Startup Magazine of Hong Kong: Jumpstart Issue 14 (March/April 2017) Hong Kong by Jumpstart Magazine: The Entrepreneur's Magazine

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My Startup STORIES OF 5STARTUP

Kenneth She

General Manager Uber Hong Kong

ISSUE 14 March/April 2017

CONTENTS

A NOTE FROM THE EDITOR Uber’s last known valuation was $69 billion. Airbnb’s is $30 billion. Snap recently filed for IPO with a valuation of $25 billion. Startups are easy, right? Anyone can launch a company, get millions (if not billions) of dollars in funding, wait 5-10 years, and you’re a billionare retiring at the young age of 35, right? However, the reality is that 95% of startups fail, according to a Huffington Post article in 2016. Saying startups are easy couldn’t be further from the truth. The media is always pushing out successful stories, but we rarely hear about how many wrong turns they took before they got there. While there is much to learn from the success stories, there is just as much, if not more, to learn from the stories of how things didn’t go as planned. In this edition of Jumpstart, we share some of these untold stories and what you can learn from them. We hope these insights will help you in entrepreneurship and in life. As an entrepreneur myself, I can attest to the hardships of building a company - failing to close that deal, failing to launch on time, failing to make the right hire. These are all a rite of passage to getting to your final destination. Just remember, failing does not mean you’re a failure. Failure only happens when you stop getting back up. Maggie Lau Guest Editor

COMMUNITY INTERVIEWS.................... 2-3 Interview with Soundbrenner and MinorMynas

INNOVATION AROUND THE WORLD........ 4-6 Top 10 business ideas & opportunities for 2017

OUR BIGGEST MISTAKES...................... 8-9

HK entrepreneurs share their experiences

5 STORIES OF FAILURE....................... 10-21 TRACTION ISN'T EVERYTHING

MEET OUR TEAM Managing Director: James Kwan Associate Director of Content Operations: Kaden Ng Guest Editor: Maggie Lau Director of Community Engagement: Anita Chan Founder/Advisor: Yana Robbins Contributors: Jeffrey Broer Derek Kwik Sherman Lee Brett Martin Julia Lam Mia Zhao Special Thanks: Regina Larkö Joyce Ngo Peach Poon Sherry Ho Michel Debolt Michael Michelini John Chew

Jeffrey Broer Jumpstart is available at over 350 locations, including: Airport Lounges: CNAC Lounge Dynasty Lounge Royal Orchid Lounge Emirates Lounge United Lounge Plaza Premium Lounge EAST Plaza Premium Lounge WEST Morning Calm (Korean Air) SQ Lounge

INVESTORS, FOUNDERS AND CROOKS

Derek Kwik

RAISING MONEY IN LONDON ALMOST KILLED MY FIRST STARTUP

Sherman Lee

THE RISE AND FALL OF SONAR

Brett Martin

FIGHTING TO TURN THE LIGHT ON WITH BUCKET Julia Lam

THE MAN BEHIND UBER HK.................24-25 Interview with Kenneth She

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MARKETING TIPS ..............................26-27 8 Common Mistakes in Chinese Social Media Marketing

Party with Jumpstart & PostMortem! March 9th, 7-9pm @ Garage Society QRC. Light refreshments will be served. Free admission, register now via qr code →

Copyright © 2017 Jumpstart. The contents of the magazine are fully protected by copyright and nothing may be reprinted without permission. The publisher and editors accept no responsibility in respect to any products, goods or services that may be advertised or referred to in this issue or for any errors, omissions, or mistakes in any such advertisements or references. The mention of any specific companies or products in articles or advertisements does not imply that they are endorsed or recommended by this magazine or its publisher in preference to others of a similar nature which are not mentioned or advertised. Published articles do not necessarily represent the views or opinions of Jumpstart Magazine. Printed by Magnum Print Company Limited. 11B E-Tat Factory Building, 4 Heung Yip Road, Wong Chuk Hang, Hong Kong.

Community Interviews: From latest funding rounds to product launches and acquisitions, Community Interviews give you insights into workings of cool startups in Hong Kong. Want to be interviewed? Email us at info@jumpstartmag.com.

What challenges have you encountered in your journey? How did you find the courage to overcome these challenges? Preparing for pitches and events. Since I didn’t have much experience of memorising things, knowing that a business lies on it makes a lot of pressure build up. What made me go through was knowing that all you do in the dark is made up for in the light – no one can do a good job if it wasn’t for preparation. Congratulations on winning the AIA Emerging Entrepreneur Challenge last year. What was the most valuable thing you got out of that program?

Interview with Hillary Yip, founder of MinorMynas.com, an immersive language-leanrning experience for kids. Tell us about yourself and what inspired you to be a kidpreneur? I am Hillary Yip, and I am 12 years old. In my free time I love to read, hang out with my pets and mess about with my younger brother as well as working on MinorMynas. I was inspired to become a “kidpreneur” when the AIA Emerging Entrepreneur Challenge came along in late 2015. What is your favourite part of being a kidpreneur? My favourite part of being a kidpreneur is the valuable experiences I have gained along the way that I could never have dreamed of. In business or elsewhere, I am certain that what I have learnt can be applied in many different ways. Who is your role model when it comes to business? When it comes to business, my role model is my mum who is always there to support me through lows and highs and will persevere in accomplishing what she thinks is right.

Thanks! The most valuable thing I got out of the AIAEEC was the exposure and experiences they gave me. Without them, MinorMynas wouldn’t even exist! Any advice for aspiring kidpreneurs in Hong Kong? My advice for aspiring kidpreneurs in HK is to always believe in your dream. If you don’t believe in your idea, then no matter how you try, you won’t get anyone else to. What’s next for MinorMynas? We are due to launch hopefully at the end of February. At this point, our goal is to build up our community in the app as well as creating a wider network of people to reach out to. OK, time for fun. What’s your favourite movie, favourite book and favourite food? I don’t have a favourite movie because I am not a great fan of them...But I read a lot! My favourite books are: • The Fault in Our Stars • The Chaos Walking Series • Frankenstein My favourite food is certainly chocolate — especially M&Ms...

Tell us about MinorMynas. How did you come up with the idea? Why is it called MinorMynas? MinorMynas is a kids-only online platform where children talk through live video calls to learn each other’s mother tongue. I came up with MinorMynas in the summer of 2015 when I was learning mandarin in Taiwan. The immersive experience meant that I learnt very quickly and when I came back, the AIA Emerging Entrepreneur Challenge triggered this idea. MinorMynas comprises of 2 words “minor” to symbolise us kids and “myna” which is a bird who imitates words and never forgets what it learnt. By naming MinorMynas the way it is, it shows our mission - to enable kids to learn languages quickly and never forgetting it. 2

JUMPSTART March/April 2017

Interview by Kaden Ng

Florian Simmendinger Interview with Florian Simmendinger and Julian Vogels, co-founders of Soundbrenner.com, world’s first wearable for musicians First off, congratulations on your most recent round of funding. Tell us how this round of funding will get your company to the next level and what’s next for Soundbrenner? We want to take Soundbrenner from a hardware company to a platform company. For us, it’s all about creating a great product. We think by adding more depth to our software app, we can create a great product experience that delivers a lot to musicians. Besides R&D, we are also going to invest heavily into creating more awareness around our company on a global level! Overall, we’re really excited about the tremendous growth we’ve experienced in 2016 and look forward to keeping the foot on the gas and moving in the same upwards trajectory for 2017 as well. Now that funding is out of the way, tell us about Soundbrenner and what inspired you to start it? We are all musicians so when we had the idea to allow musicians to actually feel the beat instead of listening to it, we were immediately intrigued by the potential. We loved the idea of syncing multiple players and creating a new kind of practice tool. I personally remember that my piano teacher would always tap on my shoulder to give me the beat so it made perfect sense from the beginning. What’s your personal background? I studied business administration and my co-founder Julian Vogels is a graduate in music technology and already built his own instruments during hi studies. Together we formed the classical startup duo: A business-minded founder and a technology-minded founder. That has served us really well. Tell us about your experience building the metronome and the app. What were your biggest challenges? For us, it was clear that we wanted to build the best metronome app on the planet. That’s very ambitious considering we had no experience building metronome apps when we

Julian Vogels started out, and there are already other apps that have been around for 5 years. So I would say the most difficult part was living up to our own expectations, both in terms of getting the concept and UX right, but also the technical execution in terms of accuracy and reliability. I feel like now after roughly one year we are at a point where our edge on other apps is starting to really take off, and it’s clear we’re on a very good path to reach our initial goal. What was your most memorable moment in your startup journey so far? That’s hard because there are so many. Startups are like a rollercoaster so that means there are so many amazing memories of ups, but also many downs. One of the most memorable recent ones was when Stevie Wonder came to our booth at NAMM and chatted for about 15 minutes about the Soundbrenner Pulse and its potential. To see one of the greatest musicians of all time fall in love with our product is mind blowing and something we wouldn’t have dreamed of when we started out initially. What are 3 things you want consumers to remember about your company? 1. We make the best practice tools that help to develop a rock-solid sense of rhythm and play on time. 2. We think long-term and are seriously dedicated to change habits, rather than wselling gimmicks. So if you have any issues, we will go above and beyond to make you a happy customer. 3. We also have a great free standalone metronome app that everyone can download right now for iOS and Android. If you could give one piece of advice to aspiring entrepreneurs in Hong Kong what would that be? Don’t get distracted by all the million things you could be doing. Stay laser focused on getting a product that people actually want first before you think about hiring, marketing, financing and everything else. Making a product that people want may take many iterations and many months of work but you can’t skip this step. It sounds simple, but most people get this wrong and work too little on this crucially important part.

