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Growing up in Canada
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Starting an eCommerce company while studying at Emory University
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Going back to Hong Kong to start a business there
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How a lack of technology inhibits scale
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Online-only stores being unsustainable
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Building a wholesale market for retailers
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What he learned from talking to potential customers
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Dropshipping versus more traditional eCommerce
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Raising capital
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What growth looks like for Peeba
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I Stumbled Across One, and I Thought I Could Make It Better
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It’s Too Much Work for Unclear Value
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We Only Make Money When They Make Money
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We Have to Grow Fast and Big
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It’s Hard to Squeeze Efficiency and Value
Read the best-effort transcript below (This technology is still not as good as they say it is…):
Michael Waitze 0:13
Hi, this is Michael Waitze. And welcome back to the Asia Tech Podcast. Today we are joined in the studio, I love when people go into the studio, by Jacky Lai, the founder and CEO of Peebaa. How are you doing, Jacky?
Jacky Lai 0:27
I’m doing great. Thank you for having me.
Michael Waitze 0:30
I cannot thank you enough for coming physically here. It’s just such a different experience. I think when the guest is in the room, don’t you think so?
Jacky Lai 0:37
Yeah, it’s totally new.
Michael Waitze 0:39
totally new. What did you think about the little tour we did of True Digital Park?
Jacky Lai 0:43
It’s very interesting. Very different from Hong Kong, I would say…
Michael Waitze 0:46
Well, how so though? I mean, I haven’t been to Hong Kong, obviously, in two and a half years because of the pandemic, but probably in like five years even before that.
Jacky Lai 0:54
Well, I guess everything else is just a lot smaller. Right. There’s just not enough space to do things like this. Right. But I think yeah, I think it’s interesting that the startup sort of scene in Thailand, like it’s sort of propelled by things like these? Yeah,
Michael Waitze 1:11
I think so. I think so actually, you came on a really good day, you can see in the room across the way, there’s like a big meeting going on. And that meeting is a combination of startup to corporate. And that’s kind of what we want this space to be. I don’t know, I love coming here every day. Why don’t we get a little bit? You’ve already mentioned Hong Kong, but why don’t we get a little bit of your extended background for some context?
Jacky Lai 1:32
Sure. So I actually grew up in Canada.
Michael Waitze 1:38
You grew up in Canada?
Jacky Lai 1:39
Yes. So I grew up in Canada when I was 11. My family is actually in supply chain. So they do manufacturing for different companies around the world. Actually, this is the reason why I am very interested in supply chain, really a lot in green and sort of my family history. Yeah, so I was in Canada and then moved to the US graduated from Emory. Emory, Emory University. Yes. And then from that point on, I decided not to work for anyone. So I started a company and E commerce company. That that for a few years. Thankfully, it was it was it was sort of quite well.
Michael Waitze 2:25
Can I ask you this though? Emory is the one in Atlanta?
Jacky Lai 2:28
Yes, yes.
Michael Waitze 2:29
So, if I remember correctly, my brother did his residency. He’s a neurosurgeon at Emory University Medical Center, medical college or whatever. I went down there to visit him Emory is a great university. And normally I would ask, like, what would it be like to come from Hong Kong and go to Atlanta, but from Canada to Atlanta is not a big stretch, right.
Jacky Lai 2:47
Atlanta is awesome. Awesome. So I think it’s, it’s a place that it’s sort of like a really big city. But then everything is so reasonable. Yeah. It’s a little bit like Bangkok. Talk for short of the US, you know,
Michael Waitze 3:05
in a way. And look, CNN made their headquarters there. Right. So once CNN did that, it kind of changed the tenor of what Atlanta was, it became this sort of very international city, in the Southern in one of the most southern states in the United States. Yeah, it had a really interesting impact on it, right?
Jacky Lai 3:24
Yes. I think Coca Cola is also there. That’s a
Michael Waitze 3:27
really good point, actually. So you got Coke. And CNN there, Coca Cola and CNN there. That is two massive globally known brands. Yes. Wow. Yeah. So you enjoyed going to school though? Yeah. Do you go for sort of Freaknik?
Jacky Lai 3:40
what is that?
Michael Waitze 3:41
It’s no idea. They had this outdoor is almost like a music festival. Okay, that they had there. Maybe it was it was before, you
Jacky Lai 3:49
know, I have no idea. I don’t I don’t usually do those. Do those
Michael Waitze 3:53
things? Yeah. What kind of ecommerce company did you start? And was that in the US? Or is that back in Asia?
Jacky Lai 3:58
In the US? Oh, so I did that. While I was in college, actually the last year of college and I did that for a year and a half, two years.
Michael Waitze 4:06
What was what was the whole thing? So
Jacky Lai 4:08
it was Penny Auction business? Go ahead. So everything started at a pennant? Yes, everything started at a penny and then people need to sort of pay to bid. I don’t know if you have heard of those before, but we are actually one of the largest in the world back then.
