalora, Lazada and Shopee measure up to industry giants like Amazon, with much stronger logistical capabilities, marketing power and product range? They do so with a firm understanding of the target market.

A classic example would be Amazon’s entrance into SEA via Amazon Prime in Singapore, an app boasting its Prime Now function, which offers a free 2-hour delivery service for order above $40. Despite its brand name, it was unable to surpass other competitors like Redmart and Shopee, with an App Annie ranking of 17 on the Appstore in 2017, compared to Redmart’s 7 and Shopee’s 4.

This could be due to several factors, the brand entrenchment and wide localized product offering of local e-commerce platforms like Shopee and Lazada, as well as a well-aligned platform to Southeast Asians’ preference.

Due to the longer market presence and stronger local networks of local platforms, the product offerings on these platforms often far surpass those on larger international players, displaying an edge in their offerings of small ticket household goods and consumables, specialised product segments which Amazon can only offer more generic versions of. The establishment of strong ties with local sellers through perks like Shopee’s 0% seller commission and Fulfilment by Lazada logistics service also enable local e-commerce access to a wide network of sellers and partners, further boosting their product offerings and brand name.

4. Opportunities and markers for venture capitals

While there are currently many late stage incumbents in the SEA e-commerce industry, the industry has not reached its peak and market opportunities and demand for innovation within is still strong. The growth in the e-commerce industry has provided strong demand not just for consumer good retailers but for industry verticals as well. Vertically relevant industries like fintech payment companies, discount and cashback platforms have all risen sharply due to the e-commerce boom. Venture capital firms on the lookout for opportunities within e-commerce industries can also expand their horizons to include companies situated elsewhere on the value chain that play a supportive role, such as logistics, e-payments and BPO sectors.

For instance, Lazada and Shopee’s delivery options support only two delivery mediums, NinjaVan and government postal service Singpost, ensuring a constant stream of revenue for homegrown logistics companies like NinjaVan.

In the area of loyalty platforms, Shopback and FavePay have been extremely popular recently, especially with their partnerships with major e-commerce companies, such as Shopback’s partnerships with Taobao, Lazada and Zalora.

Notwithstanding, there are certain key markers and issues worth analyzing about the company before choosing to invest in them.

Firstly, a common issue across e-commerce, especially with newer C2C e-commerce companies, is the problem of monetisation. The promise of a free marketplace with full seller autonomy is what companies like Carousell offer their users but this often results in monetisation problems.

While majority of the revenue are from ads, beyond ad revenue, the provision of in-app or in-platform premium functions, such as Carousell Coins, might also serve as a source of revenue for the company. However, this is likely to be a fraction of the revenue compared to ads, due to consumers’ contentment with the core features of the service. As such, the main source of revenue remains to be from ads, and this is contingent on the brand’s scale and reach, on the basis of cost metrics like cost per click(CPC) and cost per impression(CPM). A successful example of this would be OLX, which managed to break even in 2018, relying mainly on their monetization of Google Ads.

Furthermore, while ad revenue might seem the route to take, there needs to be a fine balance of ad listings on the platform to ensure targeted and beneficial ads for users, or risk losing the users’ support and membership, especially in a low switch cost environment like e-commerce. Therefore, the company needs to have a viable strategy for its revenue growth, ideally innovating beyond ad revenue, due to the hypothetical nature of the company’s ability to acquire scale sufficient enough for profitability.

A second pertinent issue the company needs to be able to address effectively is that of fraud. For companies like Carousell which offer high levels of transaction autonomy, leaving the payment, delivery and transaction terms up to the parties, the issue of buyer or seller fraud is highly prevalent, even giving rise to trending phrases like ‘Carouhell’, describing the dubious or shady nature of certain Carousell transactions. The e-commerce company would have to find an effective method of reducing such fraud risk, either by requiring payment to be done via accredited channels, a fixed delivery option, as well as clear and structured refund policies for buyers. Lazada has managed this well, providing fixed payment options via credit card, instalments and cash on delivery, as well as NinjaVan and Singpost delivery options. Lazada also reimburses buyers subjected to fraud or dissatisfactory products with their 100% Buyer Protection and/or Satisfaction Guaranteed policies. Measures such as these should ideally be in place to ensure that the company’s core service is able to be scale sustainably, without compromising on consumer satisfaction and hurting the company’s user retention.