Interview by James Kwan 3

TOP 10

BUSINESS IDEAS & OPPORTUNITIES FOR 2017 Spotted from countries all around the world, these businesses offer a taste of what’s to come in the year ahead. They will provide entrepreneurs with plenty of inspiration in 2017. 1 Blockchain technology used for green energy

2 Driverless car insurance protects against hacking

Blockchain is the public ledger technology underpinning Bitcoin but the technology has also spawned other innovations including a platform to reward the creators of user-generated content. We’re expecting to see many Blockchain-based innovations this coming year. A highlight from 2016 was Power Ledger, an Australian company using the tech to power a peer-to-peer renewable energy marketplace. Also of note was Storj, a decentralized cloud storage platform that is safe from cyber snooping. The technology is so versatile that we expect to see it applied across a huge number of industries this snooping. The technology is so versatile that we expect to see it applied across a huge number of industries this coming year — especially where there is a “middle

2017 will represent a huge step forward for driverless cars as we move into a period of full automation, and with these advances will come a number of questions and opportunities. Meanwhile, there will inevitably be a number of ethical and security question to be answered. Adrian Flux is already offering insurance for all aspects of driverless cars, such as automated parking and the hacking of connected systems. The startup has drawn up a policy that covers a range of scenarios, from physical damage that may occur as a result of assistive parking, to software issues such as protecting downloaded files and providing firewalls to prevent third-party hacking. Premiums also include coverage for in-car entertainment features. Driverless car insurance claims should be easier to prove than standard motor incidents, as the connected systems often save the vehicle’s data in a cloud storage. What are some other issues around autonomous cars that could need insurance?

man” to be replaced.

3 Wearable ring trains users to sleep better by waking them up We expect 2017 to be the year when we see wearables move beyond simply tracking metrics. As they evolve, detrain the wearer into better habits, in a very tangible way. Thim, for example, is a ring that trains users to sleep better by waking them up at regular intervals. The device is based on the work of Professor Leon Lack, whose research has shown that waking participants up at regular intervals for the first hour of sleep improves sleep quality and duration on subsequent nights.

JUMPSTART March/April 2017

vices will increasingly look to actively and physically help

4 In Japan, an artificial intelligence has been appointed creative director Automation will cause further disruption to the labor market in 2017. Just as mechanisation has had a profound effect on manual labour, AI is now similarly impacting traditional “white-collar” professions. For example, AI-CD β is an AI that is being treated as an actual employee by McCann Japan, contributing to the agency’s creative strategy. With 2016 also seeing the arrival of Armenia’s ever-evolving Lifos bots, AI being used to predict epidemics (Artificial Intelligence in Medical Epidemiology), and a Chinese AI-powered chatbot that provides medical diagnosis (Baidu’s Melody), 2017 will be a year dominated by even more breakthroughs in AI.

5 Online ratings turned into one reputation score

6 Training people with disabilities to become drone pilots

The anonymity of the online world can provoke a lack of trust in both vendors and buyers. Positive ratings and reviews can make all the difference, but until now these have been confined to individual e-commerce platforms, meaning newcomers have to start from scratch on each new site. Deemly aims to fix this by enabling users to consolidate all of their scores into one reliable, shareable ‘trustworthiness’ rating. To begin, users create a profile and connect it to their existing accounts. Then, Deemly calculates an overall score between 1-100 using a unique algorithm. Deemly takes into account factors such as how recently a score was given and assigns weighting accordingly. Then, newcomers can use their Deemly score to vouch for their reputation when using new services. In the future, Deemly scores could be used in other fields such as in job applications, banking and dating. For example, Israeli social network PersonalHeroes rewards good deeds online with kindness points. Are there any other positive characteristics, which could be leveraged online?

To many, if you utter the word “drones” it will call to mind negative military and surveillance connotations, but over the coming year we’re expecting to see a number of drone innovations that counter this association by helping make the world a better place. Last year, HandiDrone was an initiative we spotted that enables those with mobility issues and disabilities to learn how to fly modified, first person drones. The aim of the program is twofold: to enable participants to experience the tranquility and control of being outside their own bodies through First-Person-View flying, and to expose them to the emerging job of drone pilots, which could be compatible with their disability. In the UK, there is Pouncer — an eco-friendly humanitarian food aid drone adaptable to local dietary requirements.

7 Software uses big data to predict court decisions

8 Could VR representations of news stories replace traditional forms of news media?

Hand in hand with AI, Big Data will continue to have a profound effect on productivity and the labor market in 2017. Predictice is a fascinating innovation that provides lawyers with statistics and data on the likely outcome of commercial and social disputes, based on the history of the courts. Currently, in the US, Legalist uses an algorithm to vet commercial lawsuits and finance those with

The future of media remains uncertain, and there are significant questions around the best strategies to monetise content — especially in print and news publishing. New platform, Emblematic, may offer a glimpse of the future, allowing those consuming news to be inside the story through VR simulation. This could lead to greater empathy among viewers, and change how to we consume and react to news stories in a profound way.

potential for success.

9 Energy efficient street lamps are also mosquito traps Controlling the growth of mosquito populations is an effective way to prevent the spread of infectious diseases. Researchers at University of Malaya developed street lights powered by wind and solar, which attract and trap mosquitoes using a ‘human’ scent. Smart cities are about much more than Big Data. How else could biological control systems be implemented into cities?

10 Robotic Store Assistants © Photo originally appeared on Springwise.com

A little over a month ago the internet blew up following the announcement of Amazon’s new brick and mortar store Amazon Go, which will enable shoppers to effortlessly self-checkout. Due to open early 2017, the store actually offers just a taste of the disruption still to come to physical retail spaces. In Germany and Silicon Valley, there are now robotic store assistants and scanners that let shoppers perform in-store searches for physical items. 2017 will be the year we see many of the benefits associated with online shopping replicated in physical retail environments. Re-print with permission from Springwise.com Content has been lightly edited.

JUMPSTART March/April 2017

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Hong Kong Entrepreneurs Share Their Biggest Startup Mistakes

“If you are building a consumer application, do not outsource the coding. Building the right consumer application requires many iterations. If you outsource the development, the app will work according to your initial specifications, but the structure of the code is very poor most of the time, which means it will cost a lot/take a long time to make iterations, costing you precious time/resources that could have been utilized to run tests and learn user behaviors.” – Kenneth Lee, Director, CLINK www.clinknow.co

“After a decade spent building startups, I feel that underestimating timelines and overestimating potential revenues is the biggest mistake a startup can make, especially the anticipation on what could, would, or should happen. In other words, a deal is not done until it is done, signed, paid, sealed and delivered.” – Philippe Joly, Co-founder, ClickSUMO www.clicksumo.com

“One of the main mistakes I’ve made in starting up previous ventures was not choosing the right business partners. Starting up a business [together] is like getting married, but we didn’t do any ‘due diligence’ or assess how we’d complement each other, what level of commitment was needed, how we would split responsibilities, etc. Oh, and we did not put anything in writing. Big mistake!” – Pol Fabrega, Co-Founder, Rooftop Republic Urban Farming www.rooftoprepublic.com

“Not placing an emphasis to the talent acquisition function was very costly to our business. When we first started, we screened candidates solely by resumes and did not take the time to understand their personalities and career goals. By acknowledging the fact that our employees are our greatest asset through countless trial and error, we were able to refine our processes and recruit talented individuals through various channels – such as our internship program – who not only check all the boxes on the job description, but share our passion and fit in with our company culture.” – Ivan Ng, CEO & Founder, FindDoc www.finddoc.com

JUMPSTART March/April 2017

“Our biggest start-up mistake was underestimating how much we could undermine our own progress. As first time co-founders of a start-up in the social space, the learning curve was really steep. Overthinking and perfectionism only postponed the necessary discomfort involved in learning; they didn’t eliminate it.” – Belinda Poole & Sarah Fowler, Co-Founders, LocalMotion www.localmotion.hk

