It was very different actually from one consulting firm to the other one, because Accenture is more, project management, a lot more structured, a lot more process driven and methodical. I think Bain as a consulting firm has quite a heavy private equity due diligence mindset as well. I had to relearn a lot of the things about when you look at value, where do you focus? Estimating how much the value is and how to really quantify what is likely to come out of doing certain initiatives. What I learned in Bain really, really, really helped in entrepreneurship, where you need to make a decision almost on a weekly, monthly basis what to focus on and what not to focus on.
- Jes Min Lua
Jes Min is Co-Founder and CEO of The Recommend Group, South East Asia's #1 Home and Property Platform operating in Indonesia (Sejasa.com) and Malaysia (Recommend.my). The company connects customers and businesses to tens of thousands of the top-rated service professionals in categories like renovations, interior design, cleaning, aircon servicing, electrical repairs and pest control.
Recommend Group is unique in its vision of building technology that turns services into products, by standardising prices and quality, creating a layer of trust so that services can be transacted safely online. It has served 1,000,000 homes to date in services that range from $10 to $50,000.
Across both countries, Recommend empowers service professionals who connect to the platform to grow their business, collect payments and manage their team in a seamless manner. Throughout the pandemic, the company actively supported their service professionals in obtain permits to operate and advocating vaccination throughout the service worker force.
Jes Min is an ex-Consultant with Bain & Company and Accenture, where she has helped multi-national companies scale their business and operations throughout Tier 1, 2 and 3 cities in Indonesia, Thailand and Malaysia. She has also helped national sovereign funds and banks transform their technical infrastructure, as well as program managed some of the largest financial services mergers and acquisition activities globally.
Her personal mission is to build technology as a method to grow incomes and alleviate communities out of poverty. Her experience in SEA and also in Africa drives her belief that small businesses play a huge role in improving livelihoods, and this underpins the mission behind Recommend Group as well.
Jes Min is also a mother of 2 little children. By the ease at which they twist her around their little fingers, she strongly believes they will one day take over the world.
Jeremy Au (00:00:00):
Hey, Jes Min, welcome to the show.
Jes Min Lua (00:00:02):Hey, Jeremy, thanks for having me. So nice to speak to you on a Sunday afternoon.
Jeremy Au (00:00:06):Well, I'm glad we get a hangout again, from Bain days all the way to Clubhouse and here again, so it's nice to catch up.
Jes Min Lua (00:00:14): Same, same.
Jeremy Au (00:00:15):So, Jes, tell us a little bit about yourself for those who don't know you yet.
Jes Min Lua (00:00:20):
Well, what's interesting about myself, not much really. I started up my career as a consultant. I was in Accenture for about six years, and then I moved over to Bain & Company where I met you obviously. And in the middle of my Bain experience, I skipped out to do an MBA in France for one year, came back to Bain and then did a couple of years there and then suddenly realized that I should put the skills that I obtained all those years to try and create some impact in a course that I really believe in. So I left to start up my own startup with two co-founders and then yeah, here we are.
Jeremy Au (00:01:03):
Yeah. So it's amazing because you've had such a journey, growing up in Malaysia and then having that regional role across Southeast Asia as a consultant, and then of course doing INSEAD MBA not just any school in France but INSEAD MBA. And obviously doing well as a case team leader at Bain and being a founder of, Southeast Asia's number one home and property services platform. So not trying to like, hey, don't short-sell yourself a little bit here. So tell us more. What was it like growing in Malaysia, why did you decide to become a consultant? Was it the thing to do or was it like your parents were like, "Yes, bagus. Very good."
Jes Min Lua (00:01:51):
Bagus, no, no, no, no. So, well, my parents, they were something like second generation immigrants from China. So my parents were, born and bred here. So me too, I grew up very much in the city, even though they were both from small villages they moved to the city and I always grew up in the city. So you know the typical overprotected childhood for girls very, very common, when we were young. I was not allowed to do anything really. And they would never allow me to go and have slumber parties at my friend's house or do crazy stuff like that. I remember my first major win was being selected to be a girl scout and then we could all go camping.
And then my parents never really trusted the fact that the scout leaders and all that could manage all these male and females, of various ages living in tents. So every night they will actually come to the campsite and tempt me to go home and spend the night there. And then the next morning they'll take me back again because they just never trusted any authority. They'll come and bring me my food. And then they would say, "Hey, why don't you just go home and sleep in your comfortable bed? And then tomorrow morning we'll bring you back here and no one will know." And the truth is that most of the time I did that. So I went home and then I came back.
So I was always one of the one, who couldn't survive the night. So I grew most of my childhood thinking actually I cannot survive it alone. And then I went off to university. It was quite tough, being overprotected and all that. Took me a few years to really develop into my own person. And then I guess at the point of university, I did what the typical overprotected child would do, go crazy and then started to do all sort of things that they didn't do when they were young. So yeah, that's where you have it. So all the going to MBA mid career and all those crazy stuff and doing internships in East Africa, they all came up over overprotected childhood.
Jeremy Au (00:03:57):
Well, it doesn't feel like you were very crazy because you went through University of Bath and I have your LinkedIn up here. You were like, President of the Malaysian and Singapore Association, you were the treasurer of another club, you had first class honors, so it doesn't feel like you were very crazy.
Jes Min Lua (00:04:24):I think the crazy parts had, after I graduated and I started working and then yeah, I took a lot of career breaks actually. Some of the crazier things I've done is obviously going to study Chinese in China and so-
Jeremy Au (00:04:38): That's not crazy.
Jes Min Lua (00:04:38):
Yeah. That part was the good part and then the crazy part was taking a 24 hour or 27 hour journey on a train by myself to the middle of some city that I once heard of. So this is where I usually envelope crazy within the very reasonable things I do so that nobody ever finds out.
Jeremy Au (00:05:02):
Well, doesn't sound crazy. Sounds more like courageous to me, brave even. And so yeah. I mean, obviously, my parents are Malaysian and they grew up in Penang in KL. So common story obviously of going out to the UK to study, and then at some point you decided to come back to KL, Southeast Asia and join Accenture. So what was that decision for you like?
Jes Min Lua (00:05:29):
Well, at the time, when I was graduating or somewhere like 2003, 2004 firstly, it wasn't easy to look for jobs because getting a visa was a problem. Then I did get a job and it was crazy enough, a railroad engineer, something that I've always wanted to do because I studied mechanical engineering and I always thought that would be the person I'll turn out to be. So I got an offer, very prestigious engineering firm and everything, and I wanted to stay. But then my dad asked me to come home and I think he saw that a lot of the opportunities at that time was back in Southeast Asia and all my family was there and very close to my family, my extended family as well. So he said, "Come home”. Why stay over there?" So I decided to come home lah and no regrets, there, to this date. Yeah.
Jeremy Au (00:06:21):
So here you are, a Masters of Mechanical Engineering, you join Accenture, what was it like becoming Accenture management consultant, a strategy manager? Was a big culture shock from engineering to consulting or was it more similar?
