In the startup scene, when it comes to revolutionary ideas, the conversation is dominated by technologies that disrupt industries and innovative business models that challenge established conventions. Singapore’s HipVan, an online brand selling furniture and home living essentials, has been on a steady trajectory that follows this trend. Last year, venture capitalist firm Golden Gate Ventures awarded the startup US$3.3 million, their largest investment yet. With Singapore’s online retail market expected to grow up to 200% year-on-year, HipVan Co-founder and CEO Danny Tan is confident of their company’s position. “I think it’s great. We’re certainly having fun doing it, but there’s still a long way to go,” says Tan. “The number one trait of an entrepreneur is to be an optimist, right? Just keep an understanding of what you know and what you don’t, and try to make the best of what you have everyday.”
HipVan operates on a hybrid business model. On one hand, they design, develop, and contract-manufacture their own private label products. At the same time, they operate with a marketplace model, which allows traditional retailers to sell their products online through HipVan as well. In this sense, Tan believes they’ve entered into more of a partnership than a competition with conventional home and living stores.
“Furniture is probably one of the more exciting spaces in e-commerce, primarily because of the demographic shift,” he explains. “We’re going after the millennials and digital natives… The great thing is we know we’re early in this shift and the digital natives will continue to migrate into the older demographics—with higher disposable income and spending power.”
While the original idea for HipVan was born to address Tan’s own difficulties in finding affordable well-designed furniture for his own house, today, the company has expanded to include a range of dinnerware, beddings, towels, and home accessories. Now, Danny Tan has set his sights on an even larger-scale future. He eagerly shares about the company’s aspiration to be competing with Swedish furniture goliath IKEA within the next 5 years. And he believes in cultivating a team that firmly believes in this vision, working hard and pushing themselves to get to such a level. It’s this drive that sets HipVan apart and keeps them ahead in the game.
The ecommerce industry is constantly developing at a fast pace. How does HipVan stay relevant?
As an e-commerce company, we see ourselves as part tech and part retail/consumer company. For the tech side, our team is constantly trying to make the shopping experience better. On the other hand, there is also this very traditional element of retail, which is generally trying to understand consumers better and making sure that we have the right products, prices, quality, and genuine brands.
For example, if a consumer wants to buy a sofa from HipVan, one of the things we do is accept requests for free fabric swatches. We will send the sample swatches so you can look at the different colors and have a feel of the material. That is one way that we try to bridge the gap between online and offline, short of letting you sit on the sofa.
HipVan received one of the biggest cheques that Golden Gate Ventures has cut to date. What do you think they saw in HipVan?
Probably what differentiates us is that we have four very strong founders who come from the ecommerce industry. And [Golden Gate Ventures] saw the same opportunities that we did, which is where online shopping is moving towards. I think they also like that we are very data-driven. I guess people call it market research, but we call it business intelligence, which is more like real time feedback and analysis.
Tons of startups are being conceived daily, but only a fraction of them become successful. What is the most common mistake you see entrepreneurs making?
I have a rule as an entrepreneur: Never say never. I don’t tell other entrepreneurs to stop doing what they’re doing, because you never know. A lot of people have eaten their words when it comes to very successful startup companies. Fundamentally, in entrepreneurship, there are no rules to success. I don’t think there’s a formula, but for me, the day you think that you’ve figured it out is the day you start going down.
I think that motivation is probably a big part of it. Most people probably fail because they don't have the right motivation. But if you do, then you can’t really fail, right? Because even if the business itself doesn’t succeed, it doesn’t feel as if you’re failing at a personal level.
When will you know you’ve finished? Is it a monetary sum or something bigger?
First of all, I’m a big believer in building a company around a problem instead of a solution. So you're done when the problem is solved. But most of the problems we face that are significant enough will never be truly resolved.
So how will we know that we’re done? I don’t know. Even if you're talking about a really established company like IKEA, you still have to constantly innovate and constantly improve on solving the problem.
If you could go back in time to when HipVan was just starting, what advice would you give yourself?
I would say, "Go faster” in terms of what we're trying to do. But at the same time, I also know that there are things that actually take time for you to learn. Yes, we could’ve gone faster and moved ahead on certain things without necessarily having all the knowledge. But everything happens for a reason. We are where we are today for a good reason. We're very excited about what’s coming next for HipVan.
What is one thing that you look for in an employee?
Cultural fit. Absolutely, cultural fit.
Most people who want to join a startup, be it a fresh graduate or someone with many years of corporate experience, repeatedly say the same things during interviews. “I want to join a startup because I want to be in a more dynamic environment. I want to do things that make a difference. I want to be given more responsibilities…” I think that is great, and we tell them, whatever you’ve heard about startups— well at HipVan at least, is true.
But most of them who have not been in a startup environment before are not prepared for the other side of the equation. Under the responsibilities, autonomy, and casual environment, is a very disciplined work ethic. A lot of dedication and self-motivation is required because at a startup, no one has time to look over your shoulder to make sure that you're doing your work. Everyone needs to row in the same direction, so that internal hunger and drive—that’s the most important thing that we're looking for.
Does HipVan’s office culture pertain to the quintessential fun, business-casual environment that startups are so known for? Could you describe what a regular Friday at the office looks like?
Yes and no. Today is a little bit quieter than a typical Friday. It depends on whether our resident DJ [who happens to be our industrial designer] is working quietly. Usually, there’s one or two people who drive the environment, and sometimes we all just get busy working.
Passion comes before everything else. From a personal point of view, it's absolutely essential because the business can fail, but you still have to succeed personally. For me that’s the starting point. That being said, if you want to start a business and be in a company, then passion is not an excuse for not doing your work when it comes to studying the market, understanding your customers, and executing with a lot of diligence and responsibility. You can’t use passion as an excuse to be sloppy in other areas of building the business.