“My biggest startup mistake was not putting the right governance in place when it comes to partnerships. When forming a partnership, even if you are working with your best friends, it’s best to err on the cautious side by clearly laying down shareholding structures, responsibilities and KPIs. Not having them at the beginning causes difficult discussions down the road and risks losing the company all together.” – Xania Wong, CEO and Co-Founder, JOBDOH www.jobdoh.com

“To work too long on a product, trying to make it ‘perfect’, before putting it into the hands of customers.” – Patrick Kosiol, Co-Founder & CEO, Swapit www.swapit.la

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Traction Isn’t Everything Jeffrey Broer Jeffrey is a Hong Kong-based entrepreneur. He recently started a new venture called Recime.io, a cloud-based developers platform for bots. He also founded the annual Postmortem Conference, Hong Kong’s very own conference about startup failure. Besides that, he also advises family offices and high-net-worth individuals about investing in early stage startups. With his common sense and his Dutch no-nonsense attitude, he helps companies and startups prepare for investment, product launch and growth.

t’s summer 2012, I am running the UX-Web Design Studio I set up over a year ago and things were going ok-ish. We have enough work, not a cash cow, but we share a nice office and work on projects we like. But it’s consultancy work, not scalable, not repeatable and the business model is straightforward: selling hours. Being in and out of Mainland China for the previous 10 years, I had a QQ and Weibo account but trying to follow Weibo without know-how to read Chinese is tough. Few are posting in English, and why would they? Weibo was still growing in users in China with no big focus on going abroad. So while the platform was growing fast, I was curious on what people shared. But going from the Weibo

During the year 2012, the amount of Sina Weibo registered users kept increasing from the 300 million mark at the end of February. In July 400 million, and got over 500 million by the end of the year 2012. About 10% of that were active users. Source: Sina Weibo

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App, copying the post, switching to the Google Translate App, translating and switching back again was just cumbersome. Why hasn’t someone integrated the two yet? An all-in-one app where you could view your Sina Weibo timeline, have a direct translation from Chinese to English (machine at first but with a roadmap to human translation) and integrate other potential Chinese language platforms. The Accelerator Although I’ve been an entrepreneur almost all of my working life, I pitched the idea to an accelerator. I did that because so far it’s all been in the “We have a skillset, let’s market the sh!t out of this”-consultancy style business. And I figured I needed some help on customer discovery and making things scalable, Lean Startup style. We got accepted into the first Hong Kong-based accelerator: AcceleratorHK, now discontinued. This was summer 2012, the book from Eric Ries, The Lean Startup, was just published in September 2011. Not everyone (outside of the Bay area) knew what a Lean Startup was and accelerators still had a huge added value in “teaching” these principles. The operational side of the deal: 3 months program, no (side) day job allowed, at least one tech and one business co-founder. Every Monday, we had to check-in with the program directors; and every Friday, all teams came together with weekly pitching and presentation skill set training. All of this would be in a coworking

space paid for by the accelerator. The financial side of the deal: USD18,000 in return for 8% equity. Not bad for the first real accelerator in Hong Kong in 2012, while accelerators in the US were still giving the same deal. Nowadays, the whole accelerator model in broken and programs have to find other ways to add value besides USD100,000 cheques. So I made the arrangements for the UX-Web Design Studio to have it run by itself. I could do an occasional pitch to a potential customer, but I made sure I could spend more than 10 hours a day on the startup. I found a technical co-founder, Angelina Yan, an (almost) fresh PHD grad from CityU. And we were off! Surround App We started building Surround App, “We enable Chinese social media for people who cannot read Chinese”. We got a logo, a marketing website, business cards, stickers, heck we did even have t-shirts! We started to build the product. We added two other founders to the team, a marketing person and an UX person. We had all competences available: tech, design, marketing and business. We did customer discovery; we worked on the product; and we prepared for demo day. We didn’t have a product yet, but on demo day we had booth babes, stickers, everything! Due to demo day, we got write-ups in the press, around 600 email signups “for when we launch” and a lot of: “I need that!”

Mistake #5 Work too long on the wrong direction We were determined to make it work, and here is where the age-old dilemma comes into play: continue or pivot? When do you know you turned into a dead-end street if the street is curvy and you cannot see the end of the road? You see the next curve so continue to that or make a U-turn now? At one point, we also created (besides the Android and iOS app) a web browser “dashboard”. This was an attempt to follow the money and pivot into the business-to-business market of doing marketing on Sina Weibo. Homepage of Surround (App) pivot into B2B.

We got some outside investments after demo day and started hiring staff. We crunched out the first version and launched it with a great party. People could download it that evening. We were shipping a new version every week. We got a lot of traction, we also got a lot of users from South East Asia (SEA) which surprised us. We found out that K-pop was popular in SEA, and fans were following them on Sina Weibo. They used our app to translate the posts by the stars and bands to English. In the first few months after the launch, we were on 2,000–3,000 downloads a month. When I handed over the app in August 2015, we were on almost 50,000 downloads. “Handed over? But it was going great! Lots of traction and people said, ‘I need this!’” Ehhhh yes, but we made some mistakes. Not a reason for failure: running out of money Because of all the mistakes below, we were not able to get to the next funding milestone: revenue and/or mega traction (millions of downloads). Often people give “running out of money” as a failure reason, but that is a result of not getting (enough) traction or revenue. If you have millions of users or a healthy revenue stream, there is always additional money to be raised. If you are not able to raise money it’s because your startup is just not good enough. While it’s ok for a hobby to cost money, it should not become a bottomless obsession. So in summer 2015 when a language learning startup wanted to take over the app as part of their promotion and onboarding (we still got on average 60 downloads a day), we made the decision to say goodbye to it.

Although we also did a lot things right, this post is about the lessons learned at Surround App. I learned the most from the things I did wrong, so I will share ours here: Mistake #1 Being in love with your product Oh boy, we were so focused on the initial idea — an app to follow Weibo with translation — that we were only looking for answers that validated that. There was no room for a pivot, even though there were some telltale signs we should. Mistake #2 Peaked too early in our exposure Coming from “market the sh!t out of your product”, we were looking for publicity way too early. No need for a logo, stickers, or media before first validating your assumptions. A minimal viable product (MVP), a single landing page with subscription tiers, and focus, that’s all it needed. Mistake #3 No revenue model We thought we would be able to sell extra services or subscriptions. Turns out, people expect translations to be for free, thank you Google Translate… Mistake #4 Wrong audience We were targeting consumers, but we found out (after launching) that consumers didn’t find the Chinese social media that important that they would spend hours on it, let alone pay for it.

Mistake #6 Create Intellectual Property It’s easy to put together some services / APIs / platforms / etc, but there has to be something that isn’t easily copied by someone. We worked (a bit too late) on a crowdsourced slang database to improve the imperfect machine translation of Chinese. Mistake #7 The content platforms This was not a mistake but something that worked against our value proposition. While Sina Weibo was still up-and-coming, it was difficult, and sometimes impossible, to open an account on Sina Weibo for foreigners. Only a handful of country code phones numbers were allowed. Also, WeChat was on the rise. Unfortunately, WeChat didn’t have an open API so we were not able to get the chat between people inside our app to have the translation function (something they introduced themselves in mid 2014). Weibo was also under pressure from censorship. Lessons learned Next time an MVP would suffice to test the value proposition; the level of entry must be as effortless as riding a bike downhill; no media exposure until at least version 1.0; be open for the most strange pivots (follow the users, not the idea), make sure you have a revenue model; and last but not least, create intellectual property (IP). I use these learnings, and the ones I had (and still have) during my almost 20-year career as an entrepreneur, on a regular basis when I mentor, advise, and invest in startups. ■

We were covered at least in English, Chinese, Japanese, Spanish and Tagalog. 11

Investors, Founders and Crooks Derek Kwik Born and educated in Hong Kong, Derek is an early “returnee” to Asia with 25+ years of market entry experience. He is one of the most respected technology community leaders and is involved with nearly every accelerators, incubator, and coworking space in Hong Kong. Since 1999, Derek reviewed over 15,000 business plans beginning with first generation internet companies. In 2004, Derek launched BraveSoldier Venture Capital, a technology venture capital fund, as the Managing Partner. With deep experience in investment banking, direct investment and management consulting, he has worked in all aspects of fundraising including angel investing, family office, Series A and IPOs. Derek was the CEO of a Chinese contactless mobile payments company and credited for “leading from the front” from seed round to commercial responsibilities to investor exit. With over 500 day trips to Shenzhen, Dongguan and Guangzhou, Derek has supervised manufacturing operations in telecoms, robotics, wearables and PC peripherals. Derek is an author of two books, university guest lecturer, TEDx speaker, Trustee and Co-Chairman of the Society For The Prevention Of Cruelty To Animals (SPCA), Advisory Council member of Junior Achievement and mentor/advisor to several start-ups. He is also a multi-day ultra-marathon runner, PADI Dive Master and jiu-jitsu practitioner.

