Entrepreneur’s Insight: Q&A with YuuZoo’s CEO – Social Media Trend & Entrepreneurship
It is a rainy Friday morning. As I entered the YuuZoo office at Chye Sing Building, nobody seem to have noticed my arrival. Every single one of the workers I saw in the office, is either busy on the phone or engrossed in their team discussion. There is not a single soul lazing around in the office and I don’t see any sign that their activities will stop any time. I start to wonder “Is today Friday?”
The whole atmosphere is filled with enthusiasm and excitement. This is the dynamic environment of a startup! But, for all you know, YuuZoo is not an ordinary startup.
The Singapore-based YuuZoo (stock quote: AFC) is the world’s first company that introduces social e-commerce (or social commerce) to the market. With a market capitalization of more than SGD 250M, YuuZoo is also the first social media company listed as SGX mainboard in the history of Singapore’s stock market. In fact, 3 project managers working in the company have become millionaires after its listing.
I am really looking forward to the interview with Mr Thomas Zilliacus, CEO of YuuZoo. Before we start, just a little background of Mr Thomas.
Thomas Henrik Zilliacus (that’s his fullname) starts his career with Nokia in the 1980. In 1986, he was appointed as Nokia’s very first Head of Asia Pacific and relocated to Singapore. He was tasked to develop the Asia markets.
In the mid 90s, he left to become an entrepreneur and currently runs investment company Mobile FutureWorks, which advisors include former Nokia’s mobile phones CEO Jorma Nieminen and Ericsson’s former CEO Sven-Christer Nilsson.
In recent years, he attempted to buy out Nokia Mobile in order to steer the company towards Android OS. On the very day that Microsoft bought Nokia Mobile, he started a new mobile company Newkia with the intention to bring former Nokia employee to develop new phones running on Android platform.
** A quick note here. The below Q&A has been edited to ensure smooth reading for the readers. Rest assured! More than 90% of the text below follows the exact same wordings used by Mr Thomas.
Qns 1: Technology has changed radically for the past decade. Internet used to be a place where people search and exchange information. Now, it has became an inseparated part of our social life. Thanks to the social networking website. what change or trend in social media, globally, did you foresee in the year 2015?
Thomas: Well, I think there will be a number of new ideas coming up. If you look back over the last few years, it has been very much dominated by names that have been around for some time and you look further back into the history, you will see that always there have been names coming up and then disappearing and new names taking over. Now, everybody is talking about Facebook as something that will be there forever. I’m very much doubt it.
Facebook is going to see a downturn as well just like before Facebook, there was MySpace. MySpace was before Facebook seem as the name that would there forever. Now, nobody even talks about MySpace much less than uses it. So I think that we are right for a new way and that is again where YuuZoo is coming in with a concept that it’s new! So, I think that the market needs a constant reinvention and renewal of the offers that are interesting for consumers and I think in 2015, we will see new names and ideas coming into the markets.
Qns 2:. YuuZoo is the first Singapore-based social media company listed on the mainboard of Singapore Stock Exchange Securities Limited (SGX-ST). The unique business model of combining e-commerce and social networking platform for companies is what big companies like Facebook or Twitter could not do at least at the moment. With the rapid growth of mobile users globally, how YuuZoo is going to approach the market in order to stand out from the crowd?
Thomas: Our business model, as you said, is new and in many ways unique. I think if you go in and look at what our business model incorporates. You’ve already seen that our business models do stand out from the rest.
Number 1, nobody else is building a business based on franchise model. Franchise model is one that able us to offer consumers in each market a fully localized version of shopping mall that we’re building. If you look at our competitors, they all have a one-size-fits-all solutions. Facebook is Facebook Everywhere, Twitter is Twitter Everywhere, Amazon is Amazon Everywhere.
We are a different company in each market. The brand is always YuuZoo but the solution is always localized starting from design and language but even more importantly for the consumers, in the mix of what we’ve offered to the consumers; this is something that we can do under the franchise model. That’s one thing we are different.
