Folgen
-
Joining us is Natalie Doran, CEO and co-founder of Lytehouse, which does manages threat detection for security control centres.
Learn about Natalie's journey from through the world of startups and social entrepreneurship to her current startup, Lytehouse.
She shares her insights and experiences on:
- the importance of co-founder fit, in terms of skills as well as alignment
- working on startups with a mission driven by social impact
- how she tried to validate a few prior startup ideas
- her experience meeting her co-founder Jean-Vicente De Carvalho, bonding with him, and having a good skills match
- how she validated the idea that morphed into Lytehouse by sitting down with security personnel and observing their workflows
- self-care and making time for yourself when building a company.
Favourite books:
Leaders Eat Last
Picture of Dorian GrayFavourite tool:
G-Suite
HubSpot CRMhttps://www.lyte-house.com/
nterviewed three amazing entrepreneurs on how they are starting and building their companies in this stressful climate. I just wanted to apologize in advance for the audio quality of these first three episodes.
I fixed my microphone settings so that starting from episode four onwards, my voice should be much clearer, but for the time being, please bear with me and I hope the content more than pays off for the audio. thank you.
And let's gaze into the Abyss together.
welcome to Abyss Gazing. I'm your host Alvin Leong, and joining me today is Natalie Doran, the co founder and CEO of Lytehouse, a security control center for managed threat detection using machine learning.
An
AI
Natalie will tell us about her journey into entrepreneurship and startups the lessons she learned from her first startups and how she applied them to building Lytehouse. The challenges she's facing, we're going Lytehouse and [00:01:00] where she's going to be. So, Natalie, are you ready to get started?
Natalie: Okay.
Alvin: So Natalie and I both knew each other from the entrepreneur first program, but before that she's from the UK. She graduated back in 2014 and then since then she has been working in various roles in Singapore. So Natalie , can you tell us a bit about how you moved to Singapore?
Like what made you decide to move to Singapore.
Natalie: Really the move to Singapore was not as strategic or as calculated as I'd like to pretend it is. Um, actually the idea to move to Singapore really came from. Uh, I was, uh, in the, in the UK, in the West Midlands where I'm from, small village. I came out of university, the English literature degree and creative writing.
And sort of ended university hit the ground running. I was like, I'm going to go and change the world and I'm going to do one of these things. And then people basically said, well, with an English [00:02:00] degree you can become a teacher or you can become a journalist. I was like, and then? And they're like, nah, that's good.
It's kind of it. You can teach it well, you can be a journalist. I was like, well, okay, well, neither of those things really works for me. And so I was really struggling to find. Like my niche or like the area that I can really get passionate about. And, uh, you know, some, some family members, like family, family of my dad's family, uh, had been in Singapore for over 16 years, I think it is now.
Um, and so they say, you know, why don't you try Singapore. It's in need of creatives. It's a need of people with content. And, uh, you know, it's, it's, it's a, it's a far cry from teeny tiny village in the West Midlands. So pretty much overnight I agree to move. But I honestly, hands in the air, didn't know where Singapore was on a map until I got hit.
And I went, I didn't even put them in stories. I was just like, I have to leave. I have to go start a new life. [00:03:00] And so I kind of did that. And, um. Kind of arrived and when, okay, what, what do I, what do I do now? So the idea was never initially I'm going to go be an entrepreneur. It was, I need to find a job in a country that I know nothing about.
And I was 23 at the time. And I just went to every networking event I could find every single one. And, uh, ended up meeting a guy who told me he was building a startup. It was a social impact game for kids that would enable them to contribute to real causes in the real world with game play. And, uh, I sort of fell in love with the mission.
Volunteering had been a part of my life since I was very little. And so, uh, impact and the human elements of a business really inspired me and they were also looking for someone else. The content side. So a lead to the opportunity. I did six months of interning at various, uh, uh, ad agencies and, uh, some, uh, the American chamber of commerce.
So, so did a bit of [00:04:00] interning, but ultimately realized that I really wanted to try my hand at the start of game. So I joined them yet in end of 2015 and fell in love with startups from there. It hasn't been easy. Yeah, really, really not easy. Um, but I think I wouldn't change it for well, yeah. Okay. So
Alvin: this social impact startup that you joined, it's called shiftrunner.
So I pulled up the 2015 version of the site. I can share for those of you watching the video version, I'm going to share my screen. I loaded up the 2015 version of the
Natalie: site so
Alvin: we can go
Natalie: like take a
Alvin: trip back down memory lane.
Natalie: Absolutely. Is this the, the a website for the game or for the company? So it's both is
Alvin: the game was called pandoonation
Natalie: pandoo nation.
Yeah. Dot com.
Alvin: Okay. Can you see my screen?
Natalie: It is loading. So this was Shiftas a, as a company page. The [00:05:00] idea was that Pandoo nation, um, the game would contribute to the, uh, foundation. And the purpose behind, uh, the game was every game for kids is always like, kill the boss and you know, be the villain. And what we were going to do was create a game where.
Kids could take some ownership and responsibility. They could become more like global citizens. They can learn skills, but without joining an educational game, yeah, they would be able to, you know, take part. Um, take part with kids around the world in, in having a real impact, but also with being fun and engaging.
Not too literal. A lot of the games were impact focused at the time when like you're a refugee in, in Darfur and like runaway from the militia and you're like, okay, this is very intense for a very young child. So we wanted to make it a fun to see fun, well, that taught real values at very [00:06:00] discreetly, um, but also had the opportunity to be.
You know, um, a known, known kids entity, you know, rich characters and a full world and a lot of heart and soul went into it. And, uh, on the foundation side, the foundation was primarily based in the Philippines. We had a lot of different projects running there. Uh, everything from, you know, supporting a youth in prisons to education.
And the idea was that everything that the business did, it had one foot in impact. But also one foot in storytelling. So, you know, the, uh, the really interesting thing about, about game gaming is that, you know, there is a story arc, but you choose where you go. And we wanted to really bring that into lessons and learning for kids in that you add a story arc.
Can you be funny? Make it engaging and our characters to it. Not only is it more memorable, but you also get to learn in a, in a more fun way. So. Yeah, it was a, it was a great time, you know?
Alvin: So looking [00:07:00] at, looking at the site, I guess I could see that they had this news release where the appointment you
Natalie: saw and what
Alvin: do you remember like at this point? Like how far along were they were they, did they already have like the functioning game with players and, uh.
Natalie: Yeah. So the point at which I joined the company, the company I've been running for a couple of years, um, and a lot of headway than need on the game.
It was a massively, mostly online games, so, and no G, which are by nature massive. And, uh, they kind of. The kind of product where it's never finished. And if, you know, kids who enjoy gaming, you know, when she started to play, you reach the age of the map very, very quickly. Um, so there was, there was a constant flow of capital going into, into development and obviously to be, you know, world-class game.
It takes world-class development and real world-class capital. So it, [00:08:00] um, when I joined the company, it had been in for a couple of years. When some really great ideas, a lot of the characters and some of the ideas around the world where we're in playing. And then when I joined, I started on news releases and press releases and then mu, uh, over the next year to working very closely with the development team in the UK.
To be able to bring the game to life. So I took the original story. Yeah. They'd be a, the founder.
Alvin: You wrote the
Natalie: appointment? I did. I did a shameless name at my press release. Um, and, uh, it was my job. Sir. Don't judge me, but, um, yeah, I, uh. Ended up going from press releases and content to moving forward into working with the team and, um, will building, which for me was, was the most amazing thing.
I mean, to be able to say, I, you know, I took a, it was almost like a [00:09:00] short story that the founder had written. Uh, with an idea of some of the characters that could be involved in as well. And then sort of took that with him and with the, the development team to really transform that into a fully fledged world with rules and magical objects and ships and a past, present future, um, and developed an animation series for that as well.
So it was a really, uh, escalated from. Press releases to do world building on that. It was, it was, it was great. And you know, it really inspired the creative in me on a daily basis. Although naming things is actually one of the hardest things I've ever had to do. Naming things is a hard, um, you run out of words very quickly mean like
Alvin: the objects in the world.
Natalie: Oh, exactly. You create a world of objects. And then you have to name them. There's got to be rules around them. You know, and kids are super smart. If you break the logic, they're gonna like lose all, like suspension of disbelief. They're getting it. What is this? So you have to [00:10:00] think about like, how can someone, if this object can do this and why would they use that?
It mean by blueprints and masterminding and like look like a mad woman for a few months to try to bring this story together. Um. But it was, it was great. And, uh, you know, it was, it was a really exciting, interesting time. Um, learn a lot. You're working closely with founders. It's something I hadn't done. It was my first real proper job out of university, then interning and so on.
So I really got a crash course instantly in. Fundraising and no warrant agreements and all these things I had no, no idea of. But also being part of those invested discussions, seeing, you know, how investors releasing, doing presentations, putting pitch decks together. We're finding the content and the message.
So it really wasn't very hands on sorta NBA in. I learned a lot of things and then a lot of things [00:11:00] on on good and bad sides. Um, but I think that's, that's true of any, any company you learn a lot. Um, and, uh, yeah, it was sort of towards the end of that company. Um, funds were, were, uh, were an issue and it was, it was towards that decline that, um, it had the idea for my own startup.
And after using that learning, I then I then went forward. Why
Alvin: do you think that, uh, shift wrong and didn't really take off? Like what, happened to it in the end.
Natalie: Yeah. I think, you know, it's, it's, they're there a couple of things I think, um. The one thing that was a takeaway for me was, um, his team. I think, uh, what I've learned and what Alvin, you'll know from, from EF is kind of drilled into us is edges and team, you know, um, be able to, you know, really lean on those edges.
I think there were a lot of talented people in that team. Um, but a lot of us were talented in similar [00:12:00] ways. Yeah. And so then there's bringing in new perspective or being able to have a more technical edge or you know. That that poses its own problems. Um, and I think, you know, a lot of time we had happened in the company before myself and the CTO joined.
Um, but I think it, you know, it was a incredible concept of a great team of people, just not the right fit, I think necessarily. Um, so that's one thing you told me about the team. Um, the other thing that was really interesting to me was product development. Um, I had a real hands on pod in that. When it came to game development.
Um, she's something, I never thought of a plank games, but I'd never actually thought about writing them. Um, but, but what was interesting, and again, it's something that I think you read everywhere when you read about like building. So, but it's something that's quite easy to lose is, um, you know, build something small fast.
You know, something that you can [00:13:00] sell. We'll have someone use as quickly as possible. It doesn't have to be. The, the big, the big, baddest thing. It doesn't have to be the end product. It's not gonna be the bells and whistles. I forget whose credit is, but they say, if you're not ashamed of your MVP, you have waited too long, you know, get, get something out and just get that feedback.
And that was one of the strongest lessons that I took away from that experience was, you know, um, there were always amazing ideas and, and all of this talent and all of this looking forward to this, this huge game. Um. But actually, you know, piece by piece would have enabled more learning along the way and been a management of that product development timeline.
So I think, yeah, it was, I think it was a real lesson for me, uh, by law, sort of build small and build up. Um, but yeah, it was, it was, it was interesting. And, you know, I think it's when a company, you know, at the time, I was a twin. [00:14:00] Five 26, um, at the time, you know, uh, you're working in startups, it's nose to the grindstone, you know, your head's just down, you know, full belief.
And that was one thing I could say about, you know, everyone who was in that company, it was just full belief and dedication to, you know, running at full speed. You know, your wing in a prayer and just like pushing forward to get through. And then, and then when those efforts don't actually come off when.
You know, the, the door is closed and it's like, you're starting to have these conversations about, you should be looking for other work or, you know, there's a chance we're probably not going to make X month there. You know, it's a very unique feeling to see a lot of work put in time, effort, money, you know, love into a product.
And then that not. See the light of day, you know what I mean? Then it never gets, and that was something that I found really hard, and I think over [00:15:00] those, you invested three years of your life, and now I realize that it's the real takeaway. What was the learnings, you know, the lessons, the network, and I, you know, I'll always be very grateful for that.
I think at the time it was just like, Oh my gosh, the sky is falling. Everything I've worked for is gone. Everything, everyone's falling out, you know, everything is, and so then you, all these words and terms that you've known, your liquidation, things that you've never had to really deal with the full become a reality.
And it really did teach me a lot. And it was around that time. As I said, I started. Thinking of, I can't, how can I take this and use it into a positive and channel some of my energy and creativity into building something, but I'm also passionate about and something that I can take the reins on. And that's when, uh, I sort of working on this corporate social responsibility plan, um, which faces any challenges as
Alvin: well.
How would you start, uh, what was the initial seed behind this corporate [00:16:00] social responsibility idea.
Natalie: So the scene was, and they've said volunteering. We, I mean, I'm not gonna say we were made to do it because then it's not volunteering. It's home forces you to do it. But we would kind of made to force to volunteer when we're a kids.
Um, my mom is very passionate about a disability and so we used to volunteer a lot at Sable home non village. And, uh. Volunteering throughout university and, and when I moved to Singapore, it just became something that I just wanted to adopt here as well. And as a way to sort of learn more about like the culture, I mean people and save something that I was like, okay, this is, this is something I want to do.
I want to started trying to find, okay, you know, I have some time now. You know, things aren't going as well and my day job, you know, I want to really do something, you know, channel something positive. Quick, I'll just go on Google and I'll find some thing. And I just found it so extremely difficult to know how to help, aware, to help.
I would send [00:17:00] endless emails like back and forth trying to figure out a date. Then you need to do this. And I just found it was just this logistical nightmare. And then I was like, how is anyone. You know, you're gonna find the time, the effort or the bandwidth put into helping on these charities is screaming out for time and talent.
So that was sort of the idea. And I'm like, okay, what if there was ways to make it super easy, making it as easy to book as a yoga class or bring these volunteers together and then reward them for their service in ways that help them as a person. And so that was the seed and, uh, with no technical expertise.
And no idea what anyone was doing. I a cutout little shapes of iPhones and then I put them on the floor and then I was like, this is the home screen. If I click here, I go there and basically, what would you call, there's a lot of frames, but I didn't know. I was like these, uh, Southern maps and build this whole like mad gram of like.
Where everything would go to, where it would lead to [00:18:00] then converted that into a hyperlinks PowerPoint. Then upgraded that into like Marvel. Um, the other, the other app, but a graded graded. It's then become something that felt like, okay, this seems like it's a real product. And then basically when anywhere I could get a meeting and not from the dorms, like, would you find this useful?
What would you change? Um. You know, is this something your company cares about? Is this something that you care about? Survey? All my friends went to all these charities, really just random about town. And then I learned about impact tech. Um, and they, uh, formerly known as tech for good and they became impact tech through a program.
And then it was sort of like a once a week evening crash course in startups, um, sort of the basics and then also sending some advice on positioning and customer segments and went to the team there. Which was great. Um, but at the same time, I was trying to run forward with my ideas. I F you know, I fully believed in this.
I was like, this is gonna be huge. I was getting great feedback [00:19:00] simultaneously managing the fact that the day job is crumbling beneath you. You have no savings, no money, and if the company falls, you have no visa. And it was like, what do I do? You know, you're just in this flux. He was like, okay, well I could just stop everything and go for a corporate job.
Well, I just keep running and hope I hit something. So I was like, all right. So just kept pushing and joined impact tag, as I said, did the program, which was great. But then one, a biggest huddle was that I got stuck in a wheel. A vicious cycle, which was, I had companies who said, we love this platform. We would, we would love to use it as soon as you have, you know, an MVP, you can show us, we'll happily sign.
I was like, great. Then I'd say, it's the investors. Hey, they just want an MVP to do that. I need money. And they were like, well, if they sign, we'll give you the money. It's like, but they weren't signed without the MVP, and they're like, well, we would, and I got stuck going round and round around. [00:20:00] Crazy. I was like.
No, I just needed, you know, a very small amount of money to do big things and I just couldn't raise it. Um, and that was really disheartening. It was, and it was a tough time and it was like, do I go back to UK? Don't give up on being in startups. Um, but some serendipitous circumstances, you know, uh, one of the charities that I've been speaking to introduce him to our village and these guys are doing something interesting.
It's in the impact space. It's not direct aim what you're doing. Um. Wanting to have a conversation. So, uh, after many sleepless nights, and I think a few gray hairs, um, ended up, you know, meeting our village and, uh, that's, that became the sort of next step in my startup life.
Alvin: Yep. So our village, I, I've seen you actually appeared in a few like media releases with them.
Uh, back then, the messaging around them was a bit complicated. They say they're [00:21:00] doing something like a blockchain, a social responsibility thing. Now they're still around the site and it's actually become, I think they streamlined the messaging a lot more. So it's like a sharing about sharing your time and receiving time back, something like
Natalie: that.
Hmm. . Yeah. So I, I joined, uh, owl village instead of being doing the gaming company and then tried to the corporate social responsibility and then, uh, met our village. And obviously all the time I found me screaming at me. He's going to get a real job, as they often do if you're in the store, but you bringing in a real job and have some financial security and you're like, Oh, that's okay.
Instead of my twenties I can wear it. So I was like, okay, maybe I'll join a startup that has. You know, um, kind of salvage team that didn't involve in those, quite a lot of people are very well funded and, uh, you know, uh, CEO huge accomplishments and, and me, [00:22:00] something I always looked for when joining a company was mentors in the company, um, particularly in startups.
Because as I say, you working with these people in the front line every day, um, so it makes sense to find
Alvin: them.
Natalie: Yeah. I think we would really close together. Um, it was really a frontline. Again, you know, all the hats, many jobs, and you, Peter know it today. You, you certainly went home, read about it, and led to tomorrow.
And the most prime example was in, on my first day, um, I joined, uh, I spend time, we're doing an ICA. You're in the blockchain route. We were pivoting as a company in the blockchain. Can you please edit the, the white paper?
First of all, what is this? Well, what is blockchain? Second of all, what are the white papers for blockchain gonna look like? And like three. What do you mean edit? I have know nothing about [00:23:00] anything to do with this company. So it really was a trial by fire on the first day. I know then being in the office till like 10:00 PM and I haven't been, I'm like talking away, like, what am I even doing?
And then you're like, do they think I'm, do they think I should know this? Or I used to have all these questions in my imposter. It was, it was a bizarre office. And I went home. I was like, mama, I'm really, I don't know, is this the right job for me? Um, but thankfully, you know, I do enjoy a challenge. So, um, jump straight into it.
And, um. Yeah, it started off again, a company is prior to me joining as, um, platform for individuals, um, to share any service, skill or errand using time instead of money, for example. And then I walk your dog, I get an hour as credit. I then use an hour credit thing going, let get Spanish lessons, and then that person takes that hour credit and then something else.
But the training of time. Um, there's a lot of applications in, you know, [00:24:00] charities, but also, you know, in sharing skills and, and sort of building better community. So that was what really drew it to me. You know, in each of those songs I've been in, they've been a real human on to all of them. And so that, that's what really appealed to me.
And a lot of the charges I've been speaking to you, we're really excited about it. So jumped in, um, jumped in in London, in the wall West of block chain. Uh, which way you would've seen a lot of the speaking and so on, because at the time, block chain was still the new kid on the block.
It was still bubble. Yeah. Bitcoin is still climbing. Everyone was like, Oh my gosh, we're all going to make a Juliana's. Um, and every conference you went to, everybody said that about whenever it was, whatever, something token something. Dot. IO was going to be the next whatever. And uh, so yeah, it was, it was an interesting time.
And so obviously you have to learn very quickly about what a complicated thing. I would say [00:25:00] still now, I probably know 70 to 80% of what I should know about that, to be honest, because it was a black hole, but you never got out of, but enough, enough to understand. And um, I liked the application of, you know, global time currency, you know, something that is equal for everybody and something that doesn't matter where you are in the world.
You could trade your time. And I thought that was really beautiful. Content. And I think particularly now, you know, what we're facing with, with jobs and Karuna, you know, people being able to, to use that time as a, as a, as, as well, to get the things that they need, kind of honks banks, the old barter system.
So it was something I've always kind of, it appeals to the hippie and me. So, uh, that's one of the reasons why, why joined them, but I think it was the pivot to, to blockchain. Obviously. It was, it was a whole new space. It's been a lot of time speaking in conferences, talking [00:26:00] to people, you know, people, we like the application of it just as we're about blockchain.
Yes. Even Japan, Japan, Korea, uh, Singapore obviously. Um, quite a few, quite a few. And I, I'd done some speaking in general on sort of impact and tech and so on. So kind of straight into this, but it was, um, quite nerve wracking sitting in front of a crowd of very technical people on a very technical issue, talking about something you don't know a huge amount of like amount about yet, but take it any strike and you just get up there and you do it.
And that, it was great. It was a really good reception to it. But I think at the time when. Uh, the ICO was happening, the market suddenly started tech taking a plummet, and that's when, you know, the, the golden bubble of people raising like 10 million, 20 million, 100 million in four days. You know, those were ending very rapidly and on a [00:27:00] weekly basis, the entire market was changing.
And then it's like, Oh, the bubbles burst. Oh, it's collapsing. And I think it, it was kind of like an accelerated version of the.com crash. You know, who was like today everything's low. Oh no. But it's on the value gone into people's panic selling and the platform is going to be built on a theory IOM. So then that sort of, but not, so it's going down in value.
Then it's just like, people don't want to. Spend it on it, keep hold of it. It's worthless. And it's just, it became a really challenging to, to convince investors. So, um, after that, we sort of went back to the original format, um, and went back to original development. I think there were, there were a couple of roadblocks along the way, um, in that, and I think it was, you know, we'd been on a bit of a wall ride.
Um, we'd seen people come and go. We'd seen. You know, all the highs and lows there are in, in, in those startups. And it was April of last year when it really reached a [00:28:00] point where I was like, okay, you know, I've, I've taken essentially five years of, of learning and understanding and mentoring and working with people, and it's really time to now turn my attention to.
Man. That's awesome. Yeah. I felt like it was really that time to branch out and I felt like I, I'd seen from other people's mistakes I was ready to, to jump forward. So, um, made the big move, quit, quit my job, which was really challenging. It was a really hard decision. And, uh, you know, it's easy when things are going right, but when things are going wrong, you know, it does take its toll on you and it really, it really did affect me mentally, physically.
Um, you know, the, the whole situation that we're in and, uh, yeah, I think it's something that being an entrepreneur is, is, Oh, we know it's great and it's glamorous and, you know, you come up with a call line D, pretend going to get money. Yeah. You know, unicorn, whatever else. And it [00:29:00] really, it can be, but for the most part, there is a lot of pain that goes with that.
And it's a lonely place that people don't understand, you know, I think, um. When I was at that point last year, I was coming home. I was just crying. Uh, I was phoning my family. I was me, my friends. What should I do? What should I do? I, she asked as many people as I could because I wanted someone to tell me what I should do and I didn't want it to be again, I open my heart and soul into something.
And now, you know, I've lost it again, but you know, I, and that was a really hard, basic pill to swallow. And it's something that it took a lot of deliberation, a lot of time, a lot of thinking. The little self reflection on, and in the end I had seen, or what's right to me is to now. You know, step away and to, to move forward with the next thing.
And so obviously at this point, my family are like, you get the job, get a job in a stable fortune 500 [00:30:00] company. And so when I told him I quit my job and applied to EF the next day, you can imagine there was some raised, a couple of raised eyebrows. Not was for sure. I don't think everyone was thrilled. Um, but for me it was, um.
I'd never been more hungry than at that moment in time. And I remember in my EF interview, um, they said, you've really been through the ringer. I rule this time, you've lost everything. Like twice you've been up, down in a blink of an eye, go and have some stability and maybe come back to it. I was like, there's not a chance.
There's not a chance I can go and just work in a nice office and sit and do my bit and go home. And you know, it was, I had to prove to myself so I can do it. And prove that, you know, break the curse as it were. But also, you know, why waste all that time and energy, use it into something constructive. So quit the job, applied to EF.
And then as you know, we met a few months later. Yeah.
Alvin: So I remember when I first [00:31:00] met, you told me your idea, what was this like retail, a receipt, the late solution of get rid receives basically what, what, what gave you that idea?
Natalie: Well it gave me that day is that I had to do my expenses when I left the company and I'd accrued expenses over many months.
And so I basically have this big box of receipts and I was like, okay, it's time to get back through, dig through those, cause that's just, you know, cash sat in the box right there. I went back and 70% of them, the receipt of faded so much that you can no longer see the amount or the vendor. And I was just like, no.
And I was like, why? Like I can stay with my mom right now in the middle of the UK and chat with the, I can transfer you cash. You know with, with your phone number, and yet I still have to carry this like physical paper receipt to get money that is already owed to me. I was like, this is ridiculous. There is no way that this is, this is how it should be.
And you know, with environmental concerns and everything else, I was like, this is such a waste. [00:32:00] So I've been sort of working on thinking about this idea of, well what if you could digitize receipts at source and then never really have time or want to get something. I researched something I went to eff with and.
Tried and tested it, uh, worked with another member of the cohort. Um, it was really interesting because we were pushing to get that validation is something that Maurine drills into early on, as you definitely know. I've been, like, they won week one, want you to be doing 50 customers and you know, have validation.
Two weeks I some numbers and like, Oh, okay, Oh, and Sunday's not going do anymore. Something you're selling in a way. To people, you're, you know, you're getting these customer conversations you're trying to learn from. And, uh, what is really drilled in as well as, as you know, these edges, you know, work on each of the strengths, network and background and just not having that retail background.
I didn't have the network to be able to go and speak to a decision maker and say, Hey, [00:33:00] tell me all about the POS you're using. Or, you know, how did you reward system work? Us going sort of door to door to stores. And sort of, Hey, if I buy something, you tell me about your POS system. And trying to try and do it that way, which we got some insights for sure.
But, um, as a whole, nothing really quantitative, but we can go off. And it seemed like the trajectory for that research was going to be longer than even the program itself, you know, to get to those decision makers. It was going to take months of LinkedIn stalking and. Guessing their emails and getting in touch and having multiple meetings, or realize that these large retailers very slow moving.
They're also very stuck in their ways. And so we just said, you know, it's not an idea to never do, but it was like in the context of what we have now, is this the right move? And, um, one, one of the main reasons or the main reason in fact, that I went to yes. [00:34:00] Was I wanted to find a co-funder. That that was the single most important reason for me going, yes, getting funding is great.
Yes. You know, being able to. You know, take part in the program and have that seal of approval is fantastic. That the key reason was fun. Cure found it. Because when I tried to raise money by myself in the past, yes, I was a lot younger and more naive. But also, you know, having the tech and the business together, you know, being able to create something that outsourcing it, that's where I got stuck in that wheel before.
So to me, a huge part of community F was having that co-founder. So you can read cocreate something quite quickly. And, um. You know, I came in with the signed data and I think to a large extent it wasn't big enough. It seems, it seems like a big problem, but it wasn't big enough to inspire the people. And again, it was kind of a, but I think it's a great idea.
Like, well, it's great. It's why, I mean, people knew the pain point, but it wasn't something that really ignited people. And, um, [00:35:00] that's when I was like, okay. I should sort of put that to one side. Have conversations. You know, when I'd gone in and started talking to people, I already had this moment mind, I was selling them on this idea.
Instead of reading, learning, and listening and say, Hey, what could we actually do together? That's completely fresh. So that's, that's where it was a turning point for me in, in the program of being able to say, okay. Put your ideas to one side. Have real conversations with people. You know, this is a unique opportunity to be with a hundred of the sort of smartest people in, in the upcoming entrepreneur world.
You have the opportunities to work with them. And I think, uh, for myself on the, the cofounders working with initially, um, we both wanted to work on something that, you know, if we didn't have the other person, it would never work. You really both have to be super integral to that. It's not paying off. And I'm both kind of said, well, we can [00:36:00] each sort of do this by ourselves if we just hired a something.
And we're like, okay, well we really making the most out of this opportunity. So, um, he then went on to have a fantastic cofounder ship is doing extremely well and we will still see great friends. Um, and then I met Jean, he's my co founder, CTO, and, and it was like lightning when we, when we started working together.
Yeah.
Alvin: So, so like, uh, for everyone, I think Jean, uh, Jean is from South Africa. He's a software engineer. And then before he even joined EF here, and he treated like a basic MVP on weapon detection. So his whole original idea was like, security for South Africa is a very big issue. There is an issue very dear to his heart.
And, uh, he had been talking about it since the BMPs and finally nataline a team that with him. And, uh. Together, they worked on what eventually became Lytehouse. So it was like a . Let's go into more detail on how we started working with Jean was the first thing you [00:37:00] did.
Natalie: Yeah. So, um, what was really funny about, uh, Jean and I is that, uh, obviously we, we've made friends in the Cairo.
He was working with another cohort member, Andre, episode one. Uh, so they had already started, but we were very close friends. And originally it was Jean Andre. He were the initial dream team that I was working with, another cofounder and multiple different reasons. They both realized it wasn't quite right.
This is for them similarly to, to myself. And, uh. In the course of the program very early on, young was so he was so for surfing across multiple different people's houses. I'm surprised he wasn't on your couch album because he, you know, he was everywhere that would take him. He was that he would have slept in the office honestly.
And, uh, he was trying to find somewhere to stay. I am a, and I was like, like, you more than welcome to come and stay [00:38:00] for a week, use the spare room. And, uh, it's his number. We weren't even that close at this moment in time. And he stayed in the spare room and then over the course of say it was about nine days in the, in the ended up saying we had 64 hours of conversation.
I mean by that is it'd be the evening, have something to eat. No wine is nothing else. We just sit opposite each other. No TV, no music, and just sewing, having chats and the moon. We didn't. It was hours and hours of uninterrupted, uncensored. Your open, honest conversation. You know the kind of conversation I've not had before.
You know where you look at your phone, you're like, it's three in the morning now. I w we signed something like APM and what is going on? And this was every day for like a whole week. And we both sit by and went, okay, we now know everything about each of the risks, the good and the bass, which is important when your cofounders, the good and the bad.
Um, we know each of those intrinsic [00:39:00] motivations. We know what we know how each of the reacts. We know what we're afraid of. We know what we're proud off. So kind of like when we now know each other better than we know most people that we've known for years. It makes sense for us to go down this path because we're driven by the impact of it.
Passionate about technology. We've had some other beliefs, um, similar ethics. So it kind of all the pieces started spotting together and just one day it was kind of like a, huh? What was that thing about the weapons and stuff? And I am from a small village in the middle of the nowhere of the UK. And the biggest thing that ever happened in all village was someone's Robert being stolen.
And genuinely that was a. In front page news. So hearing his story, you know, 37 instances of armed robberies, kidnappings, bombings, muggings just against him and his family in his lifetime. He's 23 years old. So that's a hell of a lot of a hell of a lot of crime. Uh, he's experienced personally, and as [00:40:00] you said, he was in South Africa and his dad stole, was robbed for like a third time.
And while his dad was being, was being held hostage, he's dad sort of looked up at the security cameras. It's sort of a look of him, sort of desperation in his eyes, hoping that someone, his security company was going to see it. I know he could have been shot in seconds from that, but with no idea that no one's no one's coming.
And when they're like reviewing the footage with the, uh, with the police some days later. It really lit this fire in Jean that like, this is ridiculous, and we have the technology here. You know, all the pieces ahead to be able to notify when someone's in trouble and responds. And he's been passionate about machine learning and computer vision for many years tinkering around in his own time.
He's like, I can build this. I don't know why this doesn't exist. So I'm working on some real time weapon detection initially to protect his family and really to set it to be in these stores. Learn about eff [00:41:00] came to the program. And when we started working on it, we, we took a step back, which is one of most important things we could have done.
And we said, we know this is a problem, or we know gun crime was an issue. Let's look at security, like why does security exist? One of the things going wrong in, in the industry, we did a huge deep dive into insurance and how crime and insurance insulins, but, but on a few rabbit holes. Um, but we really wanted to get to know our office space.
And there's two people who have not been insecurity or law enforcement. We are at a disadvantage initially, you know, we, we had a lot of things we had to catch up on. Um, and so, uh, we started working on, on the, the weapon detection and building that out and quickly realized that detecting weapons was great.
You know, it was, it was a really helpful tool. Um, the computer vision is an incredibly competitive space. There are companies like envision out of China that have like 1600 computer vision engineers on the payroll, [00:42:00] and they are going to create the world's most amazing. Computer vision for detection and are you going to beat them necessarily?
So when we had to look at one, what is our, what is our niche? What is our talking about and what kind of product can we build that really captures people who've been underserved? And to do that, we had to go in markets. So we, uh, packed with all weapon detection and you know, then some well wishes. We sort of halfway through the F program flew to South Africa before the investment committee.
It was my first time in Southern Africa. So, uh, I'm a full tool, Mandeville tool, so, so some lines and stuff. Uh, but, uh. Going into the control rooms of these security companies. And just so the compete sort of overload and mismatch is happening there. And you know, we saw CCTV coming into the video management system and then you'd have the license plate recognition feeding into its Webber, [00:43:00] and then the panic alarms, they're going into something else and there's the firearms.
I don't want have these different systems and all of these different people in all of these different screens. And none of this talking to each other in an intelligent way. And that's when we started having these conversations. They were saying, we have this great weapon detection. They're going, Hmm, that's great, but every time a leaf blows in the wind, I get an alert and I'm getting a hundred alerts per hour operator at a 99% false positive rate.
Right. Okay. So detecting weapons is good, but how does this affect the day to day operations of these companies? What we realize is this huge fragmentation from a software perspective, but also of the industry itself. What's holding the industry back from becoming this huge web of, of cross sensor intelligence and understanding.
And then actually the more software that comes out and the more people that are high in the, and the greater and more sophisticated the hardware, the harder it is to bring all these things together as so these companies just patching as much as they can [00:44:00] to try and to try and build it. So that's why we said, okay, there is.
There was a need him, but for a product that can bring all this together and instead of adding to the problem in some way with another, you know, a platform, how can we be this command center for these companies? So basically the,
Alvin: the poly sensors for different purposes, it's like they have all the sensors, but they have no brain.
There's no brain that connects all of this.
Natalie: Exactly, exactly. The sentence is just say, you know, if something has happened. And that's all very well and good, but if you've got thousands of sensors saying something's happened, something's happened, something's happened, what do you look? What do you prioritize?
And then, you know, in, in emerging markets, in the markets, we're looking at, you know, one missed alert, an extra 10 minutes is, is a potential life lost? There is no two ways about that. And so we noticed a real problem, um, and one that if you can, you know, make an area safe. If you can integrate these sensors together, you make it easier to prevent.
You know, attacks from happening. If you [00:45:00] can, you know, provide faster response. If you can, de-risking an entire area, why don't you know you have the capacity to bring in more jobs on insurance and you know, be able to, to elevate some social mobility of that area. We were like, guys, so much bigger than, than detecting a weapon.
It's, what do you do next? And that's where the idea of like Lytehouse being this, this workflow tool, which brings in every sensor, every operator, every responder into this one system. And then you just the machine learning and the computer vision to prioritize them, to type them, to, to close loop the whole reporting system, um, through to become a one stop shop.
And the big vision is to one day be a, an open platform. Enabled people to build onto this, this workflow that in two clicks you can hire, you can install the best facial recognition, or you could get drone surveillance, you know, in the click of a button instead of having to rely on external tech teams.
Because what we realize is that security companies are not tech [00:46:00] teams, the security companies, but the tech they using is like the rolls Royce of technology and they're supposed to be able to know how to deploy this at scale and make it cost effective. And it's just not happening. So
Alvin: you went to South Africa a few times over E F the first time was before I see any went back there again around December.
That's after I see so. It was like both of these trips, like the on the ground, uh, interacting with all these security companies was what let you do. My finally narrowed down on this specific problem. Like I remember actually back in December, I forgot if it was you or Jean who told me that this is where you big thing, that you got to validate what of you are sensing of.
So, uh, the one was in Singapore. Uh, I was talking to you and then you got to go back South.
Natalie: So
Alvin: was it this, was it, this thing about the control center thing?
Natalie: Yeah. So before the investment committee, [00:47:00] um, yeah, we working on weapons section would expand it to, uh, detecting weapons, fires and intruders. And that's what we'd expanded.
That sweet scene. Um, and then as I said, we went to South Africa, going into the controls, saw this real problem, and then the investment committee was, the deadline for the form was maybe three days after we realized that there was a much bigger and better community. So we were like, what do we do? Do we have, do we go to the investment committee with weapon fire, intruder?
Or do we go into the investment committee with big vision? We're not there yet, but we know how to get there. But that all of the research that we'd done and all the figures that we had and all of the Maka sizing was all semi useless in this new sort of, uh, idea. While this pivot. And we deliberated on it and I mean we really, really deliberated.
There's one memory head in, hands in a coffee shop, pain, like what are we doing? Are we just freaking [00:48:00] out? Like, Oh, this is all falling apart. I'm trying to fill out a form with no information of an idea that we've only just sort of validated in a way, but we said, no, you know what? There is a, there is a real reason, a real need here.
And so we scrambled together for the investment committee form, and then two weeks later pitched for funding and got the funding. Uh, thank you for believing that there was something in this, in this big vision. So once we realized that, and the reason why I went back to South Africa after Christmas was like, we pivoted because we saw for ourselves a real need, but now we have to go and validate how much of this is a need for the whole market.
Get those kinds of numbers speak to which counted to customers about weapons section the first visit. And now I ask, go back and talk to them about workflow management, sensors scale. And it was a different conversation. It was always going back to customer conversation number one, so what kind of platform do you use and how much do you pay for it?
And we almost started again. And it was, it was frustrating [00:49:00] in a way. But at the same time, we were learning so much faster and we, there was really this undercurrent that was moving very quickly and customers were being way more responsive. They were saying, you know, when we're talking about weapons detection, it was, Oh, but this company and this company and this company are doing similar things.
All this. But as soon as you said they will be integrated in this platform, yes, we have our own computer vision, but also there are multiple other companies that we will onboard into this platform. Make it easy for you to deploy them at scale. Now it's a very different conversation because we're competitors honest.
So it really changed the game for us. We got a lot more traction and then now obviously I've demo today was canceled, unfortunately due to this whole Corona a pandemic. And so then we sort of really knuckled down on how do we present what seemed like quite a complicated idea in a succinct way that investors are going to understand and get passionate about as well.
And so when I said we put the groundwork in, it [00:50:00] was 16 to 18 hour days, seven days a week for four weeks. That was one sprint. And it was just every single day. And, uh, I flew back to Singapore. Jean's stayed in South Africa for a little bit longer to deploy a pilot. And a couple of days before he was supposed to fly back to Singapore, he was mugged.
He was walking down the street in South Africa and he was hit on the head with a brick. And he lost the ability to speak. He had his stuff that he, um, like he couldn't finish any sentences. He was passing out on a daily basis and he had a bit of like some trauma, PTSD. The incident, the flew back to Singapore and was not.
Not right. He couldn't code, he couldn't do anything. And this was now the biggest crunch time demo day investors. Thanks. And we were like, Oh my gosh, how on earth are we going to get this done? And [00:51:00] uh, suddenly, you know, I sort of took the mantle, it was like working flat out to, to get it done and only wanted to do was help, like maximum frustration.
Like, please let me do something or I can just send an email. And it was like, no, you don't have to just sit. A play Tetris because we learned that playing Tetris is great for brains when they've been broken. So, um, we basically had him playing Tetris while I was building investor decks, and it was a real test for us.
You know, you have Sydney, but all the way onto one person. And he was feeling guilty. And I was like, no, you have to go and sleep and rest your head. And, you know, I was worried about his health. It really was. The worlds was timing. Um, and then, uh. After that, you know, thankfully everyone is back to full health.
You know, we managed to, um, managed to get him back to normal. Yeah, it was, it was great. It enabled us to see that we can cope under that kind of pressure. Um, [00:52:00] but after all of that stress and those 16 to 18 hour days for weeks, I then had, which has only gone away in the past two and a half weeks. I then had a migraine for two and a half weeks, nearly three weeks solid.
So as soon as he recovered, my brain were like, why does no one want this company to give us a break? It was so stressful and it was exactly the same situation. I couldn't help. I felt guilty and frustrated. He was taking all the load and it was something that we quickly realized that. The first thing to go in the scenario is your health.
Yeah. You know, you will put that at risk. You know, you stop exercising or eating as healthily, or you know, you're not, you're not sleeping as much because it's like, I need to focus all my energy on this, and then, you know, lo and behold, your body finds a way to buy back then. I don't think so. Like, [00:53:00] here's the warning sign.
Get some rest. So for me, that was really tough and, uh, it felt like the sky was falling again. But thankfully we pulled through it and have to say all fundraising has been going extremely well. So it was just a good reminder that as a founder, you know, you have to, without you, there was no business at that stage without the two of you.
There's no company. Um, so if your brain doesn't work and your body's exhausted and your brain decides to turn itself off. Yeah. For the sake of having had a few more hours sleep or taking care of yourself a little bit better. It's not worth the trade.
Alvin: How are you balancing taking care of yourself and building a company right
Natalie: now?
No, this has been something. I didn't find it easy. Um, but it's something I've been investing a lot of time and energy into at the moment, and that has been. Uh, I joined the co-living program. So, uh, it's a space where we [00:54:00] do 6:00 AM club, which is 20 minutes off, working out 20 minutes of meditation in 20 minutes, all learning something all before 7:00 AM.
And the idea is that you take time for yourself before you start the day. So get up a bit earlier, but take the hour to just like be a human before you're a founder. And that was really, really important. And that's been a huge mind mind shift for me. Um, so be a human before founder and putting that into practice is tough because there was obviously so much to do is never ending stream of things that you haven't done yet and the days and the weeks overall in your life, there's never hours.
Um, you know, it's, it's, it's important to take those apps. Yeah.
Alvin: So, uh, now, uh,
[00:55:00] okay, on your site, like you're getting, I can hear myself.
Make focus on windows.
Okay. Yeah. Just close all my windows. Okay. Wait, y'all, your screen froze. [00:56:00]
So we left off at
Natalie: you
Alvin: were talking about how you like the 60 minute routine, 20 minutes meditation, 20 minutes reflection your current co-living place puts a lot of emphasis on that, like being human before being a founder
right.
This 6:00 AM routine every day. And then there's one way that you've been trying to balance being yourself with, with like just building the company,
Natalie: so. Exactly. Yeah. Yeah. It's, it's, um, it's been, it's been a real journey and it's a transformation program is in the three months and you sort of move in then [00:57:00] you have a coach, you do the 6:00 AM club, you do like.
The golden circle, but like deep chats, you know, about personal life and, and you know, things in your past and no point as you said, is to, to work smarter, not longer. Yeah. You know, I think there really is a tendency when you are funding a company to almost have this monster of, yeah, I can work from 6:00 AM to two in the morning.
Like, cause that's what's starting a company is, you know, there's almost like a guilt. If not, if you don't spend every hour of your day doing your company, it's like, well, if it fails, then I didn't do every hour in the day then, then you know, I could've done something. And it's that kind of unhealthy mentality that if I'm reading it, it's what breaks people.
You know? And for me, my head breaking was, uh, a bit of a wake up call and you know, you can't run yourself on zero fumes and expect the call to go [00:58:00] anywhere. Yeah. You like, you didn't put any fuel in. It's just, you know, I'm going to move. So, um, you know, if it's just his ass. So for me, I was working a lot in Jean as well.
Um, really these extraordinarily long days as I moved to the program. And a big part of that was having accountability for time off because between the two of you, you'll both sit there until, you know. It's, it's very early in the next morning and, and you know, get up early again, because you both are dedicated to what you do and you both are passionate and excited about it.
But what is harder to realize is how detrimental just sprinting the whole time actually is. And you know, a case of that is we had been working on a MVP demo for a client. And the genre. I haven't set up when you're working all day. I've been driving around, we've been having meetings and we're set up until pretty [00:59:00] late at night, and it was now sort of one two in the morning and Jean was trying to fix a bug in the code.
And he'd been on the same bug for, honestly, I think I'd been about four hours and he was losing his mind, like frustration or meeting the client the next day. He was just like, you know, couldn't, couldn't stay calm. And then obviously that was making me not calm. Then I was thinking on, do we have to cancel the meeting?
And it takes so long to get it. And it really wasn't a good place for either of us. And, um, I sort of made the call and said, look, I think we just need to go to bed. Wake up tomorrow. And like, let's look at it with fresh eyes and a fresh head. Yeah. So when to sleep, woke up the next day, he fixed it within 30 minutes.
Right. And he was like, he'd just been looking at it for so long that he just couldn't see what was right in front of him. And I think that's a great, for me, a reminder of sometimes cool.
You know, it's to [01:00:00] literally turn off. Go and do something else. Go walk in nature, go read a book, go listen to a podcast, like playing an instrument, talk to your friends, you know, do something else. And then when you come back, you have like new energy for what you're dealing with. But also you have a fresh perspective and sitting at your laptop and staring at it when you're not being productive is not productive.
So, um, we're still getting that in, in, in that learning. But being part of the program where people really drill it into, you. You know, nine 30 you should be getting ready for bed. And it kind of sounds crazy cause you like, but at nine 30 I still probably got four hours of work I have to do. And it's like if you go to bed at nine 30 and you wake up at six you know who you're going to meet so much better at your job tomorrow if you take care of yourself today.
And so that has been a real challenge. And I think it's something that everyone faces. Um, in this scenario, but I think particularly with the investors we've been speaking to, you know, we've been talking about, um, [01:01:00] staying healthy and, and having these ponds, and it's something that they respect, you know, is, is you taking care of yourself because they're investing in you ultimately, are your customers are buying a product from you, you know, at this stage is all about you and your investors that are putting their money in.
Can these two people pull this off? And to you. So if those two people are living in healthy and driving themselves into the ground and bashing their head across the Mac, like it, they don't going to get to the Tenex any Quicken. So yeah, it's, it's, it's a tough one and it's a delicate balance, but I think a Wizarding together, and I'm, I'm certainly starting to, to find that happy medium
Alvin: was the name of this co-living face.
Natalie: I suppose stage six, um, yeah. If you're in Singapore, it's new. Scott spotters would park on the shop houses on Blair road. Um, so it's the, it's a, it's Colin's space and his aim to entrepreneurs, people starting businesses, um, [01:02:00] and sort of a support from the business perspective so that your coach sort of business and life, um, support on the business side.
Uh, but also, you know, your personal. Um, what are your goals and motivations over the next few months, and how can you put in healthy steps to achieving those on, on all different sort of mind, body, business front? So, um, yeah, it's been a, it's been a real journey. It's in the final month now. And they kind of came to the, the opportune time.
And my goal going into this was one being healthier Zen. This is the medicine. Medicine got F's, but I'm not there. Yes, there's a lot of stress, but the other goal was to have a funding company within three months. Then when I joined the program, we hadn't had one investor meeting yet, and the goal was to be VC funded money in the bank three months.
It's a hell of a goal. And you know, I'm happy to say that, uh, the way things are looking, we're [01:03:00] not far off that. So, um, hopefully got some more good news for you very soon. Oven.
Alvin: Fantastic.
Natalie: Oh, yeah, definitely. Uh, I think. You know, we were pretty confident that we're going to raise very soon, um, with, with the, uh, great, great VC st you in for that. Um, and then, you know, what is interesting now is. The past six months, which is wild when you think about it. You know, from not knowing somebody to being a VC funding company the past six months, the whole goal of folks or the company has been, you know, how can you get traction?
Prove that your idea works, you know, prove that people want it. You know, and build that case, that story that shows that there's real legs to this venture. But now we're facing that point of, okay, if people are going to put real money into us now we have to actually. Do it. You know, now you've got to actually, you know, build that [01:04:00] business and it's a very different mindset.
And I think that's why we've been trying to put these practices in place now, because, you know, building a 10 X business is certainly going to be a, a pretty big challenge also. So, um, would definitely give you the update once, uh, once you're further down the track.
Alvin: So, so like right now, what's your next step? I actually saw it like you, you hire your first employee, but too long ago
Natalie: for my house. Yep. So we hired a first, uh, part-time deep learning engineer on a Canada young. He's been a great asset and worked very closely with Jean. Um, the, the next steps, they're obviously closing that funding as always.
So, uh, very fuzz, mostly closed the funding. Second is hiring. You know, we have a pipeline of customers that we're extremely excited about, about a million ARR in the pipeline. Um, over the next 12 to [01:05:00] 18 months. So, uh, we really do now need the, the town, um, the support in how to execute on these partners.
We've joined PortXL. We were invited in by, um, August one, the, the venture capital firm. And , it's a way to bring new ideas and startups into the Marine industry. So, uh, looking at ways to improve security using our platform, you know, for ports. So it'll really be the next few months we'll be executing on some of these new potential distributional client bases and getting money in the bank.
And I'm really building out this team, this core team. Um, that poses its own challenges. Obviously hiring is, is very tricky and it's something that I've seen over the past five years. How instrumental. People are, and we hope that we can learn quickly and be able to build a pretty powerhouse team over the next couple of months.
Obviously, Corona poses its own [01:06:00] challenges, but also opportunity. You know, I think there's going to be a lot of incredible talent out there looking for more work, um, just because of the situation. A lot of startups are in and I really do feel for them. this moment in time. So there'll be a lot of talent available.
Also, security is considered an essential service. So like the ambulance and the police, they're still able to operate, which is good for us and obviously is as situations deteriorate opportunists and crime does, does tend to increase as well. So , from a company perspective, we're going to try and use this in a positive way and see how we can reconnect with all Rolodex of, of companies to support them in this difficult time.
Alvin: Yeah. Fantastic. So let's wrap up here with some quick five questions. Um, what's your favorite business book?
Natalie: Yeah. Oh, my favorite business book. I think a
Alvin: mom business book is finally, uh, any
Natalie: book I can give you a multiple. So, um, I like leaders eat [01:07:00] last. Yeah. I think it's, it's a pretty great book. My favorite non, my favorite fiction.
Uh, to the picture of Dorian gray basketball and, uh, the narrow row to the deep North two excellent books, whatever you want to give those a read our road to the deep North. Yeah. And I'm also, yeah, currently in my wellness, spiritual awakening. Um, I'm also reading a couple of books, like the, the 5:00 AM club by Robin Sharma.
Which is essentially the theory behind this waking up and doing an hour of 20 2020 and using, using that, and so I just started reading that and deep human as well, so, yeah. Yeah. What
Alvin: was your favorite tool that you want to use when building your business?
Natalie: My favorite tool, I think, you know, I'm, I'm, I'm a bit of a.
[01:08:00] I'm a G suite fan. I love everything being in one place. I look around with, with, uh, with sinking everything together. Um, I think the, the, I have a, I have a. A tendency to avoid a lot of the project management tools. Cause I find that it's more effort to put stuff in there than it is that asking to do, to do it.
Um, but I'm also, I'm also a big, I'm a wholesome, a HubSpot fan. So the HubSpot CRM has helped me many times. It's free, you know, you can really get all your contacts in there. You link your, your G suite to that since you reminders. It really is a super handy tool if you're on a budget and a, you have a Rolodex of people to try and organize.
Alvin: Okay. So, um, who are some CEOs that, you know, you know, personally and you really respect, like, especially those outside of the whole ETF ecosystem. .
Natalie: Cool. Yeah. Some, some CEOs I really respect. I think, um, I see the, the, the CEO of, [01:09:00] of same sex. Um, Helena, she, you know, came out of, uh, she's running a big day to start up left that sort of tech life and wanting to help other people sort of achieve this.
This is better balance. You know, and I respect that it also takes a lot of, a lot of courage to step out of a space where you're known as a certain thing. She was part of the marketing. This is big data company and cool in a little bit more niche, but you know, is your passion. I really do really do respect that.
Um, I think there's been a lot of CEOs actually, you know, over the years in, in all of these different, um. Different types of, of tech businesses. Um, and I, I think it's, it's interesting and, and I, I didn't think, uh, any one team is built around a CEO.
Alvin: Yeah. So, uh, if there's one lesson you could tell yourself [01:10:00] back before you start the whole building own company, what
Natalie: would that be?
It's a great question. One lesson I would tell myself. Uh, there, I see this, I'll give it to you. Get double. The warm lesson I would have told myself is, um, the most important was to trust your judgment. Yeah. Yeah. There were multiple times where I tried to stop things and. You know, I let naysayers and down and you know, I'm young or you know, I'm not technical at all.
I'm not this. I let these seeds planted in and think, Oh, you know, if I don't have an IPO into my bell to, I haven't built a unicorn before, how am I ever going to pull this off if other people can't? And you have to re how that unwavering confidence. In, in your own ability doesn't mean you don't listen.
It doesn't mean you need to pivot and learn. But knowing, look, I have, I have the bandwidth to do this. I have the capabilities to pull this [01:11:00] off. I just need to learn more or listen more or observe more and I'll get there. So that's the one thing I would've told myself is to reach trust. You can do this.
And then the second would be to not skip on your research. Whether it's for your own thing, whether you're joining a startup, like never be afraid to ask hundreds of questions. You know, I think it's, it's, uh, everybody's selling something and when you join a team or when you buy a product or, or whatever it is, you know, you're, you're buying into that.
I think for me, I would've told myself to really dig deep and to have a deep understanding of, of the space I was going into before stepping in. It
Alvin: trust yourself and us. Questions?
Natalie: Questions? Yeah,
Alvin: so thanks Natalie. So today we learned about Natalie's journey from being an English major job, a major down, and going down a [01:12:00] full rabbit hole doing two startups.
Which one didn't really. Get them attraction and finding, building out my own company with a fantastic co-founder, Jean. So, uh, and as well as own whole, whole journey of like balancing self development and building a company. So thanks Natalie. Uh, I'll update the show because like
Natalie: we
Alvin: had to disable video for, for the second half.
Mostly it was . I did a video and then we'll combine that back again. Maybe I'll just, I'll call this final five.
Natalie: Okay, fantastic. Thanks, Alvin.
Alvin: Thank you. Thanks, Natalie.
-
Athena started her career in banking after graduating from Carnegie Mellon. She got her first taste of entreprenurship helping to organise the Art Basel Art Fair in Hong Kong and got into the event planning industry. After that, she became the third employee at DoctorAnywhere, a telemedicine company based in Singapore, leaving to start her own pet telemedicine company with her friend.
https://zumvet.com/
Learn her insights on:
- bootstrapping the ZumVet app using an external technology agency with her own savings before fundraising
- growing her customer base with Facebook groups
- the telemedicine industry and different business models within it
- eating her own dog-food, She uses ZumVet herself and pays for it!Favourite Book
Unbearable Lightness of Being by Milan KunderaFavourite Tool
Notion for everything from note-taking to onboarding documentsMost important lesson
Learning to work with your co-founder, find your groove where you work well with them.[00:00:00] Alvin: Okay. Three, two, one. Welcome to Abyss Gazing. In this episode, we are joined today with Athena Lee CEO and cofounder of zoom vet, a telemedicine company, which targets the veterinarian medicine market here in Singapore. Um, as he now has a background in finance and enter the world of startups after working in finance.
So I think now, are you ready to begin? Yes,
Athena: thanks for having me.
Alvin: Okay. So like, let's start off just with your background. You you're originally from Hong Kong, you graduated from Carnegie Mellon university. Um, can you tell us a bit about your, uh, Oh, you started out your career at Moody's investors and how that led to the world of startups.
Athena: Sure. So, um, I graduated in 2000, um, and at the time finance was still, you know, the way to go. I think [00:01:00] startups were just starting to take off. So when I was graduating, um, I always imagined myself in a corporate setting. Um, and so, you know, immediately after I graduated, I started applying to jobs and, um, opportunity with Moody's came up.
Um, and I'd say that. You know, it, it was quite interesting. Um, I started at Moody's. I was there for about two years, and then I moved back to Hong Kong, um, and started at UBS. And so for the first, uh, six or seven years of my career, um, I was mainly focused on finance. Um, and it was really a great experience.
And even to this day, uh, when I'm talking to people who were just graduating, um, I always encourage them to look into, uh, starting, starting at a corporate first. You know, one of the most important things I've found is that at, in a corporate setting, you have great mentors there. And so, um, one of the first managers I ever had Jocelyn, um, you know, really had a big influence, uh, on the way that I [00:02:00] worked to this day and the way that I manage my employees as well.
Um, you know, being very hands on, but also making sure that I, um, She, you know, I, I took the time to learn important skills. Um, you know, a lot of things like how Excel works, um, how a company works, how teams work together. Um, and a lot of the insight that I have, um, right now and the way that I run my company, the way that I set up my systems and processes, um, is very heavily influenced by how, um, you know, I want to grow the company.
So the way that I see my company now is to do that. I think we may have been disconnected,
Alvin: but nice. Okay. The audio is fine. Like I seen the video is freezing a bit, but I heard you, uh, all along.
Yeah. I heard your story about, uh, Jocelyn and
Athena: Excel. Should I just continue now?
Alvin: Yeah, just continue.
[00:03:00] Okay. Can you hear me?
Athena: Sorry, you're cutting
Alvin: it. Right. I hear your whole story about your mentor Jocelyn. Yeah. Okay.
Athena: All right. Uh, so, uh, just to continue, um, I think that. You know, working in a corporate environment, especially in a bank or at a financial services company, you know, gain a lot of insight into how, um, other companies succeed.
Uh, you understand the importance of having strong or robust, uh, processes and systems. And, um, you know, these are the types of things that I want to instill into the company that I have. Um, I've worked at a couple startups previously, right? And things do get very chaotic. Um, and you know, there's a lot going on.
You don't have a very big team. Um, and so things start to get messy very quickly. Um, but if you [00:04:00] have the right infrastructure in place, um, you know, things tend to go a bit more smoothly and you're able to control, um, a lot more of, um, your internal processes and ensure that your end customers, um, have the best journey possible.
Alvin: Okay, we can go into a bit more detail later on when we talk about zoom vet about how you actually implement that, uh, how you implement those structures and processes in zoom vet. Uh, but for now, can you tell us a bit about mismatch events? You, you started this company back in Hong Kong. Um, what was that like?
This was your first actual company that you did outside of a corporate
Athena: context.
Sorry. I missed the question. Oh, you chop me.
Alvin: Yep. Uh, so can you tell us a bit about mismatch events? This was the first company that you did after leaving UBS?
Athena: Yes, that's right. So, [00:05:00] um, after I left UBS, I wanted a bit of a career change. So I've been financed for about six or seven years at that point in time.
Um, and then I had taken a short role at art Basel. Uh, so our Basel is a art fair, uh, that comes from Switzerland. And so at the time they were sitting up there in our we'll show in Hong Kong. And so I thought, you know, something that's really interesting. It sounds really fine. Why not give that a try? Uh, and so my main role was to help with their VIP program, uh, and assistant putting that together.
And, um, making sure that everything was in place when, um, the fair did begin. So, um, it gave me an insight into event, event planning. Um, and I thought it was really cool. It was really fun. Um, it's something that I'd never done before, but realized that I had the capabilities to do. And so after that, um, I think it was.
Really more happenstance. Um, there were a few [00:06:00] projects that came along, um, in the event planning, um, industry. And so I helped with a number of, uh, brand launches and, uh, product launches at the time in Hong Kong. And so, um, they started out with pretty big brands, but I started working more with smaller companies like nonprofits and startups.
And that's when I got my first taste for, um, Uh, working with a startup and, um, coming from Carnegie Mellon, uh, technology is something that has always been of interest to me. And so, um, you know, when I was working at mismatch, I made sure that I always positioned myself to be able to take on projects with new and interesting companies, especially in the tech world.
And so, uh, that's when I made the decision to move to Singapore. So this was about three years ago. And, um, I was looking at the startup ecosystem here. So, um, at the [00:07:00] time it was really something that was growing quite quickly and growing much more quickly than it wasn't Hong Kong. Right. And so, um, I looked at quite a number of different startups here, and I came across dr.
Anywhere. So at the time they hadn't launched their product, uh, yet. Um, but I had met with the founder and we had a few conversations and he was telling me about his vision about where the company would be going and what kind of products he wanted to create. And I felt very aligned with it. You know, I thought that, um, the healthcare system was very broken, you know, not just in Singapore, not just in Hong Kong, but you know, all across the world, even in New York where I was working, um, it's something that's very hard to navigate and especially as a consumer, so, um, you know, working, um, you know, the potential of working at a company where it would simplify the whole process and give me immediate access to healthcare provider was very attractive.
Um, and it was a [00:08:00] perfect stage as well. So, um, they were just preparing to launch products. Um, I would have been the third employee at the time. Um, so, you know, I jumped at the opportunity, so I'm pretty much within a month of meeting the founder. Um, I packed my bags and came to Singapore. And so from there everything grew very quickly.