he Asian start-up world is infinitely dynamic and exciting with its fragmented markets and cultural influences. Yet with its overabundance of age agnostic experts with varying degrees of domain proficiency, makes navigation between awesome deals, good deals, so-so deals, bad deals, ugly deals and zombie deals, an experienced based skill of managing risk. Risk comes from not knowing what you are doing. As an early “returnee” to Asia, my start-up experience was a throwback to an era when Mainland China got connected to the Internet, Apple Computer launched the first Macintosh computer and Bill Clinton was the 42nd President of the United States. Since then, I have reviewed over 15,000 pitches and made over 500 day trips to Shenzhen. Everyone has a start-up f*ck-up story. Here are mine. Before establishing my own early stage fund, I worked for a well-known venture capital fund seeded by prominent institutional investors. The firm was flush with cash from a newly closed fund, great expectations from

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the ever watchful media, posh offices in the heart of Central and an intellectual investment team with elite Ivy League pedigrees and top tier work experience. We were led fearlessly forward by the visionary managing partners who appeared to possess the uncanny ability to see into the crystal ball. We invested in over 50 mildly interesting start-ups within the span of 24 months. It was one big game of musical chairs until the music stopped and we were the only ones still standing. The fund imploded much like a shining star in the heavens that loses its source of heat and collapses upon itself. Our laptops and Herman Miller chairs flew out the door in a fire sale and I turned off my office lights for the last time with a recommendation letter and a severance check in my pocket.

“

Failures comes in many forms. There is always something to be learned from failure. Failure can lead to something you never would have discovered otherwise. Everyone has a plan until they get punched in the face. What goes into the history books is what you do after that. If you have no response to an action, then you’re probably never going to make the highlight reel. 1. If you don’t understand a business, don’t invest in it. We only invest in technology. I knew one investor who decided to try something different and invest in a mid-tier food and beverage brand. The investment journey was like driving a yacht he had just purchased and he kind of knew the general direction to steer the

IF YOU HAVE NO RESPONSE TO AN ACTION, THEN YOU’RE PROBABLY NEVER GOING TO MAKE THE HIGHLIGHT REEL.

a 25-person start-up called Alibaba. I championed this deal and presented this opportunity to my investment committee. They quickly dismissed the opportunity and I didn’t pursue it any further. The rest of this story was history. I did not take jiu-jitsu back then and I certainly did not know the concept of pressure.

vessel (cue music - 2Pac’s Ain’t Nuthin But A Gangsta Party) and life critical skills like navigation, fuel capacity and other resources were never part of the thought process. But driving the boat was super fun until it ran out of fuel and drifted hopelessly at the mercy of the vast ocean. Along came a commercially minded person who offered to rescue him and buy the boat for $1.

Seventeen years ago, I met two co-founders on a 10 day 500 kilometer non-stop expedition race thru the heart of darkness, the Borneo Rainforest in Sabah. Through that ordeal together, I learned two things about them: they never quit and they don’t stop. In 2014, they formed an electronic cigarette start-up and today, they have a very high probability to hit a half billion dollar valuation by 2019. When times get tough, they just smile and say, “This is what we do”.

4. Focus on distribution When it comes to start-up success, distribution is king. There was a start-up I was involved with in the physical on-demand storage business. The founder spent too much time on what he thought the product experience should be rather than customer discovery and validation. As a result, funding ran out long before developing distribution channels. If I could do it over again, I would cut development time and focus primarily on distribution. Minimum Viable Product - one can always make product improvements later and spend more time understanding and fine tuning what customers really want.

5. Investors can be crooks too Investor or founder, your reputation is everything. I intimately knew one in2. Staying power vestor who raised money from others One of the most overused words in for the sole purpose of supporting a the investment community is “Execulavish lifestyle of high-class tion”. Of course it is, it’s even living, fancy cars, private a text book term (almost as jets, kept women and casino clichéd as words like game gambling. It was a catachanger, pivot, disrupt or strophic story taken straight win-win). The single most FOR EVERY START-UP FAILURE, from the pages of jailed important must-have trait I seek out in founders is Stay- THERE IS ALSO AN INVESTOR FAILURE. investor Bernie Madoff. It takes years upon years to ing Power. No business plan FAILURE TO EXECUTE, build a credible reputation ever goes according to plan. and only five minutes to Fundraising always takes FAILURE TO FUND. ruin it. If you think about twice as long and costs twice consequences, you will do as much. That one big custhings differently. Trust is a tomer that was going to valvery expensive gift. People say never idate your product and get you out of 3. Pressure expect it from cheap people but it is the hole decided to postpone the “big One of the greatest challenges in my even smarter to never expect it from order”. How do entrepreneurs respond life is learning Brazilian Jiu-Jitsu, a rich people too. when times get tough? Do they return martial art that focuses on grappling As an investor supporting the to filling out time sheets in the corpoand ground fighting. “Pressure” is the fund, my viewpoint is very differrate life or do they dig their heels in act of forcing the other person to bear ent. It’s always top down, strategic and get ready for a good fight? I have your weight on as small a surface area boardroom level stuff and we always been involved with far too many foundas possible. This is a very important play the blame game. It’s always the ers who had stellar careers in the corconcept that must be fully understood founder’s fault, right? And when it porate sector and who could present in order for a person to get good at comes to home runs, it’s always to the boardroom worthy PowerPoint pitch grappling. In most cases, the fighter credit of the investor, right? This is far decks. As soon as the funding came who can exert more pressure than from reality. For every start-up failure, in, they worked tirelessly as founders their opponent, ultimately comes out there is also an investor failure. Faildo, at least until the bank accounts on top. Jiu-jitsu has taught me that ure to execute, failure to fund. It’s six dropped to the minimum balance. physical pressure can be used for conof one, half a dozen of the other. The They found it easier to abandon their trol rather than of weight and mental two alternatives are equivalentand dream and return to the corporate pressure can be used to create a sense indifferent - it doesn’t matter which grind. There is no easier success like of urgency. Many moons ago, I once side we choose. ■ failure and failure is no success at all. met a guy named Jack Ma and he had

“

Raising Money in London Almost Killed My First Startup Sherman Lee

e planned to move my first startup from San Francisco to London in 2014. Social media marketing in Europe was 1–2 years behind the US. Techstars London invested in us, and we already had a toe-hold in the market. The new financial partners were in place; we had $600K “committed”; and our families were excited to move. We were going to absolutely crush it! Then all of a sudden, the dream was shattered. The round fell apart as we approached closing. This nearly killed us and was the second time we’ve escaped death. It was a dark, dark time both financially and emotionally. It’s tough for me to even talk about this publicly, but there are some lessons learned that I’ll never forget. I hope sharing my experience will be useful to you. The Decision to Move I know what you’re thinking: Why the f*ck would you move out of the mecca for startups?!? We moved to London in March 2014 to join Techstars. We fell in love with the city and the startup community. The market we were going after was 1–2 years behind the US. Then our visas ran out, and we had to move back to San Francisco in July. We didn’t fundraise after demo day. Our product was early and we had a cash in the bank. For the next 4 months, we were heads down coding and talking to customers. In October, a prolific UK angel was in town and we talked about raising a round in London. He committed to leading two days later. We booked flights and an Airbnb for all of January 2015 to raise money.

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Meeting with Investors The plan was to raise $225K. The lead investor helped build momentum by making tons of intros and getting angels excited about us. By the time we landed in London, he asked us to save $125K between him and a few friends. Our story was simple: - San Francisco startup wanting to move to London - Ex Google, Yahoo and UC Berkeley engineers - Techstars vetted - Hockey sticking MRR graph Meetings with investors were pretty straight forward. I filled up the calendar with 5 meetings a day for 3 weeks straight. Each meeting was simply shaking hands, showing them our metrics, and letting them know our allocation was almost full. In fact, we were completely full within 5 days. The lead investor encouraged us to get it closed quickly and not try to do anything fancy. He warned us that investors were always looking for the next hot startup.

We were that hot startup. We felt unstoppable. Almost every investor we met wanted to be apart of the journey. FOMO was real, and we leveraged that perfectly. Getting Too Fancy All the meetings were already set up, and I figured it wouldn’t hurt to see what it would look like to raise more. This led us down a path that just wasn’t recoverable. We had planned on taking money only from angels. We never even considered raising from institutional investors. However, a fund wanted to invest. The team seemed smart and was product focused. They wanted to match the amount the angels were investing. So we now had $450K and the dynamics changed. We were no longer going to raise a small amount of cash and stay lean. We were gonna slam on the gas pedal. We worked through the financial projections on the use of the money. So I turned around to the fund and explained where we could get with $600K.