Jes Min Lua (00:06:35):
Not much actually, but the truth is that I didn't know what I was going to do as a consultant. I mean, nobody really knows. They have all these nice slides and stuff and they tell you, you are solving problems and all this jazzy stuff. And you have no idea really. So I just joined and then I think it stuck me in technology. They stuck me with a bunch of the most techie of the techie, those people who are designing, enterprise architectures and middleware layers and all that stuff. Even though I said I wanted to do strategy, they stuck me in there. And then I think I crashed a server. I think I rewrote another one. Completely rewrote my own drive. Seriously I was playing with virtual server. And then after that I left the formatting disk in there, and I re-formatted my entire device. And then I had to go crawling back to IT and say, "I'm so sorry I reformatted this thing. Can you set it up again for me?"
Jeremy Au (00:07:28): That's not so bad, right? You didn't lose anything, hopefully?
Jes Min Lua (00:07:31):
I don't know. I probably lost a whole bunch of stuff though, but I think, it took me a lot of interesting disaster like that before they decide to say, "Okay, we're going to need to limit the amount of damage that you can do to our server rooms. So we're going to slowly move you out to strategy." Yeah. So I could say it was a strategic move for my behalf, to try and move verticals.
Jeremy Au (00:07:57):
I think you are short-selling yourself a little bit because of that. You're quite a lot of great noble work across the region. So not much of a culture shock for you, and then you decided to go from Accenture to Bain. So what was that transition like for you? Was it like, you reached out to them, they reached out to you what happened?
Jes Min Lua (00:08:15):
It was very interesting because I was working on a very huge plantation merger. And obviously, you have consultants swarming in all directions. So there was the Accenture bunch of their project and program management, that was what I was doing and six different work streams. And then there were the Bain guys and other consultants as well, working on the strategy part for the different business models, yeah. So I guess they saw me in action and despite all the crazy things I did, they decided that I was a good fit. So made me an offer, so I moved, because I wanted to see what a true blue strategy consulting firm, how they actually approach problems, what's the methodology that they used? And there were a few partners, which I felt were quite inspirational at that point, so I moved over.
Jeremy Au (00:09:04):Yeah. And what was that transition like for you? Was that culture shock? Was it very different?
Jes Min Lua (00:09:08):
It was very different actually from one consulting firm to the other one, because Accenture is more, in terms of program, project management, a lot more structured, a lot more process driven and methodical. Looking at things in Bain, I think Bain as a consulting firm has quite a heavy private equity due diligence mindset as well. So moving over from Bain, I had to relearn actually a lot of the things about when you look at value, where do you focus? Estimating how much the value is and how to really quantify what is likely to come out of doing certain initiatives. So from that perspective, I think what I learned in Bain really, really, really helped in entrepreneurship, where you need to make a decision almost on a weekly, monthly basis what to focus on and what not to focus on.
Jeremy Au (00:10:00):I think that's super undervalued as a being trained. Because I think, I always remember that it was like, strategy is what you choose and also what you choose not to do, right?
Jes Min Lua (00:10:08): Yes.
Jeremy Au (00:10:08):
And then more importantly it's about the decision velocity, how fast do you make decision, and how fast do you execute you from it, and how fast do you learn from it? And then pushing forward with the key dens in the structure needed to make that be as fast as possible. I thought that was a tremendous learning I had as a consultant. And that's where I met you as well, right?
Jes Min Lua (00:10:29): Yes.
Jeremy Au (00:10:29):I remember meeting you and you were super high energy and very optimistic, and working on a bunch of slides and stuff together for, I don't know, a small chunk of time. A month, I think?
Jes Min Lua (00:10:45):Yeah, I think it was a short time. Yeah. But there was a lot of slides. I mean, slide making-
Jeremy Au (00:10:48):Yeah. It's like our true scale, not strategy, but slides yeah.
Jes Min Lua (00:10:52): The speed of slides-
Jeremy Au (00:10:53):Yeah, strategy and slides. Yeah. Speed of slide making. Yeah. What was your impression of me back then? Maybe I'd have to edit this out afterwards.
Jes Min Lua (00:11:01):
Well, I always felt that you were a little bit different. Yeah, different from the typical consultant, I think. I mean, you obviously, have the lingo the smarts and everything, but there was something about you that was always willing to try something different and thinking a different perspective. Yeah. So I guess, explain a little bit why you shaped your career like that after that.
Jeremy Au (00:11:29):
Yeah, definitely. Something that I was thinking I didn't really understand back then, because I was like, okay, this is how I think about this problem. But I really enjoyed being, I think, great high performance culture, great folks. I actually really enjoyed the deep conversations with everybody. It was just that the travel was one. But also I think the fact that we couldn't focus on something we really loved and get rotated around was something that I knew wasn't going to be my long term trajectory, I think.
Jes Min Lua (00:11:56):
Yeah, for me, the point at which I decided to leave consulting was that, at the time 2004, the tech industry was just growing and you can see so many people trying to solve problems and stuff using technology. And at that point already, I think I had spent maybe nine years in consulting and I felt like, oh wow, the problems are starting to look like one another in a way that, no matter which client you went to, no matter which problem that you try to solve, you realize that actually it is a human problem. It is rarely a strategy problem or a direction problem, or really even a resources problem. It is almost always a human problem. And so I wanted to move out and pick a problem that I really believed in and see whether or not I could apply technology to solve it in a way and minimize the humanness of it, because I always feel that humans are the biggest variables and the cogs of the machine that you can't quite control in any company. Yeah.
Jeremy Au (00:12:57):
Yeah. Definitely, very true. So were you thinking about that at Bain already? I mean, I remember for me, it was at Bain and I was building out this social enterprise on the side and I had no idea what I was doing, but starting to grow. I think I remember you asking me about it quite a bit-
Jes Min Lua (00:13:12): Yes.
Jeremy Au (00:13:13):
...at that time. And I was like, okay, I feel awkward talking to you about it. And eventually I had to leave to go full time because you hit a certain level of scale where we had so many clients and so it needed me full time. And it also paid me a salary as well, which was nice. But I remember you quizzing me for a while about it and I was like, "Why are you quizzing me about it," back then.
Jes Min Lua (00:13:36):
At that point, and even now, I was really interested in social impact and in particular impact investing. Because I wanted to see the effect of providing some funding or some starting point to small businesses, in rural areas to see whether or not they could really spur on entrepreneurship and therefore, create a flywheel to get the community out of poverty. So in 2011, left to do an MBA in INSEAD in France. So I did part of it in France. Then I did part of it in the U.S. and I came back to Singapore for one of the terms. And then after that I took three or four months with Acumen Fund in East Africa. It was for the purpose actually.
So Acumen Fund is really an in impact investing company and they take the funds and they identify industries with huge multipliers on the community. So I worked on projects like cotton farming, coffee roasting, chicken farming. Actually, I found this amazing model for chicken farming, but there was chicken farming and I looked at all these models and tried to see, if we put in like a $1000, a $100,000, a million dollars, how many jobs could it create and how much income it could create? And the multiplier was huge. And anyway, I learned one thing from there, if you really want to grow a community and help spur it out of poverty, you cannot use donations, because with donations, the nature donations, it disappears and nobody has any incentive to create returns.
Whereas if you use investments, if you invest in women, especially, the returns on the funds are so much better than if you use donations. And that philosophy has really driven what I decided to do when I'm done in my MBA, went back to Bain, worked up my barn, did a couple more just to finish my whole consulting part of my life and then decided to hop into entrepreneurship.