5. Conclusion

Overall, given the fast-developing digital landscape of Southeast Asia, as well as the rising affluence of SEA consumers, the market opportunities for venture capital within SEA’s e-commerce industry are endless. Investors seeking a slice of the pie should nonetheless be wary of potential ‘unicorn’ level companies, via a thorough product and commercial due diligence process to ensure potential issues are pre-empted and planned for.


Ready to embark on your journey towards a career in Venture Capital?

Watch closely for Kinobi’s Venture Capital Digital Mentoring Program! You can reserve your place here!

We are still in the works for rolling this program out in end of Q3 2020. Follow us on our social media channels to find out more!

INTRO TO VENTURE CAPITAL – Article #2 Diving into Aquaculture

Benjamin Fong, Business Development

In this series, I will cover short and simple thoughts on the Venture Capital (VC) industry from the perspective of someone new to it, to get you from 0 to 1.

For this article, the team took a dive into the aquaculture scene, looking at

  1. What is aquaculture?
  2. Its answer to sustainable food production
  3. Its potential in reducing income inequality
  4. Some challenges the industry faces
  5. The role of investments from funds or accelerators in addressing those gaps

1. What is aquaculture?

Aquaculture refers to the process of farming aquatic organisms, ranging from fish to crustaceans and even molluscs like oysters. The process normally consists of four key production segments, the hatchery, farm, feed mills and processing facility. The hatchery, where fish are first bred, hatched and reared till maturity before being transferred to the farm, where they will be bred till a harvestable size. Throughout this, feed mills will be constantly supplying farms and hatcheries with nutrient packed feed to sustain their growth. Finally, the harvested fish will be transferred to the processing facility, where they are packaged and sent to retail stores for our consumption.

2. Aquaculture provides a sustainable, accessible alternative to catch fisheries

According to the Food and Agriculture Organization(FAO) of the United Nations, total food fish consumption has risen across the world.

There has been a 122% rise in total food fish consumption from 1990 to 2018, which has been coupled with a 527% increase in global aquaculture production during the same period.

On the contrary, the supply is unable to meet the demand. Global capture fisheries production only rose by 14%. This indicates that while global fish demand is rising, conventional capture fisheries are unable to meet that demand and have allowed aquaculture supply to catch up significantly. This is largely due to global trends of overfishing, resulting in the decline from 90% of fish stocks within biologically sustainable levels in 1990, to a mere 65.8% in 2017.

Aquaculture disrupts the market by offering a sustainable yet more efficient solution to the supply deficiencies. Many adopt demand-driven models like contract farming, where there are pre-agreed supply and purchase agreements between farmers and buyers, which reduces the chances of overproduction and wastage, a persistent thorn in the side of conventional catch fisheries.

Furthermore, aquaculture offers increased accessibility to seafood for consumers limited by income or geography, such as in landlocked countries like Sudan and Ethiopia. Aquaculture can be operated in almost all environments, without being subject to the risks and potential supply shortages that open sea fishing hold. In fact, inland aquaculture produced the most farmed fish, 62.5% of the world total in 2018.

As a testament of its growth, the FAO reported that aquaculture’s contribution to global fish production reached 46.0% in 2018, up from 25.7% in 2000, highlighting the growing sentiment towards aquaculture as a key tool in sustainable food production.

3. The aquaculture business models are optimised for the inclusion of smallholders and provides a spillover effect through employment and retail opportunities to reduce inequality in rural economies.

Aquaculture is a strong source of economic opportunity, especially for regions with dense rural economies like Asia, with 95% of global aquaculture employment found in Asia.

Common business models used in aquaculture, such as micro-franchising and contract farming also facilitate economic upgrading of impoverished communities, due to their low barriers to entry and the steady revenue streams respectively.

As an example of micro-franchising, the Shiblee Hatchery Farms project in Bangladesh was launched in 2013 to enable 100 landless farmers to cultivate tilapia under a franchise model, where Shiblee Hatchery Farms would provide access to high-quality logistical inputs like seeds, advice and training for the farmers, as well as a stable flow of customers for the farmers.

This allows low-income groups to overcome constraints like lack of knowledge of aquaculture, as well as lack of assets with production capability like land or farms, since the franchisor would provide for such needs.