Uh, so at the time telemedicine, Was really, um, just starting out in Singapore. Uh, we didn't have any competitors. There were maybe one or two, um, that were around in Singapore. Um, and there were wasn't even regulations around it. And so what we were doing was really, um, quite innovative and, um, it, it was, you know, kind of scary.
Um, I wouldn't lie, uh, cause we didn't know, we didn't know how people would receive the whole product, both on the consumer side and from the provider side as well. And so it was a very interesting journey and it wasn't easy. Um, you know, when we. We're first starting out. [00:09:00] So like, you know, within the first couple of months, uh, that I moved to Singapore and I was working there, um, we were trying to bring people on board and, you know, on, on a day to day basis, we'd been looking at our dashboard.
It'd be like, you know, one new user to users and we're just counting like, Oh my God, when are we gonna get to our a hundred users? So it was a very difficult experience. Um, and once we were able to find the right use cases, uh, then we started seeing growth very quickly. Um, you know, talking to different, uh, corporate partners, talking to different types of healthcare providers, um, we were able to then branch out and I think, you know, from there, uh, what then happened was a regulator has started to take notice.
So, you know, when you start showing them that you have the numbers and you have the traction, that's when they start caring and they realize that it's, it's something that they should look more deeply into. And that's when they started their regulatory sandbox, uh, to try to [00:10:00] understand the industry more and to understand, um, You know how they should be involved to regulate our activities.
And so I think with the introduction of the sandbox, it really legitimized what we're doing. Uh, and you know, on, on the consumer end, uh, we started seeing a lot more new users come in. A lot of doctors were more interested in signing onto our platform as well. And so I'd say. From there. Um, the whole concept of telemedicine really grew.
Um, and you know, today there are about maybe 20 new players in the market that are all in the human telemedicine space. So, um, yeah, I mean, that's something that happened within a span of three years. And especially now that we're entering a very interesting time with COVID-19. Um, it's proven, um, to really have a place in the traditional health care ecosystem.
Alvin: Okay. Um, so, so you said when you joined dr anywhere, there were you you're the employee they'll do that. [00:11:00] The two other cofounders were dead and you were employee number three,
Athena: right? Yeah.
Alvin: So, uh, the cofounder for w for, uh, was that doctor dr.
Athena: White. So what is actually not a doctor? So he is a, um, finance professional.
So he actually find it background to get investment background. Um, so he actually wasn't full time, um, when I first joined. Um, so it was, uh, two other people, one on the product side, and then someone on the operation side.
Alvin: So who was building out the tech at the time, or did you basically use like Skype or zoom and patch it together with some?
Athena: Oh yeah. I mean, at the time it was, um, it was the initial launch. So I'd say the product wasn't MVP and it was actually developed by a external agency. Um, but, um, we already had our [00:12:00] CTO at the time. So the idea was always to bring the whole system in house and to develop that in house. And so since then, um, they have been able to launch a fully, uh, a full system that was built in house.
Alvin: Okay. Yeah. The reason I'm asking is because, uh, one of the target audiences for this podcast, I, uh, I want to reach is early stage startup founder. So it was like, well, I wanna learn more and see like how we can help other founders. Learn how to like, get the, get themselves off the launchpad at early stage.
So I actually, I actually heard the same thing from another telemedicine company in Pakistan. They also hired an external agency to build their initial product. And even now they are working very heavily with them. So yeah, that was just something I was wondering. And yeah. And I that's the tech buck, but the other part is like, actually validating the idea and differentiating your business model from the other [00:13:00] competitors in the market.
So from what I understand, my doc, MyDoc in Singapore is also, they have been trying to do a telemedicine. Did they have been around for quite a few years or so? So around the same time that you launch.
Athena: Yep. They had actually already been in the market for maybe about five or six years, um, when dr. Eddie were at launched.
Alvin: Yeah. So, uh, how can you tell us a bit about how you differentiate your business model from them when you went into, up to anywhere?
Athena: Um, I'd say that. The business model was actually entirely different. So MyDoc is more of a B2B products. Whereas a DoctorAnywhere is much more B to C. And so, um, the way that we engage our consumers and the way that we had built the product was completely different.
So if you look at the evolution of dr, anywhere, we onboarded. So, so we looked at our, our [00:14:00] ecosystem and we would target two types of stakeholders. So one was consumer and the other were the doctors. Um, so. At the time we had, um, onboarded, a couple of, um, early adopters who were very keen on testing out telemedicine.
And so they were great supporters of ours. Um, and so from a supply side, um, we were quite comfortable that we had coverage, um, for any. Incoming bookings now, um, the harder a group to, to, um, gain traction with was consumers. Cause I think a lot of people, especially in Singapore, um, have a very fixed idea of how their medical journey looked like.
And that always involves a visit physical consultation where the doctor could see them. They could feel them and do all of the diagnostics on the spot. Um, so, you know, there was a lot of education that had to be done. And so I'd say that because [00:15:00] we're a purely B to C platform. Um, we were doing a lot of marketing, uh, so, you know, explaining the benefits of telemedicine, um, trying to establish what the use cases would be and communicating that to the consumers.
Um, My doc was taking a very different path. And so, um, you know, they ha they still had patients. They still had providers. Um, but to this day, uh, a key part of their business is working with corporate, such as insurers. And so, um, they do have a number of insurers that, um, they are actively working with right now.
And, um, they then, um, tailor their system to, um, you know, Allow these insurance policy holders to, uh, access to home medicine. So a very different approach.
Alvin: So was this something that you discovered over over a period of time, like what they were doing and what you were doing and how you [00:16:00] differentiate it?
Or is it like consciously thought out in advance strategy? Uh,
Athena: the truth is we, we knew what we wanted to do, and we knew what the capabilities of our product work. And we also knew the compares are out there. So at the time there was ring MD and there was my doc. Those are the biggest players in Singapore.
Um, we didn't consciously decide to take any approach. Uh, we had a strong belief, um, and that strong belief, what does that we want to directly, um, engage with our consumers and we wanted our consumers to. You know, have the right to choose what providers that they could access. And so, um, we, we didn't, um, go and talk to too many of the major medical groups, uh, or insurers at the time.
Um, what we did was to, to, you know, take a more, um, organic approach. So we would onboard clinics, we would onboard doctors, um, and then [00:17:00] we would then connect them to, uh, the patients.
Alvin: Interesting. So, so, uh, you, you were there for about slightly past one year. What was the company like at the time that you left you?
You grew it from.
Athena: So it was growing very quickly. Um, I'd say that, uh, at the time I left was after their series a, so, um, they had just gotten some funding and, um, the direction of the company was changing. Um, so we went from a, uh, Telmo some platform, so more of a platform player to, um, a online to offline ecosystem.
So we had introduced a marketplace and that is very much in line with our C. Um, a model, but, uh, we then started opening brick and mortar clinics as well. And so the idea was that, um, we, we understood the limitation of telemedicine, uh, and we wanted to [00:18:00] make sure that we had an additional touch point for all of our patients.
So for those that couldn't see a doctor online for whatever reason would have a touch point offline with doctor anywhere as well. Um, and so. I'd say that at the time I was leaving, it was, um, becoming a more holistic solution. Um, you had your marketplace where you could buy products. Um, so medical and wellness related products, uh, you could still see a, um, a doctor through video consult, uh, but you could also go to our clinic and see a doctor there.
Alvin: Um, did you identify any particular groups that were more likely to be early adopters? Let's say people who had to have frequent consults, maybe diabetic, diabetic patients or something like that. W with any
Athena: one group that really stuck out to me were females. So, um, if you looked at the data. Um, for one reason or other, [00:19:00] um, females were more receptive to the idea of telemedicine.
Um, I don't know if it's because they were more aware of, you know, any changes in their body or because, um, they were looking for more convenience. Um, you know, it could be because they were juggling, um, you know, home life and work life and just needed easy access to a medical care. Um, or they were just more tech savvy.
Right? So, um, females were definitely a big group that we were trying to chase. Um, but definitely, I mean, um, what we saw and, you know, this is quite obvious is that it was the, um, you know, upperly mobile, um, professionals, uh, in their late twenties to early to mid thirties that were users of Talmud. But I'd say that, you know, over time and even looking at the demographics of student vets, um, that has changed quite a lot.
Um, I think generally people are just becoming more receptive to the idea [00:20:00] and, um, you don't see any, um, you know, clusters of, of, uh, demographics in terms of where users.
Alvin: Yeah. But, uh, One thing I took away from a few marketing with agent podcast was that they found that behavior related targeting was better for them than demographic related targeting.
Was there anything like that and you notice any particular behaviors?
Athena: Um, I wouldn't say behavior, but conditions definitely. Uh, so what we started to doing and what we're doing now as well to embed is you want to target, um, Patients or, you know, Jen patients in general, um, question conditions. And so, um, for us, a big part of our business right now, um, is chronic disease management.
So these are people who tend to know, uh, what illnesses they have and understand what it is, um, and are, um, on [00:21:00] medication, um, and are bargain hunters. So they are looking for easy access to medical providers, and they're looking for ways to save money. And so what we found is that they're quite receptive to Thomason because, um, I'd say the quality of care doesn't change.
Um, but they're able to save on, you know, um, tangible costs, which are consultation fees and, um, medic medication costs, but also on intangibles, like, you know, um, Travel time, um, the stress of having to take your pet to the, to the clinic. So, uh, for us, what we've seen is that, uh, targeting chronic disease patients are, are, is, is quite good for us.
Alvin: Interesting. So, uh, let's move back to the timeline after you left dr. Anyway, you, you work as a, as a consultant for a Pontiac land group and yeah. And visa for pass health for, you're still an advisor there. I'm looking at your LinkedIn right now. Uh, so [00:22:00] you're doing this and then you, you, you launched zoom vet just last year in July of 2019.
So again, tell us a bit about your, what you're doing in between.
Athena: Yeah, so, I mean, um, I think. An interesting factoid is that my co founder brace, she is actually a doctor that I met while I was working at dr. Anywhere. So she was a GP who was practicing on the platform. So we had met and we had clicked because we both have cats.
And it's something that we talk about all the time. So I don't know if you're a pet owner, but we are crazy cat ladies. And so it's, it's something that really bonded us. Um, and so, you know, we, we were chatting and this is when I was still at operating room. And, you know, we had come to this realization that there was no solution.
There was no innovation when it came to veterinary care and, you know, wouldn't it be cool if we did something similar. Um, but for. Pets. So that's [00:23:00] actually when, um, the idea was seeded in us. Uh, so, so it was a while back and it's always something that we wanted to do. And so when I was leaving dr anywhere, um, you know, I rang her up and I said, Hey, you know, the idea about.
Um, the pet Thomas and let's just do it. And so, um, we, we had to start planning it basically right after I had left dr. Anywhere. And, um, at the time I took some consulting jobs, but the idea was always to, um, launch this telemedicine platform.
Alvin: So, so you, this, um, with zoom vet, you, you had the idea all along, even while you work in Delta.
Anyway, it's taking those same. Uh, principles behind Octa anywhere, but applying that to a bet, like, uh, like, um, for pets. So that was the whole Genesis of the idea. And then there was no one else doing this in Singapore at the time I did try the search. I didn't really find anything.
Athena: Yeah. I mean, there's no pure telemedicine [00:24:00] player in Singapore.
So I mean, when it comes to healthcare in general, right? So whether it's for humans, whether it's for pets, some form of telemedicine has been practiced for years. So it could be through text message through WhatsApp, through FaceTime. So, um, healthcare providers have always been in the practice of connecting with our patients outside of their clinic.
Um, but it's never been institutionalized. So, um, what we're finding and based on our experience, Intel medicine before, uh, in the human space is that there is a safe way to practice tele-medicine and there's a way that makes it, um, a lot more attractive and, you know, just, just, um, it gives a better experience for your patients and your pet owners.
Right? So what we wanted to do, um, given that there was no similar, um, company in Singapore was to take, um, principles from human health. And bring that to the veterinary world. Um, you know, the interesting thing about [00:25:00] that veterinary world is that it's, it's very traditional. So, um, there have been very little innovations in the last decade or so.
So, um, when you look at the way that these vet clinics are run, Um, it's almost like looking back in time at how, um, a GP clinic was maybe 20 years ago. Uh, so you know, what we're trying to do is to introduce this platform as a way to support that ecosystem, you know, how can you connect with, um, your pet owners in a way that's safe, right?
Both from a technological standpoint and both from a medical standpoint and provide the services that they need. And so what we did, actually, we took a bit of time in understanding this ecosystem before we even, um, started developing our products. So we wanted to understand what the pain points were.
Right. So, um, I think it's common knowledge that that's are overworked and underpaid. Um, you [00:26:00] know, they tend to have to do a lot more than your. You know, your, your normal GP would have to do. Um, and you know, they, the, the expectations are a lot higher from a pen owner perspective of, um, what they would expect from that as well.
So we wanted to see how we can use technology to solve a lot of these problems. So the way that, um, we designed an event is very different from any of the telemedicine providers out there for, um, humans. And I'd say that we are much more high touch. Um, you know, what we realized is that technology can only solve a part of the problem.
Um, and really we didn't want to compete with fat clinics. Uh, we realized that we needed to support them. So I'd say that as a company, we're probably about 70%, uh, technology and 30% service. So we actually have very in depth relationships with our clinics and we, um, you know, go there very often. We know their staff very well.
[00:27:00] And we would try to help out where we can. And the idea is to not only help the that's and the staff at the clinics, but also ensure that pet owners have a better journey and also a better understanding of the type of care they're receiving.
Alvin: So, uh, you still have a lot of partnerships with all the different vet clinics and, uh, you, you you're basically like a technology solution for them to connect.
To customers through tele medicine.
Athena: Yep. That's right.
Alvin: Uh, Oh yeah. Like, okay. Before we start recording, you told me a bit about your own, uh, experience with your cats or you paid for the consultation yourself. Uh, and then you brought after the initial consult, you actually brought your cat over and, uh, to the clinic and the, the, the physically, uh, inspect her as well.
So that's how the typical [00:28:00] consultation would work late. There's the initial consult with a two video then after that, uh, physical consult, if, if required.
Athena: So I'd say that's maybe about 30% of our cases. Um, so what typically happens is, um, we have to assess each and every case when they come in. Uh, so we need to see whether we can actually solve their problem through telemedicine.
So if we assess that it cannot be, then we will immediately refer them to a clinic. And usually that would be to one of our partner clinics. Um, that is very low percentage. So I'd say maybe about 10 to 15% of our cases, uh, for the rest of them, uh, they would then proceed to see our events. Um, so there are various natures of how.
Um, the, the consultation could go and various to protect the outcomes, but I'd say generally, um, we are able to diagnose, um, [00:29:00] because a lot of the issues that come in are, are quite common issues. So, you know, um, my. Cat has some issues with their fur or, um, their skin is very itchy. Um, you know, they might have some light diarrhea, vomiting, so the conditions are quite repetitive.
And these are cases that our vets are quite comfortable diagnosing for a platform. Uh, but for anything that's more involved and require diagnostics, um, that's when we would issue a referral and send them to one of our partner clinics. Um, and the idea is that, you know, we do have that physical touch point for them, um, to, uh, see a vet in person, but after the clinic consult, they can monitor, um, the pet's condition through telemedicine and also provide, uh, continue providing medication for that same condition as well.
Alvin: So that is where like the chronic condition management comes in. Also,
Athena: it can be some acute as well. So, um, you know, if. Your cat has been [00:30:00] prescribed with a two week course of antibiotics. And, um, you know, as a pet owner, I want to see whether it's work or not, but I don't really know. Um, I might be inclined to do a followup and speak to the, the.
That and the truth is, um, a lot of times it doesn't even require having, um, the pet being in front of the camera. It's really just for the pet owner to speak to a vet or to a medical professional to understand, um, you know, what the outcome was and whether a further, uh, consultation is required.
Alvin: Oh, interesting.
So was it, uh, through the process of, of doing zoom that you, you go by the idea of these conditions or was it. Through your own experience as a pet owner that you understood the law of the conditions don't necessarily have to be refer. Um, would
Athena: I say that being a pet owner has been a very difficult experience?
Um, I didn't understand a lot, you know, um, their physiology, their, [00:31:00] um, conditions are very different and the other thing is they can't talk to you, so you never really know what's going on. Right. And so I, I, and like many other pet owners would just Google a lot of times. I never knew when I needed to go to a clinic.
And the truth is it's, it's very difficult, you know? Um, I don't drive. Uh, so it would involve me having to call a grab, making sure that they're okay with me bringing cats and. Um, and then going there, the cats being mad at me, there's lot scratching. There's a lot of running away, so it's never a very pleasant experience.
Um, and so for as much as I could, I would try to either Google and find a solution or I wouldn't WhatsApp, my friends who are vets to see what we could do. Right. But, um, it, I mean, it, you, you still need, uh, professional advice at the end of the day. And so having this platform, I am, you know, uh, I use it a lot.
I use it very often and I, as I mentioned, I always pay for my own consults. Um, but it's, it's really helped me as a pet owner as well. Uh, because there are a lot of [00:32:00] questions where, um, I would try to look online, but never really found the answer. Um, you know, now I have a very direct, uh, link, uh, to event and, um, I'm able to see my preferred vet, the one that knows my cats very well.
And there's never a dumb question there. They're always very willing to hear me out and answer my question. So yeah, I would say that I've become a much better and more responsible pet owner. Um, and it's given me a bit more confidence, um, in terms of my parenting skills to my cats as well.
Alvin: So you, you actually, uh, You built zoom, zoom that in part to solve some of your own problems and you understood the problems with pet ownership very well.
And then the pains that you experienced, and then you put that into zoom to see how he could streamline that whole experience.
Athena: Exactly. I mean, you know, it's, it's something that we were very passionate about from the beginning [00:33:00] because we were pet owners and when grace and I founded this, we allocated maybe about $10,000 and we said, let's just.
Do an experiment. Um, let's try to understand what's going on, what the ecosystem looks like, but let's just build the product out for us. Right. And so we connected with the vet, um, in the early days, uh, who was able to give us some advice on how the, um, how the platform should run, what the operations would look like, how clinics work.
And, um, we then presented our data to regulators as well. So, you know, we were very bootstrapped. It was something, it was more of a passion project to see if it would work. And if anything, we would have a platform where we could, you know, find solutions to our own problems. And so, um, a lot of it was happenstance.
So, you know, we, we started it, we started realizing that there were other people like us out there. And so we didn't have to do a lot of marketing. To, you know, to educate people on what we're trying to do. Um, you know, the more we shared, [00:34:00] um, you know, the further the message got. And so the experience was very different from dr.
Anywhere, um, where it was much more commercial. Um, you know, you're dealing with insurers are dealing with medical groups, um, very bureaucratic system, uh, when it comes to the Penn community, it's just a lot of it has to do with emotions. It passion, um, people. Especially pet owners are very active in social media.
So you can go on Facebook. There are a lot of groups. Um, you know, you go on Instagram, you post a cute cat picture, you'll get 10,000 responses. Right. So, um, you know, the growth has been very different. Um, and so we were able to really be a B to C product, uh, and grow quite quickly that way. Um, and now I think we are more established.
Uh, we definitely have more users now. Um, I think the medical community has taken notice of us. Um, this is now when we're shifting gears to become a bit, uh, more. I'd [00:35:00] say B to B to C to cater to, um, those users in the middle. So these users would be in events, the clinics, um, even, you know, we're starting to see more insurers starting to provide, um, had policies as well.
So engaging them to see how we could be involved as well. So, um, the evolution is very different. Um, but I'd say that it's result of the industry
Alvin: itself. You mentioned that your bootstrap, you put in 10,000. 10,000 total or 10,000 each from each of you.
Athena: So, uh, that was a good question. So at the time I'd say that it was probably be about 10,000 total.
I mean, once we started growing, we realized the potential of, um, this whole products. We obviously put it a little bit more money. Um, but you know, in the first couple of months, there's really only $10,000. Uh, neither of us were full time, uh, nor did we have any staff. Right. So it was just, you know, cobbling it together and making it work.
Alvin: So the 10,000 went [00:36:00] to some outsource developers who are building out. Exactly.
Athena: And I think it made it a lot easier because we knew exactly what we wanted. We knew what the backend of a telemedicine app should look like. Uh, we knew, um, you know, to a certain degree how, um, our users would need to interact with each other.
Um, and also, um, you know, what type of, um, Uh, vendors we would have to use. So I think there was a bit, I mean, there was a lot of clarity and vision, and so we were able to put that together quite quickly and, uh, quite cheaply as well.
Alvin: So at this point, uh, is, is just slightly under a year. Since you launch, have you been thinking of raising any money?
Athena: Um, so we did raise a seed round. I mean, it's, it's just friends and family. Um, It's always a difficult question, right? Fundraising. Uh, so what do we want to [00:37:00] be? You know, what our exit strategy is the difference between working in that care and working in human healthcare is that the margins are, um, a bit more generous in veterinary care.
So, uh, what that means is we are probably going to be able to, uh, break even quite soon. Um, and see a profit by the end of the year. And so the impetus for us is very different. Um, you know, do we want to play the valuation game, um, and, you know, focus on market share and growing, uh, users, or do we want to focus more on the craft of the products, um, and focus on our existing users and making sure that they continue to have the same type of experience, um, which is very high touch.
And so. I'd say the answer for you is that yes, we will be fundraising. Um, because we do see a lot of potential and we want to move quickly. Um, there are starting to [00:38:00] be other compares sprouting up, um, across Southeast Asia. So we've heard of maybe one or two, uh, they're out there in the market. And so we have a strong belief in the products.
Uh, we, um, have a good brand right now. So, um, the idea is to grow and to, uh, cover other markets. Um, and the opportunities are already coming up right now. And in order to ensure that we can do that, um, some funding, uh, will be required. So we are starting that process right now. Um, and we should, um, you know, probably.
We'll be aiming to close Hugh four maybe of this year. Um, but for now I think we want to take it slow. Um, we're not hurrying too much into fundraising. Um, we are very lucky because we're still seeing money coming in and we're still seeing consultations being booked through the platform. And our partners are also very receptive to what we're doing as well.
Um, so I'd say it's a measured [00:39:00] approach to approach to fundraising.
Alvin: Your current pricing model is based on a commission of each consultation.
Athena: Uh, yeah, so we have a platform fee and we will share that with the
Alvin: okay. Interesting. So, um, I want to be mindful of the time, because you said you have to leave around six, so yeah, it's very interesting.
You did all this in under a year. So can you tell, tell me a bit about how, like, what your scale due to the. Um, I saw on the site, you have about five full time employees around there. Yep.
Athena: Yep. Yep. So, um, we are, let me think about this. So right now, uh, we are at our seventh employee right now. Uh, so things are growing quite quickly.
Um, I'd say the bulk of. Our staff is mainly concentrated in the medical operations side and the marketing side. Um, and it makes sense because we are a B to C [00:40:00] products, but we also take a lot of care in ensuring that, um, we are, um, supporting our customers and we're supporting our bets. Um, yeah. I don't know if that answers your question.
Alvin: So I think one of the, uh, final few questions. But before we go to the quick fire round is yeah. So how has Corvette impacted your business or you you've told me a bit before we started recording, but let's, if you're finding a course,
Athena: I'd say that COVID has been an interesting experience. Um, a lot of our partners, um, Are, uh, you know, suffering, uh, as a result of, um, the whole situation, um, sales have gone down.
Traffic has not down quite a lot, uh, luckily for us because we're an online platform and we provide remote care. Uh, we have seen quite a spike, um, in the number of bookings coming in. So I'd say in the last, um, month or so [00:41:00] our sales have gone up about a hundred, 150%. So, um, that's good news for us. Um, the reality is that, um, I think things will not return back to normal, um, in punching first, um, you know, a lot of companies are still very unsure about what the working arrangements will be.
And in fact, a lot of large companies have announced that they will, um, Uh, they will continue to work from home arrangement, uh, which means for us, I think, um, people will still continue to rely a lot on online services. And, you know, with this whole situation, I think generally people have gotten a taste for what, you know, online services could do for them.
And the types of convenience it can bring. Um, you know, a lot of the users that had never even thought about using us before are not repeat users. Uh, and they see the value in what we're doing and they're very willing to spread the word and, uh, you know, help us explain and educate a lot of [00:42:00] their friends and family as well.
So, you know, I, I think that over the next couple of months, um, we should continue to see the growth that we have, um, in the last couple of weeks. And I think that, um, it, it. You know, time for a lot of businesses to really think about how they can improve the customer journey and, you know, adapt to, um, this whole paradigm of, you know, people being a bit more cautious going out and you know, how they can, um, bring better care through, um, online platforms.
What's
Alvin: your main growth channel right now? Social media, like you're quite active on Instagram.
Athena: Yeah. Um, I'd say social media. So Instagram has brought us a lot of, um, users, but, um, Facebook has, has been, um, Probably the best child for us. Um, head owners tend to be very active on [00:43:00] Facebook. So there are a lot of check groups.
Uh, there are a lot of specialty groups for like, you know, different grades. Um, and so we are quite active there as well. Um, and we've seen a lot of users coming through that
Alvin: and then social, like something you yourself participate in organically. So it's not like a pate. You don't pay someone just to go around the Facebook groups too?
Athena: No, no, no. Yeah. I think, um, it's definitely more genuine. Uh, if we are able to have a presence online. So like a lot of users actually know me. So a lot of times when they're calling support line, it actually gets redirected to me and I'm talking to them. And they'll also get a lot of emails from me. So, um, it's something that we want to control.
Um, I, I definitely don't believe, especially when it comes to pet owners in outsourcing these types of activities. Um, I think. You get a lot of information [00:44:00] about your users. What's important to them and, um, you know, what type of services they want. And so if you aren't personally involved, um, it makes it that much harder.
And it also means that you won't be, um, you know, creating a product that fits in with your target audience and you probably won't be able to, um, be flexible enough in terms of, um, You know, directing what your business model should be and making sure that it's adapted to the, with end user in mind.
Alvin: So what, uh, what area do you think you are going to hire out more in the next few months before you raise your around?
Is it the technology department or is it more of the marketing site technology?
Athena: I'd say, yeah, definitely technology. So we are already looking to hire. Some in house, but also in the medical operation side. Um, I think that this is a team [00:45:00] that, um, is very unique. So, um, what a lot of our, I wouldn't say competitors, but you know, similar companies out there don't focus as much on support as we do.
Um, because they're looking for automations, they're looking to, um, You know, improve efficiency. I'd say that, um, when it comes to healthcare and when it comes to pet care, um, you really cannot neglect the human touch. And so, uh, we are looking to hire more on supporting the medical operations side, uh, and making sure we're bringing in people who can, um, you know, convey, uh, the type of, um, quality of care that we intended to bring to our customers.
Alvin: Okay. Interesting. So very impressive July launch in July, 2019, and then scaled to seven full time staff members today and aiming to fundraise in Q fall of 2020. So thanks a lot. I think. So let's just do the [00:46:00] quick fire rounds. So I just asked a quick question and you just answer off the top. So what was your favorite book?
It can be a business book, a non-business book,
Athena: the unbearable lightness of being.
Alvin: Oh, by Milan Kundera. Yes
Athena: that's. Okay.
Alvin: Uh, what was your favorite tool that you use for building your company?
Athena: My favorite tool. So I recently discovered notion and I've been forcing everyone to use it. Um, but it's been quite useful.
What,
Alvin: what do you use it for?
Athena: Okay. Everything. So, I mean, you know, everything from as simple as tracking my tasks to taking notes, to creating onboarding document. For the team as well
Alvin: was some founders around that, you know, personally, when you think are doing interesting
Athena: things. Oh, so I'm a company that really like a shot back.
I mean, this, something is coming to everyone knows. Right. But we recently met up with them and they were sharing, you know, their [00:47:00] plans for the next 12 to 24 months. And I think it's really interesting the type of company they built, um, the way that they've grown, um, you know, from, it was a very. I mean, the idea was very big, but it's very labor intensive, but the way that they were able to get vendors on board, so methodically is quite impressive.
Alvin: What's one lesson you would give yourself at the start of this whole startup journey.
Athena: What's one lesson I would give myself. Oh, okay. Um, I'd say that, um, The most difficult part. Um, and I think my cofounder will kill me for saying this was learning to work with her. Right. Um, up until this point, I've never had to work so closely with someone and make so many important decisions with, you know, concerning money concerning, uh, the future of the company.
Um, you know, down to, uh, what [00:48:00] partners we're going to work with. You know, I might disagree with her or she might disagree with me, but, you know, I think. That, that really was the hardest part and something that I underestimated, uh, coming into this. And so we had known each other, um, in a social capacity.
Right. But, you know, we had never worked together before, um, to this degree. And so it took us a while to find her groove, but I'd say that, you know, we've gotten to a place where we are working together quite well. And we've gotten to know each others. Quirks and, um, it's, it's been a very enlightening experience.
I think it involves a lot of communication, some emotion, um, but ultimately it's about listening and compromise. And so I'd say, you know, if I, if I could have given myself a lesson going into this was, you know, focused on that relationship and focusing. Um, nurturing it.
Alvin: Yeah. I think that's a very important point.
A lot of startup founders overlook, like even in Y Combinator, they seem most [00:49:00] startups that go through Y Combinator break up because of co-founder issue. Uh, but a lot of people don't really talk about that as much. Yeah. Yeah. Alright. Thanks a lot at dinner. So, uh, Oh, I did an interview now that, you know, once it's out.
Okay.
Athena: Cool. Thank you. Thank you so much.
Alvin: Thank you. Bye
Athena: bye.
-
Fehlende Folgen?
-
Caleb is the founder of Compass Point Opportunity Fund. He has experience with buying and selling businesses from brick & mortar industries to info-marketing and SaaS.
https://www.linkedin.com/in/caleb-page-6560142/
He shares with us:
- Case studies of how he finds and does due diligence on deals ranging from a homeschooling business to forex trading software
- Financing options from seller-based financing to SBA loans for acquiring a business
- Sources you can use to find SaaS businesses for sale
- How he plans to scale his current project, a property information SaaS companyResources and links mentioned:
FE International
Flippa
Empire Flipper
Frank KernFavourite books:
Built to Last
AntifragileFavourite tool:
Google AnalyticsAlvin: [00:00:00] welcome to Abyss Gazing. I'm your host, Alvin Leon, and joining me today is Caleb page, the managing partner of compass point.
Compass point opportunity fund where he buys and operates internet businesses. We've a predisposition for SaaS and API and businesses in real estate and information sectors. So, uh, Jacob, are you ready to be, uh, Kayla? Are you ready to begin?
Caleb Page: Yeah, I'm good. Hey, how are you doing?
Alvin: Alright. Yeah, so Caleb and I met in entrepreneur first the six.
A cohort. I want you to remember us in Singapore, and Caleb is originally from the U S he's currently living in the Malaysia. And, uh, yeah. Let's start off like with what you're doing before and what Compass Point is about.
Caleb Page: Sure thing. Yeah. It was fun. Alvin, when we, uh, when we were together together at entrepreneur first cohort, it's just amazing experiences.
We've met a [00:01:00] lot of different people. But along the way or the way I got there was I had my background's business bought and sold businesses, started businesses, but they'd all been smaller businesses as well. Brick and mortar things to franchises, property management company. I had a corporate back on the military, back outside, large organization experience, but I'd wanted to do something larger and that's where you and I met was an entrepreneur first.
Trying to figure out a way that we might, you know, find a startup or a cofounder. Where we could start a business together. Um, at the same time though, I had just sold off the last business that I had owned. And in the U S we have a way to reinvest the money. If we reinvest money into another business, or we're real estate in a specific way, we can avoid some capital gains tax.
Um, it's, it's a kind of a tax issue, but there's good opportunity around it. So I created a fund. Yeah. And if it didn't work out, which it didn't, we, uh, that fun, we go ahead and buy businesses. [00:02:00] So that's fast forwarding through kind of an experience there where we decided maybe they sent us just to go buy some businesses rather than trying to start one from zero.
Alvin: I remember before that you were doing, you've joined like a mastermind with Frank Kern and some other stuff, so you were already exploring internet business before, before you joined EF, right?
Caleb Page: Yeah. You're right. You're right. So from one of the businesses I bought way back in 2015 was a small one, is an internet site in the homeschooling space cause we were about to start homeschooling our son.
I said, well, here's a business for sale. It's an internet marketing. Let me figure it out. This was really spot on. He bought it. He was making $20,000 a year and we bought it for $40,000. And when he was my wife and me, cause she's the one that protects me from bad decisions. But I bought it for $40,000 and that started my real education in internet marketing.
And at that time I followed I the [00:03:00] early to rise guys, Craig Valentine and another fitness guy, Bedros Keuilian. And from there I went to following Jeff Walker and his product launch formula. Uh. Yeah. For about a year and work on product launches and that without full site. And then finally, Frank Kern trying to figure out something to do as I was leaving the homeschooling space and following some of the advice he gave as well by the internet marketing.
So all along the way, learn how to do launches for Facebook campaigns, uh, information products, uh, some sequencing, email copywriting, just a lot of different things in the internet marketing space.
Alvin: So did you end up selling off that homeschooling business in the end?
Caleb Page: Well, it did. I sold it in April.
Alvin: That was the same business that gave you the fun to stop combo swelling with
Caleb Page: it was part of it.
The biggest business actually was a franchise cleaning business. My wife and I had owned for about 15 years in Boston and we started that from zero and zero customers. We [00:04:00] sold it with. Gosh, I think I had about 300 customers when we sold it. Uh, and it was, it was a really nice story because we were able to sell it to the person that was working for us, that had been running the business when we were in longer or so, we were able to work out a deal that worked for her.
And for her, it is a real step up. Her quality of life is improving immeasurably. Um, and for us, we were able to feel good about it, went to a first that we can help out. So it worked out very nicely all around.
Alvin: so there was your brick and mortar experience and then like 2015 with the homeschooling was really where like your exposure to the internet businesses began and then after that,
Caleb Page: yeah.
Yeah. It's a good point of it is, it's brick and mortar really. You know, all of our leads back in 2005 when I started that, that cleaning franchise. In 2005 the advice was good male, and in that first year I lost about $80,000 on direct mailing. Just sending out to anybody in there. There's some filters you use, household income and areas of stuff.
At the same time, Google ads was becoming [00:05:00] more popular. Next, let's just move over to ad words and try that out. And in 2006, I dropped all my other spent on advertising and live a hundred percent with online adverts. So I managed my own Google ads accounts from 2006 through 2011 in that business and another cleaning business, my party management company that I started.
Um, and then finally Google asked him complex enough that you had to hire someone to run that for you. And we did all the tests and Facebooks and television, some radio, but primarily it was always online advertising, all the way creative blogs. So we've been internet marketing, if you will, in the brick and mortar businesses.
But, um, you know, it's just mixed right now.
Alvin: Yeah. Interesting. So like, um, but when you began to buy businesses was actually around 2015 when you actually bought that first homeschooling business. Like combat those things.
Caleb Page: Yeah. I bought the homeschooling business. I had bought another brick and mortar business [00:06:00] before that, but we'll talk about the internet company.
Um, that one I got in my mind, I said, I know I want to move online cause the offline space, the brick and mortar space, there's some risks, right? We have that building this, we own fleets of cars. We had employees running around. So you had employee risk in the. No worker's comp or unemployment claims, you have all these risks.
And online what I like is I could probably operate that with just me, maybe another person, maybe visual assistant. We can scale much faster. And you didn't get to be held down to say what she said. We wanted to move from Boston where we were located. Um, we were brick and mortar. Business would require us to be there, but you could think that online, wherever you went.
So it was really attractive to me to figure that out. I had a chunk of money from some of the business activities. We were in the toilet. I just went shopping and I looked around at all internet sites for sale. A brokerage is still around today. FE international had this one up for sale and uh, it just worked out.
We were able to make an offer that the seller [00:07:00] accepted and she transferred everything over to us. Oh.
Alvin: So it's always like more scalable and then like there's less overhead. So these are some of can advantages of online businesses compared to a brick and mortar? Yeah.
Caleb Page: One would hope, but not every online business is the same as you.
Tried some of these online businesses, and I think you're pretty good with advertising. I think you're pretty good with a website creation, and I know you've got some machine learning background, and as you try these different ideas, it's still hard to find a good idea. That really takes me today. I could show you a bunch of online businesses, um, FBA businesses or drop shipping businesses that you can say, yeah, they seem to make more.
Hey, but fundamentally, are they going to be around in another five or 10 years? Is anyone's question, uh, how those businesses with low barrier to entry or where you don't really own a customer exists, or are they going to exist another five to 10 years? The homeschooling space. My error was, is that I bought it from a woman who had homeschooled her daughter, [00:08:00] and she really was an ad site, so she had no offer, no email list.
She's just putting advertising up and she had one advertiser. Remember I said there's been a year, they had one advertiser that was paying I think 13 or $14,000 a year to advertise, and then all the risks, the Google ads and Amazon associates or affiliate marketing through Amazon. It was really hard to find a product that would fit or coaching to offer or anything like through that email is was six or 7,000 by the time I ended up selling it, but I was always challenged to find an offer that would really work in that space.
Alvin: Oh yeah. So it was like there's one challenge that you have, like you can buy over the existing asset, like with the list and everything, but. To connect that with an actual offer. That's a huge challenge.
Caleb Page: Sometimes it really isn't. So what happened is we ended up, here we go, and frankly, in homeschooling, it's mostly women, the [00:09:00] homeschool.
So here I am a guy trying to, you know, market, homeschooling one. Are we going to trust a guy about teaching our kids when there are a lot of women doing that? The second thing is, was homeschooling. The niche is separated into a couple of different segments that are very distinct. And thirdly, in that niche specifically, are people really willing to spend money on schooling their child and they say, wait, I can figure this out.
I could do it for free. And really one of the lessons learned there is that if we're spending money on our children, that's money that we're not spending on the household or us. And that means that's a Starbucks or a hair salon. Or it could be just, you know, things for the home that we don't pay for buying things for our kids that we could actually figure out on our own.
So it was really, I learned the importance of choosing a niche where when people like to spend money. Okay.
Alvin: So, so like going forward, what, what are the things you look out for when you, when you're looking to buying online business now?
Caleb Page: Yeah, great question. So one of the [00:10:00] things is everybody has a different thesis about what it is they want to buy in an online or any business with it, what job they want.
Right? So it's really, it's, it's. Personal question at one level, but over the years, I'll share a couple of filters that I use that have really started well. One is we look for businesses that are recurring revenue. That means a subscription base, and that might either be from, it's a membership or it might be that they pay for the service and we all pay for services on a monthly basis basis.
If you pay Spotify, that's a great subscription basis. You pay the $10 a month happily. Um. The other thing we look for is I, I put something where I can see a low churn in the customer base. And that's just a matter of how often you have to see the customers. And thirdly, is it in an area that we think fundamentally will be around?
So if it's, you know, Hey, I wouldn't go and buy a coronavirus site right now, or a Kobe [00:11:00] 19 site or anything like that. Cause that's gonna it's gonna be more, we can't tell it doesn't have a track record. So those are a couple of filters. I mean, there are other filters that, you know, obviously you're going to get into, think about where's the list coming from?
How, you know, how good is it? Are there offers? What's the product? Um, and can you actually, do you deal with it? Can you stand behind it? We looked at Forex style sites and the algo trading sites that frankly, it's a crowded space. It's really hard to differentiate it. And I'm not so sure that, you know, out of the trading is a place where, where I want to be.
Alvin: Yeah. Yeah. So, so like, how do you find these sites usually? Uh, you mentioned FE international. Do any like Flippa, like we talked about Flippa before you, uh, have you ever gone direct, like you search for the actual sites based on some criteria and reach out to them?
Caleb Page: You know, it's funny, you know, we've done some of that work.
Uh, last April I did some work with some guys and we went direct to a bunch of. People, you know, and [00:12:00] we set up kind of a filter to go out and look precise or similar, you know, in the area wanted. And that point, I was trying to see if there's anything in ed tech, and frankly there wasn't. So we kind of, you know, enlarge the search.
But as we talk to people that say, Hey, do you want to sell your site? What I've been, that's really were sellers with unrealistic expectations. And so if you think about the dynamic that has to exist when it, say you want a home and someone comes up and you say, Hey, you want to sell your home? Say, well, geez, I haven't thought about it, but if you're coming to me wanting to buy my home, I'm going to ask top dollar for it.
And you know, I'm not going to be in a place where you say, Oh yeah, get me out of here. Just give me something and I'll move. That's the case that when you go in unsolicited approach, a potential or a business owner, so you really have to figure out how to have the network and have the conversation with some of these guys.
And when it comes time to buy or sell, that's the point when they're ready and they approach you to say, you don't [00:13:00] want to be thinking of getting rid of this. I've seen how you operate. Would you be interested in buying that? That's going to be your best chance. So until you have that network and those relationships, you're probably stuck in the broker system.
Alvin: But at this point, do you, do you have the network? And so like people reach out to you, uh, when they are applying to sell.
Caleb Page: Yeah. Some do. Some reach out in that. Then at that point to the other side of that is when somebody colleges to, Hey, do you want to buy my site? What? Buy my business? You really couldn't get care for that.
Why are they selling it? Why do they want to get out of it? What's the situation that's changed for them? In some cases, like with the homeschool thing, I've moved on. I, it wasn't, you know, it wasn't a fit for me and I saw it. A homeschooling education company that they're using that in, in a great way that's a better fit for them.
Um, and I sold through a homeschool association and network of people that are homeschoolers since instead, who wants a site and it was fine. Um, and the other side of it though, is that when someone comes to you and says, Hey, you want to buy my site? And that's when the [00:14:00] conversation starts, then what are the situation?
What is it you're looking for, hoping to achieve? And, you know, first and foremost, you want to make sure the relationship works out. Um, and then after that is you get to a deal. Okay.
Alvin: Yeah. That brings us into the next step of doing a deal, that due diligence and like making sure that everything they say checks out.
So. So can you tell us a bit about how you go about doing that?
Caleb Page: Yeah, it's, it's, it's crazy. Um, honestly, you, there's one thing about walking into a brick and mortar. Please. And you can look around and say, okay, Hey, I see the fleet. Or, you know, I could see the kitchen, or I can, you know, I can see these other things online.
You really got to purpose that and figure out what it is you need to see in the validation you want to have. So for example, can I understand just the basic business models? How would you look at it? How do they get customers? What is it a giving an exchange for know what's the value that they're giving to the customers for the money that the customers are giving them?
And then how are they keeping them. [00:15:00] Um, and then as well as what's the health of the site? All along the way, you watch for opportunities to say, well, what, what could we do differently? How could we improve this business if we were to take that over? Um, I will look at that and say, okay, what, what's the opportunity here?
And then as you dig into it, you start to realize what Jaycees co came on. You know, is that a way that they're going to stick? Or these customers going to dispute the charges later on? Or, you know, is there a conversation? How engaged are they? Is there a list? What are the offers? So you've really got to parse everything apart in this.
This comes back to anything you look at buying a house relationship, getting a job, buying an internet business is, doesn't make sense. Yeah, and you've got to step back all the time. Say, this is what I see. Makes sense. And if it does, then you've got to either dig into it or start to think about,
Alvin: yeah. Okay.
Can you give us some examples of businesses, like you looked at them to this stage, like do you open the conversation with them, but [00:16:00] when, when you got closer, like you look at actual data, what were some red flags that appeared.
Caleb Page: Oh man. Yeah. So let's take the Forex example of saying, look at this algo algorithm.
And so it's an automated trading, and it was for those of you or your listeners that aren't into this, it was an IM four sites. So a MetaTrader four, and the guys set up some, um, basically a, an automated trading system. And what he was saying is you saying he was making, you know, earning a certain amount of money and that you'll make money no matter what.
And so we, we went and we paper traded that generally in investing. We wouldn't pay portrayed it on his, although for a while, and it was awesome to start with five grand. I was up to $20,000 in paper tree and I'm like, Oh, we got something live with no money on this. So we went put some real money into, I can't remember another 5,000 or a thousand or something, just to follow it at the same time.
We had to back test it. We said, well, [00:17:00] what if we're just buying at a good market now? Because last year that you would have to be almost foolish not to make money in the market last year. Uh, so it was a great market. But what if you had invested at a bad time or right before the money, uh, the modern dropped on you.
What would have happened there? So we went to our port chronic and we would do back-testing on empty for those. And he went through it and he went through a couple of different periods that they have a little period of high period. And. I don't know, last five years or something. I don't know what data he ran through it, but what happened is every time he ran that through, it failed.
And at the same point I started to see that I wasn't making the money. I would, there were problems such as you have to set this up on a virtual server, on a VPs. Uh, and then if you couldn't shut off that B S otherwise the Alva would stop cause there's no system running new affects the trades. So you ended up with this kind of maintenance thing was kind of cobbled together.
And then I got the financials, I started adding it all [00:18:00] up. I said the financials don't support the claim. Of the revenue that you're making a V income, how'd you make this? He goes, Oh, I had a little setback. The Scottish guy, I know I had a setback and Oh, it's all right, but things are better now. We're going to make the money.
But yeah, but in your, in your listing, you said it was this and it's really bad. Can you explain it? And he could not. So we had a step back from it.
Alvin: Oh,
Caleb Page: interesting example.
Alvin: So basically like. You, you treated yourself like one of the potential customers. You went in and trying to Al Gore and then, okay, at first you thought, okay, there's something to this, but then you went on to do like further due diligence back-testing and then you actually got their financials and looked through and then like the sum of everything shows that like they're not telling you the complete picture and then you decided to back out of that.
Caleb Page: Yeah. And that, so that's really just two aspects there. One is it [00:19:00] doesn't make sense from a customer perspective. And then the other one, does this make sense from a finance perspective? This does it all add up. And one of the things in the U S if you're going to bank something, they're going to ask for the tax returns and you'd be amazed at how many businesses have for tax reporting.
So the minute that a business doesn't have the tax returns in line, you've got to go and say, well, it does the banking and say the Stripe or PayPal or whatever their payment gateway, do those add up. But you have one leg missing of the due diligence is you don't have tax returns. So all of a sudden than you've been even more doubt and you've got to, you've got to jump into that further.
Okay.
Alvin: So like most recently, you just bought a real estate business. Do you want them to talk more about that? Yeah,
Caleb Page: no, this was a great one. I, uh, so this business, let's see, it was netted 300,000 a year, and he was asking him three times multiple, so asking 900,000 for the business. And Jay just, he had started about two and a half years ago, [00:20:00] and he basically had a bunch of customers that pay him on a monthly basis, and he had figured out the advertising sequence that you've figured out the sales funnel to convert to monthly subscribers.
And he, he had the business and he was ready to move on. He wanted to invest in real estate and move off of that. So we came along and looked at this business and what amazed me the most was that it had taken us in our brick and mortar business, probably 15 years to get to the same point. But this guy is set up in about two and a half years and I just owe it to my wife.
I just said, you know, it's amazing how hard we were to build that business. And we, I think we sold that at a 2.7 multiple, the, the cleaning company and this one, uh, we, we're going to buy an a three multiple. And what we liked just about everything we saw about it. We liked the subscription revenue. We liked the scalability.
We liked what we thought we could take the business to. [00:21:00] Um. And so we were able to make a deal, uh, for the business. And we closed on it last September.
Alvin: So how, how did you find these deal like FE international
Caleb Page: Flippa? So for SaaS businesses, FE International's pretty good. They, um, they have a lot of listings and you've gotta be ready to go though cause their listings quickly and they get a lot of SaaSs listing.
So it's a good place to look. Um, and of course there's always do your due diligence. This one we happened to find on Empire Flippers. And those guys, they do a great, a great service for their sellers. I mean, they, they really do bring the, the financial frame, the, um, the STO, the age refs, they bring them a lot of the information we already need.
The better deal room. They've been overhauling their deal flow or the flow on. They've got people to assist you through it. Um, my understand is they charge a little higher commission to the seller. Uh, but it could be pretty good. Generally it's harder to find [00:22:00] a SaaS business for the empire flippers. They seem to be in the FBA, I think.
Just say they came out with a list of six drop shipping businesses. But, um, if you can find a good SaaS business there, they can be worked with.
Alvin: So, so how you structured a deal, was it all in cash or do you like for these kinds of deals, are there things like seller financing involved? Usually just all cash.
Caleb Page: No, I mean, somewhere in the smaller parts of like if you're probably in a 50 or a hundred thousand dollars business on any main site, like ER for FE international, you're probably gonna pay it on cash. Um, and you could do that. You might might be able to get away with something, or maybe with a broker that does it, do internet businesses all the time.
You might be able to do something there as well that has a component at the lower end, the higher end they'll get how many people. Yeah, we're walking out, let's say, let's take a half million dollar internet. This is how many people are realistically walking around with a half a million bucks. Then I'm ready to say I'm going to put this all into that [00:23:00] one business and buy probably like this.
It's just, it doesn't work that way. You don't even buy, rarely buy houses that way depending on where you are in your life, what level. But um. typically, you're going to see a component. Um, it depends on one of your bank finance it. Or if you work on seller financing, typically you're gonna see a component of what you put into the business and what the seller is willing to carry or carry back.
Um, sometimes you might even be able to negotiate a seller earn-out in a U S we have access to financing through the small business administration that will require a 20% injection. So 20% down. So on a $500,000 business, a hundred thousand dollars in. And they'll finance three main, or you know, you're going to have tax records for the last three years.
There's some earnings requirements. There's some things that it's more stringent cause the bank is want to make sure they're going to get the money back. Um, and that 20% down that comes 10% for the buyer and 10% from the seller. So all of a sudden you can take a half million dollar business to buy it for $50,000.
Now.
Alvin: Oh, interesting. But this is, is this [00:24:00] only for us citizens.
Caleb Page: Yeah. It is unfortunately so US-based us citizens on that one. This is a problem in the international market. It's harder to find people to buy companies. We were looking at one that we really liked. Out of all Garia, I think it was in, quite honestly, to put the financing together at a place that would compete with what we can lever out of the U S is pretty difficult.
I haven't seen equivalent marketing or bank financing available out of Singapore and Australia. I haven't seen that anywhere. So that's going to have to be a deal of this worked out with the seller and many sellers would feel it would be very hesitant. Sell you a business for 10% down they live. It'd be very hard to get away with.
Alvin: Yeah, I, unless you have something like the SBA loans in the us, maybe because it is guaranteed by the SBA, basically.
Caleb Page: Yeah, the way they're set up. The DSP, I think guaranteed 75% of it. So the bank is really on the hook for 25%. [00:25:00] Um, so it's pretty risk-free to the bank.
Alvin: Mm. Okay. So going back to the property business w uh,
Caleb Page: well,
Alvin: what was the call business originally and what was it?
It wasn't a SaaS business in the, originally
Caleb Page: the property management company. Yeah. Yeah, yeah. So there, what we did is we ended up being a franchise. I got a little restless and we decided to say, you know, what else could we do? What do we know in,
Alvin: sorry. I meant the one you just bought, the one you bought.
Yeah.
Caleb Page: Yep. Yep. So the property, sorry, the internet, uh, property business. And so what this does, it provides information about. Real estate properties, so U S properties, and it's a, it's a site that basically people will say, Hey, I want to know who the owner is. I want to know what the taxes with, if there's a mortgage on the place.
Um, maybe sort of attributes about the property. But basically what it is, it's very simple. It takes a couple of different API APIs, both things together. [00:26:00] Um, and we're able to provide information to a bunch of people that are interested in properties. The real trick is though, is how do you get those customers to, that's one of the things that we've been able to, you know, effectively do pretty efficiently through our advertising campaigns.
Alvin: So the main revenue model is still advertising. So people come on, they say, anyone buy or sell a house, uh, in this area, let's say, I know in, uh, upstate New York or something, you want to buy a house in upstate New York, and then they go on a search and then you get revenue from the ads.
Caleb Page: Like that's to different, so this is a subscription model in two subscription levels, a $10 subscription level, which is just a three day plan, and we have a $60 subscription level.
For a monthly plan. And so for three days, there are many customers that just say, you know what, I'm, you know, I inherited a place, or I drove by, saw the places for sale, or I'm thinking about a [00:27:00] vacation home and I want to look up the details. Or maybe I just want to look up, you know, my neighbor's home. So they only need to look up one time.
And you know, honestly, there are less expensive ways to do it, but this is for convenience. If you don't have to go to a, you know, don't have it, figure out how to do it in another state. The, the monthly guys, so are pretty interested. So we've identified about 15 different segments, and these could be people in these, they could be property and casualty insurance agents and want to verify the application or maybe verify even the applicant that there they're in there with this study, or it could be mortgage underwriters trying to get more information about the property.
It could be. Individual investors wanting to look up property information. I talked to one customer that's private investigator the other day and she's trying to figure out, did the person I'm trying to find live in this property or where else so she can start to track them down. So it's pretty interesting about 15 different segments of users.
Hmm.
Alvin: Yeah. [00:28:00] Yeah. Actually both are very interesting because like the first case is more like a usage based pricing model. Uh, they just want it flight for this specific house or they, and they're not going to use it afterwards, but in the future they might come back again. Then a second use case within the subscription and people, they'll always 15 different segments.
So it was all like, did you, I didn't find the segments. Um, after you bought over a business or like the guy who sold it to you already found out
Caleb Page: all these segments. Yeah. That's a lesson learned that this business, we were talking to the seller right. Uh, his, his pain, his business model was a three day trial that converted automatically to the monthly, and that might've worked back in 2017, 2018, but I'll tell you, there's a lot of pushback on that model now.
And we didn't realize that. So with every business you look out, there's gotta be something new. But along the way, during the due diligence, we said to the seller, Hey, can we, we just talked to a couple of customers, we'd like to survey the customers to see who they are. [00:29:00] Cause he was saying who they were, but we weren't really clear on who they were.
Um, and he said, uh, you know, I'd rather not, I'd rather not tell the customers I'm selling. I'd rather not, not touch them wrong. I'll want you to do it after you buy the business. We sell. Sure we can do that because we see the customers, we see the revenue, the payments have been coming in. After we bought the business, we came to realize that many customers didn't know or weren't aware that they'd been automatically converted to a monthly subscription.
So we've had a lot of structuring around that business to say. Well, geez, how do we fix that? How do we make it so they do a three day plan and then if they want to, they can convert to a monthly subscription. And then we have good in the value and the conversion sequence, and we have to add additional features to have people watch the monthly subscription.
So there are some things with this business that we've had to adjust to.
Alvin: Did you follow any, uh, system for. Talking to customers like Ryan Laveck, have you heard of him? He has this ask [00:30:00] method if you do something like that.
Caleb Page: Yeah. So use a Rolodex deep dive survey DDS. We ran that through. At that point, there were about 665 customers and we got about a 2% response rate, so 18 little fewer than 18 so maybe it's two and three quarter, you know, whatever.
2.8% response rate. But 18 responses isn't enough to, to really make a decisions on, I mean, you don't even have a, you know, a sample size of 30, right? So you can even do univariate, uh, uh, modeling on that. Yeah. So what we ended up doing is just reaching out and just reaching out to customers. We did install a way to track usage so we can identify our high volume customers.
And then we reached out to every customer that had a business and the domain name, so all the Gmail and Yahoo guys I put to the side, but if they had a business and the domain name, we reached out to them, say, what are you doing? What are you using this for? Why do you send us money every month? And that's where we started to identify these [00:31:00] segments.
The stories started to appear as we went along.
Alvin: Oh, interesting. Yeah. And then about the usage site, one thing that I've been following up about looking after the crisis, how I'll be building the react. And one of the things that people say is like subscriptions, people are going to cancel subscriptions, the things that they don't frequently use.
So like there, there's going to be a move towards like usage based pricing in the future. So I think that pot, that part of your business model is very interesting as well. Like the people who are just using it for a fixed time period and they don't necessarily want to subscribe for on a monthly basis.
Caleb Page: Yeah, we'll do that. We'll do that now while we're on lockdown shelter in place around the world, but we do after a while we do like a assert a service or we just want to pay for it. Really. Do you want to have your Spotify shut up, you know, on the 20th of the month, just because you were listening to more music than you thought, or do you want, you know, you know, office three 65 is shut [00:32:00] down two thirds of the way through the month because.
You've been doing a lot more analysis. That's absolutely the wrong time that I'd want to have to pull out my credit card when I'm in the middle of something I'm doing to, Hey, I got to renew this. So I think people might be positing that, but there's a fortune, you know, I don't know about you, but I want my Netflix when I'm on my Netflix and I don't want to have to put another quarter in the meter to, to keep it going.
It's not a, it's not really laundry. This is something where you just want to turn on the TV and have a work for you. But
Alvin: the thing about this property information service is, is that it's not like Netflix, Netflix, okay. Maybe you watch it every day. But for the property thing, the people who just want to look at that specific neighborhood or something, they don't really need it for months.
Um, on and off.
Caleb Page: And that's, that's a good point. That depends on the segment. Cause our monthly subscribers, people that are doing 400 searches a month. Yeah. So we can say, well, you know, these guys are using it, but you're right. The guys that are, I call them one and done, [00:33:00] they're just, they're searching a property.
They only need to pay for that three day plan and they can get out there. They, they move on. What it's done for us. So is to say, well, what is the segmentation issue that might need to happen there? So we're looking to see what the offer might be in the B to C space for these customers that kind of come through and they leave and don't really have a reason to interact with us in the future.
It
Alvin: is the, like the revenue for the recurring customers, like the heavy usage customers, is it much more than than like the one off, uh, uses. Oh,
Caleb Page: okay.
Alvin: Yeah. And that's where it makes more sense for you to concentrate on that, on the different segments within it. Okay.
Caleb Page: Interesting. Absolutely bill, for those guys, for the main business, but be aware that you've got a lot of people that are passing through that you know that there may be additional services that would be a value to them.
Oh,
Alvin: okay. So like you also mentioned to me that you were planning out an additional launch. Did you want to talk like. Building all these adversities that you don't talk about that
[00:34:00] Caleb Page: well, that's part of testing, right? So you have one of those, one of them customers have passed through and to, obviously there's a big portion of it and pass through.
And we said, well, what can we do with them? And so with this, what we did is we first created a newsletter because these people aren't interested in real estate at some level. And with that newsletter, we just send out the newsletter and these people can. Drive and pick it up. And then over time we start to test different content areas to see what they might be interested in.
So using Google insights and the insights, what is it? Do you remember in the, uh,
Alvin: analytics?
Caleb Page: Yeah, you have Google, Google analytics, but within GA, it's like, is it audience or acquisition? But there's like interest, I think it's interest or in market, you know, in that area on the behavior. So we can see that their interest in 30 day cooking recipes are interested in movies are interested in, um, perhaps DIY real estate sales, of course, in real estate [00:35:00] rentals.
Um, so for instance, a couple of weeks ago, I just decided to test the movie one and just put some movie recommendations. I was surprised to see how many people actually clicked on the movie, recommend patients to research that. So that newsletter becomes a vehicle for testing. What. Our audience is really interested in what, what they might, uh, what might resonate for them.
At the same point, we decided to test a course, a real estate investing course, and we're in the process of going into the pre-lab sequence for that now.
Alvin: So how are you going about tying the cost? Like have you decided an outline of what you're going to teach for us or is it like mine organic approach?
Like you're going to Sovi or ask questions from the. Membership and then see what they want to learn.
Caleb Page: Yeah. Yeah. It's funny you get into this thing about DDS and serving and a lot of hearing out what they want. I think DDS works. I mean, that's a, that's a, a lightened down version of customer segmentation, which is what the [00:36:00] primary market researchers have been doing for years.
I remember doing this with SPSS, you know, I don't know, 10 years ago, but. What we're trying to do here is that segmentation. The DDS has to be mapped or measured with what you know then your customers need or may want as well. This is kind of the Steve jobs saying, right? It's like, Hey, we've got an idea, but we're, we're going to anticipate where, where are the products should go?
And yeah, maybe you might use some market research to back into that, you know, to, to confirm or validate. So this one, I have a pretty good idea about what I think the market needs. But what I'm gonna do is I'm gonna try it with a smaller offering, a smaller course, just to say, you know what? I think this is snippet on it.
So in this sequence right now, we're, we're in the midst. Are we releasing content that just gives an overview of some of the material that would be in the full word course? We'll see how that resonates. And if it is, then we'll go into the webinar. And from there we'll offer a very short course just to see if that's the type of conversation people want to have.