Jeremy Au (00:15:43):
So, okay. You're doing this Acumen thing and then you also did an INSEAD MBA, so how does that work out? Why did you say I want to be at INSEAD MBA or did you... Because a lot of people go to do their MBA, I think obviously one part of it is like, "Oh, I'm going to do the MBA for learning the community to check something off." But also a lot of people also have that subtext of saying, "I may potentially transition my career along the way." So you did that in the middle of it while you were at Bain, but I was just curious about why that INSEAD MBA, what experience was like.
Jes Min Lua (00:16:18):
So at that time, when I was doing it, I probably worked about 9, 10 years already. So I wasn't your typical three or four years and then doing MBA. So I wanted to go to a school where my classmates would be able to bring perspective from their industries and from a position that was senior enough so that I wouldn't get the usual textbook stuff. I think by the time I would have done enough years already to realize that actually a lot of the textbook stuff cannot translate so readily to the real world, because when you implement things in the real world, there are people involved and that is the one factor that you cannot really control for. So I wanted a school with more mature leaders or middle management at least India organizations.
And INSEAD was an interesting one because obviously it was very diverse. It's probably one of the most diverse schools. There were people from all over Europe, U.S. and had done crazy things in their life from, running restaurants to their own entrepreneurship, and people who are sportsmen. So I think that part of the MBA experience was very interesting. The other classroom stuff, I think you could probably even learn online. It's not super, super hard to learn online if you pay a bit of attention, but hearing all these perspectives come together, really, I asked myself like, hey, I always thought that, that was a consultant or a career consultant because that's what I did for many, many years. And it's funny how doing something for many, many years make you that person till you think like, hey, I'm a consultant.
But when I went to INSEAD, I realized that, hey, there are plenty of people building careers from a very different angle and perspective and they're fairly happy as well. So it made me question, what do I really want to do in life? And really opened up the perspective that really, I've got this one life to live, I can pick or I can design a life where I'm creating the impact that I want, I'm using the skills that I have. And I'm also feeling quite happy about the whole thing. Yeah.
Jeremy Au (00:18:17):Yeah. Wow. I mean, sacrilege, how can you be happy if you're not MBB, being BCG consultant, because all other careers are tier two.
Jes Min Lua (00:18:27):My God. And how can you be? You've never heard of a two by two matrix. How do you make decisions in life?
Jeremy Au (00:18:33):Why are these slides so weak?
Jes Min Lua (00:18:33):But you know what, people do survive, people get through.
Jeremy Au (00:18:40):
Yeah. I mean, because I think once you start hanging out with certain business crowd wherever it is. And so I was part of the social impact consulting club in undergrad. And so we were like, on one world it was the social sector side and the entrepreneurship side, and the other side was the consulting side. And as you went towards the more consulting track, obviously the prestigious jobs were like management consulting and investment banking. I think those are the top two at UC Berkeley in 2008 to 2011. And Google and all these tech companies are only just starting to emerge. There's like a place for business folks to join. And obviously didn't know anything about private equity or even entrepreneurship wasn't really a big deal back in 2008 to 2011.
So it was just an interesting dynamic where things have changed. But yeah, I agree with you. I think the MBA was a great place to meet lots of different folks with different career paths. And a lot of people who are doing things differently, both from a personal basis in terms of family, choices, values, cultures but also from a professional career. And also I think everybody enters in with an interest in resetting their career. So you see a lot of people who are doing, at least in Harvard, there was a bunch of veterans, who want to transition into consulting and I'm like, whoa, I'm transitioning from consulting-
Jes Min Lua (00:18:40): To something else?
Jeremy Au (00:20:05):...to social enterprise to maybe entrepreneurship, maybe tech. Yeah. So it was just interesting to cross paths.
Jes Min Lua (00:20:14):
Yeah. It's nice because and sometimes I look back and say, why was the MBA experience so interesting? It is because I think there are many people who are trying to make a change in their life and not always professional. Some of us are running towards something. So for example, you are thinking or running towards a different career. So you want to meet people, you want to learn new things, so was I. But there are some people who are actually running away from something, a career that they did not love perhaps, or maybe family situations, or like being in a different country, you're running away from something. And when you get a whole bunch of people who are running towards something and running away from something, it was a very nice mixing pot for things to happen. And some of them ended up being partners on the new ventures. Some of them ended up getting married with each other. So that part of it where we could transition life together, was really something else. I've never seen such level of craziness, yeah.
Jeremy Au (00:21:08):Yeah, for sure. Well, I'll say getting married and being partners in a new venture is pretty much the same thing on this one.
Jes Min Lua (00:21:18):Oh, I'm sure you've experienced more of that.
Jeremy Au (00:21:21):Well, obviously a marriage is a big venture and obviously when you are starting a new venture or a co-founder, you honestly spend more time with that person than your partner.
Jes Min Lua (00:21:31): Yes.
Jeremy Au (00:21:31): Partner at home.
Jes Min Lua (00:21:33): So true.
Jeremy Au (00:21:34):
But yeah, I think it's lot of great friends. Okay. So there you are at INSEAD and then your brain starting to tick and say like, oh, I'm having this interesting experience in creating jobs. I have this interesting set of experiences in Southeast Asia. I have this interesting geographic view of the world. I've seen Accenture and Bain and therefore I've seen the whole spread. And at some point you were like, you could push your career more. You could have been like, okay, I'm going to make partner at Bain and I'm just going to work my way from point A to point B to point C, it's a track. And sometimes I tell people getting promoted to partner is less about getting promoted and more about not quitting to do something else.
Jes Min Lua (00:21:34): Promotion by default.
Jeremy Au (00:22:20):Promotion by default, because all the Bain folks went off to do something. So you made a decision that you said, hey, I want to find something, so how did that happen?
Jes Min Lua (00:22:31):
Well, I tell people it's all about wanting to change the world, but actually there were two points at which I felt like, oh crap, maybe I'm not in the right place. I think I was thinking about a problem and then I wanted to think, oh, how can I put technology resources and how can I arrange a business model to solve this problem? And then I realized like, oh wow, as a consultant, I would need to look for someone. I would then need to influence him. And then I need to put all these things in place and hope like hell that this person does that because that's what consultants are. We are advisors and we need someone to advise and someone to take the action and then we support them. But what if that person didn't exist. Or what if nobody has the passion of solving this problem specific room that you have then you're stuck. So there was one.
And there was another point at which I was sitting on the table with many, many senior people in the insurance industry, they were really senior, I think they spent like maybe 10, 20 years in that industry. And they were also consultants from, I wouldn't say which company, but they were also consultants and they had significant experience as well. And then the CEO asked the question and then the consultant went, "I understand your question," and then they articulate it in a really neat manner and say, "In order to solve that problem, I will need to arrange a meeting on Monday with these folks, after which I will arrange a meeting on Tuesday and Wednesday with these folks and by Friday I will have an answer for you." So that was the answer from the very experienced consultant. It was absolutely right. That was a way to do it.
And then this other lady from insurance industry, I think she spent maybe like 15 years and she said like, "Yes. I think we can do all that, but I can tell you with a 95% accuracy that the answer should be this." And then I realized like, oh, wow, there you are. Those are my two paths in my career. I can either be that person who says like, this is the structure and the process and the decision making tree or whatever that will get you to answer. Or I could be the person who tells you with 95% accuracy what to do because I have done it. So then I made my decision at that point that I wanted to be the second person.
