In the MHV Podcast, we speak with leading founders, VCs and operators on their journey in Southeast Asia. In this final episode of the first season, Jeremy Au, MHV Head of Strategic Projects and host chats with Wong Zi Yang, Co-Founder & CEO of Upmesh, an MHV portfolio company enabling anyone to easily start a live selling business on social media.
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Prefer reading? Read the transcript below.
Jeremy Au:
Hi Zi Yang. Really excited to have you on the show. Really excited to have you because you're doing something really amazing with commerce and creators. And I would love for you to introduce yourself.
Wong Zi Yang:
Hi, hi, hi Nice to meet you, Jeremy, and thanks for the opportunity to come on this podcast, right. So I'm the Co-Founder and CEO of Upmesh. I'm mainly in charge of product here, and we're a startup helping people to become great live sellers in Southeast Asia.
Jeremy Au:
Amazing. And what's interesting is that, just to start off from the beginning, you studied high school, junior college in Singapore. And one of the things that we noticed about you was that you chose not to go to university. Could you share a little bit more about that?
Wong Zi Yang:
Yes. So I think as part of this journey, what I realized very early on during my JC days was that I didn't really have an idea of... Well, I knew what I wanted to do from the beginning, right? So I wanted to go into business. I was a kind of problem solver type of guy. I felt that studies are more generic in nature. And going to university without that direction set for me would have been a big no-go, right? Because I see myself as the type who will come back to university and be at the age of 30, 40 to double my learning, but not before I actually saw what happened up there in the world.
And I did a lot of small ventures to really kickstart that journey, right? So while everyone else was at university trying to figure out what kind of things they wanted to go into, like be a doctor, be a lawyer, I was very certain that I was going to go into business at some point.
And I kick-started my journey by doing smaller ventures that didn't really require much capital. In a way, almost everything I did at the time was bootstrapped. So I've done everything from even doing... I think the funniest one would be painting services. So I started a website that essentially offered home painting services for people. And I got together a team. I worked together with the more traditional industries in painting to get people to get down and paint houses.So I learned about digital marketing, managing resources and the process.
And then from there every venture was different. I did box shop selling. If you're in Singapore, there's actually a concept where an entrepreneur can rent boxes from certain shops inside shopping malls. And you can kind of put your own retail items in there for the shops to help you sell. So it's kind of a consignment basis approach. And through that, I learned about drop-shipping, good sourcing from China, logistics and everything in between.
And then finally the journey kind of brought me into tech consulting. So I did a lot of advisory for blockchain companies back then. I did a lot of marketing work for them as well, community management, essentially helping them to navigate the environment around how the blockchain industry is raising funds. And while I'm not proud of it today – because crypto is kind of a bubble that kind of goes up, goes down and people lose their savings and everything. I'm not proud of the fact that the crypto industry is sometimes seen as a bit of a scam. But I did learn a lot from how to essentially get communities up and running, and all of it really ties back to the problem solving mentality that I have. Right.
So I think that really brings me into the journey I am on right now. So it went from all the way from all these retail online services platforms, tech consulting, and then all the way into live streaming. This is where I realized that I had the biggest problem I had to solve, right. So there were a lot of people out there who were making a living with live selling, and there's an opportunity to really open this space up to get both more buyers as well as sellers into this.
Jeremy Au:
Yeah. Amazing! And it's such a contrarian move to not go to university. Especially for a lot of folks in Southeast Asia, going to university is a very big milestone and thing to do. When you were doing it, did you have any regrets? Were there any moments where you were like, "Oh, I wish I'd gone to university?" Or were there moments like, "Oh, this is the best thing I ever did?" How did that mix play out?
Wong Zi Yang:
I think for a lot of people, the university experience is a must have, right? You make a lot of your life friends along that period in that stretch of your life. That's where it's a make or break, right. But that's also where I differ in a sense that I don't want university and a piece of paper to be my make or break. Right. I want it to be the process or the journey. And for the younger generation, what I'm observing today between millennials and generation Z is that an increasing amount of people are struggling to find jobs. Not because there are no jobs available to them, but because they're not really taught how to job hunt. They are not really being taught where the opportunities of the 2020s lie. So that's something that has been a big con for me.