The other thing where we stand out is that we combine under one single URL: Social Networking, E-commerce and Gaming. That is also something that others do not offer. It is either you are in social networking or you are in e-commerce or you are in gaming and I think consumers like the simplicity in whatever they do. That’s why shopping malls are successful. Because you go to big shopping mall, you find everything there from nice café to sit down to shops that you could buy. We are creating the same thing in the virtual environment.
Last but not least, everything that we’ve built is built for mobile optimization. We are device-agnostic but we are always building it with mobile users in mind and that means we are creating solutions for mobile users, where growth is by far the fastest, are optimized and that is again something unique.
Others don’t do that. Others are built for desktop uses and then there is a mobile version which in some cases, it is not that fantastic. Some have been doing quite well but there are many companies who have not created good mobile version of the desktop solutions.
Qns 3: What are the challenges or opportunities for Yuuzoo in this new wave of social media?
Thomas: The opportunities are almost endless because I think that if you look at social media; Facebook is doing it wrongly from the point of view of the companies. Companies cannot make any money on Facebook. They create a big following in their fan pages but they are creating, through their following, a big revenue stream on advertising that Facebook keeps for themselves.
For companies’ incentive to be on Facebook is very limited because they are basically giving money to Facebook. Amazon is doing it wrong in e-commerce because they are not adding the social element that become so important that people make their buying decision. People want to communicate with the other buyers and they want to see the experience of the other buyers.
Because of how other companies are doing it. There are endless opportunities for us to get both businesses as well as consumers to start to use YuuZoo; not necessary so that they will move away completely from Facebook, Amazon or others. Rather, they will start to use YuuZoo in addition to what they are doing because YuuZoo enables businesses to make money and enable consumers to do social e-commerce in a very targeted way
As regard to challenges, the main challenge is when you fail to design a product that consumers like. Technology is well known for creating things that are fantastic from the technology’s perspective but terrible from users’ perspective. In that sense, we are not driven by technology. We are driven by the market. We understand what the users are looking for. I believe design is a challenge but it is a one that we are managing quite well.
Qns 4: Industry players have foreseen that there will be more marketplace created on instant messaging platform. Line is a good example. Ads usually annoy users. What kind of opportunities you see in mobile advertising?
Thomas: I agree. Mobile advertising is something that in many case, has not been implemented in a consumer-friendly way. There are a lot of consumers are pretty unhappy with the way advertising is “pushed” in their face.
We have a patented-pending solution where we allow users/consumers to chose the sector of advertising that they receive. Let say that a Singapore user want to receive ads relating to real estate.
We are developing a calling app. When there is incoming call, you will lift up your mobile phone to see who is calling and the number is displayed on top of the screen. Underneath, there is space to display ads. So, we will deliver user the ads in sector he has chosen – real estate for example here.
You click on the ads that you have previously chosen and after you are done with your call. It will direct you to the advertiser’s page. By doing so, it does not interfere the way you use the phone. More importantly, such advertising, instead of annoying, helped the consumer as the information is more inline to his interest. In addition, it also helps the advertiser to deliver the ads to the specific consumers whom is of their interest.
In short, we are very much on the consumer’s side. I don’t see any point of “pushing” ads to the consumers who will get irritated by irrelevant ads and stop using the app. We will only deliver ads on the conditions that users have allowed it.
Qns 5: You have highlighted an interesting trend in the global aspect. What did you think about Singapore or South East Asia in general? How does South East Asia companies or brands positioned themselves to capitalize on this rising trend in social media?
I think, in general, SEA companies are a bit lagging behind US and Europe in terms of creative thinking. When I say so, I am also referring to the consumers in South East Asia. South East Asia do not understand the enormous power that social media has.