[00:37:00] If not, then we'll back away from it. Then, you know, it's part of that. Little inexpensive test. Oh,
Alvin: very interesting. So, uh, we are almost out of time, so I think I just ask one more question before you go into the quick fire questions. How do you think, uh, Colvin is going to affect this business because people are staying at home?
Uh, he might not necessarily want to buy new homes around this time.
Caleb Page: Yeah, I remember. This isn't necessarily about people searching for new properties or properties for sale. This was Zillow and Trulia do. This is people that are trying to get more information about properties, and this could be in the re financing, it could be an insurance side, spirit could be in the underwriting sphere.
It's, it's, it's different than going to look for a property for sale. It's when you've got to a specific property in mind that you want to find out more. Okay. We see, you know, yes. It's slowed down a little bit. Our ads, this is how you and I were connecting earlier this week or last week. It's, our ads [00:38:00] are cheaper than ever.
Um, and that may just because real estate's backed off in the same space, we don't have to compete as much with the keywords, but how this plays out, my sense is that real estate will probably be one of the leaders coming out of the, the pad. Devin. We've got demand is still there. People still want to move.
You still want to sell, still want to buy. Then set that aside because we don't really know how to deal with this just yet, and you know as if you're going to have to deal with it either on the social distancing until we have a vaccine or once we have a vaccine, I think it's going to become accepted as part of the new normals are saying, well, we don't have a treatment.
Skitch get your flu shot. Get your chronic virus. Yeah.
Alvin: Yeah, makes sense. And like from the personal point of view, maybe people, they're stuck at home and then they don't really like where they live. And then at some point it they'll think about moving out and then that's when they'll start to use your, your, your service is, so it's not just about the property [00:39:00] information, but it's about like the, um, the underlying information behind just the face value of the price itself, like underwriting and all that.
Caleb Page: He said. It's possible. It's possible. And who knows where people may move by? What was it I was reading about the, uh, in, uh, after they reopened, the divorce rate went through the roof. So who knows? Maybe more people are looking for rentals immediately after they get let out of their respective countries or
Alvin: States.
Okay. Okay. Thanks Caleb. So, uh, let's wrap up here with some quick fire questions. What's, what's one business book, uh, that you really liked.
Caleb Page: One business that I really like.
Alvin: No one business
Caleb Page: book, a business book right now. I'm reading Built to Last, rereading that and I've enjoyed it immensely. Um, and um, you know, just re devouring every page, but I just recently finished Antifragile
by Nassim Taleb. That's a great
Alvin: read. Yeah. So what's, what's your favorite [00:40:00] online tool for building your
Caleb Page: business? The Google analytics like far right. I mean, it's just, it's free. All the insights are there. That's a, it's an amazing amount of information that we can get out of Google analytics. Okay.
Alvin: What's, who, who's a, uh, interesting CEO or business leader do you think should come on the
Caleb Page: podcast? She's an interesting CEO or business leader who's helped, like
Alvin: personally, like someone you knew him personally.
Caleb Page: I know personally. Yeah. He said, I don't know. I don't know who I'd name on that. Um, I think, cause it's the CEOs, we don't hang out together as much.
It did people, yeah. I don't know who I would choose on that one actually. Um, at a people that I like to have come work with me, I, uh, I think I, right now, I know
Alvin: it's fine. Um, so what's one lesson you would give yourself like before you, [00:41:00] uh, was, what was one lesson you'd tell the you like, just before you started this whole internet business journey?
Caleb Page: What was the one lesson I learned? Yeah. Yeah. Just before the internet journey, the lessons I learned there was that these businesses, we get into a business. It's never as quick as we think. It's always a five to 10 year thing. So if you're going to get into a business, if you're getting any projects like this, it's going to take a lot longer to unwind that than you.
You've ever thought? No.
Alvin: Okay. All right. Uh, thanks a lot, Caleb. This episode was a bit different from the previous few, so there's a lot more tactical about like the business specifically rather than about his backstory. So I hope the listeners enjoy this.
-
Elena Vatutina is the founder and CEO of Pharma Global, Russia's leading digital pharmaceutical distributor and education platform.
https://pharma.global/
Learn how:
- she got started in entrepreneurship from teaching her classmates dancing,
- she started Pharma Global as a pharmaceutical education company then transitioned into distribution and logistics.
- how she increased her sales 4x during COVIDBooks
Creative IncTools
Slack
iPadEntrepreneurs
Evgeny ChichvarkinAdvice
Just do it, look yourself in the mirror, don't be afraid and just do it.[00:00:00] Alvin: okay, so three, two, one. Welcome to Abyss Gazing in this episode. Joining me today is Elena Vatutina, CEO and founder of pharma global, a pharmaceutical distribution company operating in Russia and the middle East with plans for expansion to Southeast Asia.
Hi. Elena, are you ready to begin?
Elena: Of course, yeah.
Alvin: Yeah. So, Elena, we met last year back when you came to Singapore for a startup festival. And then, can you give us a bit of an idea of the scale of your company now, just so the audience knows how, where you're operating in the scale of the company.
Elena: well, our company was founded in, 2016, and I would say it's kind of, started, I D.
But, the backgrounds of [00:01:00] mine and the grounds of the team for insulting. Now the company, we are from pharmaceutical market and I started working in pharmaceutical market since 20 zero four. So I'm like a dinosaur right now on this market, and I'm in 2016. So all the Silicon things has changed that I got an idea that I can create a platform to educate healthcare specialists, using digital technologies.
And that's how our first products, from global came upon. And, we call it a farm, of course. and we started, we launched it in Russia in 2016. And Oh, it's you, coverage in a number of educational events.
it can act, it consists of, educational platform. Well, healthcare specialist, pharma and [00:02:00] digital distribution platform for our market. we are, pharmaceutical manufacturers and pharmacies and healthcare. Retail can get direct contracts between each other, but generally our business started with the educational platform farm, of course, or farms.
Naranja like we pull it in Russia and we launch this technology in Russia. And. Scaled it in the MENA region since 2019 but we established our technology in 2016 and later on when I was making a business tour now and met with the healthcare retail, met with the, Pharmacies met with pharmaceutical manufacturers.
They were asking me, so are you have connections and you have a digital platform for education? Why don't you make, it further? Why don't you make a connection, where we can make contracts, where we can make a marketing actions, so where we can, [00:03:00] just promote our goods, where we can just find out.
All the necessary information about registration process of our goods and different territories. Why don't you make it? And, it happens in 2017. And I was thinking, well, it's a good idea. And, we started testing it. at that year, and later on now, we created a platform, the second platform, which we called, far market.
And, we launched it, of course at first in Russia. And now we are scaling it in Russia. It is number one in the coverage of, sales points and number of healthcare retail where we integrated in. And, we are, just, study the first step of scaling in the MENA region. So by now we have, the full of figures, like we have made more than a 200 con truck with the pharmaceutical manufacturers who all of that form.
And there are some, he and [00:04:00] multinational companies like Pfizer, like Debra liker call, like, Serbia, like brought home from. France and, also, around 10,000, the pharmacists are already integrated into these, marketplace. Well, around 10,000 pharmacies are already integrated in this, marketplace.
And, generally, why we are creating this platform. you know, I can just. Say like, this is a digital distribution platform. This is an educational platform. But the main failure, that's, we bring to, the industry is to decrease costs inside of a supply chain. I normally, when a person goes to the pharmacy, from 45 to 19 four, five to 90% of the cost goes to this supply chain.
This means marketing. This means [00:05:00] logistic. This means field force cost. human resource courts and et cetera, et cetera, et cetera. And, generally if only we could decrease this code. So our eat on the one hand, it could make, the medicine, cheaper for people. But on the other hand, it also can, bring some money for innovation.
And, once we faced what's all of us faced here right now in the beginning of 2020, that's, innovation is highly needed, for the society because, only we can make innovation and we can do it fast. So we can fight with the, challenges like Colby 19 and, the same. the same challenges. It challenges, and, I believe that, if this system could be spreads in different regions, in different sectors, in different countries, so on the one [00:06:00] hand, it would make, medicine.
more affordable where people who are in the country and on the other camp, it can stimulate, the innovation, the biotech innovation for pharmaceutical manufacturing. So this is the main value. And this is, the, the reason why I'm spending my ma, my time. While I'm. Spending my, time and, everything that I do, is, to make this idea work.
And, generally, these Teddy year, we are implementing it with the help of these it technologies, digital distribution platform, is to be able to make a direct contract. Between those who produce medicine and those who supply these medicine. And the second, platform education platform is to be able to give knowledges about the medicines that are on the platform.
Because, only if, a healthcare specialist knew about, how [00:07:00] this medicine influence. the human, so it can just try it or just decline it, or just to be, to understand whether to use it or not in the particular situation.
Alvin: Okay. So that's very interesting. And they know, so that means some rice where you sit a bit.
So basically you're working in the pharmaceutical industry since 2004 in this company called Katrine. And then at the end of it, around 2014 you had this idea to start an educational platform to educate pharmacies on, on different drugs, the effects that those Sage and so on. And then around this, this was 2016 when you just started the company, and then around 2017 you.
So some people suggest that you do partner with the pharmaceutical manufacturers themselves. So in addition to education, you can also, help to market and distribute the drugs with your [00:08:00] existing channel of education partners. And then from there, from their own youth. Further refine your value proposition and you identify that the supply chain, the supply chain is a big percentage of the cost of pharmaceuticals, and that is where innovation can come in and help to reduce the cost and and encourage maybe more innovation as well in the actual development of pharmaceuticals.
And th this is where you are at right now and you're expanding. You're really the main player in Russia. You're expanding into the MENA region, and now you're also thinking of around Southeast Asia.
Elena: yeah. well, everything that you're told, you're 100% right. And, I have nothing to add to that except that, I was always three-minute of, riding my rent company. And, my first business I started when I was 14, I started a dance school, in the. Just secondary school that was located next door [00:09:00] to my house.
I came to the director of the school and said, well, I want to educate, kids how to dance. I was in sports, I was going in for a sports dancing and, had some achievements and took part in competitions. And, I want to just to make money. And I believe that that was the first step I was out. That was the first step to create my own company.
And when I came to, the pharmaceutical distribution company in 20 zero four, this was a kind of, a time when I was scanning the industry when I was, just searching expertise. And when I faced, the needs. Or the industry of those people who took part in the supply channel. Two parts, who worked for pharmacists, who work for a hospital, who work for a logistics, [00:10:00] logistics system.
and, and yet in 2016, I decided that it was a very good, time to start my own company. And that's how I created the first project. The educational platform. And if only I could imagine that it would become such a huge company as it is right now. and of course, I didn't even imagine that, about the size of the company when I was 14 years old.
Of course, I didn't think of it, but right now when I'm just, trying to turn it around and trying to. The oldest step that I came through, for, and all the things that were done. I can see that. Yeah. I was going to this, for all of my life. Yeah. So I'm happy that I can. do what I'm doing. And, yes, we have tested our technology in Russia because if is my model lens, we are [00:11:00] scaling these technology and scaling the business processes in the MENA region.
But we have already moved our headquarter company to the, and the next steps, that we are about to do or in the nearest. Four years will be to scale in the Asian region. Of course.
Alvin: Very interesting. I hope you, you managed to scale over here as widely as you managed to, to spread in Russia. So, One question I want to ask is when you were building out from pharma global, where you begin a big bill out in Russia, did you, was it all bootstraps, so like your own money you put in your own money or did you take in any external VC funding.
Elena: Well, you know, when I started the company, my husband supported me with the money because he, was running a company. He's a businessman as well. And so he gave me a capital around [00:12:00] $500,000, to start with. And this was, the money of my family. And later on, in, 20. 17th and in 2018, we have, attracted, and we have raised the investments from venture funds.
one of the hugest venture farms in Russia and in Eastern Europe. And, they, bought the capital of around 20% of the company and invested to more than a 1.5, a million of years doors, to help us to scale in Russia and to achieve the leadership in Russia and to be able to test our technology in the region.
Alvin: I remember when we met last year in Singapore for an assignment. You also said like you came as part of a delegation with a few different Russian stuff. Was that part of the same, the fun helped you do organize this whole trip together with the other [00:13:00] startups? Or was it like from the government or something else?
Elena: well, no. the CIMA that I came with, to Singapore. this is not the. Team of, the venture funds that invested into us. But, these guys, you know, this theory, everyone knows each other. This is a very clear fear. And so, our font used us to the guys, who were about. To launch Russian companies and Russian teams and teams who are about to scale internationally to Singapore.
And, that's how I came to Singapore. And of course, I faced great opportunities and great support from the side of the government, in Singapore. And, at that time we made a decision to move the head water, that we will operate the international business. and we have already established a company in Singapore.
Alvin: Hmm. Why, why do you decide to, establish it in Singapore? Because at [00:14:00] the time, you already set up the office in Dubai, I think,
Elena: well, are you seeing when you're making the business? So there are two sides of the business. The first side is kind of operational company, that make direct sales supply. And, this company is established in Abu Dhabi and, the company, is established in the HDGM, during addiction, in Abu Dhabi global markets.
But this camp, he belongs to the company in Singapore, and the company is in the poor, is, for the purpose of attracting, the first, the investment from. So, we have the focus for international scaling right now, and we faced, that's, and we just, became sure that we can achieve leadership within.
From two to three years in the market, we are attracting, and we, made these cases in Russia. And we [00:15:00] are in the process of, of, of making this case, in MENA region. And MENA region is, 17 countries, in different regions. And, of course, we believe we have ambitions to scale internationally.
And I believe that, There should be a company, that holds all the intellectual property of what we are doing. And, this is the Singaporean company right now for us. And, everything that we do internationally, all the codes to all the, you know, trademarks, we are moving to Singapore right now. why?
Because, It's in the poor. Your addiction has a very good conditions for, for, shareholders. even if they just who'll in 5% or 10%. So the company, so not for, those who are, the major. So who are holding the major of the company, but also that we are holding them just a small amount of shares.
And, of course when we are scaling internationally, we [00:16:00] need to open the operational company in the market. We are operating it. And if it goes to MENA region, this is the company established in Abu Dhabi. Toronto when we are about to go to a, for example, European markets or to go to Taiwan market are about to make operational companies in that territories as well.
But they will belong to companies in the port.
Alvin: Oh, okay. I see. Alright, so let's step back for a minute. so, so you mentioned a bit about the business model, one side and this, the manufacturers. Then on the other side, there's the farmer. Can you give me. can you tell me more in depth about how it works?
Let's say I'm a pharmaceutical manufacturer. I mean, maybe I just make a generic, generic drugs and then I wonder, what would you, how does it work?
Elena: Well, it depends on, where you are, operating right now. So, in example, [00:17:00] if you are in Singapore, Oh, so let's play a case. Okay? So, if you are in Singapore right now, and I'm in Russia right now because I can go back to home for Dubai. you want to sell your medicine in territories of Russia.
So, we help. Two girls who are older registrational process because we understand how to do it as quick as possible in the market. We are probating it later on. It is the first step. The second step, when, the medicine is already registered. so, we can help you to get access. To this pharmacy.
So you do not need to establish your operational office in the territories of Russia. You did not need to hire a medical representatives to visit doctors, to visit hospitals or to visit pharmacists. You just make kind of a proposal for them. And just, [00:18:00] just, Introduce your medicine to this audience.
And if I'm a pharmacy, so I can see your products in my list, and I can see that the price you are offering is very, very good. that, it is produced, it is registered medicine. And, so, in this case, I just make an order. You will see this order and. The next step is just to deliver your medicine to the pharmacy.
So, if you are located abroad outside of Russia, so you are making, the package and you deliver it to Russia, to the special sales house distribution, to, to wholesales house, and, later on it is spread within the pharmacy. and, it is so, this platform it is, it has different levels.
The first level is when you are studying [00:19:00] registration process. So we are helping and we are just requiring all the documents what is needed to afford registration. The second one is when you're placing the order and when you see direct sales, time to time. On line two pharmacy. And the third step is the logistics system.
So when you are just placing the package and when you are delivering it to territories of Russia and when one of partners are holding it, are taking care of it. And when the audit comes from hospitals, from medicine. So they are making it fulfillment, to deliver it to the certain address. And in this case, you are being in Singapore, you can see time to time all the sales that goes with your product in territories of Russia.
[00:20:00] The same goes when, for example, Russian pharmaceutical companies are trying to now sell the medicine interpreters of MENA region. So, we are integrated into the sales system in the ministry pharmacies. So, being a pharmaceutical manufacturer here in Russia and sitting in, and I can see how my sales are going on time to time.
In the MENA region, for example, in the United Arab Emirates. the same goes, now when, for example, the, the pharmaceutical manufacturer in Russia, and I can also just make the same system of sales with Russian healthcare retail with Russian hospitals, with Russian pharmacies. But I do not need to go anywhere.
I do not need to hire a medical representative to visit time to time pharmacies, to visit hospitals, and to make an agreement on paper about, about the stock, about the [00:21:00] prices. I can do everything online. So this is the main idea. And if, for example, I can see that. Okay. I can see that, my medicines are already on the stock, in a pharmacy in the surgeon pharmacy, but I can see that, they do not supply any further medicine.
I can just ask, well, perhaps I need to educate your professionals to work with this medicine. Perhaps you were a specialist, do not understand how to work with the surgeon medicine. And, In this case, or the educational platform can support because it is integrated into continuing medical education system in every single country we operate in.
And so, on the one hand I can tell the audience about my product, but on the other hand, it is, the continuing medical education system. And, so our information that is. that I'm telling [00:22:00] you during this online course, it's been approved by the minister of healthcare. So this is the main idea that I'm not just saying that my medicine is the best of the best of the best ever, but this is the information that is being approved by the ministry of health care in each region.
Yeah. This is the main idea.
Alvin: It's basically an end to end. Integrated solution for pharmaceutical manufacturers so you can help them deal with the registration regulation and grow distribution. So you'll work with like logistics partners to help them distribute across all the regions in Russia. And then not only that, they can, you can track everything online.
So even down to the actual pharmacies itself, whether the doctors, maybe the doctors are not, they are not prescribing it for some reason. Then. The, the manufacturers can still see from there, how come you're not distributing this drug? Then maybe we need to educate them more about the [00:23:00] possible applications and then you can encourage them to sell them off that particular drug.
So it is all online now. You show them all this information online, they can manage all of that on their own. And then on your site, you just work with the logistics part and as you built out the platform for them to do that. Yeah,
Elena: definitely. And, generally early, we are not about to do logistic bio all our own, it's not our business.
We are not about to deliver about ourselves. It's better to choose, one of our logistic operators or who have a special license for, the cars for the, the wholesales houses. And, we just, preferred to make this partnership. And, you can just imagine that. So, for example, if you are running a pharmaceutical company, a pharmaceutical manufacturer, and he wants to sell your medicine somewhere out of your country, it's so difficult to find the logistical rates to partner.
[00:24:00] So, we know all of them and we can just, well, you have this variant, this there, and this variant, and you can just choose out of several variants. What is better for you. So it usually, there are several things that can stop companies to attract the new region, but the needs to get the local distribution partner, the needs to get through all the registration process.
The needs to establish the local company and to hire the local staff to make all the operations so offline, it's so difficult and it makes the, the greatest innovation, in medicine. so slowly, for example, if the invention was made in the United States. It's so difficult to, make itself, in Russia and our platform helps to do it online, online without involving, tones of, budget or a human resource.
Tons of budget [00:25:00] for everything. Yeah. So generally decrease in cost is the main value.
Alvin: How do you charge the companies in this case? Is it like a flat fee or is it by per SKU or something.
Elena: Well, generally we charge a kind of success fee for every transaction that goes through our platform. So, for example, if, it builds to direct sales, so our recharge around 5%.
for the cost of transaction. Normally all these money are being paid by healthcare retail. And we transfer this money to a pharmaceutical manufacturer, and we are holding our success fee, according to the terms and condition. But of course, we have some additional services, life, educational service and eat.
Pharmaceutical manufacturer wants to educate a specialist throughout our platform. So we charge, we're, [00:26:00] every, specialists who are just taking part in this course, something like that.
Alvin: Okay. Interesting. So with the success fee, basically you're aligning your incentives with the manufacturer. So if you succeed, they succeed.
And then there's the, the reason why they pay you rather than, yeah. Yeah.
Elena: we are about, we are, we are thinking about, to launch one more service. So now platform, because we are holding the huge amounts of big data and, we can, make, analytical reports, about, the market structure about the market needs and, we can afford to sell.
It's like, like licensed. when, a pharmaceutical manufacturer just start buying access to this license, for a certain period of time, but we haven't launched it yet, and I'm not sure that, it is the first target that what we need to do because, the distribution platform is highly needed right now in the [00:27:00] circumstances that we are right now.
I have already sold you before you start recording our talk. that's, this period of making conferencey increase rapidly that, before the curve at 19, the, the average speed of making contracts with pharmaceutical mag manufacturers were around. From three to four, per one month. And, we have came with the results of 150 manufacturers on our platforms, by the end of 2019.
And, what we can see right now around 17 companies have been contracted just within one month. So it's so rapidly, so. sometimes, crisis, maybe difficulties for us, but, also creates opportunities. Yeah.
Alvin: But what are the kinds of, contracts that the companies are making it? Because like I imagine it's not only for the, [00:28:00] there are no confirmed drugs to treat Corvette now, so how come.
Okay. Can you tell us why there's this sudden increase in a big manufacturer? It's one thing to distribute their drugs small.
Elena: Well, you see 'em now because of course with 19th, everyone are staying home and medical representatives are also staying home. And, yeah. And although, there are such.
Difficult is with faced with, businesses do not want to change their plans. And so in this case, people from marketing departments, from commercial departments of pharmaceutical manufacturers, they need to search new instruments of how to make all the plants real, how to achieve their goals for this year in 2020.
but. When they are medical representative. Sustain hope. Yeah. So, so that's how, they just turned [00:29:00] up two hour, two hour service. And, that's how, we increase the speed of our growth.
Alvin: Well, very interesting. So it's almost a four times increase in the rate of growth. You said three to four per month, and now it's 17 minus four, four times increase more than four times.
Increase.
Elena: Yeah. Yeah, definitely. Definitely. And, you know, our, some team of mine, some teammates of mine, they were just a beach and a warrior. What will go down with the company because of the crisis, because all the situations that we face with, and, right now they're telling me, well, we were working with.
Around, from eight to 10 hours per day. And now we are working 24 hours, seven. I'm telling them, okay, so be relaxed because if you're working and if you are achieving the goals of the company, so everything will be okay with the company and with you, and the company will protect you from everything that goes [00:30:00] around us right now,
Alvin: you were telling me that your team.
Has all along been distributed across, you have people in UAE and Russia and in the U S so you have, you're already used to operating remotely, like communicating remotely. So, so do you use, what kind of tools do you use to coordinate everybody?
Elena: well, we get, she used to use them. for our conference to meet each other.
of course, we are use Slack for communicating for the rapid communication. of course, we are using the email we use in Volta. We use in telegram, for messaging and, and we use our, platform to career code to coordinate all the business processes. Because if it goes to. Right? Each platform of ours is consist of, the window, the web window for pharmaceutical manufacturers.
It has the web window for [00:31:00] healthcare retail, and it has our own back window because we need to see what is going on on the platform because we are kind of referee. that's all the participants will fulfill the agreements.
Alvin: Very interesting. So, yeah. Yeah. But before we go for that, there's one question I want to ask.
Like in Russia itself, you had the, you could develop the networks of all the logistics partners and so on, so, but when you expand to a new territory, how do you do that? Let's say when you're expanding into the UAE, how do you find out who are the logistics partners to partner with? Then the pharmacies, how are you doing that.
Elena: well, if it gives to the UAE, the system of, well, the system and the markets, the system, how, medicine are being delivered from the manufacturer to the patients are almost the same. So all the business [00:32:00] processes are all the same. So, if you want to sell your medicine, and if you want to make it, to leave it to patients.
So you need to make it at first, then you need to deliver it to distribution company. Then you need to, you have some business processes for marketing, for brokerage, for money, transferring for logistics, for, transport logistics or. sales, house, logistic and et cetera, et cetera. And, what we faced, the differences between, for example, the Russian market and well with the minerals market is that, all the business processes inside of a distribution company is just, brokerage money transferring.
And, transferred until house logistic and if it goes to the MENA region. So the distribution company also makes marketing also makes, registration process and others and others. So, when we are facing the [00:33:00] new markets, the best thing to do is to make a network and on this market. So I'm visiting all the single, events.
that goes for a business that goes for healthcare sector, that deals with B to B, B to B to C, for different sectors. And of course are making connection with people. And, when we are meeting and we are just trying to, Find out points of connection. I'm saying, okay, you are holding the distribution company.
You can do the same, with the help of our it platforms. shall we try and the first or the second, try the first try. And so that's how our network of wholesales, how distribution companies in quizzes and, what I have been doing in Russia since 20 zero four to, 2016 or, at least 12 years.
Yeah. So, I just try to do [00:34:00] it rapidly in different regions. Well, and of course, I need to create a business development team, in local markets. And I have told you that I have some, teammates in UAE, in the United States and these teams, they are collaborating on assertion project on a surgeon, business team on certain business processes inside of the company.
For example, making, making connection with pharmacists. So. It is one business process making connection with distribution companies. It is the second business processes. we have a local team to cover all these processes because some somethings can be done just manually or when you're a face and people.
Alvin: Interesting. So, When you move into the market, you're trained to do the networking and, different events. That was what you were doing, UAE, starting off. And then you're, you're hiring a local team to also help you with the [00:35:00] individual processes, like finding the pharmacies and find distributors. And as you expand around Asia, you'll, you'll do the same thing in Asia as well, like Philippines, Indonesia, Taiwan.
These are some of your plans to expand.
Elena: Yeah. And, seeing that, what I'm facing, one, one of the challenges, that, me and my company are facing right now is a great, multicultural team. And, people who are speaking different languages. And, right now we are making adaptations for our services to English and to Arabic.
And I believe that the next challenge when we are, we'll be scaling in the Asian region. We will need to study, so many different languages.
Alvin: There's one difficulty of Southeast Asia especially because. Within this region, there's so many. Every country has, it's almost like anguish, like, I think English is still quite common, [00:36:00] but not necessarily in Indonesia.
For example, Philippines, Singapore, you can still use English, I think, but maybe even when they show. So, but, some of the countries are not as strong in
Elena: English. Yeah. So, so that it is going to be one of the challenges for the team. I, and, what we, one of the goose cases, what they have done, in the MENA region, I took a cofounder for that region.
And, so, I know just on my own. Doing business there. I have a very strong business partner there. So, when, at the time when we will, be scaling in the Asian region. So I think, in the, surgeon markets, I will do the same. So I will try to find a cofounder who will support me on the local market.
Alvin: Oh, interesting. Maybe I can recommend you, some people that I know with background in the healthcare industry as well, but we can talk about that another time
[00:37:00] Elena: and you see how it works. So I'm just saying, okay. I'm about. To, find the cofounder of, for the technology for the local market. And you're just saying, Oh, I know some people who might be interested in it.
That's how it works. When I'm going to the new market, I'm saying, Oh, I have this technology. I want to do this. I need it. And for this, for this, for this business processes to support me. So people usually they are very open to help and they're just saying, okay, I have some, some ideas who can help you. And that's how business connections are being made.
You're just to play this case.
Alvin: Is that how you also find the pharmaceutical manufacturers to. Do what with, late you? You mentioned some of the quite big pharmaceutical manufacturers are now reaching out to you. Is it also you, you managed to talk to them at these kind of events and then now they are reaching out to you?
Well, of
Elena: course. Well, you know, when you are [00:38:00] operating in the industry, when you're a stay in pharmaceutical manufacturer, it's not the kind of, something, It's, it's about humans. It's about people. So, the company is people who are working in this company, right? And, of course, if we are saying about pharmaceutical manufacturer, and if I'm working in the industry for solar, I can understand their needs.
So, when we are starting speaking with the person who works in pharmaceutical, manufacturer, so. This person can see that I understand their needs and I have the solution to support their needs so they can read the costs to increase their profits, and later on they can decide what to do with this profit to reinvest it into biotech or depth into the price to decrease prices or et cetera.
So, we are like, we are speaking the same language and, of course. Yeah. the best. [00:39:00] Advertisement that was done for us is the word of mouth. So if, for example, you are working in the name of the street, so you have friends of yours who are working in the industry. So that's how connections have been made until it's easy, it's easy.
you know, if you want to succeed in something, you need just to do the first step, just to try to do something. Just not to be afraid, not just to, imagine that, each could be difficult or just try to do something mean the first step, the best way to succeed is to make the first step and not to be afraid of, work in the car.
Alvin: So when I went, yeah. Yeah.
Elena: When I went, I went, when I'm speaking with the friends of mine, they're telling me that I'm a person without the hobby because, my business is my hobby, but I'm one of the [00:40:00] luckiest person on earth because my hobby helps me to get money.
Alvin: Yeah. I see that there's something.
I think a lot of entrepreneurs have the same mindset. Even, I don't know if you've heard of him, Gary V, he's Gary Vaynerchuk. He's originally from Ukraine, but he grew up in the U S so he's like a famous, media investor there. And then he says, even now. Even now, he's a millionaire. One of his favorite thanks to the Dewey is he, he, he just likes to find good deals.
He'll go up, do like sales, and then he find, okay, this, this by saying, selling this thing for 10 cents, I can go online and see maybe people saying for $1, and even now he's, I mean, and now he still likes to do this card. That is his hobby.
So anyway, what was the next step for you right now? What's the next step for pharma global
Elena: right now? The next step. [00:41:00] I'm praying that, the flight and the borders would be open as soon as possible. This is all the phrase that I just. Have right now because, the team needs to meet each other. The processes needs to be supported by the people.
sometimes, some connection that can be done just, when you're facing people offline, not online. I believe that online guns, you know, just. Separate. The offline part of business I have offline part of the business is a very necessary part, and it's, help us to move forward. But the next step is to.
it achieved the leadership in, two or three countries in, the middle Eastern region. And our main focus is, to the UAE market, to Saudi Arabia market and to Egypt. So it's, we. Local markets are highly [00:42:00] needed and we are about to achieve leadership within the nearest couple of years, and then to scale to other 17 conflicts in the region.
And as soon as we achieve, the leadership will start moving to Asia, the Asian markets. this is the nearest tab. So if it goes to. the operational questions. our revenue stream increased three times from the previous year. Also, the end of a weakness, the year 2019, having the. Sweet time, revenue, increase in, in increasing, the three times.
if we compare it with the year 2018 and I believe that, we will close, the year 2020, with the speed of grills, the around 3.5 to four times. I didn't know. I will see how it will, how it will [00:43:00] work. but, I believe that the team can make it, our team is already around 120 people all over the world.
And, I, I hope so that we will achieve this skill by the end of the year near his goal. Yeah.
Alvin: I don't know if you've heard this, but there's this, rule in SAS companies, how you become a unicorn, how you hit 1 billion in valuation. So they say it's, I think it's three, three, three to do basically you, you grow by three times, one year, second year, another three times.
Then the young one, one more time, three, then two more. You double two years, and then you are $1 billion company, so you're on track to hit that goal.
Elena: Oh, well, I hope that we will become a billion dollar company within the nearest maybe six years or something like that. if we [00:44:00] will just have the same speeds of revenue growth, so it will happen within maybe five, six.
Seven years maximum. Yeah. Everything will go, as it is right now. Yeah. So what do we, what do we have already phase that, this period in Greece because of commit 19. Yeah. Definitely. And, this period is the great opportunities for the company. although it is a very difficult period for offline businesses and for some people who get influenced in this, very serious disease.
but well, I hope that we will continue the year having people in five, four, four times revenue growth. During this year using all these opportunities that where we are facing right now.
Alvin: It's very interesting to learn about your company and about your future plans. So we would just wrap up here with [00:45:00] some quick fire questions.
So I'll just ask you like, what's your favorite boat business bull? And you just tell me it will be questions like that. Are you okay? Are you gave that.
Elena: You know, the last book that I read, I really enjoyed was, I did not remember who was the author, but it was the book about Pixar, how Pixar, was, became a unicorn.
And, how, you know, being just a small studio who was producing cartoons and producing some advertisements, it became. A well known, fabric for a cartoon. And, how they made the deal with Disney. All the soul, the Pixar to Disney. yeah, I really enjoyed this. You can, I highly recommend, people who are doing business for, for all the entrepreneurs to read this book.
Alvin: It's called creative ink.
Elena: and, yeah, yeah, yeah, yeah, yeah.
[00:46:00] Alvin: Okay. So,
Elena: I can, I can, I can send you the link to the, to the ebook. Have you read it, by the way?
Alvin: I think I have CA kept, Mo kept more, kept more. He's, he's one of the founders of Pixar, and then I remember, I think I read the book. Yeah,
Elena: yeah. So
Alvin: who, who, who is one entrepreneur, you know, not one can be more than one.
So who are some entrepreneurs you know personally who you think are doing interesting things?
Elena: Ah, well, I would suggest, to just to make two parts of, my answer to this question. the first part is, the intrepreneurs whom I do not know personally, but I wish I could met them one day and ask questions in person.
And, these people, they just inspire me [00:47:00] the most. this is Elon Musk. and, we should rent.
Alvin: Richard Branson.
Elena: Elon Musk. Yeah. Elon Musk inspires me because of all the technologists and about about all his views and imagination, what he's doing, and Richard breads, and I think he's one of the best bread people who are creating marketing brands, like, you know, like Virgin Atlantic and et cetera, et cetera, et cetera.
So I wish I could meet them one day and get to know them in person. If it goes to about, intrepreneurs, whom I know personally and who inspires me also. it is Evgeny Chichvarkin, he's, the founder, he's an intrepreneur from Russia rated, retail for mobile food. So he resets in Russia, and later on he went to, the United Kingdom, and created, and created, At restaurants and, [00:48:00] opens a shop well with wine and spirits and, well, he inspires me because of the level of, he's in business, about how he paid attention to, every single things. when it goes to client service, it's perfect. And it is what we have to educate from his side.
yeah, yeah. this is the person who, yeah. You know, I need to, teach some things from his side. How does this thing, yeah,
Alvin: maybe these people. Yeah.
Elena: I met him. I met him. Yeah. I met him in person when, I was in London in one of the conferences about, private banking and investments and they, he was just telling me about his business story. Yeah.
Alvin: Interesting.
Elena: That's how we met.
Alvin: So, what's your, you, you mentioned a bit about the tools. You used to coordinate the team on your life.
Do you have [00:49:00] any particular tools that you really like? You can, maybe it's something about the UI UX that you really like, or even even even non-work told me, maybe your day to day you take notes or something. What, what's your, what are some of your favorite tools for, to help you build your business.
Elena: what do you mean?
Can you just, just, say it in a different word because it sends you correctly?
Alvin: It can be, it can be, can be Slack, can be zoom, can be telegram, or even anything else. Even like something you used to take notes that you really like or, something that helps you. exercise while while you're at home or something like that.
Any anything, anything that comes to your mind? What kind of, app app or even physical objects.
Elena: Well, you know, even though I'm running an it company, I wouldn't say I'm, highly skilled [00:50:00] in what is going on with the app and everything like that. So I think the best tool for me to make my business work is, three devices.
One is my mag group, cause the second is my iPad where I can make drawings and where I can make notes as well. using seamless, I'm using hands like this. Yeah. I'm sure you can see right down.
Alvin: I can see,
Elena: yeah. Like, like, like this too. Yeah. You know, like they still, because I'm, I'm writing by hand. and, also my iPhone.
Because, you know, when, I started my career, I couldn't even imagine that, all my work and all the business processes can be done here,
Alvin: like here,
Elena: like here. Yeah. I couldn't even imagine about that. But right now it's reality and, that's red that, we can continue to do an hour. Things. We like doing our job [00:51:00] making, connecting with people on business purposes, when, when I'm going out and having a walk with my dog, for example, or when I'm on the playground with my kids, I can make some kind of meeting or a business call.
We'll start my business partners. So these are the main tools that make me work. Yeah. So Slack is something that can be, go with different app. Zoom also can be changed to Skype or to Google Hangouts or to any different app. But what is all this with me is my iPhone and my iPad. And sometimes my Mac book, sometimes not very often.
Not so.
Alvin: Okay. So final, final question. What do you wish you could tell the, yourself back in 2016 when you just started the company? [00:52:00]
Elena: you know, this is the very good question because, when I was in 2016, I was very afraid of. Oh, the future, because I wasn't sure that it will work. I wasn't sure that people would support me. I wasn't sure that I will find money to invest into business, to, if I could get back to 2016 and I could face myself in the mirror and I will just say, do not afraid.
Just do it. Just, just make and do just, Open your Mac book and start doing something to not be afraid. Because if you're afraid, it can paralyze you, it will just close the opportunities for you. But if you are not afraid, and if you are, start moving. So, more than step by step, step by step [00:53:00] from small steps to bigger steps so you will succeed anyhow.
Even, you know, even if an entrepreneur, started the business and the business failed. So it is a success. It is a huge success because, right now the person has this expertize, has this experience and know what to do to succeed, to succeed in future.
Alvin: It makes sense. Don't be afraid and just take steps.
If you fail, you still, you still learn something from the process and you can imply that in your future.
Elena: You know, I would also say to myself that, you know, a baby, a baby, he or she cannot start working just in one day. he made the first steps and fail. Second step and fail first step and fail, and later on all of us that we are becoming adults and we can walk without, [00:54:00] because that was being taught fall down, on earth.
And, the same as it is when you are doing business. So, you are like a baby who make the first step. And sometimes you can be afraid of making the second step because wow, it makes, it may hurt. Yeah. But all of us were babies. All of us, were, just trying to walk. All of us were trying to use the spoon and you understand how, you know, when you're trying to use the spoon spoon for the first time, no one can do it at the first time.
Yeah. So, the best, way to know how to do that is just to try to do it. Just to taste good and try to eat with the school, with the help of school. And the same as with the business. So if you are not a highly educated entrepreneur, and I believe that there is no university where you can study how to become an successful [00:55:00] interpreter, no one can indicate you, no one are just, you can just educate yourself.
And the best way is just to take this tool and try to eat with the help of this mechanism. Well, the same is when you are doing your business.
Alvin: Okay. All right. Thanks a lot. And Elena, it's very, very nice talking to you. Again, another thing about how you're increasing your rate of growth now. Given the coronavirus situation and then also about your future plans.
So, I, I learned a lot from this conversation. Then I hope the audience also takes as much of this as I did, so. Okay. I'm going to stop the recording.
-
Sara Khurrum is the founder of Sehat Kahani, Pakistan's leading telemedicine platform. She started the company after experiencing first-hand the problem of married female doctors in Pakistan having limited opportunities to leverage their skills in full time jobs.
https://sehatkahani.com/
Learn:
- she started out Sehat Kahani by partnering with rural clinics
- how she gets more and more female medical talent on board
- how she created the mobile app in a few weeks in partnership with a software studio
- her plans for shifting from a free model to a paid model for her mobile appFavourite Book
The Blue SweaterMost important lesson
1. Never sign a document before reading it
2. Always believe in yourself, impostor syndrome is bullshitAlvin: [00:00:00] three, two, one. Welcome to Abyss Gazing in today's episode, joining me today is Sarah off. Uh . Am I pronouncing that right?
Sara: Yes. Yes, you are. It's called.
Alvin: See I Connie. So Sarah actually graduated as a doctor and also proceeded on to get a master's in public health. She's the founder of , which is a telemedicine startup based in Pakistan. So are you ready? Are you ready to begin Sarah?
Sara: Yes, I am really excited. Thank you for having me here.
Alvin: Thanks for joining us today. So. Like just does start off when you were a medical student where you were, were you already planning to start a business?
Sara: No, never. I, uh, I I've been brought up in a very traditional Pakistani family and, uh, and I belong to the mini class [00:01:00] and. From the time I was five years old, I think my parents decided that I had to become a doctor because it's a matter of grief, grief, privilege, and the ability for a female in Pakistan to become a doctor and a lawyer, uh, barons from the middle income background who save up to educate their daughters.
One that orders to become doctors at the end of the day. Because it is very prestigious. They're very respected and they get the best hand in marriage. So my parents had the same idea. So all my life, I was just told that you have to become a doctor. You have to have a doctor in front of your knee, and then you have to obviously help patients, but doing the business.
I don't think anyone in my family before me has ever done business, uh, let alone move myself. So, no, I never thought that I would drop business.
Alvin: So, so what was the initial spark of the idea which led to your current startup?
Sara: So I think it just evolved in a series of events. I, um, I got married right after my graduation.
I, it was an arranged marriage. [00:02:00] Uh, there's a base. There's a very, um, interesting concept in the sign. It's called dr. Bright. Um, so Pakistan has a total medical workforce of 170,000 doctors and announced 70% of this number is female doctors. Again, because of the same issue. That's very prestigious, very noble for women to become doctors in Pakistan, because then they become the real eligible bachelors.
They get the best hand in marriage. Um, so because of this dr. Breast phenomena out of that, 70%, only 23% woman book. Okay. The myths around 80 to 85,000 doctors, female doctors from the ecosystem today. Um, so following the same route, when I got my medical degree, my parents said that now you have to get married because you're getting older.
So I was mad at, but in three months, uh, through an arranged marriage to my husband and almost going when I applied for the residency, um, program, uh, both my masters and it was doing all it right until I found out that I was pregnant. Um, I left the program. And, um, just to, you know, [00:03:00] just to kill time, I joined another organization to work as a medical doctor, um, in, um, one of the clinics in a low income community in my city.
Um, my husband shifted to another city for his word. So I had to shift right after my baby with him. And I went to a new city with the new baby. Without with very early matters. I was only one year of my marriage and suddenly I fell into severe postpartum depression because I realized I couldn't work anymore.
And I had become in fact adopted. Right. Um, so through my conversations with one of my ex partners, I realized that, you know, this happens to a lot of women. In the country, not just me at the same time, the clinic that I used to do prior to my leaving the city, they couldn't find a doctor to replace me. So I started doing on-call consultations for those patients.
In that case, the nurse used to call me, we used to talk and she used to consult patients. And then we started doing it on Skype because I have to see the lesions and, and the, and the patient in like through a virtual medium to be knowing what [00:04:00] kind of symptoms they're facing. So I realized that, you know, if I can do it sitting at home.
And so I think patients in another city in a low income community who cannot access another doctor right now, how it all female doctors sitting at home and stay consolidations who are not, uh, who do not get the chance to show to doctors and their communities. Because as a lot of female doctors that at home, ironically in our country, 75% people out of 200 million people.
Don't get access to a qualified doctor in their lifetime. And that's why the health indicators in Pakistan are very bad. Um, so then became of the idea that a female doctor sitting at home and consult patients who need access to healthcare using telemedicine or video consultation, solving two very different challenges, but very applicable challenges in the country.
So that's essentially how the idea developed. Um, I came back to Karachi to work on the idea after getting some initial funding that I applied to, to a [00:05:00] startup competition. When I came back to Karachi, the main idea that we followed was we outlined nurse or community with wife led clinics in low income communities.
And we partnered with them so that any patient that comes to the nurse in that community can get connected to an online doctor through our telemedicine network and our network of female online doctors. Um, we did this for two years. Uh, uh, and then we realized that by only making clinics and low income communities, we won't be able to run a sustainable business in Pakistan because the cash that we used to get from the clinics, although they were all paid clinics and you were charging the patients, the cash flow, the cash margin from the clinics available because these were all low income area that people had very limited ability to pay.
So we sought, we thought that. Along with having a low income model, which obviously has high embankment, less cash flows. We need to find a higher revenue model in the company as well, to be [00:06:00] able to cross subsidize our clinics and also increase sustainability in the company. And that's when we started a second line of business, which is, I say had the honey mobile application and this mobile application can be downloaded by anyone anywhere in the world.
And they can connect to a doctor. 24 seven in less than three clicks and the doctors are available 24 seven. Mind's no conservational book appointment. So now they have the honey works on these stool business lines. One for low income communities. We keep creating clinics and for the masses, we have a mobile app.
Alvin: Oh, interesting. So basically the whole idea began with your own experience. When you, you didn't even intend to become a doctor, you actually intended to keep on. Uh, pursuing medicine, you did your residency and so on, but you fell into this situation of a doctor, right? And then you, you thought like, what, what else can I do?
And then it basically all started from there doing, starting out you, yourself, doing Skype [00:07:00] consultations to check out the, the lesions on the patients and then evolve. Uh, it just slowly grew from there. You joined a solid competition and got some funding, and then you grew bigger than the gun. And then you, you began working with these like small clinics in the local communities, but you realize that this channel alone is not enough to generate higher revenues.
And then you're Vince getting out the mobile app now, which is targeted worldwide. Yes. Yes. So can you give us an idea of the scope of what you have built it do at this point? Like how many clinics are you operating within Pakistan and. How many, a hallway, how many consultations do you do on average?
Sara: Yeah, so right there, we have a network of 26 clinics across Pakistan.
Pakistan is divided into four provinces now, five provinces, and we are present in three provinces. Uh, since Punjab and [00:08:00] KPK, we have 26 planets and in those 26 clinics, we have a staff of around 67 people. So in every clinic, we obviously partner with the nurse. Who's a partner who gets an incentive from each consultation, but we also, but we also hire a female mobilizer for doing health, education and promotion, and also a clinic coordinator.
Alvin: Audio.
Sara: Okay. Yes it, should I go again? Okay. So, uh, right now they have, the honey has a network of 26 clinics across Pakistan. Pakistan has five provinces. We are present in three provinces and, um, through these 26 clinics, we've seen almost 135,000 patients via tele medicine. Um, in these 26 clinics, we have our gnosis who's our nurse partners, and then we have a female mobilizer and a middle coordinator in the clinic as well.
Um, so staff have announced 67 feet as working [00:09:00] in communities with us, making sure these clinics work, um, on the app front, we launched the app last year in November, so it's fairly new, but in totality we've had more than an hour and 50,000 plus downloads and we've done almost. 17,000 plus consultations.
Um, in the app, we actually target two markets. We target regions, the application and use the app for consultation individually, but we also give it to coconuts to ensure the employees, uh, for OPD consultations, if they don't have it to the usual outage, because the usual health coverage in Pakistan does not cover outpatient consultations.
So this is our method of insuring their employees on a subscription basis. Um, so right now we working with it on 32 forklifts, uh, and have around 130,000 people who've been enjoyed into, uh, the corporate platform. Um, and I think pre COVID-19 Pakistan had a lot of inertia for telemedicine, [00:10:00] but most COVID-19, we've seen at least for telemedicine, there's an increase adaptability.
So I ad business has really grown over the last 45 days to two months, increased people have signed from the platform and also for our corporate package.
Alvin: Oh, interesting. So, okay. Talk again about mobile packet, a mobile app. You have, you have two revenue streams. One is the corporate stream where like corporates will pay you subscriptions for the employees and, uh, which is covered under the, usually the corporate plans.
Haven't included outpatient medical consultations, but, but yours will be covered on your plans. Uh, do I understand that correctly?
Sara: Sorry, I missed your question completely. Your wife's profile.
Alvin: Oh,
Sara: so, so
Alvin: you were saying that, uh, you had two revenue streams for mobile app. One is the individual consumers, and the other one is for the corporate plans.
And [00:11:00] for the corporate plans, usually they haven't covered, uh, outpatient consultations historically, but for your, your, your app is covered under the plan. So there's one huge advantage for you, uh, solely right now, as a percentage of your business, is the mobile app actually. Has it caught up with, with the clinics in terms of revenue or is it about, Oh yeah, it's more than it's really called out, even though it's just launched in November, he ready, caught up.
Uh, they are both like around equal now or is even doing better than the. In person.
Sara: Um, so we make revenue in the clinics for, with our consultations and our health education, uh, campaigns in the clinic. So right now, obviously because the clinics and the health education campaigns have been running for a lot more time, the revenue more is to the clinics and the health education campaigns.
The [00:12:00] app revenue is very, very young. It's just six months old. But what we see in the next five years is how we are structuring the cash flows. Um, are 60% of our total income will come from the application and on 30% from the clinics and 10% from our health education portfolio. Um, so we are anticipating that our high income, uh, vertical of mobile application will cross subsidize the clinics and its costs.
So that's how we've created a process that we model within the same company. Oh,
Alvin: very interesting. So right now, with, with the current, uh, COVID-19 situation, you, you mentioned that you saw a huge lift in just the last 45 days in the mobile app adoption. So are you, are you doing anything differently in terms of your marketing or sales outreach or is like companies are reaching out to you.
Sara: Yes. So when, so COVID-19 hip Pakistan on [00:13:00] 26, February, or that is when we bought our first case. And we knew seeing the trend in other countries that we are going to add the log down because we knew that in Pakistan also, it's going to spread because we got a lot of patients from Iran and China, and most of them are bought one of them on borders of Pakistan.
So we knew that there's going to be a surge. Um, so we partnered in mid-March with the dominant Fox on NGP digital Pakistan, which is environment and for digital initiatives. And what we did was in alcoves response, we did two things. Um, so he made our retail app completely free for three months for the period where COVID-19 was extensive in, in Pakistan.
So anyone who logging on to the application and get a free consultation on the application, whether it's a GP, it's a specialist or it's a mental wellness specialist. Um, and the second thing was we needed subsidy for our packages for the corporate. So even for the pulpit, we created a package enrich for the limited beautifying, the G [00:14:00] the employee can have free, and then they have to pay from, uh, from some point onwards and also be subsidized.
Um, because we made the Afrin because the dominant market with us, we've got a lot of, uh, a lot of reach and a lot of visibility. So we saw surgeon, patients. And also because when there was a lockdown, when the usual OPDs were closed, when hospitals were closed and people spell that there's a risk going to the hospital because there's a risk of exposure.
A lot of people I can make me came to online options are for showing a doc, then tried it for the first time. So because we need the Africa because we subsidize the packages because we partnered with the dominant Bieber first movers in the telemedicine space in Pakistan, first movers for overage responses.
Well, um, so all of these factors are increased our impact incredibly. So before COVID-19 we used to get 50, 60 consultations a day on an app after COVID-19 averages on 500, 600 consultations today, it's only, only [00:15:00] increasing with time. Uh, it's increasing to a point that we've had to hire more doctors.
We've had volunteers helping us be collaborated with a lot of corporate and government partners to create outreach. Um, so yeah, so we've seen an incredible response to tele medicine on our app and not just from patients in Palestine. A very interesting thing is we've gotten a lot of patients from outside Pakistan, from Canada, us Australia, Philippines, malicious Pakistanis, and non-box Tanya's as well.
Uh, which is, which is a great experience to learn from because it's also a lot of learning for the company, how to manage auto patients to cater, to all sorts of patients.
Alvin: You have a very interesting, so yeah, you mentioned you had to even ramp up the hiring doctors. Are you, are you hiring doctors directly on the or are they more like contractors?
So they are like, Well, it's like something like Uber has drivers on their platform, but they don't really consider the drivers employees. Or is that the case for Connie?
[00:16:00] Sara: Yes. So, so we follow, uh, in Uber market in which we, we, so it's a little bit different. The Ooma model stands for the fact that. You can, when you go into the app, you'll see doctors what either offline or online, based on their other.
So doctors have complete flexibility to choose their own hours and be available for as much time as they want. And they can just use a tall grid to make themselves online, offline, but because this is healthcare and a lot of doctors, compliances and box on that we have to meet. So when we get a doctor CED or a resume, or when we do a drive to hire more doctors, we get there.
CVS. We do an ongoing interview with them. We check their documents. We see if they're PMTC certified. And then we do that training both on medical and pharmaceutical protocols and also on telemedicine. So once they've gone through our list of protocols and certifications only, then they can become a part of the telemedicine network as they have tiny Apple clinics.
And then also we continuously monitor their [00:17:00] performance. How are they doing consultations? We do spot checks and regular followups. For the doctors as well as the patients. So it's, it's very stringent, but yes, the flexibility option is to same
Alvin: as a doctor yourself. What do you see are the main differences between consulting over telemedicine and consulting in person?
Are there any limitations that having medicine doesn't allow you to, like what, what, what was, um, common limitations or what are some advantages of telemedicine?
Sara: See, I'll talk about the advantages first. And then I'll talk about the limitation. The advantage is that you don't have to go anywhere to show that in your phone.
Alvin: Sorry, I cut off a
Sara: bit
Alvin: because there was a thunder running over here at the beginning of your limb, the advantages, but I [00:18:00] cut off.
Sara: Yeah. Yeah. So talk about the advantages and then we'll talk about the limitations. I think the biggest advantage is that you're getting a doctor in your mobile phone, um, which means that you don't have to go anywhere.
You don't have to beat the nines. You don't have to, um, leave your home or your work to get it off and for people and targets. And that's a big issue because they're long waiting lines for doctors, people have to be to reach to the doctor. So there's transport costs. They have to leave work. So there's leaving work cost as well per daily visuals.
And then you have to pay, the doctors were all in on us. It becomes a very cost heavy that's a first headline is the second advantage is it's cost effective. So we charge one 10 of what a usual doctor in physicalities. Um, so that's the second, uh, one cost effective, a third thing. It's 24 seven. So doctors are usually available in consulting hours.
And if you have to show it off the, after [00:19:00] others, you just go to an emergency and join the emergency, which is the duty does not have an surgeons or senior doc. As here, you can get specialists and doctors 24 seven before ed one pitch is that you, that you know everything about the door doctor. So you know, all the license certifications experience qualifications is available.
You can choose a doctor. Based on your comfort. So using your special, using symptom using a favorite off the, you as a patient, has the ability to choose your doctor. I think the fifth is data security and so on the app, all your data and your conservation with secure. So there's no, there's no point of security with their data.
So you're absolutely sure. That your data is saved and you're managing your own data. And we also allow the also provide, um, at home pharmacy options and at-home lab services. So if a doctor has recommended your lab or a pharmacy, we can also get it dropped off at your home in limited cities. Um, so these are a lot of the, these are the few [00:20:00] advantages of any medicine, but yes, there are limitations.
So I always
average. All the steel on hand, all medical officials or daily medicine should be, get issues or issues at 12 surgery or the advanced medical procedures on the application. And you should not. But I think 70 to 80% people who walk into their hospitals and bother center actually facing, but I am really medic the issues.
And if you can, um, on an app to then you can actually decrease the load on tertiary care hospitals in Boston. And even all over the world. Um, so yeah, so I live all sorts of patients. A lot of your patients on daily medicine, the second disadvantage or the limitation, what I would say is that you don't get a physical intervention with the doctors.
You can't get examination done in our clinics. We depend on the most of the world, but on our app, we generally have to [00:21:00] depend on the history that the patient is giving. Or the examination that they've done themselves or what they're feeling themselves. So I think in this case, a very good history of vertical detail history is very important.
Alvin: sorry, your audio cut off again. Okay. I think
Sara: they do get that.
Alvin: Yeah. Okay. Okay. I hope when you say, did you get it? It's okay. Like we can edit all this out later on. It's just like in between, uh, yeah.
Sara: Good on your back.
Alvin: Yup. Okay. Bye. I hope all your limitations or spine. It's just like, there was one planet then you, you look away and you say something that I didn't catch. Okay. Okay. So by any way, you went through the limitations. So, [00:22:00] okay then. So like right now, yeah. Now you mentioned like data privacy. So like, do you have to make sure that your data is all like hypo compliant and all that?
So, uh, like I, I'm not sure if I got it right by the desk. There's this like hyper compliance, medical startups have to adhere to. How does
Sara: we usually do? We do. Yeah. So we do follow the HIPAA compliance. I act has been made by one of the best of the house in Pakistan, but then faults all the security and the compliances.
Um, but at the to mean by laws of Pakistan also internationally, and we also follow HIPAA compliance law, and generally all data is encrypted and secured, um, on, on Azure platform. So we do meet all the data compliance issues. Okay.
Alvin: Interesting. So, what about like pharmaceutical prescriptions? So within, within Pakistan, one [00:23:00] of the problems that I understand is actually the supplies of some drugs, especially to rural areas is limited.
So is there any way that you are, uh, you help to deal with that? Is it like, do you work with some pharmaceutical suppliers to supply it from the major city centers to the rural areas?
Sara: So not right now. And I don't think there's any single pharmacy delivery service who supplies to the rural areas in Pakistan, all the pharmacy resources invade less.
They will not go on me. And they usually supplying to major cities. Um, we do have pharmacy shops all around Pakistan, even in the rural most cities. See, I think for focused on the model has to be a blended one. If I'm just being. App that can work for rural as well as urban areas or clinics that can work for rural or urban areas.
And the way we do it is for people who don't have access to smart phones or technology, maybe more that inter internet penetration might be your, for everyone, we create tele [00:24:00] medicine clinics, and then they create lies on with pharmacies labs, ultrasound physicians, to make sure that the patient has enough information that okay, which pharmacies close to the clinic, where can I go and get the medicine?
So we do ensure that. And for usual users who are more urban and Teddy urban and living in major cities, or if your obesity is for them, they have the application.
no, it's not happening. It's and finding and finding that and finding pharmacy options in boots shops.
Alvin: Okay. So, uh, so the way that the rule roll patients are currently. Interfacing with Connie is they is like, how white is smartphone penetration in Pakistan right now? Do [00:25:00] you, do they have, uh, do most people, even the rural areas have access to smart phones or is it still quite limited?
They have to go down to the clinics to, uh, have a consultation sort of nurse assist them, set up the consultation with adopters.
Sara: Yeah. So in rural areas of Pakistan, uh, still there is decreased access of internet, connectivity and smartphone. So in totality, there are around 75 million smartphone users in the country, which is around 30 to 35% of the entire country.
So all obviously that number is low. Yes, it is increasing with time. A lot more people have access to smartphones and internet connectivity now than they had five years ago. But still, uh, in the rural most areas that are connected with your shows that even if there's a smartphone it's just owned by the, the, the house, um, elder.
So it's usually the man who has access to the phone. So women and children won't have access to the phone and they won't be able to call a doctor using that phone. Um, So, so I [00:26:00] think for Barca San, for country, like Pakistan has to be a blended healthcare model in which they are physically clinics for the low income of the rural areas.
And then they're more mobile option for smartphone users. See the idea. Can you get involved, Walter? Right when I started. Internet penetration was really, really low. And the acceptability of mobile applications in Pakistan was really no, even in the urban areas, even the rich people want using mobile applications, but now mobility apps have come in.
Food, ordering apps have come in, banking apps have come in and not medicine apps also doing red in Pakistan. Um, so we changed our business model from just planning to also improve the mobile application. The future that I see now is maybe we won't be leaving. We won't need in the next five years to create clinics.
But we can give mobile phones and mobile application to the health workers directly and wherever they are working in communities, they can become a virtual clinic and they can help patients look. So the urge to create a physical space, wouldn't be dead anymore. And you're also walking towards this [00:27:00] evolution or towards this change also, it's also how you continuously adapt your business to the requirements of today is what matters.
And we are working through that.
Alvin: Okay, interesting. So going back to your earlier point, About the doctors. How are you recruiting more doctors? Right now? You're reaching out to the existing network of dr. Bright's because there's this huge untapped, um, available labor market of dr. Bright's, who are mostly at home.
And then your, most of your doctors are from this community.
Sara: Yes. So all our doctors are female doctors, uh, no
in freeze that infant. Um, but all of them have to be female doctors. We have a network of 1500 doctors right now. And we usually pick and choose from our own network, uh, to hire doctors as a man, the need be. So when we [00:28:00] need doctors and attorneys on the application, we just, um, uh, we just, uh, put up the request.
Now, our network, we also working with the dominant right now to get volunteers and from the Pakistani diaspora, and also the, have our linkages in female doctor groups that give us access, uh, to recruitments as, and when needed. So for us, The supply is not an issue right now, we have more than enough network of female doctors, school related conservations to even five times the number that we're doing right now, I think the need right now in Pakistan is to build the market for telemedicine and make people comfortable with the idea of doing online consultations other than physical conservation.
I think over 19 pandemics, there's not better than, um, than this. Then this time for telemedicine to prove its spot. And that's, I think what they're doing right now.
Alvin: Yeah. You mentioned you were doing 50 to 60 before the 50, 60 consultations, but they on the app before the whole crisis started and we, I forgot how much is scaled now?
[00:29:00] Uh,
Sara: 500 to 600 or, well, so
Alvin: that's almost like a 10 times increase in the number of consulting. Okay. I can put that in the headline for this episode later, how. Ali's found the increase her number of consultations 10 times. You think, you think that
Sara: actually happened, which was just crazy at first, because when we did it and we had a huge inflow of patients and you weren't expecting it, obviously we worry about, you know, we normally don't feel it until it actually there.
