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Synopsis
The first step to a successful business is to create products and services that customers want. Companies must consistently innovate to stay relevant in the market. This episode will focus on entrepreneurship and the innovation journey - how these entrepreneurs broke the boundaries, carved their own paths and made an impact through innovation. After getting one foot out the door, this episode also explores the timeline of these impactful businesses and their progression in a dynamic business environment.
Transcript
0:01
Yvonne Chan
Welcome to futurepulse, a podcast series brought to you by IPI, your Innovation Partner for Impact. Together, we will explore how ideas, creativity and collaboration drive impactful innovation. Welcome to this episode of futurepulse, we're going to take a closer look at the Innovation Journey of Impactful Businesses. I'm Yvonne Chan, and I'm joined by Jeffrey Tiong, Founder and CEO of PatSnap, and Chew Ker Yee, the CEO of Winovus. Now, it's often been said that the first step to a successful business is to create products and services that customers want. Well, consumer demands are always changing, and companies have to consistently innovate to stay relevant. In this episode, we'll get Jeffrey and Ker Yee to tell us how they broke boundaries, carved their own paths and made an impact and are still making an impact through innovation. Jeff, you saw a gap in the market back in 2004, which prompted you to start PatSnap. Looking back, would you have done anything differently?
1:06
Jeffrey Tiong
Yes, there are many things that have happened along my entrepreneurship journey. I would say one of them was I should have emphasised more on the team and the people. Back in 2010, one mistake I made was, right after I got my first seed /angel funding, I expanded too quickly, and the product actually broke down. The product wasn't working, but I had hired a sales team. We grew from 10+ to 40+ people. But because the product broke down, we could not sell and (experienced) a lot of issues. I had to make the tough decision to lay off half of the company and back to 10+ people again. It was a really painful decision and we almost spent half of the funding, about half a million, in less than half a year. The reason why the product broke down and wasn’t working was because I hired the wrong people, and so on. But actually, if we looked deeper, it's because I didn't build the right team and I was lacking in leadership back then. So, there was one of the painful mistakes I made.
2:28
Yvonne Chan
Yeah, that was in the first few years when you just started PatSnap. And to add on to that pretty painful lesson, I know you also exhausted the initial $55,000 very early in the journey. How did that make you feel and what did you decide to do next?
2:47
Jeffrey Tiong
Yes, I was quite down and even at one point, I was thinking if I should return the money to the investor. But somehow, I persisted and just continued with the journey, and after a year, I could finally say that the product is good again. I think back then one of the beliefs I had, or at least one goal I had was, even if I fail this entrepreneurship, I should have at least a finished developed product that I can tell people, "Yes, I have failed a start-up. But hey, I did finish developing a product. "
3:43
Yvonne Chan
Yeah, I mean, you're not giving up halfway, right? Even if you had to switch careers or switch to another job, at least you have something to show for it. I think it takes a huge amount of grit and determination to not give up at that downstage that you were in, you know, having to downsize from 40 back to 10, and also go out there and get new funding and getting new investors to leave and trust in you. Thank you for that very candid sharing, Jeff. Ker Yee, let's bring you into the conversation too. I would love for you to tell us more about Winovus and how you entered the market with a ready technology to sell? Who did you sell it to then?
4:24
Chew Ker Yee
What we do at Winovus is nanoscale patterns. So, we create nanoscale patterns on the substrate. It's something like moulding of an Ang Ku Kueh, except that our Ang Ku Kueh is the size of a red blood cell. So, by creating the pattern on the Ang Ku Kueh, it can actually give it its additional optical and physical properties. So what we do is very different from the conventional way of innovation. In conventional innovation, you look for an unmet marketing need and then you look for a solution to fit that need. But for us, we actually have the nanoprinting technology and we have to search for the market problem that it solves. Our main application is on the medical, diagnostic and sensors market. So we are working with our customers right now to test out our solution and to see how our solution can help them solve their problems.
5:24
Yvonne Chan
Nice. So, you went to them with a ready solution?
5:28
Chew Ker Yee
Yes, that's right.
5:28
Yvonne Chan
To see then how it can be applied, you know, in various scenarios. That's very cool.
5:32
Chew Ker Yee
Yes.
5:32
Yvonne Chan
Thanks, Ker Yee. I want to ask now, whether you think there is a formula to innovation and success, or is it more like, okay, I create the formula as I go along? Or it's like, hard and you know, tried and tested method? Jeff, what worked for you and PatSnap?
