Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy, where I interview entrepreneurs about how they built their businesses. I usually do it from San Francisco, but as part of my goal to run a marathon on every continent on the planet and to travel the world interviewing entrepreneurs, and . . . Oh, boy, I’ve got to have a goal of slowing down next year. I talk way too fast. And getting to know how business is done, not just the San Francisco way, not just the American way, but how it’s done. And I’ve got that goal, that’s what brought me here to Singapore. And I’ve got an interview with an entrepreneur I’ve really been looking forward to meeting.
His name is Arrif Ziaudeen. He is the founder of Chope. What Chope lets you do is stuff that you probably already recognize. It lets you book a reservation at a restaurant, but you also have the backend stuff that the restaurant can use to make sure that even if I don’t book a reservation, they get to seat me properly, and then when the next guy does book a reservation, the fact that they’ve seated a few people before him means that they could accommodate the person properly. Am I right about that?
Arrif: That’s right. Hi, everyone. My name is Arrif. I’m super excited to be on the show. Thank you guys for having me. And everything that you just said is correct. And there’s a lot more that we do and I have a full hour to tell you all about it.
Andrew: Oh, more. I didn’t realize it. I thought it was very . . . Like, I thought I got . . .
Arrif: Oh, no. I mean, you caught the gist of it for sure, but there’s so much stuff happening in our industry that I could talk about it for an hour.
Andrew: All right. We have that hour. I should thank the two sponsors who made this interview happen. The first is HostGator for hosting websites right. Anyone who’s starting a business should check out hostgator.com/mixergy. And the second if you’re hiring a developer . . . In fact, if you’re hiring a developer, there’s space. It’s tons of space in here.
Andrew: If you’re hiring developers, go to the toptal.com/mixergy.
So I was looking up the revenue from 2016, $5.5 million, 2017, $10.4 million. Is that right?
Arrif: That’s right.
Andrew: 2018 was what?
Arrif: I can’t share the number because it hasn’t been finalized yet, but we are looking at roughly doubling our revenue every year. And I think we will be on top of that target.
Andrew: Twenty million give or take?
Arrif: Let’s call it that. Yeah.
Andrew: Okay. All right. Twenty million Singapore or U.S.?
Arrif: Yeah, Singapore.
Andrew: Singapore. Okay. Which means that it’s roughly 15 million U.S., right?
Arrif: Yeah, thereabouts. That’s right. That’s right.
Andrew: I’ve been getting better doing the math in my head.
Andrew: I raced over here because we had like a scheduling issue. And as I raced over from this very corporate Regis office, I come over here and I’m looking on the street and I see people sitting down and eating on the sidewalk, which I hadn’t seen in Singapore. People are very proper here. The gentleman at the door didn’t have a computer or anything to welcome me. He just had me write it down on a piece of paper my name. He wanted my passport number. I don’t know what it is with passport numbers here. I feel very unsure . . .
Arrif: Interesting. Okay.
Andrew: . . .about [inaudible 00:02:48] people. Basically, it’s not like the . . . It’s less corporate than most places. I hired a driver to give me a sense of the environment and to tell me about the culture. He told me that this is an area where there are sex workers. What do you think?
Arrif: It’s possible. I wouldn’t . . .
Andrew: It’s possible.
Arrif: I think I’ve heard. So this area that our office is currently in is a little bit . . . It’s kind of the older part of Singapore’s central business district. This building that we are specifically in is one of the first few sort of high rise buildings that came up in this area. This actually . . . Singapore is pretty amazing because, if you think about what we don’t have is land. We’re a tiny country. And this road that we’re on is called Beach Road because guess what? It used to be the actual beach.
Andrew: And so I’m looking over here at beautiful buildings. Is that the landfill they created or not?
Arrif: Exactly. So what they’ve done . . . When I say they, I mean, the government, the civil service. They’ve reclaimed land out from the sea.
Andrew: This is unreal.