So having not gone to university and still managed to make a living, I actually see a lot of the opportunities out there today which people are not capitalizing on. And the school doesn't... will never teach you the realities of the job market. They are, honestly, not updated on it. They can't tell you how to get salary increments, for example, or how to find a job that's fulfilling for you? They leave it all up to you to experiment.
But when you're thrown into the job market straightaway, even after getting a degree, you realize that that degree actually only matters to pass the initial bar. I've spoken to both employers and employees in this process. And it's hilarious because the employers are saying, "There's no one taking out my job ads." But the employees are saying that they can't find a job. So there must be some kind of disconnect going on. And it's a problem that goes... it starts from the fact that school and university doesn't solve that problem. They're part of the equation. It also doesn't imbue you with the kind of hard skills that you'll realize you'll need in a working environment. So it's not just about regurgitating what you learn in school. It's about thinking through things logically, understanding how to value yourself, how you contribute to the company as a whole, right?
So, of course, there's also the other aspect where when I talk about alternative opportunities, right. I'm talking about, for example, doing things like live streaming on Twitch or YouTube, or making video content or going on a gig economy, working on fiber. These are opportunities that I've seen many people succeed in. And they've built up not only significant income sources from this. They've also built up the skills that they need to basically become valuable to the economy. So that's a lot of what school doesn't do for you and what I feel younger people should be looking at.
Jeremy Au:
So if someone is a student and they have an idea of something they want to build, and they're like a year two or year three student, and they ask you, "Should I drop out or not?" How would you advise them to think through the process?
Wong Zi Yang:
Yeah. So this is a very interesting question because one of the things that I always wanted to talk about was risk management, right? But not from the perspective of finances. More of risk management around learning, around whether you can afford to take that dive.
At the end of the day, each person's circumstance affects whether they should become an entrepreneur. So if you have a family that relies on you, if your family is not in a position to allow you to follow that journey. So the idea here is that you need to evaluate your own life circumstances and really take risk management to a new level.
If you need the income, maybe you have a girlfriend and you're going to get engaged soon, then it's all about trying to figure out what's most stable. And in that case, you can only take on ventures or ideas that either you can get funding for, or if you are confident to bootstrap it while holding a job, right. So it's all about risk management.
On risk management, there's high risk and low risk, right? So someone who believes that, for want of a better word, if they cannot cope with the stresses of having no income or eating less, or sacrifices in their daily lives, then they shouldn't take on that much risk. They shouldn't go full on into two, three years of having no income. Whereas if you are somebody who believes that, "Okay, I can eat less. I can take the MRT every day, take the bus every day, and still manage to get away with my job or do two jobs at the same time even," then that's something that you can explore early on.
Jeremy Au:
So with all of that, you've obviously gone on to work at a bunch of jobs, that kind of profile that risk, right? Some of them are risky, some of them less risky. How should someone think about it?
Wong Zi Yang:
Yes.
Jeremy Au:
From small business to all the way to blockchain. So how did you learn how to improve your perception of risk? Because I remember when I was a student, I was not very good at perceiving risk. And so I remember other people who were older than me would be like, "Oh, Jeremy's very risky. He's very risky." And I'd be like, "Oh, it's not risky. I totally know how to do it."
And now I'm older. I'm like, "Okay, it’s riskier than I thought." And there's a lot of university students that ask me the same question. So I'm just kind of curious, how did your evolution of understanding of risk change over time?
Wong Zi Yang:
Okay. This is a very interesting topic for me. Let's look at risk from some personal decisions I made in my life. So when I was in NS, I took on the risk in a sense, but I decided that I was going to spend my off time at night, essentially working on a website that I built. I couldn't monetize it, of course.
Ultimately, what I learned from it and what I did was that I gave up or sacrificed the time I had in my free time to set up something that allowed me to learn about online marketing, about websites, about how to really run an online business. And that directly leads into what happened after NS. So I was able to kickstart that home painting service website. It was directly as a result of essentially spending that time and effort rather than capital to go into something. So I didn't lose anything in the process. The risk here was minimal. That's a low risk activity.