I have a good friend who built one of the world’s first web design company in the early 90s. He has told me how difficult in those days to convince the companies to have a corporate web page. 9 out of 10 has commented, ” Why we need a webpage?”, “who is going to be on internet?”, “This is complete rubbish!”
What my friend had experienced is a bit like what social media today. Companies are still thinking that such advertising approach is “only for kids” and “We don’t need to be on social media”. They do not understand how quickly people are switching over to social media and how influential that social media could affect buying decisions. I think that companies need to understand that social media is not something that they could ignore. Otherwise, they will left behind.
Qns 6: Let’s bring the discussion to Singapore, there is a recent incident disclosed by a renowned Singapore blogger on the “questionable practices” by a local social media marketing company. what is your view on this incident? What advice you would like to give to companies or brands which is new to social media marketing?
Thomas: Advertisers have to be very mindful and don’t appear to be too smart. It is not about who you are getting the message across. It is more about how to do so. When you annoy people, it is counter-productive. Consumers will not buy into these brands if they are annoy by the ads.
I had an experience with the Olympia game several years ago. VISA has bought an exclusive advertising rights. However, all purchases could only be done with VISA card. In other words, if you don’t have VISA card, you can’t buy anything even food for yourself. This approach annoys consumers by forcing them to use VISA card. Once you are there, it is too late to apply one. That’s to me a counter-productive advertising.
Qns 7: You have done many interviews in the past. There was once you highlighted about the difficulty of hiring candidates in Singapore. What exactly the key qualities or skills that you are looking for in the candidates?
Thomas: In Singapore, you can find very good people in executing the works. Singaporeans are very diligent and responsible workers. What’s lacking is the creative mind – the ability to think of out-of-the box solutions. In my opinion, that’s something that pretty much linked to educations.
In certain countries, the people are taught in a way that is exactly what the book has written. Other countries, people are encouraged to challenge what they are taught. In our business, we need both kinds of people. People who are very dependable but we also need creative people which I feel it’s lacking among Singaporean workers. I think we have spent quite some time in finding such people.
Qns 8: For our graduates, do you advocate the idea of starting up immediately after fresh out from school?
Thomas: I think that’s a great idea. There are 2 ways to see this. One way is that you enter an established company and you learn before you start your own. However, by doing so, you lose time.
That’s also a danger when you do that, you become so comfortable with the safe corporate environment.
Being entreprenuer is risky. Your risk appetite declines with age. The longer you stay in the corporate environment, you are more reluctant to start up. From that point of view, to go straight to your own business immediately fresh out from school is, in many ways, a good idea as long you can tight up with partners and investors who have experience in areas that you are venturing in.
That are challenges in starting up especially so for fresh graduate without experience. However, I think there could be overcame. There are many VC and angel investors who are willing to help, not just by providing money, but also their expertise to the young entrepreneurs.
Qns 9: It is known that every investor has their own set of checklist while evaluating a business venture. As an investor yourself, do you mind to share with us yours?
To me, it is pretty much depending on the personalities of the entrepreneur. Education background is certainly not one of the areas that I am looking at. He could be a guy with no education but possesses good entrepreneurial personalities. However, I would like to emphasize that there are good entrepreneurs with good education background as well.
Hence, I will go in-depth in understanding the personalities of the entrepreneur and how he derives and approaches his business idea; not just building of the business but also, at the same time, how he is going to manage it. There are often a need to change track during the course of building the business.
When you are building a business, it is about ideas and creativity. Once you have reached a stage of managing it, it is much so about control and processes to sustain the business. In that aspects, it requires a change of management meaning different people to run the business.
I will not be impressed by people who show me fantastic idea or belief. So what it is a great idea? I don’t think people should be ashamed if they do not have a formal education. If they have good idea and right frame of mind, they could be extremely successful. Look at Mark Zuckerberg, he is a dropout from university so are many other successful entrepreneurs.
Not enough? See Q&A with Mr Ralf Wenzel (co-founder of foodpanda) here