Steven Lam always had an entrepreneurial spirit.
From teaching himself to fix bikes, to selling electronics and serving hot dogs, the high school dropout got creative in his teens to progress up from the low-income family in which he was raised.
But the venture that shot him to fame and spawned Hong Kong’sfirst unicorn — a start-up valued at $1 billion or more — was actually born more out of accident than anything.
The idea came to Lam and his two fellow co-founders when they were working on another business entirely: A start-up selling advertising on takeaway boxes.
They’d discovered the ad opportunity while working together in a Chinese restaurant in California to support their MBA studies at Berkeley (Lam had reignited his academic career after moving to a stateside community college). But, bringing it back to their native Hong Kong, they found a major issue in distributing the boxes throughout the dense city.
It was 2013 at the time, and ride-hailing platforms were gaining momentum internationally, but the delivery industry in Hong Kong remained very traditional. That meant businesses such as Lam’s had to rely on call centers using radio frequency systems to hire drivers for jobs.
For Lam, Nick Tang and Reeve Kwan, that was too inefficient — especially because they had to complete the majority of their deliveries by 10 a.m. They thought there must be a better way.
“One morning we had to deliver 100,000 boxes and it was very chaotic,” Lam told CNBC Make It. “So we decided we had to find a solution.”
Just start. You’ll never get anywhere if you don’t start.
Starting with a WhatsApp group
When looking for a solution, the trio quickly realized they could work much more effectively if they consolidated all of their most trusted drivers into one platform.
At the time, they had no intention of disrupting an entire industry as Uber was then doing in the U.S. They simply wanted to ease friction at their ad start-up. So they started small — very small — creating a series of WhatsApp chat groups to use as platforms to post jobs for the city’s best delivery drivers.
“I didn’t even know what Uber was then,” said Lam. “We started to formulate our product on our own.”
The idea worked, but almost too well. Drivers responded to jobs, but because WhatsApp groups were then limited to 10 participants, and drivers were pitching for work on multiple chats, it became hard for the trio to honor their first come first served policy.
“That solved some of our delivery problems, but we decided it would be better to have a big group. That wasn’t possible on WhatsApp at that time,” said Lam.
However, it helped the then 20-something founders unearth a greater, underlying issue.
“The more we spoke to the drivers, the more we realized they were dissatisfied with the radio frequency system,” said Lam. “And so we were stupid enough to carry on.”
It was at that point that the scales tipped and on-demand logistics platform GoGoVan, as it’s known today, was born.
Hitting the road
Lam and his two co-founders had stumbled across the all-important business pivot, but now they needed to bulk out and hire the people who could make their idea a reality.
So they pooled together what they could — 20,000 Hong Kong dollars (about $2,560) — hired what Lam described as a “shoebox” office in Hong Kong’s Kowloon district, and took on their first two employees: A technical engineer and a designer.
With a larger platform that could far exceed the speed of the radio frequency system, the team quickly began to see interest from drivers and other businesses. But, in order to scale, they needed cash, fast.
Nine months after starting the business, the company successfully managed to secure one of the only funding schemes available in the city at the time: A microfund of 100,000 Hong Kong dollars ($12,812).
“By September, we were running out of money,” said Lam. “They saved our lives from the edge.”
That got the ball rolling, and GoGoVan soon gained additional cash through several investment rounds, allowing it to triple its office size and expand the business internationally.
Yet despite the increasing success, Lam said his time spent watching the pennies in his early years has stuck with him and has been instrumental in reaching those milestones.
“One success factor was running on limited resources,” noted Lam, who said he would frequently go into the office over the weekend to clean.
“It’s that mentality of not waiting for someone else to fix the problem, but just doing it yourself.”
Advice from the best
As CEO of GoGoVan, that’s an attitude he tries to instill in his 2,000 employees and other would-be entrepreneurs.
“To most people who want to do something, (I’d say) just don’t wait,” said Lam.
“I learned in these past five years that there’s no perfect timing,” said Lam. “What is perfect? Most of the time we don’t know what perfect is. If we don’t know what is perfect, why do we need perfect timing?”
“It’s like (Amazon’s) Jeff Bezos says: ‘I just need 70 percent of the information, not 100 percent. If we wait for 100 percent of the information to make a decision, it’s too late. Some decision is better than no decision.’”
“Things like that are really true, including (for) starting a company,” Lam added. “So just start. You’ll never get anywhere if you don’t start.”
Source: CNBC, Dec 6, 2018