And then let's look at something more high risk. So a lot of people would say crypto investing is high risk, right? So that's something that in order for you to understand how the crypto markets work at all, or even understand the basics of Bitcoin, you kind of need to know about the industry, about the tech. You can't just look at the lines and the charts and say, "Oh, I'm going to buy Bitcoin because everyone says to buy it."
The risk there is that most people don't realize you actually need to be full-time into crypto in order to even start crypto investing. That's high risk because you need to spend a lot of your time and effort for something that may even lose your money, right?
So when you make decisions as a result of the kind of circumstances you're in as well as what kind of things you can afford to do, you'll find that your life goes a lot better in general. And that risk extends beyond just finances. If you take on a job, for example, and that job pays well, but it doesn't give you a lot of learning, it doesn't give you a lot of growth opportunities for your next job, that's also a risk. Because you may be stuck in that role for a while and you can't switch jobs easily because your new employer is going to look at it like, "Wait, you were washing dishes for $6,000. What does that mean when you join my tech company, for example, right?" It's a dead end in that sense. So you need to look at not just the finances and numbers.
During a school period, I would say it is even more important to be choosing how you want to invest your time, because you have to juggle studies with extracurricular activities, with your commitments in real life. And, on top of that, if you're going to start a business, let's say a lot of people will say that their drop-shipping successes start from uni. I would say that they are sacrificing something in the process. It's just how much of that to you is acceptable?
Jeremy Au:
And what's interesting is that there's not only just risks that you're managing. I like what you're saying is that you basically learn how to manage risk by taking on risk over time.
Wong Zi Yang:
Right.
Jeremy Au:
There's also a reward dynamic as well, right? Because some jobs pay more, some pay less. Some crypto, you need to have some capital to even begin investing; otherwise, if not while you're learning or while you're growing. How do you think about that aspect, about the reward part of the dimension?
Wong Zi Yang:
I think people need to clearly define their objective for doing something. Let's say you're looking for a job, right? If you're able to see how you're going to grow and contribute in that role before you've even applied for the job, that actually gives insight to not just yourself. It also tells the employer what's your journey. Right?
When I hire people right now for my startup, the questions they ask me do not necessarily have a correct answer. It's not really to evaluate your skills anymore. Because part of the job hunting process is about where you are going to be in three to five years time, right? And having visuals of insights into that actually helps you to plan a hit for the rewards you're going to get. If you know that you want to elevate yourself to a certain role within three to five years, maybe your stint at that company will be shorter than staying long term. Because maybe that company just doesn't scale in the way you wanted it to.
So, for example, a big company may not do as many promotions. If you were working for a company with 50,000 employees, they're not going to have that many C level people or many executives, right? They're going to have a lot of senior, junior people who are sitting there, and that's the end part of the cycle. You will plan a hit in such a way where you gain the experience and learnings at these companies. That's your reward.
But when you switch your job, that's when you can upsell yourself using these skills and tell people how you contributed and how that contribution is actually magnified than by joining, let's say, a smaller company or a startup. And your pay doesn't necessarily drop because at the end of the day, the job market is certain roles have certain prices, right? It's just a matter of whether you can contribute enough to justify that company paying you a certain amount, right. So being able to chart that route ahead of you helps with that reward cycle, right.
Jeremy Au:
And what's interesting is that it seems over time, you've taken on opportunities that are more risk-oriented in some ways while derisking them. So how did you learn to do it?
Wong Zi Yang:
I think that evolves from really going through it. So let's use public speaking, for example, and being on this podcast is a very good example, right? When I was a kid, I wouldn't say that I'm the type of guy who goes up and confidently says things out loud. You go up to a mic, you're nervous. That's normal, right?
But, as you experience something, the confidence level goes up, and with confidence, surprisingly comes a level of success, of aptness, right? You're able to actually believe in what you do because you're confident.
When I'm running a startup – I'm in a product role right now – but I understand why marketing fits into product and how it feeds to a business cycle. And that's something that, as an insight, helps me run my company better and allows me to take on bigger risks in what I do because I no longer just have to worry about, "Okay, do I actually know what I'm doing?" You have a bigger understanding of the world at hand.