Um, so when it happened, we had to reconfigure that entire business support teams, tech teams, doctor forces, quality controls, because a huge part of our work went into the clinic. And the app was recent, very recent. So we hadn't gotten full force into the app yet, but it was, so it was so surprising that he made the app free.
So the day we made a free the next day, our clinic closed down because of the lockdown. So we knew that our clinics will work for another two, three months until the log down was [00:30:00] over. So in a matter of one day, my entire team shifted their focus from the clinics and the health education to the app. And they're all like venting to a rapid door, reverse lenses company.
I think I'm really proud of my team for pulling this off because in a day we were able to like make procedures, quality controls, aligned doctors, aligned tech team, aligned support staff. We also have a 24 seven helpline for the Abby. We're able to recruit more people for it. And it just happened in a matter of day or two.
And now when you talk about, and I, Donald Lee meetings, when you talk about the app, it seems like something we're doing for years. It's not like something you've just known six months back in one month back, we've gotten such a patience. I think for the first 15, 20 days, it was pretty hectic, but now it's become a part of our usual operations, um, which is great to see.
Alvin: Oh, well, so it's basically like you almost reconfigure the whole structure of the company within this about two weeks to two weeks or so. So yeah, again, tell us a bit more about how you did that. Like how you prioritize the different [00:31:00] things to work on and how you redeploy that your team members to work on that.
Sara: I think the idea stuck to us when we heard that the lockdown was going to happen and we got an opportunity to work with the government. And we took on this opportunity because we knew that it would be a real game changer for us. Um, I still remember when I put down the phone with the government official, I told my team that we will be making a free for the next three months.
And, uh, it's going to be promoted by the government and the government officials. And I think for my team, it was just a Testament of how hard we had worked for the last three years. And making sure that telemedicine does come in Pakistan. Because Domine, usually don't really partner with startups that evidently in the country.
So it was a huge opportunity. And thank you to the digital box on you for doing that. But it also knew that if you don't deliver, it's going to create a very bad image for all telemedicine companies in Pakistan for ourselves, obviously, but also generally for telemedicine. So I sat my team together [00:32:00] and I said that, see, it's a bad time for the clinics because they won't be able to work.
They're still going to support them. They're going to support the clinical staff in data salaries, but we, as a core team now need to focus on the product that we have that will really help people. So, yes, it's good for the business if the app grows, but it's also good for the community. If people have a doctor during lockdown to actually talk to someone for physical issues, COVID-19 issues as well as mental health issues.
So I think my whole team kind of realized the importance and the urgency of the matter. Um, so we, so the first thing that we do is we figured out our finances because how we make money on the app is then we take money for consultation on the advocate, 50% of the doctor, that's how the doctor owns revenue.
But in this case, we were making the app free. So the doctor couldn't earn that 2% anymore. So we would give them a stipend averaged out on the number of consultations that they were doing a month. Um, we hired some doctors on a stipend and some, we did an award entry. This is. So that's the first of that, that we did.
And we [00:33:00] figured out if we had enough cash flows to manage this extra burden of doctors, then we knew that we had to Anthem our technology. So we got increased service support from our tech partners. We increased our tech support team. Um, the increase, the call center team. Once all of this is done, I think it was the day before the log down.
I think I told my company that. Um, the need to do this perfectly because we don't do this. If this is not a time that telemedicine can Excel in Pakistan, there won't be another opportunity to do it. So we really need to give it our best. And I think my team has worked around 16 to 18 hours a day to make sure that everything is streamlined.
All the doctors and patients are having a good experience. Um, there are team members that don't sleep the entire night, making sure that the app is up and running this team for like two or three hour nap schedule. And I think it's all a team effort coming together, uh, all 16, 17 of us to make sure that the app works with quality.
It's not just the app is working as a tech platform. It's also the [00:34:00] quality of consultations that we provide. I think when the reviews come in, my positive testimonials come in and the doctors and the patient appreciated when other corporate partners came to support the app. I think the motivation just kept on burden.
And then there were so many opportunities to work with the government who are for the corporate partners to create corporate partnerships. It's just the motivation and the virtual walk more kept increasing day by day. And that's what got us here.
Alvin: Yeah. I can see, like you got, you got very excited as you started talking about this is something, something you're very proud off.
Like having skill basically scaled 10 times over this short period of time and then like revamping the whole business. So you mentioned your, your walking of a tech Butner. To build out the mobile app. So, um, and then, and then you also, you have to manage cash flows. You have to manage cash right now. Are you funded by investors or are you like already working [00:35:00] off cash?
So you are like cashflow positive. You're reinvesting the money from the cash flows back into the business.
Sara: Yeah. So we knock, ask the positive. You raised our seed investment in 2018, we are looking for, to raise our pre CDs around a $1 million. You've done announced 60% of it. And because of the COVID-19 issue, we were facing a delay in the rest of it.
So we're looking for investors to fund the rest of the 30, 40% that is left. Um, and of course there conversation going on, lose existing investors. Um, so they are looking for investment, but, um, we do make revenue from our clinics, from my health education, from our app prior to COVID-19. So we knew that we had enough cash results to last us three months, four months.
And we could take a leap of faith that we'll be able to finalize our investment drowned or adding some support for the company, or, uh, make sure that, you know, we are earning from our corporate partnerships to make sure that we able to pay expenses. So we did that due diligence [00:36:00] before we made the athlete.
So hopefully we won't be able to, we won't be running into cashflow issues for the next three months and we will do our best to, you know, secure funding, uh, or the investment in that period. We need to get cashflow positive in 2021.
Alvin: Okay. But it makes sense. I think like right now, right now telling medicine is a very popular investment thesis for a lot of VCs.
Are there any way in Singapore? A few telemedicine. And so I've just, just close the around, like in the middle of the crisis just a few weeks ago. Uh, so I don't know about Pakistan, the investment I made in Pakistan, but although on across the board, VC investments have been falling. So some VCs will still say they're open for business, but generally the data's coming in that time sheets are getting withdrawn and so on.
I think Danny medicines still as a good, uh, as a good prospect, given the current situation. Like it makes sense for investors. We invest in [00:37:00] it. And right now, right now, I, uh, are you the main player in telemedicine in Pakistan?
Sara: Sorry, I missed the question.
Alvin: So are you like one of the main players who else is doing telemedicine in Pakistan or, or you're, you're one of the first few.
Sara: So we are one of the first few, but there are other players right now there three or four companies we're doing telemedicine, the app. Um, they have the app and they're doing tele medicine, but I think how we are leading different from them is if we have a vertical solution for the community. So we do sustainability clinics visually, no other company does embark assign.
We also provide instant consultation, 24 seven. So you can get connected to a doctor on an app and lives in a minute. But just something that now the other apps offer and it's also 24 seven access to GPS specialists and meant to then the specialist. Um, so it's just the, um, uh, it's just the accessibility factor, um, which, [00:38:00] which makes us different from the competition that is out there.
Alvin: And
Sara: generally daily medicine, uh, environment has increased in the last two years.
Alvin: And like the Punisher of the government must also. It also gives you a big boost in credibility compared to some of your competitors, which don't have that.
Sara: Yes. It's just because we've done X thoughts, right? I mean, obviously the government, because it's a 200 million people population and it's a huge population of the fifth largest.
Um, so. It one telemedicine company can not make sure that you're covering the entire population. So they need more partners to come and work. But I think having the first mile wide one page, it also sets the bar high for others who come in, right. They'll always have a standard that they have to meet. So that's something that gives me a good view.
Alvin: Okay. So we are close to ending our interview. So I'll just finish off with a few more questions before we go to the quick fire questions. So. What [00:39:00] are your plans for the rest of 2020? I, or, sorry, your video froze. Can you show me? Yes. Okay. Okay. Okay. Okay. So, so what, what are your plans for the rest of 2020?
I realize it's quite uncertain now, but so your main goal is to keep scaling up the mobile app. So for the next three months, it will still be free. And then as the situation is clearer, you plan to start charging for it. And right now you're in the charging for the corporate plan still.
Sara: Yeah. So I think the, the, the idea for the next six months is how can we move the app back from the free model?
Um, to, uh, just, just one second. Okay.
Alvin: Yeah, no problem. We can, we can do everything.
Sara: Because, you know, you're at home, so people are walking in and out of the house,
Alvin: um,
Sara: in and out of the, in and out of it. Yeah. Um, so I think, [00:40:00] um, for the next three months, our focus will be, how will we shift from a free model, into a paid model?
How can we make sure that we're still having some subsidized costs for COVID-19 patients? And it still stays in DocuSign if God forbid associates. Um, for our corporate plans, how can we ensure more corporates are coming to the platform, more corporates are buying the binder, the corporate packages, and they're creating enough cash flows through that.
How are we opening the clinics again and scaling the clinics as the plan? Because we usually open new clinics. We go by 10 clinics every year. And the usual timeline to do it is to August, September. So having making sure that we're still doing it. Um, but the essential idea is how are we working as a company to make sure that all the scale that is happening, um, they're are able to, um, be able to create quality controls and checks around it so that we know that we're scaling, um, as a good company, as an efficient company and efficient operation.
So I think more next six months would be a focus [00:41:00] that every new vertical that we are creating should be sustainable. Shouldn't have all the quality controls in check so that when we scale from here, we don't have a problem in replicating the Morgan, um, in different, in different companies or different markets or different regions.
So I think that's something that we're focusing on for this year.
Alvin: Okay. Of thing talking to you, Sarah. So let's wrap up here with some quick fire questions. So I'll just ask like a short question and you just come say whatever comes to your mind. So what's one book. Well, what's one book that you learn a lot from, um, in the process of building your business.
Like it can be a business book or even on this business book.
Sara: Yeah. Um, so there's a book by Simon acumen fellow, and there's a book by, uh, Jacqueline. Who's the founder of the acumen fund. Uh, it's called the blue sweater and it's, it's my favorite book. It talks about social impact and how she started. And I think that because acumen fellowship came in a point of my time and I was having a very [00:42:00] difficult time in navigating my own personally struggled with being a social entrepreneur.
So I think it really helped me figure out a lot of things. Um, so that's one of my favorite,
Alvin: the blue sweater. Yes. Okay. Okay. Oh yeah. We can put that in the show notes. So w who's one, one other founder of a business that you think it can be more than one, if you can think of more. So who was some other founders that you think are doing interesting things?
It can be like a fellow social entrepreneur or anything else.
Sara: I think very, I'm very inspired by this. There's a couple of Pakistani founders, Pakistani found a couple, uh who've who launched a company called mofo and other create, uh, shoes called atoms. Um, and, and I'm, I'm really inspired by their journey because they started from humble backgrounds.
They literally learned everything on ground. They made the shoes and they took them. We went to San Francisco, Boston Y Combinator, um, [00:43:00] refigured their business to create atoms and now refigured them called creating mass. So I just, and just very inspired by the journey of the Capri and how they dealt with a lot of societal challenges to come together, to do it, and how quickly they've adapted their business to different challenges.
And I think they, what they create is with a lot of love and passion and detailing and commitment, um, which is something that I keep on missing with some of the other founders. And the way that is focused on their work and what they want to do. So I think they are one of my favorite founders in Foxconn that I really, really look forward to.
Alvin: Yeah. I heard about them from the mom before, so she's also, she's still in contact with them and then she will, she chats with them on WhatsApp. So how many children do you have right now?
Sara: I have two children. I have a daughter who's seven years and I have a daughter, which is almost two years. Yeah.
Alvin: So how many hours of sleep do you get?
So I imagine that you have to wake up quite early in the morning sometimes with a young daughter.
[00:44:00] Sara: Yes, I have. I'm a morning person, so I can't, I can't stay up late at night. I can wake up at five in the morning, but I found steps. The 3:00 AM in the night. I'm a morning versus I get it on five, six hours of sleep on a good day.
Um, but then what I do is if I'm getting repeatedly less hours of sleep, then I just have this Monday, but I crashed. And then I do this nine, 10, 11 hours of sleep and I'm done with it. But yeah, I've, I've, I've been in practice for continuously waking up at night because of my daughter. So I'm generally cool with sleeping this Albert's
Alvin: what's one lesson you would give yourself at the, uh, what's one lesson you would tell yourself at the beginning of this whole entrepreneurship journey.
I think there
Sara: are two, uh, one is never signed a document before reading it. That's one because it's, it's, uh, it's made me do a very big mistake in my life. Um, the second doctor, the second mistake is always believe in yourself. I think we generally do question ourselves and a lot of [00:45:00] decisions that we're taking.
Uh, we go into imposter syndrome. Um, there are a lot of things that happen to founders at a mental level. Uh, but always believe in your gut instinct, always believe in yourself and your ability to take the right decision.
Alvin: All right. So never, never signed document before reading it and always believe in yourself.
So, yeah. Thanks a lot, Sarah. So I enjoy talking with you and hope we get you on in 2021. Again, the seeing how far you've come across.
-
Aaron grew up in the US, graduated from UC Berkley in CS where he joined an early stage startup in college before coming back to Singapore for National Service. He came back to Singapore and worked for larger corporations including Blackrock and GIC, Singapore's sovereign wealth fund, helping them deploy CRM software.
https://www.privyr.com/
Learn about:
- the time he almost wanted to ask his parents to legally disown him
- how helping adoption of new software across an existing large enterprise helped him pick up product management skills
- his failure to build a product people wanted in his first startup after coming out of BlackRock
- the problems a lot of salespeople have with existing CRM software
- how he's building and scaling Privyr to solve the problem of lead gen and customer management for people ranging from real estate salespeople to course creators and goat farmersTools
Megabase for quickly pulling and visualising data
SlackCEOs
Dave Bailey
Ken Singer
Will from Pencil[00:00:00] Alvin: Hey guys, welcome to Abyss Gazing where I interview entrepreneurs on how they are building their companies in a post COVID world. If you like the topic, but you can't stand the length, check out the website, abyssgazing.com that's a, B, Y, S, S, G, a, Z, I N, g.com where I post show notes and full transcripts of all the episodes.
Okay. Okay. Three, two, one. Welcome to Abyss Gazing. Joining us today is Aaron Lim, CEO, and cofounder of Privyr of what set base CRM system targeting. All salespeople will use WhatsApp as their main tool of communication for sales. Um, Aaron Allen, will tell, us today, how he got started into entrepreneurship, how he validated previous and what he's doing now in the current market.
Okay, so Aaron, are you ready to begin?
Aaron: Yes. Sounds great. Thanks for having me.
[00:01:00] Alvin: So, so Aaron, you're actually a singer boss citizen, but you grew up in the U S and then you, you finish your college degree now, before you even came back to surf, uh, your national service. So for those listeners out there who don't know about Singapore, All male citizens have to serve for two years in the army.
Uh, so Aaron actually finished his whole education in the U S before he came back to do that. So, Eric, can you tell us a bit about your experience growing up in the U S and, uh, and I saw that you actually did a startup during the final years of your degree. So can you tell us a bit about that and how you got started in entrepreneurship?
Aaron: Sure. Sure. Um, so I'm Singaporean born in Singapore. Um, but I moved to the U S to California when I was four years old, all my family there. So all my education was in California and under the U S education system. Uh, I think I [00:02:00] probably got lucky compared to a lot of the people in Singapore and Asia and that the education system there is a lot more lax.
So I had a lot more time to, you know, play with my friends, play video games, go skateboarding, play hockey. I do a lot of these other things. Um, I actually didn't get into startups or even computer science or coding until I went to university. Uh, so I went to Berkeley and I was doing engineering undeclared.
I thought I wanted to do mechanical engineering because I loved building stuff. And I really hadn't worked with computers much other than displaying a lot of video games at the time. Um, but after, you know, the first year or so, I just loved the computer science classes that I was taking. Um, I was, this is when, like, you know, Facebook was just getting big.
Um, a lot of these internet companies were just starting to get big. Uh, so I spent my summers one playing video games and hockey, but to also mixing in a web apps, Facebook apps, uh, all sorts of these small projects just to do stuff I wasn't thinking of it [00:03:00] from a career perspective. I didn't do any internships.
This was all like. Foreign to me, I wasn't very good at finding at the time, but I guess after doing a lot of these projects, people just started to notice, of course, with Silicon Valley just right there, and startups would reach out, um, they'd offer projects there, they try and hire so on and so forth. Uh, so I ended up getting involved in a startup, um, as part of the founding team in my junior to senior year.
Um, that was, uh, that eventually became the world's first enterprise app store. So. Essentially allowed you to build, uh, applications and deploy them to personal phones so that the company could control the data on personal phones, uh, while you would still have full control over your own privacy. So at the time it was like you have your company Blackberry for company ownership, you have your personal phone, um, and you can't run apps on it because of security, et cetera.
So this kind of enabled companies to, [00:04:00] to allow employees to use. The personal funds for work while, while retaining data privacy, uh, security, et cetera, without encroaching on, you know, the personal information of that employee. So that was my first, I guess, foray into entrepreneurship. Again, I had no idea what I was doing.
It was just, you know, opportunities that came up. I just liked building stuff. Um, and then after graduation, I had to come back to do national service, uh, as you mentioned, so there's huge change two years in the army. Um, disconnected from everything else. So that was a very, very large change change of pace.
Alvin: Did you like keep up your, keep up with your coding during the army? Like during the weekends, you, what, what are you doing, uh, doing during your breaks in the
Aaron: army? Sure, sure. Um, so the first few months, like during bootcamp during, uh, of opposite cut at school, I didn't really have much time to stay connected.
Um, and at that [00:05:00] time, uh, you know, smart phones weren't as advanced and we couldn't bring in phones with the camera anyway. So we're very limited. Um, towards the end, I was a trainer for reservists people. So like training them on, you know, weapons, handling, conducting ranges, et cetera. Um, and then the iPod touch, uh, the nice iPod touch without the camera came out.
So it got one of those so that I can play with it and the iPad. So that's when I got into kind of app development. And I just felt really simple apps that I can use for army related things, for planning, logistics, trainings, et cetera. Um, so that's how I kind of kept in touch with all the cutting elements, but only towards like the last six months or so.
I've made two years full time in army.
Alvin: Well, yeah, I remember. Okay. Uh, during my time there was always this, uh, quarterly. Thing you, you, you, you're supposed to suggest a new idea about some improvement you could make, uh, was that where you, you gave him the idea. Okay. I have this app. I can, we can use this for logistics [00:06:00] planning, and then you like formally submit any of your ideas for consideration or just something you kept for yourself.
Aaron: Yeah, those ones I just did for myself, because you know, like, I quite touches and iPads and like third party apps that weren't running on internal networks were weren't really that accepted by military, uh, you know, 10 plus years ago. Uh, so there was this more for personal use, but I did come up with random suggestions to improve things and like reduce energy bills and stuff.
Alvin: We sort of like, but for this first startup that you helped out in, did you get any equity from that? From the, um, from the work that you did for them?
Aaron: So there was equity, but what happened was, um, by the time I had to come back to do national service, um, I hadn't hit my best in cliff yet. So, uh, so we actually had an agreement that it would be kind of kept on hold.
Until I came back because it's not that I chose to left. I [00:07:00] actually tried a lot of things to get out of it. Um, I don't tell as many people that, but I, because I had spent so much time in the U S I was like, no, this is home. I am going to, uh, you know, I start started up. It's doing really, really well. We're just going to a series, a fundraise.
Um, and I wanted to stay there. So I tried every way to get out of doing national service. Uh, then included two, uh, two things. The first is I tried to get legally disowned from my family. If we've got the company lawyer to try and say, okay, well, if I'm no longer my parents' son and my parents are the reason I'm Singaporean, then I don't become Singapore.
And, and I don't need you to argue. Yeah. I mean, like I was, you know, 20 years old at the time they used, um, that didn't work. I'm still their son, thankfully. Uh, the second thing that I came to do is I tried to get married. So I asked for girls to marry me in the span of a week. Uh, one actually said yes. Um, but I realized that all that would allow me to stay in the U S um, that didn't solve anything with Singapore.
[00:08:00] Um, so at that time he said would just come back until maybe it is, uh, all my family's here at anyways. Let's not make any, uh, two drastic decisions. Uh, so I came back. But by the time that I finished national service, you know, like the fundraiser had gone to, it was on the verge of acquisition. So many things have changed, um, that it didn't really make as much sense for me to kind of go back and continue with that.
So decided to stay here in Asia and, uh, you know, see what other opportunities would lay out
Alvin: here. Yeah. So the first that you joined after you finished, and this was black frog, like what, what made you decide to go for them instead of doing another soda?
Aaron: Sure. Uh, yeah, so first choice was definitely just, okay.
Should I do a startup in Singapore or back in the U S or should I go work for a larger corporate? Um, so the U S had changed so much since I was there. I decided, you know, I hadn't really spent enough time in Asia. I thought that there was a lot of opportunity. My family was [00:09:00] here. Uh, so first decision.
Okay. Let's stay in Asia. Second one was in. Okay. Do I do a startup or do I go to a larger company? At that time, the scene out here wasn't as good. I didn't really have any connections. I didn't have any co-founders. Um, I wasn't as familiar with the culture and, and what would succeed or not. And just startups weren't as, uh, how I say supported back then, again, this was, uh, 10 years ago, so I decided to go to BlackRock.
Um, at the same time I chose a role that was a lot more kind of entrepreneurship, uh, entrepreneurial in nature. Um, so the role was kind of to launch and roll out their CRM system, uh, throughout Asia. So they had acquired a CRM as part of a company acquisition of a fund of hedge funds in Seattle. And they wanted to roll the system out globally.
Um, and I was brought in to kind of roll that out across Asia on all the offices. So it was, it was more of a exciting. [00:10:00] Um, you know, new and exciting role rather than sitting in front of a computer all day and doing the same thing day to day. Uh, so, so that's what attracted me to it, even though it is a much larger corporate and I had a fantastic time there.
That's where I learned all about CRMs. Uh, got to sit with the sales teams and, you know, every office traveling around Asia and really getting to know on the ground, what people value, how they're using it. Um, and you know how to roll a PR product apart.
Alvin: Oh, so it's all like what you were doing. There was like product deployment and an understanding from the ground feedback, how it actually helps the sales people with the daily activities across all these different, like run officer's around the Asia.
Aaron: Absolutely. So I mean the first thing, so I didn't create the product. I wasn't involved too much in the development. Uh, all that was done out of Seattle, but my job was to go around Asia first, kind of sell them on the concept. Train them up on it. Uh, and then give [00:11:00] support and sit with them. And how, how does each team, whether you're a secretary or managing director or sales or operations, how do you use the CRM?
How does it help you? Uh, what are the tips and tricks that you can use? And then of course, feed that back to, uh, headquarters in Seattle. Uh, you know, what the people needed in Japan versus Hong Kong versus Korea. Uh, how do we need to improve the product there? Uh, so it was, uh, it was more on launching and training and rolling out evangelizing.
Uh, but I found that that was a very crucial time for me to learn, you know, like what do actually people want? How do we communicate it? How do we synergize that with what the product feature is and roadmap are?
Alvin: So, so did they actually take in the feedback and make changes to the product in the end?
Because like a lot of these big organizations, they don't necessarily want to customize it for every single office. Do they.
Aaron: Yeah, well, I mean, um, there's always a balance, especially in a larger company. I would say that they were actually pretty good [00:12:00] at incorporating the feedback. Uh, most of the time it would be kind of regulatory issues.
For example, Japan has very strict laws on data sharing outside of the country. So those are easy things for me to kind of slip in and, and, uh, get prioritized quickly. Uh, everything else, we did a more formal prioritization. How many people want it? Um, is this something that goes across the firm or just for one office or one team?
Uh, but I would say generally they were pretty good at responding to the feedback.
Alvin: Oh, interesting. So, so actually this role, um, is not exactly a product manager role by involve all the same skills. As well, because you're you're, you are rolling on their brother. You're getting feedback. And then you are educating the audience about how we use the product.
So all of these are that there's quite a lot of overlap, like with the kind of product manager role. Then after a while you were doing this for about two years in BlackRock. Yep. [00:13:00] Then what made you leave to GIC?
Aaron: So actually after BlackRock, I went to do my second startup in Singapore. So what happened was, uh, after, you know, two plus years, basically we went from no one onboard the system to everyone in Asia, onboard the system and the role transition into a bit more of a support rather than, uh, pioneering and launching.
Um, so I took that as my cue to, okay. It looks like things are kind of in a steady state. Now let's move on to the next thing, a great company. Great culture. Um, I love my time there, but for me, I, uh, I like to always be changing and evolving. So I went out to do my second startup. That was details. It was kind of a create your own TripAdvisor for anything.
Uh, so I thought I realized that most of these aggregate rating sites for either, you know, TripAdvisor travel related or food related and every country had their own version of it. And I thought that if we could do to aggregate [00:14:00] reading sites, what WordPress did to, you know, general websites. People could create their own content much more, more easily.
So we can do, you know, the best podcast for entrepreneurs are you can do, you know, uh, great books for, um, you know, like vegetarians are or whatever it was. So just giving people a platform to create their own social circles and share information, uh, vote down, vote reviews, et cetera, et cetera. So I ran that for a few years, I think two to three years.
Um, did it work out eventually there was people using it, but I'd say the biggest problem that I had was I would be too afraid to commit to any one opportunity. I always wanted to keep things generic, uh, make it usable for everyone. Uh, as a result, a lot of people liked it, but very few people loved it.
Yeah. Um, and, and by the time that I kind of figured that out. I realized that I wouldn't need to essentially turn into a content creator into a blog or myself to show the power of my own [00:15:00] platform for a couple of years before getting other people onto it. Um, it didn't align as much with the culture in Singapore and Asia as well compared to the U S so I decided to move on and go to GAC, um, yeah, for my next corporate law.
Alvin: But, uh, how were you funding details? Was it on bootstrap?
Aaron: Yeah, so that was all bootstrapped. I was just using my own savings. It was a very, very low cost. Uh, I didn't pay myself and we had a small little office where I could touch all the walls. Um, and then one of my ex colleagues from black rock left to join me as well.
So we just had very, very low costs.
Alvin: Um, that was
Aaron: probably less than like a couple hundred dollars a month. So we were just paying that out of pocket.
Alvin: But may still have been painful because like you are watching your savings, like get law every month, like you had to eat and you still have to eat.
Aaron: Yeah.
[00:16:00] Yeah. Well, like cutting into the savings is fine, but just the opportunity costs of not having a big corporate salary. Yeah. Obviously it was her fault, but, uh, I mean at this stage, and even what I'm doing now, it's, uh, you know, the excitement and passion for creating something. And the potential for it to grow.
Yeah. I feel is much greater than, you know, getting, getting it paycheck
Alvin: every month. But so the problem, the problem you're trying to solve was basically you wanted to create a WordPress or like a Shopify for aggregators sites. So yes, but what we see now is that. A lot of these aggregator sites, um, the, the cross national boundaries anyway, like treatment visa, the visa.com.sg, and then.dot co.uk and so on.
Uh, so in hindsight, did you think that this was a problem, like in the end, all these big biggest sites that they would just expand out and going to local tat [00:17:00] trees anyway. So, so that's why there wasn't as much of a market for local aggregators to come up.
Aaron: Um, so that one, actually, it wasn't so much competition that wasn't an issue.
Um, and, and it will be the same thing for Privia, which we can talk about later as well. Um, the things like TripAdvisor and the large aggregate rating sites, um, those were the opposite for what we were targeting. So the TripAdvisor's is all consolidated. So everyone there's like a universal, uh, global opinion on, you know, this hotel or this, uh, Attraction, et cetera.
So it's less personalized. It's kind of one size fits all. And it's also only a travel related. So we weren't trying to compete with TripAdvisor. What we were trying to do is if someone wanted to create their own personal TripAdvisor, just for their own community or their own circle of friends, um, on any topic, it could be not troubled or [00:18:00] food-related that they'd be able to do that.
So it was much more of a software play than it was a content play. Like TripAdvisor is, um, so one common thing that trip advisor wouldn't be as good as doing is, uh, people kept asking, you know, when my friends would come to Singapore, Hey, I'm coming to Singapore or what should I do? What should I eat?
What should I see? And, um, having my own personal TripAdvisor, if it was for travel to send to them, and this is something that I did where here's the restaurants that I like. Here's the attractions that I would recommend to go see and the ratings and reviews aren't of random people that you've never met, but they're all within our circle of friends.
Um, those people, those types of, you know, more targeted niche use cases were quite popular and that's where we're targeting. So even if TripAdvisor was in every country, et cetera, uh, it didn't give, you know, the closed community, more high touch feel and more targeted, uh, you know, content. For the individual users.
Alvin: Oh, I [00:19:00] see. So, so like all it was like, is it offers users of virginity degree, like curator lists of the, um, like preferred options, like say my favorite Hawker center. So my favorite books, and then I can recommend my friends, but it is still hosted. Is it all hosted on details.com or?
Aaron: Yes. Oh,
Alvin: so you don't.
Aaron: Um, and, and you can of course add your own list and, and add your own photos and ratings, et cetera.
But your friends could then add to your list and they could add their own ratings so on and so forth. So, um, there was a community aspect, but it was more of your community rather than random people on the internet here.
Alvin: I see. So, so the problem in the end, you say the, the, the fundamental problem was that you, you tried to appeal to too many people instead of.
Niching down to one specific market. So,
Aaron: yes. So there was a lot of [00:20:00] opportunities, for example, in the wedding industry, wedding planners, wedding photographers, wedding videographers, bridal dresses, wedding venues, so on and so forth. There was a lot of demand on the hotel side, there was a lot of demand as well for the hotels to kind of white label it, to give their guests.
Um, there was a lot of these really specific things that we could have done and gotten revenue, gotten business out of it, but I at the time was adamant on, okay, let's just make this a platform play. Everyone can, uh, it can do everything for everyone. Let's not commit to any one industry. Um, which on paper.
Yes. It sounds like this gives you a much bigger market. But what I realized is that it's just gets watered down. It's too general. Uh, and no one cares enough, uh, if, if they don't think that it's very specific to their needs. Uh, so that was probably the big mistake. The big takeaway that I had from that whole situation.
Alvin: And now, like, it's very common, a lot of like the lean startup materials [00:21:00] or, um, I think even Paul Graham talks about Nestle, you should always say you should target. A smaller audience and then satisfy their needs before expanding out. But anyway, you learn that the hard way, just from your own experience.
And at the end, you realize that, uh, for, for prevail, you can, we can go onto that leader after you've talked about JC, but for prevail, you approach it quite in quite a different way, like targeting a specific niche first and then expanding out from there. It wasn't by any way, your next move was into GIC where you, you went back there and then you would, you were working on CRMs again.
Aaron: Yeah. So, so the broader role that I was hired there for was general knowledge management, right? Like in these larger corporations that have offices across the world that have many people working on similar things, but in different geographies, different, uh, verticals, et cetera. Uh, there's a lot of knowledge.
[00:22:00] That needs to be shared across the firm. Um, and there's no easy way to do that because a lot of times just in meetings, in phone calls, in emails, um, and there's no central way to access this, of course, taking into account material, nonpublic information, insider trading, all that stuff. There are permissions in place, uh, but every firm has issues with knowledge management.
Um, the bigger they are, and especially for an investment company is being able to share that knowledge when we're relevant. Um, and legally allowed is, is key. So my job was to see, how could we get more of this, uh, information shared and accessible to the people who needed it the most. Um, and how do we get people to use it?
Because it's very easy to say, Oh, we'll have one central system where everyone puts the data in and can pick it out. But getting people to actually use the systems is actually the hardest part. Software is easy to build. Behavior is incredibly hard to build. So you need to actually build the software [00:23:00] around the behavior.
Uh, and oftentimes the process around the software is just as important as the software itself. So that was my role at GAC. That one was more of a formal product manager role. Um, CRMs was one of the things that I did work on, but other knowledge sharing, um, uh, tools, discussion boards, uh, we, we created a proprietary discussion forum for people to kind of share and debate, uh, Items like elections or impact of certain global events on, on various
Alvin: stocks or interesting.
It was like an internal forum where people could both dreads and then pause the, uh, opinions about how this would affect the investment.
Aaron: Yeah. So, so it was basically anything related to knowledge and sharing that. So this discussion forum. Platforms their CRM platforms, uh, chats and chat bots, uh, for internal, uh, persistent chat was, was [00:24:00] under my purview as well.
Uh, so anything related to, how do we share information across the firm and how do we get people to engage and do that more? That was essentially the scope of the role.
Alvin: Yeah. I actually worked on a project for GAC. This was after your time. Uh, but, but yeah, so yeah, I remember like the security days actually very tight, the different levels of permission.
If you want to install a package, you have to get permission, get the proper permission and go through the process to install stuff. So it was all you all, this was a big consideration for your different. Products, you have to make sure that the right people have access to the right information and limit access from far more sensitive information and
Aaron: so on.
Absolutely. I mean like at GAC and any other investment company and most companies in the world, um, you know, data security data, privacy is extremely important. Because, uh, you know, any data [00:25:00] leaks is terrible and especially when you're dealing with investments and when you have company, a company with both private investors, private side investors and public market investors, um, you know, not breaching any regulations or laws is, is super important.
Um, and not allowing the systems to accidentally do that. It's also super important.
Alvin: Yeah. I actually heard that GIC is doing is, is doing quite relatively well compared to some I, the, um, financial institutions in terms of the technology anyway.
Aaron: Okay. Yeah. I mean, they have a great technology department. Uh, I won't talk too much about specifics. Um, about each company, but yeah, they had, they have a good company, good culture, et cetera. It's definitely, um, a priority for them. They brought in a CTO a couple of years ago, uh, to really emphasize their focus on [00:26:00] technology and innovation.
Alvin: Yeah. So anyway, um, you, you all get on this knowledge management role for GIC, and then you did. The different products within it, like the discussion forum, you mentioned chat bots, CRM like system. So
Aaron: yeah,
Alvin: after a few years in this role, you applied for ETF. So what, what was this, what was the trigger that led you to apply for
Aaron: ETF?
Um, so the trigger, I was actually quite happy at GAC. I wasn't looking for anything new, but what happened was entrepreneur first reached out. And, uh, you know, they sent me an email and the email was something ridiculous. Like start a startup now or something. I thought it was spent the first three, I just ignored.
And then on the fourth email, um, I clicked on it to kind of block the sender. But then when I looked at the email, I thought, Hey, this looks like a real person. So it was this [00:27:00] replied and that person replied back and said, Oh, you're a real person. Ah, so this is interesting because this was at a time, um, when I just got married, I just bought a house.
I had all these commitments in place. My wife wasn't working at the time. Um, and she was so happy because, you know, she was with me with, uh, through my second startup. She saw that, you know, the highs and lows of that. And she was so happy that, you know, we finally could settle down and start a family and do all those commitments.
And so I think it was two days after our wedding that I got this, uh, you know, fourth email from entrepreneur first and I, and I replied back to them and I had a chat with them. Then I met with them so on and so forth. And I thought that, okay, well, I do want to do a startup. It's always been in my blood.
Um, if I don't do it now, I'm definitely going to be kind of committed to, you know, working in a larger company. Cause if we're going to have kids and all these other commitments, um, so this is my [00:28:00] last chance. To, uh, to do it. So talk to her wife, learn more about ETF, um, and decided to make the jump and say, okay, this is, this is my last hurrah.
Um, before I have kids, uh, third time's a charm. Let's try it. Um, so you know, a couple of months later joined the third Singapore batch of entrepreneur first in Singapore. That's where I found my cofounder and starting to prepare
Alvin: wait. And your wife was okay with it. Like you, you had the discussion then she said like, just go
Aaron: for it.
Yeah. She's she's, she's very, very supportive and
Alvin: nice. So, so you join um, how many co-founders did you meet before you, you, you fall on your current
Aaron: co-founder. Yep. Uh, so I went to three different co-founders, uh, including, uh, my, my eventual, uh, final co-founder, [00:29:00] uh Chavonne who is now the cofounder of Privia.
Um, I went through each of the different profiles. So EOF has three different profiles at the time. One was a technical edge, which is kind of like a PhD and postdocs, et cetera. So I started with, uh, First of all founder, who had a PhD in three postdocs on natural language processing. And the idea was okay, I wanted to do something in CRM.
I knew how big of an opportunity it was, but no one wants to use it. No one wants to input the information. Everyone wants the information to be there, but no one wants to actually put it in it. So the idea was if we could do lots of magic and wizardry in natural language processing, we could automatically populate these systems.
So that was my first profounder. Um, that eventually didn't work out. Um, I went with my second cofounder who was completely on the domain side, so he had a yield double degree, Harvard business school. He had done a startup before, um, you know, worked in real [00:30:00] estate and private equity, uh, around the world.
Um, and that was great. But, uh, after two, two weeks, uh, he decided that, you know, uh, with his skill skillsets and his passions, he would probably be. A bit more suitable for a venture type of role rather than in the startup for now. So with four days left before the deadline of forming a team in EFI found my current cofounder Shabaam.
Um, I had met him before, but because our profiles were so similar, we're both kind of product edges, full stack developers that have done startups before. Um, it didn't seem like a good idea to pair up with someone who was so similar to myself was probably 80% overlap. In our skillsets, but it was kind of, you know, the last few days, uh, we, we chatted about our backgrounds and everything, and we realized that actually there was a lot of while there was a lot of overlap in skill sets.
There was a lot in common in terms of motivations and how we wanted to approach it. And while [00:31:00] my experience was more on the B2B side, enterprise side is experience just purely on the machine learning and consumer facing consumer apps type of side. So that allowed us to take. It's a brand new approach to this whole CRM relationship management thing for a new market, new audience that really took advantage of both of our backgrounds.
Alvin: So all along, you knew you wanted to do something in the CRM market, but you, you went through a few different iterations and then those didn't work out. And, but with Shivonne you, you, you had the new idea within this. Within the whole CRM market, which combined over your skill sets, how did you go about trying to validate this idea?
W w yeah.
Aaron: Yeah. So, so at first, um, uh, with my previous co-founders, you know, CRM typically is a B2B thing. It sold top down, you know, Salesforce sells to management management then tries to get the people to actually [00:32:00] use it. Um, so the issue is always, it's easy to sell a system. It's easy to build a system.
Um, but if no one uses a system, then there's no data. If there's no data, there's so insights, insights, and everyone's unhappy. The people that bought it are unhappy. So it was always focused around how do we make this easier for people to use so that management still can get their results. Now, when I paired up with Chevonne because his background was all consumer facing this whole concept of, uh, Oh, let's build something for management and do reporting, et cetera, was this foreign.
So he. His idea was just why don't we just build to the people, make right screw management, screw everyone else. Let's build something that the users actually want to use. And that's where his, uh, kind of insights and passions were. So we said, okay, well, let's, let's see, how do we do that? And of course, the B to B sales process is very different.
So he said, can we do much more of a consumer facing, uh, sales process [00:33:00] and an acquisition process? And can we do this for people who interface. With consumers rather than do B to B sales, because most CRMs are very B2B focused. Um, so we went on and spoke to a bunch of people. We spoke to real estate agents, insurance agents, private bankers, et cetera.
And I think there was a few things that were said that still stick in my mind. The first thing that we heard was. Look, if you build a system and you make it infinitely easy to use, I'm still not going to use it. Cause I don't get anything out of it. So it wasn't about making it easier. It was about delivering the value.
Uh, so delivering value rather than reducing costs. The second thing that we heard, and this was from the paleo bankers was if you build something and even if I like it, if the company owns it, I'm not going to use it. So they had more of a concern of this is my data. I want to own it. When I leave my company and go to the next private bank, I'm going to take my clients with me.
Um, this is [00:34:00] what they do right now. And why, you know, banks love to poach bankers from other companies cause they bring their networks with them. So something that enabled this bottoms up adoption that allowed people to own their own data and bring it with them. Um, so, so all of this pointed in the direction of occupancy, build it for the sales person.
Not only should we get them to use it, but we should get them to pay for it out of their own pockets so that they could be our only stake holder. We don't need to sell the management. We don't need to sell the corporates. We sell direct to the salesperson. They use us and we build the stuff that's useful to them.
Um, and that's eventually what ended up working, but it was kind of a newer concept. That I hadn't really explored previously. Oh,
Alvin: okay. That's quite interesting. So this, you knew you wanted to do something in CRM, then combine both of your skillsets. He was suggesting that you go directly to the end user to understand their problems instead of the [00:35:00] traditional B2B Salesforce CRM software, where you go through the management.
So it's like, do these interviews with the real estate agents, with the private bankers, you understood more. About their concerns. Like they want to own their own data and they want to like, uh, some, some of them don't I think like the real estate agents, historically haven't many UCRM, so they didn't see the value in it.
So there was one part of the whole value as well. So you're trying to, uh, on one hand, one big problem was just educating them on the value of a CRM, even providing the value in the first place. And the other part is. The data or you have the data. So if they pay for it themselves, they own the data. So the company doesn't have to come in.
So you, you learn all this from your customer interviews and then, uh, you carry on from there and you started to build out an initial
Aaron: MVP. Yup. Yup. So, so because both of us for full stack [00:36:00] developers and we had done startups before. Uh, our first reaction is let's just build something, right? And this may not be the best advice in general.
Obviously you should go out and validate and you know, do interviews and do all this stuff. But because both of us just wanted to build something. Um, we spent the first two days just building a prototype. So we had fresh prototype out within two days, we gave it to people. Um, and within I think the third week.
We had people that messaged us that were willing to pay. Um, so, so that was kind of like the validation rather than, uh, rather than, you know, talking. And would this be useful to you? Which of course we did. It was more on, okay, well here it is. Try it out. What do you think? And the moment that people said, great, how much do I need to pay?
I have a colleague that wants to use this too. How did they get onboard? That's when we really, uh, Realized that we were onto something. Oh, okay.
Alvin: So like immediately after you formed the team with Shivonne, you, you already started [00:37:00] building it, he started building up. Then you, you had the conversations, you showed them for that.
You let them try it for free and they volunteer to be, and introduce it to their friends. And that was where the conversations about owning the data and understanding the value came up when, when they actually saw it in practice. And these are the points that they Reeves.
Aaron: Yeah. So that was in parallel.
Know, the first two days we just spent building. Um, and then after that, you know, the next, you know, year we spent, you know, talking to customers, doing interviews, giving it to the people that it was relevant to, and just chatting with the people who, who weren't ready to use it right now. Um, and then, so all those insights were just synthesize across, you know, what were people seeing?
What people, what were people doing, uh, where people actually using it so on and so forth.
Alvin: Yeah, I guess that's the advantage of working with another developer. You can create the initial MVP much more quickly as well with the [00:38:00] MVP in front of them. The customers can also get a better idea of what they want or what they don't want and just give you the feedback.
So the feedback loop is a lot tighter also.
Aaron: Absolutely. What I realized is. Our bias. And this happened with my second startup. Our biases entrepreneurs is we want people to validate our ideas. We're looking for people to say yes and subconsciously we ask things in a way that make people see us and we give ourselves this false confidence that people actually want it.
Whereas in reality, we're asking you things that are so obvious that people want, um, that no one would ever say no to it. For example, if I said Elvin, uh, would you be interested in a platform that helped you triple your sales, who would say no to that? Everyone would say yes. Um, would you like to have, you know, better, more personalized engagements with your clients and new leads?
Yes. Everyone's gonna say yes to that. Uh, [00:39:00] so, so most of the time we're just so caught up in trying to prove ourselves, right. Um, that we don't actually listen or really find that the more important things which are, what are the things that people are concerned about, what are the things that would prevent them from using it?
Um, so just being more disciplined, around finding what are the barriers to it. And the second thing is just, just give them something, uh, you know, like give them a prototype, given a prototype, there's this concept. Uh, just test it out really, really quickly. I feel that any, any idea can be tested out within, uh, within a few days you don't need something super heavy.
Even if you don't develop, you can use PowerPoint or other things. But just really get to the meat of, well, people use this or not rather than trying to prove yourself, right? Yeah.
Alvin: There's this book that, yeah. And some other stuff, uh, people's recommend called the mom test. I only have hope that, so it's always about how to structure your conversation.
So you avoid falling into the trap of like asking leading questions, but [00:40:00] the additional point to that you're saying is that not only should you talk, but. Ideally, you can just show them something as early as possible. It doesn't have to be a full product, but even just like some slides or like basic design that helps them get a better sense of what you're talking about too.
Aaron: Absolutely. Absolutely. I mean, people, I think as founders, we get very, very caught up and very excited about the process of how something works. But in reality, your customers only care about what they get out at the end of the day and everything else is left for you to figure out. So for us, we started out with this very simple service where someone could request, you know, a personalized site and, you know, within a day we would send them back to it.
And I was just sitting there coding and HTML and putting that together myself. Now, whether it was me doing it manually [00:41:00] or an intern doing it or an AI doing it. The customer actually doesn't care. The customer just says, how long does it take? Does it look nice? And is it cheap? And if those three things are true, they really couldn't care less if it's an automated system or if someone's doing it manually or if it's an intern.
Um, so like taking those concepts away from the customer and just showing them what the output is, uh, you know, how much effort does it require for them? How long does it take? What's the quality like, uh, how much do they need to pay? Those are the things that really matter to the customer. They really couldn't care less about if it's, uh, if it's, you know, manual or automatic, et cetera, as long as the costs that speak to them is good.
Alvin: So, uh, your initial product was what was the nature of w w was it just like a basic, very basic system on how you can like enter customer details and the links like, uh, the stitch in a deal and so on. [00:42:00] Yeah.
Aaron: Like, so our initial product wasn't even so much on the CRM side. It was more on the content side where people could create an personalized version of a web page that they can send to a client.
They would just add the claims name in there and have their contact details. At the bottom and this was in the basis because by putting in the information, um, that's where we get the data for, you know, who the customer is and what their phone number is, et cetera, et cetera. So we didn't even have a lot of the CRM type of stuff, because what we realize is CRM is one of those things where it's like eating healthy.
Everyone knows that they should do it. Um, it's easy to convince people that, you know, it's useful, et cetera, but getting people to actually do it is really, really hard. Um, so we needed to focus on things. That had immediate productivity improvements that, you know, some, some, something someone is already doing now and it takes them, you know, extra minutes or X hours and you [00:43:00] do it in half the time or like one 10th of the time.
So the entire focus of is how can we make your life easier now let's not introduce new things that you're not doing. Let's see, what are you doing now? How do we make that easier? And how do we populate a CRM in the background? Um, by helping you do the things that you want to do faster because CRM, it's not something most people are familiar with, especially consumer facing people.
Um, they're not looking for a CRM, they don't want to hear about a CRM. Um, but they need one. So, so it's hard to sell them a CRM and we don't use CRM in most of our, uh, language and messaging, but we focus on, okay, what do we help you do? Oh, Connect with people in WhatsApp within five seconds, auto, personalized content and track PDFs, um, you know, uh, get instant alerts for your leads from Facebook or your website.
These are the things that, uh, you know, we sell and people just happen to have a CRM that comes with it. [00:44:00] Oh,
Alvin: so I know like the real estate agents here in Singapore, they will create like a custom site. Let's say my, you mentioned the other units and my, you mentioned matching ups for sale, then they'll create.
Their own custom site for that, they say like this, like the official sale or something, but they'll put in their own number and contact details at the end. So in the beginning, what you are doing is you are custom creating these kinds of sites for them with the contact details, but from, from the contact details of the leads who discovered them through SEO or whatever, then.
That is where you get the customer information and you automatically, there's something that you did beat dong. You automatically will get the leads from let's say Facebook messenger or WhatsApp or anything, and then connect that back to Privyr. And then from Privyr, the real estate agents can see all these leads are coming in and then they can just
Aaron: respond.
Yep. [00:45:00] That's exactly right. So we started with something that's really, really simple. Um, how do you send a personalized version of content to your, uh, your leads to your clients? And then after that it's okay. Well, if you've sent this already, um, how can you actually track? Are they interested when is a good time to follow up?
Um, and then after that, what we realized was a lot of people would be using this for lead generation. So they would take the premier content, which was meant to be sending to people that were already interested. And they would create clients called like dear buyer or prestigious client and stuff like that.
And they posted on Facebook and they're like run Google ads on it. And they were essentially using our system, you know, quote unquote, wrong. And a lot of times, if someone's using your system wrong, you should actually double down and see, okay, well, what are they trying to do? How do we enable it? In our case, it was a bit different because they were trying to be generation.
Everyone wants leads. Leads is something that is easy for people to understand. Whereas conversion is a bit harder. [00:46:00] Uh, and more effort, but everyone just wanted leads. So people kept asking us, get us leads, get us leads, even though that's not what the system was built for. And we explained, you know, hundreds of times, you know, this isn't to generate leads, it's to engage with leads that you already have, but people just kept trying to use it that way.
So we had decision, we had to decide, okay, do we go into the lead generation business or, um, or do we find a way to integrate with it? So going into lead generation was not something that we wanted to do for a few reasons. One was that lead generations, incredibly localized by industry, by geography. It's very, very competitive.
There's always market leaders in that place. Um, so we didn't want to get caught up in that. The second thing was if we were a CRM, which is meant to protect and store your lead details and your client details, it's in direct conflict of interest. If we were also selling the details. Uh, so, so we could sell you [00:47:00] leads or we can take care of your leads.
We couldn't do both. Uh, there was a conflict of interest, so we decided we will take care of your leads, who will help with the conversion once you get a lead, but we understand that you need leads. Uh, people told us, well, if I don't have leads, I don't have a use for period because I don't have any clients to engage with and follow up with.
So then we ask, okay, well, where do you get your leads from? Um, And they said I can I'm from property grew, which is a local, uh, property listing website. I get them from Facebook. I get them from my website. I get them from ABC. And we went one layer deep, deeper and said, okay, well, what happens when you get a lead from each of these sources?
Um, and we really, uh, struck big when they started talking about Facebook. Cause they said I run Facebook lead ads. Uh, it's really annoying because I, you know, I pay hundreds if not thousands of dollars. And I don't know when a lead has come in and I can't check on my phone. So once a day, I need to log into my laptop.
I need to download a CSV. I need to [00:48:00] open the CSV. I need to cross reference and see if any of these new, these are new. If they are new Amy, to then send them into my phone book, I need to wait for it to sync over to WhatsApp. I need to open WhatsApp. I need a restart WhatsApp two or three times because it takes time to sync.
Sometimes they need to restart my phone. Once the lead is there, I will type a message manually copy and paste. Ah, sometimes forget to change the name and then send them a message. And by the time I do all this, it's, you know, six to 18 hours later and he just doesn't respond to it. Um, so, so when they really broke down into that previous, this that I got my leads from Facebook and for a few weeks were like, okay, that does, that seems fine.
You get your leads from Facebook, but only when we said, show me how you get into these from Facebook. What do you do? Um, did this, uh, pain really come up? And we saw this time and again, and we said, fine, let's just build an integration to Facebook. Let's make it so that your lead immediately appears in Privyr.
We'll give you the alert. And from there, um, you know, everything is [00:49:00] easy. You don't need to copy and paste. You don't need to type, you don't need to do manual data entry. You don't even need to save to your phone book. So that's when it really unlocked for us. Uh, the first 18 months of the company were kind of just like understanding things, but our real big break.
Came from when we integrated with their lead source, because they no longer needed to remember how to use our system. They don't need to remember. They don't need to change their behavior. They just install the app and link it to their Facebook. It takes 15 seconds. And after that, they just put it in their pocket.
We will let them know when they have a new lead. Everyone wants to clip a new Liam notification and everything after that is kind of streamlined in, uh, into the process. Oh,
Alvin: interesting. So basically you went in the way of, uh, instead of, instead of going into the lead generation part, you helped to integrate from like, whatever source they're getting leads from.
And in this case, like the Facebook is the biggest one. You integrated [00:50:00] that directly with Privia and then that. That just like enhance their workflow a lot. They don't have to spend hours downloading going through comparing and seeing who's new and who's not. And then sending them the response that they could immediately see when the new lead comes in and the respond to them.
Uh, so like the, the lead will still be warm by the time they respond. And that there's a real value for them in the end.
Aaron: So what we found is once they start using them, Then the discover all the other features. Um, and, and that's kind of our hook or our ramp to get people in because you know, one of the common, uh, examples is painkillers versus, uh, health supplements or something like that.
Alvin: Vitamins
Aaron: or vitamins, uh, you know, vitamins obviously are good to prevent a lot of these health issues, but it's very hard to sell vitamins to people who think that they're fine, but the painkillers are the one that everyone wants to buy. Uh, and they have an urgent need for us. So the CRM in this [00:51:00] case was the vitamin, uh, people agree that they needed it.
Uh, they should be using it, but they're just not willing to invest, to learn and do these things now. Whereas the Facebook lead, um, issue and just leads in general, taking too long and, and, and being too troublesome to respond to quickly, that was a burning issue because they were spending money and they were wasting that money.
Um, and it was just a huge problem for them. So that was kind of our, uh, you know, pain killer that then led into the entire ecosystem of what premier does. So we actually built the main thing first and no one cared about it. Then we just found this little, um, you know, like a niche,
the dieting that unlock the entire value chain.
Alvin: So going back when earlier point you mentioned that. You want to worry about competition in the case of Privyr? So this is one of the reasons why, because you unlike Salesforce, okay. First of [00:52:00] all, the sales process that you use is completely different from the large scale B2B, CRM.
And second, like the whole problem that you're trying to solve is very different. You're not trying to solve the CRM problem. You're trying to solve. How to integrate lead generation directly into CRM. So you do have the CRM that's, uh, that's your core product, but the part that links it up with where they are getting the leads from that is the real pain for them.
And so, so right now, I guess like some of the, uh, like HubSpot, they do it to some extent you can integrate new leads on your site. From Intuit, like the HubSpot CRM, but in the keys of Privia you're doing it for like a very specific audience. Did they use what's app as the, I mean tool rather than like email marketing?
Aaron: Absolutely. Yeah. So, so on the surface and we get this all the time, the [00:53:00] conversations that we have with people who are not users. Conversations. We have people who are users that are completely different, the non-users and potential investors and your friends and family, et cetera, are always like, but this is just like Salesforce.
This is just like HubSpot. Um, all these features on paper exists in other systems and the CRMs are incredibly competitive and crowded market, largest software market in the world. Uh, you know, probably 10 new CRMs are launched a day. Um, so it seems insane to go into this space. Without, you know, clear defensibility or differentiator.
Um, but while on paper it looks similar. When we break down into who are we doing for them? What's the problem that we're solving. That one is very different. So if you look at all the other CRMs that are out there, um, yes, they do connect to lead generation sources. That's actually a common thing for them, but they are, uh, they differ in a few ways.
So first is what are they looking to [00:54:00] solve? Most CRMs are solving management, reporting issues. CRMs are there for management and the company to have all the information, to be able to, uh, you know, reduce risks. If someone leaves the company, or if someone is out sick, someone else can take over for them.
They want reporting and forecast, et cetera, on the sales process and how things are doing. And the salespeople are just there kind of as the hamsters on the wheel to input the data. So most serums are built around reporting. Um, premier is built for productivity inefficiency. And because of that, we don't do a lot of the reporting elements of it.
And most of the sales staff don't care because they don't need us to tell them how they're doing. They just want to get their job done in a faster one. So one is this okay? Is this for reporting or is this for productivity? The second one is. Are you built for B2B sales process or are you built for a, B to C sales process?
Most of your arms are built for B to B. And this means meetings. It means sales [00:55:00] funnels. It means emails. And a lot of these things, uh, dust pump is also another thing that's very, very common. Whereas for us, we are B to C, uh, and we are mobile first. So a lot of companies there. Yes, we're a mobile first mobile first, but the reality is that desktop heavy software with all the bells and whistles is the main product.
And the mobile app is just, you know, the small subset of functionality for people to be able to access some of this functionality in mobile. Whereas for us, it's the complete opposite mobile first WhatsApp first is the main thing. And now we're building this. Desktop in parallel to not replicate the functionality, but to have a different view of the information.
Um, so these are the, I guess the key dimensions that we differentiate. So, whereas, you know, CRM, relationship management, client management, uh, taking [00:56:00] care of your leads and sending followups is the same, who we're doing it for, how we're doing it. Um, all those things are completely, completely different.
Okay.
Alvin: So going back to an earlier point about the fundraising. So at this, within the ETF process, so you, you cleared, I see you say, I see Judy has some revenue coming in, people asking to pay for the products. So you already have revenue coming in, then you can, I see using this, then you have wants to prepare you for their demo day and they will.
They expect you to. You want to raise as much as possible. That was one of the KPIs, I think. But you, you actually, you, you are debating whether or not to even raise money that you were thinking. Maybe you could just continue on bootstrapping. So, so can you tell us a bit about your thought process at this time?
This was about between three to six months into, um,
Aaron: Privyr. Yup. Yup. So, um, so we started. [00:57:00] we formed the team in April, 2018. So this is just a few days before the investment committee, or I see a, once we pass that we pass it. I think we're less than a month old. And we're going into the demo day, uh, when we were about three and a half months old as a company.
So super early on still, we did have paying customers. Um, we did have a product, but everything was still very, very early stages. Um, so the thought process that we had was okay, do we need to raise money? Now, um, a lot of companies, of course, you know, they need to do research and development, really complex, deep tech things.
They need to build out a big team to do it. Uh, but for us, especially with my cofounder and I both being full stack developers, we realized actually we could just build this thing ourselves. Um, and then run off revenue. We were already generating, uh, you know, a small amount of revenue. There was the man to grow that relatively quickly.
We also had, uh, um, you know, commitments. And [00:58:00] inquiries from much larger organizations. Um, you know, in the several hundred thousand, I think the biggest one is $500,000, uh, to do, you know, much larger scale systems for them. So there's a lot of demand there. So we felt that actually we can just build this ourselves.
Um, the considerations that we had was did we want to spend, you know, six to nine months fundraising, full time when we could to raise the $10 million? When we could just make a million dollars in revenue in that time without fundraising. Uh, so that obviously was attractive. Let's not waste the time trying to try to sing and dance the people just to get money, to build a business when we can just build the business in the same amount of tape.
The second thing that we wanted to see was if we bootstrapped, would we have more control over? If we raise money, a lot of people. Look at fundraising, especially from venture capital as kind of losing control of the company. Uh, so how I [00:59:00] looked at it was I broke this down into two different things. One is view mean losing control in terms of equity, given, you know, 10, 20, 30% of your company away to someone else, or do you value control in terms of day to day decision making?
And what I realized a lot of people, including ourselves are fine to give some equity away. That's fine. Um, But losing day to day decision making, um, and, and not being able to build your vision early on was, uh, was something that most people are not comfortable with. And what we realized was, uh, and this is when we were kind of deciding between, should we kind of bootstrap or take angel money versus, uh, versus take venture capital money was if we were to bootstrap and we were to take these large, uh, you know, contracts and agreements.
The clients would control us a lot more than the investors, because the clients had very clear instructions over what they wanted to [01:00:00] build. And that deviated from what we wanted to build, what we were essentially doing consulting work, which is fine, it pays the bills, but we wouldn't be able to build the privy vision, uh, without, uh, you know, a lot of external sources coming in and putting in requirements, et cetera.
So we decided to take VC money so that we would have more control actually over how we built it out. And we could use that money to kind of turn down a lot of these starch contracts and focus on building out what we wanted rather than being forced to build what someone else wanted.
Alvin: So that was the main reason why in the end you went for VC money.
Aaron: Yeah. Well, and we got really lucky. We were able to close in less than a month. Um, So, uh, so we got to get around that whole, you know, spending nine months or a year fundraising.
Alvin: Yeah. So I only, if you want to tell this story, but [01:01:00] initially, initially you only asked for 400 key, uh, during demo day. Was that, was it a point when you were still thinking, like, whether you should take angel money or VC money and, uh, in the end with more interest coming in, you went for VC funding.
Aaron: Yeah, absolutely. So what we decided was, okay, let's just go out and race, see that we're raising something. Well, we don't have to raise, but we'll just, uh, you know, go up there and give a number, uh, just so that, uh, you know, there'd be a point for us to pitch. Otherwise, if we went up there to pitch and said, we weren't raising that kind of, uh, uh, besides for everyone involved.
So we said, okay, let's pick a number that we're comfortable raising quickly. And we knew that VCs and we told this to VCs, VCs would literally ask us during the meetings, why are you raising $450,000? This is a weird number. And our Uplay was [01:02:00] usually the VCs have a minimum of $500,000. So $450,000. It's just under the minimum that a VC would invest.