5:50
Jeffrey Tiong
I will say there isn't a methodology to really innovate, (instead) it is a lot of trial and error. But I will say one thing from our past couple of years’ experience in terms of innovating our new product is that I find that as the whole organisation grows, if you want to come out with an entirely or a new initiative, you really have to inject a lot of resources, and they have to run independently and not tied to what I call the mothership too much. If that's the case, once they do not have (the mothership), it will be hard for them to get the momentum (going) because the inertia of the organisation is so huge and everyone has different KPIs. The mothership, they will have certain KPIs, for example, maximise the market share, or sales, while the new initiative has a very different KPI. If you try to put them together or have them live under the same hood, then it will be very, very hard on the new initiative. So, what I found that works and we are still doing it now, is that whenever we have a new initiative, we set up an independent unit and let them have all the resources they can have on a smaller scale, but they still have all the resources to do whatever they need to iterate fast and to make the decisions and changes they want on their own.
7:35
Yvonne Chan
That's actually quite a generous approach, right? Autonomy for your spin-off. So, very democratic. They have their own decision-making process. And like you said, cut it off (and) sort of reduced ties with the mothership, so then there's avenues for them to turn out new ideas. I like that. Ker Yee, what do you think, on your side? Formula to innovation or trial and error?
7:58
Chew Ker Yee
Firstly, I don't think that there is a structured methodology to innovation. Step one, this is what you do, then steps two, and three and four. I think trial and error is important and I think addressing the right problem is very important. Identifying the right problem to solve is important in the innovation process. The second thing I think that's very important is you have to learn when to let go and to draw a different pen. So, you cannot be too stuck on your sunk costs. For example, you cannot say, "Okay, we have spent half a year using this method and it will be costly for us to move into using the next model." So, I think this is where the trial and error comes in. So, you need to be able to fail fast and apply a new method to test and solve it.
9:00
Yvonne Chan
That's right. Failing fast is important because you need speed and agility to survive in this kind of innovation and quick impact businesses. Partnerships, though, that's also key and I know you started very early in the innovation journey for PatSnap, Jeff. Did the type of partners you sought change along the way?
9:22
Jeffrey Tiong
Yes, I will say there are different types of partnership - core development, innovation kind of partnership, market channel partnership, and different types of partnership. (Based on) my own experience in developing a good partnership, it’s actually the same as I would say looking for a co-founder or looking for a really important team member. At the end of the day, you and the partner, especially the one who has the decision rights to drive the partnership, really need to have the trust and the ability to understand each other. So that is some of my own experiences.
10:08
Yvonne Chan
Trust and understanding. Ker Yee, your thoughts on this?
10:11
Chew Ker Yee
Right. Okay, the first thing we need to recognise is that the most intelligent people are normally outside of our organisation. So, we need to recognise that if you find the right people, they can help us refine our ideas and improve on it. So, for Winovus, when we want to innovate something, we look at who are the best people in this area, and we bring them in to work with us. Having said that, I think we need to train ourselves to recognise that there are people out there better than us. Yeah, and we need to train ourselves to listen to them and to work with them.
10:56
Yvonne Chan
I think Jeff, kind of shares that same mindset, right? When you talk about, you know, hiring the right people for your team to ensure that PatSnap also survives that long journey. What kind of entrepreneurial mindset are you looking at in your hires, Jeffrey?
11:16
Jeffrey Tiong
Yes, throughout the last couple of years, I could only say from my own experience, we tried to hire some senior corporate executives, who had never work in a kind of start-up environment, and so far, the success rate has been very low. For PatSnap at least, based on our own experience, in order to find someone who can survive and thrive in PatSnap, you need to hire entrepreneurial people. And what I mean by that is actually someone who can roll up their sleeves when needed and go down and solve the problem by him/herself. This type of people, at one minute they are talking about a 50,000 foot view strategy discussion, and at the next minute, they are actually at 500 foot view, solving a problem on the front line. So, I think that is one characteristic of entrepreneurial people. Second one, I will say, is to have what I call a growth or open mindset, where they're really open to ideas, open to new thoughts and keep learning. In our current hyper competitive world, especially with the internet or in a start-up world, by definition, a lot of things keep changing. So if we don't have a growth or a learning kind of mindset, you will find it very hard to survive. We have to always grow ourselves. So, these are some of the attributes, I will say, an entrepreneurial person should have.
12:56
Yvonne Chan
That's pretty descriptive. Yeah, having a very strong growth mindset as well as the kind of person that you want has to be very agile, being able to think high level but at the same time when it comes down to it, get down to the nitty gritty and get that problem solved on the front line. Is it easy to find such people here in Singapore?