So from an experience perspective, you can go into new ventures when you have insights into how it works. I can give a great example. And you mentioned, fundraising is something that no one knows how to do. Frankly speaking, if you ask any founder to give you an equation, it really doesn't work because it's their personal journey of fundraising. But what I realized was that actually it's more logical than it sounds. Because I saw two different fundraising cycles.
I was in the blockchain industry where companies were using tools like ICOs to raise money. I've also gone through my own personal journey as a founder raising money for Upmesh through typical VCs. They both work actually in the exact same way even though they're two very, very separate industries in a sense.
So you only get that kind of insight from something you've done in the past, right? You can't get that kind of insight by pretending you know about it. You actually have to go through more things in order to take on more risk.
Jeremy Au:
And what's interesting is that your understanding about risk, reward on a personal level is also a big part about why you've built Upmesh as well because you're letting people be able to transform what they're passionate about as a creator and helping them monetize and make a living. Could you share more about how that came about?
Wong Zi Yang:
Yeah. So a lot of people would categorize Upmesh as like, "Oh, we are a B2B, I don't know, sale enhancement to like Shopify, but for live sellers, for example." But the way I see it is that we're building out a set of tools and an ecosystem of buyers and sellers that effectively allows anyone to become a live seller. So I'm removing the risk for you, right?
If you want to sell products live on the screen today, the first thing you need to do is to get capital, you need to buy inventory. You need to figure out your administrative processes. You need to know logistics, for example, right? Knowing logistics is something that I can't... even till today, I can't imagine people can figure out just by sitting in a basement planning on stuff. It's actually quite hands on.
So these are things which as you look at the live streaming industry as a whole right now, a lot of people can actually enter if the only skillset required was just to learn how to livestream or show up on camera. That's very accessible. But all of these other business parts of the equation, figuring out how to do fulfillment of goods, sending out goods on time, collecting orders, these are things that you can't actually immediately start off with. You need to go through failures, right?
We effectively remove the need for these failures as a platform. So we're enabling new content creators to rise up. We are enabling an industry of people who can create content. In this case, they are selling products on livestream, right? And that's really how I see Upmesh's role. Internally, we have a thing where we see ourselves as becoming the equivalent of Amazon. Amazon just wants robots. Amazon is all about trying to sell people things as efficiently as possible with as little barriers. But we believe that people can be a part of the eCommerce cycle, right? And we want to enable and empower those people to essentially become content creators, take on the opportunity of live selling.
And I need to emphasize again that live selling has made many people rich in a sense, right? It's actually a very easy way to earn money. It's much more lucrative than most things you can do at the age of 20 to 30, in fact. I'm seeing numbers that most people will balk at.
Jeremy Au:
And what's interesting is that creators and social selling and live streaming, these are all tools, and they used to be considered hobbies, right?
Wong Zi Yang:
It is still a hobby today. In fact, most of the sellers that we're talking to, don't see themselves as only business people. So they have to juggle with where to draw the line between one of my buyers being a friend and it being a commercial transaction sometimes because of the closeness of the relationship. It is in effect an engagement.
So when they first started off doing this, it was really because they want to have some influence in a sense, right. They want to go out and show people that, "Oh, this is a hobby of mine. I'm selling some of my clothes. Or these are clothes that I personally like, so I think that you guys should wear it too." And then it so happens that in the process of holding this hobby, it became an entire micro community of its own.
Today most live selling in Southeast Asia is at very early stages where it's just small communities doing things privately. It's not in the mainstream yet, even though it shows up in the news quite often because essentially it's hobby is doing something, right. But there's, again, the opportunity to bring it into the mainstream.
Jeremy Au:
It's interesting because there's kind of a creative pyramid, right? So, at the bottom, there's a bunch of folks who are learning to get in very small counts. So it's a hobby by experimentation. And in the middle of the pyramid are people for whom it's not a full-time thing or it is full-time, but it's not necessarily a large quantum, but obviously more than whatever they were planning. So they're semi-professionals, prosumer. And then, at the top, you have people who are kind of like the stars, who are making a lot of the bank, big names and so on and so forth.