And the reason that we did it was just to send a message that we don't want to rely on VC funding. We don't want to rely on the six to nine months raise period. We're going to close very, very quickly. Um, even if we just do it through angels, et cetera. So we just chose this number that was just underneath the threshold, just to kind of make a point of, we're not gonna rely on VCs.
We don't have to go the VC route. Um, but what happened. And, um, this is quite common for a lot of the entrepreneur companies, is that once people are interested, bill, then ask you to do a larger race. So from four 50, we had that committed, uh, very, very quickly. And then after that, the VCs will then say, okay, well, can you do a financial model based on a $600,000 raise?
Can you do it based on [01:03:00] an $800,000, he would be sort a $1 million release. And I think after, after. A certain point. We just said, look, if we raise any more than this amount, it's just going to sit in our bank. I'm tired of doing financial models. Uh, but we ended up doing a much larger round. We raised, uh, uh, you know, a million dollars.
We had actually 3.8 commitments. Uh, but we cut that down to $1 million just so that we can get the right people in.
Alvin: Over, even after you raised you, you mentioned it in one month, which is quite a short period of time for agents started by an agent start, uh, especially in Southeast Asia and in Singapore.
And, but for like you mentioned, the whole product development, like understanding and problems still talk usually from beginning to end, about 18 months, we do that together. The idea of like the lead generation problem and how you integrate with that. So this was still an ongoing process while even after you raised the money, w what, [01:04:00] what do you use the money for?
Like, after you raised it?
Aaron: Yeah. So, so the, the first year in 2018, since we founded it in April through December, uh, it was only just my cofounder. Shababa myself, just the two of us, uh, you know, building and getting people on board, doing trainings, uh, just running the company, uh, all of last year, all of 2019 was this okay.
Let's build out the team, build out the product. Uh, the mobile app only came out, uh, you know, over a year. After we started the company, which is insane because previously there's no app, there's no push notifications. There's no phone book integration. Um, there's no icon for people to click on, which is like a huge issue in the earlier stages.
So it was just building out the team, building out the product, um, just iterating, seeing how people were using it. We had a few false starts where a lot of people were using it for a different reason. Uh, what they were buying and what we were selling were completely [01:05:00] different things. Uh, so it took us awhile, most of 2019 to figure that out.
Uh, and only towards the end, really in the last few months, have we kind of, uh, I wouldn't say we've found product market fit yet. That's always a journey, but we're at a stage where everyone's buying the same thing. Everyone's saying the same things. Uh, people are really happy. Uh, previously we had a hundred people asking for 150 different things.
Now we have a hundred people asking us for three things. Um, so, so we're at that stage now where, um, again, all the work's not done, but, uh, we, we have a much, much clearer picture of what are we doing for who are we doing? It's uh, what's the problem that we're solving and yeah, it took 18 months to get to that stage even after fundraising.
So
Alvin: I think 18 months is quite, it's quite a standard, like from beginning to like discovering you have an a hundred percent found product market fit yet, but you're almost [01:06:00] there. 18 months is quite a good process. Even a, I don't have all of him, but super human by, um, uh, ruffle RO Vora. He was. Like from beginning from launch the building initial team to getting some product market fit again, against first indication of product market fit.
It took him I think, three years or something. So sort of 18 months, you haven't quite gotten there, but y'all on the way there. I think that's a good achievement, but so like at the beginning of 2020, then covert hit. So, how did it affect you, but because like most of your clients before this were in the real estate industry, um, how, how has that affected you so far?
Aaron: Yeah. So what happened was, uh, most of 2019 when we're kind of figuring out what we're doing, that was all in real estate and it's not that we, we went out to build a real estate [01:07:00] specific problem. Um, we knew that our, uh, our clients. And our persona was, you know, B to C consumer facing salespeople with pain center, high commission that had personal relationships and followups with their clients.
And therefore we said, okay, we can just wrap up all this jargon with a salesperson that uses WhatsApp and real estate was a very attractive industry because one in Singapore is extremely consolidated. 80% of the real estate agents are within the same, you know, four to five companies. And they have incredibly high incentives and commissions, so they're willing to spend, um, so what actually happened was the real estate people just really like what we were doing.
And they just kept calling us to come and do trainings for their team, for their project, so on and so forth. So we never had, we didn't spend a single dollar on sales and marketing for the first 18 months. Everything was just inbound. And we said, fine, this just front of this, this people are so interested.
Let's [01:08:00] do it. What we realized was again, what they were buying and what we're selling, um, was a bit misaligned, uh, uh, uh, throughout most of last year. And then we said, okay, let's, uh, instead of trying to find someone buy real estate, let's go real deep and see what are the behaviors that they're doing. And then that's when we discovered, okay, if you're running Facebook, lead ads specifically, and they're getting between.
Five to two 50 leads a month. And when you get a lead, what you want to do is immediately call or message them and then follow up a couple of days later, we really like narrow down from sales person that uses WhatsApp, which is like huge, huge market. Sounds nice into, okay. What traits can we define where we have higher than 50% chance of converting someone that takes all those boxes?
And, um, and once we narrowed that down, we realized, actually this is not specific to real estate. Let's just open it up. And then [01:09:00] November, 2019, um, almost six months ago, we opened it up, uh, to, you know, public, anyone can create an account. It was invite only for the first 18 months we opened it up. And then we started seeing people all around the world, uh, in really interesting and, and, uh, You know, random industries, if you may, uh, start using courier.
Uh, so, so I can talk a lot about that type of persona and all the interesting use cases, but once COVID-19 hit, uh, we were in a position where actually we didn't have to do in person trainings. People could just click and try it out themselves. Um, we were tied and we still are quite a bit to the marketing budgets.
So what would happen is. The man would decrease at the top of the funnel. And some people would leave because they just stopped running ads and they weren't S they stopped looking at, uh, you know, solutions to run their businesses. Cause they weren't running their business anymore, but [01:10:00] we've still been able to, uh, to grow, uh, I'll be at a slightly slower pace, um, and, and get new customers on board.
And we're actually starting to see things pick up now, especially in the countries where, uh, locked down from the restrictions are being lifted.
Alvin: So what, what kinds of industries, uh, uh, less impacted by like, you're still seeing new new customers coming in from, but because like, I imagine real estate would be quite limited.
W w um, being unable to go and visit the site, that's a huge limitation for them, unless they have some other solution like VR or something.
Aaron: Yep. Yep. So, so, uh, I'll start with. You know, who are the customers or what are the industries that came in that, uh, that were obvious and the non obvious ones, and then how each, uh, were impacted.
So right now we're the stage where we're industry agnostic. It really doesn't matter where you're from, [01:11:00] as long as you're getting beads online and you're trying to contact the leads and manage those leads, um, you know, throughout the process. So real estate of course, is a very large, uh, industry that does it.
Insurance is another one. What we've found is coaches and trainers are also a big one that can teach anything from digital marketing to math, to, uh, you know, calligraphy and art, so on and so forth. Um, those are really popular auto sales, so on and so forth. I think those are like fairly obvious things that people would think about.
Um, and then into the long tail of, uh, you know, like wedding planners, wedding, photographers, and videographers, um, we have a magician. Um, we have, uh, you know, like goat farms we have, uh, uh, nowadays, well, we're seeing a bit more of is, uh, people who operate remotely. So, uh, we have cell phone repair people in India, uh, and that one, yes, you need to [01:12:00] travel out and go out and about, but what we're seeing is now, uh, there's more people doing like astrology and kind of fortune telling types of things that you can do remotely.
These people we had never imagined would be previous subscribers. But again, when you take out this industry specific thing and are they generating leads online and do they want to reach out and manage that relationship? Uh, as soon as possible and as easily as possible. A lot of these, uh, industries, uh, that can be done virtually and remotely are coming into, into play.
And even for real estate, we're still getting a lot of subscribers that are coming in and, uh, you know, in certain countries where they're less impacted or just to. Get the lead first and create that relationship such that when the lockdown is restricted, you already have these people ready to go. So we're seeing actually a big uptick in, in that sort of activity because people are starting to prepare for the lockdowns being lifted and everyone just want to get out of the house and buy and spend money.
Um, so, [01:13:00] so people are capitalizing on that. So actually the last few days in the last few weeks have been kind of our highest engagement. And most activity that we've had in the history of the company,
Alvin: or very interesting. So basically right now, uh, your industry agnostic and new even geography and knots that you're selling over the world across all these different industries is usually a relatively high ticket size for B2C purchase.
So. Not necessarily like groceries or something, but I think like astrology, they can charge even like a hundred dollars or something around there. So it's relatively high ticket and all these cultures, cultures about the same price point, I think so. So they have like a list of clients, recurring clients, and then they want to charge.
They want to keep track of all the students, clients, and so on. And they would use Privyr for that. They are getting leads. From Facebook or their own site and previous integrating [01:14:00] that. So the main criteria is a B to B UC facing customer. So he can be various agents, insurance agents, or even like the farmers, if they sell directly to consumers and they manage things through mobile, that's their main point of contact.
So these are the two main criteria. Yeah.
Aaron: Yeah. I mean, essentially, if we just say, if you get these online and your first reaction is, let me call them and WhatsApp them. Um, that's just an easy way to, uh, to like ask two questions and, and, and, and qualify someone easily. Because a lot of times the people themselves may not consider themselves as salespeople.
They may not understand, you know, B to C what does that actually mean? Um, but if you just ask them. Do you get these on me? Yes. Great. Um, what do you do when you get a lead? What's the first thing that you want to do? And they're like, I want to call them or I want to WhatsApp on, um, if that's true, [01:15:00] then, then, then, then we're all set.
So really just translating that into something that they resonate with. So how are
Alvin: you getting all these leads? You, you start your P marketing can beans around this time and this where you're getting the news from. Okay.
Aaron: So there's a few things. One we do, uh, you know, we, we just started with Facebook and Google ads just to see how that would work.
Um, so that's, that's giving us a good stream of people coming in. Um, we're also seeing now there's a lot of opportunities to partner up. So, uh, one of the more interesting things is, uh, social media and digital marketing trainers and agencies. So these people are awesome for us because one, they use our service to fill up their courses themselves.
And the second thing is when they run courses, um, they teach people how to do digital marketing and those people that they teach need something like Privyr to manage the beats that are happening and what we've seen. And we've seen this dozens of times across [01:16:00] dozens of countries, even the coaches have an issue because they teach.
The students are, oftentimes they teach correctly, but the students don't know what to do with the lead. And because a student doesn't know what to do with the B, they co they ended up calling the leader messaging to be three days later and they get terrible conversion rates. And then the students end up blaming the trainers for teaching, you know, crap, if I may.
Um, whereas if the students just have a system that helped them with it, that guided them through and made it easy for them. Then they would get extremely good ROI. We've seen a lot of people get anywhere from three to 10 X improvement, um, in the conversion rates, uh, which makes the student happier. It makes the course that the trainer is giving happier.
Uh, and everyone's just happier. So these digital marketer, uh, trainers and agencies, and with the agency, the same thing, except they're giving it to their clients rather than their students. But these are [01:17:00] extremely synergistic because, uh, not only are they users themselves, but they're in the business of creating more users for us and educating those users.
And it's just like an incredibly connected and synergistic ecosystem for us. So we're seeing that as a very, very big growth opportunity. Uh, not only in terms of expanding reach, but because these trainers will be teaching students in their local languages. Yes. Specific to the industries, so on and so forth all around the world.
And that allows us to have presence and, uh, you know, onboarding without having a direct sell staff ourselves.
Alvin: So how are you thinking about your pricing? Because different geographies have very different budgets. Do you, do you, does it vary according to a location within the pricing?
Aaron: Yeah, we do do have some are.
Price variations based on certain countries, certain developing countries will, will be, um, you know, [01:18:00] a bit cheaper, especially because it's cheaper for us to acquire in that country as well. For most of the country. Uh, most of the countries it's just a fixed 22 us dollars, 220 U S us 22 U S dollars a month or totally 20 U S dollars a year.
Um, we haven't changed this pricing for, uh, a year, essentially. We will need to bump it up. What we're seeing is a lot of the developed countries. This is underpricing significantly, and we're actually running into issues, not just leaving money on the table, but people just don't trust us. We've literally had people that say, I don't trust you at this price point.
What's like, you must be selling our data. Um, um, and, and it's funny because I replied to them. I say, well, isn't it good that it's cheap and these customers, and it's not in their interest to say this, right? Like, Uh, it still fascinates me, but they say, look, if I brought you to McDonald's and there was a fish burger for 50 cents, [01:19:00] would you buy it?
And don't even talk about McDonald's. If it's a new, it's a new restaurant and they sell fish, you know, fish burgers are 50 cents. Would you buy it or would you be more comfortable if it was $5? Um, And so we realized that, you know, especially when we're dealing with client data, people are unsure. If it's too cheap, they get concerned that we may be selling their data or doing funny things with it.
We will need to adjust pricing at some stage, but we're not too worried about that right now. Uh, probably a good problem to have. And what we actually do is we describe all their people and, uh, so that if, if they started on a certain tier, uh, we'll let them keep that tier.
Alvin: No. Very interesting. And, but right now I don't have now would be the best time to raise prices because a lot of people are going to leave this crisis.
I mean, maybe you can maybe, I don't know, uh, if it were what, but you can see like limited pricing, limited time pricing at [01:20:00] this, what we are keeping our prices or still, uh, but after that we are going to resource something like that.
Aaron: Yeah, I haven't really increasing prices having different pricing tiers.
We will do that. There's many, many things that we need to do. Uh, it's just not our priority right now. Uh, it's not, it generates more revenue. Great. We can double prices. We double our revenue. That looks great. Um, but it's not, what's important to us right now. And our investors are a named as well. Right. It doesn't prove anything other than people are willing to pay for it.
It doesn't create more value. Yeah. Um, it doesn't, uh, you know, add more functionality or solve more problems for the user. So right now we're still in a phase where, you know, there's hundreds of things that we need to do, um, that we've validated that will add more value that will unlock new use cases that will allow teams to use it instead of just individuals that will allow all sorts of network effects to happen.
And for us dedicating the engineering resources to that, Ah, it's much, much more important than, uh, [01:21:00] you know, trying to get a few extra bucks out of the existing clients right now. Revenue optimization is a problem for later for us.
Alvin: So it was right now your main priority is still continuing on the, on the road to a product market fit.
Aaron: Yeah, absolutely.
Alvin: Okay. Okay. Thanks a lot errands or I think. Actually we ran past time. Uh, but I learned a lot. I, I, I like you all like very product and customer focus approach to validating and the problem, and then developing a solution. So let's just wrap up here with a few quick fire questions. I'll just ask like a very short question, like how, like what's your favorite business book or non-business book, and then there'll be questions like this.
And then we'll just do a few of these and wrap it up. Sure. Okay. So what's your, what's your favorite book business or otherwise?
Aaron: So I'm actually really bad at, uh, reading books, but I read a ton of medium articles, which I feel [01:22:00] are just as good. If not the YouTube, somewhere, his books are probably medium.
Like
Alvin: what were some articles that you remember of the Tommy over him?
Aaron: A lot of these startup, uh, articles, uh, there's this one author that I love, I think his David Bailey is kind of CEO, coach. Uh, he always has super relevant, uh, insights.
Alvin: OK. Interesting. Dave Bailey, we'll put that in the show notes then.
Uh, who's one C O that, you know, personally, who you think is doing was doing interesting things, um, can be a CTO. Yeah. Yep.
Aaron: yeah, sure. Um, uh, one of my, uh, good friends from my entrepreneur for single three batch will from pencil, uh, is one of my favorite guys. Um, we meet up every now and then, uh, we, we align a lot in terms of how we look at business and customers, et cetera. [01:23:00] Uh, and I really, really respected, uh, even before he started.
That's all. I think he's doing a great job right now. Okay.
Alvin: Um, and anyone else in like outside of the eff, uh, community
Aaron: art center that you have committed any? I actually don't know that many people in the startup scene locally, uh, but one person that I would say outside of, uh, my, my first CEO for the first startup 10, um, Ken singer, who's now a director of entrepreneurship at Berkeley at my school too.
Uh, he's someone that really earned my respect, uh, going in there. I was the director of engineering and he gave us everything, even though he was the CEO, he took the smallest office without any windows and just gave everything to the rest of us. Um, even when we were just like interns at that company.
Okay. So he's fantastic.
Alvin: Ken, Ken singer
Aaron: Kensington. Yes.
Alvin: How many hours of sleep you get every night?
Aaron: How has it been? [01:24:00] Oh man, I'd probably average five to six hours in the bed. Asleep is probably a bit less than that because I have customers pinging me, checking things on their phone all the time.
Alvin: Okay.
That's not too bad. Yeah. Yeah.
Aaron: Yeah. I consider myself lucky with that.
Alvin: What was some of your favorite tools you use while building your company? It can be like vias court or whatever idea you use or Lenasia soft piece of software. You
Aaron: use software, our Slack, definitely just to communicate with my team, everyone, like all the startups are using it.
It's just so easy to use. Uh, so, uh, So easy to just communicate with my team and get everyone on the same page. Um, in terms of other tools, I really love megabase. Uh, this is not something that I used before, but my cofounder Chavon installed it for me. Um, I learned a lot of [01:25:00] SQL and my BlackRock is so, I mean really deep into the data and, and coming out with all sorts of different reports and weights and look at it.
I've probably built like 200 or 300 different reports on base. Um, it's basically, you can just do a SQL. Um, and pull up the data and visualize it in different ways. So that's probably my favorite tool in the company other than our own tour. Of course,
Alvin: Privyr you actually use Privyr yourself to manage the leads as well.
Aaron: Oh, absolutely. Um, so, so we, we don't really do lead generation online, um, but it's just so much easier to keep in touch with, uh, you know, investors, customers, so on and so forth. So actually one story was, um, when sending out. The investor decks to people, um, you know, entrepreneur first advise us to not just send the raw PDF or send it through a link so that we can change and update, um, and control access at a later stage.
So we [01:26:00] decided let's just send our decks through Privyr because not only could we update it later. Uh, we could also then track which investors are interested. So this gave us a very unique advantage because we will know exactly when the investors would be opening it. How many times they've opened the deck, how long they spent looking at it.
We would know the exact moment when they're having the investment committee and seven different people open the deck at the same time, within a five minute window. And they're all looking at it now. Uh, so that, that actually helped us close things a lot quicker.
Alvin: We, Zoe was. It was a PDF holster on the previous site or, uh, how did you do how'd you do that?
Yeah,
Aaron: so we actually, so for PBS, there's a few ways that you can have content that's trackable, but everything will go through a link on a premiere on a, of your hosted domain for PDs, what you can do now, this is something we added in the middle of last year. You can just throw a PDF in and we'll convert it into images and then track it.
So this [01:27:00] is new. There's a lot of systems out there like. Dr standard ClearSlide, uh, so on and so forth that can do it. But our main thing is this, uh, integrating easily into your contact list and your phone books so that you could send a personalized copy in five seconds through WhatsApp. Oh,
Alvin: okay.
Interesting. So, um, last question. What what's one, one lesson you give to yourself at, uh, start off this whole entrepreneurship journey. Like if you have a goal, if you could go back in time. Yeah,
Aaron: I would say delight phase people. They can make five people love it. I mean, I know it's not new in terms of, you know, um, people say, you know, it's better to have five people love you, then a thousand people like you, but really going deep into that and seeing lists out 10 treats that seems so insanely targeted that there's maybe only five people in the world that Fitbit.
But of those five people, you have a hundred percent confidence [01:28:00] that they will love it. And until you're narrowed down that much, it's still too broad. So I would go back and give myself a lot clear guidelines around, you know, what does a few people loving it really really mean. Um, and just starting from there and, and, you know, the market, the growth trajectory, all that stuff will change over time.
You'll learn, you'll figure it out, but really starting out with. Who are the five people that will just use this everyday to just fall in love with it, um, that can't live without it and just get to those people. And, and, and don't worry about the next 10 or the next 50 or the next a hundred. I told those people are just absolutely above.
Alvin: Okay. All right. Thanks a lot, Aaron. So this was, um, uh, a great, uh, I learned a lot from this interview, so thanks for your time. Okay. And, uh, again, we'll see you in one yearns and see, see how previous doing then.
[01:29:00] Aaron: Great. Thanks so much, Alan. I had a great time as well.
Alvin: Okay. I'll start
recording.
-
Brice started his career helping football (soccer) clubs find sponsorships in Asia, then got into sustainability. He's running BizSu, where he helps sustainable products go-to-market and helps companies find sustainable solutions.
https://bizsu.co/
Learn:
- how he managed to get leading hotels to give him B2B deals on sustainable bottles
- how he plans to transition to B2C distribution with COVID-19
Books
Subtle art of not giving a fuckAlvin: [00:00:00] Hey guys, welcome to Abyss Gazing where I interview entrepreneurs on how they are building their companies in a post COVID world. If you like the topic, but you can't stand the length, check out the website, abyssgazing.com that's a, B, Y, S, S, G, a, Z, I N, g.com where I post show notes and full transcripts of all the episodes.
welcome to Abyss Gazing the podcast where we interview entrepreneurs about how they're navigating the current turbulent times. Joining me today is Brice Degeyter of BizSU where he helps companies be more sustainable and do good for the environment while developing business opportunities.
Brice, are you ready to begin?
Brice: Hi. thank you, having me before. thank you for having me here. I'm all good. Thank you. Yeah,
Alvin: no problem. Yeah, thanks for joining us today,
Brice: my, [00:01:00] yeah.
Alvin: So can you tell, I saw that you started off your career in sports in a few different roles, and then you went on to this company called central group in Thailand where there was more sustainable to you later.
Can you tell us a bit about how you made this transition from like sports to a sustainability related business?
Brice: yeah. I actually, I didn't, study, sustainability myself. I studied math, thanks to refinance. so it wasn't really, my, my, my, my field originally and, and I started a business when I was in Thailand five years ago. And so we were helping, basically football clubs to find sponsorship in Asia.
And. Well after, [00:02:00] after, more than a year, almost two years, the company found, we suddenly like really, in a motto of, of ours. we just lost our appliance and. Or, and all suppliers, because the King in Thailand guide died, at the time. And, so basically we, we, we lost the bid everything in the end.
Basically. What I realized at this moment, is that what I was doing was working in football. It was, it was good. I do this for, we, we had the feeling to helping a lot of people enjoying football more. however, I wanted to do something better for the community. I wanted to do something which is.
More important than this, which is more valuable. And so at that time, I, I, sorry. That's okay. [00:03:00] At that time, I, I, I then started to, to think about having my own business in sustainability. so I started with, No. With cameras. I started, to have a roll our window miner when it position with the minor room in sustainability.
and, so at the time I was, you got on the big sports store. And so it was still related to sports and somehow, and we were the first, the first of in Thailand to stop plastic bags. so that was a pretty, pretty good achievement. And, and then I wanted to do more than this. so then I moved to central group and I go to a major room.
In sustainability. and we stopped the plastic bags in, 10% of our stores. so knowing that the group, it's huge in Thailand, I was, there was actually [00:04:00] a pretty big thing for the country. and just a matter of days, all the competitors, did similar things. And a few weeks later, the government.
Fast alone to stop completely, plastic bags in, installs in time. And, so I was, it was pretty, pretty interesting to do, to do this. It was amazing actually.
Alvin: wait, before you carry on, like I think w what you said early on about the football sponsorship thing is very interesting. Like that was your first try at entrepreneurship.
And it didn't go well. But, like now thinking back, can you think of like the reasons why it didn't go so well and like how you do it differently now? Is it because you said the King, the King died then, it had an impact and they don't how, how, how did the King Steph affect the business directly?
[00:05:00] Brice: Well for one year, pretty much the business was down in, in Thailand at that time. It was really big thing. It was a really big thing. however, a lot of businesses, still. Still went down after the, during and after, after this period, after this morning. So, what it means is that we were not resilient enough at that time, because we just couldn't figure out how to, how to survive at this moment.
so it was also our mistake in a, in a certain way. we were now really easy to resilient enough. And basically, I think at this, at this moment myself, I wasn't, much prepared, you know, from many people. I would say most entrepreneurs, the first experience is never perfect. maybe for [00:06:00] maybe with it was perfect, but, most of them it's now.
and for me it was the case. I wasn't prepared at all. I, yeah, a lot of things that I didn't know. I could hear some people telling me this at the time, you know, the client, you feel like, no, I know what I'm doing. and actually you realize a few years after that you had no clue. Sometimes some, which we're doing really.
so yeah, I, it just, I just wasn't prepared and many different things. I didn't know much how to set up, set up a company, how to do business with people, how to communicate with people, how to interact well, in, in term of business with people. so. Yeah, it is. It's just, I'm just not enough knowledge and competencies.
I would say at the
Alvin: time, at least, you went through that experience, like it gave you like [00:07:00] more, it's like more experience for your subsequent, and diverse as well. So, yeah. You, you went through one crisis already in Thailand. Now we are all going through another crisis, or maybe you're taking some lessons from that.
And applying it to your current business?
Brice: yeah, it's, it's different, but it's, it's, it's pretty much, as Sudan as the, as the previous one ended, both of them, were very suited. yeah, if every, every, every lessons. really, Good experiences. I like what rich our grandson says, is it, you really recommend to, to start a business?
And he say, in the, in the worst case. You will learn from it and start again. and if you don't learn from it, at least you will have fun. Yeah. I liked this. I like her. So what medicines they say I never lose. I either [00:08:00] we knew. Learn. it's exactly what happened in terms of business,
business entrepreneurship.
Alvin: Yeah. Yeah. There's, bring it up to the present time. So be Sue Gannon. Tell us a bit more about what you do and what's the business model.
Brice: Yeah. so basically we help companies to be more sustainable while, while, Making them lopping business opportunities. So the goal is really these two things.
It's really two on one side. How on the planet. the other side is, to be viable financially because basically, companies, they want to do good for the planet, but. They have the pressure from, from their shoulders. They have the pressure from bosses that they have. They have some sort of pressure, and they cannot, [00:09:00] allow, just, they cannot just spend money, for the planet without.
my Twitter or it should be included into, a strategy that, make them also, make money. How, and so we really want to work on these two sides. So it should be business, viable, and it should be sustainable for the planet. So sustainable on both ways. For the planet and for the business. And so basically, we, we distribute, we supply, different product and services to companies in Singapore, and we focus on, three topics, three topics, one, it's linked to the food.
So this is what we call the future of food. the second one, it's linked to beliefs. and more precisely. it's energy efficiency in buildings. And the third one, it's [00:10:00] linked to a single use plastic. So basically we want to tackle single use plastic. they damage our oceans and they, that makes mostly our health.
so we basically provide products which are made of. Alternatives to plastic. Okay.
Alvin: So let's dive deeper into each of these three areas. So food building and single use plastics. So, so for the food side, how, how do you, how exactly is it so like, I'm what, what, who are your, who are the clients that you help or is it like restaurants or the food importers or was it down the food value chain?
Brice: Yeah. so it will be mostly linked to hotels and restaurant, I would say. So, for example, one of our solution, it's, it's a food waste solution. and so we [00:11:00] help a restaurant to reduce, on average by 40%. the ways they have, you know, hotels, for example, every day the waste 500. Kilograms of food, you know, all the B phase and stuff.
Yeah. waste. It's wasted. it's, it's, it's very bad. It's very big issue that we have. And so basically we want to solve this problem. And, and so in Singapore, I, I partner with, with a company specialized on this topic. another one, it's, it's a company making spirulina based product. So spirit, it's a, it's a bit groggy.
and it's a micro thingy that it's considered since many years as, the food of the future. it's been so many years that, has two notes. the experience to go on the, on ISS international, special space, [00:12:00] space station. and so basically, this meat groggy, contains 60% protein. I contain a lot of, vitamins.
Basically all divided means that your body needs any, contain also a lot of, antioxidants and nutrients. so it's one of the best source of food, that you could have no matter what. so it's a lot of super food that you can find in the market. And this one is really, It's, it's really amongst the really top one.
and we, the other advantage of it as well is that it's very good for the environment, because, it needs a lot of CO2 to grow. Most of your chewy has a bigger, the factory that grows and the bigger grows, the more oxygen he rejects. so it's like trees. but I'll be a much more powerful than trees.
So, basically this, this [00:13:00] product is source of food. It's clearly, it's a no brainer is clearly the best source of food that we can have on earth as the most sustainable one.
Alvin: How are you helping with desperately now you. Like helping this, spilling up producer market the products? Or are you helping the, Oh, okay.
That's what you're doing. Okay.
Brice: It's, it's, it's a part of it. so we had them to, to market it. It's really a collaboration. So we have them to market, the product and at the same time, where we also. Supply the product on, on another market, on a market where they are now. and so we, we worked closely on this, on this, on this topic and this regard.
it's one by connecting and doing business, business development and sort of selling product. And on the other hand, it's also giving feedbacks about the [00:14:00] market, about the, the customers, what your students think. it's. Yeah, being in term of marketing, giving as well. or vision about it. or insights.
So it's, yeah, it's, it's strong, strong collaboration and this is what it should be in business. You need you suppliers to survive if you want to survive yourself. and when you're an entrepreneur, a lot of companies fell within the very first year. so I want my suppliers. to survive, if I want myself to survive, that's the same thing basically.
So we, we have them, as much as we can. Yep.
Alvin: So overall, you, when you say that Bisou you. You consultant, it's like a consult con consultancy model. You consult businesses on how they can be more sustainable while at the same time they are still making profits. And these are the [00:15:00] three areas that you have done so far for the full building and and single use plastics.
So do you consult them on how they can reduce food waste or like make use of the food waste and the building efficiency and single new classics.
Brice: It's, it's a slightly different in the sense that, or, or business model is to sell products, and services. So, mostly it's product actually. so we will, get aware of which companies are interested in the products that we have.
And we will. Then supply opera to these companies. we will do as well a little bit of, of consulting. so as I explained before, in term of food waste, for example, it's, it's a consulting. we are so advice or com or clients, we advise them on what they can, and [00:16:00] what they should do. Harvard, this is.
I wouldn't say included as well in, you know, you know, where in our role, basically if we supply product, we also want them to do good, to implement them this product the best way. We're so want them to do good for their environment. so basically we would advise them. Just because we want them to, to succeed as well.
And it's just a matter for us to bring value. I believe we need to bring value, to companies. If you don't bring value, why, why are you here? Why they will choose you. so basically by advising them, I will say for free, we're so bringing them much more value than. what a core business
Alvin: is. So how did you find your first customers for Mizzou?
[00:17:00] Brice: Yeah. so the first, first suppliers, I got, it was linked to my previous job, linked to my previous experience. so I would, we, We get to know, we get to know each other. And, and, and when I was moving to Singapore basically way, NAS, this I, this ID of business, then we, we knew each other pretty well.
So we decided to, to continue to, to work, to collaborate together. then the first, client. In Singapore. I was, it was after a networking event. I just, I, I basically made friend with, with the, the, with the people in these events. And, and one of them were really interested in, in the product that I had.
And. So, yeah, that's, that's how we started it. Tried a product. we met several times. we became closer and, [00:18:00] tried to solve their problems. and yeah, and that's it. I believe also it's more if you, you know, in, in, in, in sales, lot of people just want to push for their product. No focus on the people first, focus on what they need, what they want.
And, and from there, then you can include, if needed, what you have. So basically it's, it's what I did.
Alvin: What kind of event was this? Was this like a sustained with the relater event or a just a business networking event?
Brice: it was, it was a new new source of protein event. so basically, yeah, we were, we were trying different type of, different type of food, and it was how I was, Got introduced to the food. It was, this is chicken without chicken. This is [00:19:00] beef without beef. and so this is, I, how I, I talk about a spirit based product because it's so, vegetal source of protein. and so yeah, this is how we, we got along well with, with people at this event.
Alvin: But you actually had the table at the event, or you just went there as a participant and then you went over,
Brice: yeah, I went there.
Yeah. I went, I just went there on my own to, to have a look, try meet people. Yeah.
Alvin: Okay. So, so for this first client, what industry was he in? Was he in the hotel industry?
Brice: yeah, I was in the hotel industry. Yeah.
Alvin: Yeah. So, I, we were talking about this earlier, so I remember like a lot of your clients were actually mostly from the hotel industry, so, how, how is that impacting your [00:20:00] business now?
Brice: yeah, so this goes client. It was. it was Shangri-La. So I'm happy to happy to name them cause they are pretty, it's very good what they do. really like it. And now of course, all the hotels in Singapore, are closed. we as well, work with, restaurants. we work with, stores. So of course.
Right now it's more complicated because I love them. they are closed, for another six weeks. So, right now how we, how we change this is that we, focus more online. So I believe that what we do now, will affect us much more than we think, over the long term. So we are doing much more things.
Online. We work online. We have our meetings online. [00:21:00] We order food more often online. we buy groceries online. and so this is something that we didn't focus. Enough, until, until now. And so this is something I want to really want to target now, because it's clearly it will be the, the future of our business.
Alvin: Yeah. Like I've been reading, I read this article like a few days ago. They were saying that because people are ordering more online, the other delivery there is so much use of all these single use plastics as quite bad for the environment that you, you no longer go to the restaurant to eat and wash the plates.
Usually if you go down there and eat, but now it's all plastic. And then in the U S there are even some supermarkets that say you can no longer bring your own bag because it might contain jumps and they want you to just use the spot plastic bags. [00:22:00] I think you can, if you can find some alternative to the single use for all of these supermarkets or delivery, that can be one.
One way to go.
Brice: yeah, this is actually what we have been focusing on, since the beginning. this is single use, compostable product. single use. Plastic are very bad. Yeah. we usable. products are very good. However. People don't really have the habits of using them. Even even myself, I, I have reusable coffee cup.
I have reusable, but or further, do I bring them all the time with me? Not exactly. So basically all, Oh, jobs is the beginning was to bring a single use compostable product. So we have tons of product, which [00:23:00] are, compostable. we have, compostable, but our father, so the bottle itself, within three months, it is, appears.
It's, made of plants. It's amazing product. we have a lot of, take away boxes and containers. Yeah. Made of, by gas, fiber. And so these are compostable within 40 days. Beautiful. 40 days. It's, it's nothing you can put them in any side. A nourish is the side. that's, that's an amazing product. And, and it's, it's really a circular economy that is pure sense because.
But I guess fiber product, it's actually made of, the sugar cane. So once you move the shear of the cane,
and in cases it's spur, and so it creates CO2. it creates carbon [00:24:00] emission. And what we do with this is that we make a fiber and we put it in a mold, and we have a new product. And, and so. Then this product, you can put it in the, in the fridge, for several days until two weeks. No problem. We can put it into that in the all the microwave.
It, you have tons of utilizations. it's just this material. It's, it's great. So we have these type of things for restaurant, for and for individuals. And, and then we, we, we did as well with a compostable, shopping bag. So we supply a shopping bag made of plant as well. and the shopping by doubt as resistant as plastic.
It's again, amazing material. It's, I don't know why we don't use this.
Alvin: but it is the cost of it a higher then. Normal
Brice: plastics. So yeah, usually I, [00:25:00] I can hear about ghost or bottle of water. they are the same, same cost, same price on the market. Then, come on, but of water and they are even, they are even more cheaper than none of bottles that come from the other side of the planet.
Like. Yeah. You know, it's, it comes from the other side of the planet and it's last stage. Fiji. It comes from the other side of the planet and it's plastic. And over there they don't have, you water, for themselves. but they explore water. it's, for me, it's complete nonsense. and and so this is the same.
It's ready, the same price of. common water. for the take away boxes, the containers, it's 10 cents per piece. Every, Hocus center, every food center, they can potentially have it. If it's too expensive, 10 cents, increase your price of 10 [00:26:00] cents. nobody, nobody really mind, but. The value that you bring to your customers, it's much more higher.
It's much higher than just 10 cents. and for them, buys is, is, is the same. we supply as well. Compostable strokes. What is the value that you bring to your customer? when you have a straw which is not made of plastic in your drink, if you drink a MERITO and your heart is feeling of doing something good for the planet.
I promise you that the filling it's way different compared to, to having a plastic straw. so just, if we think about the value, again, it's been almost, the cost itself is the same. The value is, it almost.
Alvin: one thing is like, how are you distributing all these materials? Not a bit. Well, I, I think actually there, there will be a demand for more and more takeaway material as the, even they say they are currently using plastics.
[00:27:00] At some point, the supply chain, this is going to be a harder and harder to find new materials. So I think there's a good opportunity for you to go to the Hawker centers or restaurants and then see like, I have all these. So I've seen in both materials. do you want the other, are you doing anything along this line now?
Brice: Well, try to, we have a lot of stuff to do, so, so yeah, really, we really try to, as well, the thing is we, so far I like, what, Simon signing says. connecting to two companies is, is it connect to companies that are willing to hear, which are willing to hear you w which are willing to, hear what you, what you, what you have to say, what you are saying.
it's really what we do. It's, we just want to talk to companies which are really to push sustainability forward. and because you [00:28:00] just right now we are pretty small, so you waste as well a lot of time, to communicate to everyone. So, so far we have been communicating, only to the companies who are willing to hear what we, what we are saying, willing to buy what we are selling.
Alvin: Yeah. But I think, W w was their current situations. Like everyone, everyone is looking for more take away materials. If you, you don't even have to talk about the testing. If the cost is competitive, even the people who are not that induced sustainability. If the cost is combat, if they will be interested as well.
Brice: Yeah, for sure. Well, we, we, we, we, we fight. We communicate, as much as we can. yeah, it's, it's, this is, this is what we do. I know we have several companies, coming back to us and say they're interested. it's, it's not the case for everyone [00:29:00] at the moment. It's not the case for every companies. So we still have a lot to do.
Okay,
Alvin: nice. So, anyway, for the business model part, right now you're, you're setting up the deal to import the materials from the different suppliers, and then you make a commission of, of each deal, or obviously you mink. Of a margin from the CEO of each, each SKU or something like that?
Brice: Yeah, it's a bit different because, there are several, services brought as well.
It's, it's more like a, a collaboration. So basically, it's, it's, it's a bit, it's, it's a bit different, different, different than this, but yeah, basically. When, when a pro post virus, yeah, the, the, the best way for us to, to survive from this, from, [00:30:00] from, from this work is to make modern under product that we sell.
yeah. It's, it's, it's one way, one way to say simple. It's, it's this. Yes. Then. More practically, it's slightly different because, because basically we know suppliers, we, we, we collaborate with our partners. so the price that we sell the product is not the price that we sell it to, to us. And, and, so, yeah, it's slightly different,
Alvin: particularly.
Oh, I see. So have you encountered any problems in the logistics supply chain recently? Like, I, I've been reading about, they say the passenger flights have been won the biggest free, effort providers. But then now with all the passenger flights cut down, there have been problems like trying to get the planes to fly.
Have you encountered any problems with your supply chain. [00:31:00]
Brice: yeah, yeah. We got some, late, just, a few days back. we had to receive. quite a big box for one of our clients, and the box was lost. I dunno, I don't know how exactly. I do know how it was possible. but, like we paid more to, And to have it delivered quite fast and, because our client wanted to need to, to have it fast and, and the product was lost. The box was lost. yeah, the app. And sometimes, and during this period, more surprise is, often, it could happen every day, like at least, at least every week I would say we need to, yeah, we need to, To be aware of this and to, to pay attention to that.
Alvin: Okay. So going forward, what are your plans for the next few
Brice: months? well that's, that's, For the next few months were developing [00:32:00] online. clearly it's. It will be key. it will be key for us, but it will be key as well. I think for many businesses, we need to improve on communication.
so now, not everybody knows us. and we have product for everyone, and affordable for everyone. So, we need to be, I mean, one of the JV, one of our executive objective, sorry, is to be a, is to be known, from everyone. So we need to keep working on our communications. and, yeah, I think if we, I mean, if we have this, we will be clearly on the, on the right track, Lisa and took customers.
that's for sure. That's crucial as well. We need, you need to hear more from us. We need to, yeah, I've all product and services really fitting what they need. yeah. It's. That's already quite, [00:33:00] quite intense, but a few months it's going to be pretty intense. That's exciting. Yeah.
Alvin: And your, your target customer segments might have to change a bit in the next few months compared to what you were doing before, so,
Brice: yeah, for sure.
Yeah. Online would be, would be for sure, much more present at, what we were, what we were thinking originally. I'm well, how
Alvin: are you, trying to plan out the online presence? So is it going to be lead generation basically? So because it's still B to B, or are you trying to shift to more B to C model as well?
Brice: Yeah, I wouldn't be more, it would be moving to C for sure. B to B would be, it would be, it would be for sure, less strong, and, and B to B, B to C, the lasso things that we can, that we can play on this, on this market. so yeah, we [00:34:00] would focus much more. this, on this business,
Alvin: can you tell me a bit about how, so are you imagining like the individual consumers, maybe they want to order more reusable, packaging, but what, or is it more like hot girls?
They see the hot ghosts. They go online. They are trying to search for, Reusable packaging. Then they just order, okay, I need 100 Deno. Then you deliver 100.
Brice: It's, it's, it's quite simple. We need to, we need to be on all the platform as possible. Yeah. everywhere, when we're all products, can be found.
We need to be there. It's, yeah, just us impose this if we need to. if someone wants to find us, which will make it very easy for them, to do so. so yeah, that's, that's the target. So we need to be on all the big players. Lazada, xAPI, Amazon, and, [00:35:00] we need to be. Present on this, on these platforms and this menu, it doesn't as well.
Alvin: Okay, I see. So,
but the target customers will still be like small businesses like the hawkers or, or do you want even the home users to order your products as well? Because the home users, I don't know how. A white lead, they will use the reusable materials because they can usually, let's say I order, I buy food from the supermarket home, then I cook the food.
I use my plate. Nine can wash the plane afterwards. Why? Why would I order the reasonable plates?
Brice: so, Oh, okay. Takeaway boxes. or containers, compostable containers. this, no, indeed. You're right. We [00:36:00] won't target individualism. however, we have a products. It's a toothpaste and the toothpaste, it's actually not a normal toothpaste.
it's a tablet. so it's a little tablet, that you. Bite and you show it, you brush your teeth normally, and then you rinse normally. And this little tablet, we remove the water because very, we already have Selema, so we don't need to have water. the biggest ingredient in two spaces, water. So we removed it.
We don't need it. we removed a plastic, because. Plastic, our bad, and toothpaste juice. They are not, recyclable idol. So we removed that and we move all the harmful chemicals, because you have a lot of harmful chemicals in toothpaste. we don't know, usually, [00:37:00] and none of kids that will swallow the toothpaste.
It's really bad. This is really bad. so this toothpaste. A toothpaste tablet, we sell it. and so this, it's, we were targeting OTRs originally, but we can easily sell it to individuals. and we recommend Indios to, to use it because it's much safer for them, just much safer. And it's more expensive than a common toothpaste.
Alvin: Oh, interesting. So, so you have a few more products like this also, like the home user can use as well.
Brice: Yeah. yeah, we have, we have several ones. Yeah. We have, almost 10, 10 partners. So 10 brands. we work with. So different, different type of products from expense.
Alvin: Okay.
Brice: Yeah.
Alvin: That's very interesting.
Okay. So, so, so basically in that is your plan for going online, right. Rather than you still, you [00:38:00] still want to do the B to B site for the packaging? but, but the online site will be mainly focused on all these home use products, like the tablet and other, other
Brice: things. Yeah. So basically on online we can sell, so this tablets, toothpaste, tablets, we can sell, the compostable bottle of water, and we can sell the spirulina product.
and I talked about earlier. Yeah. so this three type of products, we can easily sell them online. We can easily sell them to, interviews. A two household. Yeah. And yeah, this is, this is what we do.
Alvin: Yeah. It makes sense. Makes sense. Yeah. So it sounds like, sounds like a plan. So let's wrap up here with some quick fire questions.
Brice: tell me, so
Alvin: what's your favorite book? It can be a business book or even non-business book.
Brice: yeah, [00:39:00] I've read a lot of, business book. I kind of prepare this, one I really like. It's, this one Subtle art of not giving a fuck, from Mark Manson. I really liked this one. it's, yeah, it really, it helped me personally, so this is, it was two.
Learn myself more. Yeah, me. probably my favorite. It's, this one
Alvin: friends
Brice: and influence people. I don't really like the title of it. it's, it's an amazing book to, know more about all the people. I will say. And when you more, when you know more about all those, you know more about yourself as well.
It's really an amazing book. It, like you need like almost 30 years, to write this book and it's really powerful. So, yeah, this one. Yup.
Alvin: It makes sense. So who are some founders, you know personally and you think they are doing something interesting. [00:40:00]
Brice: yeah, there are many, many founders actually that I that I know even more when you're linked to system.
ABGs are many people. They do amazing things. if I need to keep only three, there is a. A friend of mine, is, it was an ETF as well, like you and, it works on, it works on, on plastic additives as well on plant base, plastic alternatives, mostly with, with mushrooms. yeah, very likely.
what is doing. another friend of mine is, is Lemmy Sopheon. it works for a company called, hug 40, rings, H Hong Kong, a, a on Dora, C Canada and K like kingdom K. Hack 40 and, like hacking and, yeah. And [00:41:00] what he does, it's basically bringing innovation, into cooperation. yeah, it's, it's really like, I really like what these guys do.
and then. last one. I will say it's, it's another, another friend of mine that I, that I had to change to, to, to meet and to discuss a lot on, on sustainability. his name is Taylor. Taylor. He can, he can, I can, sometimes I'm, I'm, I'm, I'm confused in English with, with the eye. Is it was a former engineer in oil and gas, and, and now I just, it just wants to do a lot of research on how to, protect the nature, decarbonize the economy, and, and, and push this research to, companies and governments.
and yeah, basically it's, it's, yeah, it just. very stop what it was. the, [00:42:00] the, I would say the combine, there's so very safe and comfortable job that he, that he had, to, to do nice and really, help the planet to, to be a better place. I really admire that
Alvin: was his
Brice: company. it's, so now he has a company called, three 50, so it's, so, yeah, so it's a, it's a consultant, right now.
And, his company is, is called, three 50. I'm sorry, give me, just to sake. Three 50 Singapore, does the name. Okay. okay. Yeah. Very interesting. Would they, would they do,
Alvin: okay. Interesting. Three 50, Singapore. Alright, so final question. What's one thing you would tell yourself? w when you start that your entrepreneurial journey journey.
[00:43:00] Brice: Be surrounded, by, smart, people, who can, because you really need a lot of help when you're, when you start your entrepreneurship journey. so be surrounded by advisors, be surrounded by people who have experience and can, teach you as well. A lot of small things. that's one thing.
another thing that I really like, in the, in the book of Mark Manson is that it's okay to be different. and it's also what, Robert Green says, in, in, in some of his books, it's, it's OK to be different and. In business, you actually have to be different. It's a, so what, Peter teal says, be different from the others.
And, and then the last,
when you are an entrepreneur, if you don't take risk, if [00:44:00] you're a thing too small, yeah, we'll never make it. I will be. Very hard and low in complicated to make it. so yeah, take risks,
Alvin: take risks and think big. Okay.
Brice: Right. Yeah. Yeah.
Alvin: Okay. Thanks a lot. Breeze. So surround yourself with good people. Don't be afraid to be different and think big and take risks.
So Bisou you're shifting it from a B2B model, which has been serving hotels, trying to shift towards a more B2C online model while doing the B to B site as well. And then in the coming months at that, let's see if you can come, come on, come on on the show again in a few months and see how you're doing.
Brice: Yeah, I would love to. I would love [00:45:00] to with Breyer.
Alvin: Okay, thanks a lot Reese.
-
Akshaya Bansal finished a PhD studying how to use light to destroy cancer, joined Entrepreneur First to try her hand at entrepreneurship before joining Esco Ventures as an Associate. Learn about Esco Venture's venture programme for biotech experts, the biotech system in Southeast Asia, and about biotech approaches to developing COVID vaccines.
https://www.escoventures.com/
Company
Carmine Therapeutics (https://www.carminetherapeutics.com/)Book
Age of StagnationTools
Airtable
[00:00:00] Alvin: Hey guys, welcome to Abyss Gazing where I interview entrepreneurs on how they are building their companies in a post COVID world. If you like the topic, but you can't stand the length, check out the website, abyssgazing.com that's a, B, Y, S, S, G, a, Z, I N, g.com where I post show notes and full transcripts of all the episodes.Okay. Three, two, one. Welcome to Abyss Gazing.
Joining us today is actually Akshaya Bansal, a venture fellow ESCO ventures, where she does technology scouting and venture building. For biotech startups in Singapore and Southeast Asia. So, uh, actually, can we start off, like, can you tell us a bit about your background and how you got into biotech investments?
Akshaya Bansal: Sure. Thanks Alvin. So, um, I did my PhD from NUS in biomedical engineering and nano medicine. And then I did a two, two and a half years of a [00:01:00] postdoc work as well, which is basically research. And then I got into, um, entrepreneur first where I had my first taste of entrepreneurship and it was a completely different world.
Now she got me really interested in the venture capital space itself. And then I also realized how different software and biting investing is, which is why I wanted to see for myself how biotech investing works. And that's how I landed up at Esther ventures and their amorphous program. I can tell you more about it later.
So. Oh, yeah. That's how I landed up. So it was, I'm a part of the Marcus's program, a venture fellow at Esquire ventures. And we are when you build up and the focus on biotech companies only, um, yeah, and we work with BIS from the very beginning and help them start a company.
Alvin: So there's been a lot of attention on biotech recently because a lot of VC's on Twitter and so on, they are saying that.
There's going to be a Renaissance in the biotech investment field. You [00:02:00] do like attention from COVID and so on. So it can tell us a bit about the differences between biotech ventures and software ventures, which is a more common form of startups that you see on there.
Akshaya Bansal: Sure. So, um, biotech actually has been a very hot space for investment in the last five or six years, I would say, um, more so in the U S where like billions of dollars of funding, um, Go into it every year in Asia, it is catching up.
It is inherently very different from how software companies work. Um, in a software company, you would have a minimum viable product, which you can deploy easily. You can do several rounds of testing and you can have a product out there and reading the new in a fairly short period of time. Um, but in biotech, it's very different.
Um, product life cycles can be very long. Many many years to develop something. So when you first put in money into an idea, you don't, you might not actually have a product. You might not have bought it for years to come, but you [00:03:00] bet on the science and you bet on the people doing the science and that's where the difference lies.
So you identify a problem and then we move to the solution. And if it's good enough, you spend a lot of time and effort and energy into developing that. So essentially the defense would be itself at companies. You could see a product. In a fairly short period of time. But, um, for, by the companies, the investments are, are very long term and you might never get a product.
Um, and the two have to be from the science and also the regulatory approvals around biotech products are very different from those in a software company. So for biomedical products, especially drugs are, you have to go to drinking, testing, um, Phase one phase two and phase three, you have Googles to deal with.
And that can take a long time and the drug can get killed at any stage of that process. So it is a risky business, but it's very rewarding because in the end you will end up helping millions of people at your product success. Yeah. Well,
[00:04:00] Alvin: there's one thing you mentioned, uh, in your description of the differences that they struck out to me.
So you said you still start from the problem and then you develop solutions. From like the biotech investment point of view, you still see, like there has to be the problem first before you come in and build solution for that. So let's say your PhD is on a new property of these kinds of enzymes, but it's just something, some interesting discovery.
You, uh, what a startup being possible to be possible, make a start of that or the. Like from an investment point of view, still rather focus on the problem. Then the solution,
Akshaya Bansal: I would say the problem always comes first and you might have super interesting tech, but if you don't have any way to use it, then, um, I'm not any, then it's, it's not as investible to begin with, but we always have the problem in biotech in the biotech space, you [00:05:00] identify a clinical need.
And you have a white space. You know, there is a problem that exists and there's no other solution. There's no solution at present. I can solve it. And then you go out there and you look for technologies that can help you solve. It could be as simple as this coming up with a hypothesis and gathering different types of technologies that can be put together to solve it problem.
But yes, the problem is,
Alvin: so that let's say you, if, uh, you identify a problem that you're working in the university lab, you identify a problem. The solution doesn't necessarily come from your own research. You can go over papers that people have done before and bring them together and create a solution based on that.
Is that, is that a common practice that you have seen in biotech startups?
Akshaya Bansal: Um, so maybe I can put it in a slightly different way. So, um, a lot of university labs, they focus on developing really cool science and, but they might not, like you said, necessarily have an idea of what problem to solve. [00:06:00] They're working mostly on the science itself.
It is up to, um, by the PCs like us venture builders, to be able to, to know the problems and why they exist, and then to go out there and engage the PIs, to see what, to help them build the technology to solve this problem. So they might, the PIs might, the academics might not really know what the problems are, but the problems are very clearly defined and known by the VCs that's out of our job description.
Okay. Cause we know that we know where the problems lie and then we know how to stop, do not use the song.
Alvin: I see. So, um, so you recently just joined ESCO about six months ago, gain, tell us a bit about this program that you joined us going home, how it works?
Akshaya Bansal: Not sure. So I'm in Singapore and in Southeast Asia in general, but you could, the biotech ecosystem is fairly new.
It's still developing. And ESCO ventures is, um, is a very part of [00:07:00] trying to develop that ecosystem. So because of that, we've started this, uh, program of the Morphosis fellowship. So what they do is they will, um, they invite people, but a PhD in life sciences. I do apply for this program where they're trained for six months in different aspects of venture building.
So you have a month long training program where you have industry experts from pharma, from the IP side, from the business side of things, but we extend the entire lifecycle of a product and how bidets are built. And after that, you actually get hands on hands on experience of how to evaluate pitch decks.
You get a lot of pitches from different people coming into the company and we actually evaluate them and we're able to see what works and what doesn't. And so the whole idea of this program is to, to take people from academia and to train them, to evaluate technologies, to start companies. I think in that [00:08:00] sense, it's very valuable.
So they have, um, three to five people with the deacon every six months. And so the whole idea is to contribute to this. I think he persisted in Southeast Asia.
Alvin: So they usually take in academics with experience in biotech, because like in order to do the due diligence in the first way, you have to have the academic knowledge to evaluate whether this technology makes sense or what is worthwhile.
And so, yeah. Okay. So can you tell us a bit about the life cycle of bringing a product to market in biotech? Because I imagine it will be. A lot longer than the case for software.
Akshaya Bansal: Of course. So, um, it depends on value starts. If you start from the technology in the lab, it's probably, um, they might, there might be some IP around it there in collaboration with the, um, technology transfer offices and other patent offices within the university itself.
But that IP would be around the [00:09:00] product, which is probably tested in the preclinical stages, maybe in animal models. But it's not close to, not anywhere close to being tested in human beings. So you take this technology, you see how it has to be developed to the point where it is useful for that problem.
And then you do multiple rounds of preclinical testing first, then, um, it requires a lot of investment from the stage onwards, bringing it to phase one trials. And at that point you also want to collaborate with some pharmaceutical companies. So. Um, because they do have the I suppose, the knowledge to bring products to, to clinical testing.
So from prenatal testing to clinical testing, to determine the product is approved, can take several years. Um, I would say a minimum of four to five years, and you go through your phase one phase two, when these 300 efficient can be really, really high. But if you start off with about a hundred different technologies or products or one.
Indignation, you might end up [00:10:00] with one thing that actually appears all the hurdles and safety as well as advocacy. And once you have the approvals, after going through clinical trials and your product is ready to be marketed. So as you can tell, it's going to be a very long process and it actually depends on what problem you're trying to solve because the size of clinical trials, the number of people be enrolled in clinical trials because it can actually take sometimes to recruit enough patients to.
I've conducted clinical trials. So based on what problem we're trying to solve, what technology you have, uh, you, your product can take a decade or more to come to fruition. Yeah,
Alvin: so like given the long timelines and the effort needed the average check sizes for biotech investments, also a lot higher on average than comparable software companies.
Like, um, how. Do you have like a rough figure of how much the founders will [00:11:00] keep, like by the end of a seed round in biotech.
Akshaya Bansal: So I think I could point it out because it's not a software company and it's a very long term play the initiative ticket sizes out very much, but the VCs have taken a substantial amount of risk putting that money in.
Um, it's so. Even though the founders might not have a very high equity when it comes to exits, then those can be huge. So if you look at the, um, couple of acquisitions that took place last year, and most of them have been a few hundred million to over a billion police, even locally in Singapore, you, uh, and you're often, um, and had a deal recently, which was what?
Over a billion dollars. Even though others might have a brief, have a, might have a very large stake in the company. They can end up making a lot of money off it as well. Yeah. But the VC, I think substantial reestablished [00:12:00] safe, they go in the seed round. They will take a nice chunk of the equity.
Alvin: Yeah, I see.
Okay. Can you tell us a bit about working with the technology transfer officers in the regional universities? But so recently I was listening to another podcast and then the founder there, she was working with the MIT media lab. So she said actually MIT is very, quite liberal pro uh, policies on how they, that people spin off companies.
You have to pay a small fee, but basically. They don't take that much away from the phone. How is it like working with the, let's say like NUS or officers?
Akshaya Bansal: So, um, I think, um, if you look at, um, Singapore NUS, you haven't, you have ESR and you can, yes. So the TTLs and most of these organizations are very positive cause they are, uh, they do want to get the modules out there.
So working with [00:13:00] them, is it easy? Yup. Opposite things tend to move. Um, but once mutual festival established. So I think, yeah, there is a push towards commercialization and deals are easy to work with. I, um, the kind of agreements you reach of the videos will differ on the kind of technology licensing. So I wouldn't say there's one size fits all.
Um, but yeah, there, there, there are no dailies in when it comes to like getting things done.
Alvin: Okay, but does he usually walk by, like you have to pay them back a certain fee? Like I say, it's like a hundred, $100,000. When you make this more revenue back, then you paid the TTO back or does it come and it's like a percentage of revenue.
What kind of view structure do they usually come up with?
Akshaya Bansal: I'm not that familiar with this yet because I haven't personally worked on these kind of deals as of now. [00:14:00] Um, but from what I know, again, it depends on the DMS that you agree with. Uh, usually you would want an exclusive license of the technology because you wouldn't want honorable people licensing symptomology out.
So obviously exclusive licenses will be a bit more expensive than ones that are not, uh, but in terms of revenue sharing, uh, it really depends on case by case basis as far as I know.
Alvin: I see. Okay. Alright. So, um,
Yeah. So can you tell us about some, um, like recent biotech stocks that you have found in Singapore? W we should have like, w we are doing some, which are doing some interesting things.
Akshaya Bansal: Oh, sure. So in a bar and lost them, I guess they get her and has, has had quite a few and companies there there's, um, gets a therapeutics.
Does, uh, in your opinion, is mine TCR. Oh, all these are working in hardcore biotech areas. Um, [00:15:00] cause I worked on cocky therapies, uh, which is a form of immunotherapy for cancer. Um, you had line TCR, which is also working on cell therapy and which works on fibrosis. Um, so all of them are homegrown technologies based on the different views on academic work done in our university.
So that's quite, um, exciting, I would say, um, from a. More diagnostic point of view. I would say like the score with nine to 19 situation has been, um, has really shown that the investment and the backtick Siemens, Singapore has feed off that. So many of these companies coming up with a diagnostic kit gets as well as psychological tests, um, for, uh, detection.
And we've had the capacity to scale because of biotechs have been doing these tests. So I think, um, if you want a few examples of the companies that are working in this space that we have to do, who share?
Alvin: Go ahead. Yeah. So
Akshaya Bansal: we have, um, a lot of various that came up with, uh, with [00:16:00] the service desk kits, which
Alvin: will be deployed
Akshaya Bansal: a, B E R E D U
Alvin: S V E R D E U S
Akshaya Bansal: B E R E D U S
Alvin: Veritas, the a R E D U.
Akshaya Bansal: It's a very, it is, uh, there's also acumen and biologics. All of them came up with, uh, test kits or COVID-19 you also had, we also had Duke NUS coming up with the first logical test, uh, which helped us link to, um, previously unconnected clusters in Singapore and sort of, um, you know, helped us trace back a lot of these cases.
Yeah. There's also, um, S. You can, he was working with Arcturus, which is the U S is bad to compete, developed, and tiny vaccine to Duke NUS has a platform which helps to guide the dosing of vaccines. And I can help accelerate the vaccine development process. So that's been a very good collaboration [00:17:00] and, um, it's quite promising.
