He also has no doubt that the Malaysian ecosystem has a lot going for it, thanks to government intervention that has started to pay off now, years later, he told the 17th DNA-TeAM Disrupt panel discussion yesterday.
“I am truly, truly a product of our Malaysian ecosystem,” Aaron said, sharing that he had graduated from Multimedia University when Cyberjaya had only two buildings in it, and had worked at English daily The Star, where he had helped compile the In,Tech CD series which featured thousands of freeware applications and archived articles from the paper’s technology pullout, In.Tech.
When he did finally venture out into the startup world, it wasn’t too bad at first – his ventures managed to get government pre-seed funds through both national ICT custodian Multimedia Development Corporation as well as Ministry of Finance agency Cradle Fund.
The ventures still failed. “Clients who don’t pay up are the worst,” he said.
But he still credits the Malaysian Government for ‘allowing’ him to fail, saying that he would not have come so far if it weren’t for such intervention.
“I think they played a real part. The company that got the pre-seed fund didn’t make it, but it did enable me to run for two years, and those two years were invaluable. I learned so much. I learned how to run a company, and I learned how to manage teams.
“I love to get up after falling down, so indirectly, those funds succeeded … three or four years down the road,” he said.
Aaron also argued that the whole idea of government funds and grants is to help build companies that would create jobs and ultimately generate tax revenue, and indirectly, this has succeeded too, noting that MyTeksi employs 90 people in Malaysia, and 400 regionally.
“The people I were with on the Technopreneurs Fund, what we call the ‘pre-seed babies,’ all of us have grown up now and have become more mature – we know how to run a real business.
“I think it’s finally coming together, after about 12 years. You can see a lot of exciting startups coming out of Malaysia, and it’s going to happen,” he said.
His optimism was shared by fellow panellist Cheryl Yeoh, who after exiting her second venture in the United States, returned to Malaysia to take on the chief executive officer role at the Malaysian Global Innovation Centre (MaGIC) that will be officially launched on April 25.
“I was born here in Malaysia, grew up in Petaling Jaya, and was fortunate enough to get a JPA (Malaysia’s Public Services Department) scholarship – so the Government sponsored my education,” said Yeoh, who studied engineering at Cornell University in New York, before getting another scholarship by Cornell to do her Master’s.
Her first venture failed too, she told the panel discussion that also included Azrul Rahim, a DNA Digerati 50 who sold his first venture JomSocial to a US company in 2013 for an undisclosed sum.
The DNA-TeAM Disrupt panel discussion, organised by Digital News Asia (DNA) and the Technopreneurs Association of Malaysia (TeAM), was moderated by DNA founder Karamjit Singh.
It was a Disrupt panel discussion, on the topic ‘Leadership lessons from startups’, that saw more than its usual share of brutal honesty and heartfelt learnings, down to the level where sometimes the panellists actually said, “Please don’t tweet this or write this down; I’m only sharing this with you guys.”
Here are some more excerpts:
Lessons from failing
When speaking about his first three ventures, MyTeksi’s Aaron said the key reason he failed previously was “focus,” or lack thereof.
“You need to be laser-focused. I used to have so many ideas, and wanted to do them all. So I do this for a month, I code that for two weeks, and then it’s let’s try something else.
“One thing that we did differently at MyTeksi, and this is from my partner, MyTeksi founder and group CEO Anthony Tan. He told me, ‘If you only focus your energies on one thing, we can do great things together.’
“And that’s what happened,” he said.
Meanwhile Yeoh, who stayed on in the United States after getting her Master’s, spent a few years in management consulting, first in Arizona, then in New York City.
“It was during the financial crisis of 2008 to 2009 when New York got the entrepreneurship bug. A lot of people in the financial industry were either laid off or quit, and decided to start companies,” she said.
It was time when Facebook, Twitter and other new Internet companies were taking off in the West Coast of the United States, and the East Coast began to take notice.
“There was momentum building; it was unique because it was a new ecosystem – pretty much what Malaysia is going through right now.
“I was really bored in my consulting job – doing procurement, and firing people because (companies) wanted to cut cost. It was really sucky, and I had to really consider what I wanted to do in life,” she said.
And that was to start a company. Her mentor introduced her to a programmer, and she recruited him as cofounder. They started CityPockets, a digital wallet and secondary online marketplace, in New York.
“We built a prototype, but my co-founder didn’t want to quit his job until we either got funding or a thousand users – which was a big number then; these days the benchmark is 100,000 users,” she said.
Yeoh had already quit her job, and her co-founder finally did so too when they got into an accelerator programme in North Carolina.
“Then suddenly we were in this world of venture capitalists (VCs) and technology, and I knew nothing about startups. I was a first-time entrepreneur who has frankly made so many mistakes throughout that journey,” she said.
