In breaking the news about CXA Group’s layoffs, Terence Lee of TechinAsia shared this:
LA vs SF
Yes, Rosaline Chow Koo, founder of CXA Group, is a frequent speaker at conferences – and people find her inspiring. We do too.
Her story of growing up in a rough Los Angeles neighbourhood is probably mentioned more in the media than Travis Kalanick not able to find a taxi in the rain.
The company, which is essentially an insurance brokerage platform, seemed to be speeding its way towards success. Last year it raised US$25 million from investors including HSBC, Singtel Innov8, Telkom Indonesia MDI Ventures, Sumitomo Corporation Equity Asia, Muang Thai Fuchsia Ventures, Humanica, and Heritas Venture Fund.
All investors became partners. Of course, with companies as entry points, CXA has the potential of reaching out to millions of insurance customers, and the data they collect would be very valuable for insurance companies too.
A very expensive team
So what happened? Rosaline apparently replied to Terence’s message, claiming that they only cut 12 out of 316 employees: One thing you would struggle to understand is – why do they need so many people. This is a picture from their LinkedIn page:
The cash burn is probably very high. With most of the headcount in Singapore, this could easily mean a few million dollars a month.
I leave it to anyone capable to do your own math to figure out how big is the insurance brokerage market and how much CXA can effectively capture (with all the competition).
So cash burning, revenue is slowing, what should you do?
Cut costs. In fact, Rosaline claims to have cut only 12 – she should have cut MUCH MORE to be a responsible leader.
Not seeing it coming?
You might ask, why did they not see the cash crunch coming? I mean, this kind of mistakes is common amongst rookie founders, but for someone who is more than double the age of an average rookie founder, she should have seen it coming.
Maybe CXA’s leadership team profile on the web site offers the answer: Yep, you got it. No CFO, no COO.
Regaining the health
But we all know that inspirational founders are not necessarily always good operators. More often than not, they are pretty bad at execution.
I am not saying that this is the case with CXA – but having those two positions filled with capable people would probably propel the company much further.
And it has the potential to become a profitable, healthy company.
Valuation aside, of course.