Michael Waitze 4:24
And do you still own it or no, you
Jacky Lai 4:25
still know so? Yeah, I eventually have to exit the business. Yes. Okay.
Michael Waitze 4:31
But that’s interesting. Why e commerce? Why does a guy whose family’s in the supply chain business start an E commerce thing? And is there connectivity there where you thought like, I could get products from the Far East into United States because I understand that supply chain or that had an upside
Jacky Lai 4:46
with that as well while I was in college, that’s how I sort of made a little bit of money. So I did that as well. But then ecommerce why Penny Auction? I just happened to stumble upon one and I thought that I can make it better. That’s the reason.
Michael Waitze 5:04
I love it. And I love how you say in passing. I graduated from college and I decided I wasn’t going to work for anybody.
Jacky Lai 5:11
Yes.
Michael Waitze 5:12
So was your was was your cohort of kids at school? Were they really entrepreneurial? Do you stand out? You know what I mean? Are we just hanging out with a bunch of guys and gals that said, nevermind, I’m not gonna go be a consultant. And I’m definitely not gonna go live
Jacky Lai 5:24
Sark. I think I think I have that in my mind. I think even when I was young, that’s just me. But I I sort of regret a little bit. I don’t really Yeah, I think I need to have sort of one to two years of sort of experience. I guess it’s just for life. I thought, you know, it’s just more interesting.
Michael Waitze 5:45
But do you think, do you think you’re even employable? Not because you’re not smart? Not because you don’t work hard enough for those reasons. But because, think about it, you saw the Penny Auction thing and said I could do it better as a kid. So do you think you could actually get hired into I don’t know, like, some big consulting company? You know what I mean, like Accenture and have them go, Okay, we need you here at seven o’clock in the morning. And you need to be here until midnight, and when’s that deck and be ready, and you got to work on Saturday. Do you know what I mean? Yeah,
Jacky Lai 6:11
I mean, I think I think even if I am not I should learn to be able to. Okay, that’s, I think that’s, that’s sort of the discipline that, that I wish I had learned. You know, I think I think it’s important to be a good follower,
Michael Waitze 6:26
you know, interesting, really. So I had a friend once told me and I think he was being derisive actually towards me when he said this. Although he didn’t say it directly about me, I think he said, The world is separated at scale into two categories, generals, and soldiers. And he said, some people are just really good soldiers. And he was like, I’m a general. Do you feel like it’s important to learn what it’s like to be a soldier? Absolutely. You can understand how good I like how hard it is to be a good general. You know what I mean?
Jacky Lai 6:59
Absolutely. I think that’s, that’s necessary. How can you be a good general without knowing how to be a soldier? Yeah, I
Michael Waitze 7:06
don’t know. I don’t think you can. I don’t think you can. But if you look at you know, if you look at military school, right, they take these guys and put them right into officer school. Yeah. And a lot of them never see the front line. They just end up being generals or admirals, or whatever that is in the Air Force, right?
Jacky Lai 7:21
I don’t know. Yeah, to me, it’s just important to know,
Michael Waitze 7:26
I think so to look, when I was at Goldman Sachs, right. I enjoyed the fact that I knew how to do the job of the people that worked with me. And that worked for me. Right? Because if, and even on the IT side, he’s to have these arguments with the guys that did our tech support and tech development, they would say, oh, we can’t do that. And I would say, Wait a second. If you look at this, and that and this and that. I know that that’s possible, right? And I’d go through whatever it was, it was dotnet. If it was C sharp or C++, I’d run them through. And they’d be like, Oh, darn it. Okay. Well, we can’t pull the wool over this dude’s eyes. But that’s important, I think for being in a management spot. No.
Jacky Lai 8:03
Absolutely. I mean, that’s one thing that I think I, I would have changed. You know, I can start something anytime. You know, maybe, maybe, yes, maybe maybe at the same time, I think. Honestly, I think it’s just a different experience. Yeah. It’s just totally different. So
Michael Waitze 8:22
So, and again, I’ve been accused a lot of like, golden handcuffs, right? Because like, once you get into that system, you also get into a lifestyle. It’s just hard to give up anyway. So I hesitate to ask this right, because you didn’t really come back to Hong Kong. Did you? Or did you like when you thought about because you grew up in Canada? I presume at some point your family emigrated from Hong Kong to Canada?
Jacky Lai 8:47
No, they did not. It’s really just me and my brothers. And my mom went to Canada, you know?
Michael Waitze 8:56
And was it 1997?
Jacky Lai 8:59
1998. January,
Michael Waitze 9:01
right. So but there was still some concern about the handover back then. Yeah, that was the reason so your dad and family were like, Okay, if anything happens, you guys are in Toronto, or wherever it was right kind of thing. Vancouver, Vancouver. Yeah, fair enough. But there was a big and look, Canada made it really easy back then. For people from Hong Kong. To come to Canada.
Jacky Lai 9:20
i You don’t know that. I was 11 years old.