The traction slide from our fundraising deck

We had meetings at lots of swanky offices. You can see Karl excited here. This place had tons of flat screens.

They were onboard, and I let everyone who committed know about this new plan. Everyone was excited about being part of something big. Like I said, we were unstoppable. Our last meeting was with all the partners of a top VC firm. All Downhill from There If the VC firm invested, we were looking at a $1M seed round. They passed and that was okay. We never wanted to raise that much money and we never told anybody about the million dollar plan. However, it was time to get everything legally sorted out. We hired a UK lawyer and accountant to collaborate with our US counsel. A standard US-style term sheet was drafted and circulated to the investors. The lead investor’s lawyer tore it apart as it looked nothing like the UK-style term sheets. Holy crap! Week after week of marking up the term sheet and all of a sudden 2 months have passed. Investors were getting bored waiting for all this paperwork to go down, but we’re super close to getting this all closed. Some people have signed and wired money in. The Money Just Vanished Uh-oh, the fund who was going to put up half the round tells us they were no longer investing. Getting the legals together was too slow for them. They gave us a small window to get this closed, and we missed it. I had the fun task of telling all the other investors that we were going to raise only $300K now. There was a group of people that were still happy to invest. Thank you for your support! Since we took so long and with the fund out, some other people dropped out of the round.

At this point, we were looking at less than $200K. That hot startup was suddenly not looking so hot. The lead investor wanted us to lower our valuation; we racked up $30K in legal fees trying to get the round done; we almost ran out of cash in the bank; the charges hit on our personal credit cards for the fundraising trip; and our growth slowed down. A Million Things Raced Through Our Heads Where do we go from here? Is this situation even salvageable? What do we tell our wives? We took a step back and tried to look realistically at our current predicament. We needed to find a way to give our company the best possible chance at succeeding. Moving to London no longer made sense, as we would need to pay for the relocation of our families, immigration fees, UK branch setup fees, desks, etc… To be frank, we were pretty distraught, depressed, and frazzled at this point. Fundraising was the top idea in our mind for 3 months, and it almost killed us. I have to say that Ryan and Kyle from Keen were super supportive during this time (a big thank you to the Techstars network.) They encouraged me to think about just starting over. Onward! Once we stopped holding on to the London fundraise, we knew exactly how to give our company the best chance at succeeding. That meant staying put in San Francisco, keeping our burn low and returning to our exponential growth. We did end up raising cash using a SAFE in four days.

Karl and I at the Launch conference at Fort Mason trying to keep it together.

The key lessons learned: 1) Don’t get too greedy with raising money. Take what you need, close the deal, and get back down to building the business. 2) Fundraising is a huge distraction. Try to batch the process in a short timeframe. Then get back down to building the business. 3) Failed fundraising rounds happen all the time. Accept it. Get back down to building the business. ■

About the Author Sherman Lee is the co-founder of Rocco.AI – your AI-Powered Social Media Marketing Assistant. He worked with over 3,000 global brands on social media strategy as a first time founder with GoodAudience.com. That led to a crazy business adventure around the world. From almost getting kicked out of Techstars London to building a remote/distributed team, he now finds himself tinkering with AI in Hong Kong. Originally from San Francisco, Sherman studied computer science at UC Berkeley and got a high paying job at Yahoo. He spent 5 years heads down in big data and machine learning. The content platform team he was part of scaled from 0 to 600M users. With a rare combination of machine learning and brand experience, he is going to disrupt the social media industry.

Postmortem of a Venture-backed

Startup Lessons Learned from the rise and fall of Sonar Brett Martin Brett Martin is Co-Founder and Managing Partner of Charge Ventures, a small pre-seed focused venture fund based in Brooklyn, NY. He also serves as an Adjunct Professor at Columbia Business School. Brett has spent his entire career either building or investing in technology startups as an EIR @PrimaryVC, Founder @Switchapp, Founder @Sonar, Investor @Appfund, and Marketer @Vice. Brett began his career on Wall Street as an equity research analyst. Outside of work, he has published his Fulbright research in Harvard Business, founded an indie rock band, started a non-profit, and sailed 6,000 miles on a 30ft sailboat. Brett graduated from Dartmouth College and proudly hails from Ocean City, Maryland, USA.

or those unfamiliar, Sonar Media Inc. was a mobile app created to help make the world a friendlier place. Our mobile app buzzed in your pocket when friends were near and ushered in a new wave of “Ambient Social Networking” companies. Downloaded by millions of people all over the world, Sonar was promoted by Apple and Google in 100+ countries, won numerous awards such as runner-up at TechCrunch Disrupt and Ad:Tech Best Mobile Startup, raised nearly $2,000,000 from prominent angels and VCs, and was featured on more than 300 publications including the New York Times, CNN, CNBC, TechCrunch, and TIME. And yet, we failed. We did lots of things right and lots of things wrong at Sonar. Below I do my best to share a few of our lessons learned.

The Search For Product/Market Fit

“Make something people want.” —Paul Graham Listening to your users: False positives We launched Sonar with Facebook, Twitter, and Foursquare support. Shortly thereafter, users buffeted us with requests for Linkedin integration. Ostensibly, they wanted to use the app to meet fellow professionals. Eager to please, we rushed to add Linkedin. The net effect? Nada. My guess is that the people asking were not actual users, but rather people that “wanted to be” users. We had mistaken noise for signal. 18 JUMPSTART March/April 2017

Lesson learned: “I would use your product if only you had X feature” is a dangerous signal to follow. Users do their best to anticipate what they want before they’ve seen it but, like entrepreneurs, they are often wrong. Enterprise companies should validate demand by asking customers to put their money where their mouths are. Media and social networking companies should double down on analytics to find, observe, and build for actual user behavior. Listening to your users: False negatives One of the most requested features was a “map like foursquare” for our check-ins. Instead, we appended a simple “@Sonar” to content that users shared from our app. Although we had designs for a map, we never got around to building one. We were too busy building the future of ambient social networking! Mistake. People didn’t like the bland “@Sonar” text string so they stopped sharing updates from Sonar. Their friends never engaged with our updates in the first place. Facebook noticed this and started hiding our posts. Instead of optimizing for actual user behavior, we spent countless whiteboarding sessions trying in vain to design an alternative.

Lesson learned: You are probably not the Steve Jobs of ______. Removing friction from existing user behaviors (e.g. checkins) almost always has a higher ROI than building castles in the sky (e.g. hypothesizing about your API). Find all the dead

ends/local maxima in your current products before building new ones! Growth vs. Engagement We received conflicting advice from lots of smart people about which is more important. We focused on engagement, which we improved by orders of magnitude. No one cared.

Lesson learned: Growth is the only thing that matters if you are building a social network. Period. Engagement is great but you aren’t even going to get the meeting unless your top-line numbers reach a certain threshold (which is different for seed vs. series A vs. selling advertising).

Things I Wish I Spent Less Time On

“Focus is saying no to 1,000 good ideas.” — Steve Jobs Events I realized the error of my customer acquisition strategy as I awkwardly made my way through a small Meetup I had just pitched. It was 11pm on a Tuesday, I was exhausted and still had real work to do once I got home. Yet there I was, in a shitty bar trying not to skewer anyone with my Sonar sign as I dodged person after person asking me to install THEIR app.

Lesson Learned: Events are for research, business development, and hiring; NOT for getting to 10,000,000 downloads.

Brands & Agencies When MTV, Kraft, Digitas, and the like reached out to us we weren’t sure what they wanted. It took us at least 10 meetings to realize that, rather than delivering us millions of their customers on a silver platter, they were keeping tabs on us so that they could get access to OUR audience if we ever took off!

If you don’t believe me, try this proof. Are your competitors releasing a bunch of the same features that you have on your roadmap? Yes? Do you know what consumers want*? No? Great, then neither do your competitors. Get back to figuring out what users want!

Lesson Learned: Be polite, but postpone brand and agency “intros” until you’ve built your own audience. If you build it, they will come (and pay). Corollary: Investors know this. You sound stupid when you talk about your impending “big deal” with “XYZ brand” that’s going to drive massive customer acquisition and revenue.

Selling the company When the ambient social networking space iced over in the spring of 2012, Sonar’s controlling investors decided it was time to “flip the asset.” They connected us with a daily deals company looking for “Big Data” solutions. We stopped working on the app and devoted all of our resources to repacking our backend technology to solve BigCo’s problems. Instead of paring down expenses to extend our dwindling runway, we piled on hires and ramped up our infrastructure. The daily deals space imploded but we spent nearly nine months, dozens of meetings, and several hundred thousand dollars “selling” Sonar into a company that nearly went bankrupt.

