As a savvy businessman who has successfully scaled his maritime start-up, Yoong Hui is in a unique position to be a Lead Mentor at PortXL Singapore. From developing market fit, scaling a global team, negotiating contracts, to raising capital, he has done it all.
In this interview, Yoong Hui sheds light on what it takes for start-ups to succeed, drawing from his wealth of firsthand experiences to guide entrepreneurs on their growth journey.
How did you get into maritime and start Ascenz?
Other than serving the Singapore Navy for 7 years, the maritime industry was a total stranger to me.
The idea to create a system for ships to monitor fuel usage came when I was trying to sell accounting software to shipowners. During that time, oil prices were the highest in history, and I noticed that it was the biggest operating cost after manpower.
In addition, shipowners were still using the ‘Sounding’ method for fuel measurement – a primitive way using measuring tapes to estimate oil volumes. Naturally, this was prone to human errors, and shipping companies would panic whenever oil prices fluctuated drastically.
From my past experience in the Navy, I felt that there should be an automated way to manage this issue. Identifying this as an opportunity, I teamed up with my former Navy buddy, Sia Teck Chong(currently CTO of Ascenz) to create a system to solve the problem.
In less than 6 months after our Proof of Concept, we managed to secure our first order for 26 vessels, and spent the first 5 years working on board to fine-tune and improve the system before marketing the solution.
Are there unique challenges that maritime start-ups face, as compared to more ‘common’ sectors like fintech or medtech?
The use of technology in maritime is one or two decades behind other industries, making it one of the toughest and most challenging to break into.
People accept new technologies at a slower pace, so it takes a lot of effort to convince potential customers to get on board. You have to focus on the problem which you’re solving for people, understand their concerns and be committed to helping them address those issues.
At Ascenz, we work closely with customers to handhold them in their digitalization efforts to reduce their concerns and fear of execution. In our early days, I spent 5 years onboard a customer’s ship to learn and ensure our systems were fully integrated.
It is also important to have someone with deep maritime experience in your leadership team. This is not an industry that someone can just jump into – both in terms of expertise and more importantly, connections and credibility. With a strong maritime network, it’s much easier to convert an old business model into a new one.
From experience in Ascenz, do you have advice for maritime start-ups when it comes to scaling or fundraising?
Things are changing now, but it is still generally harder to raise capital for ship tech due to the lack of domain knowledge among investors.
In fintech for example, people can still sell ideas, but not in the maritime space. It’s a very practical industry where founders need to show that their solution works, so a Proof of Concept is a must-have.
For Ascenz, we raised our credibility by participating in various awards like National Infocomm award, and the Emerging Enterprise award. With these awards, we proved to investors that our business is viable and scalable. Our first seed funding came 6 months after our Emerging Enterprise award win.
But at the end of the day, the most important success factor for any start-up is a viable business model. Once you’ve proven that, you need to raise funds as early as possible – because competition comes fast, and a company needs money to grow.
What are some common pitfalls start-ups can avoid?
A good product does not necessarily equate to a good business model.
Most start-ups have issues with their business model, which makes it hard to scale and convince investors how much their company is worth.
So I’d advise start-ups to focus on finding key customers, rather than raising funds at an MVP stage. In the maritime industry, one customer can have a fleet of ships or assets, so landing a core customer is big achievement.
What are some trends you’ve observed in the maritime industry in terms of digitalisation?
Smart IoT devices and sensors are gaining momentum, with more being installed in buildings and vessels to gain a better understanding of environmental influences on performance.
Dynamic Data remains a critical part of digitalization to provide a more accurate and dynamic modelling. Blockchain, digital twins and autonomous vessels are still in early stages of development, but are gathering more interest in the industry.
Technology remains a key driver for businesses and is evolving at a faster pace than before. But to obtain optimum results, it’s important to see how technology can effectively assist humans in our tasks or break new ground for unsolved problems.
It is not a simple decision to just adopt a new technology – companies need to have a clear strategy and reason behind why they are embarking on it.
Is it for a new business model, enhanced customer experience, or cost reduction? Besides looking at the costs involved, does adoption of this technology have a social impact on people?
Timing is also key in implementing technology. You do not want to be too early and work on a solution that needs longer time to mature. But if you’re too late, you might lose out to competitors and be forced to play catch up.