Michael Waitze 9:23
Don’t ask me any question. I
Jacky Lai 9:25
have no idea. I was like, how? Yeah, I mean, I just knew I did. Oh,
Michael Waitze 9:31
I know. I know. Because there were a lot of people that were in Hong Kong that I knew that actually did that with their family. So fair enough. So in a way you did come home, but what made you decide to come back and do this thing do pizza?
Jacky Lai 9:43
You know, I? I guess I just wanted to do something for my country. You know that that’s, I mean, I guess back in 2011, I decided that I wanted to go back to Hong Kong. I wanted to be closer to my family. Fair enough, you know, and I wanted to Build something sort of for for the people here, you know, and, and that’s why I decided to sort of flew back from Atlanta to Hong Kong. And then initially I was actually, my dad wants me to sort of work for him. Sure, sort of helped him with his manufacturing business. But then, you know, I really liked tech and, and my brother really wants to sort of take over Vulcan and so I decided to just not do it. And I guess I did that for a year or so. And then, and I decided not not to do that. So you joined the company for a little bit? Yes, for a little bit. And then I decided to go to Shanghai. Oh, wow.
Michael Waitze 10:43
Are you a mandarin speaker?
Jacky Lai 10:44
Yes, I am. But not not really good. But I can definitely communicate. Yeah.
Michael Waitze 10:50
So okay, so not a big deal.
Jacky Lai 10:53
So I went to Shanghai, you know, really wanted to understand the China market. What year was that? That’s 2013 or so?
Michael Waitze 11:01
Yes. So it’s like, almost 10 years ago, but not that long. Like, in a way it’s a while ago, but not that long ago, but so much has changed as well in the interim. Right. Go ahead. Yes. So
Jacky Lai 11:11
yeah, so I basically went to Shanghai and started another business, you know, in marketing automation. So
Michael Waitze 11:20
marketing automation. Okay. Would I know the name of it? No,
Jacky Lai 11:22
it’s okay. Probably not. It’s tone dial. You probably wouldn’t.
Michael Waitze 11:26
Did you feel it? Did you build it for the Chinese market? Yes, I did. And how did that go?
Jacky Lai 11:30
I mean, that company did grew, you know, it? It’s, it did okay. But it wasn’t growing, you know, in my mind. I guess the reason why I joined a startup is really because of growth. You know, startup is growth and scale scale. And it wasn’t that that is turning into sort of like a business, if you would, you know, and it wasn’t growing at a startup pace. Right. So I mean, yeah, so. So I actually did that for many years, like until 2018. Okay, so that again,
Michael Waitze 12:05
not that long ago, not not not that long ago. So you said you were into tech. And the reason I think why I’m into tech is because of the scale and the access that it gives you, right? Whereas even in my business, I could have had a radio station in the old days, right. But that was uniquely local. Then it moved into serious all this other software went national, and in some cases, global, right, because it’s on a satellite. But if you’re running a business today, that’s not a tech business, you’re kind of restricting your ability to get scale. At speed. Yeah,
Jacky Lai 12:37
yes. I think I’m interested in tech, because I liked the ability to sort of have a real defensibility. You know, there’s a lot of business that you can build. But then you’re competing sort of with a ton of people. So no, so how
Michael Waitze 12:53
does tech give you defensibility? Scale? Yeah, but even if you have scale, right, I mean, look at Nokia had scale, but they were completely undefended.
Jacky Lai 13:01
Yeah. But I mean, to me, Nokia, Nokia is a product company. I mean, they are not a platform business. Go
Michael Waitze 13:08
ahead. So now, but that’s now now you’ve said it actually go ahead. Now, because it’s really important, right? So people look at Apple versus Nokia, right? I mean, when the iPhone came out, first of all people don’t understand people that didn’t watch this whole thing happened, right, with Blackberry, with Apple and with Android and with Nokia. In particular. Nokia was developing a whole bunch of phones, right? And Nokia had Symbian as an operating system, but wasn’t sort of ready for the modern world. It wasn’t really ready for development, although they did have games on there. They were doing a whole bunch of stuff. But because they internally consider them a product business and not a platform business. He was problematic internally, because the executives were like, we sell phones. And we’re good at it. And we dominated we don’t sell platforms. No, yes.
Jacky Lai 13:54
No, I totally agree. I think that’s one thing that Apple really did. Well, I mean, I don’t even know how I can use Android. Now. It’s so hard for me to even well, he tells me why pored over my stuff. You know, I’m just I’m just fully hooked. Do you want to buy all these like ecosystem thing like all these I votos? And like all these?
Michael Waitze 14:15
Yeah, it would be impossible, but not impossible. So hard. That’s what you mean. In other words, it’s not like you don’t know how to use it. It just had everything you have is on that platform. Yes. Yes. But it’s the same thing, right. And that’s why it’s so important. moot the friction of moving from one platform to another. That’s the place where you get scale, but that’s also the defensibility exactly right. Because apples like shoot, we go to Android. We’re happy to have you go there too, because we have some services and stuff for that, but good luck doing it. Yes. So what was the idea around peba? And were you still in Shanghai when you started?
