After Obtaining HK$11 Million, Benny Liu Aspires to Revamp the Home Renovation Industry

Name: Benny Liu

Company: HK Decoman Technology Ltd

Starting Up 

How did you come up with the idea for your startup?

Several years ago, I was considering a refurbishment of my home. What came to my attention was the fragmented information in the renovation market. The lack of clear info and guidance made it extremely difficult even for smart people like me to make the right decisions.

Solving a Need

Who is your startup most useful for?

After some research, I found that this problem is universal: 80% of homeowners have to rely on family or friend recommendations when choosing a renovation company and materials due to the lack of an integrated solution. On average, a person needs to spend 10 weeks on choosing a vendor and managing the progress every time they go through a major renovation.

What problem does your startup solve, and how would you say it relieves “pain” for your customers?

The obvious pain point we see in the traditional renovation industry is that homeowners have no way to find the right company, the right material, and the right idea for their flats, leading to huge wastage. Relying on recommendations from the people around you is safer than a random pick but far from optimized. 

Our role here is to provide an ecosystem where the right parties can meet.  To illustrate, each party can gain added value with lower costs via our ecosystem; thus, we are earning by creating extra value instead of charging more, and this core element establishes the foundation of our company culture and value proposition.

Raising Funds

Have you tried to raise funding? Why or why not?

We obtained a cash injection of HK$11 million from pre-A series funding in 2018, of which HK$10 million remained unspent in 2020. Our annual revenue grew from US$1.2 million in 2018 to US$4.5 million in 2021, with a 55% CAGR. The continuous rapid growth during the pandemic reflected our tenacity and swift response to market change.

Now we are working on our Series A round for our APAC expansion. We plan to bring HK Decoman’s ecosystem to five Southeast Asian countries by 2022. We first launched our service in Taiwan in January 2022 and Singapore in May 2022, and now we are expanding to Korea with the support of KSGC.

If you’ve tried and succeeded, how hard was it to raise funding?

It’s clear that the pandemic has dramatically changed the fundraising landscape for startups. The biggest concerns about fundraising in 2022 are a continued sense of uncertainty and the impact it has on the global economy

If you’ve tried to raise funding but haven’t yet, why do you think that is? How much are you looking for?

We are currently working on our Series A round, looking to raise US$5 million at a valuation of US$50 million. We have signed a term sheet with a local fund house, and they are willing to contribute 30% of the total investment amount. Thus, we are still looking for additional investors for this round, the target ticket size being at least US$500,000 for each.

Cash Flow and Exits

When is the company expecting to be cash flow-positive?

Our cash flow has always been positive, with growth since 2019. 

What does a successful exit look like for your business?

The vast majority of successful startup exits are not IPOs but rather acquisitions, big or small, including acqui-hires. They can represent happy exits for any young company.

While many founders may think that some day they’ll ring the opening bell on a stock trading floor as their startup goes public, the reality is that most don’t, and it is not a MUST for me as well. 

What’s your best financial management or cash flow-related tip for entrepreneurs who are just getting started?

The fact is that most new startups fail. The path to success is filled with pitfalls, wrong turns, and obstacles. Decisions along the way can make or break a small company. Every entrepreneur must face this harsh reality and learn to master it if they hope to survive and wind up on top.

Startups are in the middle of a storm. Regardless of your ability to fundraise, it’s the cofounding team’s responsibility to ensure the company will survive if it cannot raise for the next 24 months.

Keep your burn under control; if you can’t, cut costs and extend your runway within the next 30 days.

Marketing

What are some marketing strategies that have worked for you?

The Decoman ecosystem contains a core traffic hub along with three business units.  Each block interacts and creates synergetic effects.

The traffic hub is made up of various useful and valuable information that enables us to form the foundation of the community within the ecosystem.

A great portion of our business is organically generated through high volume, day-to-day organic traffic, which is partially coming from our extensive media coverage and B2B partnerships. We are ahead of the competition with 80% overall online traffic (the remaining 20% divided among competitors); thanks to this dominance, most of our leads come from organic sources, which protects us from entering an advertising war with the rest of the market in challenging times (like COVID) and increases our conversion effectiveness and, therefore, our business efficiency and tenacity.