So it's already in preventable, uh, studies. Um, what else from an ESCO point of view, um, ESCO ask, which is the CDMO, um, CDO more of the Aaron group has come up with mobile test hoods as well as mobile labs. And they're also working in collaboration with other collaborators in the U S as well as where else in Singapore to develop a vaccine.
So you have multiple vaccine candidates in Singapore. You have universities working on dive, not the diagnosis and testing and have multiple biotechs. It was homegrown technologies working on desk. So we'll see. This has been quite exciting. Okay.
Alvin: You can go into a bit more detail on the serological tests and how did they help identify the different clusters?
Akshaya Bansal: So, um, as you can tell, this does, he was quite an insidious. So a lot of times people can be isn't dramatic and difficult to [00:18:00] distinguish with being, I see a common cold in some and forbidden in sunrise. So we had these two clusters associated with, um, Um, I think I see in my dinner gathering. And so back when we had a lot less circus than we have now with two unlinked groups of cases, which, um, even the contact reason you put into the link was, and then, um, this group in NUS developed an antibody based test kit.
So how it basically works is that you measure the, you, uh, you can test for antibodies in the blood, uh, against the virus. So even if you recovered, you will still have antibodies against that virus. So they were able to test a bunch of people and they relaxed somebody's body recovered from the virus was actually the link between two different classes.
That was quite exciting. So, I mean, it sounds simple. There's actually, uh, it was done in a very short amount of time developing antibodies against this virus and deploying it to [00:19:00] test people within a few weeks it's unprecedented. So that was pretty, pretty cool.
Alvin: Oh, interesting. So like is like mass production of these test kits possible, um, is, is already being done is being done right now
Akshaya Bansal: that mass production is how fancy desks work.
Right. So you have the lack of, of tests and you actually developing those kinds of tests or a COVID as well.
Alvin: Yeah. Interesting. So in the future, in very near future, we have. Like we can just buy a test kit from a convenience store supermarket and test
Akshaya Bansal: it at home. Yeah, you could. I mean, there's always, there, there is a caveat though that it might not be a very accurate, so you have to take it with a pinch of salt and you wouldn't want to rely on it to diagnose you, but it, from a surveillance point of view, from a community point of view, I think it'd be very helpful.
Alvin: Uh, we have to be aware of like the false negatives, [00:20:00] the false negatives. These are the most important part of this, rather than like false positives. You want to keep
Akshaya Bansal: them false positives, still manageable, because you can ask three people. Right. But if it's a false negative, then you have a bunch of people going around.
Think they don't have the virus, but they do. And you're correct. It's something you really have to be careful about. Careful. But yeah,
Alvin: they can go into a bit more detail on this. The M M R N E a vaccine that is being developed and maybe even the different vaccine solutions that are currently under development right now.
Not
Akshaya Bansal: sure. So typically how vaccines work as you know, or the oldest versions of vaccines used to be basically inactive forms of the pathogen itself. So you would just take your virus and you would essentially deactivate it and then inject it back into it. The person. So your body would be able to raise an immune response without getting infected.
So, but what is it that causes that immune response, which is actually [00:21:00] exactly the proteins on the virus, which trigger your immune system. So now the newer versions of vaccines hypothesize, and then instead of putting the. Attenuated virus inside of the bus and vital. We just put in those proteins that actually cause the immune response.
And that is the base of all these peptide based vaccines at MIT vaccine. So at Tybee based vaccines, um, basically take fragments of those proteins, which caused that immune response and put it inside your body. And then it causes your immune system to get active. MRED vaccines are a bit more stable than that fight, uh, vaccines.
So they actually supply the MRI, me, which codes for that peptide. So you put in that MRD and it gets taken up by those by your body cells. And then yourself, we'll take that information on the MRN and produce that protein, which is alien to the body and triggers the immune response. And then that will cause your immune system to become active [00:22:00] and will produce antibodies.
Alvin: So basically it's like using the body itself to produce the antibodies against cocaine. So, so have there been any previous vaccines that use the same solution?
Akshaya Bansal: So am I any vaccines are a fairly new concept and they are, they're been tested for a lot of different diseases, but, um, the best of my knowledge, they're not there yet.
But a lot of the mind advanced data yourself then go trials. So I think one of the lead candidates being developed by Moderna a biotech company in the U S is also, am I right? Am I new Maxine, which is encapsulated in the lipid nanoparticle. And I think it sounds quite promising. And the one we've been developed in a beginning, you asked with
Yep.
Alvin: So you mentioned that this, the Duke NUS. Is being based on the, of this existing [00:23:00] platform, which allows for more rapid discovery of new vaccine candidates. If I understand correctly,
Akshaya Bansal: maybe I can talk a bit more about that. So, uh, Duke NUS is part printed. This company called up tourists. So accuracy is an MIT.
Um, there'll be company. They have two different technology platforms. Once called the star of that farm, which is the mod of that farm and other one's called the new owner of that farm too. They're not about a goes, which carry the MIT. And, um, Duke NUS has, uh, um, it has a platform for easing for guiding the dosage procedure, which is based on genetic analysis.
So it helps, uh, in partnership with up tourists. So Arcturus develops a vaccine and using the , they can actually select the dose. Um, doesn't presume a vaccine as well as the candidate or a vaccine to use. So it accelerates the whole process of discovery and, [00:24:00] you know, and bringing it to the clinic it's complimentary.
So you have the vaccine candidate from Arcturus and you have the platform from Duke NUS, which allows you to select which vaccine candidate to choose as well as the dose of the vaccine.
Alvin: Oh, okay. I see. So basically like Arcturus did they specialize in MRNs vaccines specifically while do NUSD have this actually slim platform, which allows you to try out the different candidates at different dosages and, um, analyze the results from there?
Akshaya Bansal: Yeah. Yeah. So basically you, you can move really fast instead of having to work by trial and error trade-up and dozers and different bats and candidates, you have a scientific way of analyzing what would work best.
Alvin: I see. So like, I've been, I read a few articles recently about the Kobe Corona virus. So some, some people ask, I don't know if I understand correctly, but people said that the [00:25:00] Krone virus, um, mutates less frequently than regular viruses.
So. I forgot if it's like mutates more frequently or less frequently, but there's something in it that makes it harder to develop vaccines for it. Then like a regular viruses.
Akshaya Bansal: Um, I mean, I'm not, I'm not a virologist, so I wouldn't be an expert in this field, but from, I read the same thing as well that this virus tends to mutate slower than other viruses.
But, uh, I would think that that would make it, but I'm not sure if that's the reason why it's harder to develop a vaccine against it. But what I can understand is the reason why this is so infectious, because it can, it binds to yourself very strongly, which is why, if it's rid of infectivity is really high.
So it might just be that finding a candidate that stops that process from happening might be a tricky, but I'm not too sure. Cause this is not my [00:26:00] expertise.
Alvin: Your, your PhD was based on nanoparticles, which is also like very similar. Like, I think you said before, but I would say of this conversation that viruses are basically a bit like a kind of nanoparticle.
Akshaya Bansal: Yeah. Yeah.
Alvin: So, uh, I, I have seen this. I have to go, but there was a researcher, a French researcher who did research on the original HIV virus. And then he claimed that the virus, uh, the Colvin coroner virus has been genetically modified from the original source virus that do include some HIV things. Like, do you, uh, I don't know if you have read that, but do you think like, based on what you've read, so we'll find that, does it make sense that.
This is something genetically modified or it seems to be a natural molecule
Akshaya Bansal: in [00:27:00] this last speculation, right? Like, I mean, people kind of find the original version of the virus, but I mean, there was a counter article by a bunch of other researchers as well, actually trace the lineage of this virus. And they were the presented some pretty convincing evidence that this is of natural origin and that the kind of changes that happened that caused it to cross the work runs the animals, human beings.
And not something that was done in a lab. So I guess you might have people coming up in body evidence to argue on either side. But I think at this point is just speculation. That's something. Yeah. I would be very sure about that. I think it's, it seems fairly natural. I mean, most, most likely it is a natural origin and it's not that, I mean, viruses have crossover to humans in the past and it's happening more and more frequently primarily because of, um, Erosion of natural habitat.
So it's, it is bound to happen in my opinion.
Alvin: Yeah. Okay. Then one, [00:28:00] one of the thing I read recently was that this, uh, this wasn't suggested an alternative to developing a vaccine. So, so it's basically, I forgot what, what term he used for this, but it was basically, he was saying that due to the differences in mortality rates, Um, it's probable that the viruses are already mutated and then there are much less lethal streams in some countries and in other countries.
So. You can just identify the less lethal streams and distribute that as like, it's not exactly a vaccination, but it helps to spread immunities. So have you read anything like that?
Akshaya Bansal: I'm talking about herd immunity,
Alvin: not like exactly. So it's all like, it's more like an alternative to developing a vaccine.
So just identify the, the less lethal streams of the virus and, and, uh, distributing that.
Akshaya Bansal: I mean, um, thing is like, because viruses, mutate and kind of, I mean, [00:29:00] introducing a virus into a population can be a double edged sword. I feel like you, you don't know what it's, what it's gonna lead to. So I guess the best thing would be to actually have a vaccine.
And you don't know whether I'm being infected by whichever form of the virus, uh, confers immunity, longterm. So. Yeah, I think it's probably, I would be led by science and more, um, I guess, rational approaches to treatment. And I wouldn't want, I mean, that's just my opinion. So you don't know enough about this virus to say how it's going to react with forwards ending, exposing a population to any form of the virus.
Alvin: I mean, there's quite
Akshaya Bansal: a bit of responsibility. Yeah. I think we should, we should probably wait for the community confidence with vaccine and he'll then practice social distancing, I think,
Alvin: but they can be played. It's unlikely. The vaccine can be completed within one [00:30:00] year, even at the most optimistic estimate.
I mean,
Akshaya Bansal: you, you want to be rigorous in your clinical test things, even if you have lots of candidates out there, I mean, it has to go through the cost and you say for use, which is, I mean, If these technologies themselves are fairly safe, but even then you want to make sure they're rigorous. So, um, to when I'm asking, does eventually come out, it can be deployed at a large scale without next side effects happening.
So I think it just it's worth waiting for a good vaccine, but I agree with you only very quick. Uh, but it's what the week week, and, you know? Yeah.
Alvin: So I don't know if you have heard of it. Uh, th this guy called Balaji Srinivasan.
So he's, uh, he's, uh, he's the founder of Coinbase, but he also previously did a bio informatics startup. So it was like, I've been following him on Twitter. One thing he says, he, he, he also have a [00:31:00] kid like having a strict lockdown for the time period, then introducing testing and tracing. So basically trying to do something like the Taiwan or South Korea model.
But like, he also has been saying that for a lot of the regulations around testing in the U S like with the FDA approval, the hamper, like rapid development of, uh, of new drugs, then he says like, if, if one, one of his suggestions is that developers of vaccines can approach the public direct leave for volunteers.
Um, I don't know the exact situation, but it was from my understand. There are a lot of regulations behind getting approval for trials and so on. Then if they relaxed that you can possibly get more trials done more quickly do what? Wait, where's your understanding of the trial situation? The clinical [00:32:00] trials.
Akshaya Bansal: So honestly, um, at the FDA, and generally, generally the regulatory bodies have been very, very responsive and come to some COVID-19 and people are fast tracking, uh, vaccine development. In fact, there's been, um, consortium of sorts of several pharmaceuticals that have come together to develop accelerate the pace of vaccine development as well.
So the FDA is fast tracking it, but I. I do think like sort of circumventing the due course of regulatory approvals is a good idea because if some people start doing a Virginia and this sort of, um, child, then if something bad happens, how do you trace it? Right. So all of them people's processes are in place to be able to mitigate, um, side effects from happening.
And if they do happen to trace back as to why they happen. So I feel like. Um, was trying to fast track, fast track things, but, uh, it should be done with your process in mind. Like, I don't think you should. I mean, [00:33:00] I agree it should be faster, but it shouldn't, uh, Silverman revelation at the end of the day.
If you, I mean, if, if the idea is to give billions of people a vaccine, you can't take chances with the product that you're getting out there.
Alvin: Yeah. It makes sense. So, um, I would say of that right now. How do you feel about the biotech scene in Singapore and Southeast Asia in general? Is Singapore like still the major hub around this region for the four biotech startups?
Akshaya Bansal: Um, I would say Singapore is is, is, is getting there. The investment in biotech is, has been quite good. And there's a collaboration between different government bodies, as well as private companies to actually push by the companies out there. So I think it's on the right track. So, uh, as, as far, I mean, I don't know enough about other countries, but from what I can understand, a [00:34:00] Singapore is investing more in the more, uh, is investing more in deep biotech companies, as well as, as opposed to just digital health or health tech.
So if it comes, if you're a biotech, looking to get funding, I think is going upwards. So, yeah,
Alvin: like what, what are the options for, um, biotech stops? Usually, usually they come out of a lab. It's usually based on a previous PhD work. And then you're trying to bring it to the market or lately, because from what you see, like ESCO is a venture builder, you identify problems.
And then do you solicit. Proposals to the problems or do people come to you with a solution and then you see where they can be applied to a problem,
Akshaya Bansal: better books. So we do, um, actually let me tell you a bit more about like what Apple's doing, the building, the system as well. So, um, we are a venture builder.
We [00:35:00] don't look at just a million. We don't look at just putting in money. Let's use AB work. We work with companies from the very beginning. So we. Have an idea of where the problems are and you will go out to different universities. It doesn't have to be onions. And I bought the region itself, uh, to be able to identify technologies that can help us solve a problem at the same time.
Um, we, we do have people coming to us, um, with the ideas and they're open to that. Um, in addition to that, um, I suppose also starting a platinum grant, which was basically funding provided to PIs from expo. But you do develop the technologies and commercialize it. So I think it made it from France. We are facilitating the process of bioethics being a more, more complete being built.
So I think, um, part of it is also education and kind of, um, create awareness about what kind of product is needed as well. So the research can also be [00:36:00] directed in that direction, I guess. And besides that, like, you also have. So your school also has a head offices in Boston as well, which is the hub of biotech development.
So having seen both sides and having a foot in Worldcon in what countries we, the company does understand what is needed to build about a company. And we actually do have, um, we've had successes with our portfolio as well. If you have a company called Carmine therapeutics off of local technology, which is not being incubated in Boston and Singapore.
So I guess local technologies, um, then, uh, the science is, uh, is untapped still. And you can, I mean, um, you just need people to help you create a company. I think that people are there who are doing this now.
[00:37:00] Perfect. I couldn't hear you very well. Sorry.
Alvin: Okay. Yeah. So it's like, going back to this example, you said, uh, Cammie therapeutics coming, coming. So, uh, how, how did they start off? Was it a team that was originally at one of the local universities and then they applied to ESCO or, or the S-corps recruit them to build all this venture
Akshaya Bansal: actually ESCO reached out to them.
Uh, I mean, And I mean, it wasn't me. This was before my time, but, um, that earlier team and ESCO, and which has now grown, reached out to the city university of Hong Kong to provide this apologies from, but now the, our professors based out of NUS and this technology, they decided that it solves a very big need out of, um, having good delivery vehicle or various pillows.
And, uh, it sold a lot of that. [00:38:00] Problem that exists with current technologies and the label to, um, develop to be the sort of potential of this technology. And so how do I put it? So we invest more, mostly in platforms, um, and not single candidate sort of, uh, portfolios. So this technology is it's basically, um, excess solar bicycle, which, um, okay.
I don't know if I should go into detail about this, but. So to speak. They're naturally, they're not synthetic they're made from the body itself. So you have read that cell switching, but off these vesicles, which can be modified to carry a genetic material. And then you can use that to develop various forms of therapeutics.
So there's that fun potential there. So we, yeah, so the, the team here recognized what smart you can do and they help license that technology develop more IP around it. And then this [00:39:00] company was incorporated, which is now based out of Boston and input. And it's been getting a lot of traction. It's won this golden ticket in the business as well, but they're not gonna give you the nuts and bolts just like procedures.
So, I mean, that's what I still can do for academic labs. Identify the technology, fills a need and then help.
Alvin: Oh, I see. So, so like you have a bit of like a wider overview of the problems in the industry with a view to commer commercialization. So you're, you're able to better identify like which technologies out there being published, have the potential to be commercialized, and then you go out and reach out to them and try to form some kind of agreement to build the company from there.
Akshaya Bansal: Yeah. And the thing is, uh, it's more, the relationship is based obviously on mutual respect as well. You work very closely with the PI. So instead of just licensed [00:40:00] lessons to Margie and taking over all the control, um, the, the new model, um, by the VCs is to actually build a company with the pies. You work with them, you enact more experiments, you make the technology into a more mature.
And so you work together. So in besides just providing funding to take about a call, what do you also provide support in many ways? Uh, how do you, um, develop the IP around your product, but what should the strategy be? What will make this product more attractive for future funding accounts? So there's a lot of support that can be provided by a VC in the biotech space that wasn't really.
Alvin: So you mentioned the P I T he's currently now a professor in U S uh, so she, she, she's still a professor at NUS then, so she still has this main job as a professor, but, uh, she, she says this thing, [00:41:00] like, what did you bring on additional staff to help her with the day to day? Oh operations. While, while she's doing her main duties as a professor, she, I guess like she still continue on with research in different areas and also teaching.
Akshaya Bansal: Yeah. So these key, so think of it as this being one of the technologies she's working on. And now this is licensed into this company where she, the founder and the company itself hires of people to work on this technology exclusively. So the BI has her own lab, which is running according to. The plans that she has for her academic development and the company is separate, which is licensing that particular technology and developing it for commercialization and then all the hires happening within the company
Alvin: itself.
Oh, I see. Yeah, they make sense. It makes a lot more sense for why biotech VC stick a larger equity stake, because like most of the risks would be on the VC site, rather [00:42:00] of venture builder rather than the, on the professor.
Akshaya Bansal: Yeah. I mean, almost all of the risk is taken by new Queensland. You didn't know technology, which is, um, that just exists as IP.
You're taking this licensing, it hire doing the diet, hiring, developing, capable people, follow you around it, getting more investments for investors for future rounds. So the risk is really high and it's born almost exclusively by the PC.
Alvin: Oh, I see. So that's why also you, uh, you rather go for platform type ideas rather than like single candidate, um, for, for a particular solution.
Because if the platform works, you can apply it across different solutions. While if you have just one solution and it fails, then you lose all the money.
Akshaya Bansal: Exactly. I mean, you, you have a different VC than book on different models. I honestly, that home place [00:43:00] are more, if these are be risking to some extent, like you said, so if one particular indication does not work out, then it needs to have that bond to fall back on.
If the platform itself is robust, which is where obviously the site is not as versed. And if you have a platform to begin with, then you do your risk, your, your technical risk. Okay.
Alvin: Yeah. Yeah. So like, I'm not an expert in this field, but like Zaman journ, uh, Ginko, uh, and geomatic also have these relatively famous biotech startups, and they are all like platform based as well.
Akshaya Bansal: Exactly. So even if you look at, um, so a lot of the magic's, uh, then now they're platform, please. So even if you were to look at Moderna, which is an MRD company, it is a platform basically MRD for many, many things. Yeah. Well,
Alvin: interesting. So, uh, yeah. Anyway, we are almost running out of [00:44:00] time, so we'll just wrap up with a few more questions.
So what what's next for escalate? You're going to, you've just finished a six months then you're going into the next phase of the ESCO program that you're joining them as a full time. Staff now. So what was the next step like in, uh, in view of the current situation?
Akshaya Bansal: Um, so I mean, it's, it's work as normal.
So I think as we've been lucky enough that we can work from home. Uh, so we'll continue with our, um, talking, been doing, obviously you'd be looking, um, in any, I think my health goes. Spaces one, which will get more attention going forward, in my opinion, primarily because of the massive risk it is, it has exposed the whole corporate situation.
So I think, um, I'm hoping the healthcare space is we'll see more business, [00:45:00] uh, obviously, um, any, I can predict what happened in the future, but for me personally, I'm looking forward to, uh, look in my mind, interesting technologies, helping develop the ecosystem all by itself. And just learning more about how biotech works and yeah.
Alvin: What were some of the major venture builders like S-corps in Singapore? Like I only have you see them as competitors or like complimentary.
Akshaya Bansal: Yup. I think, I mean, it's, it's still a nascent ecosystems. It's still building up in the more number of people you have, the better, as I know, there, there is stone.
There is, um, which is also working in this space. You also have, um, a lot of different VCs working in the health tech space, not exactly biotech, but you do have others. Um, you have, um, so I mean, besides like, and Esquire, I'm not aware of too many biotech based VCs, there might be more, I might be missing [00:46:00] some, but I do know there is a lot of interest here.
And, um, so it doesn't, it's not only limited to just biotech. You also have the diagnostics, you also have health tech have digital. So, yeah, no, I
Alvin: have one program called blue Chile, but they focus more on like medical and health care rather than biotech specifically.
Akshaya Bansal: I think it's more of an accelerator format, my phone.
And you also have the NSG labs, which is yeah. Helping get lab space, which is great.
Alvin: Yeah. Let I see. So, uh, yeah, I think. Is there anything else that you'd like to add?
Akshaya Bansal: I don't know. Is there anything that I've missed? Um,
Alvin: not that I can think of. I think it's quite comprehensive. Like we had, we went over a good overview of the biotech investments and in [00:47:00] Singapore context and also when to call it.
Yeah, I think we hit all the outline points. Okay.
Akshaya Bansal: I'm not very good at this cause I'm having done this, but
Alvin: that's okay.
Akshaya Bansal: Want me repeat
Alvin: it again? Even like they don't like it. I would just add all this part. Yeah. Yeah. So yeah. Uh, Oh yeah. So Annie. Interesting stops in the escort portfolio that you think you can mention and talk about what they're doing right now.
Akshaya Bansal: So like I mentioned too, there are a couple of more happening right now, which I mean, you'll probably hear about soon, but I think the most exciting one right now is Carmine. Like I said, so, um, it's a phone based technology and going really well. And I think it's exciting for him only because of. Solves a big [00:48:00] problem that I'm delivering stuff inside of your body.
So right now, um, how gene therapies, I mean, I don't know if you're familiar with gene therapy, but how they work is you have these biases about genetic material to do, to consult types. There are lots of issues with it. And what this technology into do is to help to treat is to not use viruses, to use something which is safer and can carry much larger pieces of information inside it.
So I think that's pretty exciting.
Alvin: Hmm. Okay. Interesting. So, okay. Let's, let's wrap up with some like quick fire questions.
Akshaya Bansal: What,
Alvin: um, what's your favorite business book, or even it can be a non business book. It can be like fictional anything.
Akshaya Bansal: Um, I think that you just, stagnations what I'm, I've been reading and I think it's been pretty interesting.
Alvin: The age of stagnation. Yeah. What was it about.
Akshaya Bansal: So it's basically I'm cloud the whole market [00:49:00] situation the last decade or so, and how atypical it is. Uh, the really there's so much money in the system and what means and how like the market is in about music. Yeah. It's been, and at the same time you don't have inflation.
So yeah, since that, it's a very good take on the current situation in the last decade that you've seen.
Alvin: Okay. Interesting. What, what's one tool. What was some of your favorite tools you're using right now? Like as part of your role at ESCO?
Yeah. Do you use any other tools to coordinate like remote work? Uh, a lot of people have started using notion. Do you use that or just use Google sheets?
Akshaya Bansal: Um, I use quite a lot
Alvin: at table
Akshaya Bansal: or. Yeah, I think it's been very useful just to keep track of things we're doing. So at dibbles, zoom, Slack, and Slack. I don't, I use [00:50:00] personally, but not for work.
I think yeah.
Alvin: What, what do you use it for you? Do you use it like something like a CRM to track the different companies in the portfolio?
Akshaya Bansal: A bit of everything, honestly, like it helps you just, I mean, um, Helps keep track of what more people are doing in the projects we're working on. Um, and just having a place to just have all this information sorted.
It's this combination of project management last year. Yeah.
Alvin: Okay. Um, how many hours do you sleep? Every night?
Akshaya Bansal: Me, I should have been getting good sleep. Seven, six, six or seven hours.
Alvin: Not too bad, not too bad. Are you exercising at home right now? Did you have like some phones, right. Yeah, I don't
Akshaya Bansal: think it goes to crazy.
Kevin fever cancer. I do exercise like an hour or two a day. And
Alvin: what do you, do you just like follow what got videos on YouTube or something?
Akshaya Bansal: Um, actually like the last month or two, a lot of [00:51:00] people have taken initiative to start with uh, home-based uh, practices. So I do yoga quite a bit. So I have at least three to four people who just started zoom sessions on your event has been really good.
Alvin: Yeah. Wait, you say you've got your events. Is it some site that you're using?
Akshaya Bansal: So, um, I think one of her ETF companies, um, Pluto started yoga sessions. That was one, another one was a friend of mine. It's called yoga for good. So she organizes, um, yoga sessions twice weekly it's free, but you can donate money to a charitable cause at the end of it, if you feel like it,
Alvin: but it's free.
Yes,
Akshaya Bansal: it has been quite good.
Alvin: Okay. Nice. So, um, what, what's one piece of advice you would give yourself, like before you started this whole journey into, uh, entrepreneurship and
Akshaya Bansal: startups? Um, I would say like, just keep an open mind. Like when you're meeting new people, being open to new ideas, sometimes you can be very [00:52:00] rigid.
It's just understanding the other person's point of view and just people can learn. Yeah, I think, yeah, that's pretty much it just, people can come learn. Okay.
Alvin: All right. Um, thanks a lot for your time. I think it's also a very, uh, educational interview for me. I learned quite a bit then like hoping, uh you're you're just starting out your full time role now.
So it was, I hope it all. It goes well for you. I think there's probably a good time for biotech as well. This is going to be a boom time for biotech.
Akshaya Bansal: Very exciting. For sure. And in Asia,
Alvin: especially. Yeah. Yeah. All right. Thanks a lot. Yeah. I just stopped recording.
Akshaya Bansal: Yeah.
-
Zenos started his career working at Microsoft straight out of high school. After working for a few years, he left to travel the world while doing a degree, meanwhile starting a web agency together with his brother. He tried out a few startup ideas with his friend in Singapore before ending up with hmlet.
https://www.hmlet.com/
https://www.linkedin.com/in/zenosschmickrath/Learn:
- how he got his start in entrepreneurship with selling auto parts in school
- how he got a job at Microsoft without a degree
- how he started a web agency with his brother while travelling the world
- the mistakes he made at his first startup, Belugabeats
- how he iterated on the idea that became hmletBooks
Ender's Game
Venture DealsTool
miro.comCEOs
Mad Threads
Pomelo[00:00:00] Alvin: Okay.
Zenos: Wait, let me, let me pause or stop this one. Okay. And, uh, I will also do the same.
Well, okay, now you know a bit of the story. Okay. So let me know when you start.
Alvin: Okay. Okay. I'll do that. If three do one again, then do the intro, but I'll see, I forgot to press record.
Zenos: Yeah. Sure. Okay.
Alvin: I'm trying to go through it again. Okay. Okay. Three, two, one. Today's guest is co, founder of Hmlet, a Sequoia backed co-living startup, operating in over 100 locations across Singapore, Hong Kong, Japan, and Australia.
Zeno started out his career as a software engineer at Microsoft and try being the CTO at a few startups before pivoting into Hmlet. Today we'll explore his journey into entrepreneurship, how he pivoted from op scotch into Hamlt and the various pivots that [00:01:00] Hamlt met along the way. So Zenos
Are you ready to begin?
Zenos: Yeah, I'm excited. Let's go.
Alvin: Okay, so we are beginning again for the second time because I forgot to press record, so we might repeat a few of the same things. Again. So Zeno's uh, was entrepreneurship something that you, you did early on, uh, even when you were growing up?
Zenos: Good question.
And, and, yes. Uh, the first time I got into doing something entrepreneurial was when I wanted to go to Japan for the first time. Um, my mother was hosting a group of exchange students. And I got really interested in Japan, the culture, and I was about 15 and I decided I'm moving to Japan and I had no way to get the money together to sign up for the program that I wanted to go on.
Um, and so I came up with, I would sell candy at school, and that [00:02:00] was my first real kind of hustle into entrepreneurship and learning how to make money, uh, for myself. And eventually I was able to make 30, $40 a day. It still wasn't enough. And I was really lucky too, to figure out a way. I actually got to, in the end about a sponsorship to Japan.
Uh, but when I came back after that year of studying abroad in high school, uh, my life was completely changed and I decided that I would always be doing something entrepreneurial. Um, and so after that I did tons and tons of things that,
Alvin: yeah, so you actually started working. And Microsoft at age 19 before you even completed university, did you even enroll at university or you will hire like street, all of
Zenos: high school?
Yeah, so what ended up happening is as soon as I got back from Japan in high school, I. Decided that it's high school was kind of a not for me. It kind of sucked. So I enrolled [00:03:00] directly into a university course, um, that you can do starting from when you're 16 and so I was able to do that when I was 17 when I just got back from Japan.
And, uh, by the time I was about to turn 19 part of that course was it was computer science and business and part of that course was doing memos and putting together resumes. And I said, well, if I'm putting together a resume, I'm going to send it out. So, so I just sent out my resume to a whole bunch of people.
I was like 18 year old kid, and uh, I got a couple of responses. And one of those was Microsoft. I ended up going for the interview. I ended up getting the offer. And so they're like, well, here's the offer. And I still had, of course, like three, three and a half years of university left. And I said. Well, okay, I'm taking this job because I think I'll learn more on this job than staying in these courses.
Alvin: But how different was the hiring process back then? Like do you have to go through, um, like an algorithm and the [00:04:00] instructors interviewed to get the job? Uh, was more like informal.
Zenos: Um, at that time it was. Early two thousands so this is right before, so early 2000 so right before the.com crash and tech companies, every tech company was scrambling for talent, liquid, you know, think and actually get stuff done.
Um, and, and I was being hired as like a young, kind of the lowest level of software test engineer. And so they weren't super particular. And the team I was hiring and hiring into was also not super particular. They. They really just needed someone that could think rationally and help out with what their objectives were.
Um, so I, I went through about five rounds of interview in order to get that, but I wouldn't say that it was super strenuous just because I was very young. They were hiring entry-level. Um, so, but I do feel the timing was [00:05:00] super lucky for me. Because about six months later, the tech bubble kind of collapsed inwards.
Um, but luckily I was, I chose Microsoft and they were able to keep me and I was able to graduate to being a full time employee incentive, a contractor, et cetera, et cetera.
Alvin: But first. Crisis that you, you, you went through right in the start of your working career, six months in was the.com crash happened and then, but you've managed to keep the job at Microsoft and then you carry on walking dead for about seven years along the wig.
Like, can you tell us what kind of a side hustle that you do
Zenos: along the way? Sure. Um, one of the first things that I was doing was. I was fixing cars and then selling them. So I would go to auction or buy them off of the internet. Uh, and I've always been a little bit mechanically inclined. And so me and my brother would get these cars, we'd [00:06:00] fix them, sell them, and then as time progressed, I realized that I could make a lot more money if I sold motorcycle parts instead of whole vehicles.
Um, so what I would then do is I would go out and tear down these motorcycles. I picked up. And then ship out the parts on eBay too, or sell the parts on eBay to whoever needed them. And that ended up making about, say, a thousand dollars a week every single week that I did it. And that was a really great sign also.
So even while I was at Microsoft, I did that.
Alvin: But how much time did it take you? Was it something you did for fun anyway, so, so you didn't feel like walking at all? It's just something is like a hobby. And then you mentioned make some money off of it.
Zenos: Yeah, exactly that it's because I always like this kind of, I mean, it is the hustle, right?
It is just like getting stuff done and there, there's something that really draws me in about like making money or, or providing a service or flipping something and [00:07:00] getting more value out of it. Um, something about that is just really fun to me. And so I love it when, if I can go buy a motorcycle for $300 and sell it for $1,500 in parts, and I'm just like, this is so fun.
Um, so I, I would probably spend maybe five to 10 hours a week on this, um, in total.
Alvin: Yeah. That reminds me of something a lot of entrepreneurs seeing is quite similar. Like Gary V, I don't even have a listened to him before, but he'll say like, he likes going to garage sales and then like seeing what kind of random books or stuff that people have for sale and then going online to see if there's a better price and he just likes doing that.
Even even now, like he's a millionaire like me. I go how rich he is, but he still likes going to regard sales and doing
Zenos: that. Yeah. I, there's just something really, really fun about finding a good deal when no one else has found it. Right. It's not about, it's not about like creating the [00:08:00] app and then making slight improvements to it.
There's something very satisfying to that business model as well. Um, but coming across like coming across a gym that no one else has seen or no one has recognized and, and then realizing that profit. Yeah. Something just really, really feels good about that.
Alvin: Yeah. So after doing Microsoft for about seven years, you decided that you, you had enough of this, you'd learn enough from the job, and then you, you want to go out and see more of the world.
Uh, and then you started to go to you, you decided to go to China, Japan, and thanks Scott.
Zenos: Yeah. So what, what ended up happening in a little bit of a longer story is that I went on a business trip or a Microsoft over to Japan and the team in Japan really liked me. I already spoke decently good Japanese cause I've lived there year in high school [00:09:00] and they said, we really want you to come over and work in Japan.
And I said, that's amazing. Of course I'll, I'll do it. And they tried to apply for my visa and realized I didn't have a college degree. And Japan's immigration standards are really tough that you need at least a college degree or 10 years of work experience in order to get a working visa in Japan. And so I was, I was pretty bummed out because I couldn't take that opportunity.
Um, so I started looking at night schools or ways that I could get a degree so that I could continue, uh, and work abroad. And what I ended up finding was this school in, in the U S close to where I live, that allows unlimited transfer credits. And that's really rare for a school to allow that. It means you can travel anywhere in the world and as long as it's accredited, all the, all the credit transfers back to the home university.
And as soon as I, I saw that, um, I started to form this plan that maybe I won't [00:10:00] work for Microsoft. Uh, and, or get a degree and work for Microsoft in a different country. Maybe I'm just going to quit and travel the world as a student. And so that's what I did. I spent the next three years remodeling my house.
Um, then I sold that, quit my job, sold everything I owned, including the motorcycle parts business and my car was, and then I, I went on my way to Japan and China and Mexico for a year each. Wait,
Alvin: how they work. Exactly. So you apply as a transfer student or exchange student in each of the universities in Japan, China and Korea and Mexico.
Zenos: Um, so the home university helped me find the programs that I could enroll in, and then I was able to just enroll in the study abroad program.
Alvin: So, Oh, I see. So, so like you spent, you started off in Japan first and then you. Uh, you were just like a student and they're taking classes and then you, you also [00:11:00] walking on page where the, at the same time together with your brother.
Zenos: What ended up happening is after a year in Japan, um, I went on that vacation, like family vacation and my brother told me about what he was working on, which he was focused on the SEO SEM space, and he had just started his company called page where they, and. Um, he started telling me about what he really needed, which was someone that could develop and run the technical, uh, technology development side of the company.
And this is in about 2007. So it's, it's like the pre iPhone, kind of the pre app store environment where everybody was just getting online. All, all of the smaller mom and pop and midsize companies were starting to get their stores online. But Shopify didn't exist. And a lot of these, like easy to easy eCommerce solutions didn't exist at that time.
And so what I ended up doing is taking a year off [00:12:00] of my studies, uh, between Japan and China, coming back to the U S to work with my brother on developing page weather. And that actually worked really well. And then what I was able to do after one year was traveled to China and then travel to Mexico. And still work as the technical lead for Patriot as the CTO.
Alvin: So this was around 2007 2008 yeah. So I'm sensing like a common theme here of it, because like every time you make a big change. It coin way with a big crisis, right? You start off your career just before the.com crash, 2007 2008 was also the recession, and now you're, you're making a big transition now and it, and we are just entering this crisis right now.
Zenos: Okay. Yeah, exactly. You're really right. I didn't think about that, but, um, you are very correct actually.
[00:13:00] Alvin: It's just, uh, uh, we, uh, going to,
Zenos: well, I think when there are crises or light, like in a crisis, are the biggest opportunities. Yeah. So I think it's also not the time to be shy about trying something new.
Yeah. When everything seems like it's completely upended, it's the time to think where are all the new opportunities.
Alvin: Yeah. So from 2008 to 2012 working on pitch worthy, and then the next big role that they saw on LinkedIn was beluga beats. You came to Singapore to do beluga beats as the CTO.
Zenos: Yeah. So this is also a little bit of a story, which is, while I was in China, I ended up meeting my best friend.
His name is Ming, and we, we became good friends in China. I went to Mexico after [00:14:00] China, and, uh, he went back to Harvard and he was graduating from Harvard. Uh, at the end of that year. And we kept in touch and he ended up proposing that I move up to Boston and we started internet company together. Um, and I wasn't really for that at first.
I'm like, no, I'm going to finish my college degree. I don't have a degree yet. Like I'm still in Mexico. I'm finishing everything up. But he ended up convincing me to come up to Boston and to start a company with him. And I don't think that company is on my LinkedIn profile. It was a company called blackmail.
And, uh, that we, we ended up failing after nine months. So at the time I was still doing some work, of course with Pedro and my brother. Um, but Ming had to come back to Singapore because his visa was running out in the U S and he's Singaporean. So it kinda came down to this question of. Well do you want to move to Singapore or stay in the States?
And I [00:15:00] was like, yeah, okay, let's move to Singapore. So like two weeks later, we arrived in Singapore.
Alvin: So, so you was, um, beluga beats related to the original idea, blah, blah.
Zenos: Not related to the original idea. Um, we, we ended up going through multiple iterations of different ideas. Uh, and beluga beats was the last one that we did together at that time.
Uh, and so beluga beats was the music player that we put together, um, me and Maine. And it actually did pretty well, but never ended up generating revenue. Um, so we eventually had to shut it down just because we weren't ever going to, we didn't see the pathway to good revenue anytime in the near future.
Alvin: I am, uh, I went to do some.
Research, like some Googling on beluga beats and I see like you created a Twitter page and then there's a Facebook page where you post it like different songs. [00:16:00] And I hope the whole idea of the site is you have songs with together with the music video. This was back when YouTube was just starting to get popular, so you were competing against YouTube at a
Zenos: time.
So actually what our idea was to use YouTube and other music streaming services and to compile these together and then have it be like music for the people that they would curate based upon their own preferences. And this ended up working pretty well for the users. Um, Irene, there were some technical hurdles that we never ended up being able to overcome.
Such as playing YouTube in a iPhone browser, for instance. Um, it was really difficult to be able to, YouTube just doesn't allow their, their player to be minimized, for instance. But on the desktop, it worked really great, uh, on a iPhone. As long as the phone was open, it worked really great. Um, so, so we were able to get a pretty good traction with people.
[00:17:00] And if you remember at that time, um, this is, this is, um. Like there was a couple other streaming services. Spotify was coming up, but they didn't have a big percentage of the market yet, and it was, there was Deezer, there was eight tracks. There were some other ones that were, had similar business models to ours.
And so we were competing in that space.
Alvin: What was the revenue model behind the business link? Um, based on the music companies themselves paying you a subscription fee or something.
Zenos: It's a good question. And at that time, I think we were pretty much naive entrepreneurs where we thought if we build a social product where people that people use, we can monetize it later though, of course, we did think through like how would we get like subscription revenue?
We thought that that was possible. We also thought of course, advertising revenue as possible and we thought that song purchasing revenue would be possible, like either through referral or, uh, other means. [00:18:00] And we ended up at the end of it getting contacted by big port, which is probably the, the biggest, uh, online store for DJs to shop for music because it's super high fidelity and high quality.
And they're able to pull down tracks and then use those directly on the sets when they go out playing music and clubs. Uh, and, uh, they, they contacted us and asked us if we wanted to join their team and fold our technology into theirs, but we would have to move to Denver to do that. Um, and so we, we decided we didn't want to move to Denver.
We wanted to stay in Singapore.
Alvin: Then what happened? The end like, um, you walk on this for how long.
Zenos: Um, a little under a year. Oh yeah. And what ended up happening is simply that we ran out of my funds. We ran out of runway to continue doing it, and [00:19:00] that's what led to my transition into rewards. Oh,
Alvin: okay. So we once were, they also like studying very early on at this station and you just joined in as a Steele.
Yes.
Zenos: Yeah,
Alvin: no. That the way we want done as G.
Zenos: Yes. So at that time, rewards side, SG was still really new there. Their tech was still pretty new at that time as well. And I came in to build out the platform architect, everything. Um, and so I, I ran the technology side of things for a little bit of time. I guess.
Just over a year, um, pulled together some tech talent and, and got the platform up. So at the same time, doing that, um, is when the Hmlet journey started. So I was doing both at the same time, and I ended up starting the Hmlet with Ming and [00:20:00] our other friend. Uh, so I ended up starting the Hmlet at that time with Ming and, uh, our other friend Johann.
Alvin: Yeah. So I read a bit of, uh, I don't know if it was you or your on, but there that was, there was some interviews where, uh, one of you talking about the early journey together, so it was you, you, you're renting one house together and then you thought like you wanted to rent out the extra rooms, two people.
And that was, Holly got
Zenos: started. Yeah, actually it started from, even earlier than that when my, at the time girlfriend was looking for a new place to stay and, um, we found a really nice six bedroom house and, but she wasn't able to afford it, of course. But I saw that there was potential for the other rooms to be rented out and for her to maybe live rent free if we manage it really well.
Um, and so [00:21:00] me, her and my friend ended up going together and getting this house. Uh, we kind of don't like risk quite a bit of money for us at that time to do it. Um, and it worked beautifully. We ended up making good revenue on the, on the house, uh, ended up being a hundred percent occupancy. And this is all in, uh, like quite a bit before we started having, so this is in 2013 and because that model was working well, um, while I was doing rewards, uh, then we started to think about other businesses we could do together.
Uh, and because this was already working well, um, we ended up, uh, like adopting this for our company.
Alvin: So, so the first iteration of this company was of scotch.
Zenos: Yes. So actually op scotch is, we use that name at simply because we had already registered the company. Oh. But we hadn't done anything with it. So we're like, well, we have this [00:22:00] company, like, let's just use that.
Alvin: So, so like how did you start out with, it was just basically the same model. You renting out six bedroom houses and then finding finding occupants and then renting it out to
Zenos: them. Yeah, correct. In the early days, we very much saw it as a shared accommodation thing. Um, and our, our big focus then was for us to earn enough money so that we could start an internet startup.
But about, I would say about, uh, six months in, um, me and Johan looked at it and said, yeah, this is something, actually, there's something here and we want to continue with it. Um, but Ming, uh, here, if you wanted it to be a much quicker growth. Uh, and he also was thinking about internet startups at the time.
And so, so he exited at that time. And then me and Johann continued that journey together. But
Alvin: what was it [00:23:00] that made you think that they could be, there could be something else here that was more promising than an internet site because I've met some people who also, I don't know how long ago they did it, but also a few years back.
They were renting out apartments, not houses, like if I'm on the sale, then pitching it as like a coal living and call walking space so he can walk, treat it as your office at same time as live. But in the end they said that finding the occupants was a big limiting factor for them and they didn't carry on.
So what was it about your model that may you see that there's something to it?
Um,
Zenos: I think. I'm just a very good salesman when it comes to that. Or maybe it's more, I really care about the people that were our customers. Uh, and so even from the very beginning, we really wanted to, to take care of the customers. And so I manage the operations and sales at [00:24:00] that time. Um, and so our, for, for our first, uh, around 50 people that live with us, like I did everything.
All the customer service, um, all the networking, all the sales. And, uh, we were very much targeting as well, the expert working professional. And I think because I was targeting someone that was similar to myself, I was able to make the case very, very well. Um, why they should live in this shared flats and this, the shared accommodation.
Uh, and that said at the beginning, and probably when your friends were running this too, we also thought the same thing. We're like, this is just a nice way to earn revenue. We're going to grow it to be big enough to that we hire other people to do it for us, and then we'll work on something else. And we really didn't have this mindset shift into co-living, uh, until later.
Um, the, because we. We were thinking about [00:25:00] just growing it as like this revenue company growing at slow, um, and continuing to, to hopefully start getting dividends, you know, as an entrepreneur and to our pockets. Um, we had a really nice opportunity through one of my connections to go to Japan in 2015 and we were able to apply the same model that we did here to Japan.
And that model actually worked in Japan as well. Where we were renting to ex-pats and tripping Japanese people like that wanted to live together and then managing the shared flat that way. Um, and right about that time is when we work really started exploding. Like you were seeing them in the news all the time.
They were, they were kidding, like super, super big highs. Um, and we saw them using this, this term co-living, uh, in some of their properties that they were just considering in New York as well. And we started at that point to really think, well, what are we [00:26:00] building? Is it just this shared flat accommodation space?
Um, and what do we really want to achieve? And so this became a bigger conversation, uh, between me and my co founder about where to take the company. And eventually we decided, well, there is something here and there's something special that we're creating and we can take it all the way. And that's when we decided to raise money.
Alvin: So you raise your first seed round around 2016 2017
Zenos: yeah. 2017 in 2017
Alvin: or so, or shouting was one of the investors back then. That's how you got to know her. Oh,
Zenos: yeah, correct.
Alvin: So what, what were you using the funds fault to basically, uh, get, get more clients on board, get more properties on board?
Zenos: Really good question.
Um, so we, we were really lucky to get our seed funding from arm investments cause they were [00:27:00] also in the real estate space and they're like the family office might here in Singapore. And we, we ended up, uh, using almost all a huge chunk of that funds to step up our game and to get to the next step of what we were trying to build.
Uh. And that was to secure one of the biggest co-living locations in Singapore. Whereas before that, we were mostly doing individual apartments because simply our, our capital was limited. Um, we were then able to take that investment and get close to a hundred room, uh, apartment building. And that is what really started to propel the game forward because then we have a lot more control over the entire community and how people move in and out.
Um, and we can provide more services in one location and that, that propelled us onto the next funding
Alvin: or interesting. So basically this investment was, it was also on some [00:28:00] level of strategic and investment because like this fund, they have a real estate, um, entity as well. So that gave you a bit more credibility to get this 100 please location and then expanded, expanded next level from there.
Zenos: Yeah, it absolutely gave us the credibility. Um, but actually we, we never ended up managing any of our investors portfolio or any, at the end of the day. Um, and we were really careful about, you know, taking an investment from someone and then being tied to them very closely, um, and providing services to them more as like an arm of their company.
We didn't want to do that. And so we were really fortunate to find both someone that was already in property but with, but that was willing to. Work with us and see our vision and, and say, well, you don't need to like work with us as company partners or anything, but we believe in your vision and we want to support you in it.
And they were, uh, arm investments was willing to do that. And Michelle Young and, um, [00:29:00] what really believed in what we're building.
Alvin: So how, how, how was your relationship like with them? You will go them. Um, and then say like, this is all plan. We want to expand this way and then do, we'll help you out. Like getting, connecting.
You have the right people in the real estate industry and things like that.
Zenos: Sorry that, that actually cut out quite a bit there. Can you repeat the question? Okay.
Alvin: So how, how, what was the main way in which you worked with, I mean, investments. So basically they will help to introduce you to different real estate managers.
The
Zenos: proper team
Alvin: developed bursts and so on. How to use like security at first. Big deal.
Zenos: Yeah, exactly. Besides just the credibility of having one of the bigger real estate companies in Singapore invest in us. Um, and this is also the, it's part of hub, which is one of the biggest construction firms in Singapore, if not, not bigs.
And so that really gave a lot of credibility that we were going to be able to [00:30:00] manage bigger projects. And. Not runaway with once it failed, if it ever failed or that we were just going to be able to meet our obligations. Um, and so using those funds, we were both able to secure bigger buildings and as well to grow our team and grow our capability.
Alvin: So what was it that you showed them? Showed the investors that convinced them of your vision. So you managed to make it. A revenue producing business, both in Singapore. In Japan, there's this good enough in itself, but for VCs anyway, for VCs, they want to see like exponential growth. Like you can scale it very easily.
I guess family offices are not as constrained by that as much.
Zenos: Yeah. I think what we showed them was that this business model had the potential for exponential growth. Oh. And as as well, that it was a very compelling need for customers in the market. [00:31:00] Um, both of these things as a VC make you want to invest these, like you're solving a real problem and it has the potential to grow to be quite thick.
And both of those are the things that we really were able to convince our initial investors.
Alvin: So what was the problem you identified? Like basically expects one some way to. Live where they can find people like them and like live together and have fun. Oh, you phrase that
Zenos: problem. I would phrase that problem as the future.
I would phrase that problem as the younger generation is looking for a completely different living solution that exists right now. And the traditional business or the traditional real estate model for renting apartments and even rooms. It doesn't work for this new type of customer [00:32:00] because, and this is like the sharing economy customer, right?
And this is the thing we also realized with we work in office space and their explosion into office space was that actually real estate is even a bigger opportunity. Um, and it as well as going to fundamentally change in this way. And it's because people consume their, their Springs today in a much different way.
It's like most people don't own a car anymore, or they don't feel the need to own a car, cause they can get a grab, they can get an Uber or they can find that transportation easily. Um, you know, they, they don't. Just, they don't own things as much anymore. And because of this change, like you take, you take it to Spotify for CDs, right?
Um, it's like you don't need to buy the music anymore. You just rent the music. Um, Netflix, you don't need to buy the movie anymore, or you go and rent it and everything is like convenience and it's all sharing. Um, everybody shares that shared resource [00:33:00] and we really saw that real estate was going to go that way, especially for the younger consumer.
The young millennial that is moving abroad for a project for six months really can't, uh, can't afford to find an apartment, furnish it, sign the, sign up all of the facilities or sign up for all of the internet and utilities that they need to sign up for. They want a already put together solution that they can just pay for.
And on top of that, we were creating community. So these two things combined, uh, there, there's something that's really compelling. Yeah.
Alvin: Yeah. It's very interesting. I think especially like the problem of living situations now, it's still like in these times where everyone is stuck at home late, the, that whole problem is becoming more apparent than even before.
So I don't know if Hmlet had the right solution. It has the right solution solution to that, but it isn't an industry. [00:34:00] Interesting problem. Yeah.
Zenos: Yeah, I think so. And I think it is absolutely a problem that needs to be solved.
Alvin: So like Karen carry on you, you use the first funding round to secure this big location, and then moving on from there, what was the next step in Hmlet.
Zenos: Sorry. It's breaking up again. Can you repeat that one more time?
Alvin: So like after, after you secure the funding round, you seek out this big location. What was the next step for Hmlet?
Zenos: Uh, so as you know, also as a fellow entrepreneur, what ends up happening at that point is you need to continue growing. Now you've proven that you can start to get new customers.
You're growing the team. But then you need to continue finding funding so that you can continue to growth. Sorry. Sorry about that. You need to continue finding funding so that [00:35:00] you can continue your growth story. And this is where we once again went out and started raising funds and we were really fortunate to be introduced to Sequoia.
Um, and what ended up happening is we invited, uh, some of their representatives to one of our parties. Our opening party of that building. And once they saw the product we were putting together, um, they were really interested in and invested in our company.
Alvin: Oh, nice. And, uh, I think, I remember this funding run was actually closed around end of 2018 or 2019.
So there was this second realm. The first round was like an angel round that this angel and family office, this was an actual VC funded realm. You know, you'll see what he's a.
Zenos: Yeah, the series seed was actually, uh, arm investments is actually a VC. Um, so we, we did it as a series of series, seed round and yeah, this was our first, let's say, [00:36:00] institutional big BBC that we brought on board.
Alvin: So like, using this money, that new skill, even for the, you, you actually acquire a co-living space in Hong Kong and, uh, that was how you expanded into Hong Kong at that time.
Zenos: Yeah. Actually, all of them, all of that negotiation and whatnot happened right after our series seed. That's when we got some news out.
And the, sorry, again. That's when we got the news out and the, the managing directors of the Hong Kong entity saw what we were doing. Um, they saw that we were also considering the Hong Kong in the future, and so they reached out. And we ended up having a really great, a really great vibe, uh, like we just jelled really well together.
So over the next few months, we worked out a deal where we would acquire them.
Alvin: So, but was it really more like a mojo than an acquisition? So did the founders of debt, and did [00:37:00] the get some equity in the combined new, um, entity?
Zenos: Yes, correct. So, so we, it, it really was like the, the full acquisition, um, where we, and, you know, there's many types of acquisition where you can acquire just the company assets or the company IP, or just the founders for instance.
Uh, and, and in this case, we, we really wanted us to be together as one entity. So we, we did the whole thing.
Alvin: Okay. So then very quickly, the next year after that 2019 then you, you raised a series B. I remember my friend and EFS diamond, so I was an ETF. She went back to the U S and she saw Hmlet on the news in the U S you just raised $40 million.
Zenos: Oh man. I would love to see that news. That's
Alvin: amazing. Yeah. So, uh, what, what was the plan for this $40 million? But I remember like. Actually [00:38:00] Hmlet, even in Singapore, he was acquiring more larger species as well. That one, there's one in cut dong. Not all my ear friends was living there actually. Then you also have one at Marina B.
This was, this was around that time that you were acquiring the properties.
Zenos: Yeah, correct. Yeah. And you can see that, uh, I think it's typical of the entrepreneur journey and, uh, the company growth cycle is that. Growth kind of just accelerates at every single stage of funding. So once you have a good recipe together, um, well then you just need enough like the ammunition to get it done.
So it really is, you know, getting enough money together to buy the ingredients to make a
Alvin: successful company. Yeah. But the, uh, the model has shifted a bit by just fine because you are actually building out the properties, acquiring the properties and building them up rather than subleasing them.
Zenos: Yeah, so I, I can't really speak too much to that side of the [00:39:00] company cause this is also at the same time that I was exiting the company.
Um, so yeah, lots, a lot starts to shift, especially as the company starts to grow up. And what I realized there was that I'm, I'm really good at the early stage of companies. Um. Yeah, exactly. And the one to 100, actually, the company turns into a real corporate entity. Um, and so for, for this stage, I think that, um, I have lots to learn on that side of things.
Um, but actually I think where I can provide the best value is in the zero to one stage and, and that's what I'm going to focus on,
Alvin: right? I think that this is good lightly knowing, knowing what your strengths and working with your strengths, um, as something a lot of entrepreneurs should learn as well.
Like, if you are good as you're the one, just do just do that.
Zenos: I mean, I love, I love to be good at everything, but, and that's what you [00:40:00] need at the stage zero. Right? You need to be really adaptable and able to do, do everything. And as the company grows into being a, an actual corporation worth, you know, tenths or hundreds of millions of dollars, well then everybody needs to narrow the focus and be good at really only one thing.
Um, and, and I actually really enjoy doing all of the things that are necessary for the company. Um, and that's where I'm really good at executing.
Alvin: Because like your background was actually in software engineering, but you went into sales and operations with, with Hmlet. So it's quite different from what you were doing before as well.
But you enjoy that. You actually enjoy
Zenos: doing handyman, but cleaner.
Alvin: I remember watching this old interview with James Goldsmith, so he's a billionaire. He was very famous by in 1980 so, so you're saying like when you're running a small business. Basically you have to do everything, the marketing, the merchandising, packing everything yourself, and then [00:41:00] like, he really enjoyed that.
But as your company grows bigger, then you have to learn to delegate more and more. And, uh, like from the interview, it seems to me like he enjoyed doing that stuff a lot. So it seems to be the same for you as well, doing many things.
Zenos: Yeah. I really do enjoy doing many things. And I, I find that that kind of, I'm able to shift a lot of mental focus into different things, and that's really fun.
Whereas if I'm doing the same thing for 10 hours in a day, then I get a little bit, I, I'm too distracted. Like I want to be doing other things. So,
Alvin: uh, so was that the main reason why you, you left him. No, no. You're studying a new venture. Was that the main reason why you want to do this zero to one stage again with a new idea?
Zenos: Yeah, I do. I mean, of course this, this comes with a lot of consideration with, with the board, with the current [00:42:00] investors, with my cofounder. Um, so all of that comes into play and, uh, you know, it's always like a tough decision to make. Yeah, definitely. Yeah. Now moving on and doing my next thing. I'm really excited about
Alvin: it, so, okay.
You don't have to answer this if it's too personal, but was it also because at some point, like the skills match between you and Yuan, you had too many overlapping skills? Uh. And by, by the time he was thinking of exiting, and then that made you, that was like, for other reasons, I was like, this is something I've heard from a few other founders.
He's also, they feel like having as few overlapping skills as possible, your co founders is a big factor in building a company together.
Zenos: Um, I, I think to an extent that's true. Um, you, you either need a. You either need almost [00:43:00] completely overlapping skills or very different skill sets. Um, I do think that me and my cofounder have very different skill sets and a lot of ways, um, and, but where, where I was not able to, uh, dive in further was in, um, you know, managing a hundred percent an organization.
So that. Like where I want, where I want to be is in, in building up a small organization, you know, really lean, scrappy, and getting stuff done. Um, and then that next stage is, is something that I think I may learn in the future, but definitely, um, what the company needs right now, uh, is people with a lot of experience.
So we ended up doing a whole bunch of interviews and bringing all of these skilled people into the company. Um, so I'm, I'm really proud of the team that we were able to build. And at that time, um, once we had everybody in place, that was the right time [00:44:00] for me to look at like, well, what is the next
Alvin: step?
Okay. Interesting. You know, um, I've been reading a lot. Okay. I don't remember which article this was exactly, but there are some other goals on VC sites from founders who say like, at a certain point, you have to know whether. You might want to fire yourself from a certain job and bring on, bring on a seat, fire yourself as CEO.
So actually like Larry Page, Larry Page did it himself, and then if I am cell phone, well they, they brought on Eric Schmidt after that, afterwards he came back again.
Zenos: Yeah, yeah, yeah. I absolutely think it's a really important, and it's, it's a really hard thing to do. Um, and I think it's one of the hardest things to do as a founder and coming to that realization is, um.
Yeah, it can take a lot of time. And, but finding the right people to run the organization is absolutely critical because once the company has grown up to be, say, a hundred plus people, you really need to think about [00:45:00] like the roles, responsibility, and who's the best person in order to get something.
Alvin: Yeah.
It makes sense. So what, what's your next step right now?
Zenos: Good question. Um. So I'm doing a couple of different things. The first is taking a lot of time for myself. Uh, I haven't had a vacation in five and a half years, so this, this is a really great time for me to just relax, uh, read a whole bunch of books and dive back into learning about the entrepreneur's journey.
Um, I'm also spending a lot of time advising a couple of companies right now. Um, and this has been really great. One of those is Matt thread, which is a clothing subscription service. And that like learning about how this new company that I haven't had operational experience and um, learning about their journey has been really great.
And then basing them on, you know, funding and the next steps for them and [00:46:00] how to navigate their growth has been really great. Um, so I'm doing that not just with, not thread, but some other companies as well.
Well,
Alvin: you, you mentioned that you, you have an entree pass right now, so, uh, are you like, uh, so for those of you not in the, not in Singapore, aren't your boss buses like a visa, a special visa for entrepreneurs?
So, so are you, do you join some, um, fun that, that, that is helping you with Andre POS? Oh, sorry.
Zenos: No. So actually I ended up applying for other entrepreneurs with an idea that I have. I can't share too much yet because I'm still like right in the midst of developing it. Um, but I think it, it does play into my, my skillset and both in technology and real estate, that type of customer.
Alvin: Oh, interesting. So, okay. I guess you, yeah, maybe you can pop on the shore in a few months. [00:47:00] More about their company and,
Zenos: yeah, absolutely. I, I'd love to, um, I, I think I'll always at the early stages until you have like a product out there, it's not that you want to be so secretive. I, in fact, usually you just want to tell everybody about it.
Um, but you, you want to get a little bit of traction and get things a little bit cohesive. And we're still just really, really early stages. Uh, so, but I actually, I was, I was really happy to get approved for Entreposto because, you know, I haven't gone through an incubator or anything like that. Um, but, but, uh, actually I got the past, like one day before they shut the border with Malaysia.
Uh, so I was just really lucky to get it at the right time, so I don't need to leave Singapore.
Alvin: Yeah. Nice. So, uh. Wait. Okay. I forgot the question I want to ask. I agree with, again, we, again, I'll tell him, but let me try it. We're going [00:48:00] to go, uh,
Oh yeah. Okay. So I remember, I think, I think I saw your old get hot. You're using Django. So was this something that you miss. W w when you were doing Hmlet because it didn't seem like it was your role, there was very technical. Was this something that you missed, like coding and not building something?
Zenos: I did miss coding a lot when I was building Hmlet.