“At the accelerator, they asked us to change our business model, to try various things – so many VCs will want you to do things which are not what you started out to do,” she added.
Inundated by so many suggestions, she and her co-founder accommodated them, but still couldn’t raise any funds.
“So we went back to New York and realised that we needed to refocus on our original idea, and went to the South by Southwest conference where we finally raised funds,” she said.
CityPockets were in the first wave of new startups coming out in the East Coast, so managed to get a lot of press coverage, which complemented by word-of-mouth, saw it increasing its number of users.
“So we rode that wave a bit, and got a few hundred thousand users,” she said.
But while they weren’t selling vouchers, but managing them, they were in a ‘Groupon-like’ space, and when the group-buying site listed in late 2011, “the whole space, from about 600 companies, collapsed to a handful,” she said.
“We knew no investors were going to invest in us for a second round if we continued in this business. We did our calculations and knew we were not going to make it,” said Yeoh.
“It was a very painful decision – CityPockets was my baby. You’re very attached to your first idea,” she said, adding that there were some co-founder conflicts as well.
But CityPockets was finally shut down and replaced with a new idea – Clip.It, in the familiar ‘deals’ marketplace but using coupons, and with a different business model. They managed to raise funding and participated in the 500 Startups accelerator in Silicon Valley.
“I knew then we had to be in Silicon Valley,” Yeoh said. While things were happening in New York, the ecosystem there was still nascent.
“We were a big fish in a little pond. I was blown away by the difference in mind-sets between the East Coast and West Coast, in terms of both investors and entrepreneurs.
“You had to be there, in the same way that if you wanted to be in Broadway, you had to be in New York, and if you wanted to be in movies, you had to be in LA (Los Angeles),” she added.
JomSocial’s Azrul meanwhile started as an investment analyst in 2002, but it took him only one-and-a-half years before he realised that this wasn’t what he wanted to do with his life, so he and his wife founded a software company in a “dingy office” in suburban Subang Jaya, hiring a third person as a developer.
The company hit US$1 million (RM3.2 million) in revenue within five or six years, and had grown then to about 40 employees. How did he make that transition to managing people?
“It was very hard for me because I was from a technical background, and you know engineers – all we want to do is build things.
“One bad thing about founders who are engineers is that we spend too much time building things, and not enough time selling or marketing. For many years, I fell into the trap because I liked building things so much.
“Even when we were building our tech team, I overstepped my boundary – instead of encouraging them, guiding them and believing in them, I would tell them exactly what to do,” he said.
Azrul said it took him a long time to realise that the only way he could build more things as an engineer was to work with other people.
“And that’s it – my motivation to change from an engineer to a manager was really a selfish one: I wanted to build more things!
“I think in a lot of areas, that’s what entrepreneurs do. We just do what needs to be done. In my case, because I had to build a lot of things, I had to build a new mentality first, to [be assured] that the team could actually do things without me.
“Throughout my years, I did a lot of things wrong. I should have learned to bite my tongue and let them get on with their jobs.
“Managing a marketing team was relatively easy because I hated doing marketing, so I let them do whatever they wanted to do to get the job done,” he added.
This mind-set change to leave the technical team to its work “took a lot of conscious training,” said Azrul. “It was like a muscle, I had to exercise it every day.”
It was different for Aaron, who had had experience managing people in his previous ventures.
“But I never had to manage more than 20 people. Once you scale past 20 people, all the awesome Github-like culture just goes out the window. You need structure, you need processes,” he said.
“We still want to maintain the culture, at least within the product and tech team,” he added.
He conceded that structure and processes would be needed in certain departments, but the main thing is for everyone in the company to strive for common goals.
“We only have two goals in MyTeksi: No 1 is to help drivers make more money, and No 2 is to help female passengers feel safer when they take taxis. Everything we do is based on these two goals,” said Aaron.
“If we want to spend money on some advertising or want to partner somebody, we ask ourselves: Does this partnership increase revenue for drivers? Does this partnership make women safer?” he added.
Fire in the belly
When asked by moderator Karamjit on how founders can keep themselves emotionally charged through all their ups and downs, MaGIC’s Yeoh did not hesitate.
“Seriously, I think entrepreneurship is really the one single thing which gives you life’s lessons, where you mature and become a better person because you learn so much about yourself, and what you stand for.
“It builds character and personality. Ultimately, you have to be passionate about what you’re working on, and the problem you’re solving,” she said.
Yeoh said that the money wasn’t the only reason why she sold her second venture to Walmart Labs, part of the US retail giant.
“It’s funny … when I started I was full of passion over my idea, but over time I realised that this was not a business I wanted to spend the next 10 years of my life building.
“I was passionate about building a company, but this [business] was just an idea that came and stuck, and not what I wanted to become known for. This was not truly me,” she said.
Her new role as MaGIC CEO would at least mean she has the opportunity to make a difference. – Digital News Asia