Jacky Lai 14:51
No. So in 2018 I just decided that I wanted to do something more and the first thing that I looked into is really, how can I help my parents out? You know it because they are in China, their factories are in China. And as you know, like manufacturing or moving overseas, you know, a lot of the mark, like sort of companies are opening factories in, say, India, Vietnam, stuff like that. And I was just looking into if there’s any way for me to leverage technology to improve sort of their competitive advantage, the
Michael Waitze 15:29
efficiencies, yes. efficiencies, what kind of products to your parents manufactures? electronic stuff?
Jacky Lai 15:34
No handbags? Okay, so you’ve been very labor intensive,
Michael Waitze 15:38
really interesting. Yes. Sorry. Go ahead. Very comprehensive. Yeah.
Jacky Lai 15:41
So while I was looking into that, I obviously did talk to a bunch of customers, sort of how, how they view tech in sort of the supply chain, you know, what I learn is, it’s, it’s tough, they, they care about cost and costs only. And when you look in China, although it’s very antiquated, but they are very efficient, if you know what I mean, very. So it’s hard to squeeze efficiency, and sort of generate the value, so that we can be sort of a significant company in that space. But while I was talking to all these sort of competitors, not not competitors, customers, they were all telling me I wanted to grow. And they want to grow. Yeah, they wanted to have more sales. And this is where I start to flip into sort of, maybe I can do something to help them grow. And,
Michael Waitze 16:37
yeah, so but is it but is this a one sided thing, I like to look at these things and think, if we can make the factory more efficient, even in the way, like, if you draw a diagram, let’s back up for a second, if you draw a diagram of the supply chain, let’s say you have 50 suppliers to make one handbag, right, but all of them or none of those supplies are connected, necessarily. But but they could be. Now none of them are connected electronically, let’s say to them, and um, let’s just talk about a one factory world just because it’s easier to for people to understand this. They’re not connected to the factory, either. I don’t know how orders get placed to the factory, or how or how raw materials get ordered either. But if it’s on paper, or even in an Excel spreadsheet, or even on a Google Doc, right, or a Google Sheet, it’s not super efficient. Right? So the supply chain is really complicated. And because it’s really complicated, people look at it and go, Hmm, I think I’d rather make a photo app. You know what I mean? Like, if you’re a tech guy or gal, you’re like, that’s easier.
Jacky Lai 17:40
I think I think the issue with the supply chain back then, it’s just, it’s just there’s so many antiquated processes that you need to change sort of the behavior of people tell them that potentially would make it more efficient.
Michael Waitze 17:56
So why does this all need to be digitalized? Tell
Jacky Lai 17:57
me back then. Yeah. Supply chain. Yeah, for brands
Michael Waitze 18:01
we have for anytime you just tell me what you look at. And you’re like, Okay, this all needs to be digitalized. Why? And can you give me an example? You know,
Jacky Lai 18:07
no, so exactly the concept that you were talking about just now. Okay. It’s sort of the area that I was going into sort of like this Cloud Factory. Yeah. Yeah. You know, but, but honestly, when I looked into it, it’s just tough, you know, a lot of unless you can be cheaper, like, a lot of the customers that I speak to, all they care is cost. I mean, they don’t care if it’s more, sort of little bit faster, because they even if you can allow them to do things like what sorrow can do, they couldn’t, because there’s a lot of these marketing thing they’re like, I mean, it’s just organizationally, they don’t need that speed. They are already used to sort of manufacturing, six months ahead, right, you know, and so on. Sure, it’s going to change, but it’s not going to change, like, tomorrow, you know, it’s going to change years later.
Michael Waitze 19:04
So I was gonna say, when you talk about customers, you’re talking about the wholesalers and retailers of handbags.
Jacky Lai 19:13
The brands themselves, yeah. Okay, for example, like Samsonite, like those kinds of brands got it. And then they would sort of go to my family got in, get their bags manufacturer got it. You
Michael Waitze 19:25
know what, again, Samsung, it’s not FMCG, right? They’re not It’s not Zara, they don’t give a shit if you can make it like two days faster. Do they?
