The Exchanges

Q What was it about reading about or learning about him that was interesting to you?

A I think Carroll is just a, this amazing author. So he He wrote Lyndon Johnson's life more interesting than a novel, right? And also the complexity of, of, of him is, is really fascinating. I, I, I felt like by reading the book, I felt like I was, I was living the, the life. And, and also I think Carol basically wrote the entire U.S. history for, from like the, the thirties to, to the seventies, right? I remember Any character that appeared in the book, it was a huge chapter about it, right? Sam Rayburn, uh, you know, Dick Russell, people I have never heard of, and were not, like, known by probably non-Americans at all, but I was able to learn their stories as well.

AI assessment note: “He wrote Lyndon Johnson's life more interesting than a novel, right?”

Q And, and was WeChat mainly the sort of the, the platform on which people learned about We, or were there other places that people found out about it?

A So WeChat was our main user acquisition channel. We did not have money to do any advertisement, so we had to rely on word of mouth. Uh, so the, the, the foundation we built during the group buy days, uh, paid off because We still had those groups, right? We still had those group leaders who, in each of the groups, there were hundreds of people. So they just help us to advertise to those customers, say, hey, now we does delivery, and so we developed a feature, uh, we called order share feature. So for example, if I place an order, I would be prompt to share the order with, with my friends. Usually people share into WeChat, right? So, so, so Guy, you are my friend. You saw in WeChat that Or Larry just purchased these products? Click the link to get a coupon. So after you click the link, I would get a little bit of money back as incentive.

AI assessment note: “So WeChat was our main user acquisition channel.”

Q Where would you buy them from and where would you buy them cheap and then sell them for more on eBay?

A So I, I, I bought them either online or in local stores. Uh, that's, that's very early days of e-commerce, so a lot of the companies were not very savvy, so they would give you coupons that can be reused many, many times, for example. I remember, uh, OfficeMax had this coupon, 50 off 250 dollars, and can be used over and over and over again. I bought online, I didn't even need to go to the store, they, they had online, so I bought online, I would For example, buy two cameras, that's like, uh, a 130 dollars each, right? So I would apply the coupon, and then sold them on eBay, and the coupon can be applied to on sale items also, right? So when they were on sale, plus the coupon, you can make a profit.

AI assessment note: “I bought them either online or in local stores. OfficeMax had this coupon”

Q you used it to communicate with people, to, like, have, um, you know, sort of text chains with people, and WeChat was also a place where people, certainly, like, Chinese expats, would talk about, like, things going on in the area, or, oh, you know, if you're looking for this product, you can find it at this store. Is that right? Is that, am I kind of describing that accurately?

A I remember in 2014, early 2014, Seemingly overnight, WeChat became super popular among Chinese immigrants. And WeChat in the early days allow you to add people to groups without their consent. So not only I was on WeChat, I was added by my friends to so many different groups. For example, I was in this, uh, added to like a San Jose mom's group, um, by my friends. And then I saw something really interesting. I saw people were trying to buy things together in those groups. I remember one night, a mom in the group posted some information. She said, oh, I went to this harbor called Half Moon Bay. There was a fisherman's market, right? She said, I talked to this fisherman because I really liked the fish, the Pacific black cod. And, um, if you guys want to buy together, I, I can actually ask the fisherman to go out and catch the fish. And then deliver to our local community. And then in one night, right, she got an order of, like, 10,000 dollars. Like hundreds of people.

AI assessment note: “I saw people were trying to buy things together in those groups.”

Q what were some of the things you were thinking about on how to You know, get the business back on track, because you say two years in, it starts to grind to a halt. Um, so, how were you thinking about, I mean, were you, were you panicking, or were you just kind of calmly going through a list of, like, different things you might try? What were you doing?

A Now looking back, we were doing the exactly wrong thing, which is when, when something is not quite working in a smaller, uh, geographic area, we, we, we try to make it work in more areas, right? Wider range, right? So we were, oh, maybe we need to find more group leaders outside of California. Maybe we should, You know, try to bring it nationwide and even internationally. Oh, maybe some people do group bias in Singapore or Australia, right? When we didn't know what to do, uh, we just, we just tried to bring it to, to a wider audience, hoping to sustain that growth or momentum, but that, that didn't work at all. So yeah, I was, I was trying to raise money also by the time, by, by mid of 2017, we, we were running out of money. We had less than one million dollars left.