So when you think about that pyramid, what do you think are the challenges associated with each level from your perspective?
Wong Zi Yang:
So I think you can address this from a business perspective first, or rather as the perspective of the platform. So if you're TikTok, or YouTube, that pyramid exists as well, right? So the content creators at the top, they're getting a lot of money. They're being paid well. They get all the influence. They're essentially the major people on your platform moving most of that volume, so to speak.
And then, at the bottom, you have smaller communities or smaller groups and people, influencers who essentially, you may not realize it, but small numbers doesn't mean that you don't earn much. That's the first discrepancy I think that people have. So I wouldn't say which channel it is, but I used to have a YouTube channel. Of course, it's anonymous in that sense that you wouldn't know about me from it.
But, from a subscriber count of 3,000, you can actually get roughly USD800 in ad revenue on YouTube, which is that 3,000 is not a lot. And then for my live sellers right now, a follower count of about 30,000 is actually a ton of money. So it's not strictly about absolute numbers in the pyramid. It's about the viability and the excess and the ease of getting into it that's the problem right now.
So the gig economy is a bit strange in that it's very opaque in how much you can earn from it. Of course, companies are not going to publish their numbers because that kind of sets the cap on it, even if it's good. Right. So, as an influencer, as a content creator, the only way for you to figure out how good it is is to get into it. And that's the part where people need to first try it. Even if you're going live on Facebook for about five hours a week, that kind of builds up over time. It may seem like, "Oh, five hours, and there's only five people watching my show. At most, I'm taking in 10 orders a week, but it builds up."
That's the whole point of the content creating economy. The same goes for TikTok, right? You start out as maybe a nobody. You create enough videos that one of your videos goes viral and then suddenly you are a minor content creator and then so on and so forth. So these are pyramids that just because you're at the bottom doesn't mean that it's not sustainable. And there is a formula of sorts to climb that pyramid.
Jeremy Au:
Yes, and then you get to the stage where you're starting to monetize a little bit, but it's not really enough for you to go full-time or part-time. And, these monetization tools are a big aspect that I think the whole world is trying to build out now. Could you share more about what's going on here in terms of trends?
Wong Zi Yang:
So that's actually an interesting equation happening. You're right. There's kind of that bit of a transition phase, a boundary where you're not sure whether it's worth it to go full-time into content creation. And that part is actually the tech platform's problem. So depending on the platform you're in, it's their algorithms and their services that allow you to monetize. So from Upmesh perspective, for example, we try to optimize for a few metrics, right? How can you earn more money or spend less time live streaming? How do you increase the amount of live streaming time you have at your choice, right? How do we reduce the number of barriers to entry so that you can spend a very little amount of work to get a large amount of output. Be it in terms of content creator or in terms of the number of products you can go through during a live selling session.
So these are things which the tech platform is in charge of. And depending on the industry you're in, there may not be someone servicing that particular hobby or particular community. And that's where platforms like us or startups like us come into the picture.
I think that the transition boundary is better expressed by essentially calculating how much you lose and how much you're growing it. That's something that people will need time to learn So if you look back on the past five to seven months of your journey as a content creator and how long it took to get you to this point, and then you use that to extrapolate how much longer, even at the worst case scenario, it would take to reach the same income as you had before, then you can kind of easily make that decision.
So I've seen the content creators on YouTube for very weird niches like resellers, for example. There are people who resell products by buying them from thrift stores in the US. Goodwill, for example. And then they essentially resell those products on eBay. And, yeah, the income is very bad at the start. But these channels are... they went from 1,000 people watching to 100,000 people watching now. And then their income shifted from, as a reseller, maybe 80%, 20% content creation to now 40% content creation, or even 60% contact creation and the remaining 40% for reselling. So it's a very interesting equation that's happening where it's kind of people figuring out that route and tech platforms further amplifying or making it easier for you to shift.
Jeremy Au:
And there's a race, right. It feels like an arms race between people trying to monetize, trying to get more viewers, etc. Does it feel like it's too much, it's overheated, or you think we're just under potential?