Jacky Lai 19:34
Know excuse my language? I don’t think they do because even if they do care, there’s a lot of sort of cooperation to make it worth like, even if you can manufacture things faster then, like you need to market faster you need to like change yesterday logistic needs to change. I mean, that’s just a bunch of stuff that Saira has doing that enables these kinds of speed,
Michael Waitze 19:55
right but Zara is doing it, because it’s they’re vertically integrated. Yes, for the most part, right. So they’re not selling like Zara and maybe they are I just don’t know. But they’re not selling Levi’s
Jacky Lai 20:08
don’t they’re not they’re
Michael Waitze 20:09
selling Zara branded clothing? Yes. So they control the whole thing front to back, except maybe the manufacturing, right? Because I don’t have an expertise in that. So they may even rely on the manufacturer to order all this stuff. They go, we want to have at this at this quality at this speed, this number of things use this type of thread, blah, blah, blah. Exactly. And then they go go. And the manufacturing goes and does that. Yes. Right. I mean, this was one of the things that Walmart did at scale, right? I mean, is that they had super, super close relationships with their suppliers. And then automated everything. This is why Kmart and JC Penney, and all these other stores went away because they couldn’t keep up technologically. Exactly. And is this a China facing business that you’re doing? Or is it
Jacky Lai 20:49
Oh, that so that was so my family business actually work with customers around the world? Yeah. So. So a ton of handbags, wallet brands? Yeah. You know, but, but yeah, so. So the reason why I didn’t go ahead, really, it’s just I don’t know how I can actually squeeze, margin, like cost, decrease the cost using technology, because sometimes technology can increase the cost. Because no one really wants the technology. Right? They don’t need the technology, they need the value. They don’t really need new technology. To be honest. They don’t care technology is only a facilitation. Yeah, I just don’t know how, you know, it can actually worse be worst? I mean,
Michael Waitze 21:37
well, yeah. Because if you got people that have been working in the factory and running the factory and designing for stuff like that for 20 years, and you come in and say use this thing, just be like, No, right? Because it’s so they have to get used to it, they have to learn how to do it. Right. It’s like putting a racecar driver into a self driving car. They’re just like, Can I have the gears back?
Jacky Lai 21:55
Exactly. So it’s just too too much work for sort of unclear value. Okay, so, so then I was looking into sort of how to help them grow. So the number one thing I did, actually, I wanted to open a store, it’s really crazy physical store, physical store, digital sort of store, you can imagine that as sort of like this co working space for retail. But it’s tech enabled. So how does this I don’t get it. So for example, you can sort of rent a space in my store, okay, and you can online sort of tracks or digitally how many people touch your product, how many people walk past it, sort of like because I always believe sort of offline, it’s sort of like a media channel, in the end. Go ahead, sort of just how, how, how, yeah, how I view it. But then, yeah, I did that for like, actually, a couple of months, I actually did all these like, found designer did all the drawings, all these 3d stuff, you know, and, but then, when I started to, sort of try to talk to investors, and I, I start to realize that there’s a high chance that I will only have three stores. That didn’t scale again. And I will be I mean, I, I just think that it’s not easy to have a store ran in a way that’s hyper scalable. But then my idea is that the store can potentially become a media, right. And when you look at a media, you need 1000s of stores, you need, like you need like to have 1000s of stores to to enable a brand to have any impact in terms of presence. You can’t just have one store here, you need to have 500 locations, you know, and a brand can just sort of pay to sort of get get their offline presence.
Michael Waitze 23:52
What do you think of a company like Warby Parker opening up a flagship store, like in Soho or downtown in New York, right? They don’t have a ton of stores, but moving from online to offline, just as a place where because you know, Warby Parker was famous at the beginning for just tell us what you want, we’ll send you three of them, or five of them, you pick two of them, send the other ones back, no questions asked, right? It’s just like going to a store. But you don’t have to go there. The same thing you would do there, you’re trying a bunch of stuff, and then you just give send it back to them. But what do you think about them opening a physical store? Again, they don’t have 500 of them, right?
Jacky Lai 24:25
No, I actually don’t haven’t looked into Warby Parker, but you know what they are? Yes, of course I do. Yes. No, I think that’s a great strategy. Right. As you know, online is actually fairly expensive. It’s not really sustainable at
Michael Waitze 24:38
sort of for the future. Online. You mean Yeah. Online? Only? No way.
Jacky Lai 24:42
I think. Yes. So I don’t believe in that at all. So I think I think I’m always impressed, you know, by how one store can sort of have this huge impact in people’s minds. So to give an example, there are a lot of companies in Hong Kong that might have raised millions of dollars ecommerce company but you know, One has ever heard of them, right? If you talk to sort of like a random person on the street, but what’s important? Like, what’s really interesting to me is if you ask them, Hey, do you know the store at the corner of best street? They definitely know.
Michael Waitze 25:12
Yes. So tend to wait in line to get in. Sorry. Go ahead.
Jacky Lai 25:15
I mean, it’s just, it’s just amazing to me that like with just a simple store, yeah, the entire Hong Kong would know what that store is. Right? And I mean, when you really think about it, I mean, how much does it really cost to have that store? Right? And to have sort of that impact? I don’t think online can create sort of this memory in people’s mind, because you are Warby Parker.
Michael Waitze 25:41
Yeah, yeah. But but they’re going in reverse, right. But I don’t disagree with you. And I think that online until we get to a point where a room like this is completely immersive. So I do think at some point, this is going to happen. And I’ll tell you what this is, but I want to get back to people in a second. Yeah. I think you’re gonna have spaces like this size, maybe a little bit bigger. And for people that maybe are disabled or can’t get to Paris, or can’t get to Italy, I’ll be able to facilitate that trip through deeply immersive experiences, so that they can have because what you’re saying here is, unless you’re in that space, you’re not getting a visceral connection to that source so that when you leave in the back of your brain, there’s like, I’m going back to XYZ, because that place was amazing, as opposed to just clicking on something getting a product and walking away, and you have no relationship with it at all. Yeah, yes. But I think we’re gonna be able to build spaces that can simulate that through haptics and through vision. I really believe this. I can see you looking me like, Okay, this dude’s crazy. But if you think about it, that’s the scale of what you’re trying to build.