Side projects In the winter of 2011, we signed a partnership w/ Wired magazine to demonstrate our technology by providing visitors of their Times Square popup store with personalized instore product recommendations. That “small side project” cost us 6 weeks of development and delivered no appreciable benefit other than getting to hang out with the cool people at Wired.

Lesson Learned: You do not have 20% time. Identify your top three priorities. Throw away numbers two and three. Competition In the run up to SXSW 2012 when the insider media had fabricated Highlight as heir to the throne and some of our more fair weather investors had written us off, my confidence was against the ropes. We reordered our roadmap to rush out comparable features but were now BEHIND. I put on my best brave face but inside my gut was rotting away. I still remember thinking on the flight to Austin “fck, we had it, and now we are going to lose it.” Oops! Highlight never went anywhere but we definitely wasted a ton of energy and sleep “responding to the threat” when we should have been figuring out how to make our own business work.

*Hint: If you did, you would already have traction.

Lesson Learned: Companies don’t get sold, they get bought. The best way to get bought is to build something of value. That’s hard to do when you are trying to sell. Misalignment We built Sonar out of an incubator that I helped launch in 2010. To be absolutely clear, the incubator was

instrumental to getting Sonar off the ground and helped us considerably along the way. Unfortunately, there are a number of structural issues facing incubators and the operators they employ. I address some of these below. The decoupling of responsibility from control created ambiguity and confusion, tension and frustration for all parties. From day to day decisions such as negotiating an employment contract to company defining ones such as when to sell the firm, alignment was a constant challenge. Occasionally, we were simply at odds. Perhaps the most detrimental aspect of the incubator model was not its potential for hinderance but its facility as a crutch. As someone responsible for building and running a company that I ultimately didn’t control, it was far too easy to point a finger. In my opinion, the most tragic example came when our incubator sat on a financing that would have rebooted the company. After nearly a month at loggerheads, our would-be investors gave us 48 hours to “take it or leave it.” In hopes of saving the company, I made an ultimatum: we move forward together or I would have to walk away. No one budged, time elapsed, and our term sheet evaporated. I resigned as promised, blaming them for killing my baby.

Lesson Learned: As John Burroughs said, “A man can fail many times, but he isn’t a failure until he begins ▶

Lesson Learned: Be steady at the wheel. The only way one startup can kill another startup is by getting into the other’s head and leading them off a cliff. 19

◀ to blame somebody else.” Avoid bad relationships like the plague but when you inevitably find yourself in a difficult partnership, don’t waste precious energy wailing against it. Make it work or move on quickly.

It’s All About People

“The essence of competitiveness is liberated when we make people believe that what they think and do is important – and then get out of their way while they do it.” — Jack Welch Be practical about team building We lost our first would-be hire, a fantastic Google engineer. While we were debating his contract, he was taking a job elsewhere. Conversely, we hired another, much less proven, engineer on the spot. While he ultimately wasn’t a great cultural fit and we definitely waited too long to part ways, he was instrumental in getting V1 out the door.

Lesson Learned: If you are an experienced entrepreneur with lots of options, by all means, hold out. For most first time entrepreneurs, holding out risks never getting off the ground. In the beginning, established people probably won’t work with you. Prove yourself by finding diamonds in the rough, like yourself. With their help, you can level up your organization and convince the big fish to join.

Culture is your cofounder We built an amazing team at Sonar. Everyone was extremely smart, passionate, dedicated, and hardworking. We celebrated milestones with tequila. We hung at the beach. Even when times were tough, everyone pushed as far as they possibly could, and then some. I have big love for all of my former colleagues and am confident they feel similarly. That said, our culture was more of an emergent property than a deliberate choice. Sure, we had brainstorming sessions and posted goals prominently but most of our culture we absorbed from the people with whom we surrounded ourselves.

Lesson Learned: Think of culture as a cofounder that is present when you are not. You are decisive, communicative, and respectful but it’s your culture that helps everyone know how to act when you are out of the room. Give that voice clarity and authority. The trick is to avoid hollow words. Since a startup’s culture ultimately mirrors that of its founder, maybe the best thing that you can do is work hard to get clear on who you are. Write that down and share it with your team. If you’ve been honest, every action you take will reinforce your values.

Fighting to Turn the Light on with Bucket

A postmortem of our startup experience Julia Lam

10th March 2016 is the beginning of the end, and also the end of the beginning. We announced that we’re shutting down Bucket, the innovative trip planning startup that I’ve been working on for almost three years. On days like this, I always think it’s helpful to reflect and share our experience with others that might chose to take a similar journey. What inspired you to build this crazy idea in the first place? How did we get here? What happened? Sunset at Nusa Lembongan, Bali →

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Onward

“What we fight with is so small, and when we win, it makes us small. What we want is to be defeated, decisively, by successively greater things.” — Rainer Maria Rilke via Tim O’Reilly Startups don’t die when they run out of money, they die when their founders let go. I ultimately stepped away from Sonar when I came to the conclusion that, despite all that we had invested, everyone stood a better chance starting anew. It’s difficult to accept, but sometimes you have to concede a battle to win the war. I am indebted to the hundreds of people that invested their sweat, money, love, and/or time into Sonar, be it three years of labor or a casual phone call. Special thanks to my amazing team, faithful advisors & investors, and supportive family & friends. Finally, huge shout out to the millions of users that gave Sonar a shot. Your stories about meeting your boyfriend on Sonar made it all worthwhile. We started Sonar with a belief that everyone has the potential to be amazing and that technology can unlock that potential. My experience at Sonar has only strengthened my conviction. I can’t wait to bring everything I’ve learned to bear on what’s next. Let’s do this. ■ This article originally appeared on Medium

The Idea For those unfamiliar with Bucket, we allow you collect trip ideas from any text source, aggregate it with any other information needed to decide, and go. Our original inspiration came from friends’ Facebook posts asking for recommendations. Posts like: “I’m going to Paris for a week, I like high end accommodation, shows, and nice restaurants. What should I do?” People who knew the requester’s tastes and had been to Paris offered curated suggestions. These weren’t your run-of-the-mill recommendations from a Lonely Planet book or a TripAdvisor page. These suggestions were personalized, off-the-beaten path, and tailor-made for the recipient. They were the best suggestions. We thought, wouldn’t it be amazing to have all the information about a potential trip in a few clicks, leverage my social graph, map the suggestions, figure out if they were highly ranked, and make a decision to go right now! And we built it. We created a technology that could scan any sort of text source, add in all the other information you’d need to decide and go (photos, ratings and reviews), where it was on a map and you could take it with you on any mobile device.It was niche, but it was appreciated. People were always asking us for more.

What happened?

When any startup closes its doors, I think people always wonder what happened to it. Here are a few of my thoughts on what happened to Bucket, and what we would do differently if I tried again. People loved the concept. They just didn’t use the product. People loved Bucket’s concept of

what we were doing. Whenever we’d demo, people would swoon all over us — the experience was magical. Airbnb and Facebook used us and all the big hotel chains were interested in running a pilot. We won pitch competitions, we got funding, we had partnerships and earned lots of media attention. What we were doing was revolutionary. The problem though, was that when we looked at the metrics, people were hardly using our parser. People said they wanted an easy way to collect information and plan trips, but our usage showed that what they really wanted was simply a place to discover unique trip ideas with filtering.

If I were going to do it again: I’d get a limited version of this into market as soon as possible. We got distracted with the idea that we wanted to parse from any text source which was complicated even in a small physical location — our initial launch was San Francisco Bay Area only. Our international version only allowed you to save from Tripadvisor, Foursquare, Airbnb, and Facebook Places. This was enough for most people and easier to explain. I also would have prioritized some of the work we’d only started to explore in the last few months — using content around the web to create a bunch of personalized starter buckets on our site. Since it took so long to get nationwide coverage, we didn’t have an easy way to create these starter buckets automatically until recently. But if I could do it all over again, I would have just had our team create them a long time ago. At least then we could have given Tripadvisor a run for their SEO money much earlier.