Um, but I also kind of mandated that we not use any custom technology until we started raising significant funds. And the reason for that is there's lots of off the shelf solutions or that you can customize enough to make it work for your business. And until you have a really strong business model, uh, hypergrowth and, um, something that warrants you spending lots of money on technology and you just don't need it, right?
[00:49:00] You can, you can use Google sheets, you can use other things that are out there. If you're an eCommerce store, you Shopify don't build your own thing until you're really, really ready for it. Um, so w we didn't end up getting deeper into technology until after our seed round. And that's when we started hiring, uh, technology staff.
So we did end up doing some, uh, technology solutions and initiatives. Um, you know, we, we built an app, the website, um, a whole bunch of other things, but I never really got back into coding very much while I was at Hmlet. Cause there's so many other things to do as a cofounder. Uh, and so, yeah. Uh, I do absolutely still miscoded in, um, I'm getting into it a little bit these days, but something I definitely miss.
Alvin: Yeah. But like what you said earlier makes sense. Like, even within coding, a lot of times you can just use a lot of open source libraries and frameworks. Uh, and I don't know [00:50:00] if you've been following it, but there's, there's no quote. Low coat or no coat movement. So it's quite active on Twitter, the of tools online now that help you, like even if you want to create a market place, there are tools and help you just create a marketplace.
Shopify. Um, I saw this Twitter thread the other day. People get, this guy went for for a job interview and they asked him to create, create an eCommerce shop in three hours. And then he said, I would just. So Shopify come and sit and sit for three hours.
Zenos: Exactly. It's like this. You have the solutions out there.
Um, and why not use them and leverage them when you can. And I really believe that that is the future kind of entrepreneur journey for a lot of companies. Not that they don't need to create their own tech. They will, but they can get by for quite a long time using solutions on the market. Yeah.
Alvin: Like basically [00:51:00] using, using the, these existing solutions for your MVP, but as you, as you actually demonstrate that there's traction that people actually want this, then you can start building out your own technical capabilities as well.
Zenos: Exactly. Yeah. And a lot of what you can build is simply the UI and then the backend is humans. Right? Or, or the backend is even a Google spreadsheet or something that, that you apply a macro to like you, you can solve a lot of these type of, um, problems in with preexisting solutions and, and then build it later.
Yeah. And actually you can get really, really far without doing like huge, deep tech things unless that's your startup, right? If your startup is providing a service or, or. Something e-commerce at, um, you know, typically you can just use off the shelf solution.
Alvin: So is that what you're doing for [00:52:00] your next
Zenos: idea?
Oh, for sure. I mean, you, you have to, you have to use as much off the shelf as you can. Um, because it, it's kind of silly to build everything from scratch. Yeah. So, so go out there and find out what your competition looks like, what everybody's using. And then go find the off the shelf kind of solutions.
It's like, is irritable a good fit? Uh, can, can you use like, um, some of Amazon web services like premade, pre-baked solution? Um, there, there's so much already out there that you could leverage and then you can outpace your competition just by using these things that other people built. Because the idea out there is, I need to build it from scratch.
And in reality. You need to make sure that you're serving your customer better than they are. And it's oftentimes, it's not about the tool you're using or that technical solution, it's that you're closer to your customer.
[00:53:00] Alvin: Interesting. Okay. So let's wrap up here with some quick fire questions. Um, yeah. What, what's, what, what's your favorite book?
It can be a business book or even a non non business book fiction or
Zenos: something. Wow. Um. Favorite book is Ender's game by Orson Scott card, but favorite business book that I read is venture deals, and that shaped my entire fundraising mentality and what type of deals that I should be accepting and how to navigate fundraising
Alvin: and those games.
Are you into sci-fi did you eat quite low scifi.
Zenos: I would say so, yeah. Relatively big amount. Yeah. Okay.
Alvin: So, so, um, what, what's your favorite tool right now for, um, ID thing on your next venture?
Zenos: So one of the things I've been using a lot is called [00:54:00] Miro and my R. O. Oh,
Alvin: yeah. I know mural.com you can use it to basically brainstorm and. Do different diagrams, very easily white boarding white button on your screen, basically.
Zenos: Yeah. So it's super useful to be able to just plan things out and get them in a visual format, but not have to do this with sticky, like sticky notes or paper.
Um, like I don't have a lot of space on my desk right now cause we're kind of corn. Everybody's working from home. But mural is like this, just this massive whiteboard that you can throw things on and organize things in that way. And so that's been amazing for ideas. So
Alvin: who wants some CEO's, you know, uh, personally are you thinking of doing interesting things?
Zenos: Um, good question. So I just mentioned the mad threads CEO that I'm doing some advising for. Uh, and I think that her business model and the way that she's approaching her [00:55:00] customer is amazingly good. And I think she's going to be able to take it really far. Um, some other CEOs, uh, recently, uh, so I'm part of a group called C founders, SCA, founders.
And this is for post series a companies, uh, founders to be able to join. And recently did a masterclass in Thailand before all the circuit breaker stuff happened. And, uh, I, the, the speaker and the guy that we were talking to as the CEO of pomelo, and it was amazing to see this story, uh, and about kind of how he approached the fashion world.
Um, so I really enjoyed that. Okay.
Alvin: Interesting. So what's one. What's one thing you would tell yourself and the style of this whole startup journey? Like what was one thing then you have now would tell that you have back then?
Zenos: I, I think that one of the things I would [00:56:00] say is that while it's all worth it, because along the way there were, I don't know how many times I thought I should just go back and work for a corporate like. I have $0 million in my pocket, like we're not earning enough revenue. Um, I invested all my money in this company and I could be working like, you know, a senior developer, position it at any tech company and making enough money to be really comfortable.
So like, why am I on this entrepreneur journey? Like, is it really worth it? And I, there were many times where I doubt I had a lot of doubt whether. This was what was going to be the thing that was worth it in my life. Um, and I just have to say this.
Alvin: All right. All right. Thanks a lot. Zenos. So, uh, thanks for your time and then like, hopefully you can come back on in a few months to tell us about your next venture.
[00:57:00] Zenos: Okay. I'm really looking forward to it. Yes.
Alvin: All right. Okay. Thanks.
-
Rathin Shah is the CEO and Co-founder of Spenny, a FinTech app helping millennials in the Indian market invest their spare change. He started his career at JP Morgan, then launched his first startup creating pallets for shipping, which he exited before entering Entrepreneur First to launch Spenny.
https://spennyapp.com/
Learn:
- What he took away from JP Morgan that helped him on his startup journey
- How he validated the idea that became Spenny using a picture of a monkey
- his experiences with his first company
- What he learnt from Y CombinatorFavourite Book:
Netflix Culture Handbook (https://jobs.netflix.com/culture)
[00:00:00] Alvin: Welcome to Abyss Gazing, the podcast where we interview entrepreneurs about how they started their businesses, the challenges they overcame while building their companies. Today's guest is RathinRathin: Shah
Alvin: Rathin is the CEO and founder of Spenny. A FinTech app helps customers in the Indian markets save your spare change Rathin.
Graduated as an electronics engineer and was working as an investment banker after graduation. He then started an industrial manufacturing products startup before joining the talent investor Entrepreneur First, he went on to Y Combinator with his idea Spenny. Rathin. Are you ready to
Rathin: begin? Yes, absolutely.
Very excited to begin. Okay,
Alvin: so just to the viewers know, I forgot to press record, so we are repeating about 10 minutes of our conversation. previously I was asking
Rathin: Rathin.
Alvin: He graduated as an electronic engineer, but he went
Rathin: into
Alvin: KPMG and then JP Morgan, even though he had a lot of like
Rathin: entrepreneurship related
Alvin: activities [00:01:00] back in university, he started, he was a co founder of a
Rathin: tech bottle called top talent
Alvin: in and the center for
Rathin: entrepreneurial leadership.
Alvin: Rathin was telling me earlier about why he decided to do that instead of starting his own startup after graduation.
Rathin: Yeah. I mean, you know, way startups. I like this. you know, we started working on something and we realized we forgot to press record. So it's funny. but, no, I mean, the reason my actually, as a part of my university, I was super involved with a lot of stuff.
During my first year of university is one, when I had my first brush with entrepreneurship and I fell in love with the idea of, you know, working on an idea and implementing it, taking it to, you know, taking it to a real. A business. And that is super exciting to me. And so us, for us, what we did was that every year we would sit down and, you know, well, I figured out one idea that we wanted to implement during the course of that year, and that's how we came about.
you know, toptalent was one of that the center for entrepreneurial leadership was [00:02:00] another one of that. So on and so forth. But while doing these things, I do realized also that, there are a lot of stuff, there's a lot of stuff that I need to figure out before I can actually run a full pleasure business.
in fact, that the things which I want to get trained in the things which I want to get, Jane myself in, specifically by working in. High pressure work environments. and, and in good brand name environments, which can really help me develop as a person. And then that can, that skill set can help me in my businesses later on.
So that was the whole idea. And so that's why after university, I was, I was very lucky to be associated with two of the top brands. one escape BMG and the other was JP Morgan. Both of them are of a good high risk. I mean, high intensity work environments. and one of them had me a lot in, in, you know, shaping me to, to do my businesses later.
Yeah.
Alvin: So tell us a bit about
Rathin: how,
Alvin: what, what you brought away from the experience at JP Morgan that helped you with startups.
Rathin: Yeah. Yeah. Okay. So, specifically with JP [00:03:00] Morgan, my role was I used to work as an investment banker, with JP Morgan and, working across geographies, in India as well as in London.
I was, I was majorly walking on the Europe and geography. for me, I used to walk in the MNA advisory division, which is mergers and acquisitions advisory division, specifically overlooking the AMIA and all the sectors of consumer health ed and reading. so essentially any, any companies, within the consumer, retail and healthcare sector.
Which would require modern acquisitions, advise anyone, anything of that sort is something that our team would look at. and for me as such, my personal takeaway during these two years was that I really got to know about that and that business life cycle. From, from a financial standpoint. So, you know, right from the point where a particular company gets their first round of funding as a startup all the way up through, you know, CDs, ABCD funding, and then eventually, sometimes leading up to IPO and eventually getting acquired.
So, it really, for me, it was more like a first hand [00:04:00] exposure towards the life cycle of a company to the financial standpoint. And I got to know stuff about valuations. I got to know what exactly how violations are commanded, how they are said or what, what happens in an IPO. I also know about the strategic side of the business, how businesses are run, how they expand into new geographies, how they look for other acquisition opportunities and so on and so forth.
So for me, it was really like a first world glimpse into the business world, which really helped me
Alvin: later on. So like both of the students out there.
Rathin: I'm thinking
Alvin: of doing something similar. Can you can tell us a bit about how
Rathin: JP Morgan
Alvin: investment banks work with different entities to invest in startups or like just provided advisory
for startups
Rathin: yeah. Okay. So in general, JP Morgan is one of the big bulge bracket buybacks, which means that they don't work and a hands on with startups so much. They're more like a advisory funds for the fortune 500 companies or the multinational corporations. But what happens is that there are a lot of [00:05:00] PE/VC firms which invest a lot in startups, especially in early stage or even in late stage startups and take controlling stake on the startups.
And so these VC firms come to JP Morgan. to get advisory on what sectors outside of, to work in or, or what are the opportunities out there in the market, which are hot and which can be looked at. So that's how basically JP Morgan is basically like a one step away from the action. But from there on, they can actually, they take a bird's eye view of the entire landscape of the entire scenario of startups.
And that's how they get to know about stuff.
Alvin: So you actually
Rathin: mentioned earlier that. The
Alvin: idea for your first startup Recopro , is that
Rathin: right?
Alvin: Okay. So I, if for Recopro, you already had it while you were in university. at the back of your mind, was this something that you wanted to pursue even when you started your
Rathin: career?
Yeah. Interesting. Okay. So interestingly, like Recopro was started actually while I was in my final year of [00:06:00] university, and it was something as a part of the project that I had done that. And it was kind of like an incubation period. And when I decided to go for a job, and, very interestingly on my first day at JP Morgan, I actually went to my manager and I said,
Hey, I'm here for like two years maximum. And after that I'm going to quit the company , quit the job and start my own company. And that's my, that's been my dream always. And it still is. I'm here for a short amount of time and I wanted to learn as much as possible within this, two years. which by the way, is very odd to say to your boss on your first day of a job.
and I would not recommend, you know, doing that, you know, in my case, however, I think, my mentor, and my boss, basically mr Samuel bioenergy was, he's been an extremely influential, person in my life and he's been very supportive, very nice guy. And someone that I look up to. And, you know, the effort to, even even today.
You wouldn't do it today. So it was a what supportive person. And I think that [00:07:00] that really helped me. But so for me, my mindset going into the job was always that, all right, I've given myself a deadline of like 24 months. I want to extract as much learning as possible from this. And, you know, I'm like a sponge.
Just absorbed the knowledge and then, quit the job and then started working on my own.
Alvin: So what
Rathin: you
Alvin: say also, you throw him down on the first day. Like, what was, his immediate reaction?
Rathin: So his immediate reaction was a couple of things. One was bewilderment and he was quite amazed as to why would someone say that literally on a first day of job.
and he was amused by that. But he, I think at some level, you also saw promise in the sense that he knew. I mean from, from day one, I, he knew that I'm going to do something for sure, and I'm going to, I want to leave, leave the job at some point. At the end of the day, investing the, he told me that, do you know how many people have told me this?
It's interesting how many people tell me [00:08:00] that they will quit the job and walk on their own startup or work on their own thing, but very few of them actually do. and so I'll see that when you actually do, and so it, that stuck struck me, that stuck with me for the entire time and I knew that I had to stay true to it.
And` then eventually on my last day, he was still my manager and he was still there. And, I, really, you know what I mean? Went to his room and we had a long chat about this. We had a, any, any, and we laughed about it and he was actually, in the, divining me of the thing that I said to him on day one is like, yeah, so
Alvin: like, So tell us a bit about reco, you you've designed and manufactured recyclable paper pallets by, for storage components over there. So, yeah. What was the Genesis of this idea and how did you start?
Rathin: Sorry. Oh, yeah. So interestingly, my starting point, my starting point is very simple. The idea was I wanted to, Mmm.
I wanted to do something [00:09:00] to reduce global warming. That was the goal. Now, there are multiple ways to look at it, but then the way I wanted to do this was that I want to do reduce the cutting down trees, by replacing wood with recyclable paper. For certain essential items like logistic based products, like , like the balance, basically.
now what happened was at MV, you're that thousands of trees, which occurred for, for creating this palette, which are used just once or twice, and then they're thrown off, and then you've got new trees again. Rich do my mind was ridiculous because if we can develop so many recyclable materials or a lot of other use cases, why not for this has been so that's what the whole idea of, that's how I did, you know, started and, and then we looked at a bunch of other materials that could replace food.
Eventually we came down to recyclable paper. And this paper is basically sourced from your waste materials and it's 100% company DV psychos who don't need to cut. and then the challenge was to design a design of [00:10:00] ballet, which by the way, if you know about it, is a platform like structure or which you keep about 3000 kilos of goods, and it's, you take them from one based on other using forklifts and, and inside those containers.
So, which means we have to make our recycled paper palette as strong and as sturdy as a wooden, which can hold like 3000 kilos and still stand, still, like still not get destroyed. So that, that's, that was the design challenge wasn't, and reordering him that dimensionally, and that's how we started with the department.
So like
Alvin: when you were just starting out, you apply any of like the valuation metrics that you learned from JP Morgan to creating a business model. And so on.
Rathin: Yeah. interestingly, I, this is my personal opinion. I feel like many people, like too many entrepreneurs out there, worry about valuations and finances and, and projections who, or lead with the startup.
so to be honest, I started, does not take shape for [00:11:00] like, you know, good. good. two, three, four years. I mean, it can take almost three years for some time for a startup to figure out the product market fit, figured out the monetization model model, figured out the unit economics, figured out the projections, so on and so forth.
the reason why my investors generally like to like to see you have a projection or our valuation metric in your mind, et cetera. It's to basically see if you've done your homework, you have some sense of where you're going. it's, it's a classic case of, it's a classic case of, you know, how they, how they say, without a goal, you can't score it.
So this goal may keep moving. What do you need to have a goal in the first place to begin with? Otherwise, you're just going to go out and go on and sell goods. And so what that means is that yes, you should spend a little bit of time around finances and valuations and getting our high level projection, but don't spend sleepless nights, or would it because.
Things I want to change so rapidly, every night that are more things that can kill the startup in the [00:12:00] short term than in the term. And I'll be my special. and so that's why I think that, yes, Morgan hit me significantly in the projections and all of those things, but I feel like the amount of.
Headed there, I need it is something that even with people who have no finance background can do it. Absolutely.
Alvin: Basically like an investors want to see that you've done your homework, that you're thought through all these things, but they expect like none of us are not going to be
Rathin: accurate. Exactly. 100%.
They, in fact, Paul Graham, very, recently we did, saying that, often, like most of the startups actually planned for the longterm. Well, what kills them is the short term. And it's ridiculous how, a little tiny percent of the startups actually plan for the short term. So what he says is that, listen, you need to, the longterm, you need to plan for the long term if you are going to be alive in the longterm.
And so you need to plan to stay alive. And to stay alive, you need to thwart the most imminent danger to your startup. And for my startup, for example, or for any of the [00:13:00] early stage startup, it's not whether your valuation of the company is 10 million or 12 million, it's not whether your revenue down five years is, you know, a a hundred million or whatever.
It's actually that a, can you achieve product market fit or not? Are you creating something with the users actually want? If not, go back to the whiteboard, talk to users and, you know, keep looking. I mean, yeah, that's, that's how, that's what you wanted to optimize for.
Alvin: Was it something you did with Recopro?
what did you do in the short term for Recopro to try to achieve product market fit.
Rathin: Yeah. interestingly, I did none of these things, for Recopro, I did every possible thing, opposite to what I just said. And I think that's, that's how I, I learned from the mistakes as well, because, for me, I was coming from a JPMorgan environment where it was, you know, like a multinational.
Global corporation working with thousands of employees. It's a very different mindset. And when you come down to a startup and you literally are the, you're, you're literally the first person and you are the everything of the startup. [00:14:00] You are the compounder, you are the CEO. You are the. electrician. You are the, mechanic.
You are the strategy person. You're the business person. Everything, which means that, initially, I mean, at that time I was in a very idealistic state of mind and I, and I actually created . Like an 18 page business plan and a 15 slide deck and all of those things, which in hindsight I'd realized was pretty stupid, does not require, you should not be focusing on all of those things.
But I did. I did all of those things. I created a evaluation and I did not optimize for the short term. It was about three or four months into the of when I started realizing, all right. which mean for two months now, I have not moved the needle in terms of a product. I have not moved the needle in terms of customers.
I don't have any significant traction. There is no good product development. I don't even have a good team. and you know, I've been spending most of my time, just making decks and chasing investors. And so that's when, it was suddenly [00:15:00] I changed my approach three 60 degree. and then is when I.
Then my real journey started. So I then I started speaking with the users. So I got to go down, got my hands dirty, spoke with a lot of, potential customers. What are the problems I get? I literally, visited like to it 12 or 13 factories, every day. And I did that for three months, from then on.
And, I got to know so much about the problems that they have and all that. And I went back to my. you know, office started working on the top three or four problems, and that's how we started on the product group.
Alvin: you went on to do Recopro for actually a few years. You managed to actually create and design this recyclable paper pallet, which I think I remember you told me that it's still ongoing.
It's
Rathin: still ongoing with your whole cofounder. yeah. So basically what happened was, so for the first few months we were. you know, as I said, we would've lost after that. We started working on the product, [00:16:00] and I ran it around the company for two years. yeah, actually excited two years. And after that though, one of our initial investors had a portfolio of sustainable products and, he offered to acquire the company.
And that's when, I saw an opportunity. because he was an established industrialist who had, who potentially produced this manufacturer does that at a way larger scale than we could anyway do ever. And the mission always since day one, was, as I said, to save the cutting down of trees. And I felt like he would be able to help this mission way more than anybody else.
And having found the perfect fit, I think, you know, I took that opportunity, the company got acquired and I got an exit. Oh,
Alvin: nice. So that was your first exit, like after, after make all these mistakes, you turned it around and you actually did the customer development process, and then you finally created this product.
You launched it, and you had a few customers, but you got this attention of the industrialist and [00:17:00] then he offered to acquire company and then that was your first exit.
Rathin: Exactly. Exactly. Yeah. So
Alvin: after that you actually got into INSEAD, the MBA program and you applied for EF at the same time.
Rathin: Yeah. that is another story. So actually what happened was after my, after I got the exit, I, I kind of took a step back and I wanted to take perspective of what do I actually really want to do? What am I passionate about? And so I took about six months off from working on anything and I was actually doing a bunch of experiments.
I, what I wanted to do was I laid down a list of all the things that I always wanted to do. Since university and I started doing them one by one, one activity per month. And so I think, I think I did speak about that with you. So, the, for the first month I tried to stand up comedy, so I performed stand up comedy across four for 30 days.
And then finally, for the next month, I did travel blogging, for, for the next month I pursued music. I'm a trained percussionist. So, I used, [00:18:00] I pursued, Indian percussion for, for a month, and so on and so forth. So I did like multiple experiments. I'm going to six months and that was the time when
I actually applied for business school. and I got, got through INSEAD, a couple of other good universities across the world and I was about to join the INSEAD university when a friend of mine actually, he was a part of the EF. SG 4 batch. Sahil from Atomionics . So he's a very good friend of mine. He is also from my same university.
And so, he, he tweeted something about EF and I just went accidentally to the website and I was checking through and I found that super interesting. I was like, Oh, this is interesting. And so I applied. and at that point I had already applied to Intel, had gotten it, and I was about to join the MBA program there.
I had. I remember I had about four weeks. Yeah. I had about a month before joining the program, and I actually applied to in Bangalore. because for some reason I thought [00:19:00] I'd be more relevant as a, as a candidate to the local board. And, interestingly, I had a conversation. I mean, I had an interview with the EFL Lordy.
And they rejected me saying that, you know, I should, probably not yet. An IDN probably should work on something else right now and then probably come back again. so that is what he investing. So I was like, okay, this is interesting. but I, I wanted to, I found the concept so interesting that I was like, I need to go.
I need to get into IEPs. And then as, as a, as a, as a more desperate measure, I applied to all the ETFs, F London, baddest, Berlin, Singapore, everything. But the problem was the deadline for Singapore had passed already. and it was June. I remember the date, I think it was toward June, I think it was 14 June or something of that time.
Yeah. And the eff Singapore cohort had closed, as in the application been closed in me. And so for me, I just reached out to Frankie, why? I think when I was, I hit its head [00:20:00] and then, I spoke with Frankie and Frankie told, I haven't actually applied for the next score. Oh, that's so funny. You just got on a call, you know, explaining about the F and I said, yeah, I know about it.
I actually want to apply to this court. And he said, wait, but I don't do a quicker. The next one. I said, no, no, no. I want to buy for this. And he said, Oh, in that case, let us take a proper in w a and said yes. And then he said, alright, let me get off the call right now. I will schedule a proper interview tomorrow again.
and then we can have a proper interview and all this. and so I said, yeah, cool. I got to the call next day. I had an a dose loaded with Ben fromF and a that ended, we went, went, and that's how they decided to roll out an offer to me of Singapore. and so quite literally in language, I Honeybadger my way through to the Singapore cohort after getting rejected in the Bangalow cohort after the lens that passed.
So, quite a story. And then once I got, I remember the day very specifically because, June party, it was my boat today. What's today? The first email I saw [00:21:00] was that I got into yet. So does like a great present. And, at that, at that time I had to make a decision of whether I want to go to or go to Singapore.
And my, my, my, I had my French visa. Everything was done. My flight tickets to France when seven days. And I had to make a decision and I called up my parents and I said, Hey, listen, I am not going to, I'm not going for, I am instead, I'm going to join yet. And then I do give the whole speech about what eff isn't explained them.
and yeah, that's how, that's how I decided to join you. What was it
Alvin: that made you decide to join EF NCO? Was there, is there like this thinking process?
Rathin: So, for me, I think one of the mindset changes that has happened over the past few years since I graduated is that idealized that, there are two ways to live life.
One is that you are. You are good at five things. I'm at an [00:22:00] 80% level, in which case you're better than 80% of the people at five things, which is great. The other thing is, you're, you're good at one thing, at 99% level. So you're better, better than 99% of the people in one thing and you don't get about the others about, about the other things.
None of this way of life is right or wrong, but does this two ways. I realized that I used to live the first, way of life. Or for the forest, you're not ready to hear the my life. That's how I've lived for the first 25 years of my life actually. And, I realize that if you want to be legendary at something, if you want to really make an impact in the world, Judy, reached a particular success in one particular field, I think it's the second field that you need to choose.
if you think about any field, and if you think about the top person in that field. They added the Adam. They are mad people who just fought with the, putting their horses blinders on, the focus on one single thing, and that's what they want to get. They want to be so good at that, that then legendary in that particular thing.
And then they don't [00:23:00] get about the rest of the things. And I realize that getting an MBA from INSEAD, even though full respect to the people who that and full respect to the university, it's a great band name. But I do realize it's a generic degree, and I realize I want to get deeper into the startups world.
And I'd really want to be, you know, dedicate my, you know, my energy is, especially my young, young years, that, that particular thing. And I also realize that if I can go for the MBA program, then I would have to shut out because, I mean, it's really expensive. So then I would take a loan and then to repay the loan or do a job, it's going to eat up my entire twenties.
And I don't want to be in a position where, you know, I wake up certainly at 35 and. Hey, I had an abortion, or you do do a startup back in my twenties and I did not, and I didn't want to say that. So that's why I joined yet.
Alvin: Yeah, so that worked out quite well for you. Right now we don't own our future, but so, so far it's getting going quite well.
[00:24:00] So the end of June, you got the notification and then you fell down for
Rathin: a
Alvin: year. I went down to the kickoff weekend, kick off weekend, and then you met people there and then you just. So, so your first co founder was actually Julian, and he's still a good friend of yours. Can you tell us a bit about how you, how you met and how he formed the team and, how you validated the idea?
Rathin: Yeah, so for us, I think, A off weekend was, as I said, the, I, I ran to pick up again. I mean, you were there and had, had a great conversation with so many good interactions. and I had never been exposed to like a hundred people with so much talent, all of which wanted to do a startup. And so for me, that is fascinating.
Just out of them. And, I was loose using the opportunity to just speak with, speak with as many people as possible and get to know what their background is and try to figure out if we have any synergies to potentially make a startup there. so that was a [00:25:00] process. And now through the entire, you know, why that was walking the cohort as I'm just speaking with everyone, for somehow, I think conversations with Julian were amazing.
he was super invested in different deck. at the diamond you started speaking of. And I was interested in FinTech as well. and so, I mean, I had literally gone from the finance background. So for me it was more like a national thing. and he was, he was also a director of engineering at a tech, a startup space.
So he was, I mean in his light is pretty much one of the best people at eff. not Justin double-up, a software developer, but also as a leader. And as a, as someone that, you know, you can start a company with. And so we hit it off immediately and, we have a good change. Actually, that was a key to, you know, having a paid partnership.
And, that's also I and speaking of, I was speaking with someone else as well. You were speaking to some of the answers, but what do we do with that? Is that. We both could accomplish. We're Greta in 48 hours as opposed to we could do with other people. And that is an [00:26:00] experiment that DF suggest, by the way, that, you know, try and get a fond of it by, by having start experimental coordinators and feeding artists.
If you're working with and for us, what are you realize is that I'm, I'm, I'm more on the high energy side. and he is the calm, composed guy. So it does, but as it does have find a nice combination. And I think we did, you know, we'd be good friends. We still have great friends. so to support each other.
Just the other day I actually texted him, Hey dude, how do you hire technical people just to give me some ideas? So, and then, you know. We always on, on text. I, I'd afforded application. Do I see this in me? So, yeah, we have a good trend. Now. The thing is, we made fun of fast-moving D. that was the crux.
We made four of eight possibly demon. That's why we decided to start working.
Alvin: So you, you actually, you, you have a very strategic and creative process on how you value that as brother. I remember you
Rathin: print out Arby's. Posters of a monkey with like some gambling
Alvin: thing and then you, you, [00:27:00] you had this gambling idea, originate on point investments and then
Rathin: like
Alvin: came to us a bit about
Rathin: how you,
Alvin: the process, like what was your, the first experiment and what you learned from it.
Rathin: How did you
Alvin: value it, the rate from that to your final idea of spending.
Rathin: Yeah. so you're just pretty investing. So, I had a high bar, so the way we work was that Julian and I decided that every Thursday, we will run an experiment, whatever, that experiment, basically to help us get closer towards our product marketer.
And. Through Friday, Saturday, and Sunday we will see the, we will analyze the results of the experiment. And on Monday we'll regroup and figure out what did we learned on this experiment and what do we want to prove now next? And we would spend in, when does it, to design the next experiment. And those that would be implementation back.
And so we did this, this was up all night. [00:28:00] And for the both of us, we did this for the first, we did this for the entire time that we were team action, which was like four weeks or so. and so we did four different experiments. Now, the first one that you started with, the monkey experiment are very funny because we were actually sitting, this was our first day as a team, and we were sitting in, I remember we were sitting on the second floor.
And, we, it was about eight in the evening. And, you know, people were just about, grabbing some billers by the site. And interestingly, Vivek was also a friend of ours from just send us an article we'd send that. In the past 30 years, there have been a set of monkeys that, they're blindfolded and they've given darts in the hand of this monkeys.
And in front of these monkeys, they put a list of stocks and they would ask the monkeys, which are blindfolded to throw darts at the stocks. And interestingly, these people would, whenever they throw a dark, on the stock, they would buy this stock and that portfolio of the [00:29:00] stocks that is monkeys joys.
did so when in fact they all performed the outperform the market as opposed to the analysts who had spent so many hours of research and mathematical modeling to figure out which stocks were doing. And interestingly, they did this across 30 years and what, 27 years, the monkeys won. And this was a deciding point.
I said, okay, if this is the case, which means if a monkey can pick a stock better than a human being. Then why don't we make it very random? Let's give it by this thing. Let's create an experiment where we want to test out whether I humans okay with buying a stock. Like they would gamble. and, I'd hypothesis was young generation people, they are high risk taking people.
they, they want hightest, high toward, and so for that they would be willing to do this. And so the way to test it out was we designed a spin wheel experiment where there will be a spin read, there'll be stocks, the stocks will raise from $1 all the way up to thousand dollars, and you need to pay $5 to spend the wheel.
Once [00:30:00] you can get a $1 stock or you can get $1,000 stock, it's to you, it's on your luck. And, we wanted to see, can we get enough people to, you know, get that thing rolling. Nope. Do spread the word. This was literally our first week in the app, remember? And so to spread the word we taught, I mean, we got to do something hacky.
How do we get everyone's attention and do our minds at that point? The best thing that we could do was that just print out like a thousand monkey posters and just write down investing. So easy. A monkey could do better than you and just put that on a poster and literally stick it across the office. You know, the elevator, the tables, the floors everywhere.
and we did that. and we, as you said, I mean, you got a lot of eyeballs and a lot of people who gave me, to be experiment, and we don't have gas due to give for the stocks, meeting. but, I think that was a great starting point for us. We got to know of any important trade, and that's when we realized that gambling money is different and investing money is different.
[00:31:00] So all apart from all the fun. Odyssey. This takeaway from this experiment was gambling. One is different. You mentioned money is different, which means if you're designing an app for gambling, don't expect people to use it as an investment, and that's how we changed that hypothesis. That was a beginning of hypothesis.
Then we kept doing experiments and eventually we landed to the hypothesis that about 71% of the people. What an investment product that gives them a little bit, and then the bank account way. So they want that steady state returns product. A load is loaded on product. That's what they were looking for.
And that's how we gave more the ideals.
Alvin: So originally, I remember you told me
Rathin: I'm
Alvin: spending, you wanted to charge you based on the subscription model, so about $1 a month, but then you found like a subscription model doesn't really work as well.
Rathin: Yeah. so for us, monetization models where we board and still continue to be a point of experiment, and initially we started with a model [00:32:00] where we would charge a subscription, which is, present, fixed, you know, in a dollar per month.
For India, it was a 62 piece per month. however, that didn't work well because we realized that any net subscriptions don't really work with. In fact, most of our friends, if I ask them, what are the subscriptions that you currently are using, for? And I, speaking of the NIC gout, they would mostly be, either Netflix, or, or a couple of other, OTD platforms.
And probably at best as a matter of word, basically a food, food delivery, thing. So, only like a couple of these things. Now people don't have a really subscription based mindset in India. Especially not funding us from raised product. And so, so then we decided, all right, what are the other modern?
So then the second model that we figured out was we could go on a hedge fund base monitor, which is based on the, based on the performance. So what polio does when you on does not do well, then you lose proportionately. but again, that was again, something that was not, didn't work well, because it [00:33:00] is complex for a normal, you would do on this.
I mean, normally the customer do understand they not everybody's available. The hedge fund model, and it's a very complex procedure to actually explain it to someone who is not on the. So, so then we wanted to make it a simple modern, but that a model which can also help us in our unit economics. And so the way we started doing it was that, we judge 1% of the AUM.
It's pretty straight forward. You judge 1% of the, of whatever money that you put into by every a hundred rupees that you put in with us, which I'd wonder as, as straightforward as that. So that seems to be picking up speed because that is something that could very easily be underserved by people. And people did not mind being that it was also a percentage of whatever transaction that you're doing.
So it's fine. That's Sunday. Then people are, people are used to that kind of model, so that's how we started.
Alvin: So as long as he can beat the 1%, like you give him even 2% returns, it's worthwhile for them to invest.
Rathin: Yeah, definitely 100% yeah. [00:34:00] And to be honest, we are actually competing with the, with the, with the existing best product, which is the bank.
Now, the bank, if they put the money into bank account, they will get about 3.8% so essentially we need to give anything more than. Oh 0.8 a to B, B to B, that, now we invest into government basic Ortiz, in India, which have a steady state, Redondo, 7%. So, I mean, these are very safe products, which even if, even in today's market scenario where the market is down, as you know, globally, these products are still giving us expanded percentage.
Alvin: These are basically treasury nodes in India.
Rathin: Yes. Yes. So they are basically a debt based, mutual funds, debt funds, treasury bills, the government
Alvin: or so, okay. I don't know if you're comfortable talking about this, but I remember like you, you managed to get a partnership with a bank very early on to get certain information.
I know you talked about talking about that.
Rathin: Yeah. Not a [00:35:00] problem. Actually. so the, we right now we have one position is that, we voguing with ICSI bank as a partner. Now, how that works is that essentially, they, they initially, when. Oh, during the time in the F, our partnership was based in a way that we would be live with one bank at a time and then are to keep adding more banks, which is why we needed the partnership.
However, now we've completely pivoted from that model, which is like the thousand deliveries that you've made so far. But, now actually we don't depend on one particular bank. So, and that time we started doing, working with ICSI bank. But essentially now we are live with every single bank in India. In fact, you're alive with a hundred rendered backs in there, which is like literally every bank in India because we changed our model where didn't get not dependent on the bank.
We had actually latched onto the government UBI, and so we can directly, every Mac is national with the government rate, which means we get access to all. So it's not a problem anymore.
Alvin: So it's like, how is it publicly available? This [00:36:00] government UPM thing that you mentioned. So it's just any company will be able to, you have to incorporate barber company, but once you do that, you can just apply.
Rathin: Absolutely. Yeah. So, I mean there are basic stuff, basic procedures. One is that yes, you need to incorporate a company, do that other, a bunch of regulatory and compliance certifications that you need to get from the government of India. so you need to get like a AR in registration number, NASM certification.
These are basically technical. No, it was more to get the basic licenses and certificates and compliances in order. Once you have all those things, then you can just apply and the government will let your organization check the certificates if everything is nice and yeah, not a problem. Yeah.
Alvin: So, okay. I think I left out one part, which was, okay, you broke up with Julian, then you started working with Gaurav off.
So how is
Rathin: the
Alvin: experience like. All the friends that we're working with. Julian.
Rathin: Yeah. so, with [00:37:00] Gaurav, I think one of the, one of the best advantages was that, one, he understands the B to C consumer market in India way better than anybody else. so obviously Julian was great, in his own right as a software developer and a junior and as a software lead.
however, I mean, there was always a challenge of the cultural gap between. The Indian market and the Indian customer psychology and the way he would think, because obviously he's not from here. He's not from India. So, we've got up on the other hand, he had actually come off by, you know, come off, working, you know, for X ago where you as working as the growth hacker, any, you know, growth hack the, the app to make it the second most downloaded travel app in India to more than 100 million in downloads.
Which means that he really understood the . And so that was a major advantage for us. when many, many came on board really to give the product a proper in in Spain, we gave it, we added features, which we know that the Indian customer would really like. And that's also [00:38:00] why the business model, actually this Sango came about because he was wanting to, I wasn't sure that the subscription is not going to look.
And so we decided to start thinking of the different models. So that was the one there will also be not freelancer majorly. And which means that he was almost like a one man army in download, a full stack engineer, and you would work one of these supervisors that you worked insanely fast. And so just between the time of our mock IC, which is like super check in and at IC within within those three weeks.
he joined out an entire product, like, like a proper full fledged app. and I wasn't doing it for us. He is the only one in chords. I did kind of the partnerships and the business side, but he's the one that code. So, and at that point, we didn't know. It didn't even have any built in anything. So he literally singlehandedly discorded the entire product within three weeks.
So, yeah, I mean, I think super bonus to work super in a super fast. So I think that was, really played to our advantage. Yeah.
Alvin: So around this time was after the [00:39:00] F. I see. It
Rathin: was around
Alvin: November, early November. Then you, you apply for YC
Rathin: as well, and then
Alvin: you, I think I remember you went back to India first and you applied for YC, through India.
You had an excellent w in India.
Rathin: yeah, so actually what happened was, what from this year on what they did was for are all Southeast Asian companies. They, they invited the companies to Banglor for the face to face interview, and the partners at YC were the same partners who would take them.
There was in us. They flew down here. In fact, I think about eight of them, eight partners from YC through down doing the inversion, and we had all our English in it. It was in backlog. So we applied to IC. thankfully we got through to the, to the first round. So we got invited over for an interview. We went there, to Bangalore and, and yeah, thankfully, I mean that is a whole other experience, by the way.
Have I seen those insane? It is insane, but, it is, it was great. I think we did well and they liked us enough for, even though we were [00:40:00] super young, we would just literally just launched at that time. And that's what I maybe faced. But they liked us enough for, you know, to have faith in us and invested in us.
So it got selected. Yeah. I remember like you
Alvin: face some visa issues with,
we're going to U S . Then like, can you tell us a bit about how you hustle your way into like finally getting the visa.
Rathin: Yeah. Yeah. I mean, I think one consistent team year has been that we need to Honeybadger Audrey through places.
So through the similar thing happened in the U S visa got rejected for the first time. So we actually got him and I applied for a us visa for the right combination of some Singapore. And they rejected it on the basis that, we've had admitted visits and we were not in Singapore long enough for us to be applying for a us visa from Singapore.
You should, you should actually be applying from India. and so they rejected it on that grounds. And, it was tough at [00:41:00] that time because, not many people have gone through is, are rejected then accepted in such a short amount of time. and so for us it was, it was not going to be possible unless we figured out a way.
And now we talked about it and we don't, there's one way in which we can do it. And that's that if we get an application for a visa interview through the YCB. and, and glove it with all the other YC startups, which are going to go to us from India. Then we had a chance, because in that case, we would be able to explain, Hey, listen, there are these other 10 startups which are going, we are also one of them.
therefore Ghana does the visa. That would make way more sense than just two random guys going up and saying that, Hey, listen, we want to go to YC after having just got take it for the same reason. And so, that was a challenge. but getting through to IC at that time was. A hell of a challenge. And so we just kept, we just kept on in mind.
We just kept growing. We kept on binging them and all that, and it didn't seem to work. And so I've as a final pick on my sleep, I just called email to shut [00:42:00] down Sharma, who is the CEO of your story. Your story is one of the largest media organizations in India. And I just said, I just had this much in the, in the headline, I said, selected by my Combinator, rejected by U S visa.
That's it. And, and then I said like, Oh, send like a one line email saying that hatred that I understand you will be super busy, but we are a team and we just got selected for by . Can you just help us out in any form or fashion? That's it. And I had Zito Wilson on load because she's pretty much the music, one of the busiest person.
And by the way, I didn't even know if I had to cut it and email it. So I just, I, I tried emailing on a bunch of Prudential email IDs, like, shut down or shut my jaw straight or deal straight or whatever. I just tried all my . one of them. And fortunately she, she replied saying that, and Diane to her team and said, alright, you look into this, check back, someone is on the email.
And, and then, and then I was like, [00:43:00] Oh, thank you so much. This is what we use with et cetera. And then radio silence for the next, like, you know, 15 days, zero things now. And then suddenly I get a call. from, from the embassy saying that, Hey, I got a call from this, who was a part of the team and here's what has happened.
And a B regarding regarding nobody's situation. Why don't you come over to India, the after tomorrow, and you'll have your endeavor started in, in Mumbai, and we met in Singapore at this time. And be like, all right, let's back out bags. Let's go. And then literally in a day's notice, we packed our bags.
B, due to Singapore on a few guys. Our friends flew to India, made it just in time for the interview.
Alvin: so, so yeah. Yeah. That was quite an experience. Like I remember like you went off quite suddenly, then you will to India. Then you just went to YC. So. Oh, after you left for YC, like tell some mobile experience where I was like, I [00:44:00] like we on the ESI, we don't know much about how, how your process or going through IC is a
Rathin: lot more
Alvin: the, they have all those lead talks and then you have the apartment sessions.
how, how was it different from the F process?
Rathin: Yup. Yeah. Okay. So, I would say the front number two, the difference between NYC is that any app, you're coming as an individual and your whole purpose is to find a cofounder. In YC, you're coming in as a team and your whole purpose is to find a product market fit.
So the same important that he gives to finding a co founder. Why is he gives to finding a product market and, identity. The basically out of the, how YC program works is that, one is that there's, there's, every week there's a weekly dinner, and when I say weekly dinner, it means that there is like a whole spiel.
It's like, it starts from right, from like a, you know, three or four. three or four in the evening goes right all the way up to, about 10 or 11 in the night. And you have dogs by previous YC founders, your talks by [00:45:00] other famous entrepreneurs in and out Silicon Valley. We had from superhuman. We had, we had a governor of flex coming in.
We had, we had, we ended both founders of Airbnb coming in. It's overall a great learning experience. I think I have not had more learning experience, then from the horse's mouth themselves. and, and, and all the stalks are designed in a way that they aligned with the work that you're doing for that week.
So let's say initial times the talks would be more on, you know, how to get a deal or how to talk to users. I would get feedback from users, how to make something that they want, how to measure product market fit. So on and so forth. On the, in the later part, it would be more like how to figure out the monetization channel, how to get customer acquisition, how to do customer can cheaply, how to do marketing, how to do growth, et cetera.
And then the last part of the segment of the talks during our three month be, it would be on. Now that you're ready for the basic stuff, how to fundraise, how to command a good valuation, how to get dumb sheets, how to hire, how to [00:46:00] expand your team, et cetera. And so that's how the whole progress of flow work.
And, and for us, I mean, those are the dinners. Basically, apart from the dinners, you have something called the group officers and individual officers. So individual officers are with your group partners. so your partners would be people like Michael who is like the CEO of Twitch. And also the CEO of Combinator and so on and so forth.
These category of people who are, who, who themselves have built billion dollar companies. So they are literally the best people that you can potentially get any advice on. and you have group officers in which all the teams, which are similar sector, let's say Indian FinTech companies would form a one group.
So like there are these different groups in which you are apart of and you will discuss amongst your group, you know. Your updates, your progress with one another. And, you know, if you can, if you can help each other in an email. So that's all the Weiss he typically works.
So
Alvin: how did that change with the onset of Corbett
[00:47:00] Rathin: with, I mean, the onset of ? I think what changed was most things when our lane, as had, as have across the world. but I must, you know, credit it to trends where they are. Do YC has done a phenomenal job to make sure that it's almost the same as offline. I mean, they have, you know, it's been flawless from their side operationally.
they've, they were doing, they're doing the same things online and in a way that it does not have for, you almost don't feel that you are actually online. so yeah, I mean, things went online, but I think they manage it in a great way. So even the dinners,
Alvin: how do they do that online?
Rathin: So what they know is, I mean, obviously there is no food.
The food is basically what you have in your own fridge. But, the talks during those dinners, they were still the same. So basically, you know, there would be group zoom calls. They would just be global present on, on the, on the zone bar, the slides would come up. and using the interaction tool of IC, you can actually do it the same way.
You can raise your [00:48:00] hand, ask the question, get it onto an end. Your questions can be heard or heard or seen or read by everyone else also. So pretty much the same experience that you would have.
Alvin: Nice. Yeah. I remember I read this, I could actually build their
Rathin: whole own
Alvin: conferencing itself using zoom or
Rathin: something.
Yeah, yeah, they did. They did. So, I mean, in that sense, I think I see a lot of the best in terms of setting out this architecture. So yeah. But I think one striking difference, I would say between. F and YC are, I would say, not just the FOIC, but probably YC and any, any other startup, accelerated down is, is how obsessed crises with, with just one thing, which is that Aquia users make something they want measure.
If you're, if you're doing that, repeat. And then this particular cycle, it's insane how obsessed they are with this. are they, we have not been so [00:49:00] product focused and product driven, and then then NYC and, and it kind of liberates you in a way because it kind of gives you the independence that all right, if something is not working, change, change like that.
So. Yeah. Th th
Alvin: th th there were a few Indian FinTech companies also in your cohort. Right? So like, how was it like to by your competitors in a, in a sense.
Rathin: w to be honest, they're not competitors. there are a lot of, great independent companies that actually, which, in different, different spaces.
So one of them is in, money markets. one of them was in the payments space. the, one of them was in groups with payments and like one of the Spotify space. so yeah, I mean, I would say, one of them is an in children's space. So there are some great, Indian Bendex startups, B. So we add into micro investment space.
So what they had done, I think, was that they divided the NFL spirit into different categories and they kind of picked up, picked out one startup in, [00:50:00] so they would not endodermally be a collision, but at the same time would broadly cover the entire front deck. Oh, I
Alvin: see. So how difficult
Rathin: was it
Alvin: to walk from San Francisco while your customers were in the or when India, like do you still do live interviews over video calls with them?
Rathin: That was, that was tough. That was a challenge in fact, which is why, devices are treatment programs. So gen five, March, but, I was your only for Jen, and then for the, in that favor, I was actually back in India while water was your, so Gato would be, would take care of the stuff. You're, I would be back in India talking with the users and working with the bank partnerships.
And, in March, again, I came back because we wanted to start fundraising. and so yeah. It's, it's a legit challenging, obviously, because you're working cross border across a 12 and a half hour time difference, as well. But, it's not that [00:51:00] bad because I mean. Now. Anyway, more than ever. Everyone's just working from home, irrespective of where you are in the world, even if you wanted in there.
I mean, the, and that, and then also are the lockdown. So even if you are in India, you would still have to work on some cards. So it doesn't really change much, to be honest. Apart from the . Yeah. So actually, . You flew back to
Alvin: San Francisco
Rathin: for fundraising goes like the fundraising
Alvin: market is much rather than San Francisco, and then like YC gives you a leg up as well.
Yeah. That was a bit about your fundraising journey after the YC demo day and,
Rathin: Absolutely. Oh my. See, then it goes to YC demo day. I think I'm in fundraising. So far. We had some good, good traction, in down the, the fundraising. As in we had some good interest from investors. in fact, one of my investors immediately agreed to, you know, company did a $500,000 check, at, at a good valuation.
you're here at ICF [00:52:00] on the day of a demo day, so that was. So in that sense, I think YC really helps you. another thing was we wanted to start a fundraising in my seat in California, because since you have the YC tag, you can actually leverage it and try and get a good amount of funding from you. the unfortunate thing that happened though is that for our batch, you'll see that it's, it's the evaluation, as an innovation, but the funding is not great.
and that's because the market scenarios is not great. I mean, it's. You can see that the market is going to go to session and people actually holding up. do you know the, they're, they're in a position where they're not letting you know, People have been conservative, for the lack of a better word.
Basically, they're not taking a good amount of beds right now. because the market is about to go into a downtown and they want to make sure that, you know, the kinds of cash, and have a longer runway. And so the investors are getting hesitant, which means the investment atmosphere is not the best right now.
And so, [00:53:00] ideally, after I see, we would have had a great advantage point, but we didn't have that much amount of. You know, I'd want to just point and, and when I say weeds, the situation is same for all the startups here. So, yeah. But nevertheless, I think it's been great. I, I see the response in the inbound that'd be receiving because of IC is great.
as I said, we had a couple of commitments directly on that date. I'll be close to a couple more, so hopefully, fingers crossed it. So I
Alvin: can look at your site. I saw that, the most recent version. You actually want your appliances offer a debit cotton along with, the app itself. So where you require like a cash reserve to offer debit cards.
Something.
Rathin: all right. So first of all, the debit card is just an experiment that are trying out with a very small group of people. It's not necessary to the product. So to be very clear, the product is completely independent and it's just the app. The debit card is a completely separate thing that we are experimenting right now.
[00:54:00] If that works, then so yeah. to be honest, right now our focus is just on the main product, which is the app. The debit card is more like an experiment.
Alvin: So what, where are you at right now? And then what are your next steps?
Rathin: so I mean, I think it's the other very exciting time where the market sign of flux and, we've got to play it very belligerently right now.
And so our first order of business is, as soon as the airports open up, you want to come back to India and, you know, and then start working on the ground. what would the customer grow? The, grow the product. So our primary goal now is to get like a lot of users or growth and marketing would be our primary focus.
Now, the product is almost dished out in the sense that we have. We've done multiple versions of it, and we are almost fully ready with the product. It's an annex focus would be on, on hiding. at the moment we have, we've just started to hire, in fact, last night at 3:00 AM California time, we just made our first offer.
We [00:55:00] roll out our first, offer to upper school. and so that was a great progress. we need a couple more people in our team. and so those are our main, main focus area as a good team. work on the book, on the growth of the product and, you know, go on from there,
Alvin: what we'll call it be volume.
Again, I have like full stack developers or market does or.
Rathin: so one, the first person that we hired was actually a backend developer. We needed it over a solid backend guy who can help us with the, you know, because it's, it has to be a secure, payment. I mean, it doesn't go investment network, which has to plug into the integration of the bank and, or the KYC and all of those things.
So we didn't have any solid back in debt. I'm very fortunate to have found one, a super talented guy. and so we'll be joining our team immediately. So that's our first couple more hires in the one in the design space and one in the content marketing space, basically. Oh, okay.
Alvin: Nice. So let's wrap up here with some quick fire questions.
What was your [00:56:00] favorite business or even non business book or podcast or anything?
Rathin: I actually liked the Netflix, culture handbook.
Alvin: Netflix culture handbook. Is it available online?
Rathin: Yeah, yeah. It's a little bit online. Netflix manager handles pretty much the best book on, on deem culture that you will find and pretty much a very, very eyeopening thing.
yeah, I think I love that thing. Oh, interesting. Okay.
Alvin: Can you recommend, three other founders who you think would be interesting and we have on the show.
Rathin: Oh, definitely. I think, Jordan was definitely one of them. Yeah. you want to be spoken with nightly and you already spoken with Andrea. does it have to be yet only or can it be.
Oh, okay. Oh, then it opens up, the field, a friend of mine called Sanskrit beach, she's doing an amazing startup. It's, it's basically they are creating, basically any, an instrument that can help blind people learn braille. and that's amazing. I think the work they're doing is brilliant. So I [00:57:00] mean, that's one recommendation.
Do, and the third one would be a friend of mine from, called the yantra the money, who is also a YC founder. runs a company called tag mango basically, and he himself is a kind of like a social media influencer. He has 200,000 followers, and I think he's, he's an amazing person to speak with.
Alvin: Okay.
Nice. Okay. I will definitely talk with Julian soon. That then starts with D and,
Rathin: yeah. And actually, yeah. the other guy was . Yeah.
Alvin: Okay.
Rathin: I actually, I'd actually recommend also speaking with Fatima, I think, I don't know what would make for a grateful, I'll say great guest on. I
Alvin: actually, I did my interview zero with us, so he's not Bob online, but I did my demo.
Rathin: Oh, that's amazing. Okay.
Alvin: At some point, maybe we'll do a public episode as well
Rathin: then.
Alvin: okay. So what advice would you give
Rathin: yourself
Alvin: when, What w what advice would you have to the gift that you have, [00:58:00] like last year when you're starting out?
Rathin: I mean, there are couple of things. One is that I would say that, that they're going to be too many ups and downs.
So you only have so much emotional resource. don't get expended. like, you know, I, I'd say. Oh, hold on, hold on. To be a little more calm, be a little more composed when it comes to, you know, there'll be so many ups and downs every single day feels like, like, alright, I'm going to, I'm going to be the best.
You'll be gone again. And, you know, demography is like, I'm so fucked. A startup is closing down. nothing's going to happen. And the funny thing is these waves right out and, and eventually figured out something or the other and you keep persevering and, and so the point is. Just keep it as you're recording.
don't think so much about the short term. in terms of the immediate. Mishap or a win on a loss, but just make sure that this sounds a fast passes and then you can, you know, keep focusing on, on the main desk and keep
Alvin: calm, composed, [00:59:00] and keep persevering. Okay. we just had a meeting interview with Rathin cha.
He shared with us his story of hustling all the way back when. He was an investment banker at JP Morgan down to how he started spending, how you validated the idea going to YC and the things he learned along the way. So Rathin. Thanks a lot for being on the show was the best place for people to reach you if they
Rathin: are interested.
Yeah. first of all, thank you so much. I love it for, you know, having me and, I love the concept of the podcast and I love the way you will post and the questions. You are so amazing. I'm chatting with you, and, do reach out to me. You can just reach out to me on Twitter. My handle is at or you can also reach out to me on Instagram.
Also the same hand I'd shout out to, You can also just email me. If you want to email me, it's dot com
Alvin: dot com that's the website for spending. If anyone's interested, especially if you're in the Indian market and you're looking to invest your [01:00:00] money. Look at spending app. You have a very creative take on investing your spare change.
So thanks once again. Rathin. Have a good time back in India. .
Rathin: Oh yeah, I hope so. Get back in the NASA one and you do stay safe. Take care, and hopefully you and your family, you know, right out this whole corner situation again.
Alvin: Yeah. Thanks a lot.
Rathin: thank you. Bye
bye.
-
Andre Lorenceau, serial entrepreneuer, Forbes 30 under 30, co-founder of LiveLike, a sports VR startup, and DiviGas, a startup aiming to revolutionize hydrogen purification talks about his journey into entrepreneurship, how he faced OCD, his struggles during his journey, tips about fundraising, and how he's dealing with the coronavirus situation with his current startup, Divigas.
Books
Hard Thing About Hrad Things
Venture DealsTools
Trello
Miro
WhatsApp
LinkedIn Sales NavigatorReach out to him here:
https://www.divigas.co/
[00:00:00] Alvin Leong: Three. Two one. Hi. Hi everyone. Welcome to Abyss Gazing. I'm Alvin Leong. I'm the founder and this is a podcast where we interview entrepreneurs about how they started their companies, the struggles that they go through and the specific strategies and techniques that they use. The building of companies joining me today is my friend AndreHe's French, but he grew up all of America. He's a serial entrepreneur, having built a company called LiveLike,
Andre Lorenceau: which he brought to series B.
Alvin Leong: Today he's working on Divigas, a company building the next generation of hydrogen purification membranes, which is going to revolutionize the green energy market in, uh, in the next few videos.
So, Andre, Are you ready to begin?
Andre Lorenceau: Yep, sure. Thanks.
Alvin Leong: Okay. So, Mmm. .
Andre Lorenceau: Okay. Okay. Take
Alvin Leong: us back to your childhood and then like what was the first thing [00:01:00] that made you want to go into entrepreneurship?
Andre Lorenceau: I actually never wanted to go into entrepreneurship at all. I've never actually wanted to go into it. I fell into it actually multiple times because I had no other options.
Uh, I, I was always a bad student. And I think I realized very recently is because I'm completely incapable of reading. Like a kid just can't, can't sit and read a book. I just, I'm completely incapable of it. And that's kind of super important for having good grades in school. And, uh, I, um, I basically, the first time I fell into it is because I was.
Graduating from university of Texas and I was making beer with a friend of mine. We were just casually making beer and we, uh, I graduated then he wanted to make a business out of it. Then a couple of ideas on what sub segment we could hit, but mainly is just, I had a terrible GPA. I had like 2.8 by the end out of four in the U S system.
And, [00:02:00] uh, basically I needed someone, I was French citizens, so I needed someone to sponsor my visa, which would cost a ton of money. And. The whole procedure. And so with that grades, nobody wanted to do it. So I basically had no other choice because I could extend my visa if I actually started a company, because I was a business major.
I could, as starting a business, countered as a visa extension, sort of like a metric. So I S I had to start something and we were making beer and we decided to start a brewery, which was actually initially called Austin's pride. It was in Austin, Texas, and it was actually targeting the LGBT community. It was like trying to.
Just fundraise for the LGBT community. Cause I realized that there's a ton of LGBT bars, gay, lesbian, and what it what have you. And uh, and uh, visited all of them and I kinda got them all too, or the vast majority of them had got them too commit to buying two barrels a week, Mmm. Before I had a product.
And so I was like, okay. So there's clearly enough support for this for me to be able to launch off of it. And [00:03:00] that was the first time.
Alvin Leong: It looks like LinkedIn, this company eventually became Olympus brewing.
Andre Lorenceau: Yeah, it was from the start, but we ended up never launching it, basically, because. I mean, we, we did all the research.
We even had the product orders ready for the heavy equipment. We had some people that are going to invest, like we were going to do it, but I, on one side, I discovered virtual reality, which in 20 it was 2013, 2014 at that time, uh, and I got to try a really advanced version of it and it just blew my mind.
Uh, and at the same time, my friends who was doing it with me had a six figure, uh, offer from ExxonMobil to be a chemical engineer over there. And so I was like. You know, like you could do the super risky thing with me. He was totally gone home, but. You can do the super risky thing with me, or I could follow virtuality.
So I'd say it's a full virtuality. We ended up not launching Olympus brewering company, even though we had prepared everything for like a year. And, uh, and basically I, uh, yeah, I had to go back to France cause I lost my visa [00:04:00] because of that. And I, I just. Posted on every virtuality forum I could find trying to find the VR related job.
And I found these, this great studio called Innerspace VR. The inner space is still around today. Um, they, they make, uh, games and experience, but at the time, they were very making very, uh. Experiential, sort of like experimental videos and virtual reality. And they were very good at what they did, but they were just God awful at business.
And so they need a business guy. And I was like, I'll help for free. I just want to get some on the hands experience. And then this new industry, and I have them for a few months. And then, uh, I, uh, they got picked up by Samsung for their first. Mobile VR headset and they went to South Korea. And I was like, okay, cool, bye.
I was still just helping them out. Uh, but at one day after call, after going over there, they called me and they were like, uh, we need your help. We can't do this alone, and how fast can you get here? We'll pay you $1,000 a month and we will not pay you the flight to come over, but we need you to come over.
And so I [00:05:00] borrowed money from my dad. I flew. I was like, hell yes. I don't care that it's terrible deal. I flew over. And I, uh, I started working with, Oh, I flew, actually the cheapest flight was actually three days later. Very weirdly. So three days later I was in South Korea working and negotiating with Samsung on this content deal with no experience whatsoever.
Mmm. Yeah. And it worked out. It was fun. It was like a big roller coaster.
Alvin Leong: How do you think you managed to convince them to, hire you as a director? Mmm. Because basically at this point you, you had one business which didn't really take off because you're interested in VR. Was it mainly because you will, you're okay with like working for free and just what $1,000 a month?
What was that in the main reason?
Andre Lorenceau: That was a reason to, they were very, very bad at this. This, I mean, anything, anyone, like I had a, I mean, you've got to understand also like the French business mindset is [00:06:00] not the same as inAmerica. Just as something that seemed completely common sense. in the business world, in America, even basic like artists would understand, and Francis status score is not the same.