Jacky Lai 26:52
It’s actually similar. Yes, I do agree. i But obviously, those are things that I’m probably not going to happen tomorrow. No, no,
Michael Waitze 27:01
no, definitely not. Definitely not. Yeah, I mean, look, we spent the last 20 years having everybody tell us that, you know, online, retail was going to shut down malls and physical stores everywhere. But to me in its current incarnation, I think you get to like 15 17%. And then people are like, hey, check, you want to go shopping? Let’s meet me at the mall. And we’ll go shopping, then we’ll have dinner, do all this other stuff. No one says like, Hey, meet me on Sharpie.
Jacky Lai 27:31
I actually disagree. Go ahead. So I think the reason why sort of some malls are dying, actually, a lot of malls are dying in China, for example, in China, okay. Yes. And I think I think a big reason is just that people no longer sort of travel the same way. So for example, like I might need to, say, go to a mall 10 years ago, because that’s like the Amazon like I can, I can sort of buy everything that I need. But now that everything that you need is actually on Taobao on shopee. That’s true. And, and because of that, I think people becomes a little bit more destination focus, so I can sort of go to a place to eat that far out. That’s a little bit more unique. Versus I might have to actually before go to law, you know, it’s just some fair, and I think Internet changes that and I think store, it’s just changing in my mind.
Michael Waitze 28:26
Okay. Yeah. So let’s get back to peba. I digress. What is it doing today? And what does it meant to do as you go forward?
Jacky Lai 28:39
So to put it simply, peba is a wholesale marketplace that allows retailers in Asia to buy products online, with reduced inventory risk. So what we meant by that is, retailer can come on, we firstly give them next 60 times. So every retailer who buys on our website, don’t need to pay today for six days, 60 days later, which is reverse normal, yes, sorry. Go ahead. And then we put them we guarantee sort of the payments to the brand. So so we actually bridge sort of this FinTech or credit. So we have our own sort of ways to determine how much sort of credit limit we should give
Michael Waitze 29:22
each retailer. So you’re building credit analysis and credit history.
Jacky Lai 29:25
And then they can just buy online, as you know, wholesale is actually very antiquated as well. Sure. It’s trade show oriented. Yeah, very much. So. Yes. And in a way we’re trying to build sort of the future of b2b retailer sort of buying their products. Yes.
Michael Waitze 29:45
So who’s in it? Who’s a sample customer?
Jacky Lai 29:48
Oh, a bunch. So we have online stores, we have offline stores, but they have to be a store so we
Michael Waitze 29:55
can’t be an individual. No, it can’t
Jacky Lai 29:57
be a shop at podcast for example, like if you come To our, our website and try to save, buy things for your business, it doesn’t work that way. You can only buy things to resell. Right? So
Michael Waitze 30:08
what if I have swag? You cannot? I can’t do even if it No, but what if I sell it? Like I’d say I’m the largest hat seller? capsular? In Asia?
Jacky Lai 30:17
Yes. So you can apply. So to be on the platform is actually totally free. We don’t charge the brand anything. We only make money when they make money. So so if they sell something, yes, if they sell something only, and, and because of that, we actually looked into sort of qualifying each and every applications vigorously to make sure that they’re the right brand for the retailers that are on our platform. And you need to just be a good, good, good brand with some wholesale experience. That’s so
Michael Waitze 30:49
interesting. So is there is there a comparable business out there like this, that you’re trying to build, like a similar business? You don’t I mean, I’ll give you an example. Ali expresses this place where like, you can just go buy anything. Like really anything from like a small screw for your light stand to the cabling and everything else. And you can buy it at scale, or you can buy one of them at a time. Yeah. But we’ve always thought that like, that doesn’t exist for the rest of Southeast Asia. Right. In other words, because that’s all for manufacturers in China. Yeah.
Jacky Lai 31:25
Yes. So So Ali express to us is more generic products were more sort of unique, branded products. Got it. So it’s a little bit different. It’s very different. And we only serve as retailers. So retailer can come to our website. And they can buy things with 50% margin, for example, right? So that they can actually make money before us. They need to negotiate. They need to do a bunch of stuff, right? They need to send an email, there’s a bunch of different things.
Michael Waitze 31:54
What if I want to dropship something, though? What What’s your view on drop shipping?
Jacky Lai 31:58
I think it can work. But it needs to be done in a different way.