Jeremy Au (00:24:32):
Wow. That's amazing. I mean, that's as tight anecdote around, I think the big decision for many consultants. Because, obviously beyond the travel, which is logistical and lifestyle and beyond the dynamics of the industry, hopscotching, it's really about the role that's really the crux of it. Do you want to be an advisor and a consultant or are you going to be an operator? And there are different ways to be operator, founder, an executive, a CEO, lots of true ways to be an operator. And I think that's a lot true to that.
Jes Min Lua (00:25:07): Yeah, absolutely.
Jeremy Au (00:25:07):
And I think that's something that I too also face. Because there I was consulting and making slides and I think I had a great time being exposed to CEOs, meeting CEOs, hearing from them, being on the side for both great CEOs and CEOs that wanted help. And you know there's a strong overlap between both, right?
Jes Min Lua (00:25:28): Yes.
Jeremy Au (00:25:30):
It's not mutually exclusive. But it was just nice to observe them and just be like, yeah this is a tough situation, this is a good situation. And I was thinking to myself like, am I going to be a person writing this script and making these slides for him to present?
Jes Min Lua (00:25:46):Yes. Are you going to the guy.
Jeremy Au (00:25:46):Or am I going to be out there, doing it?
Jes Min Lua (00:25:51):
Yeah. It's all true. And there's there's a place in the world for both types, I think yeah, just got to decide what kind of person you want to be. I mean, there are many times when I look, I say, oh, wow. You know if I stay in this consulting track, definitely my bank balance will be much more than it is today. And in a way, it's nice. Like you said, being surrounded by some of the smartest people in the country solving something, because there's just nothing like having a conversation amongst really, really intelligent top tier people and the ideas they can bring out. There's no feeling that compares to that. Yeah. As opposed to rolling up your sleeves and being in the trenches and really doing something and realize that, oh, crap, that was a bad idea. How do we roll that back? And oh, wow. That was a great idea. How do we more of that and keep having that velocity of doing it, and changing and doing it, and changing and doing it, and changing it until you get it right. Yeah.
Jeremy Au (00:26:43):
Yeah. I think that's something that you said true as well to tie that is like, as an operator, you're really mastering the results in the industry and the organization. And as a consultant, you're really mastering the process. And that's very, very different mindset altogether. And I think you have the master process in order to be an operator for sure in some ways, but I think you can't, over blot the process as well because the speed is important. And I think the type of problems that consultants are called in to do a million dollar project on, are big questions, tough problems that are difficult to solve. But they're not the everyday problem the company has. Which is like, how do you find a great hit of sales? What is wrong for the digital marketing campaign and how do we improve it? How do we increase the ROI on our initiatives?
And people are like, "Oh, we don't have a great strategy." And I'm like, "Maybe it's just like three or four tactics that you're not working out." And if those three or four tactics are working out well, then everybody's going to say that you have a great strategy because of these great results. But-
Jes Min Lua (00:27:47): Yeah, it's so true.
Jeremy Au (00:27:49):Like what's the crux of it, right?
Jes Min Lua (00:27:50):
Yeah. And the thing with consulting is sometimes you feel that there is the right answer and if your process is right, you will actually get at the right answer. You know I begin to realize that there are not many things like that because there are factors that are not within your control or that you wouldn't know. Things like timing, things like how technology deviates. For example, if you look at battery technology, 10 years ago, would've been impossible to figure out which battery technology was right. But today obviously, the world has chosen one. So there are a lot of things that you cannot predict along the way. And that the influence of timing is something that in entrepreneurship I think is hitting me more and more. It makes me realize how important this element really is. So those are the differences.
Jeremy Au (00:28:36):
Yeah. I agree. Because I think consulting really works when you're working with multinational corporations, working on high capital decisions that are very complex, because then the right process in average helps remove all those biases. The complexity of information, the complexity of geography, the fact that there's a large amount of capital that's like a binary-ish decision that requires a lot fore-taught before you make a decision. But I think it's very different from being a founder, which is like what makes money. Or any idea, what does a customer want to buy? And how do we get them to buy more of it? And how do we make our product better so that people want to buy more of it? It's very fundamental stuff. And I think one thing I also realized was like, being a consultant in Southeast Asia is so different from being a founder in Southeast Asia because as a consultant, you're hanging out all these multinational corporations.
And so you're working at the regional business elite where every country is just a slide. So this is a regional strategy and then every country has two slides. And there's maybe three more backup slides-
Jes Min Lua (00:28:36): And appendix.
Jeremy Au (00:29:51):And appendix. So it's almost like you have that regional pan view, versus as the founder's almost inverted, which is, who is the customer and who is this customer in this geography at this time?
Jes Min Lua (00:30:02): Absolutely.
Jeremy Au (00:30:02):And then we're going to expand another country after that. So the sequence is totally opposite.
Jes Min Lua (00:30:08):
Yeah. It's also because most of our consulting clients are those that are already multinational or regional, which means that their business model has been proven to work in many, many different geographies already. What they're trying to do is get that, from 95% to 98 or 99%, which means that you don't really have to reinvent the base. You just have to look for the extra marginal efficiency gain and these ones, usually, you can look by looking at a competitor in Canada, competitor in Germany or something. And say, okay, if you fix this five different things, then you should, get you there. The problem with the whole startup space is that very often you are one of the only people in this space, which means that, okay, there's a compelling reason somewhere else, but it doesn't really work in your space.
So you are already one of two or three companies trying to solve this problem in that space. There are no real comparables. So in a sense you have to make a hypothesis and then you really literally have to execute upon the hypothesis and say like, I think it's like a why, sometimes I cannot really say it's a gut feel thing. And sometimes I might have some numbers sometimes I might not, but I try it first. And I time base it and I say like, okay, lets time box it to two weeks and then we'll see the results, four weeks and then we'll see the results. And if it doesn't work, sometimes we also don't know why, but we just step back and we try something else. So this mindset can be very disturbing to some of our previous clients, but that's how it works in entrepreneurship space, yeah.
Jeremy Au (00:31:35):
Yeah. Totally true. I think that's so spot on. I think as a consultant, you're always thinking to yourself like, okay, what I'm doing is going to have upside of millions of dollars, hundreds, and billion dollars over a 10 year timeframe. But yeah, you're right. It's still just optimization where 98% of the company works, HR works, leadership works, the product sells in multiple countries. They already have a base, there's so much data available. But we get hundreds of million dollars of upside because there's such a large base to improve that 1 to 2% improvement is actually a massive gain for this whole company.
Jes Min Lua (00:32:12):Like 300 million, you're like, yay.
Jeremy Au (00:32:14):Yeah and you are. Or we had a 300 X return on our billion dollar fee.
Jes Min Lua (00:32:19):
Yeah, it's so amazing because the base is so large. Like you said, a small little percentage gets you a very big number on the bars. So even now, in entrepreneurship, when I look at my bars I'm like, how come these numbers are never as big as the ones I had in my consulting career? It's like I have to do so many things to get so little millions. Last time I just tweaked one number and I had like 300 million, damn.
Jeremy Au (00:32:45):Exactly. You don't even need to assume to do thing after that. You just write assumption. Assuming that operation cadence-
Jes Min Lua (00:32:45): Yeah, people are not robot.
Jeremy Au (00:32:45):It's case you know, exactly.
Jes Min Lua (00:32:55):
Yeah, CEO Cycle. Yeah, done. And then if there are any issues you just put here are some identify issues and then like list of 20 and stick in appendix. Now how will you out? There's 20 key risks that you have to mitigate somehow. Yeah.