Wong Zi Yang:
From a perspective of live selling, then definitely not because there's not even enough, both buyers and sellers in the equation right now. There's no company building up the demand in that sense. If you're Shopee, you build up demand by running ads for your wares and your merchants, right? No one's doing that for live selling right now. So, we are at a very nascent stage. It's not like social commerce either where the profit margins are a bit of a question, right?
If it's from a live selling angle, then I would say that we are in very early stages. If it's just from content creation as a whole, the rat race of content creation doesn't exist. That's the beauty about content creation. You can join and build and create any kind of content you want. There's even if you repeat someone else's content, even though that's not something you should do, it gets views, right? So that's how YouTube works. A video from seven years ago that's a documentary, even if you change or kind of do your own documentary version of explaining something, it still gets views. That's kind of the whole point of content creation. It’s a neverending cycle.
So it's not a competition where only one person can win. It's more of a massive tournament where everyone gets a prize reward, right? So I would say that there's definitely that one influencer or streamer or success per story at the top. But it doesn't mean that the people who are in the middle of that race or didn't do as well are not getting better results.
I would say, in fact, that... I can give an example, right? From a cursory glance, those kids who are 15 years old, 16 years old, screaming their lungs out for Minecraft on YouTube, you might think that they are just making a joke of themselves. They're probably making something like $20 to $50,000 a month. That kind of changes things. It's a very weird story to tell.
Jeremy Au:
I guess where it's interesting is the Southeast Asia and the APAC lens on this. How do you look at Southeast Asia? How is that distinct or different?
Wong Zi Yang:
So I think for Upmesh, what we did at the beginning was as a very straightforward approach, we built a solution, a SaaS solution in a sense for a local community. And it works. China has a much bigger community to work with. So their communities speak the same language. Everyone uses the same platforms. Social media is the same across all folks in China. In the US, there are some variations, but it's still a bigger country as a whole compared to looking at individual countries in Southeast Asia.
But what is interesting about opportunities in Southeast Asia, not just for live streaming, in fact, is that people haven't noticed, but there are localized influencers doing very well in each country. If you look at the top subscriber counts of the communities or the influencers on YouTube in Southern countries, you can't even search for it right away because their names will be like in the Thai language or Indonesian language, for example, right? They are actually having 11 million subscribers, for example. That kind of number doesn't really happen that often, but it's proof that Southeast Asia has communities.
And if you serve the communities locally for each Southeast Asian country at the beginning, then homogenize them in one, it's possible to match or even be bigger than that of the US or not China for sure. But definitely contest the kind of perspectives people have about building for Southeast Asia.
Ultimately, live streaming will become a global thing. The difference between live streaming in the US today and Southeast Asia is that in SEA, we are more community-driven. So a lot of people are shopping through live selling right now. They are actually following a specific live seller, One interesting industry in Singapore that I have seen is crystals. So people who buy gemstones that are anywhere from $1 per piece to very expensive pieces, right? And these are communities, very small groups that have made... It's, like you mentioned, a hobby, right? And they are willing to do buy and sell transactions within their community.
In the US, maybe they have things like collectibles. They do have some level of fashion live selling. And in China, everything flies, right? The biggest influencers in China right now, they're not just selling what they were originally doing. So the biggest one is called Li Jiaqi. He's the Lipstick King. He started off selling lipstick, and he's a guy. He went on now to become the biggest influencer and now everyone just goes through him to sell anything. You can sell cars. You can sell anything I can think of. So yeah…
Jeremy Au:
That's really interesting. And one aspect of it is also your decision to build this tool to help these local communities do it. How did you go about conceptualizing the idea and then eventually go out to rally a team and investors to it?
Wong Zi Yang:
I think the origin story didn't start in live commerce. So the origin story was in live streaming. Initially, we had two co-founders, myself and Jan. And what we were doing was that we saw how you could essentially build growth engines in delivering communities, right? So you could do reward referrals for people to join the delivering community. You could build up the actual organic growth crew incentives. We wanted to take that approach and apply it to live streaming and gigs.