Arrif: And what they’ve done is they built beautiful buildings there, including the Marina Bay Sands, which is now that sort of the iconic part of Singapore’s skyline. All of that land didn’t exist when Shaw Towers, which is the building we are in now, was first brought up. This used to be right on the beach.
Arrif: And so you have to imagine that this building has been here a long time. And if you could see through its eyes, if you could sort of do a magical time lapse of everything that’s happened over the past, I’m going to say 50 years, maybe, since the 1960s, ’70s, you would have seen this entire area turn from sea into land into beautiful sort of modern building skyscrapers. And this building that we’re in represents sort of the old Singapore, and really old because this building actually is going down in about a year’s time. They’re going to demolish the whole thing.
Andrew: Wait. Hang on a second. I’m looking at your space. The space looks gorgeous.
Andrew: Very like not even San Francisco. San Francisco is seedy. Very like Silicon Valley or further south.
Andrew: And they’re demo . . . It seems like you built this recently, and they’re going to demolish it?
Arrif: Well, I wouldn’t say we built it. I would say that when we first came in about two years ago, it was an empty shell of an office, and we put up some walls, some partitions and painted some of that stuff bright colors, and now it looks all cheerful and everything. Thank God that the design aesthetic for most startup offices is quite deconstructed, so we didn’t have to put in new plus sort of couches or anything. But the building as a whole is super old . . .
Andrew: I see. So, you’re saying . . .
Arrif: . . .and so they’re going to bring that down. And that’s Singapore for you. That is out with the old, in with the new. Let’s keep that little life cycle, circle of life stuff going and that’s very Singaporean mentality.
Andrew: You know what the tour guide driver that I hired to get me a sense of the environment said, “That is actually starting to bother people.” And they’ve designated some older buildings as historical landmarks, a place where you buy Chinese food, just to give people a sense of heritage and culture and not allow every single thing to be destroyed the way that they seem to want to.
Arrif: Sure. There’s pros and cons to that, right? You can imagine a much worse situation where nothing was earmarked as cultural and everything was modern and that would be a much worse situation. Sure, we tried to do some cultural preservation. There are certain areas of the city and country that have been . . .we hold off to make sure that the future generations can remember what Singapore was like when it was just up and coming in the 1960s.
Andrew: So let me go back to before . . .
Andrew: . . . when you’re up and coming. I’m trying to get a sense of where you came up with the idea for Chope. Where was it?
Arrif: Okay. So it came from problems that I personally had in this situation. So I eat out. I eat out quite a lot. I noticed your eyes looking at me. Yes. I enjoy my food. Yes, I do. And obviously, the chief problem there is contacting the restaurants to not just book reservations, but to ask questions and whatnot, contact and communication with that.
Andrew: So this stuff existed in other places. I’ve been booking online for at least 10 years. Is it that you traveled somewhere and then saw that and said, “Why don’t we have that here?” It is.
Arrif: Absolutely. You know, I’d spent a couple of years in the Bay Area myself. I studied at Stanford for business school and worked there as well. And that was one of the earliest times that I was exposed to that service in the U.S., but also in Europe, right? And it occurred to me that across all of Asia, this didn’t exist. And it wasn’t just Singapore as a country. I mean, I’m talking about all of Asia. Right? And I said, “Well, it feels inevitable. Everything else is transportable across the board. Everything else is analogous. Why wouldn’t this exist across Asia? We’re no different.”
Andrew: Why do you think it didn’t exist before?
Arrif: Yes, good question. I don’t know. And I guess that’s what drove me to experiment with it because that was how this started, right? I didn’t start off the business thinking, “We’re going to grow this into a $15 million revenue, doubling every year kind of business.” I was like, “Hey, why doesn’t it exist?” because I’m having a hell of a difficult time booking dinner tonight for my family. So what’s going on here? And why doesn’t it exists here when it exists elsewhere in the world? And so I started speaking to restaurants to just think about that problem.
Andrew: You did?
Arrif: Yeah, I did. I just . . .
Andrew: Before you created anything.