Apart from our traffic advantage, we have created an ecosystem that provides house owners with a one-stop shop experience. They gain the knowledge and service they need in one place, and companies enjoy the services of all three business units by partnering with us, making all parties winners. Having an ecosystem also means our traffic from each business unit generates more traffic: Every advertisement dollar of ours contributes to all three business units, making us more efficient and versatile than the purely profit-driven agency model of our competitors. 

What are some marketing strategies that didn’t work for you at all?

It’s becoming increasingly expensive to advertise on Facebook. The main reason is increased competition. As more and more advertisers bid for space, the cost goes up. This is expected to rise year after year.

I am not saying Facebook Ad didn’t work at all as we are still spending quite a lot on it every month. However, it obviously doesn’t work as well as a few years ago, which is why our marketing team has been testing other methods.

Competitors

Who do you believe to be your biggest competitors? How do you differ from them?

We have several key online renovation platform competitors, all with five years longer/shorter company history. The biggest ones imitated our ecosystem model in recent years and opened Mall and Academy services on top of project matching, but we still lead in online traffic and the number of paying brand partners by over double.

Hiring and Employment

How exactly does the company develop talent?

The war for talent is not new, but it has intensified lately.

As a fast-growing startup, we do not set any limit on headcount, but we follow a 5X-value principle and a stringent probation policy whenever we consider adding and keeping a new employee.

Each staff member has their project/area ownership where they can demonstrate their capacity, and they are held accountable for it.

We have a competency framework (on personal skills) and do semi-annual 360-degree appraisals (on culture and values), which ensures work performance feedback is readily available and measured with a set of high-standard, holistic benchmarks.

We treat every employee as unique and make sure they have a career vision working here. Our editor interviews every staff member in turn and produces articles showcasing their mottos and characters. We also stick their self-selected mottos on our “feature wall” to remind each other of our goals and vision. This promotes a positive culture both internally and externally and enhances employee trust and job satisfaction.

What criteria do you consider when hiring employees?

Being a startup, we promote a culture that supports consistent high growth, such as a self-driven attitude, direct communication, objective ownership, high efficiency, and effectiveness. We are especially stringent when hiring to ensure every newcomer brings not just productivity but also a positive impact on other colleagues. 

Diversity is emphasized not just across but also within BUs. While every team naturally has its characteristics, the operations manager and CEO would challenge the new hires and ensure they add something different to the current team.

Tools

What pieces of technology does your startup swear by?

We have applied technology in our ecosystem smartly. To me, the definition of good technology depends on how many people benefit from it instead of how high-tech it is. Our technology solves industry pain points through the application of AI, Big Data, and blockchain technology. Some users may not even notice the technology, but they are already gaining from it. We believe that’s what technology should do.

Advice

What’s the single best piece of business advice that has helped shape who you are as an entrepreneur today, and why?

Ask any entrepreneur and they’ll probably tell you the same thing: 

“I’m never satisfied; I always want more.”

“Whenever I get what I want, I then want something new.”

“It can ALWAYS be made better.”

This is not just in business but also in relationships; not just in sales numbers but also in living conditions; not just in efforts from the team but also in life experiences. There is a level of satisfaction for entrepreneurs that appears to be continuously aimed for, yet it is rarely fully achieved. 

What’s ONE thing you recommend ALL aspiring or current entrepreneurs do right now to take their business to the next level?

Always have a plan B or a plan C as there are always unexpected things in reality. However, once you have created that backup plan, try to put it out of your mind.

Don’t count your chickens before they hatch, don’t put all your eggs in one basket, and don’t create plan A without creating plan B. Having a backup plan for your company and even your side projects from the get-go will help you feel more prepared to tackle any challenges that head your way and give you the confidence to pursue plan A. 

What’s one thing all entrepreneurs should avoid?

Execution not only nurtures an idea but also tests its potential at each stage to determine its viability to attain success. An idea, however, unique as it may be, remains a concept and a mere representation of thoughts. It is the execution plan that gives true vision and direction to an idea.

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