One of the rising stars of Hong Kong’s tech scene, Snaptee allows users to create highly-personalized t-shirts via app and kiosks in shopping malls. Wai Lun Hong, one of the company’s co-founders, discusses entrepreneurialism, the company’s history, expansion plans and why things are better on the cloud.
1. Tell us how Snaptee began?
I graduated in computer science and worked both at Microsoft and an advertising agency. My first entrepreneurial venture was selling goods on eBay, and I realized e-commerce was a scale-able channel to grow a business. In 2010, I helped launch the first group-buying site in Hong Kong (gobuya.com) which went from a small team to 30 people in two years. It was an amazing journey, and my first time growing something at that speed. With the competition growing tremendously, we, unfortunately, had to scale back and it was a big learning experience for me.
In 2013, the next big idea was Snaptee! At the time smartphones were taking off in a huge way. We looked at it and figured the camera is the killer app that would get ten times better, and so a photo was the way forward. We didn’t think we would compete with Instagram, and knowing the Hong Kong market, we wanted to bridge something digital with something tangible. We sought to enable creativity, and yet also have something physical to offer. T-shirts would be able to bring this experience to the largest amount of people.
2. What tips would you provide to entrepreneurs?
Those who are successful dream bigger and persist towards what they believe. At times you may doubt or lose faith in your idea. For an entrepreneur, you always need to have perseverance and persistence. You have to hustle because you don’t have the time or resources, so you need to dig deep and show how much you want to win big.
The key is to keep moving and don’t lose faith or energy. Since 2013, we have transformed from just a stand-alone app, as customer acquisition became difficult because of overcrowding and high ad cost on social media. To solve this problem we developed an offline experience to complement the app.
We tried everything from pop-ups to weekend markets, and we figured out that a vending machine concept would be the most effective. Snaptee can be present in shopping malls, but we don’t have to bear the burden of a traditional mall – rent, manpower, inventory estimations that can go hugely wrong.
We now run mobile display windows in malls, with iPads for customers to engage in. The kiosk is great because it acts as a brand touchpoint, and a billboard for us as well. When we are next to a Rolex shop in a mall, it means we are in a very good company! Once the kiosks are constantly updated, people are always curious to see what is coming next.
It took a much longer time than I thought. The first shopping mall took six months to convince, especially as it was our first mall – that’s a huge barrier. Once you have one, the rest are good to go, but you need that proof of concept. Anything new takes a huge amount of time, but it is worth it.
3. What other challenges are there?
For start-up entrepreneurs, the main issue is to get the resources to grow. You need to figure out how to get through the period where you have to assemble the team and your idea is still not fully complete and not generating enough cash flow. Those periods are the hardest time and most of the successful entrepreneurs have to go through that – you need resources but don’t have them.
Through the challenges, you need to understand the uniqueness of your positioning. For us, we stand out as people can upload their photos and make t-shirts. It’s not just a rectangular canvas, but have different templates for travelers, or family, or Valentine’s, so we offer high-personalization which is what drives the market right now. A big barrier is that people are not as creative as they think, they are not designers. So we build an easy framework for them to have a great end result.
We now have 20 kiosks around the city, and Hong Kong has a strong potential to grow as well. For fulfillment, we have a proprietary on-demand supply chain in Tsuen Wan that can print and send to the shipper in 48 hours, with another two days to get to the customers’ homes. Customers can also send clothes back for a refund, so it works quite well.
4. Tell us about how accounting and financial management is important to you?
At our current stage we do not want to hire a big internal finance and accounting team so we outsource our accounting function. Obviously a tool like Xero is handy to make everything smooth and transparent. It also allows us to take a look at what our next steps with the data and advice that we need to grow the business.
So at the moment, we are focusing on expanding markets such as Japan, which is a good fit for us, and maybe even China. We have run some pop-ups in Tokyo which were an amazing success, and now we have three Japanese staff to help us expand. Japan is a world fashion leader and a mature market with cultural synergy to Hong Kong, so we need to be there. I have an investor who has Japanese operations and they are helping me learn the culture of their business. So it’s all about looking at what you need, and finding the most cost-efficient way of achieving it.
I use a large set of cloud tools so I carry out the likes of business modeling and accounting on the go. Luckily these tools let me stay in touch with my family and friends while traveling because I do everything from everywhere, from cash flow to financial metrics and this helps us scale and grow. Most founders have a very busy schedule, which is why cloud tools like Xero are incredibly flexible and fit to when and where you want to use them.
5. How can you fundraise successfully?
It’s a process of explaining your beliefs in a simple enough way that the people in front of you will understand your dream and ambitions. Tell your story as many as times as possible and in the most efficient way in time and words you use. What this means is sharpening your pitch, talking to as many people as possible in the shortest amount of time.
What it comes down to, is believing in what you do. We came from nothing, in five years, we want to be in every prominent mall in Hong Kong, Japan, and China. In Shenzhen, the malls are high-quality, co-branded with Hong Kong developers, and have a good tenant mix, so that will be a city we will explore initially. China has 5,000 shopping malls, so we have lots of places to go to. If the mall is well managed, we will be there.
We are also working on co-branded products with the likes of Chupa Chups and Garfield where customers can make clothes with their own avatars. People told me it was impossible to do, but now we are the only company that allows Garfield customization. So how did we do it? We control what people can do, and make sure they can’t make anything ugly, out of scale or off-brand!
6. How do you manage expectations from investors?
Being transparent is the key with your shareholders and investors so you don’t have to set the expectations, you just provide the facts and they will understand what is happening. That’s why tools like Xero are useful to get your numbers together, but the most crucial element is, to be honest.
On our journey, I always say we are still learning, growing, achieving, but also making mistakes. I still consider myself a start-up but given we have six years’ track record, sometimes people think we are more of an SME. What I would say is being a start-up means you have the will to grow and innovate, and you don’t ride on existing models but try and breakthrough to new things every day. That is a start-up, which is much faster than SMEs. Two years ago, I knew nothing about kiosks but now I can tell you everything and we have dedicated staff as well as a control panel to operate everything centrally.