Arrif: Absolutely. One of my beliefs is that before you start with a business, get out and speak to people and get opinions on it, and then people will all tell you, “It’s a bad idea.” Then there’s a better than zero chance that it’s a bad idea. I’m not saying you have to listen to everybody, but I’m saying get out there talk, hear and . . .
Andrew: Which restaurants did you talk to?
Andrew: Which rest . . . And by the way, this is very much a Stanford idea right now.
Arrif: Sure. Is it? Okay.
Andrew: Well, it’s been there for a while.
Arrif: Lean startup.
Andrew: Yes, exactly. I could see that you brought that here. What type of restaurants did you go to, and how did you go about it? Were you just knocking on doors literally trying to talk to the owner?
Arrif: A mix. Yeah. There were places that I would frequent. The great thing about restaurants is they’re not like accounting firms. You can’t just like buzz into an account and say, “Can I speak to an accountant, please?” They’ll be like, “Who? Why? What?” But with the restaurant, you very much can do that, and that was the thing I took advantage of. I would just go there, have dinner, say, “Hey, can I speak to your manager? Hey, I just want to ask you like three questions or four questions about how you take reservations, how . . . What are the problems that you guys face?”
Andrew: And they were willing to talk to you about it?
Arrif: Sure. Why not? Because they’re in the business of chatting with customers. Here I’m eating my tiramisu or whatever, and I’m like, “Hey, man. How’s business?” And that seems like a normal question to ask a guy in the restaurant business. They love talking, by the way.
Andrew: What did you learn by doing that?
Arrif: Well, first of all, I learned that it wasn’t such a crazy idea after all. People were like, “Yeah, same as you. We’ve heard restaurants elsewhere in the world. We travel too, by the way, right? A lot of the restaurants set up here in Singapore, people have learned how to cook or serve elsewhere in the world. Italian chefs from Italy, people come in from the U.S. And so they said, “We had this technology elsewhere. It doesn’t exist here. Why? We’re also a bit perplexed about this, so why not? And we’re waiting for somebody to start it.” And I was like, ding, ding, ding. “Waiting for somebody to start it? Why not me?”
Andrew: Really? They literally said, “We’re waiting for somebody to do it.”
Arrif: Yeah. Somebody actually told me that. I mean, obviously, I spoke to more than one person, but one person did say that. They were like, “We’re waiting for somebody to start this. If you’re thinking about it, why don’t you let us know? Maybe we can work on something together. You can build, design something for us.” And then I was like, “Oh, me. Well, I’m not a tech guy. I’m a . . . I went to business school. I have no skills.”
Andrew: How did you find the tech guy?
Arrif: Early on, we had a group of friends that came together and started this. And unfortunately, none of my friends were techies either. So we had a bunch of sales and marketing operations guys, and we looked at each other, we were like, “All right. Well, you know what? We need a website.” So, between us, we had enough friends who were in the tech business and advised us, but nobody really sort of came in full time. And so we had to start . . . Strangely, we had to start hiring tech talent full time as our first few hires.
Arrif: So, really, the founding team, if you put it that way, the guys who were just doing it for fun. Can I swear?
Arrif: Shits and giggles. We were just doing it for fun. And all non-techies. The first few full-time guys we hired were techies. And then very quickly, this is interesting now, very quickly we realized that there wasn’t a lot of tech talent here in Singapore specifically. And so we had to start hiring from other countries, which I think in the U.S. is very unusual. Imagine having to import talent as your first three or four developers.
Andrew: It’s first three or four for sure.
Arrif: You think so, import from overseas?
Andrew: I think . . . No, no, it’s unusual for the first . . . By the way, if you didn’t have any developers on the team, you’re a smart guy. Why do you even need them? Why not say, “I came up with this idea. I’m talking to the restaurants. I’ll go hire developers myself. Why did you need the co-founders for?”
Arrif: Oh, right. Okay. So, at that time, we didn’t really think about things like equity share and . . . We really were just trying to figure out what the problem was, right? I mean, of course, in hindsight . . . That’s the beauty of our business. Hindsight is 20/20. There was a lot of inefficiency. Absolutely true. But neither do I regret any of it at the time, because all the guys that were in it were in it just passion, for passion. And we ended up not having a lot of the stuff that early founding teams have, which is like shareholders agreements, investing agreements and all that stuff. We really were just five, six guys in a room trying to figure it out.
