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In November 2015, I received a job application for a co-founder post from a Chinese-Malaysian chap named Pei, a graduate from the Imperial College and University College London and a straight-A student.
I run a venture builder called LaunchPad, and Pei got cracking by bouncing ideas off the team. He worked on one venture, a restaurant menu on mobile phones called Menyoo.
Menyoo seemed a bit too obvious, a bit too good to be true. But these early signs were good, so Pei brought in two more co-founders—Nicholas, a guy that knows how to sell ice to Eskimos, and Aku, an old buddy of mine who works remotely from London as CTO.
As weeks went by, we realized that getting users to engage with our product was extremely challenging and that the problem we were solving wasn’t acute enough.
You need to provide a solution to a compelling problem, a solution that consumers will be willing to not only pay for but also go out of their way to use.
We developed a loyalty app within Menyoo and it was getting far higher engagement. So, we started mulling on pivoting to a loyalty app, but Pei reckoned that a simple substitute to a physical loyalty card wouldn’t cut it. We would need to monetize customer data to make it work, so we ran a test with one of our retailers.
We sent 354 text messages to customers who hadn’t returned to the retailer for more than 60 days. The cost of the text messages was about US$8. The number of customers who went back to the retailer due to the text messages was 16. The total revenue generated for the retailer, then, was around US$107. Ka-ching!
We did a few more trials and then we pivoted. Menyoo was dead. Long live Mulah.
The way Mulah works is simple. Over-the-counter retailers stick an iPad next to the counter, and customers can tap in their mobile number to claim loyalty rewards.
Stay lean and keep moving, learning, and pivoting.
In July 2016, we were beta testing the app with a handful of retailers and we got some bad news. We found out that a gorilla is coming to town—and he’s teamed up with King Kong.
Zap from the Philippines had a similar model as ours, except that they didn’t have an app. Launched in 2013, they had grown to 500 outlets in the Philippines. Called Big Zap in Malaysia, they’re ready to take out the country—and they’re backed by AirAsia.
When the news hit me, my immediate thoughts were not exactly positive. But I knew we needed to out-innovate this gorilla. We had to play to our advantage. We were smaller and more nimble, but we had passion.
Nicholas suggested allowing retailers to send out push notifications to customers’ phones via our app so they could have a direct connection to their loyal customers for free—something that Big Zap couldn’t emulate, as they they didn’t have an app. A month later, the retailers trying the feature were loving it.
We had our first encounter with Big Zap when Nicholas approached a Korean restaurant. They were about to sign up with Big Zap but he nipped the deal in the bud by showing them our new messaging system.
3. Fight using your assets to your advantage
Don’t go head to head against a much bigger competitor. You have to use your agility and your passion to your advantage.
But Big Zap was moving too fast. For every retailer we onboarded, their much larger sales team was onboarding three. We needed to grow the sales team but experienced sales people didn’t want to join us when they knew we are competing against an AirAsia venture.
Pei saw that we were failing, so the poor guy turned to philosophy. He said we needed to adhere to Sun Tzu’s proverb: “Know thyself and know thy enemies.” I was like, “Whatever. You do your Chinese stuff, but show me some results.”
Pei got the team to start stalking Big Zap, Triad style.
When the chips are down, you need to hustle even harder.
Nicholas started calling each of the merchants, targeting the less satisfied ones and converting them over. We also approached retailers that our competitor had visited. Since we were the second company approaching them, the retailers already had confidence in the concept, leading to high conversion rates.
At this point, we realized that our enemy was actually helping us close a lot of sales.
I was loving Pei and Nicholas’ hustle. But despite all these successes, we still had a serious problem that could bring the entire company down. We were struggling to get customers to engage with the iPads.
Nicholas went to some of Big Zap’s retailers to find out how they had nailed this. But they hadn’t! But how did Zap get to 500 outlets in the Philippines if their customers were not engaging with their product?
Nicholas eventually figured it out. Malaysian retail outlets often have poorly trained foreign staff unlike in the Philippines. The work ethic of Filipinos is just incredible. The foreign staff in Malaysia weren’t introducing our product well enough.
So, we focused on training. And a month later, we were getting nine times as many customers engaging with our iPads. Finally, we got the product-market fit and were beginning to scale.
Never underestimate the power of localizing your product or operations to each market.
Seemingly unable to adapt to the local market, Big Zap recently announced that they will be exiting Malaysia.
Now, that’s the power of hustle combined with on-the-ground local knowledge, running circles around a foreign-led gorilla.
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