With all that said, there still exist key problems in the aquaculture industry, especially pertaining to smallholders in the aquaculture value chain.

4. Smallholders lack access to quality inputs, technology and might not be well coordinated with other value chain actors

Even within the aquaculture industry, there exist levels of inequality, with poorer farmers not receiving the same quality of feed and seed that larger firms have, as well as a lack of the advanced analytics and monitoring systems larger firms can rely on. Additionally, the nature of smallholders being spatially disbursed and more unorganised results in lower engagement levels with quality retailers or suppliers which offer more competitive rates and have access to the wider markets.

5. Investors can bridge the gap by funding innovative technologies and companies that leverage off smallholder’s capabilities

Investments from aquaculture focused investors like Hatch, an accelerator, and AquaSpark, an investment fund, serve to provide funding and expertise that drive technological advancements in aquaculture across all market players.

For instance, Hatch, an aquaculture accelerator, provides personal mentorship from long-term industry professionals, access to discounted R&D facilities as well as networking and pitch opportunities for the companies in their program. As part of their Hatch Fund 1, one of the companies they invested in was Aquaconnect, a Chennai-based startup which utilizes tracking technology to monitor water quality and suggest ways to enhance water quality and reduce diseases amongst the fish via their FarmMOJO app.

Companies like these not only raise the level of technology and efficiency of aquaculture, they also do so in an equitable manner, empowering smallholders with their technologies by keeping the cost of the technology low and actively reaching out to community farmers.

Another example would be AquaSpark’s investment in Chicoa Fish Farm, which supports regional smallholders in aquaculture by being a supplier of quality seed and fish feed to these smaller farmers, as well as providing training for them, with an ultimate goal of providing a sustainable blueprint for an aquaculture industry in Africa. Access to such inputs provides potential for economically sustainable aquaculture smallholders to develop, contributing to the overall growth and vertical upgrade of employment opportunities within the aquaculture industry.

For instance, Hatch, an aquaculture accelerator, one of the companies they invested in was Aquaconnect, a Chennai-based startup which utilizes tracking technology to monitor water quality and suggest ways to enhance water quality and reduce diseases amongst the fish via their FarmMOJO app.

Conclusion

Overall, the strong growth of aquaculture industries globally, both in higher and lower income regions would bode well not just for environmental sustainability efforts such as the United Nation’s SDG (Sustainable Development Goals), but in the area of economic opportunities as well, in terms of employment and investment opportunities.

With a projected USD224.2 billion market in 2022 by a 2018 Technavio report, there are no signs of the aquaculture train stopping, and climbing on board certainly does not seem like a bad idea.


Ready to embark on your journey towards a career in Venture Capital?

Watch closely for Kinobi’s Venture Capital Digital Mentoring Program! You can reserve your place here!

We are still in the works for rolling this program out in end of Q3 2020. Follow us on our social media channels to find out more!

INTRO TO VENTURE CAPITAL – Article #1 Op-Ed on Risk and Returns

Benjamin Fong, Business Development

In this series, I will cover short and simple thoughts on the Venture Capital (VC) industry from the perspective of someone new to it, to get you from 0 to 1.

I just read a research article published by Going VC, on common pitfalls in the industry and suggestions to improve them, titled – “Is the VC Juice Worth the Squeeze?”

My thoughts? An interesting and holistic analysis of the VC industry, definitely worth a read for interested entrants or current industry members! Before I begin, I must caveat that these are technical in nature, and may actually be different in practice. We will try to examine from a facts-based perspective due to some controversial statements that could be made. Here are some of my takeaways:

1. Strong 80/20 Pareto effect regarding invested funds and generated returns

The VC industry remains highly attractive to investors relative to other asset classes, with the top 25% of VC fund managers’ returns outperforming other top performing asset alternatives including private equity, real estate and high-yield bonds. Yet with this attractive outlook comes the overlooked caveat of the remaining proportion of VC funds, the not-so trivial ‘many’.  

  • According to data from Horsley Bridge, a respected Limited Partner (LP) in multiple VCs, a small 6% of their investments, which represented only 4.5% of their total dollars invested, generated 60% of their total returns.
  • A study in 2016 showed that while only 2% of the total VC funds invested belonged to the top 20 VC funds, a massive 98% of VC funds invested belonged to the others, which might not stand the same chances of success. This means that while the returns on paper might be extremely high, there is an even higher chance of the returns not being generated at all in reality.