Michael Waitze 32:04
Tom? How like, how is it different? How How does it need to be? Well,
Jacky Lai 32:07
I think I think the problem with drop shipping now is just the products. It’s just not good. I mean, when you think about it, I mean, I mean, why would I buy from you? And I know I can buy from AliExpress? I mean, it’s just because when you talk about drop shipping, you mean I can drop ship the products on AliExpress? To make money, right? Yeah, like that. Yeah, to do that, right. I think you need to invest a little bit more time. Yeah. To just go to AliExpress. No, no, I
Michael Waitze 32:32
agree. And look, I’m trying to figure this out. Because I look at online, like E commerce stores online. And they can sell a ton of product. But one of the ways that they sell a ton of product is by spending a million dollars on advertising. And it’s unsustainable people asking me to do this for my business. Right? Pay me this amount of money, and I’ll guarantee you 100,000 People will listen. Sure. But I want to grow organically, by having good product, right, so that people will listen without having to be advertised to all the time. Right now, if I There are products that I trust that I want to advertise about, that I’m happy with, right? Definitely buy like, you know, use Pay Pal to make it whatever it is, I don’t really care. But I don’t want to have to advertise for people to come and listen to this. Because once you do it, it’s like a drug. Yeah. And I think the dropshipping anyway, is the same thing. Just Facebook ads after Facebook ad after Facebook ad and then people buy the product, then you buy it and ship it to them. It’s not it doesn’t feel sustainable to me.
Jacky Lai 33:34
Yes, I think it can work because at the end of day, there are cost for holding inventory and so on. And it has been
Michael Waitze 33:43
not for what you’re doing. So for what you’re doing is you’re saying, here’s a great brand. I’m curating that brand, I’m having great brands, and they’re retailers that want those brands, but don’t want to go through all the hassle of getting those brands, right. So they’re not out there necessarily just like pumping Facebook with ads, because the brand has a reputation. And you’re saying we have a platform, it’s gonna make it easier for you to get that brand. We’ll do 60. Net, to make it easy for you to pay for it. Like that’s a completely different thing. So
Jacky Lai 34:09
so we our mission is basically to allow retailers to buy things cheaper, faster, and make more money. So yeah, so our goal is that simple.
Michael Waitze 34:18
And how’s it going?
Jacky Lai 34:19
It’s going well. What does that mean? So it’s, it’s yeah, we’ve been growing quite a bit.
Michael Waitze 34:29
But how does this work, though? Because if you’re doing if you’re curating, and there’s an application process to get on, and you know, what products are being sold to you have a reputation with the brand. You know what the retailers are buying. Now you have all this information. But you also there’s risk inside any platform, right? Is there an insurance angle here? Do you make money off a payments like what else are you going to end up doing that maybe people haven’t thought about yet?
Jacky Lai 34:58
So we make money on time. transaction as well as credit. But eventually, obviously, there’s a lot more ways for us to be more efficient. And the way that we think about things is, is we only make money when you make money. So that’s, that’s the angle that we sort of looked at, or our revenue model. So if we wanted to say, make money in logistics, we don’t want to make money and logistic just to make money. We want you to be saving money while us making money. So
Michael Waitze 35:26
do you run your own logistics business? Or do you partner with who?
Jacky Lai 35:29
Right? So? So we partners, but but but our logistic is getting more complicated? Yeah. Now, because what we want it to do, obviously, initially, it’s not possible for extra retailers to buy small quantity and not pay a hefty sort of logistic cost. It’s actually not possible. And that’s why there’s these like, wholesalers or whatever, they try to buy 1000s of product and sort of save money on the logistic and sell back to you. But then you are buying from a middleman. Right. What we are trying to do is yes, consolidate. So we are doing something very interesting there right now,
Michael Waitze 36:04
do you feel like what is it 2022? Do you feel like after 11 years of starting businesses, doing that automated marketing business, looking at the manufacturing side of this? Do you feel like you’ve finally found a business that can scale using tech?
Jacky Lai 36:20
Yes, obviously, I think I think we are in a very interesting market, to say the least least, I think b2b, it’s about time to be digitized. And when you look at retailers that we’re servicing, there’s really no technology that’s really helping these people to make more money.
Michael Waitze 36:39
And why do you think that is like, Why did everything go consumer first? Do you know what I mean? Was it easier to do that?
Jacky Lai 36:46
I think most people are just let me put this way. I think there’s a lot of people have tried or have been doing these b2b marketplaces. But But b2b is not that simple. No, b2b has relationships. So. And that’s that. And I guess the transaction is a little bit more complicated, right. And that’s why the only way to make it work is to have these sort of auxiliary services that we offer to streamline to make online possible.
Michael Waitze 37:22
What’s the reaction you get from your longest standing customers?
Jacky Lai 37:25
I mean, they love it. Because we made it easy for them.
Michael Waitze 37:32
But are you also feeling like what the product that you built at the beginning, is has iterated along with the things that though your potential customers and your existing customers have told you like, hey, Jackie, that’s great. But how about this kind of thing? Like you take it under advisement as well?