13:14
Jeffrey Tiong
It is not even in Singapore, but I would say globally, where we have teams, it's hard. There are a few ways that I will try to identify (such a person), one being if they have started a business themselves or he/she has worked in a start-up for a period of time before, for at least kind of like two to three years. When I look at one person's resume, if this person let's say for the last three to five jobs, they have only hung around for one to two years, that is a bad sign because as an entrepreneurial person, everyone will make mistakes, but you have to live with your mistake. Whenever you are in a job for less than two years, I will say it's hard to do something complete. Someone told me this before, that three to five years is a good time. In the first year, you go in and try to understand (what's going on). In the second year, you make some mistakes and you try to live with it. In the third year, then you correct your mistake(s). So, I will say three years plus is a good timeframe. And secondly, it’s also about their background as well. If someone is entrepreneurial, their family members, their parents, their dad, or someone close to them actually have entrepreneurial experience and started a business, I find that that actually have a big impact on them as well. The third one being, if they have participated in very competitive sports, if there's a chance like now there's the Olympics, if there is a chance somehow we find someone who was an Olympian…
14:56
Yvonne Chan
Hey, never say never. Yeah, he might. You think that's good, an Olympian mindset?
15:01
Jeffrey Tiong
Yes, it's because about the attitude. Someone who is able to work hard until they become an Olympian, their mindset is, at a lot of times, similar to an entrepreneur as well. Like a sports player, we really need to have a great mental mindset. Someone, like an Olympian, would definitely have.
15:20
Yvonne Chan
That's so interesting. A resume with one to two years, one to two years kind of gap, are alarm bells for someone in the start-up phase. Whereas I think a lot of millennials, and sometimes xennials, also think that, "Hey, that means I am chalking up experience in all these various firms." But rather, to a seasoned entrepreneur, you would want someone to be able to stay the course. So, my job experience was four years and nine years, I think I still have hope with some entrepreneurial mindset there. Ker Yee, coming back to you, as a second-generation business owner, what do you think was key to your company's success? And I also want you to tell me more about the challenges, you know, in creating something that really transformed your family's business?
16:05
Chew Ker Yee
Right, first of all, Winovus is technically part of our family business. We actually sold off the family business and I co-founded Winovus with some of our ex-colleagues. So, I think one thing about working for a legacy business, you need to be able to change the way certain things are being done – the culture of the business. So, for example, we need to create a culture that’s mistake embracing. What I mean by that is we need to have tolerance for failures and setbacks where everyone can try so that people don't cover up their mistakes and can openly discuss about them and learn from each other. To do that, I think it's important for the top person, the key person, the entrepreneur, to set the tone and remove a blaming culture. So, a blaming culture will really kill innovation.
17:23
Yvonne Chan
And still staying on you, Ker Yee. Coming back to something quite current, how has the pandemic affected your business?
17:31
Chew Ker Yee
From an operational viewpoint, we were shut down for about three weeks last year. So, I was fearful because we only started operations in January, and in April, we received notice from the government that we could not operate. So, I was fearful because I felt helpless. There was nothing I could do. I've learnt two things from there and the first thing is, I've realised that we really need to invest more in manufacturing technology, so that even when there are no staff operating on your shop floor, you can (continue to) operate. The second thing is, I've realised the importance of the medical technology industry. This is one area that we are focused on and something that we will be putting more resources on. So, this is how the pandemic has affected our strategy and my thinking.
18:34
Yvonne Chan
And it had also made, you know, Winovus come up with more targeted strategies and targeted approaches going forward.
18:43
Chew Ker Yee
Yup.
18:43
Yvonne Chan
Thank you, Ker Yee. Jeff, PatSnap just garnered, most recently, that very coveted unicorn status. Congratulations. What advice would you have, for others looking to do what you did with PatSnap? And I mean, still in this current environment, to understand that there is this huge R&D boom going on right now?
19:04
Jeffrey Tiong
Looking back on my journey, I would say yes, entrepreneurship needs a lot of grit, determination, hard work, diligence, but there is definitely the luck component as well. I think PatSnap can come to where we are today also because of the environment. As you have mentioned, the R&D boom, especially since a few years back, actually even before that, if we were to look at the statistics. Since the Second World War, at least based on the number I have, since Second World War, every year the R&D expenditure has been growing even though there is a crash in the market, a financial crisis, the R&D expenditure globally is still growing year by year. So be it good time or bad time, the whole world including the governments, including the companies, are investing in R&D. Because if you don't invest in R&D, that means you are still using the current (ways of doing) whatever you have to do to do business, and it's just a matter of time that you will be out completely. To me, investing in R&D is investing in the future, especially right now, it is even more needed. The environment is very hyper competitive and is globally connected. For example, what we do in Singapore, your competitor is not just in Singapore, it can be from Shenzhen, it can be from Israel, and it can be from the US, therefore you need to innovate more. But innovation is actually getting harder as well. There was a statistic I saw from Harvard Business Review article. Over the past 40 years, R&D productivity has dropped by 65%. That means 40 years ago, if you invest $1 in R&D, let's say you get $1 return, today you will only get 35 cents in return. It's getting harder. There are various reasons why but I won't go into that. But coming back, for us, I will say because I think we are glad that we are in this juncture of an era that R&D is key, and what we are doing is providing a platform and tools for innovators, for R&D on the frontline to innovate better and we will continue to do that. Even after we gained this status, I told the team, it is BAU, business as usual. We still focus on the user, innovating ourselves and developing good products that the customer will use and are willing to pay for.