Jeremy Au (00:33:13):Yeah. And then you're a founder and you're like, wow, these are 20 things I need to handle right now and it's just me. This is my to do this, exactly. So for us, it was just a role.
Jes Min Lua (00:33:26):
And you know what's the worst thing, there's no one to escalate it to. In your previous life you're like, there's always someone to escalate it to. Someone can make the decision somewhere. I just need to make sure my list is complete. And it's got green, red, yellow buttons. And I told you, 10 things, green, yellow, red buttons. And yeah, I'm done. But now that is your to do list. And you're like, oh, my God, there's no one to escalate it to. I have to do all these things myself. Yeah, so that's-
Jeremy Au (00:33:26): A 100%.
Jes Min Lua (00:33:53): ...the difference, man.
Jeremy Au (00:33:53):Now, next time I've to do list, I'll just mark green, yellow, red then I'm done.
Jes Min Lua (00:34:02):And you feel better. And it's like let me just do that tomorrow.
Jeremy Au (00:34:05):Yeah. Email straight to myself as PDF.
Jes Min Lua (00:34:12):Yeah. It took some getting used to certainly.
Jeremy Au (00:34:16):Yeah. So you made a transition obviously to becoming a founder and then what was it like suddenly becoming a founder, building it out. What was it like?
Jes Min Lua (00:34:27):
I think the few things I had to get used to, I guess the first one was, I was very lucky to meet very great co-founders. So I have two co-founders Alex who's based in Singapore and Anthony who's based in Indonesia. And I guess things worked out very naturally for us. We worked well as a team and all that, but it was only later on I realized how lucky I was to meet these two guys who were, completely honest. And I never have any question on any one of them, but I realized that is a rarity. A lot of people have to trust their co-founders. So I realized one of the things I learned was how important that initial partnership was, your co-foundership, that was very important.
And then I also realized how difficult it was to get people, because in consulting, you have a lot of big buck. So with big bucks you can always hire the best people. But in startupship or entrepreneurship, you have to motivate people a lot because you are not paying people the biggest bucks. Your company is uncertain, any time you might go down. So you need to convince people that you are for real. They know their skills, but how do they know that you are for real? So you need to convince people that you are for real, you have the skills, you have a vision that is not completely built on the clouds. You have a way to get there. And that process is something that was new and it was certainly very challenging, the second thing.
And then the third one about managing cash flow, making sure that is the endless balancing of the PNL, versus the balance sheet, versus the cash statement, and making decisions that optimizes these three things was something that we never had to deal with because in consulting you're mostly dealing with the PNL. You don't care how much cash the company has, or you don't care whether or not there's a lot of assets being written down every year. But you just worry about the PNL. As long as you can return staff to your line, can return staff to your net profit line is a lot better. But in entrepreneurship and a lot of times your business operator, you have to worry about the cash flow impact, the balance sheet impact as well. And that is something that a consultant has to learn into becoming an operator. I'll say that those are the three things. Yeah.
Jeremy Au (00:36:39):
Yeah. I think there's a very true point. I forgot about that. Yeah. Managing cash flow is very different as an operator and even more different as a founder where you have no cash, always going to run out of cash, even after your raise is very different from being a consultant who takes that assumption, that desk capital to execute the initiatives you have to do. And also I'd say consultants don't think about the time, the time budget you need to execute stuff.
Jes Min Lua (00:37:08): Yes, yes.
Jeremy Au (00:37:08):Which is also a form of cash, because they're paying salaries and...
Jes Min Lua (00:37:13):It is. We just draw staff. In one phase is like two, three months sounds about right. So we just say like,
okay, there's phase one, phase two, phase tree and here are the targets and all that. Yeah, but-
Jeremy Au (00:37:22):I can't think of anything I really did as a founder that was like two to three months. If it took two to three months, it's just way too long. That's like, whoa, like-
Jes Min Lua (00:37:32):Yeah, like what's going on here. Two, three months, you can get a product out to the market and be testing it already. So nothing takes two to three months. We always think in weeks, if not in days.
Jeremy Au (00:37:41):
Jes Min Lua (00:37:43):
Yeah. That's something that you get used to. And some people find that they are very uncomfortable with always speeding up stuff all the time, and they do go back to proper corporate job after a while because there they're kind of passive. Yeah.
Jeremy Au (00:37:55):Yeah. More conscientious in terms of wanting to be more tolerant deteriorated, but it's a luxury, I think, especially in the early stages of a company.
Jes Min Lua (00:38:05):
Yeah. Certainly, yeah. I think more than anything, doing something different, teaches you about yourself and who you are, what's important to you, what strengths and weaknesses you have. And if you thought you knew your strengths and weaknesses before, when you start doing something, which is out of the way, like entrepreneurship, it really tells you that look, this is your weakness. And unlike what people tell you that you can always strengthen your weakness, maybe you shouldn't, maybe you should hire someone to make up for their weakness, because if you are constantly trying to fix your weaknesses, then you have no time to strengthen your strengths and that's where they need you. So yeah. Learning how to team to make up for your weaknesses and really understand yourself, because your company's strengths and weaknesses are your strengths and weaknesses, and they'll be for the first 5, 10 years. Yeah.
Jeremy Au (00:38:55):
Super true. I mean, I think that's the toughest part. Because I think that's something that is totally different from a corporate versus being a founder. Because as a corporate, you join a team because you got hired and selected for certain qualities, and all your coworkers are people who were also selected by someone else with similar qualities. And then you all hang out and you're also very similar because you're all selected for that role, if that makes sense. Especially in consulting, you're all selected to be a problem solver, a certain communicator, et cetera. And then as the founders, almost everything's inverted which is you are the one picking people, and then you to find people with super strengths that are totally different from each other, and you're to move fast. It's very opposite versus being an employee.
Jes Min Lua (00:39:47):
Yeah. It's very opposite. And there's always the risk of hiring people like yourself, because you get along with people like yourself. So you say like, "Oh, Jeremy is great. He's very much like me. We get along really well. Let's hire him." But very often the people who are right for your team are people who are very different from yourself, so. How do you find people-
Jeremy Au (00:40:04): Yeah, 100%.
Jes Min Lua (00:40:04):
It's not easy at all?
Jeremy Au (00:40:07):
I think one thought I have is that, so what was it like building something for Malaysia? So before that, Accenture, you've been always working under regional level, even at Bain, you're also working from a regional level and here you are building a company, of course, with a distributed team, but for Malaysia market, what was it like?
Jes Min Lua (00:40:28):
I don't know whether it would have been different if we were building it out of Singapore or Indonesia, but I guess I just happened to be here. So the first few team members were here, I think the first 10 or so. The year after we were formed, we really went to the market in 2014, and 2015 we expanded to Indonesia. And from then on these two countries were very much part of our growth strategy. Later on we moved our development team to Indonesia near Institut Teknologi Bandung (ITB) where they churn out good tech graduates on a yearly basis. So what was it like building out of Malaysia? I don't know, actually. I don't see whether it would've been different had we started elsewhere, but don't really know what I could say on that.
