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Budding Entrepreneurs Pitch Business Plans at CKGSB Forum
The Americas branch of the Cheung Kong Graduate School of Business (CKGSB) hosted an E-Commerce Entrepreneurs panel—featuring four young Chinese entrepreneurs working at, or running, web-based start-ups based in the US—on November 3rd, in New York City.
The panel, which was staged as part of CKGSB’s Knowledge Series, featured Lu Wei, product manager of Pokenet, a Pokemon-related app; Jaily Zhang, a pricing analyst at Jet.com; Xiao Rui, founder of several apps including Timi and BeforeTaxi; and James Wan, the co-founder of Yoollo.com.
The panel was moderated by Julie Zhu, CKGSB America’s Program manager, and the event featured three judges: Mary Wadsworth Darby, the Chief Representative of CKGSB Americas; Dr. Li Yong, a partner at IW Ventures, which focuses on China related investments; and Alan Chen, director of CKGSB Americas.
Zhu first asked the panelists to introduce their products, and give a brief overview of how they conceived of, and executed, their ideas.
The idea for James Wan’s Yoollo.com—a website that sells Chinese and Japanese snacks, which aren’t widely available in the United States—was borne out of the real-life experiences of Chinese students studying in America. “The reason why we started this company is that my co-founder went to high school in America,” Wan said. “But he wasn’t in New York City, he was in the middle of nowhere.” In most places in America, it’s difficult to find Chinese or Japanese snacks that students far from home crave, so Wan and his partner set out to create a solution.
Zhang, who serves as a pricing analyst for the online retailer Jet.com, shared her experiences working for a startup that achieved huge success when it was sold to Walmart for $3.3 billion in August 2016.
She told the story of founder Marc Lore, who realized that there was an unserved market in the ecommerce space for customers who want to save money through bulk purchases. Jet.com partners with online retailers, offering customers larger discounts as they add more items to their shopping cart.
Timi and BeforeTaxi
Xiao presented to the judges two separate apps: Timi, which helps connect friends who “you may know, but not very closely,” to meet up for meals or other social gatherings, and BeforeTaxi, an app that allows users to compare ride-hailing apps to find the cheapest option. Xiao said that his app can “help people save 20% of their taxi bill every month.”
Lu’s app was an attempt to capitalize on the Pokemon Go craze that became a global phenomenon in the summer of 2016. Pokemon Go is an augmented-reality game, in which users try to capture Pokemon using their smartphone. But unlike a normal video game, Pokemon Go users navigate their physical surroundings to find and collect pokemon.
Lu’s innovation was to create an app that helps users perform better in the game. “The key function is a real-time map that helps you track Pokemon,” that shows users where in their city or town Pokemon are located.
Unfortunately for Lu, Niantic, the company that created Pokemon Go, no longer makes public real-time data on Pokemon locations, rendering her app unusable. But before that happened, the app garnered more than 300,000 users worldwide, with 100,000 daily active users.
Questions and Answers
After their introductions, the moderator, Julie Zhu, pushed the panelists to explain weaknesses in each of their business models. One question she had for all the participants was how they expected to compete in markets that are already crowded. For instance, Jet.com is competing in the ecommerce space, where nearly every major retailer is beefing up their operations, not to mention online companies like Amazon.com that remain dominant.
Zhang argued that there is room for plenty of companies to cash in on the ecommerce boom, as the online retail industry is expected to growth from $3 billion today to more than $5 billion by 2020. “We’re not taking over Amazon,” Ziang said, arguing that Jet.com is simply going after the more value-concious online shopper.
Another issue that two of the panelists encountered was how to market their products. Perhaps the most successful of the entrepreneurs in this regard was Lu, who was able to ride the enormous success of Pokemon Go. The demand for products to help users succeed in the game was so large that her app was able to organically attract a large following simply through word of mouth and users touting it on social media.
For the other entrepreneurs, marketing was more of a challenge. To create awareness of his app, Xiao’s created a video game that he hoped would go viral. The game, which he released during the Valentine’s Day, was called “Kill the coupled dogs.” “Viral marketing has to trigger people’s emotions,” Xiao said. “One thing we really focused on during Valentine's Day is that some people really hate people posting pictures about their Valentine’s Day dinner.” In the game, users combat dogs who are paired off in romantic couples. The game leveraged people’s dislike of Valentine’s Day and caught on quickly. And once users are done with the game, it prompts them to download Xiao’s apps. The game garnered one million page views and 8% of users ultimately downloaded one of his apps.
Finally, Zhu raised the issue of customer service with the panelists. While app makers generally don’t have to deal with this issue because they are offering their products for free, the retailers on the panel said that it was a primary challenge for their companies. For instance, Wan’s Yooloo.com has just 2 warehouses and a handful of employees. That makes staying on top of customer service complaints a challenge and makes it all the more important to beat competitors on other metrics like price.
Darby was complimentary in her evaluation of the products presented, saying that “each one [of the panelists] has established an element of creativity and design,” in their products. What she saw lacking however, was a plan to “develop as an entity.” Creating good products, Darby said, is just the first step towards business success. Darby said that she would have liked to have heard more about how the companies will grow and what obstacles they expect to face in that regard.
Dr Yong argued that one issue that wasn’t raised by the panelists was that of investor interests. “Investors have a different perspective than entrepreneurs,” he said, emphasizing that if and when these companies take on outside money, the will have to focus on other issues like limiting risks that have not yet been analyzed by the panelists.
Finally, Alan Chen pointed out that two of the companies presented—BeforeTaxi and Pokenet—may face crippling issues when it comes to leveraging data that is owned by other companies, like Uber or Ninantic. If these companies don’t agree to share their data, these apps will be rendered useless.
Overall, the judges were impressed with the panelists, but argued that more work will need to be done, especially in terms of garnering investors and building a plan to increase revenue. Luckily, as Chen pointed out, CKGSB is well-positioned to help young entrepreneurs do just that. As Chen said, “If you attend a CKGSB program, we can help you with your business plan, understanding your customer acquisition costs, how to evaluate a company and how to make a pitch to venture capital firms.”