Many companies claim to value their employees, but how many tangibly express appreciation for the people who keep the business running? In Taiwan, Vpon is trying to do just that by earmarking 20% of its shares for employees, providing a minimum of 16 days starting personal leave (more than double what typical Taiwanese companies offer), and adding more perks to create an enjoyable work environment.
Giving back to employees is part of the company culture being built by Vpon's Founder and CEO Victor Wu. Wu says this is because “A startup isn’t just buying an employee’s labor, it’s buying that employee’s youth, hopes, and dreams. We owe it to each employee to give back as much as we can.”
Vpon’s story began in 2007, when Wu won first place in an entrepreneurship competition in the UK, where he was a student. This was when feature phones still dominated the market, and Wu began building a product that would allow retailers to employ mobile coupons in their businesses. As with many startup journeys, Vpon didn’t find success overnight, and there was much to be learned along the way.
After returning to Taiwan from UK to start his career, Wu and his partner got to work building a customer base. Vpon gradually collected numerous heavyweight clients like Starbucks, PartyWorld, and even Nokia, which led the mobile industry at the time and pre-installed Vpon’s app in its devices. “In theory,” he says, “we should have been seeing solid profits from all of this, but unexpectedly the business stalled.” It was at this time that Wu reached his lowest point, fearing for the future of the company. Unsure how to turn the business around, Wu and his team dove into research, and ultimately decided their best course of action would be to pursue mobile advertising.
For three years, Wu poured everything into turning his business into a success, devoting himself to the emerging industry of mobile advertising. Not only did the company have to essentially reinvent itself from scratch, but boldly choose where to invest the company’s resources: coupons or advertising. At the time, the team looked at the problem like this: You have two trees, but only one bucket of water. By sacrificing one tree and giving all of the water to the other, you will lose one tree, but the other will have the chance to grow strong. In the end, the team decided to let go of their mobile coupon model to fully concentrate on building a stellar mobile advertising business.
Still, there was a steep learning curve for Wu. “At the time we pivoted to the advertising business, I did not even know the advertising terms CPC (Cost-Per-Click) and CPM (Cost Per Mille),” he says, shaking his head. But he felt he needed to meet the challenges of educating himself in order to lead his team. After communicating the change to existing clients and building out the new business model over three months, the team was on track for a full transformation into its current form, but naturally there were more obstacles ahead.
Finding an investor is like finding a girlfriend
As with any startup, Vpon’s next big problem was financing, and Wu had to convince VCs that his company was worth investing in. According to Wu, “Fundraising is a lot like predestiny. It’slike looking for a girlfriend -- if one of you doesn’t like the other, it won’t work, but if you both are interested and are a good match, you’ll have a good future together.” Adding to Wu’s learning curve was a new market for the company: China. Early on, Chinese VCs remained doubtful about Vpon, so Wu chose to first return to Taiwan and stick to the market he was familiar with until the business model was solid. “Fundraising is never smooth sailing. You need to identify problems and clarify why VCs aren’t willing to invest, and then make the right changes.” Later, Vpon successfully signed on with McDonald’s, the startup’s first Chinese client, setting the stage for Wu’s business to take off in China and to begin attracting the right investors.
Advice to the new founder
Throughout his startup journey, Vpon’s CEO says he has been fortunate to have the support of others in positions of power who were able to open doors for him. For instance, Wu emotionally recalls proposing his mobile coupon service to the head of marketing at Starbucks, who told him that Uni-President (the parent company of Starbucks in Taiwan) didn’t go for untried concepts, and certainly not with such a small company. “However,” stated the Starbucks representative, “we want to support young Taiwanese entrepreneurs, so we’re willing to give you a shot.” Working with Starbucks became one of the company’s first big breaks. Later, when Vpon was breaking into the China market, Wu was able to tap into his network of advisors, who made introductions that led to Vpon successfully fundraising millions.
Now that Wu is himself has years of business experience under his belt, he is eager to help young entrepreneurs the way that others helped him when he first started out. Some pieces of wisdom from Victor:
3 Essentials for Any Business Plan
No one gets everything right when they first begin. “My first business plan was only 4 to 5 pages, and ended up being something like 70 pages,” Wu says, laughing. Now he has learned that there are three important things to focus on:
Market size. MBA programs will tell you that VCs are typically only interested in companies pursuing a $10 billion market or bigger. But remember that numbers aren’t the only thing -- you must have a sexy, disruptive story to appeal to investors.
Differentiation. Your business strategy, product positioning, product features, and marketing absolutely must be unique. If you are doing things exactly the same way as a larger company, you’ll get killed in the marketplace.
Team. You can have the biggest market and the best differentiation strategies, but without a strong team, you’re just daydreaming.
Play the imitation game -- strategically
Wu is unembarrassed to admit that he researched and employed many existing strategies from other companies in the process of building his startup. Using Tencent as an example, he argues that there is nothing wrong with copying ideas as long as you do it in a strategic way. Wu explains that creativity comes at a high cost because testing a new business model, promoting it, and educating the market are resource-intensive. Naturally, there’s more at stake the larger your business gets, so he advises new founders to exercise their creativity and experiment with big ideas early on and adjust as needed.
Paying it forward to the next generation
The past two to three years have seen a tremendous amount of change in Taiwan’s startup ecosystem. As the ecosystem grows, we are seeing more “old hands” available to pass on their experience to the next generation of founders. To Vpon’s CEO, it’s up to these experienced entrepreneurs to engage and commit to growing the ecosystem. “If our current generation does not build the framework for future startups, what will happen to the next generation of entrepreneurs?” Wu ponders. It’s with this in mind that he hopes to devote more time to helping new founders, giving them the same kinds of chances others offered to him at the start, and encouraging them to overcome the kinds of obstacles that forced his business to pivot. He says, “In startups, you may stumble, you may fail, but the key is to brush yourself off and jump right back into the ring!”