Jeremy Au (00:41:17):
I think a lot of founders are making decisions about watch geography, the target in Southeast Asia. So you see a lot of Singaporean founders who are like, I need to build for Indonesia, or I need to build for Malaysia. There's a lot of Americans flying to Southeast Asia saying, I'm going to build for Malaysia, I'm going to build for Vietnam. And I guess maybe one thing I always think to myself is you got to build for the market you know and it's very tough to build for a market you don't know. I mean, you can probably co-found with someone who does know, and it helps a lot. But it's pretty tough for a CEO founder to make allocation or tough decisions if you don't understand the consumer. So at least to me, it feels like you were building for the Malaysian market and consumers, and you're very familiar with these Malaysian consumers as your beachhead market.
Jes Min Lua (00:42:11):
Yeah. Okay. From that perspective, I think I can answer the question better. Completely agree with you that the initial funding team should be very, very familiar with the market that they're addressing. Because at the beginning you can't afford to hire too many people and if you have absolutely no advantage in the market, i.e you don't know the market well, you don't know enough people, your networks are not strong enough to give you a headstart in the industry, then really what are you doing there? So you really do need to understand the market. Sometimes in order to make a decision, you need one of two things. You need either damn good data about something in order to give you confidence to make that decision, or you need damn good gut feel, and your gut feel comes from really knowing the markets. So I would definitely think so.
You are right to say that our solution is very much focused on the developing market, not necessarily Malaysia, but it's the problems that any developing market has. And when I say developing market, it is not Singapore, which is why we did not build for the Singapore market. Because in a developing market, a lot of things are consistent across Malaysia, Indonesia, Philippines, Vietnam, Cambodia, that sort of thing. Industry structure, big gap between the people who can pay and the people who are willing to work, because that's your strategic reach, that's how much your maximum profit potential is. Things like trust issues, are there already very strong regulatory infrastructure? Do people trust this infrastructure or do they trust a third party with good reviews and ratings, for example.
Can people pay for the services? Do they tend to outsource these services? Or are they like, there are more types that like to fix broken and then fix themselves. And then if they need a car part, they go and buy the wood from the, I don't know train station, and then build it themselves. So I don't know if I mentioned this in our platform, RecomN Group, we are about connecting people to service professionals. So anything you need for the home or anything you need for your business, for example, plumbing services, cleaning services, electrician, pest proofing, pest control, whatever it is, we provide. So it is about people needing the services, having no time to do it themselves but outsourcing it to a bunch of distributed workforce who is already trained and verified by the community. Yeah. So it's important for us to find people who like to outsource services rather than do themselves.
Jeremy Au (00:44:38):
Yeah. I mean, for time saving productivity, also expertise and many hands to make work right. So what's interesting of course is that you build for Malaysia and the Indonesia market and there's a lot of truth to that, which is, I see a lot of Singaporean founders building for Singapore and they want to enter Malaysia, Indonesia afterwards. And I'm like, whoa, Singapore is not Southeast Asia. Not representative at all in terms of GDP per capita, in terms of cultural attitudes, even in terms of language and tech preferences. But of course, there's been some successful like obviously Singaporean companies, well, I guess you could look at Grab and say it's a Malaysian company and it's just-
Jes Min Lua (00:45:24):It is a Malaysian company.
Jeremy Au (00:45:25):Yeah, there we go. It's like I need chicken rice and just like taco with you. Okay. Got it. Okay.
Jes Min Lua (00:45:34):Oh, man. We're getting into a whole Malaysia Singapore argument.
Jeremy Au (00:45:38):
And then you look at Razer as well, I guess. So I think what interesting of course is, you went from Malaysia to Indonesia, which is a very fair, I think, and very natural market expansion. I think you also see that other the way around, from Indonesia to Malaysia. I mean, obviously on the face of it, a mostly similar language, some similar demographic and cultural similarities and GDP per capita, what was your experience expanding your market from Malaysia to Indonesia? So yeah, one co-founder from Indonesia. So I guess that helped quite a bit. But what was it like expanding from Malaysia to Indonesia as a tech startup?
Jes Min Lua (00:46:14):
Oh, it was quite interesting in a sense because when we were expanding to Indonesia, our tech team was still here. So we had a tech team in Malaysia managing the stuff in Indonesia and then we had product managers in each country trying to customize the product and all of that. I think that experience taught me a few things. The first one was the importance of a local partner, local co-founder who really, really cares about the mission of the company. And we had that in Anthony. And because of his passion, he hired a very, very good starting team. And that starting team is basically most of the reason why we could grow to be the biggest in that country.
And they were super passionate. They were working pretty much 24/7 to get the product up, to get the marketing, the business development and everything going. So that is very important. And then the second thing is really testing the market and understand the unit economics. A lot of things we take for granted like industry structure, it seems like there's a profit pool there and this and that, but until you run the funnel from the beginning to the ending, what I mean by funnel is the customer acquisition funnel, depending on where you get your customers to until you monetize the customer and get the customer coming back again. Until you can figure out your lifetime value of the customer with respect to the customer acquisition costs, you don't really know the market.
So you really have to keep testing until you get an LTV to CAC ratio. That really makes sense. And then you can tell yourself, I understand the funnel in this market. All right. So I'll get to that point as quickly as possible. A lot of people like to earn within the market using free things or free for a while, free for whatever, come and use it first, that sort of thing, but running something for free actually tells you almost nothing about the world, apart from the fact that people like free stuff. And we all already know that. If something's for free, they will always use it. But the moment you start charging even $1 or $10, whatever is it just charged, because the moment they open their wallet is the point at which you really understand what they're willing to pay for. So that's the second thing.
And then the third one is where we decided to move our tech team from Malaysia to Indonesia, just because the skills there were more readily available, it became a bigger market after a while. So it just made sense for those two teams to work very closely to each other.
Jeremy Au (00:48:38):
Wow. I think people are going to undervalue what you just said, which is about how do you actually understand the market? And that's not just a geographic market, but even your normal customers, or a vertical market is, do you really understand the lifetime value and the customer acquisition costs? Do you understand the whole funnel? And can you drive it to a way that's sustainable at a minimum, if not like a strong set of unit economics? And I think one thing that ties in well to what you said previously is like, having a strong local co-founder and also you yourself actually coming from a place, and geography that's very similar, lets you both have that intuition about how to build that funnel and also the conviction that you're not building a funnel to nowhere. So I think I see so many people panic because you don't know where to go and then when they make the base are poor, and then they also don't feel conviction they're going in the right direction, and then they just bail, so.
Jes Min Lua (00:49:36):
No, it's so true. And the initial markets like Indonesia, I actually worked there personally for a few years. So that's the reason why I feel more comfortable as well, because I'm familiar with the market. I know people, I can ask them. So try to pick a market that you're familiar with, that makes life so much easier. And if you have a few people there that you can always bounce ideas off with, it makes a lot of sense as well.
Jeremy Au (00:49:59):
Yeah. Total truth there. So there you are, you spent two markets, Malaysia, Indonesia, and there you are as the number one player at home services. Okay. You're making a bunch of strategic choices, you're growing the team, you've done everything and then COVID hits. So 2020 was quite a year for many industries. So from what I've chatted with you before, it was actually a bump which is a positive upside, but tell us about what was it like dealing with COVID as it came in and how did it impact the business?