We didn’t move fast enough. We’ve been working on this idea from May 2013, full-time since September of that year. When we started, hardly anyone was competing to become your automated trip assistant and absolutely no one was working on text-to-visual translations of trips. The travel industry has always been crowded but Google Now didn’t provide great information; Pinterest didn’t have actionable data; and Airbnb wasn’t trying to get into the trip planning business. There was an opportunity. We bootstrapped for more than the first year — partially so I could beef up my design and product skills, and my co-founder could focus on pieces of the engineering stack he was less familiar with. There were also a number of life obstacles that slowed down part of our team. We wanted to raise ~3 months in, but there was some uncertainty about whether it would work, so against my better judgment, we waited until we had our next version live. Like most products, this took longer than we expected. Our small team was stretching itself to fill a number of roles that we didn’t have experience in, and we didn’t have the resources to hire in the areas where we were weak. The tech itself proved to be quite complicated, and testing an asynchronous version where we faked the technology hadn’t proved extremely useful in validating whether or not the idea was sound. The bottom line is, we missed our opportunity. We could have been first here. As it is, there’s interest in some of the text-based concierges to plug into something like Bucket, but we were just not developed far enough, fast enough. ▶ 21

◀ If I were going to do it again: In hindsight, I would raise almost immediately, accelerate as fast as I could, and prove out if this was going to work or not. Technology moves quickly. If you don’t move as fast as you can, the landscape will change beneath you. Also, if you can’t raise in your first 3 months, you rapidly lose the opportunity to ever raise. There’s also an element of wear and tear that happens in startups the longer you’re at it. It really is a practice in resilience and how many times you’re willing to get up after getting knocked down. The longer you’re at it, the more times you get knocked down. Moving faster with the maximum amount of resources will reduce this wear. Hit the gas, or go home. We needed a more senior team. Since we had limited funding, we always were trying to make it stretch. My co-founder and I took little-to-no money in salary and when we could find someone young and bright to join our team, we often took them since we felt like we rarely could afford the senior talent (it was also just hard to hire, because, you know, Silicon Valley). Although we had a number of bright, young, talented people, on-boarding took too long and required too many resources. They had good ideas, but rarely the experience to execute. We needed to hire experts who could hit the ground running. These constraints meant we couldn’t build as fast or as high quality as we needed. When we lost a senior tech member late in the game, we struggled to move forward.

If I were going to do it again: I’d hire the smartest, most senior people I could at ANY cost. I’d also make sure to let go of people early if they weren’t working out. You want a half-million dollars a year to join my team and you’re awesome? Yes, and yes again! You want 10% of the company, of course! If you have senior members on the team, you’ll be able to keep fundraising because investors will believe you’ll keep figuring it out. With a strong team, you’ll also have a better chance at acquisitions. Plus, if someone owns 10% of the company, they’re highly incentivized to make their stock worth something. They have laser focus and the company has a better chance of making it. 22 JUMPSTART March/April 2017

What I learned overall

Startups are incredibly painful, even more painful when you don’t succeed. However, they are one of the most effective tools for continuously teaching you new skills and about the world around you. Startups are about the journey, not the destination. I’ve spent the last few years noodling on these ideas about the general startup experience, so today I’ll share them. People you don’t even know are pulling for you. You often feel like you’re alone in entrepreneurship — you’re navigating a ship without a map and you hope you’re going in the right direction. But I was constantly surprised by how gracious others were at giving us their time. Experts gave time to share their specialties and figure out a strategic plan, fellow entrepreneurs lent their strategies, sentiment, and sympathy, and random people on the street gave us a few minutes to help validate ideas. I experienced so much empathy and kindness from my network and from other entrepreneurs, when I needed it the most. Almost everyone had a story about how they had been in my shoes at some point, and they made time to be helpful and kind. We could not have built this company without the help of many people who took the time to give an opinion on a survey, like a Facebook post, and try out our product. I’m incredibly grateful for all the support we’ve had over the last three years. People want you to win. Startups are hard. It’s even harder for female founders and diverse teams. It’s fashionable now to say you care about diversity, that you’re funding more diverse teams and hiring more diverse teammates. At its peak, our team’s gender breakdown was 4 women (57%), and 3 men (43%), out of 7 employees. That breakdown is virtually unheard of in a tech startup. I love and support this idea, but as far as I can tell this isn’t actually a priority for VC funds or other companies. Being a female founder in a startup is one of the toughest things I’ve ever done. I’ve narrowed it down to one factor in my experience — you don’t get the benefit of the doubt as a woman.

In an early stage startup, the only thing you have going for you is the benefit of the doubt. You have a vision, some minor metrics off of a small test, a founding team, and the will, blood, sweat, and tears to make it come alive. This is where women lose. In a study by MIT, they recently conducted an experiment in which participants evaluated a video pitch from a new company that used slides, an identical script, and either a male or female voice-over. The male voice was 40 percent more likely to receive funding. Same idea. Same pitch. Different chances of funding. For the most part, this isn’t intentional gender bias. In my experience, investors are very willing to fund female founded startups if they have killer metrics. However, if investors have to take the leap of faith and make a judgement call, which you often have to do in seed funding, that’s where women get short changed. As a woman, this means you often end up with less money and less resources to do the same work, thus lessening your chances at success, completing the cycle. Travel is going to be disrupted in the next 5 years. The opportunity we saw three years ago, still exists today. Someone is going to disrupt travel — and I think it’s going to happen soon. We’re moving into a time when nearly everyone is on a mobile device spending $26 billion on travel in 2014, projected to be $68 billion in 2018. Millennials, who spend $217 billion on travel in the U.S. alone, are going to be the biggest travel group within the next 5 years. Wifi, mobile, and social are going to revolutionize travel. Finally we’ll be in a world where every service will intimately know a traveler and push curated recommendations based on their tastes, timelines, and desires. In the last year we’ve seen a number of players enter the text messaging e-commerce space from Facebook M, to Operator, to Pana. People know there’s an opportunity to reach people while they’re on the go, provide a personalized experience to them, and have them purchase something. Our long-term vision was to build your automated trip assis-

tant — there’s still room for this. People still want a plan based on a set of constraints served to them, booking on the go, and personalized suggestions specifically for you. I still believe this will happen. It just won’t be built by us. So what’s next for me? My startup mentor, Sam Odio, once said: “Building a startup is like fumbling around in a pitch-black room for the light. You desperately want to turn it on — and find product-market fit — but you don’t know if the light is right next to you, or across the room. All you can do is continue trying.” For us this “startup room” will stay dark, and this adventure will end, but it just means a new chapter begins. This is a hard time, but I’m at peace with the decision knowing we did everything we could. My next plan is to travel for a few months (surprise!), recharge, and refresh. I have a love of less developed countries and want to spend some extended time in a few places while they’re still relatively untraveled. Burma, Cuba, and a few other places are high on my list. I also take suggestions.

Now that I have the extra time, I’m also planning to release a few more startup-focused blog posts, so subscribe if you want to stay in touch. After that, it’s back to a bigger company. As thankful as I am for the opportunity to build my own idea from absolute scratch, I’m excited about working on someone else’s idea for awhile in product, business, or goto-market. I’m excited to work in my strengths and actually be in a “room” where the light is on, and I can see. To all of our users and supporters, thank you to all who tried out Bucket over the last few years. We

appreciate it and hope you liked it. Now onto the next chapter. Afternote In an exciting turn of events, Bucket was acquired by Galavantier after I wrote this article. We announced the acquisition on the day that we were supposed to shut down. If you’d like to learn more about this part of the journey, you can read my sequel blog post: The Aftermath of a Medium Post about your Failed Startup: Bucket acquired by Galavantier Thanks all for following along and helping make this happen. ■ This article originally appeared on Medium

About the Author Julia Lam is an early Facebooker, a serial entrepreneur, and currently the founder of Tara&Co, a soon-to-be launched venture that creates fashion and function for women on-the-go. Previously, she was the Co-founder and CEO of Bucket, an innovative trip technology that allows you to collect all your trip ideas in one place from any text source, decide, and go. She also doubles as a Co-founder for the A3 Foundation, a nonprofit supporting emerging Asian American artists in the media, and serves as an advisor for innovation and entrepreneurship at UCLA. Prior to joining the startup foray, Julia was an early Facebook employee where she led and worked on many high impact developer marketing initiatives including the Facebook Developer Garage program, Facebook Presence, and the f8 Developer Conference. Julia also worked on Facebook's $10MM fund, fbFund, helping choose and mentor over 50 startup teams including Wildfire, Zimride (now Lyft), Taskrabbit, Samasource, and Vitanna. Julia holds her B.A. in Communication Studies from UCLA.

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Kenneth She

The Man Behind Uber Hong Kong We had the pleasure of sitting down with the man behind the wheel at one of Hong Kong’s leading startups: Kenneth She, General Manager of Uber Hong Kong. In this interview, we learn how Ken got Uber started in Hong Kong, the progress they’ve seen, and the hurdles they still face.

Tell us a little bit about yourself. I was born and raised in Hong Kong. The idea of exploring the world and trying something new has always been at the top of my mind so I worked hard and eventually got to study at Oxford University on a full scholarship. I have a Masters Degree in civil engineering but started my career as an investment banker. I also have a keen interest in music. I’m a composer, pianist and guitarist for a band. I’ve performed in malls and composed songs for independent movies. Additionally, I used to go busking at the TST Ferry Pier and many other outdoor venues. Lastly, Thai boxing is my way of releasing stress.

