In Deskera’s early years, founder and CEO Shashank Dixit slept at Singapore’s Changi Airport for days at a time just to save costs.
Capital was dry in 2008, unlike today’s investor-fuelled #startup scene. It was the year Dixit registered his company in the city-state. It was also the year the global economy burst into flames.
Undeterred, Dixit went door-to-door selling his online enterprise software to customers, and got many rejections.
These same folks now welcome him with open arms. Deskera made just under US$42 million in revenue last year. It’s also been profitable in many of its years of existence, a rare feat for young internet firms.
Deskera is putting Singapore on the enterprise software map. Unlike massive incumbents Oracle and SAP, it is laser-focused on serving small and medium enterprises (SMEs).
“Asian success stories have started from SMEs,” he says, citing Alibaba and Sony as companies which prospered by first serving small businesses.
Deskera keeps its solutions affordable by offering mass market software to tackle common and complex problems that small firms face.
For US$6,600 a year, SMEs get an enterprise resource planning (ERP) software, which essentially integrates various business functions together so they can be easily managed. ERP is critical for businesses that manage inventory, says Dixit.
A cafe chain with two stores and a warehouse is a good example. If one store runs out of sugar, it can request more packets from the other store or the warehouse. But as the chain adds more stores, the number of paths that inventory can travel on grows exponentially. Soon, using spreadsheets to track the flow of goods becomes impossible.
That’s where Deskera comes in. Its 80,000-strong clientele today includes Starbucks and Sushi Tei.
GST: Music to its ears
Deskera’s genesis in 2004 was cliche enough. A group of guys get together in a college dorm. They had a dream and built a company.
That’s what Dixit did with his mates from the Indian Institute of Technology-Kanpur: Somesh Misra, Brajesh Sachan, and Paritosh Mahana.
Things then took a different turn. The team moved the company to Singapore where ERP software penetration was low. Dixit betted that country was on the cusp of change: A new generation of internet-savvy entrepreneurs was starting or taking over businesses, and they’d be willing adopters of cloud apps.
Deskera had another ace up its sleeve. The Singapore government started proactively encouraging businesses to become more compliant with the country’s Goods and Services Tax (GST).
So the startup tweaked its software to help businesses manage their GST and got it approved by the Inland Revenue Authority of Singapore, the country’s tax collector.
Another strategy it employed was securing distribution partnerships. One of its early partners was a telco and cable provider. “Starhub brought my sales cost down because their sales people became my sales people,” he says.
Entrepreneurs: Shed your pretense
If the adage that nine out of 10 startups fail is true, that makes Deskera a rare Singapore survivor alongside mainstays like property listings site Propertyguru, which was started in 2007.
In all these years, Dixit has seen a sea change in the startup scene. “I’ve come from an era where money was extremely expensive,” he says. “In the mid-2000s you couldn’t raise any capital. You’d go to investors and they would laugh at you and throw you out.”
With fundraising options aplenty these days, he feels entrepreneurs sometimes forget a fundamental rule: Cash flow above all.
It’s okay to be unprofitable if customers are paying you on time to keep the lights on. Once the cash flow stops, monetization means nothing, he says. So there’s a lot that hip startups can learn from traditional businesses.
“What’s the difference between guys who open up a store – whether it’s a store for supplies, or printing, or a hawker store – and a guy wearing a jacket and having stubble who’s sitting at Block 71?”
Ultimately, internet startups have to respect the basic rules of business just like traditional SMEs, he says.
Singaporeans: Stop seeking validation
Deskera today has over 300 employees as it expands rapidly into Indonesia and India. It’s taking its GST-compliant strategy to India, which introduced that form of taxation this year. It has expanded its product line to include customer relationship management, HR, project management, and more.
Dixit attributes its rapid progress to an unlikely source: Unassuming and hardworking Singaporeans, who often look down on themselves.
Singapore offers the best human capital in the region.
“Singapore offers the best human capital in the region,” he says in his office in One Raffles Place, overlooking the country’s skyline.
He heaps praise on his Singaporean colleagues – Johan Tan, an ex-government scholar who heads up Deskera’s Indonesian presence, the company’s India and Malaysia office heads, his trustworthy assistant Lace Sim, and the Singapore Management University fresh graduate who comes in earlier and leaves later than him.
Young people in Singapore are well-trained, he says. They just need more exposure to develop their potential, and better awareness of how competent and dependable they actually are relative to workers from the rest of the region. “It just takes one trip out of Singapore to realize how good the systems are here,” he adds.
Dixit adds that he’s amazed by the high ratio of imaginary bad things, perceived by locals, to real good things.
“We’ve got it,” he says. “We can be a global nation of high-tech providers.”