Jes Min Lua (00:50:35):
Oh, my God. So last year, I think, since March last year, it has been ups and downs, roller coasters. Because when the news of COVID first hit and the governments were all thinking of shutting down, obviously we went into overdrive because we thought, okay, our services are mostly face-to-face. And face-to-face things will become a lot more difficult and challenging with COVID and with the lockdowns and all that. So what are we going to do? So we had plan A, plan B, plan C, plan D and it was actually measured on a weekly basis. If this happens, we'll take plan B, if this happens we'll take plan C and we panicked. So when lockdown came, I think it was March 16th for Malaysia, for Indonesia it was April something. But when it was locked down, the first two weeks, nobody knew what was going on.
And as a result, nobody serviced their air con. No one did pest control. No one knew the SOPs, whether or not the service professionals would be allowed to cross the police barriers and all that, so volume tanked. So all our service professionals were really struggling at that time. And in all of us, all these home services start-ups, cleaning start-ups, I think we all had the same discussion with our team and said, look, it's going to be really tough for the next few months. Do we just follow the team, go sit on a beach or something somewhere and conserve cash until this thing is over, or do we, as we did, continue on it somehow, try to survive it. Everybody take some salary reductions and reduce costs at a minimum and try to survive.
And then our team actually sat down and we asked ourselves like, why do we exist? We exist because we want to help customers find services and to find a good service professional is not easy in Southeast Asia. So then we ask ourselves in this time where your fridge is extremely important, your washing machine is extremely important and this infection is super important. Do we want to be there for our customers, even though the numbers might not make sense, because who knows what the demand will be? And then also these professionals as well, they were completely in a mess because they did not have proper authorization like those, they could not pass what blocks, they got harassed by police. I remember there was one point of time where, I spent like nights talking to police stations because I give them my personal number and they all call me. Police stations called me and said, we caught this guy. He did not print out the authorization letter, but it was in his phone. You have to tell him that he has to print it out. And things like that.
I had to convince people not to arrest them because they were really legit working, they weren't doing dodgy stuff. So at the time our team had to ask ourselves, do we want to struggle and go through this period with all our customers, and our service professionals, or do we just want to take a break? And we said that if at this point where everybody needed us, we weren't here for them. Then actually, why do we exist? So we all made a collective decision. Everybody voted and we made a collective decision to take salary cuts, whatever it was required and we didn't release like a single person and we just went through this period together.
And you know what, the thing tank for two weeks and then it started increasing, and increasing, and increasing. And we were like, hey, where's this barely supposed to be? And then we realized that, oh, gosh, we don't have enough service professionals because the demand is increasing. Everybody's at home. They want to do up their places because they're now working at home. They realize that they need a proper desk, they need air cons to be working. They need us to construct additional room and stuff like that. But our service professionals still had problem coming to the market. So then we had to acquire, and acquire, and acquire. And ever since COVID struck our volumes have definitely increased far beyond what they were pre COVID, but what was interesting now we need it to acquire service professionals of different types.
So previously it was the usual stuff, cleaning and all that. But now we have a lot of people who want to extend the special study room. They want to renovate part of their homes. They want to lay proper floors, so that it's comfortable. So they want to make their home a pleasant place to be, rather than just coming home at night to sleep. So I think our business is a lot stronger after COVID in this pre COVID and the volume seem to be sustaining it, wasn't like a bump and then it went down. People continue to view their homes as important part of their daily happiness.
Jeremy Au (00:54:54):
Wow. What an amazing journey because I think, a lot of people who are outside in a pandemic, it's like, okay, these industries, the pandemic was definitely a tailwind and then for other industries it's a headwind. And it makes it sound very simple but I think for the inside out, on a chronological basis, I think every business was going through that summit like, freeze, trying to understand what was going on and trying to decide whether to double down and how to do that. I think you get a lot of credit for seeing the wave of opportunity and pushing the team, I guess, to figure it out. Not every startup could have done that, to be honest, even with that tailwind.
Jes Min Lua (00:55:40):True. But the truth is it's not over yet, it's still going on.
Jeremy Au (00:55:47):
Yeah. I mean, other ones in Singapore, Vietnam, Taiwan, Indonesia, and Malaysia obviously are all back under some form of MCO or lockdown. Yeah. So and I think what's interesting is, as you think about that demand and supply obviously, we're talking about pandemic as driving demand in some aspect. But yeah, let's talk about something very fundamental, which is the whole marketplace demand and supply, where you're like, you figure out and solve one side and then after that you succeed with your experiment and then you run off to the other side to, I don't know, chase the chickens supply side. So is that like a tip for people with two-sided marketplaces about how they should think about how to manage a team? Because sometimes it feels a bit erratic, like suddenly one month you're doing demand and another month you're doing supply as a parity. Is there any tips on how to organize or manage a team to chase both at the same time or on alternate months? How do you do that?
Jes Min Lua (00:56:48):
So this is a very, very long question. I think anybody who operate marketplaces of... So we call it liquidity, how much we are able to coral our supply to meet demand at any one time. And there are sometimes where demand outstrips supply, and some months where supply outstrips demand. And for a marketplace, it cannot vary too much because if one site falls off, the other side will fall off. And you always want to get yourself in a positive way. I tell the team the positive spiral more demand, therefore more service professionals, therefore more demand, therefore more service professionals. The moment that reverses, which means like, too little service professionals, customer says that, "Oh, I can't get fulfilled. Why do I come," less customers, less customer service professionals and that is a spiral of death. So for a marketplace, we always have to make sure things are in a positive spiral moving up.
And I mean, there are a lot of things that we do right for marketplace to make sure that these things are always balanced. So automated methods of acquiring service professionals. So for example, when there's more demand, does your product naturally encourage more service professionals to come on board? And with more service professionals, how do you then use that to give more certainty to the customers that they are indeed getting the best of the best of these professionals. So it took us quite a few years actually to work these things out. So these things are built into the product today. However, when you're launching new categories, it's always necessary to figure out what are the right characteristics left to get everyone to the market. This problem is not just in marketplaces, every on demand is similar.
I don't know if you've heard, but in Malaysia now, actually when the economy closed, a lot of people lost their jobs, so they all became delivery riders and food riders. And then suddenly when the economy opened up, they all went back to their proper jobs and then suddenly you have a shortage. So by no fault of the platforms, we suddenly have a shortage in delivery riders and you cannot order food from anywhere. No one's available to deliver it for you. So this is a problem that I think all on demand, all marketplaces have now.
Jeremy Au (00:58:55):
Wow. I really liked what you said. It would just, not just the characteristics by category entry, but also, the team management. But I also really like the part where you're like, explicitly designing features to help manage the other side, when one side goes up or goes down. So that's actually a really good tip, I think, for people who are handling two-sided marketplaces.
Jes Min Lua (00:59:16):
Yeah. And it's not just a take rate because if you always think that you can play with the take rate in order to do that, you will find that you're always using margin to get people to behave the way that you want them to. And that's the worst thing, because every time you troll promo codes for example, or every time you reduce your take rate in order to encourage more supply to come on, it's actually margin diluted and you don't want that to happen all the time. So when things are good, you want to earn more. But if you find that when things are good, demand is going up, you need to use your margin to get people to the market again. Then you find that there's a dampening effect on your pool.
Jeremy Au (00:59:51): Interesting, yeah.
Jes Min Lua (00:59:51):And I definitely am not the expert when it comes to this. It's such a complicated thing, but it is the one thing that we've been trying to tune over the years. And it is fascinating, totally fascinating.