And then obviously, when the time came to hire full-time staff, we said, “Okay. We’re going to have a pot of money. We need to hire. We need to pay some salaries.” So I said, “Look, I got some savings. I’ll kick start this thing,” because I had been the one dragging it through from the beginning. So this was only a few months in my new. It wasn’t like three years in or whatever. It was just a few months. So I said, “I’ll put in whatever savings I have, and we’ll hire our first few developers.” And, frankly, at the back of all our minds at that time, we were like, “Well, and then we’ll lose all this money because this whole thing probably won’t work out and then . . .”
Andrew: In your head, did you really . . . In your gut, did you believe that it was going to work out?
Arrif: 50-50. I have to be very honest with you.
Arrif: Yeah. I can say that now in hindsight. I would never have said that to an investor on the day, but in hindsight, at the time, enough people had come up to me and said, “Hey, man, what are you doing? Get a real job like . . .”
Andrew: You went to law school.
Arrif: Yes. I did my undergrad in law.
Andrew: And then you got your MBA at Stanford.
Arrif: Yeah, that’s right.
Andrew: You’re a guy who wanted to be what? Were you sure?
Arrif: No, no.
Andrew: Were you going to be an investment banking?
Arrif: No. It was always a journey. Right? I think . . . And that’s pretty much how I approached starting this company. I believed that life was a journey, which is a cliché, obviously, but I really lived it that way. So going to law school was to figure out whether I liked it or not, did enough internships to figure out that I didn’t like it.
Andrew: You went to law school to see if you like the law enough?
Arrif: Sure. Yeah.
Andrew: That is a lot of time and commitment to just taste.
Arrif: Well, it was better than any of the other alternatives that I had in front of me.
Andrew: Growing up, what were you doing? What were you like? What was your thing?
Arrif: Oh, interesting. I think I was a mix of different stereotypes, of different tropes. One was I was the kid who was bullied, right? I studied overseas for a while, and there was a little bit of this sort of new kid in school from somewhere else, from a cultural . . .
Andrew: From where were you?
Arrif: I’m from Singapore.
Arrif: Yeah. And then I studied in the UK for a while, right?
Andrew: Got it.
Arrif: Yeah. And so I was that kid that was new and not from around here and a little bit bullied.
Andrew: Why did you move to the UK?
Arrif: So I think one of the things in Singapore is sending your children overseas for education and we can afford it. And my parents could, fell into that bracket, and so they did. They sent me overseas partly to open my eyes to . . .
Andrew: You mean as a teenager?
Arrif: Yeah, yeah. I was 15 when I went . . . or 14 when I went overseas.
Andrew: One of the things I’m learning about this culture here is that it’s very much about learn, study, prepare. Were your parents like that?
Arrif: Yeah, I think so. Education meant a lot to them.
Andrew: Give me an example of how that played itself outgrowing up before . . .
Arrif: I was about to say, but I think it differs from . . . Well, I suspect that it differs from what you’re talking about. See, education and learning might be two different things, right? In the context of my parents, they wanted us to have a great resume going into the workforce, and that meant list of the best schools so that you could get a good job at a good bank or whatever, a good law firm, and that would be another piece of your resume that you could then progress on. So kind of a very playing a game of life, right? And so very, typically, my parents sort of fell into that bracket and they sent me to the best school so that I would have a great name on my roster of things when I apply for a job.
Now, to me, that’s very different from all the stuff I actually ended up learning at that school, which came in terms of character building with all the . . . I talked about stereotypes of being the bullied kid. At the same time I was also the smart kid. So just very many different things that I learned that were so much more than just a name on a resume, right?
Andrew: And so you went to Stanford, which is known for entrepreneurship now. In fact, it has been even before the startup scene.
Andrew: Because you had a bug, an itch to be an entrepreneur?
