Shanghai-based startup 24tidy is one of the pioneers in China’s fast-moving on-demand laundry industry. Yao Zongchang, the man behind 24tidy, recently shared his entrepreneurial experiences and lessons learned along the way with TechNode.
Yao was born in 1983, making him a member of China’s post-80s generation characterized by optimism for the future, entrepreneurship, and individuality. When Yao first decided to strike out in 2003 at the age of 20, he opened Beyoon, an ad innovation firm targeting foreign companies. By 2009, the company had established favorable world-of-mouth and most of its clients were Fortune 500 companies. At the end of that year, Yao sold out to his partners for around RMB2 million (around US$327K), thinking the startup environment for the traditional ad industry was deteriorating.
During interactions with CITIC Bank, one of Beyoon’s clients, Yao found out that the lack of funding is a common business problem. So he invested all the money he earned from the first startup to set up Hahadai, one of the earliest P2P lending platforms in China, in September of 2009. The platform enforced rigid risk control policies and acheived a zero bad debt rate.
Hahadai received angel investment in 2009 in exchange for a 60% stake in the company. But, it failed to raise further rounds after the capital was burnt out in the second year, as too much share capital were given away in the angel round. Some investors suggested Yao start another P2P platform, but he declined. Hahadai was closed in 2011.
“When I started 24tidy in 2012, I was penniless”, he said. As an art major, Yao self-taught himself programming to construct the website and did part-time design work to sustain the company. After surviving its toughest year in 2013, 24tidy secured RMB10 million of Series A financing from SIP Oriza Seed Fund Management, an early-stage investment platform under Oriza Holdings.
[Update] The startup announced that it netted eight-digit USD in Series B financing from Sequoia Capital on Nov. 13.
24tiday is now available both on web and mobile, ready to enter new regional markets in Beijing and Nanjing. It claims a monthly order total of over 10,000.
Lessons learned from Yao:
Giant competitors that are more established and better-resourced are a danger to startups, but their omnipresence in every vertical means that they can not be the best in each and every sector. This is an opportunity for startups if they stay focused and make the best of every detail.
Another competitive edge of startups is the ability to act and respond quickly to market changes, thanks to their small size and therefore greater agility.
Entrepreneurship can be a tough journey for many, especially those who are bootstrapping their businesses, but for Yao, it is the feeling of loneliness that bothers him most. As a leader of the group, founders should think at the edge of the curve and it can be isolating to stick to the ideas you believe in despite enduring challenges or even ridicule from families, investors, and colleagues, according to Yao.
‘The startup journey has changed my characteristics to some extent. I am becoming more rational and letting the data talk.”
Originally from: Zhu Guilin