Because what was happening in the live streaming space was that people are watching on screen, yes. But there's a lot of engagement between the influencer and the viewers that wasn't being tapped on. You could incentivize people to do something even outside of the live stream. So, for example, if you play a certain title or game in my name, I can give you something for it. And the company that actually runs that game would of course incentivize the influencer to do that. So there was a lot of tinkering around, trying to build a growth engine on top of live streaming on Twitch.
But the reason why we didn't go there was because, first of all, we are Southeast Asians, right? At the end of the day, when you want to build something, you need to see the potential from your perspective, right. If I'm sitting in Southeast Asia, I can't fly to the US and serve predominantly the US audience on Twitch. I need to interview people to find out more about what problems they're facing before I can embark on that journey.
So we went from that and did something closer to home, right? We looked around us and was there live streaming happening in Southeast Asia? And it turns out, yes, there's a lot of them. We interviewed them, we find out what they were doing, how much they were earning, how did they come to be? And it was all things that was replicable, and things that happened very organically without the help of tech.
So when tech comes in the picture, they amplify things. Everything goes 10X, 15X. So that's essentially how Upmesh started. And today, of course, the approach is entirely live commerce-driven. That's not just because it's a commercial value out of it, but because it turns up people watching live selling like it's almost a K-drama. There are people who watch live selling every week even when they've run out of disposable income. They just tune into the live stream, they interact and engage with their influencers. So this has become a bit more than just enabling people to sell stuff. It's more of an entire ecosystem of people interacting with each other. Similar to TikTok really.
Jeremy Au:
And how did you go about fundraising for this? What learnings have you gotten from building out this fundraising process to rally capital to join you in this mission?
Wong Zi Yang:
And this is an interesting note for startup founders out there. Typically, most people would describe to you a certain journey for fundraising, or they just flat out tell the truth, which is that they don't know either. The way I can explain it to people who are looking to fundraise is that it's actually like cooking, right? There's a recipe. You need to tweak it. You need to commit to certain amounts of each ingredient in order to achieve the final result, right.
So to put it bluntly, I had two experiences with fundraising, right? I helped companies to fundraise during the crypto climate where three, four years ago, there was a crypto bubble. Every tech company in the world was trying to do something blockchain-related. And they just look for people who can advise them how to do fundraising. And the easy way to put it is that VCs are looking to de-risk their investment. And de-risking their investment means you need to have some kind of organic views on your product. So meaning as a tech company, your website has visitors, right? As a tech company, your Telegram community isn't barren. As a tech company, people are interested in a product. So that's what VCs do to de-risk themselves from a crypto perspective, right? They can only invest in something that has a minor proven track record.
So what we did was that we came up with a picture of a simple service community management for blockchain startups where you could build up that community and show investors there was interest in your product. So that was my first experience personally with fundraising, essentially figuring out that, "Hey, if you de-risk it for the VCs, they come in, right?" That's a surprisingly simple equation.
And then essentially, when we went into outside of crypto, it's much harder to fundraise. I'm not going to lie, but it's the exact same equation, right? In order for a VC to want to invest in you, you need to show them that your product has the minimum viable level of success. That doesn't mean that you need to build up an MVP. It doesn't even mean that you need traction, although both of those help drastically. It just means that you need to be able to convince the VC that whatever you're doing from a numbers perspective is able to reach the valuation they are asking from them.
So that means, for example, if you need to prove that live selling exists, go and run ads in the countries they are targeting. Or if you are trying to problem-solve, show the VCs that with X amount of money, you can actually get the results that would justify the valuation. And you can prove it in a very hard manner. You can't prove it just with extrapolated numbers. You actually need to go out, for example, interview, say, a 100 merchants or get a 100 contracts on the table. And that's where you filter out who's a bad founder, who's a good founder and people who are willing to walk the talk, go down and interview the people you're actually serving.
For Upmesh, before we launched, during the six months or even one year before we launched, collectively, I think the early co-founders have done 200 plus interviews. And not all 200 interviews were a target audience, but we talked to them. We find out clearly what is the value that you are serving, right? So essentially if you de-risk it for the VCs to enter, that's when they come in.