Arrif: Well, no, actually. The interesting thing was, I was, as I said, on a journey. So coming out of law school, I decided to join a consulting firm . . .
Arrif: Bain. That’s right, yeah. To get more general management skills. And it seemed like a really exciting job, because they were parachuting you into new countries every month, well, every couple of months to new industries. And as a young business-minded person, that was a great way to expose myself to just so many different facets of work, right? And it was.
For three years, four years, I ended up in India, Malaysia, Indonesia, Thailand. I was in the U.S., East Coast, West Coast. And then I ended up on the West Coast, and I really sort of fell in love with the area and then I applied to Stanford. Very, very, very lucky to get in. And it was a no-brainer for me to take it once the opportunity came up. And really, I went in thinking, “What am I going to get out of this experience? I don’t know, but let’s try. Let’s see . . .” Again, to your point about going to law school and expense to this, I knew that there was no downside to getting a Stanford MBA. Nobody was going to say, “Oh, this is a stupid waste of two years.”
Andrew: You just don’t have . . . The thing that shakes me or that . . . You just don’t have that anxiety that I do about “Where is this going? Is this the best use of my time?” Like, every minute I keep thinking that. Like, I wondered was the first question I asked you even worthwhile.
Andrew: It goes . . . You don’t have any of that. It’s just, “I’m going and I trust that I’m going in the right place and it’s going to move me further.”
Arrif: You know, I read an interesting paper about what makes entrepreneurs entrepreneurial. And really, this is one of the first academic pieces I read about entrepreneurship before I started Chope. And to this day . . . Obviously, I’m mentioning it now To this day, it leaves a huge impact on how I think about the journey, which is that you can call it academic or you can call it inductive versus deductive reasoning, but really it’s about the best analogy I’ve heard is like, there’s two types of explorers out there. One is the kind who’s trying to get to the top of the mountain and he says, “There it is, the top of the mountain. Now, let’s plot how do we get there? We go around this way, up this thing, swing up here, but the end goal is there.” And then you’ve got the second who’s an explorer. And he sets off from harbor and he says, “Guys, boys, don’t know where we’re going. We’ve got some food. We’ve got some supplies. We may not come back alive. We’re going in search of who knows what. But here we go.” And that is the journey . . . That’s the goal in itself.
Andrew: And that’s you.
Arrif: And I think I’m much more on the side of the explorer, the sort of sea voyage type than the mountain climbing type. Now, there’s no wrong or right, right? I think at different times in the business you need to be different types or you need different leaders, but certainly, over the . . . on average across my life, you can see that I’ve definitely been more on the voyage kind to try and see what lies ahead of me. And it’s worked I guess pretty well, because I don’t have an end goal in mind. So I can’t fail, right? I can not get there because I have no end goal in mind.
Andrew: I like the analogy and I like the framework of two different options. You then came up with the idea. I read that one of the first, maybe the first step you took was creating the logo. Why was that so important to you?
Arrif: Funny because somehow putting it into a tangible form somehow makes it more real, right? Actually, there was a step before that, if I can share that story now for you.
Andrew: Yeah, please.
Arrif: So what happened was, so a friend and I were sitting around talking about this idea, and we were trying to think of names for the company. And the first thing I thought of, “Hey, we’re going to try to help you make a restaurant reservation, so Eat Seat maybe.”
Andrew: That’s good. Okay.
Arrif: And then he goes, “Well . . .” He was less effusive about the idea. He was like, “Eat Seat? How do you spell that? Is that sit or a seat?” He’s like, “And you mean eat sit or what? There’s just too much a variation here.” And he said, “Let’s go for something that’s very difficult to misspell. And then we were thinking . . . And we’re both in Singapore where there’s this word called chope, and it’s very unique to Singapore almost, not even this part of the world. It doesn’t really have . . . It doesn’t really come from any language. It’s a slang word that means to reserve. We have this practice here in Singapore, which is, again, very weird where when you’re eating at a sort of a low-end, mass market, food court type thing. It is very normal, because Singapore is so crowded at lunchtime, to reserve your seat by putting something down there and most usually it’s a tissue paper. It’s like a packet of tissue. Have you seen these?