Jacky Lai 37:45
For sure. For sure, we talk to our customer as much as we can. And we try to iterate fast. Yeah, we test a bunch of stuff. And, and that that’s one thing that we’re, we’re sort of very good at where’s your tech team? So we have half half? So Hong Kong as well as Vietnam?
Michael Waitze 38:05
Vietnam? Yes. Sweet. Yes. And do you eat? Do you have your own team? Would you outsource to its own people?
Jacky Lai 38:11
We have our own team?
Michael Waitze 38:13
And how are you surprised by the level of technical ability for the teams in Vietnam? Like Was that something you knew was happening?
Jacky Lai 38:20
I mean, I just got into Vietnam. By luck, really? I it’s, it’s because our CTO is actually from Vietnam. Okay. And, and that’s how he, yeah, how we got the Vietnam team because I, I’ve never, I would never have thought to just got to Vietnam.
Michael Waitze 38:37
But it’s pretty amazing what’s happening there. I mean, I can’t tell you how many teams like to me I’m not surprised at all. Because over the past 10 years, I’ve just seen so many people, build tech teams in Vietnam, build tech businesses and Vietnam, on June 24. of next month, right. So next month, I’m having a conversation just like this with a guy who’s built a 300 or 400 person team in Vietnam, that does tech development and builds their own products as well.
Jacky Lai 39:03
Yes, the talent in Vietnam is amazing. It is amazing. I have no doubt we’ll have a huge presence in Thailand. In Vietnam, sorry. It’s weird because you’re sitting
Michael Waitze 39:14
in Thailand. So your brain has a you have Thailand on the brain. What does growth expansion look like to you? And is it methodical like, do you have to grow fast? Or do you just have to have a vision to grow big? Do you know what I mean?
Jacky Lai 39:28
We have to grow both. I don’t think in our business, I don’t think there is a choice for us. We have to grow fast. And go back.
Michael Waitze 39:37
How do you so one of the things that my I think this was in 10th grade, you know, one of my teachers said it’s okay to hurry but it’s not okay to rush. Kind of like you know, it’s okay to go fast. But it’s not okay to rush right? Because if you’re rushing, you’re gonna miss stuff along the way.
Jacky Lai 39:54
But missing stuff is good. I think I’m just asking No, I think I think we definitely need to be fast. and rush. I think at the other day, if we are not missing things, I think there is something wrong with the team. I think that that’s why. Yeah, I think I think we, we need to do both. I mean, especially in the market that that we’re in, I mean, as you know, we are a marketplace, a platform business. And, and in our space, really, it’s, it’s easy to lose, but it’s also winner takes all
Michael Waitze 40:25
in a way I was gonna say, right, if you can get big enough fast enough, I guess Is Winner Take All Yes. Hmm. And you expect to be that winner? Of course. Yes. I’ve no doubt we will. And you guys have raised money. Do I have that? Right? Yes. It’s not why I reached out to you in the first place.
Jacky Lai 40:39
I think so. Yes. Yeah. We just recently closed a seed round. Yes.
Michael Waitze 40:44
Congratulations. Do you feel more pressure after raising money?
Jacky Lai 40:50
Yes or no? Because I, the pressure is always there with or without the money? Yeah. Because I think the pressure doesn’t come from the money comes from my responsibility. Yeah,
Michael Waitze 41:01
I agree. But it’s just that a lot of people feel like, they raise some money. And they feel like I’ve accomplished something huge. It’s not like you’ve accomplished something small. But the real proof is in the what do you do with that money? And what do you accomplish with it? Right. And you’re right, I think a lot of great founders will raise money, celebrate for a day, and they just get back to work. Right? Because that’s more important to
Jacky Lai 41:24
know that that’s exactly what what we do. I think that it’s just a tool. So we’ve got like, some tools. But it doesn’t mean that that you know how to build, build the building, for example, now you just have a lift. Now, before we might need to be carrying things by hand, you know, now I can buy, you know, a car right to move things. I got it, you know, and I just, yeah, the building is not there yet. But at
Michael Waitze 41:50
least some of the tools are there. What is your family think now that you’ve actually built something? And that it looks like it’s growing really nicely?
Jacky Lai 41:58
I mean, yeah. I mean, they don’t really bother me that much. I guess they don’t really ask me a lot of questions now. But I’m sure they they like it. But I I always tell them that I’m far from from there. That they Yeah,
Michael Waitze 42:15
but you’re excited. I mean, you do. I always say that people like everyone’s an overnight success. 10 years later, right. And I feel like all the building and all the training and all the iterating that you did in your other businesses have gotten you to here? No.
Jacky Lai 42:28
Yeah, of course. I mean, I think I think I a little bit older and a little bit wiser. Right. So it’s, yeah, but it’s for sure. A lot of my experience that has gotten to me to start this business, for example.
Michael Waitze 42:41
Awesome. Okay. Yeah. I really want to thank you for coming and doing this. Jacky Lai, the Founder and the CEO of Peeba, which in Thailand, they say, PeeBaa.
Jacky Lai 42:51
Thank you very much for having me. It is my pleasure.
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