So they were very, very bad at anything related to business, and they were far too cagey about their technology. They were far too cagey, but a lot of things. And they were just, we're not . Fundamentally did not want to be a commercial enterprise, but they needed money. They wanted to just be artists that just do cool stuff.
And they kind of like, I help them for free. And I was like, guys, if you just like frame it this way, you don't compromise your vision. And at the same time people might, right. You don't. And they tried it a couple of times when I was helping him for free and they were like, Oh wait, shit. That actually. That actually, okay.
Makes a difference. And so little by little like that, that kind of won them over. Um, but they had like no money. And the only reason why I, they could bring me to Korea as, because they had some money from Samsung too, to do some stuff over there, and so they could actually [00:07:00] spend on me. But the only reason they spend on these, because they trusted me, they knew that I was trying to get an the industry, I didn't particularly care.
They were also very suspicious of everybody else. Like everyone that's a business person was just like, total bastard to them. It's, it's a French mentality. Business people are exploitative of artists and worker. It's like literally, it's a thing in the French mindset that business people are fundamentally evil.
It just is like that in
Alvin Leong: France.
Andre Lorenceau: It makes them suspicious completely. Yeah.
Alvin Leong: Yeah. Yeah. But anyways, so like in our space was really like your first experience of fundraising from investors and meeting VCs and negotiating contracts with Samsung, all these like big B2B companies.
Andre Lorenceau: Yes, yes, it was my first time I picked up an angel at a bar.
I can't even remember how I met him, but there was at a bar, there was an angel there and he ended up investing like 300 grand or something like that, which for an angel is like crazy high is fell into my lap. And I was like, Oh, [00:08:00] okay, cool. Well, there you go. So I gave him way more money than they ever paid a large amount and uh, and they were super happy.
Obviously. Yeah, and I'll work with them for a few months. Hey, we did the content deal with Samsung, a bunch of stuff like that. It was just all. It was a super fun. And even at the time I was, I had a two hour commute every day and I work right next to the North Korean border at this weird city called Paju
And yeah, but I live in Seoul, which is the capital and it's an hour bus up and an hour bus down every day. A and I would work literally 12 hour days and, but I just didn't care cause I was like. This is so cool. This is virtual reality. I have a real job in virtuality doing deals with Samsung on the secret project that Ave announced.
Yet. I was like, I was breathing. The excitement was just like I was more than happy to do 14-16 hour work days at that time. Mmm. It was super cool. The excitement takes you really a long way. Mmm. Yeah. But at this point I wasn't an entrepreneur, you know, I was just working for [00:09:00] 400 it was that, I wasn't
Alvin Leong: like your title was director of business development.
It was all right, but
Andre Lorenceau: how
Alvin Leong: big was the team at his point? Like when, when you were in Korea,
Andre Lorenceau: six, eight people, something like that.
Alvin Leong: And you all the rest of them are all technical people.
Andre Lorenceau: Yup. Or or yeah. Yes, yes. They all technical programmers or directors of art and illustrators. Yes. That's something that I was the only non.
Non non technical version.
Alvin Leong: So so I notice that uh, you, you worked for Inner Space until about 2015 and then like the dates kind of overlap with LiveLike you start LiveLike while in the middle of working for Inner Space is fine.
Andre Lorenceau: Yeah. I didn't want to start LiveLike I didn't care at all about, so first of all, I'm not a big sports fan.
They had only one sports team I care about is the university of Texas football, and that's like 13 Saturdays a year, and that's it. Or 12th or 13 whatever. And, uh, but yeah, but I, I had a [00:10:00] VR headset after Korea. I came back to France still working with inner space and I just brought a VR headset to my brother who had a sports data startup.
And we just, uh, I just gave him the headset, we tried it on, and then we were just kind of brainstorming while literally while playing board game and be like, Oh, we can do this thing. And it would be cool if we did this and be very different than what I've seen out there and et cetera. And I did this for a little bit, and then I realized that.
Like, Oh, that's actually a pretty good idea. So I went on Reddit. I picked up a, I literally just, it was for like five minutes, there was a red as it separated channel, those called VR jobs. A bunch of people trying to get jobs in the VR industry. And I posted, Hey, I don't have a job, I can't pay, but I have this little projects and I've accessed the VR headset, like if anybody wants to, which is very precious time cause there's not a lot of the release stuff.
And I was like, . Yeah. Again, somebody helped me build this little demo, and this guy was in England who was super nice dude called Graham Graham Reeves. Uh, he, uh, helped me out for free, built me a little demo. It was like, basically it was like a couch. So you have a 3d room. [00:11:00] And you have a couch in the middle and it's sort of like, imagine a square room, but there's no front window.
The front, whole front wall is like open. It's like empty. And in front of it we, he puts this curved screen and that would just be playing a GoPro footage. So my brother was in a sports data startup and he had access to some stadiums and stuff. So we went to the local rugby stadium. Those just put a GoPro on a tripod.
And then we filmed the whole game. And so he gave me this, this like 3D environment. My brother gave me the footage and we just put it together. And we kind of had this like taps review where you felt like you were at the stadium, but it was this very wide angle view. Cause GoPros pros, this super fish islands.
And essentially. It's kind of, if you looked around and kind of looked like you were in the stadium, like they gave a good impression. Video quality was terrible and a bunch of other problems with it. But as a prototype validation, it works actually really, really well. And it solved a bunch of technical problems in VR as well for other reasons if I'm going to get into.
But the thing is, so again, because of my brother, uh, he was [00:12:00] talking to some sports, uh, TV channels and the, and he introduced me to somebody very low level, uh, at those channels. Yeah. I was like, Oh my God, this was like way better than anything I've seen. I was bringing it up and we brought it up too. Two levels.
One was a VP and then he brought it up to like basically the board of directors where I met with. 12 executives on this TV, public, big public TV channel in the, in the, in France. And they were like, you guys need to keep working on this. This is super exciting. And I literally, that doesn't want, I'm not trying to do anything.
I'm like playing around the side prototype while working on an airspace. But then I sit back at my desk right after that meeting and I'm, I've literally have a to do list of things I gotta to do for both my job and for this. Travel list, and I just look at it and I'm like, I can't do both. I just don't, it's not even an option for me to do both.
So I literally just pick up the phone, call my boss, and I'm like, Hey, I got to quit. And he's like, well, I was supposed to go to San Francisco with them and help them get into this accelerator, [00:13:00] et cetera. And I, I did still do that, but I phased myself out. I went to summer suit with them, I handed them off and, and, and.
To help them along, sort of like Meg. I didn't make it painful for them. Mmm. And, uh, yeah. And that was the beginning of LiveLike pretty quickly after that, after that, by that point, I had one, I had my brother's a cofounder, I had another co founder who was my chief design officer
Alvin Leong: Graham, the guy who
Andre Lorenceau: Graham Graham never wanted to, he never wanted to start a startup.
And he also, he's a guy who likes to work on 50 little projects and he doesn't like. Like he works at, he works at the time, I don't know if he still does, but he worked at an agency that made a ton of apps and what do you like was literally just do this little prototype and do this little prototype and do this little prototype.
And he liked to make little things, so then they just didn't make sense. But I'm sorry, we're gonna have to work on the same thing for five, six years. It's like she was like, not interested at all. Okay. And she, uh, yeah. And, [00:14:00] uh, yeah. So I, I basically ended up putting the team together. We were four co founders and, uh, by February of that year, like four months after I got back from Korea, um, you know, I was starting this new company and I super quickly, I have a cousin of a VC
Didn't want to take money from him at all. But I wanted to show him and get some advice on how to fundraise. And I went to visit him at his office. Somebody is passing by and everyone, he was kept being like, Hey dude, check this out cause this is a cool demo on this VR thing. And I showed it to people and people were like, Oh my fucking God.
Like this is amazing. Like, and, and one investor was like, I'll give you 350 K like $350,000 right there just to, just to do this thing. And I'm like, okay, we're doing it. And so I decided to move to San Francisco. And, uh, and that industrial never gave us the money. And so we actually had our first major crisis.
Um, we have two major crisis actually at the same time. Uh, but the first one was that just like we were running out of cash, so we had to borrow money from a friend. [00:15:00] Oh, from an acquaintance to to just like stay afloat. Even though there was like four of us in San Francisco, four or five of us in, in a house in San Francisco trying to make this thing happen.
And we didn't, we didn't actually get any other investor for six months while we were five people in San Francisco, which was like, not, not great. Not good. Um, but yeah, but we, we, we did eventually we could, we kept thinking that the guy was gonna to . Pay us and he was just having some liquidity issues. But no, you ended up never paying us.
You mean years later, which is, okay, let's
Alvin Leong: summarize this a bit. Basically, while at Inner Space, you went back to France for a while and then like you're talking about it, and then you came up with, he came with this idea for sitting, like creating a VR experience of sitting in the stadium itself, and then you found Graham on Reddit and you basically build this MVP.
You showed it off to a few people. They sounded very interested in it. And then you came up with all the things to do for this idea, which eventually became lifelike, and at the same time you're looking at in a space [00:16:00] and then you decided, okay, like this, this idea seems really promising and you want more on this right now, but you're never really a sports fan.
You're more in it for the VR side of things.
Andre Lorenceau: Yeah, it was, yeah. Yeah, it was born for the VRF side of things. I mean, there are now, I like sports more than it did back then, but it's forces, it's just fun be in, even if you're not a big sports fan, it's just like, it's not the worst industry to be in and it's pretty dynamic and
I don't know. There was a lot of good lining, but yeah, it was more in it for the VR initially. Um, and if you are ended up never really taken off, you know, so like. Uh, I mean, it's, it's growing slowly right now, but it's, it's still not a ubiquitous thing, as we know. Yeah. Yeah. But yeah, it was just, it was really tough to, to have, to borrow.
And, you know, we got like in like $40,000 worth of debt with just people, um,
Alvin Leong: like living expenses, just living a life by everything. [00:17:00] Yeah. 2015 late February
Andre Lorenceau: incident was San Francisco. The time where we were without money, it was from basically, I think it was like March or April, March or April, 2015 is it 2015 no, it was, see the 2015, 2014 I forgot.
Anyway, yeah. You have, you have the dates in front of you. I don't, but, uh, so probably 2015 and uh, yeah, until like September. Or August, September. We didn't have, it's an August. We didn't have any cash basically. So it was like,
Alvin Leong: Oh, you feel like you are, you were going into debt and then, um, but you still, you still believe in the idea and she was struggling to make it.
Well, at this point,
Andre Lorenceau: well, no, the idea was working on its own. The problem was. Like we thought we were getting money. So to me, we had cash. To me, we were like, we're just boring, but we got 350,000 coming. So what does it matter that we're like 40,000 in debt? You know, like that doesn't matter. I don't care.
[00:18:00] No. In hindsight, that was actually pretty risky. But is it does a ton of these problems that you're going to realize that like, cause I know there's one or two other issues that you're gonna realize. It's like I was near the brink of death and I didn't realize it and not realizing is the only reason why I made it through ignorance is bliss is like a saves me a lot of time.
And I mean, I'm sure it will again, like just because, yeah. Because I don't, didn't sometimes just being like, Oh my God, we could, we could, we could. There was just like, no, we're doing the thing. It's working and just make it work. Otherwise, you know, um. Yeah. So that was the first sort of issue. And right around that time I got, uh, because you want me, I mean, you know, you, you want to go through the struggles, right?
So, yeah. Um, there was right around that time, I think it was maybe July or June or something like that. We're invited [00:19:00] to this startup event at the baseball stadium over there. Exactly. Like in the CV show, Silicon Valley basically. Exactly. It was actually a day after that episode aired too. And, uh, we were just, we have these, uh, experience center preneurs come in and get, tell us about different things and their experience.
And one of them was about, so like managing stress, and I'm always been just super confident, not a worry in the world, but I'm sitting there at the back of the room and this is my two cofounders in the front row, and she's talking about how she felt crushed by responsibility. Uh, how is she felt like she had bank stacks and she was freaking out a lot of the times, but she got over three inches just powered through it and et cetera.
I'm just sitting there and at one point I go, my brain just gives me this idea of this like very pernicious idea that just like these guys came halfway across like my two. I'm looking at my two co founders and my brain goes, these guys came across. Halfway across the world on this idea that you sold them and both of them are very experienced and [00:20:00] have like awards and prospects and everything and they're making no money based on your word.
And I was like, I don't know what I'm doing. I'm like, Oh my God, I don't know what I'm doing. And I had my first ever panic attack, like ever, like in this like. Public environment for startups or the ton of people around me, and I'm like, what the hell is going on? I was like, I feel like I'm dying. Just like, and I was like, I felt like I was about to hyperventilate, so just like run out of the room.
I was in the back, so I don't think anyone noticed, but they go to the bathroom and I'm like, I call my brother hell is going on. Like, it's just like, I feel awful and like, I'm like, am I, did I do all the wrong mistakes and et cetera, et cetera. Yeah. And uh, and my brother kind of calms me down. Then whatever.
Panic attacks eventually go away, and for the next month or two, I frequently have the same thought that creeps in. That freaks me out. But I suppress it and I go, it's fine. they knew what they were doing and, and like, you didn't force anyone. And for a month or two, I [00:21:00] just have these panic attacks and then one day, Mmm.
Taking the train down to to Silicon Valley, and I, uh, I'm in a train and I suddenly get this like little voice in my head. It's not really a voice. I'm going to call it a voice. It's not really a voice. It's like more like a force, like a almost or somebody. Pushed you physically. And this little voice basically told me to go outside the train while it's running and to jump on the track and kill myself.
And I'm like, that's not a pleasant thought. Mmm. And I'm like, I'm not going to do that. And the voice repeats and the voice repeats and the voice repeats. And then once it gets louder and louder and louder, and I'm like, what in the world is going on? And I wasn't the stream for like an hour and a half.
And I, I was just freaking out. I was like, that's like, I'm going crazy. What the fuck. One in the world is going on. And so I, I, I get off the train at my stop and the sub supposed to get off and I was fishing a M D [00:22:00] ventures that day and officially in the ventures. I'm completely finding the bitch, like it's completely gone.
No voice, nothing. Get back on the train. The voice is back even worse, like screaming at me like, you're going to kill yourself. You're going to kill yourself. And I feel like it's going to lift me up and forced me to do it. Like it's going to take over my body. And I'm terrified. I mean, I'm like what the world is going on.
And at this point I was starting to be like, I mean you're crazy cause you have voices in your hand, right. And um, you need to quit the job and you know, forget about your dream. Forget about your whole life. You need to be locked in for your own safety, cause you're gonna like this feels like you're about to kill yourself and you don't want to and find a way to quiet this waste very unpleasant.
Like probably the two worst hour of my life. No, I've had the worst hours, but one of the worst hours of my life, definitely. Thankfully, I get off the train. I called my mom. My mom is actually a psychologist and she's not specialized in this at all, but she tells me, it kind of sounds like an OCD and we like to joke about OCD, but she sends me [00:23:00] this, uh, there's this, I think it's ocd.org or.
There's this very, if you literally typed dot org you can probably find it. Mmm. But there's this kind of like public resource for what an OCD looks like in the talk about what the symptoms feel like. And I think Sandra and I read it and I'm like, it's exactly this, like, it's exactly how I felt. And I was super thankful.
And the more I read about it, the more it actually called me down. And I've read that it was very, it's actually a relatively. It takes work, but it's actually, you can cure it. And the vast majority people do get it. Cure it, completely fine. Live with it. And it's not, and I still have it today. You would never know unless I told you about it, cause I don't do anything differently than a normal person.
But in my head, I often still have these little like voices that tell me to jump off the balcony right here. And I just, and it happened today. It happens every day, but it's not strong because I know how to suppress it. Yeah. I feel like this,
Alvin Leong: I listen a lot of podcasts and then there's something, then not a lot of people [00:24:00] mentioned.
So I, I don't think I had it as intention as you, but I did have a taste of it. Well, going through the eff process. So, yeah, like, yeah. Yeah. I think like more people should talk about this. So like at what point, uh, was life like at this when you started, uh, you, you mentioned you pitching in the event, Joseph,
this
Andre Lorenceau: morning.
Yeah, we were pitching, but the MD, nothing happened with AMD ventures. Just like one of the many, many pitches you'll have to do when you fundraise. A lot of Lake was just, we were in the prototyping stage. We were just trying to get, we were trying to find a deal to do a broadcast, a live broadcast with us, with the VR live stream inside the VR headsets.
Um, but we were at the prototyping stage. We were improving the demo while at the same time trying to raise fund to be able to do live sports broadcasting. And it took us another like another 10 months before we had anything to broadcast. Like live anyway, we had more sort of like prerecorded, improved quality [00:25:00] image sessions and et cetera.
Just a, yeah, not that. Mmm. Yeah. And, but I mean, we'll see. The OCD is actually this very common thing. I think they claim on osi.org that about 25% of people one point in their life experience and OCD, like, yes, I had a very. Acute, very intense version of it. Oh, she's, they latch on them to different things.
So the one we all know about this, that the person who cleans everything, you know, like they're terrified of germs, so they're just like making sure everything's clean. It's fundamentally, OCD is our, uh, it's basically, your brain is afraid of something. And, uh, it kind of goes, the alarm system is broken, essentially, it's in the house and the alarm is on and you can't turn it off.
But then you start wondering like, why is the alarm ringing? You know? So it's kinda like, uh, for somebody who's like afraid of germs, um, they got to clean everything and they think. If I don't, if there's one spot that's not seeing, I'm going to die. And for me it's [00:26:00] basically, it's your sense of fear, overreacting to something.
So for me, my fear was that I could die on any moments. Like at any time I could accidentally kill myself and I could lose control. And I guess it became, it happened because I have panic attacks and it was the first time ever I lost control of my brain. My brain was like, sort of like this runaway process, and it was a new to me and I.
Yeah. I just, I felt like, Oh my God, if I can, you know, have a panic attack and lose control of my brain like that. What says that I can't become schizophrenic and just like jump off the balcony and die? And that was a terrifying thoughts to me. And, uh, yeah. And it's like, it's very, uh, unpleasant, but I went to see a shrink, a specialized therapists, no CDs and uh, yeah, actually, can we pause for a second?
Alvin Leong: What do you mean.
Andre Lorenceau: Right. Cool. Okay. So, so for the break and just talking about this [00:27:00] freaked me out a lot because it's still like very emotional energy. So I needed a second quote down. Um, but, so I went to see this OCD therapy and she made me do these exercise, which is called cognitive behavioral therapy, where basically you gotta face your fear.
So when you're afraid of jumping off the balcony, you got literally go to the balcony and stare and be like. Are we going to do it now? Which is the worst thing because your brain is telling you you might do it and you have to go, yeah, chicken, like, am I really going to do it? Which is the worst thing in life, but you have to do it.
And every time you do it, you realize that you're standing at the balcony for a while and then you started being like, I'm bored of doing this. And you kind of got to bore yourself out of it. And it's one of those things where you gotta, I don't know how it works for when you clean and stuff, but basically you got to expose yourself to germs.
You don't expose yourself to it and realize that. You're not going to do it or that it's okay that there's germs in places, but you need help and guidance for that. And yeah, I, I, I took care of it and I live a very completely functional, like, it's never gone, [00:28:00] but I live a very functional life and it doesn't get in the way of much of anything else.
Yeah, of course. When I talk about it in great detail, it still stresses me to out. But,
Alvin Leong: uh, thanks for sharing that with us. Yeah. It was like, uh, you probably didn't expect become like rushing out. Before you start talking about it?
Andre Lorenceau: No. No, but it's, I usually also don't talk about it in such detail. I mean, most people would like, I don't.
Yeah. Hello. But, uh, but I've had other, I've had other, uh, you know, mental related issues, not that, that spun off from that. So like, it's always. I don't know. I've always had a battle. I mean, since that moment, actually before that I had zero issues with any mental health whatsoever, and just like basically since then I've had recurring multiple variations of mental health issues.
Mmm. Yeah. You live with it and. Shrinks are the best thing on earth for that. You got to see a specialist cause they, they're [00:29:00] trained in helping you with this arm. These things, they can't get inside your brain and fix it for you, but they can tell you how other people's, or fixed it. They can, um, give you breathing exercises, which are the dumbest thing, but the most effective things.
And it's only way as well. Mmm. And uh, yeah. And just talk about, uh, this kind of stuff. Yup. So we got the money. Uh, live Lank. Uh, we have $800,000 by September, including, we actually got into Techstars, New York. Oh man. Yeah. And Techstars, New York. We actually try to get into tech stores, Disney, cause they had a joint accelerator for a minute, but we didn't get into that.
But one of the people helping to vet tech stars accelerator was a man named Alex this cold, who's now a VC that I highly recommend. . 2048 DC. Uh, he, uh, he called me and it was like, Hey, I need you to apply to my accelerator cause I really want want you guys there. And we [00:30:00] talked business and super quickly I realized this guy knew everything about my business while having only glanced at it for five minutes, I was like, I can learn a lot from him.
Mentorship is super important for you to get better at your job. And I, uh, yeah. I, I, we went to, we got into the New York program after applying, so they login, uh, and we, we all went to New York and we were like, we'll be here in New York for just three to six months and we'll see if we want to come back to the West coast.
We ended up stay. Yeah. Despise, despise. Sorry. Despite my. Strong hates of New York city. Not a fan of that city at all, but we decided to stay and we stayed in another three years.
Alvin Leong: The entertainment industry is a lot more prominent in New York compared to San Francisco.
Andre Lorenceau: Um. Yes. Compared to San Francisco.
Yes. There's also Los Angeles is big entertainment industry wise over there, but yes, the, the hub of advertisements, the hub of media rights is mostly dealt in [00:31:00] New York. Uh, but also is just that we had a lot of traction, early, good traction with, uh, Europe. Um, yeah. A lot of. Success in Europe early on. And so the time difference of nine hours is very difficult to work with Europe, but six hours of New York is manageable.
Yeah. So we that that was a major, major driver. It's in the U S
Alvin Leong: you're still getting clients from Europe and it's time that you are,
Andre Lorenceau: we were getting, we were getting pilots with a bunch of European clients, probably, I can't remember which one was the first ones. I remember what the first actual live broadcast was.
It was, uh, actually, uh, ATP tennis, uh, so tournaments, and it was Indian Wells, which is this Los Angeles tournament. And we did the whole tournament. Um. We did the whole tournament, uh, in the, in live broadcast, which brings me to the next crisis, which I'll try to remain my cool for this is that, um, [00:32:00] so where, uh, we've got $800,000, but at this point, we're burning quite a bit of money and we, uh.
Uh, we are in like, late February, and we, we tried to build a round and the round collapsed. Uh, we literally have $3 million committed and they went away. And like one day it was just a huge gut punch. And then at one point, we're burning. I think we're burning 50 cam months. And, uh. We, uh, there's like a week or two weeks, uh, before, uh, we run out of cash and everyone's like, aren't we kinda like low on cash?
I'm very transparent about what's happens in the company. And I was like, yeah, yeah, but we'll figure it out. I'll make it work. I'll make it work. I'll make it work. And like two weeks from then, we were gonna like, uh, run out of cash. And I, uh, I basically. We had this broadcast like a month later or something like that, or three weeks later, I think it was a month.
And it was our first major public live broadcast in VR. And, uh, I basically, we had talked to all these [00:33:00] investors for a long time, and I, out of the blue, I just called the one that I know liked me the most or liked us the most. And I was like, Hey, Mmm. I need $200,000 right now to order this piece of equipment, which was true.
I needed that cash to do that. Mmm. And uh. If we don't get the money by Thursday, it's Tuesday. If we don't get them any by Friday, we can't order the hardware in time to be able to do live broadcast. I'm opening a convertible notes, which is like a small, for those who don't know, it's like a . Uh, when you do around.
You, you get a bunch of money together and once you have enough, you sort of closed around and you get the money and you, everybody signs the one piece of paper and notes. Convertible note basically says that instead of waiting for everybody to get together, you give the money now, but you get a little bonus on sort of either a better valuation or whatever.
You get a discount. The price of the shares for having, Mmm. Sort of taking the risks of [00:34:00] come in before everybody else came in. And so I, I called them and I'm tell them, uh, my first investor, I'd tell him, we're doing, we need $200,000. I'm opening convertible note. You'll get 25, Nope, not like 15% off or 20% off or something like that.
And, um, I need you to tell me by tomorrow if you're in, I'm not sure if I'm taking more than $200,000. I'm not sure. I'm not taking more than $200,000. We'll see. But I might also close it. Uh, it depends a lot on them who comes in first and that how much and etc. Uh, and they go okay okay. We'll, I'll tell you by tomorrow.
Hang up. I called the next one do the same thing, called the next one and the same thing, call the next one and do the same thing. And I was like running out of cash for the company by Thursday. I had $1 million and I cannot tell you like I was like before this happened, like I didn't plan this. I just did this because I was like, I got to do something before this.
I was like, if people were asking you, okay, and I was like, yeah, I'm fine. We'll figure it out. I believed it.
[00:35:00] I was annoyed by a lot of people and a lot of things. And then when I got the money the day after, I remember eating like eating something normal, can't remember what I ate, but I tasted it and I was like, Oh my God, why does this taste so good? Like flavor, like it does so much flavor. Flavor is amazing.
And then I was talking to a friend who was just annoying me like crazy three days before. And I'm talking to her and I'm like, you're not annoying. It was me. I was just dying under a mountain of stress and discovered that like, I actually, I'm terrible at noticing when I'm stressed out. And, uh, and yeah, but like, it was like, you know, we, we had $15,000 when we were burning 50, so we had one five.
When you did five zero every month. So it was, it was, it was tight. But, uh, then after that, you know, we, we, um, we did the live broadcast. It went really well. Uh, we got, uh, it was a pilot for a client that was very interested in longterm and ended up becoming a partner longterm. [00:36:00] We right after that, also won the tech crunch, uh, disrupt for sports.
It was like this thing called the NFL first and future. Which is also, you can actually go to YouTube on that one and type in live like, uh, at tech crunch. I have a video in there. They have a video in there that's got the real hustle. Mmm. There's a funny story with this. Is that, so it's in Stanford at the super famous stage where a lot of stuff have happened and there's like NFL executives all over the room and there's like Kleiner Perkins, a lot of investors, it's live streams.
If you win, you win two Superbowl tickets. There's 50 startups. I know there's dirty 30 startups or something like that, and uh, and we're pitching, but the demo we have our demo onstage is you put on the headset and I had to like look around the room and it was mirrored on the giant screen, like what was inside that?
The headset was on a giant screen behind me. Except [00:37:00] that our demo was not on already to be able to do that. So when we mirrored the screen, you could see what I was doing on the screen. But inside the headset, it's completely black. Like it could only show one screen at a time. I could control the big screen, but I couldn't see what I was controlling because I had the headset on my head.
So when I do the demo in that video, if you guys go to the video and you looked at it and you're seeing
Alvin Leong: to a video, yeah. .
Andre Lorenceau: If you see me do the video, I look at some notes and I go, and now I'm going to look over here and I'm going to click this button. And I then that by memory, because I couldn't see anything inside the headset.
Um, yeah, that's it. You gotta you gotta find, yeah. So it's relatively towards the beginning or, yeah, probably around there. Mmm, yeah, yeah, there's a part, yeah. You were on it. Yeah. So when I'm doing that right there, what you can see on the big screen. Mmm. That part I inside the headset actually couldn't see anything.
And I also, if I move too fast, it would crash the big screen and [00:38:00] I wouldn't know inside the headset. So it'd be still talking about features while it crashed and I would look like a giant idiot. So I have to do it very, very, very precisely. And thankfully it did not crash. Thank you, Chris. Thank you. SAS.
What amazing. Jump to hack this together. And we actually won the events. We won $50,000. Mmm. And I, uh, yeah. And then I, uh, we got two super bowl tickets. I got up to go to the super bowl. Um, and, but more importantly, that was really a big momentum push forward for us. And we, uh, we met because of that.
Probably we managed to close our first 5 million seed round and, uh, yeah, like another 14 months or whatever.
Alvin Leong: So this was all on
Andre Lorenceau: I own like the
Alvin Leong: middle of 2016 you, you mentioned
Andre Lorenceau: this is early, early 2016 and the first quarter of 2016 like March, March, April, 2016
Alvin Leong: yeah. Now. So you just put your first live broadcast, you managed to reach the 1 [00:39:00] million in convertible notes, and then you pitch the tech garage and like if each of you, and is it really when you began to take off from, from here?
Andre Lorenceau: Yeah, yeah. Where we had a lot of momentum after that. And, uh. I'm not going to go through every year after that because it's basically just became, it just grew and grew and grew, and basically, um, you know, long story short is that I ended up having 60 employees. I ended up doing another round series B, raise 10 another $10 million.
And, uh, the, the investors became majority shareholder. And, uh, at some point I just, I resigned from the company, uh, over, uh, some differences, uh, and the company's still around, um, and a sole shareholder. And
Alvin Leong: one thing I think I want to ask before we move on. All these are big customers.
Andre Lorenceau: The customers were big. I mean, we had an [00:40:00] exclusive for the CFR 2018 world cup. We had a, an exclusive deal. So every virtual reality app for the world cup, and there was 13 countries that ended up having a virtuality app like Fox sports VR. VR sky VR was, it's tiny. I think it was sky guy in the UK, sky Germany of VR.
But even Malaysia, Astro VR, Japanese, NTT, DoCoMo, all these VR apps were built by us. So we, we are legit at the biggest stage in the world. We did the super bowl with Fox sports in VR one time. Mmm. And, uh, we had a longterm, longterm relationship with Fox sports where we powered their VR app for, for years.
Um. And, and, you know, and we actually am fairly sure that I hold, um, I'm actually sure that I have. I was, I'm 90% sure that I hold the record for most views in a virtual reality headset ever, both because of the FIFA world cup where there was a very decent amount of people streaming. Again, say the numbers, [00:41:00] uh Oh, very large amount of people streaming and I building anything with VR.
That scales ever happened since or before. And also because we did a major activation with them. Biggest sports and ESPN are the biggest force channel of India has star and they actually distributed. Like hundreds of thousands of headsets, a little cardboards for people to use, and the numbers coming out of that were ridiculous.
So I actually think I have the record for most of using a VR headset ever, but I can't really prove it. But I don't think anybody's ever done anything on this scale since or before. Even like New York times and stuff. We did the excavation. It just, I don't think they had those numbers, but it's at least not a live broadcast.
Alvin Leong: Like was it really like the tech stars being featured on tech crunch gave you credibility to cause all these big clients are, or like,
Andre Lorenceau: uh, even though the tech, the tech was cool, the tech was. Like there was a lot of hype in VR, but the tech worked. We were a lot easier and cheaper to deploy than other people.
Like there was a company called next VR [00:42:00] who had better video quality, but they had these massive, like digital trucks that were cutting edge technology. They had very intense stereoscopic 3d like technology and stuff like that. And it was fine and all. But R we, we didn't think that the video quality, like it's like from two keto fork, it is not that much of an improvement.
And in VR you needed improvement in video quality. But fundamentally what was more important was that when you had a VR headset on, you couldn't talk to your friend, you couldn't look at your phone. And when you go to a sports game, you talked to your friend and you'd look at your phone. What's a super fun?
But it's not. 24 you're not glued to every moment of the action. It's more true. If you talk about soccer, maybe there's more, but if you do tennis, if you do American football, if you do NBA, there's tons of breaks in the game all the time, and you talk to your friends what's happening. So if you're in a VR headset, you're isolated.
So we wanted to bring back to the people into the VR headset. We wanted to bring back even come function as your phone does inside of the VRI assets. And also because we aren't [00:43:00] focused on the screen, we didn't need to have this ridiculously high resolution. We didn't need to have this ridiculously, we didn't need to have 360 degree video camera.
You could do a normal camera with a wide angle lens and just do a three environment for the rest of the view around you. And it worked and it was just a better product. Baseline from which to go on. And we were the only ones doing that for extremely long. At some point, somebody started copying us, but like it was literally three years in after we had gotten FIFA and et cetera, that people started copying us.
Um, but we, even when we had talks with VRS for years, nobody was doing anything like us. I can't explain to you why. Cause usually people copy stuff all the time, but they are, they just wouldn't, wouldn't do it.
Alvin Leong: Yeah. I have more questions asked by by thing like we are running off time, so maybe you want to move on.
Yeah, I might if I have more time. I'll ask you more about like how, how you came up with this idea that you're going to bring this experience in compared to your competitors who didn't [00:44:00] like think about the experience of watching sports events you talk to your friends with when you're watching a sports event.
So I, I don't have a you have to someone to go after this. Oh, you okay?
Andre Lorenceau: Okay.
Alvin Leong: I'm good. Oh, yeah. So it's like, yeah, I mean, maybe you can tell them a bit more about that. Like what, uh, now
Andre Lorenceau: was the thing that
Alvin Leong: made you think about all these things? Like they use the experience of watching sports.
Andre Lorenceau: Oh, I mean, I mean, I knew VR well.
Uh, we knew sports pretty well too. Um, we just saw what other people were doing and we were like, that's not the right thing to do. And then every time we tried something, people were like, yes, this is the right decision to make. And we don't think about, we did a ton of stuff wrong. We had terrible tech debt that crippled us and prevented us from building sufficiently.
Our business model had issues because everyone wanted the customized experience. For their business. And it says the world big clients, each of [00:45:00] them like could dictate to some degree, some customization cause they forced broadcasters then when I've all had the same technology. Mmm. Um, I can't tell you one thing why we did it differently.
I mean, all right. I did have a designer in my cofounding team. It wasn't just like business people, technical people. It was like a designer. So design was always a major component. But. Yeah. But I can't tell you. And, and we've made a ton of mistakes, but for some reason it's just, yeah. You know, and even the next VR who like next year, raised $150 million, like they outraise the ever living hell out of us.
But we kept ending up winning the contracts that they were bidding for. That's how it works. Well, we had a different business model to be fair to them, but, but they had way, way, way, way more money than we did. And people liked our experience better when it wasn't buggy. Cause we had a ton of bugs. Yeah.
Alvin Leong: And then [00:46:00] what you said about having a designer on your founding team, it makes them all sense, but you also like design. Okay. I've been guilty of this, uh, myself. Like I used to think like design just about making stuff ready, but it's not like you have to, it also involves like understanding user experience, all that.
It's a lot. Yeah.
Andre Lorenceau: Yeah, I'm not sure. I mean, okay. So I'm not, this is not a dishonor on my cofounder, Jeremy, cause he was amazing and he's a super hard worker. Major disclaimer there. Mmm. But what you're describing is actually more of product person than a designer. Yeah. And that's fine. And I do think product people make good founders just because they, I mean, they understand the user, but understanding, you know, the design is, is.
Okay. So it's visuals, it's graphics and etc. It's also a UX or how the user goes through and the user, uh, designers do design this, but it's a little bit more a front and [00:47:00] EA front end, even as it's more like which buttons do they click on and, and how much time did they take to go through this thing?
Whereas product is really the basic rhetoric. Like what is the user. What do they want? What are they missing? What's making them angry? Fundamentally not, which buttons makes them angry, not which, but like really more core principles. And I think a product person who could find him super important.
Designer and cofounding team, I think is maybe because I had too many co-founders. We were, by the end, we were basically five co-founders. Mmm. And I basically ran over a parliament, which is very unusual, but, Mmm. I, uh, you know, cofounder seats are expensive and sort of the figurative terms. Mmm. I'm not sure a designer is necessarily the right rule for that, unless you're a very design heavy business.
Like if, if you're like a, a consumer brand. Yeah. The designer makes total flux double sets right. Yeah. That's why I used
Alvin Leong: to play a lot of games. Did you [00:48:00] play games during this period?
Andre Lorenceau: Uh, yes, but less. Yes, but less,
Alvin Leong: yeah. Like you played the Witcher three during this. Okay.
Andre Lorenceau: Maybe I can't remember when I played the Witcher three.
Yeah, yeah. Yes, yes. I did a little bit play the wish for thrilling that time. It was more later in the company. Yeah. Um, I didn't have a good computer, so I couldn't really I never console or I didn't have a good computer during the beginning phases of it, so I didn't really play during, at that time at all.
But yeah, video games is my happy place. Yeah. The only place I can really offload my brain,
Alvin Leong: the Yoko phone was playing as well. It's just a three
Andre Lorenceau: straight though. Not really. Not really. No. None of Michael. Well, my brother did. No, not even that much, like no, none of them really did. I mean all of them dabbled, but very lightly so.
And one, I've actually, my CTO actually came from Microsoft game studio. He was actually a game engineered, like a technical person from the [00:49:00] game studio. Which is relevant for VR, but he, he, uh, he was not much of a gamer himself. I'll let you know.
Alvin Leong: Yeah. But, but he did have like this game design and development experience.
So I was just thinking like maybe your co-founders brought that through the product design as well for, for LiveLike, so, so, which mean you. Would you like help me differentiate and treat this customized experience more? Because like the way people design games, that there's, there's a very good, a presentation by superhuman, the civil human CEO Russell.
He talks about how game design influenced product design. Yeah. It's quite good.
Andre Lorenceau: Yeah. Yeah, yeah. But yeah, we were definitely in the games industry, basically VR and the games industry, even though we weren't a video game per se. Uh, the, the, the, the industry has overlapped a lot. From a technical standpoint, it was completely run like a video game.
But yes, the design portion is very close to that too. Yeah. So anyway,
Alvin Leong: so at this, uh, by like 2018 you, you left, you left [00:50:00] LiveLike, and then you are,
Andre Lorenceau: uh, yeah. I did some consulting for a couple of friends at startups, just building a sales team. I went to India for notice three months to build my, another friend's, uh.
Uh, the software team in India, cause I used to have a full software team and as I went over there to India a lot, so I helped a friend build his team there. Mmm. On the ground. And uh, and yeah. And so I won Indiana. You do a little visa hop just to go in and out of the country. It's a reset my visa and I decided to go Singapore and that's where I found Entrepreneur First.
But this whole time I really wanted to start something, a new business, but I just. I, my ideas were just not good enough. My ideas were just not, and I couldn't find anybody that had an idea that I was like, yeah, this is cool. Like, this is good enough. Mmm. Uh, until basically I came to Entrepreneur First and a lot of people have very interesting ideas.
Uh, and I tried to do the security thing, but I kind of realized I didn't want to work in the security industry. Mmm. Just because it's kind of, this might mix, right? It's sort of like violence, adoring [00:51:00] industry, like just guns and violence and security. . Anyway, and uh, and I, I got randomly matched up on a law hackathon with Ali, my current cofounder.
And even though I, well and gas hardware was completely not on my radar, I did a little hackathon with him. I was like, this is like really that much better. Like this is not like a little bit good. This is like really good. And I was like, okay, I'll just explore it for a couple of weeks and just, I was trying to find some clients for it and stuff.
No, was just doing it to do it. Cause I was in the program pretty quickly. I had clients that were like, Oh my God, this is amazing. This is so much better than anything we've seen, et cetera. Like basically a LOI almost right away. And uh, yeah. And now we're, we're still proceed. Um, but we're out of the program.
We got invested by Hax and Entrepreneur First trying to raise my pre-seed right now. Because I've $17 million in LOIs from clients, and I'm trying to [00:52:00] build a prototype to build a pilot too, so that I can do a pilot with them. Because after that, they will convert their elwise into full on product orders and contracts and a, and I'll build a big factory and I'll manufacture.
That's my 2020 plan.
Alvin Leong: Yeah. You mentioned me before your, you're quite satisfied by the whole experience because it's like mainly because you had been wandering around trying to find a cofounder for, since 2018, but you finally, like even our Entrepreneur First, like, uh. We can, I think we can be frank here on the doesn't have the best terms, but you'll give that
Andre Lorenceau: the terms.
Yes. The terms are not the best, but yes, the, the value. I mean, there's just nothing else. Like when you start a startup, you don't normally be like, Oh, I want 99 other. Candidates that are available and each have different expertise and a bunch of different sectors handed to you and then go and let me pay you a salary while you talk to them and brainstorm [00:53:00] for three months.
Like that's, nobody gets that deal. Right. So even though at the end of the day, they take 10% of your company, Mmm. Like. For not a ton of money, like in, in sort of a comparatively, yeah. It's kinda like, it's, it's almost, it's just like a really, really cheap way. No, it's not a cheap way. It's a really efficient way to find a co founder is not cheap.
The cheaper way is to go out there and find him at meetups and stuff, but that takes forever. And the quality of people that you meet is way lower introvert versus a really, really, really good filter for people. . Just, yeah. I'm just like, I was very impressed with a very large number of just plenty of people I was not impressed with.
But there's plenty of people that I was very impressed with that, that I'm very, that I think are going to be a, there's decent number of businesses at EMF that came out of our cohort, or that'd be like, I wish I was working for that quote for that company as well, because that company is going to kill it.
Like, I just know it. [00:54:00] Mmm. Yeah. I think it really provides the value. The fact, if you go, Oh, well, I'm getting $100,000 a basically, and they're taking 10% that's like million dollar valuation. It's not great, and it's true. It's not great, but that's not. The 10% is not for the a hundred thousand to 10 the 10% is for de-risking.
The brainstorming part is for handing you a hundred other co-founders, which are qualified and ready and willing to start a company. It's, it's extremely worth it. W
Alvin Leong: what do you feel that like EF could do more of like you, you went through Haxfor a bit and then you heard from people, Antler as well.
So we, we both talked about this a bit. They're doing, I think like they're doing a bit more for the people they go through with them than EF.
Andre Lorenceau: Yeah, that's my, that's my impression. But there's a lot of factors here. Like. W I feel, and I know that a couple of people feel [00:55:00] that, okay. Antlers selection process for candidates is lay as less.
Um, there's less quality in the people, but they do a better job at managing the program. They introduced you to Morris, you're like better investors and things like that. Mmm. I still think that the finding the cofounder portion and having good co-founders is more important than anything they could do during the program.
Mmm. But. Well, that's my objective. My opinion is very subjective, and it's also that like Antler here has more senior staff. They've got the partners here and they're there. I feel like they're more like Singapore for EF feels like a pretty satellite office. Mmm. Maybe not feel it. And maybe, you know, we came when there was a big turnaround, people twice in the staff, in the two programs that we were there for the program that we were there.
So it's. It's very hard to say that, you know, EF is this, isn't that because the London or the Paris program could be run [00:56:00] differently then what we've been exposed to. So, I mean, it's totally possible. I don't mean to be
Alvin Leong: mind this. Yeah, but maybe I think it will be like good feedback. We'll give them back as well and like we put it up on the public channel.
If it goes like, I feel like one thing is that
Andre Lorenceau: I've told this, I've told this to you, like, I've told this to the new managing director. I, I've, I've been very candid with her, Bernie who is real cool and smart and totally capable, and I think she'll do a great job. Uh, but, uh, but I, I sort of thing I just said, I told her directly to her face.
Yeah. She read the portions. She disagrees with portions as is expected then. Yeah. Um, and she has a strategy to address these things, and you know. You're Buster. Yeah. And I think like, I'll go home. I'm still happy with the value. Overall. I think it's unbeatable.
Alvin Leong: Yeah. Like I, I'm like quite happy myself. Even go, like, it didn't turn out that well for me.
I still think I learned a lot. I went off on this whole, just slightly on the one year now, you know, [00:57:00] so, so at this point . You told me like a few weeks ago that you had to raise 200,000 for Divigas and then, you know we, we, when you said the 100,000 thing for or live like that now, I was thinking like you're facing like almost the same thing.
You need a hardware.
Andre Lorenceau: It's very different scenario cause I hear, I have no burn. Like we spent no money right now. Like until we get this money. Like back then I had a team of when I needed just 200 K I had a team of 15 people and a live deployment to do on the clock. Like here. Yes, I'm a little bit on the clock because I want to build this things cause I want to do stuff with Corona.
Virus is slowing everything down. And if it doesn't happen, I'm not like running out of cash. Like I have a lot of time to be able to just survive until this works out essentially. So I, I'm, yeah, it's just a different kind of a different, uh, mindset or process. It's definitely less stressful right now. But [00:58:00] one
Alvin Leong: thing we have, one thing that, uh, I was thinking of is that you all gave Ali, you, you've known him for a few months at this point.
It's quite a different experience from, uh. Do you mean with your brother and then other people you know?
Andre Lorenceau: Well, I didn't know the others before I met them. I didn't know the other. I didn't know them. I found them through various ways. Mmm. But it is very different because Ali, Ali is a PhD, you know, a chemical engineer.
Very different personalities. The Iranian, as opposed to the other ones being French American. Um, he. But he's also very nice, which is easier. Um, it's generally been a very easy relationship with Allie has been, has been the, he's, you know, he's a crazy level, deep of expertise in this specific subject matter.
Mmm. Again, not the hating on my X team, but my X team was not as senior as he is into this [00:59:00] topic. Uh, uh, and, and on the flip side, you know, he's really not a business person being a PhD chemical engineer. And while he has a little bit of business instincts, for sure. Mmm. Very funnily enough is because he, his families are iron.
They ran and they're a carpet salesman. People, they sell the carpets. Rarely. They do very well with it. Mmm. But, uh, but so he's always had this little bit of a, like a, uh, like a salesy sort of a attitude, but still overall, like he didn't know anything about startups. He didn't know anything about fundraising.
He didn't know anything about a lot of the stuff that we've had to do. Mmm. He's not as familiar with American or, or sort of maybe, let's say, international culture as . Uh, so we have a really good, clear delimitation of, of, of skills and tasks that we do. And so it's, it's actually very easy if you're, if you don't have too much overlap in responsibilities, it's often actually, if you both do your job, usually don't fight very much.
Where it becomes a problem is when you overlap on [01:00:00] responsibilities. Hmm.
Alvin Leong: Yeah, it makes sense. Yeah. Based on my own experience, like, yeah, I think that that played a role as
Andre Lorenceau: well. Yeah. Yeah. If not, if you have two people that act as Celia, two people that do the administrative, you have two people to do the sales.
Uh, if you have to be able to do things like you, you, you, there's no better way than to get people to fight, to give him the same job. Like it's just, it's two completely competent and successful people will kill each other if you give them the same job. It's just, that's how it works. So, but thankfully Allie and I are extremely different and we get along well.
Personality, I mean, like I drink and. And go out and he does not, I mean, you goes out, but he doesn't drink. He just hangs up with very different friends than I do and that's okay. Easily as I am. I am, but that means that we're bringing very different mindsets to the table and we don't overlap in our responsibilities.
Alvin Leong: At what point are you at? We'd give you guys right now, you feel drank a wreath, a small round.
Andre Lorenceau: Yeah. I'm trying to raise a 300 K I'm [01:01:00] a to be very transparent and 125 K short and I am sweating a little bit because coronavirus every VC out there is, you know, I made a list of 280 VCs hardware that were hardware VCs that were in or angels that were interesting to me.
Send them to a bunch of different sources and that's where I'm going after them. I went on LinkedIn, I made a huge list. I found all their LinkedIn and I found who I was linked to them on LinkedIn. And I asked these people for introduction cause reaching out to cold is a terrible idea. And uh, I got answers from not a lot of them because VCs right now, they're all telling me like we're trying to keep our portfolio companies alive right now cause everyone's in a cash crunch because of coronavirus.
So. We're not investing in new companies. So I, I still have 175, but, um, trying to find a rest. And then, um, I mean, there, I'm progress, this progress. I'm always, I have conversations going on. I have people that told me they're interested in that amount and et cetera. But it's, it's, it's pretty hard in the current climate because I mean, with $17 million in LOI [01:02:00] would the upside of this market with hydrogen being the future and et cetera, I really feel like this should actually be much easier.
Yeah. Then but that's okay. That happens. It's crisis time. We'll see how we deal with it.
Alvin Leong: Yeah.
Andre Lorenceau: See, I'm flipping thought about it. I'm like, Oh, it's not a big deal. Y'all make it work. Maybe inside I'm freaking out and I have no idea. I can't tell you. It's like, it's like the 200 day thing when after I get the money, I'll be like,
it's like not realize that you're holding your breath. .
Alvin Leong: You mentioned a bit before, like you found the Singaporean investors, like the. I found them quite different from when you're facing the U S
Andre Lorenceau: yeah. I've not been happy with Singapore and . So far I've, I've been, I've been generally disappointed. I've been the, the, they've been, uh, yeah.
It's just, it's just . something that's very useful as an entrepreneur is actually to study VCs, study how they make their [01:03:00] monies, study how their funds are structured, and studying how they typically dispersed their money. But even the history of VCs. So like what kind of terms they used to do in the two thousands and in 2000 early 2000 tens there's just now, it's actually very interesting for a number of reasons and basically what you have here is a lot of terms that used to be more common around 2010 and basically the VCs in San Francisco have evolved.
basically the entrepreneurs, I've been like, I don't, I'm not okay with these terms because they're just bad. They're just prohibitive. They're just not conclusive. And they don't really give you, even the VC, what you really think. It gives you things like trashing the money, sort of like when they fund you, they don't give you all the money.
They go, okay, well I'll give you the first half and I'll give you the second half when you reach these metrics or whatever. Mmm. I really dislike that because it just really puts a Garrett on your, your neck ended up pivoting. It could, it could screw you out of the money if they don't like the pivot, even though it could be the right thing for the business.
It's also [01:04:00] just a, not the trusting thing. Um, and if you don't trust the business, then like, why are you investing in the business in the first place? Mmm. Well, along things like that. Uh, and so, uh, there's a lot of practices that are done here that used to be done in the 2010. So that kinda got eliminated in the Silicon Valley, or it's still done, but not by legit AAA.
VCs and I met my, I'm going to say something and it may be totally wrong and I'll get somebody to slap me, but, you know, I don't think Andreessen Horowitz trenches their money. Um, I don't think, uh, I don't think Sequoia trenches their money. Um, I don't, I don't think the real, the people who we look as the rock stars of the VC world that have the best deal and the best client, et cetera, do any of this stuff.
And in Singapore, most of the people do stuff like this. And I'm like, you guys need to. Basically educate yourself and also the date, the valuations, the R R quite low, quite low. I mean does sometimes [01:05:00] they're not, it's kind of, it's inconsistent. But, um, I, I've just, I've seen a lot of friends now go through rounds and, and VCs are trying to negotiate them down one day and when they do have traction and really good deal and they're trying to negotiate like a third or like two thirds of their evaluation down, then it just like.
It's like you're haggling almost over nothing. And, and they go, Oh, but this doesn't like this in Singapore. This is the price in Singapore. And I'm like, well, then why are we in Singapore? You know? Like that's just prohibitive for the entire ecosystem. Mmm. And it's not like VCs actually have that much less, I mean, VC does VC funds here, they have plenty of cash.
I think they just think they can get away with it, and they do a little bit right now, but I don't think that'll be the case for long. It's just like, it's a newer ecosystem, and I think they're just. Yeah. They have to go through the motions because it's a newer system and they have to meet a lot of, you have to lose a lot of good founders who go, I would go with you, but sorry, you're trenching the money.
These other people, not in Singapore, not transferring the money [01:06:00] because of this terms. You lost me. They'll lose four or five deals this way, and they'll be like, you know what, maybe actually we should not, we're losing them. We're losing the best entrepreneurs over this stuff, and they need to see it have that pain, uh, for them to really feel it.
Alvin Leong: You can give us like a quick, uh. A few quick tips about how to negotiate it. So it was like one thing you recommend, one thing you just recommend. Nice. Like if they give like reading back dorms like, Oh, or like DMS out there, they're not advantages to start up just to say, no. So,
Andre Lorenceau: I mean, every, every negotiation is leverage.
Leverage is negotiation. So the best thing you can do for your business, first of all, is I have a good business, which is a stupid advice. But like, if you have a bad business, you're going to get into a term sheet negotiation and then you're going to get screwed. Like it doesn't matter, cause you're not gonna have a lot of offers.
You're not going to be able to walk away from the table and you're gonna be able to dictate whatever they want. And it's not like, depending on negotiation skills quite so much. Mmm. [01:07:00] If you're in a good position, like I'm not a good negotiator. Really? Yeah. No, I'm actually pretty mad. But the only skill that I have is that I understand the how leverage works.
And I know that with my 17 million in LOI right now, if I raise a small amount and I get that into a product order and I show up with $17 million in product order to a VC, I go, Hey, I need 2 million to build this factory. My position is overwhelmingly better because I know they don't get a lot of.
Startups that come to them and go like, Hey, I have 17 million books, um, and I need $2 million. And like, they know that a ton of people would do that deal. And because they know that they will give you better terms for it, and you can be able to dictate whatever you want. And if it's also about timing year-round, correctly, so.
Basically what you want is to do a lot of research, go after a lot of people. Can I hit them all at once? Try to keep them all fresh and going at, at a, at a decent pace. That's like a regular sales job, I [01:08:00] want to say. And, um, and, uh. You know, when you get a term sheet, you go to your other ones and sometime you can't show them the term sheet, which is fine, but you tell them like, Hey, I have a term sheet.
I'm assigned it yet. Um, if you want to compete, if you want to get in on this, uh, you're, you're going to have to do it very soon, basically, because I'm going to have to do this. And usually when you get a term sheet, there's a lot of other ones that end up falling. And then you kind of compare your options and you go to the one you like best and you go, okay, well, I like you best because I think you'll give me the best support and et cetera.
But, um. But, uh, you know, this term in this German term is not good. If I'm going to go with these other people where I don't have, you know, I'm going to go with this other solution unless we change this and, and you can do that because you have other options. If you. Don't have other options. You can do that basically.
And this is the basis of it, right? It's just like basic leverage. It's, it's, it's like not rocket science. Like,
Alvin Leong: yeah, that makes sense. Like you have been following the coronavirus situation since [01:09:00] it began to hit Singapore, like in January. Um,
Andre Lorenceau: it has not hits hit good for, but it has not hit single
Alvin Leong: control.
Andre Lorenceau: Yeah. They're not going to be able to do that forever. I don't believe they're going to be.
Alvin Leong: Yeah. I know it's uncertain for everyone in the world right now, but what are you doing personally for your business,
Andre Lorenceau: do you, there's not much you can do. I mean, my business is not as. Hey buy this because it's a heavy industry works and very long sale cycles.
So I'd like this will slow things down, but I got product development. I got to do basically building these pilots and stuff. My clients are not shying away from their commitments that they have right now. So these kind of business as usual, the only thing that sucks is that investors are scared because a lot of the other businesses, other startups are.
Dealing with cashflow issues. Um, and because, you know, consumer businesses, they're, all of their clients are shutting down and not doing any purchase and et cetera. But, um, [01:10:00] so how much do you can do? The problem is I want everything slows down. Like you, I mean, you can, I can do a lot of research on my clients.
I can build better information networks. I can, right now I'm still completely mostly in fundraising mode. Mmm. But there's not a lot you can do.
Alvin Leong: Yeah. You're
Andre Lorenceau: at the mercy of the market sometimes. . What you can do is lower your burn. I think less was salary and just wait it out.
Alvin Leong: Yeah. Okay. So, uh, let's, let's wrap up here with like some quick vibe questions I actually use on some of the podcast.
I want to try it. Obviously if it works for me. Sure. Was one business book that you recommend or even one book they recommend in general,
Andre Lorenceau: the hard thing about hard things, Ben Horowitz.
Alvin Leong: That's a common one. A lot of founders recommend.
Andre Lorenceau: Yeah, but it's because The Hard Thing about Hard Things is a book about the terrible things that can happen to you in a startup.
And it's like a list of terrible things and how you survived them. [01:11:00] And I've been through like, like half of the things that happened in that book. I've been in one form of that or another. There's a form called the struggle that you can even Google, and I've been in the struggle, but like. So hard, like it just like, like there's a line for them.
The struggle is basically a poem and there's one line that says, Mmm, when, uh, when everyone around you thinks that you should be fired and you know, there's, and you know, they are right, but nobody can fire you and there's no one to replace you. And like, I've been in that situation, I'm like, I should be fired.
I'm not good enough for this job, but nobody can fire me. There's no one to replace me, so I'm just going to keep doing it. And that's a terrible feeling cause you're there. I'm like, I am inadequate. I'm not good enough. But anyway, it's a great book because it gets into some very real stuff like that and it just kind of prepares you and it doesn't sugar coat it literally just kind of goes like most people are not tough enough for startups.
They're not tough enough to go through the [01:12:00] cycles and the pains and the mental breakdowns and then get to the other side like.
Alvin Leong: Okay.
Andre Lorenceau: Well, I'll say another one, which is Venture Deals. If you ever have to fundraise and to do a term sheet with investors, eventually deals, that's like a, that's not even like a book. That's a textbook. That's like something, it's almost like you mandatory reading basically like you have to, as a founder, if you don't read it, you're an idiot.
Alvin Leong: Okay. What was one tool that you found really useful for building a business? So I know that you use miro.com, uh, you introduce it to a lot of
Andre Lorenceau: Miro. Good for brainstorming. Um. I, I stupidly enough, I use Trello a lot. I, I'm, I'm big on Trello. Just task management, organizing. I have 25 Trello's for different stuff.
Um, I have two Trellos for [01:13:00] Divigas. I have one for the day to day, and I have the tracking sprints and stuff like this and one for the investor funnel. Mmm. Uh, what else.
WhatsApp is better than email. So like personal. Yeah, like it's not just more rapid. It's just say it's more personal when you're in, when you get to somebody what's up, you're one of their friends. When you're an email, you're one of the many people that send him emails. Like emails are cold and impersonal, and in fundraising and in startup relationship, if you can be on one WhatsApp better than email, you learn this from.
I use, I use, I use HubSpot and I like HubSpot a lot. So HubSpot's pretty good. Mmm. Yeah. I, I like how fun a lot. I even did the LinkedIn, I use the LinkedIn, I use LinkedIn sales navigator a ton. Sales navigator is amazing. Super worth it. And you have to learn to use [01:14:00] it. And I even, I used it for a while and then I even got like a kind of a bot for it.
And I just. And I was doing very targeted and it's very, how using LinkedIn depends a lot on your business, but for me it worked out and I'd know it worked for a lot. Any B2B business usually, Oh, LinkedIn sales navigator is going to be a major, major part of you getting early traction, getting involved with people.
Okay.
Alvin Leong: Can you name like three other, uh, founders in Singapore that you think I should interview.
Andre Lorenceau: When they told you to interview Julian, but he's gone. But you should do it with him in the U S Julian Colina because he's got a lot of good stories too. Yeah. Mmm. Again, not in Singapore. If you want. I got a guy in Germany called Torbin free.
It was a close friend of mine. He's went through similar war stories that I did. Um, and he's, he might actually do Entrepreneur First soon. Um. Sorry, I'm not giving you Singapore people. I'll give you at least one thing of [01:15:00] corporation. Uh, yeah, you should go. You should do Natalie.
Alvin Leong: Yeah. Again,
Andre Lorenceau: that only has good stories and she'll be super fun to talk to and, and British accent is going to sound great, Natalie.
Um, okay.
Alvin Leong: Uh,
Andre Lorenceau: what else?
Alvin Leong: Um, what was one piece of advice you would give to yourself five years ago?
Andre Lorenceau: Listen less to others. Listen to yourself more. Yeah. But I had this big problem because I had, I was dealing with the parliament too many co-founders and I had to do consensus a lot, but I really struggled.
Two, I really struggled to, um. To a sort of like, listen to my own voice, like very often I would just kind of let them decide all things altogether and I should have been like, I'm sorry, but I disagree and that's it. Like, and I trust myself and, and I have better information than you do. And yeah. So like trust your gut, really trusting your [01:16:00] gut and not just letting everybody influence you too much.
The opposite advice is true that depending on who you are and your context, you have to listen to people all the time and you should listen to people more always. But then coming to your own decision, trust your gut is a big thing. Okay. Trust me, it was, I needed to trusting my gut more. Yeah.
Alvin Leong: Okay. Yeah, it makes sense actually.
Like I, I myself, I, I asked for advice from a lot of people, but in the end, I usually do
Andre Lorenceau: asking for advice for a lot of people, asking for advice from a lot of people is super important. You should do that basically as much as humanly possible. But then. Don't let them decide for you. Like trust your gut, like gather information.
Decide what you were good.
Alvin Leong: Yeah. Thanks sense. Okay, Andre, thanks a lot for talking to us. I actually have a bottle of wine. I can go. If you're afraid I can go down to your face later.
Andre Lorenceau: Sure. I'm not going to say no little bottle of wine. You know, I'm down. Yeah. All right.
Alvin Leong: Thanks. Thanks a lot for doing this. So [01:17:00] we're going to add it, and then if all goes well, I'm going to put up on YouTube