21:52
Yvonne Chan
So still remaining customer centric, you know, despite the new status, but at the same time, investing in R&D regardless of the environment or circumstance is quite the imperative for businesses to survive, right, in this hyper competitive environment. What's next on the agenda then for Winovus, Ker Yee? Because you've talked about those targeted approaches and strategies that the pandemic has brought about on the company? So, what's next?
22:20
Chew Ker Yee
Our substrates are used for medical or diagnostic applications which include early cancer and dementia detection. So besides these, we think that our manufacturing technology is the backbone supporting many other deep tech applications, including sensors, which is a growing market for us. So, the subsequent stage is testing and scaling up. We do believe that there's a lot of potential in the disruption and transformation in the nanofabrication technology. Yeah, so we will focus on that, our target market and scaling up.
22:59
Yvonne Chan
Testing, scaling up and focus on your competitive advantage, right? Your area of specialty, not trying to be something to everyone. And how about software as a service? It is so hot right now, like you said, Jeff. Reports say that you're going to use some of these latest funds for product development and to expand your sales presence, your team sales presence. I mean, you started from 10, now you have about 1,000, am I right? How else does PatSnap intend to stay ahead and what's on the horizon for you guys?
23:32
Jeffrey Tiong
Yes, as we continue to dive into serving the R&D and innovation market, we find that every vertical is quite different. Let's say, Life Science developing a drug is also a R&D activity, compared to developing a clean tech renewable energy car or electrical car is a very different R&D process and sequence even though they have similarities. So, moving forward, we are going to enter different vertical segments. So, Life Science is one, Finance is one, Automotive is one and others. So, that will be how we will continue to innovate and entering every vertical. To add on to the previous conversation we had on how to innovate, in each vertical we are setting up an independent team (that is) as independent as possible. And at the same time, our challenge is that we are very good at patents data and other type of data analytics, but when it comes to vertical, we have to hire a life science professional who has worked in the pharmaceutical company for many years and been in this space for many years, to work together with our guys who know what we know, and together they go on to merge their knowledge to innovate. These will be some of the challenges we face.
25:02
Yvonne Chan
I think one common theme that I'm definitely getting from the both of you today is you know how important having a diverse team with various capabilities is really key to building up the company's success in the long term. So before I let you go today, if you have one word of advice for our listeners, what would that be? If you say, okay, I've listened in to Jeff and Ker Yee, I just want to remember Jeff said this, Ker Yee said that. What are your parting words, Ker Yee?
25:32
Chew Ker Yee
Okay. I would like to ask our audience one question, what is it that you're not doing because of the fear of failure? So ask yourself, what are you afraid of? I think take the first step, move into the uncertainty, feel comfortable about it and then take another step. Yeah, so I think this is important.
25:57
Yvonne Chan
Where are you not doing because of the fear of failure? Okay, I will think about that too, probably quite a lot. Thank you, Ker Yee. Jeff?
26:07
Jeffrey Tiong
Yeah, I will say usually, when I talk to someone, I hope that whatever I share, helps to inspire them, the audience, similarly to Ker Yee actually, to inspire them to do something that they have been thinking of doing and just do it. Hopefully, through my sharing, for example, looking at me, like, "Hey Jeff, he is quite a normal guy, normal John Doe, and he can do good in something, why can't I do that?" So yeah, hopefully be some sort of inspiration.
26:45
Yvonne Chan
That's really nice. Thank you so much, guys. I really enjoyed the conversation today. And I appreciate the very meaningful and insightful sharing from both of you on your companies’ journeys. I mean, even though, like you said, you may have gotten one foot into the door, or you know, you think that you're you might be at the peak of your journey, but this is a highly competitive environment, there's a lot more work that has to be done to stay on that path of success. Some key takeaways from Ker Yee today, was really you know how important it is to drop that blame culture and being able to fail fast and not get too hung up on that sunk cost, so that there's speed and agility to survive in this environment. And I think for Jeffrey too, the importance of investing in R&D, regardless of how challenging the environment may be, is imperative to a company's survival in a globally connected and hyper competitive environment. So, thank you so much, gentlemen. My name is Yvonne Chan, thank you so much for joining us and we will see you next time for another exciting and insightful episode.