Andrew: Yeah. And now I didn’t understand it. I said, “Why didn’t the restaurant give me a pack of tissues?” Now I understand. You bring it with you so that when you’re done eating, you clean up with your napkins you brought from home?
Arrif: No, that’s not how it was. Actually, the purpose of the tissue is mostly . . . Well, there’s still a purpose. The first is to reserve the seat for you. So what you do is you put your tissue packet down on the table or the chair.
Andrew: But where do you get the tissue packet?
Arrif: You got to bring it from home, buddy.
Andrew: From home.
Andrew: So why are people walking around with tissue packet? Just like to wiping their nose, that type of thing or . . .
Arrif: Well, for this purpose, really. It’s kind of self-fulfilling, right? You have the tissue to do this.
Andrew: Okay. I did . . . I looked . . .
Arrif: And you can buy it.
Andrew: . . .and it was this tiny, thin little packets.
Arrif: Yeah. And there must be like 10 pieces, 10 tissue.
Andrew: Ten napkin tissue.
Arrif: And they don’t cost that much, 25 cents or whatever. And really, you just put it down on the table and you walk around, and then you can buy food from one of the many stores that surround the area and you come back and it’s kind of . . . It’s an unspoken tribal practice that you do not take somebody’s chair that has a piece of tissue on it. Right? If it has that napkin and somebody sees you, they will come and they will call you on it, “Hey, I chope this spot. How could you . . .”
Andrew: Really? They would actually say that.
Arrif: Oh, for sure, man. It’s like cutting the line at a store. Right? If somebody is going to call you out on that. And so it’s heavily enforced culturally and . . . Anyway, so I said, “Come on. That word, chope, someone’s got to own that website.” So, my friend was like, “Let’s check it.” And back in the day 2G, whatever on the iPhone took me an hour to like, load up the site and we were like, “Oh, my gosh. Nobody’s got the site.” So we bought it. We designed the logo around the name because we were so amazed that it wasn’t. And then that was how the whole thing started. Now we had assets that were burning a hole in our pocket, balance sheet.
Andrew: Oh, yeah, yeah. And was it chope.co that was available at this point?
Arrif: Yeah, it was. We didn’t have . . . We had no funding. We didn’t have time to go buy .com because some dude was squatting on it, and we later bought that after I think our second or third round of funding.
Andrew: Okay. I should say, by the way, this interview is sponsored by a company that would let anyone get their website, whether it’s with their domain that they already have or a brand new domain, it’s called HostGator. And if people go to hostgator.com/mixergy and just bring their idea, they are just like for you. As soon as you create a site, it feels more real. As soon as you own a place, you just get a little more creative with it.
Now, for many people they get creative, they dump it, move on. Don’t feel bad. That’s the way it works. No artists says, “I started drawing this and then I threw out the paper. Gosh, it sucks.” It’s a freaking web page. This is digital something that goes to someone else and it goes away.
Arrif: Yeah. Let me tell you . . .
Andrew: Yeah, tell me.
Arrif: . . .a little story about . . . Well, two stories. The first is that . . .
Andrew: You know what? Let me close it up by saying, if you want to go to HostGator, go to hostgator.com/mixergy. When you do, you’ll get the lowest price that they have to offer. You’ll get unmetered disk space, unlimited email, lots of offer, lots of stuff, and 45-day money-back guarantee.
The two stories. Now I closed out that ad.
Arrif: Right. Okay. Well, they relate to hosting. Well, the first thing I will say is that we got the website and to make it really tangible, so we had the logo, we had the website now. And then my friend put on a counter, and usually, you count down to something. We don’t know what we were coming down to, but we just felt that we needed to have something dynamic on this website. So we put a counter on it, and it counted down to June 15th, 2011, which was at that point three, four months away. Suddenly we have a deadline and that . . .
Andrew: Just because you did that, arbitrarily pick the date, now you have to work towards it.