There are other ways to do this as well, which is maybe where the gray area comes in where you get supporters on your side. So people always say raise from your friends and family first. But, in reality, the reason why you raise from friends and family is because your friends and family are your supporters, right? And they're willing to introduce you to people. They're willing to do certain things that gets you in touch with the right people.
So I can say that that is part of the journey as well, right? The signaling that having people invested in new rigs, right? So one step at a time. Bringing friends and family. Friends and family introduces you to people who are kind of more important. More important people bring you to more and more important people. And it goes up the journey from there, right? And you just have to spend a lot of time talking and talking and really telling them why this is the opportunity of a lifetime.
Eventually when you spend enough time doing something, it becomes a conversion number, right? X percent of people will invest in you. X percent of people go away. And then X percent of people refer you to the next group of people you need to speak to. So I think that it summarizes the equation that's happening in fundraising right now. Of course, it looks very different for different companies, but as an overall perspective, it is roughly correct.
Jeremy Au:
How do you approach that conversation with investors about, "This is what I have, this is what we want to achieve, and this is the 100 interviews or the hard evidence that I can get there?"
Wong Zi Yang:
So of course it's part of the journey and the growth, right? So even for Monk's Hill, which I'm sure you know, it wasn't when I meet them, meet you guys the first time and then I tell you guys what I do that you're convinced. I tell you that this is the idea. I tell you that this is where I'm at. I tell you that in two to three months' time, I'm going to get bigger. Right.
So maybe in that first impression, it seems like that's not going to happen. Right. So ultimately during the first session, it's more of, "Okay, you say they're going to do something, but we're going to wait." And then later on, if you prove that growth does happen, even on a small sample size or scale, that's when trust is built up. That's when you can actually tell the person on the other end of the table, "Look, what I say is coming true, right? If it goes on for another two years, it's going to become big."
And that's kind of what you need to do, a bit at a very basis for every single meeting that you have, right? Not every meeting is going to work well on a first meeting. The best ones of course, the person is aligned with your vision. They've done their research. They invest in the same mandate as you. They are in your space, they understand what's going on. You don't need to explain anything to them.
That's great. Good for you. You found the right person, the right investor. But most meetings, you are the one explaining to the investor why there's an opportunity on a table. And then you have to prove that the opportunity exists through actions afterwards.
So I would say that for people in the fundraising cycle, remember to plan out the journey. It's not your first meeting that will go well. Maybe you need to extrapolate forward as to what X plus something an amount would convince that person to put in Y, right. So that's really the approach I would take when it comes to fundraising.
Jeremy Au:
Awesome. Thank you so much for sharing all of that. On that note, I'd love to wrap things up by paraphrasing the three big themes that I got from this conversation. First, thank you so much for sharing about what it meant for you to skip university. And that's a really tough conversation because we talked about how we can fool ourselves about the risk, we fool ourselves about the reward. The second that was really interesting was talking about creators in terms of the pyramid, the dynamics, the monetization, and the same risk and reward dynamic, but more from that lifestyle, hobby and decision making. And I laugh a little bit about how you mentioned you and I have no idea how anybody handles logistics as a creator, right.
Wong Zi Yang:
Actually, it's ridiculous because some of my sellers – so I have sellers who even before any tech came into the picture – they were making an insane amount of money. People don't realize that for every five minutes on screen, they probably spend one hour packing. So, in reality, they haven't slept for five days. It's because of logistics, and that's the crazy part about it. If we didn't have tech solutions coming in to solve all these things, you would literally have people who can't sleep and are sacrificing way too much.
Jeremy Au:
Exactly. So it's really good to hear that. And, lastly, thank you so much for sharing your fundraising recipe for cooking. So about how to approach VCs in terms of what you're building as a business, why you care about it, why the problem is really interesting. And then actually going deeper to say there are always going to be tough conversations because you're persuading someone or persuading yourself. And that there is a differentiation between good founders and great founders based on their willingness to be able to do the work.
So thank you so much for coming on the MHV podcast.
Wong Zi Yang:
Thank you for inviting me as well. I appreciate it.