24 JUMPSTART March/April 2017

How did you come to know Uber, and why did you choose to work for Uber rather than staying in investment banking? Another colleague of mine from Uber got me into this company in the first place because both of us wanted to find something meaningful and exciting to do when we were working an i-bankers. The jump was not difficult because I could envision the positive changes Uber would have to the city and that the potential was great! People in the city need quality transportation with polite drivers, nice cars, and safe rides. There are people looking for flexibility in work.

Starting out in Uber was challenging when I was the only local employee. I was joined with two other colleagues to build up the Hong Kong operations from a coffee shop two and half years ago. In order to recruit driver partners, I had to talk to as many as 100 drivers in a day to get them onboard. The Uber team has now grown into a company with 100+ employees in Hong Kong. What are some difficulties you face now in your expansion of Uber in Hong Kong? When we first started, the team was really small. We faced manpower issues so I needed to carry three phones to handle queries from driver partners. And ridersharing is a total new concept that we brought to Hong Kong. We work hard to educate the market on what is ridesharing and the benefits it brings to the community. Lastly, finding talented people to join us is a difficulty. Since this issue’s theme is about learning from failures, can you tell me about a time when you almost gave up, and why you didn’t? Growing a brand from scratch to a household name is never an easy thing to do, especially when Uber was mostly known as a foreign company that provides luxury car services when we first started in Hong Kong. There were days when I spent hours giving out flyers on the street and teaching people how to download the Uber app! Some of my friends who recognised me on the street even thought that I was out of a job! There are people who first rejected what we are doing but are now starting to see the positive side of it. I didn’t give up because I know the concept can be applied to Hong Kong to improve the city in general.

Tell us more about UberEATS? What makes this different from other food delivery companies? UberEATS is Uber’s new food delivery app that makes getting great food from your favorite local restaurants as easy as requesting a ride. The UberEATS app connects customers with 950+ local restaurants and food, so users can order from their local favorites whenever they want. We aim to provide efficient deliveries (less than 35 min) and work with restaurants to come up with ways to speed up the preparation process and improve food packing so that foods can be delivered to customers nice and fast. Our audience is mostly people in the startup community. What advice would you give to aspiring entrepreneurs? Be brave and try new things! OK, time for fun. If you had to pick one superpower what would it be and why? I want to read minds (in a good way of course, like Professor X?) and hope people can see things from different angles and perspectives. Uber for instance is a disruptive company that often caused a lot of misconception to the public. Sometimes bias causes unnecessary arguments, and hence complicates things which should have been simple. Would that superpower help you survive a Zombie Apocalypse? Hopefully. What about on-demand Uber Zombie for Halloween? :)

Interview by James Kwan 25

8 Common Mistakes in Chinese Social Media Marketing Mia Zhao China has become a market that many brands desire to enter. However, its diverse market needs, highly competitive and dynamic environment, and its sophisticated consumers can make it difficult for novices to navigate the market. Social media, known for its networking function and cost effectiveness, has become another strong marketing tool for marketers. In China, there are over 60 social media platforms, and they all come with different features, advantages, and focuses. This makes it especially difficult to master Chinese social media, and novice users are often prone to making mistakes. Before opening your Chinese social media accounts, you should first take a look at these top 8 mistakes commonly made by brands and learn how to avoid making them yourself. 1. Creating multiple accounts without purpose In order to expand and raise brand awareness, brands seek as much presence as possible on social media. However, opening many social media accounts simultaneously without any strategy may not be helpful, especially for startups or small brands. On the contrary, it may generate disorganized information and hinder effective communication with audience. Before engaging on any Chinese social media, you should ask yourself: why should I be on this platform? Who do I want to talk to? For example, If you want to post frequently and deliver your message to a large and broad audience, Weibo is a suitable platform. If you are focused on providing services to target consumers, registering a WeChat service account may be a better choice. If you want to promote video based content, video platforms like Youku and Miaopai should be considered. 2. Destroying users’ habits by random posting frequency As a brand, you are responsible for catering to your audience’s reading habits on social media. Publishing too much content in a short time may distract your audience from the most valuable information. Even worse, they may feel uncomfortable or irritated and unfollow your page, damaging their perception of your brand. On the other hand, your brand will be forgotten easily by your audience if you do not uphold a reasonable frequency of posting or interaction on Chinese social media. For general brands, posting 1-5 times per day on Weibo, and 1-5 times per week on WeChat is a reasonable and typical frequency. 3. Ignoring audience’s preferences of content Simply copying and translating content from western social media to Chinese social media is a common mistake by international brands. China has a very sophisticated consumer group. Knowing their preferences, following their language style, and adapting content according to specific social media platforms is essential. Only being interested in the messages that your brand wants to deliver, and ignoring what your audience wants to read is not an effective marketing tactic. For example, flooding the page with only promotional content will not bring you real sales. An Italian luxury brand, Zegna, has over 236,000 followers on Weibo, but each of its posts get very few interactions because most of their content is product introduction or sales promotion, without any call-to-interaction incentives. 26 JUMPSTART March/April 2017

4. Using unrelated hot topics “Hot topic marketing” is a unique tactic employed on Chinese social media. When news, holidays, or events happen, brands are trying to catch the audience’s attention immediately by following the topic and creating related content. However, not all hot topics are relevant to your brand identity or target audience. Following the trend when it is not connected or relevant to your brand in any way may damage your brand personality. Meanwhile, not all hot topics are suitable for social media marketing. Making fun of serious or sensitive topics may create controversy. In 2015, popular Chinese singer Bella Yao passed away due to breast cancer, which shocked the public. On that day, a fresh food ecommerce platform published a Weibo post, saying “Come and buy these Top 9 fruits to prevent breast cancer on our website”, along with the hot tag #Bella Yao died# and their website link. Many followers were angry, criticizing the brand for being disrespectful to the dead. The post was eventually deleted after pressure from the public. 5. Setting high criteria for interaction As mentioned, audiences in the modern age of technology have short attention spans. If your interactive activities on social media, such as campaigns, are too difficult or complicated to participate in, users will lose interest in them. Always keep interactions fun and easy. For example, take these two different WeChat campaigns: one is asking followers to share the article with three WeChat friends and send back the screenshots to enter a lucky draw; and the other one is asking followers to comment below the article to enter the lucky draw. If they are offering the same content and campaign prize, which one would attract more participation? Obviously, the latter. 6. Not keeping the promise Although social media is more casual than other marketing channels, it is still official and highly connected with brand image. Brands should take responsibility for what they post on social media platforms. If you can’t deliver what you promised to the audience, you will lose their trust. Mengniu Dairy launched a giveaway campaign on Weibo. Winners were picked and informed automatically by the Weibo system, but some of them complained that they did not receive the promised gifts. Mengniu later deleted the campaign post without any explanation. Some angry followers reported it as a “bogus campaign”, which negatively impacted Mengniu’s brand image.

7. Reacting slowly to customer service or crisis management As contacting a brand via comment or private message on social media is more efficient than more traditional approaches such as phone call or email, audiences often use social media as a primary customer service platform. Subsequently, they expect immediate responses and solutions. JD, the famous Chinese ecommerce website, has fallen victim to these sort of expectations. In July 2015, one famous writer complained on Weibo that the fruit she bought on JD was rotten. She asked for a refund but was rejected by JD’s customer service team. Although JD negotiated privately with this customer, it did not publish any positive responses or statements on Weibo beforehand. This damaged JD’s brand image in the eyes of some consumers.

8. Purchasing fake followers Fake follower trading is illegal, yet unfortunately it is still common on Chinese social media. Accounts can not only buy followers but also page views, likes, and comments; creating a false sense of popularity. It is largely a waste of money to buy fake followers as it will never bring you any real customers or interactions. Always keep in mind that the primary goal of social media marketing is mutual communication and a long-term relationship with your target audience. In summary, Chinese social media is a powerful yet challenging tool for brand marketing. If you don’t want to repeat these same mistakes, ask yourself the following questions before launching social media in China: • Why do you need social media in China? • What is your social media strategy? • Who do you want to target or reach? • Is your content on social media valuable for your target audience? • Are you engaging in effective communication on social media?

About the Author Born in Jiangsu in mainland China, Mia relocated to Hong Kong in 2010 to pursue her studies in Media and Communication. As the marketing manager at Alarice International (www.alarice.com.hk), for 4 years Mia helped clients succeed in China with social media marketing, creative campaigns and KOL/influencer marketing. She is now excited to be able to help even more clients through ChoZan (www.chozan.co), the most comprehensive guide to Chinese social media for marketing managers. You can reach Mia at mia@chozan.co

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