Thus, this reinforces the strong 80/20 pareto effect in the industry, and the highly volatile returns structure, where one singular bet could make up 90%-99% of the returns to the fund.

2. Lottery-like approach and low fiduciary nature of compensation results in a stronger emphasis on generating returns, rather than focus on risk management, leading to increased risk.

Lottery-like approach is simple to understand. VC is arguably more of an art, with managers forming their own science around the approach. At the seed and Series A level, it is tough to measure how a startup can succeed, except through more qualitative approaches such as looking at the team experience, and betting on the founder’s tenacity, connections and experience.

With regards to the low fiduciary nature of compensation. This is arguable depending on the fee structure. For some funds, with fees guaranteed regardless of performance (i.e. management fees), risk management may be inevitably de-emphasised, causing uneven fund allocations with a bias for higher risk investments. Add to this the illiquid nature of the capital invested. However, that said, different funds use a myriad of fee structures, with some having a 1%/25% instead of the usual 2%/20% (management fee/carried interest), which skews the fund to be incentivised to make sure that their investments yield returns, or they may not get paid.

Adding to that, we see a faster pace of deal-making. Whether or not this de-emphasises risk remains to be seen.

  • The Founder of First Round Capital, Josh Kopelman spoke to the heightened pace of deal making at his own firm at a tech showcase in California, saying that the average time from first contact with a startup to drawing a term sheet has shrunk from 90 days in 2004 to 9 days today.

Combining these 3 factors together, perhaps returns could be argued to be prioritised over risk.

  • For instance, well known ‘unicorn hunter’ Kleiner Perkins, has already invested much of the $600mil raised in 2019, and is already looking to raise a 19th fund, revealing the speed of deal-making and what some refer to as a lottery system of “spray and pray”.

That said, this is the nature of the VC industry with extremely high risk. One could always play safer in growth capital in the Series C stage onwards or allocate capital into other markets with low correlations and betas.

3. Higher expectations on General Partner (GP) accountability

For the uninitiated, the GP manages the money in the fund, which consists of moneys from LPs. Based on economics, LPs expect GPs to put some of their money where their mouth is, and invest also in the very startups that they will use other peoples’ money to invest in.

In order to increase accountability and prudence in investments, there could be higher expectations for GP’s accountability. Increasing skin in the game, regular performance updates and sharing investment direction with Limited Partners are all ways the VC GP can operate to ensure higher accountability to their clients.

  • One such example would be Indie.vc, whose approach to funding removes the wait for an exit to cash out that most VCs adopt, and instead is compensated with cuts from the excess cash flows of the company, until Indie.vc makes its desired return on investment. Additionally, the startup can also opt to buyback their shares from Indie.vc within 12-36 months of the first check.

This model targets sustainable businesses instead of unicorns, holding the VC more accountable to performance, since the startups will have to prove strong revenues in order for the VC to get its return.

Conclusion

As we consider the risk-return metrics and considerations in the VC industry, it will be interesting for finance majors and those in asset management to note how do these risk-return metrics compare across asset classes, especially the public markets, or even Private Equity (PE) leveraged buy-outs (LBOs).

Stay tuned for more op-eds and a deep dive into the VC industry!


Ready to embark on your journey towards a career in Venture Capital?

Watch closely for Kinobi’s Venture Capital Digital Mentoring Program! You can reserve your place here!

We are still in the works for rolling this program out in end of Q3 2020. Follow us on our social media channels to find out more!

INTRO TO TECH SALES – Article #2 Debunking Common Misconceptions

Farid Mohammad, Head of Business Development, Kinobi Singapore

This week we will be talking about debunking the common misconceptions of the business development role in big tech, continuing our series in Intro to Tech Sales. Let’s dive in!

Business Development (BD) = Business + Development.

What does it mean to be a BD Professional. As we have dissected them, Business simply means, what business are you in? What are you selling? What is your product or Service? Development is the tricky part of the role.

Especially for Small to medium-sized firms, naming the role your employees carry can be an especially tricky business. The confusion comes into play when a company offers you a Business Development role, but you realise, “Hey, I’ve been tricked! They actually want me to do Sales!”