Jeremy Au (01:00:05):
Yeah. I think there's actually amazing insight that suddenly just dropping knowledge here because I think when you use, adding financials, that seems to be a current incentive, but I think if you've deteriorate your ability to collect cash for your own company, it deteriorates the actual ability to design product and UX improvements that actually improve the liquidity in a different form or fashion, which is psychological or behavioral incentives. And I think it just goes back to the existing bias for a lot of people who built a set of marketplaces, they think everybody is an economic rational agent. And so they think money is the big incentive for everybody but it may not necessarily be.
Jes Min Lua (01:00:45):
It may not necessarily be. So for example, we recently did a poll and we asked our customers and service professionals, why do you stay with us? Because our take rate is not the lowest. I've never believed in throwing prices or throwing take rates when it comes to a marketplace. And the reason is because we're dealing with people. So a factory can, if they had extra stock, they can always throw the margins on the products because every subsequent product, as long as they cover their marginal cost they're okay. So in a way, they can actually throw it for very low price. But for us, we can't because we're dealing with humans and every human only has eight or 10 hours a day. If they start to work 10 or 12 hours, they will exhaust themselves.
So I cannot increase their working hours and decrease their take rate per hour, just to make sure that they earn more because there's a limit to that. So we never believe in throwing price, we never believe in taking the lowest take rate because it's simply not sustainable. But instead what we do is, we train them, we prepare them to pass roadblocks and we build relationships so that they know that come good time or bad time, we will be there to support them in whatever they are doing. And recently when we did a survey, we asked them, why do you choose us despite the fact that you probably have one or two options out there? And they say, because you really believe in helping us. When times were bad, you were there. And because you helped me, I help you. And I'm like, oh, wow. You know, you have thought of everybody like you see, he's an economy player. I just want to maximize my own returns, but turns out that, loyalty does exist.
Jeremy Au (01:02:24):
Yeah. And I think that makes total sense because on a very logical way is like if you can preserve a fair take rate, you're just using that to build out the rest of your team, which is your customer support, your ability to help both sides of the market, better UX design. It does flow back to them actually. So it does take a little bit longer, but it's more recurring and more stable as an improvement versus take rates. Well, we're coming out of time here, Jes. So I was just wondering, when you look back over your career, could you share about time when you were brave?
Jes Min Lua (01:03:05):
Wow. A time when I was brave. Okay. So a lot of people think that, coming from a consulting career where salary is always high, you never have problems with money in your bank and stuff like that, to coming to an entrepreneurship world where sometimes you don't pay yourself for like six or nine months, I'm not joking here. Sometimes you really don't, if you don't have enough cash. I was brave. They think I was brave, but the truth is I don't think that was bravery because I had some savings, in a way I'm building my skills in an area that I know that if I just needed to drop this and go back to work, someone would hire me, because the skills that I built are valuable skills.
So from that perspective, I have a very strong safety net and I know that no matter what happens, I can always go back to work. So I don't think that was bravery. But I think what was brave was starting this thing at the same time where I wanted to start a family. A lot of people put off having children or put off starting something exciting on their own, because they think they want to start a family, because they think, oh, how would I handle these two things? I think that was brave of me to just decide that no matter what happens in life, I know, God will help me through it because you don't know how long it takes for you to have children. I wasn't in my 20s where you can just have children at the drop of a hat. It's something that you need to plan towards, something you need to try for a few months, that sort of thing.
So I needed to start already. I couldn't just put it off until I was 45 or 50. So I just went and did it. And honestly it was very, very tough. Because at the time where I gave birth to my first daughter, it was a time where we raised our first round of funding. And I remember at a time where, I was in a hospital giving birth and I know that my IC was in one week. And then I needed to train my co-founders to pitch on my behalf. And they are very different from me. I like to talk and I like to explain stuff to people, but they are real operators. And some of them are also very much introverted. So I had to train them to get them to do an IC on my behalf and honestly, I was very, very nervous.
I remember the second day after I gave birth, I was in the hospital. There were slides on the bed, there was my laptop and I was on... I can't even remember what we used before then, but it was some phone call, but I was screaming at someone to say like, "This is not how you present. This is what we say," blah, blah, blah, blah. And then a nurse came in with the, I can't remember what it was, some injection or some painkiller or something, and I waved away. I say, "Go away, go away. I have no time for this." And she was like, "I've never seen someone as ridiculous as you, you should stop doing this." And then one week later we had the IC. We pass obviously, and it was all for good, but that period was very tough. Having very little sleep at night, trying to pass an IC, trying to make sure that the cash gets through, making sure that everybody was okay when I was not there.
At the time, the team was very small, like 10 or 15 people. So it was not like you could get people to pick up your job all the time. So I think that was truly brave, but if anybody was ever going through the same thing, I would just say, just go. You need to have faith that no matter what happens, you can do it. The people around you will rally to help you go through that period. And somehow you must have the divine confidence that it would just all work out. Yeah. That's all really I want to say.
Jeremy Au (01:06:40):
Wow. What a journey? I mean, as a new dad, myself, obviously, I just had to observe that process from the side. I mean, I was a founder and I did do a marriage during closing the series A, so some similar dynamics there. But I think, trying to be focused on a marriage while doing a series A fundraise is very different from obviously going through a pregnancy, a delivery, and labor and all that stuff with a fundraiser as well. So I think, kudos to you. And I'll say, you're brave both ways. I mean, I think, the first one, yeah I think we as people who have had the benefits of going to do our MBAs and having been consultants, we have that budget, our savings, we had that thinking to save up for that so we have that flexibility, but still, I think it's still brave to build something from scratch.
And like you said, it's also super brave to set up a family and keep going with the business. It takes a lot. Wow, Jes, I really appreciate you just sharing all of that. We're coming out of time here. So I wanted to talk about the three things that, I really appreciate you sharing with all of us. I think the first one is thank you so much for sharing about your early career and your childhood and yeah. I think you call yourself crazy but I think you've been crazy in all the right ways, to be a founder. So I guess it all worked out. And a second one, thank you for sharing, I think obviously, the dive between consulting and entrepreneurship, I think there's a big difference between being an advisor and operator. And even, especially within the context of Southeast Asia, like the 60,000 foot view versus and a one foot view.
And then thirdly, thank you so much for sharing, I think lots of great tips on how to run a two- sided marketplace from the beginning to market expansion, to dealing with the pandemic and doing the chicken and egg dynamic, between both sites on the liquidity side. And of course, the last thing here, is thanks so much for sharing your moments of bravery. I don't know. I really respect you for that. And I don't know, I really do, because I really struggled doing a marriage and a fundraise at the same time. Let's talk about me and my wife was like, gave me some-
Jes Min Lua (01:09:15):
Jeremy Au (01:09:17):Not Bridezilla, I was just very distracted while I was doing the wedding rehearsal. And I was just busy trying to close the transaction. So-
Jes Min Lua (01:09:25):Oh, gosh. I can imagine that-
Jeremy Au (01:09:28):Yeah. But that's nothing compared to obviously having a kid as well. So thank you so much for coming on the show.
Jes Min Lua (01:09:34):Yeah, although it was great to catch up with you again. I hope to see you in person at some point.
Jeremy Au (01:09:40): Next year, fingers crossed.
Jes Min Lua (01:09:42):Hopefully, okay. Get vaccinated okay, and then we'll see each other.
Jeremy Au (01:09:42): Yeah, for sure.
Jes Min Lua (01:09:47): Okay.