AI assessment note: “we were doing the exactly wrong thing, which is... try to make it work in more areas”

Q I mean, I read that you saw 700% revenue growth year over year, that pandemic year, which is, seems just unsustainable. Like, I mean, how did you manage that?

A So it was very hard. So we had to add capacities constantly, uh, meaning warehouse capacities. And, um, wherever there's a warehouse, we just couldn't wait. We have to, uh, get the warehouse and, uh, move in to that larger warehouse immediately. And by moving the warehouse, we actually did not shut shutting down the business, not even for a day. We, we ship today's order. Then we put Away the inventory. We disassemble the shelves. Then overnight we move the shelves and inventory to the new warehouse. We reassemble the shelf, put the goods on the shelf, and deliver from the new warehouse the next day. Um, and people from our community, they were, they really appreciate what we did because they, they were like, okay, this is the only place we can actually get the products.

AI assessment note: “we had to add capacities constantly, uh, meaning warehouse capacities.”

Q dream of, like, one day living in Beijing? Like, you know, like, a kid who grows up in Omaha might think of moving to Chicago, or, you know, New York is, or obviously LA. Growing up in Wuhan, is it like, I'm getting out of this place? I'm getting out of this town, and I'm going to Beijing or to Shanghai or something. Is that how you thought growing up?

A Not really. I think most kids were Not like the kids today. They didn't know what to do. When I was a child, I did not know what I want to do. So we all kind of followed this pattern. Our, our, our parents or teachers told us, right? You just be really good at school. Then you apply for a good college. Then It seems the past was drawn for everyone. So we, we, as kids, we didn't really think a lot about what we wanted to do. In the future. If you really ask the kids, they all told you, oh, I want to be a scientist. Um, yeah, this kind of generic answer, right? So, so it's very, very different from America, where kids from early age are encouraged to think about what they want to do.

AI assessment note: “Not really. I think most kids were Not like the kids today.”

Q a job. But as you started to kind of think about it, how were you going to turn that in? Like, it's not clear to me how you were going to make money off of it. You would, you would create like a platform where people could organize, self-organize, group buying things, but then Because it would be on the platform, you would get like a 10% commission or something?

A We didn't know how to make money, uh, at all. So, so, so first of all, I, I saw a lot of pain points in the group buying process. The, the organizers had a lot of work to do. And, um, They didn't make any money, so they couldn't just do this as a volunteer for very long, right? So our initial idea was, okay, let's create a platform to solve these pain points, to make order super easy, to find vendors for the group leaders, to enable the group leaders to make some money, and by making them match, We can also make some money in the process. That's what we thought we could do, but we didn't think through the business model at all in the very beginning.

AI assessment note: “We didn't know how to make money, uh, at all.”

Q just normal. I have anxiety all the time about things coming around the corner or unfinished work. But I wonder if you ever did that by Your valuation that year was 2.8 billion dollars. Did you breathe a sigh of relief? Were you like, ah, now we're, we're good. We're in a good place. Or, or did you still, as a, as a CEO and a founder still feel anxiety?

A I use this analogy when people ask me that question. I said, when we were small, we were kind of like, like a, let's say a basketball team, right? We were playing with other, Uh, regional Basketball team. Then when we get a bit stronger, we, we start to play say national college basketball. Then we become a bit stronger. We, we play NBA. Which one is harder, right? Is it harder to play NBA? Is it harder to become NBA championship? Or it's harder to play a regional player? I think it's always, it's probably harder when you raise your game to the next level. So all the success we had basically only earned our ticket to, to play the next game, and the next game is going to be harder. That's, that's how I felt. I, I felt it's, it's definitely harder than the early days, simply because we have bigger vision, we have bigger dreams, and we are competing at a different stage with much stronger players.

AI assessment note: “all the success we had basically only earned our ticket to, to play the next game”

Q So people were like, I want some of that, so people, and she ended up getting 10,000 dollars at the borders for, to go to this fisherman in Half Moon Bay and say, hey, can you catch, we'll give you 10,000 bucks, can you catch all this cod for us and we'll buy it?