In this article, we wish to debunk the common misconceptions of the Business Development Role within a large tech company. So here we go!

Misconception #1: Business Development = Sales

Perhaps the most common misconception of Business Development is that it’s just Sales in a more sophisticated title. However, the role of Business Development depends on what the company you’re working for needs.

In the context of BD in Big Tech, Business Development would involve meeting with prospects to help them develop a product which does not yet exist, but you believe your company is able to ramp up an existing product to meet the client(s) needs. On the other hand, Business Development, in perhaps, a company like Sephora, a cosmetics retailer, involves more of engaging brands for partnerships to onboard their product under the Sephora brand.

So why do some companies offer the Business Development Role, when really, they just want you to help them sell their products? Well, there’s a half-truth to naming it so. Especially for smaller companies, who are unable to afford the headcount, they typically hire a person to carry out a dual role of a Business Developer and a Sales Representative.

Therefore, this person may carry out the cold-calling of prospects to closing the sale to onboarding the new client. Another reason for doing so, would be for the simple reason of the stigmatization of the title of Sales Representative. Think about it, would you like it if you’re talking to someone, and the whole time you’re thinking that you’re being sold to…

Ultimately, as mentioned, it boils down to these 3 things:

  • The size of the company
  • The company’s product offerings
  • Current Customer Base of the company
Misconception #2: Business Development Executives need to Sell to generate Revenue

While Business Development and Sales work very closely and function in the same funnel of generating revenue for a company, their responsibilities are certainly not the same. What do we mean by “function in the same funnel”?

In any company, when you have a product, and you are trying to generate that revenue, there is trickle-down effect in terms of how many potential clients/customers you reach out to, then how many that engage with you and eventually how many purchase your product.

To put it in simpler term, we have 3 stages when it comes to securing revenue for the company:

  1. Generating Awareness: Through the various mediums of cold calling, cold e-mails, building networks, leads generation (They work together with Marketing too at times for generating ad placements in various media platforms)
  2. Engaging with leads to address pain points as well as to educate leads on the company’s current product offerings via methods of engaging leads directly or through partnerships
  3. Conversion to sales: Securing the lead into a customer, where they will be onboarded to the company’s products and/or platform

The figure above would explain the “funnelling” role Business Developers play within a company. Business developers need not necessarily be involved in generating revenue for the company in the short run by closing deals. Instead, they are involved in the initial stages of securing revenue for the company, which in this case is generating awareness, education & engagement. Business development places an emphasis on the long-term view for the company.

Misconception #3: In that case, Business Development sounds a lot like Marketing!

It is true that Generating Awareness, Engagement & Education are functions of marketing as well. Marketing generates awareness, engages & educates its audiences with the use of advertisement and mass communication mediums, which happen to be mediums that business developers use as well.

However, the fundamental differences lie in terms of how closely connected business developers are to the customers in terms of having their ears close to the ground. Think of it like this:

  • Marketing: You have a product or service, and your job is to find a strategy to make customers think of your brand when they are in need of a particular product or service, via the use of media channels. That way, you assist in  drawing a connection between what customers want & need to what your company can potentially offer
  • Business Development: You play it closer to the ground by actually finding out the prospective pain points and draw similarities between these group of consumers or clients.

The essential thing to note here is that marketing and business development are not mutually exclusive. Rather, both actually work very closely together, to ensure that there is both a consistent flow of information and style of messaging that is being passed down to these prospective consumers or clients.

Misconception #4: Business Development requires you to develop products

There’s half-truth to the statement as product development is a business development strategy. In the literal sense, given the context of a big tech company, a business developer will not be tasked to engineer an entire software.

Instead, a business developer will be more involved in the research phase of that product development stage. Additionally, they will be the bridge between the product development team, sales team and the customers.

We reiterate again that as a business developer, you may play both the role of someone who brings in current products in the market and evaluate them with your product development team, or someone who conjures up a completely novel idea and gets the product development team to engineer it.

So, in summary, what are the key pointers of the Business Development role?

In summary, apart from those misconceptions addressed earlier, here are some key pointers of the Business Development role in Big Tech Companies:

  • The role in Business Development tends to be more inbound when the company already has a solid base of customers (i.e: getting in touch with customers, addressing their needs, handover to sales team to secure onboarding)
  • The role of Business Development is often much more outbound where the business developer will be tasked with leads generation
  • For smaller companies & depending on their product offerings, Business Developers can be tasked to handle all things from marketing to business development to sales.
  • Building relationships with customers or clients is the single-most applicable skill across all Business Development roles

Ready to embark on your journey towards a career in Tech Business Development?

