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Working at an Early Stage Startup (Pt. 1)
Disclaimer This post does not in any way represent the views of Fumi as a company, but is solely my individual opinion and reflection on my experience as a software engineer at an early-stage startup
COVID-19 brought an abrupt stop to my studies in the United States, leading me back to Seoul. As I was always interested in the startup scene, I could not turn down the opportunity to intern at an early stage startup when it presented itself. Following rounds of interviews, I landed an internship at Fumi, a Korean e-commerce startup catered to the senior fashion market. Fumi had recently raised $3M in Series A funding and was rapidly growing its team. Over the past 4 months as a software engineering intern at Fumi, I was able to grow not only as a software engineer, but also as a future entrepreneur. In this blog post I would like to share my takeaways from working at an early stage startup as a software engineer.
Business Side of Things
One of the best things about working at Fumi was that I got to experience the business and engineering verticals of an early stage startup. More specifically, I worked with the product team, which was composed of 3 software engineers, 1 product designer, and the Chief Operations Officer (who also largely took on the role of a product manager). Most of my business-side engagements occurred during daily product team meetings where we shared our progress and shaped short & long term goals for the product we were building. It was particularly interesting to gain insight into the company's finance / product metrics on a daily basis. Here are some of the insights I walked away with following my internship:
Competition is Fierce in the Business of E-commerce
E-commerce is a highly competitive industry, especially in South Korea. There are extremely popular e-commerce platforms such as Coupang that already dominate the market (think Amazon). Coupang offers next-day delivery, one-click pay, and an expansive product lineup. In other words, as an e-commerce platform, it is very difficult to compete with such a massive and established entity. Even if we hone in on a more specific vertical like “fashion e-commerce,” the situation doesn't get much better. This area is hyper-competitive in Korea because fashion is HUGE here (especially among the younger generations). Hence, there are apps like Musinsa, Ably, and StyleShare that are catered towards younger audiences and boast millions of active users. But what if we narrowed down the market even further - to senior fashion e-commerce, for example? All of a sudden there isn't a clear market leader - and that is how Fumi came to be. The founder of Fumi saw significant market opportunity in the space of senior fashion e-commerce.
Market for Seniors is Big but Difficult
Fumi's standout point in comparison to other e-commerce platforms was that we targeted senior customers. This is how Fumi was able to attract heavy-weight investors including Altos Ventures for their Series A funding. Senior consumers (aged 50 and over) tend to hold stronger purchasing power, which makes them a very attractive demographic to target. Needless to say, however, getting them to actively participate in online-shopping is a challenge, and it was the most important problem our team set out to solve. Our product needed design considerations such as larger fonts and UI components in order to accommodate senior customers who may suffer from deteriorating eye sight. We also found that many of our customers preferred to make phone calls to ask for assistance rather than using embedded online chatting solutions. Many of our customers also had a difficult time with making payments online, to which our team made significant efforts to build the payment experience as seamless as possible. As we can see, the market for seniors is a constantly growing market, but it is a difficult market to crack due to the need to properly understand the different characteristics of senior customers.
Finding the Product Market Fit is Hard
The single most important factor for any startup to succeed - finding the product market fit. Can I confidently say that Fumi found a product market fit (PMF)? Not yet. In fact, I don't think Fumi even came close to finding PMF during my 4 months there. Objectively speaking, Fumi is currently an e-commerce platform with an emphasis on senior fashion, with no next-day delivery and no brand-name recognition. However, we were able to see some explosive increase in active users when launching events such as the "Senior Model Contest.” The platform definitely grew significantly due to efforts on all fronts over the last 4 months, but it is still unable to demonstrate signs of sustainable & organic growth. There might have been some negativity in what I just said - but most startups that exist out there have also not found PMF, remember that :)
Back Office Application is Important for E-Commerce
The importance of a solid back office application for an e-commerce company is often overlooked. Obviously, as back office applications typically are not client facing, it often receives less attention from engineers (especially if the engineering team behind the product is also responsible for building the back office application). However, from my experience at Fumi, having a well thought-out back office application is extremely important for the business to function properly. A back office application is used to track inventory, respond to customer service needs, track delivery, and configure the customer-facing app to meet certain business needs. All of the above are a critical part of any e-commerce platform business. If the back office application is not properly set up, then there can be a lot of overhead for the developers, as all other teams (merchandising, marketing, customer relations, etc) constantly look to the developers to solve issues. For example, a customer relations manager may have the need to change user data on the database. If a back office application is not well set-up to perform such a task, they have no option but to ask the developers to do it for them. Over time, this can decrease the working efficiency of the software developers, as they constantly have to deal with external matters instead of being able to focus on the product itself. These kinds of issues only become more apparent as the business scales.
What I learned from an engineering standpoint will be covered in part two.