A Yeah, so, so she, she named the price, you know, roughly how, how much per pound, and, you know, the Pacific Playa Cod is like 10 to 20 pounds each. So she, she asked, okay, do you guys want any, right? So people just text in the group, I want one, I want two, And just, you know, more than a hundred people sign up. Um, very, very, uh, new to me. So I was, I was very surprised to see that. And it was like, just incredible. And then after people got the fish, the whole WeChat group exploded again because everyone loved the fish. They said, wow, this is the best fish I've ever had in the U.S. Um, when can we buy again? People posted a recipe, posted pictures. It's just such an incredible experience.

AI assessment note: “Yeah, so, so she, she named the price... more than a hundred people sign up.”

Q the business. I mean, you're still teetering on the, on the brink of bankruptcy. This is the summer, because in the summer is the summer of 20 17 where you break your back. Right. You come back to the US. I have to imagine the first thing you need to do is get more money just to stop, stop the business from going under. So how did you do that?

A Right, so I tried, I think I tried a couple new pitches to new investors. Obviously, I suspected no one believed me, uh, because the old idea didn't work. Um, we had no credibility that the new idea would work, right? So my only hope was to turn to our existing investors. I pitched this new direction. Our investors were highly skeptical, of course. And I'm really appreciative that they decided to put in some capital, partly because, you know, they're, they want to give us a try, partly also because otherwise all the investment they put in just went down the drain. The three co-founders, we also put in some capital to, to show that we had faith in this new direction. So, so with that, we were able to raise a little bit of capital, um, from existing investors.

AI assessment note: “my only hope was to turn to our existing investors. I pitched this new direction.”

Q Larry, you were working in finance for a different company at this point called Atmel, which was a semiconductor manufacturer. And at what point do you remember thinking, you know, I don't want to do this anymore. I want to start my own business. Like, I want to do my own thing. Do you remember when you started to feel that way?

A Yeah, I did. I actually remember exactly which date I had this epiphany. It was January second of 2012. I had this epiphany that I, I really wanted to, um, start my own company, and I wanted to pursue e-commerce specifically. Um, yeah, I remember watching this video, uh, by Jeff Bezos. It was a very early, I think you can still find it, very early TED Talk Jeff gave, right? He, he made the analogy, he said, oh, now the e-commerce is like the electrical era in the early 1900, right? So he, he just basically said e-commerce was in the very, very beginning. So I, I really believe that. So I, I felt like e-commerce would have a really bright future. And I also remember I read this book Good to great. So you had this concept called Jim Collins. Yeah.

AI assessment note: “It was January second of 2012. I had this epiphany”

Q a low period of your life, or maybe even the lowest period, Because, you know, when your health is affected, of course, that can really, I mean, that, that takes over everything. I don't know, did you just think, were there moments during that period of time where you, you just kind of wanted to give up entirely and just, just fold the thing and start over, start something different?

A After I started, we, I started to understand this word, faith, the meaning of this word. You know, China, most Chinese people don't believe in God, right? So, so when, when we grew up, we never spent, you know, it never occurred to us or nobody taught us about this word. But I started to develop my own sense of faith. So I felt, okay, since this is something I'm just really passionate about, I started it. So I'll do my best. I'll give my all and let the outcome to, to show itself. Uh, but I'm not going to question so much every day, whether I should continue or not. So I start to develop this, this faith and, and also I didn't know this. I knew this later from a very wise mentor from, from me. I asked him the question. I said, when should I give up, right? What's the criteria? If, if I pursue something, he said, it depends on whether it's the right thing to do or not. So he said, there are two ways to look at things. One is, is this the right thing? The second question you ask yourself is, are you doing it right? So if it's the right thing and you are just not doing it right, you should not give up. You should try to find a way to do it right. However, if it's not the right thing, You should not try to make it better, because it's not the right thing. You should stop right away. You can never make it right. So I think deep down, I knew that I couldn't summarize as, as well as h…

AI assessment note: “deep down, I knew that it was the right thing to keep up.”