Watch closely for Kinobi’s Tech Business Development Digital Mentoring Program! You can reserve your place here!

INTRO TO TECH SALES – Article #1 Companies, People and Product

Farid Mohammad, Head of Business Development, Kinobi Singapore

The five tech giants in the world currently – known as the “FAAMG” – Facebook, Amazon, Apple, Microsoft & Google, have a combined Market Capitalisation of $4 Trillion. (or we have the FAANG! with Netflix replacing Microsoft in some cases).

In recent years, Technology Sales & Business Development Roles have seen a boom in the number of hires in recent years. These hires boast a higher than average base salary of at least SG$6,000, not inclusive of commissions (For Sales Representative).

This article aims to give a broad overview of Technology Sales and Business Development. That is, exploring the structures of these Big Tech Companies in Singapore, the People who work it, and the products that they offer. When we mention Big Tech Companies and Sales, we mean Tech companies which offers the services such as:

  • Business Applications
  • Digital Transformation
  • Spend Management Softwares
  • Cloud Solutions

The list is non-exhaustive of course, but with the few examples above, it should give you a clearer idea of the type of products these Big Tech Companies offer.

Bringing in the context of South & Southeast Asia, we have seen a stronger presence of these large technology firms.

  • Google sets up Regional HQ in Singapore (2007)
  • AWS sets up in Southeast Asia (2010)
  • Amazon Prime in Singapore, first in SEA (2017)
  • Google launches Data Center in India (2017)
  • Microsoft Azure expands Southeast Asia Region in Singapore (2018)
  • Facebook sets up Singapore Office (2018)

What this would mean for the South & Southeast Asian region would be a boom in e-commerce, digitization of businesses as well as an increase in availability of tech-related jobs. There is a myriad of tech-related jobs out there today; Data Scientists, Information Security Engineers, Software Engineers, Support Specialists, etc. However, in this article, we would place a central focus around Tech Business Development (BD) as that is a track within Kinobi’s Pathways and our International Tech BD Mentoring Program.

There is an overlap between Tech Business Development and Tech Sales, same same, but different. We can explain that in another article “Debunking the Common Misconceptions of the Business Development role” that you can watch out for! Focusing on Tech Business Development, which focuses on the more long-term view for both the technology firm and the client.

To simplify, Business Development Executives/Managers place a central focus around these few things:

  1. Cold Calling/Referrals to Prospective Clients
  2. Building a Relationship – An evangelist of sorts for the Tech Firm
  3. Building Strategic Partnerships
  4. Building ideas, initiatives or activities to make the Business Better
  5. Working towards a product that may or may not exist in the Tech Firm

Then you’ll start to wonder, “Well, how do I sell a solution that my company has yet to offer?”


Exactly why I would reiterate again that Tech Business Development ≠ Tech Sales. Business Development Professionals have an interesting job scope of being on the go and having to be on the lookout for happenings not just within the firm & its rivals, but the industry and all other closely related-industries. This can be in terms of what these industries need, but does not yet have.

For example, Amazon Web Services (initially in the business of selling physical books online) is in the business of cloud-computing solutions for its clients. A Business Development Professional not only has to know the As to Zs (No pun intended) of the business of cloud-computing, but has to also be well-versed in the type of companies looking for cloud-computing solutions. This run the gamut of questions: What type of business are they in? What kind of solutions are they looking for? How can Amazon come into the picture of their business?

Again, we reiterate that Tech Business Development looks toward finding out how the tech company can remain relevant in terms of the types of tech-solutions these clients wished they had, but it may not yet exist or it may be a bespoke product tailored specifically for that firm.

While in most small and medium-sized enterprises, a Business Development Executive may have a dual-role of being the Business Developer and Sales Representative, the same would not be true in larger Tech Firms, where there is a clear distinction between a BD Professional and a Sales Professional. Both however, work hand-in-hand.

Ready to embark on your journey towards a career in Tech Business Development?

Watch closely for Kinobi’s Tech Business Development Digital Mentoring Program! You can reserve your place here!