NOX: From $183,000/year to $0 - How not to deal with competition

What's your background, and what are you currently working on?

Hi I’m Jeremiah, a self-taught digital marketer, UI/UX designer, and ex-entrepreneur based in Singapore. I’m currently working as a UI/UX designer at AdZiggy, where we aim to bring programmatic marketing to small businesses.

I started NOX back in 2015 with 2 of my cousins and 2 good friends. The initial idea was a nightlife app that allowed users to browse events, book bottle services, sign up for VIP guest lists, etc. At that time, we raised around S$120,000 (Singapore Dollars) in seed funding from several angel investors and were hustling to build our dream. I was in charge of deploying marketing campaigns from ideation to execution.

Mistakes were made and lessons were learned. After about a year, we decided to pivot the business in an attempt to save it — We made use of our connections in the alcohol industry and turned NOX into an e-commerce platform (NOX Express) focusing on alcoholic beverages. We even managed to turn the company around and at its peak made over S$250,000 in yearly revenue.

What motivated you to start NOX?

It all started when my cousins and I were queuing up to enter a club. There was some popular DJ playing on that particular day, and the club was packed and the queue was insane. We began talking about how we could book tickets to movie theaters, yet still had to queue to enter a club. What began as a small discussion eventually led to the birth of NOX.

The main idea of NOX was simple, we wanted to create a nightlife app where users are able to buy entrance tickets to clubs and pre-order drinks (if they wished so). This would help users to plan their night better, instead of spending their time waiting in line to enter a club.

How did you build it?

None of the founders knew how to build a mobile app or had any prior knowledge of programming or coding. The founding team mainly came from marketing, design & finance backgrounds, hence mobile apps were definitely not within our domain of expertise.

We had to hire programmers to help us with creating our app, but it’s super challenging to hire technical roles if you don’t have the expertise to assess candidates. In the end, we did manage to roll out an MVP, which consisted of a simple booking system and a listing of all the major clubs in Singapore. But due to our inexperience and the lack of capable developers, we were unable to take our product to the next step, and ultimately had to pivot our business in order to survive.

We then created NOX Express, an alcohol e-commerce website, using Shopify. With the connections we built through NOX, we aimed to educate consumers on the different varieties of alcohol available at affordable costs. We worked with suppliers, importers and brand owners to market their products to our users.

What were your marketing strategies to grow your business?

When we first started, we leveraged our connections with the clubs and marketed to their existing customers. We also relied heavily on social media and email marketing in order to grow our user base.

We had good results, especially when we did social media contests, where we would reward the winner with a bottle of alcohol. This allowed us to grow our reach and build a good following. We used content and regular newsletters to engage our users and educate them on new alcohol brands.

We used Klaviyo for our email management, Shopify to create promo codes, and Google Analytics to track and evaluate our marketing campaigns.

What were the causes of NOX’s failure?

There were several reasons why NOX failed. Although at our peak, we made around S$250,000 in annual revenue. Yet, due to critical mistakes and increasing competition from bigger players, everything slowly started to go downhill from there.

One of the main causes would be a lack of financial discipline. I think that it’s very important for startups to learn to manage and control their burn rate. You shouldn’t be starving, but by spending strategically, you allow yourself more runway and freedom.

We also realized that it would be hard for us to continue when we had to constantly lower our margin in order to compete with the other bigger players like Redmart, HonestBee, and many more.

For me, the speed of growth and scale of operation that I felt inspired by had started feeling out of reach. New competitors were popping up and it was getting harder to maintain our competitive advantage. Even with access to funding, we didn’t have a solid plan to scale the company. Ultimately, the deciding factor was my own lack of confidence to bring the company to the next level.

What were your biggest mistakes and challenges you had to overcome?

When working with my cousins and friends, I realized that it was hard to administer a frank and withering appraisal on their work performance, mainly because I didn’t want to risk hurting our relationship. That decision might have led to unaddressed faults and caused operational issues to continue longer than they should have.

Don’t get me wrong, working with friends and family can be a very enjoyable experience, but it definitely doesn’t come without challenges and there’s always the risk of spoiling your relationship. If I could go back in time, I would be more professional in dealing with my “co-founders” and not see them as friends or family while we’re working together.

What were your expenses? Did you achieve some revenue? In the end, how much money did you lose?

We lost the most money while trying to create NOX. We raised around S$120,000 and lost all of it (mainly on the salary of our developers). But we managed to be profitable when we pivoted to NOX Express, having annual revenue of S$250,000.

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If you had to start over, what would you do differently?

I would go straight to creating NOX Express instead of developing a mobile app. The lack of technical expertise was definitely the main pitfall for NOX, which I had to learn the hard way.

I know a lot of people are going to say stuff like good founders can always hire their way out of a technical skill gap. But in reality, this theory falls short as it’s super challenging to hire technical roles if you don’t have the expertise to assess candidates.

What are your favorite entrepreneurial resources?

I normally read articles from Medium to learn about other people’s experiences. I also listen to different podcasts like “Tech News Briefings” by WSJ and “Ted Tech” to learn more about the latest news in the technology and startup world.

For videos, I like to watch Scott Galloway (L2inc) as he always has an interesting take on the latest trends in Technology.

Where can we go to learn more?

If you want to talk about startups in Singapore, or just want to chat, you can connect with me via LinkedIn. Feel free to reach out to me if you think I could be of help.

I also write about UI/UX design, startups, and technology on Medium here.