Arrif: Yeah, absolutely. And that I think is the most amazing thing when you really set a goal. And sure we could have set any date for it. God knows why we set June. But we did and we really pushed ourselves to get it out by then. And I have to admit that the first version and the second version of the site were terrible, but we hit the deadline because we really believed that speed was the essence. And I think if we hadn’t done that, today we might even be sitting around still fiddling, trying to get it perfect. So that’s the first thing about the website that really made it real.
The second thing was that, to this day, we have a bunch of domains out there, because you’re right, we didn’t just buy one name. We bought a bunch of them, right? We said, “You know what? If we don’t like this name, why don’t we go for this name, that name?” We bought translations in Chinese. We bought different versions, so different . . .
Andrew: Okay. I saw Chope.sg is also one of your domains.
Arrif: Yeah, yeah. And we just bought different . . . What do you call it? The dot whatever.
Andrew: Top-level domains?
Arrif: Yeah. Top . . . But we also just bought different names because as you said, it was almost like scrap paper, right? We were buying different names to try it out. And to your point, it doesn’t cost a lot of money, so I would completely recommend you guys to go out there and start buying these domains, because that actually starts making this stuff real. And don’t be stingy with it. Like, hold on to this stuff. One day, it’s going to be like gold dust.
Andrew: Do you still have one that’s maybe going to be used by something? Have you sold any?
Arrif: I never sold a domain. I hold on to them all. I used one for my wedding once.
Andrew: You did.
Arrif: Yeah, because we hosted a wedding website, where guests could like RSVP and stuff. So I used one that was the domains that I bought. My web guys were nice enough to sort of help me with that, but yeah. It’s off the books. Don’t tell my investors.
Andrew: How did you get the first restaurants? I heard it was them doing you favors, but you had Mario Batali with . . . What is it called? Motza?
Arrif: Yeah, yeah.
Andrew: I love that place. Isn’t that the place where he makes pizza?
Arrif: Yeah, that’s right. That’s right. It’s shut down now, unfortunately, but at the time.
Andrew: Oh, that’s too bad. I had such a good date with Olivia there . . .
Arrif: Oh, great.
Andrew: . . . in L.A. So, how did you get these restaurants?
Arrif: We begged, man.
Andrew: You just walked into restaurants? I thought it was begged a family friend. No. It’s just beg restaurants that you go in.
Arrif: Well, you know, I think . . . Okay. So sales is really where it all starts, right? And for us, you can’t be shy. So, like I said, restaurants are open. Walk in there. If you can get anyone that matters, talk to them. And my approach was to go speak to the top-tier restaurants, the really triple-A guys, figure out . . . If you’re going to spend time building relationships and building products specifically for people, these are the guys you want, right? And 9 out of 10 times guys would be like, “Yeah. Dude, get out.” Right? Like, “We don’t want to buy your stuff.”
Andrew: They’re not super . . . They’re not known for being nice to vendors and employees at restaurants.
Arrif: Yeah, absolutely. Completely true. Plus, add on top of that, I have no product, right? I’m just walking in there saying, “Hey, we can give you a product.” They’ll be like, “How many users do you have?” We’d be like, “None.” “What product do you have?” “None.” So we go in there and say, “We have an idea. Do you want to work with us on this idea?” They’ll say, “No. Get out. I got enough stuff going on in my life.” But then 1 out of 10 would be like, “Hey, your idea makes sense.” And some of the guys that we spoken to, I’d spoken to early in the sort of idea genesis phase, of course, some now felt a little emotionally involved that I had started this thing, so they were like, “Sure, we’ll help out.”
So we started building this whole system around the few guys who agreed to be part of the beta trial. And it really failed, I have to say.
Arrif: Yeah, absolutely. We launched . . .
Andrew: What do you mean? I heard 15 reservations the first month.
Arrif: Yeah. Yeah. No, no, no. First week. First couple of weeks, right? All friends. I mean, I could . . . We looked through the list and be like, “Okay. I know this guy, this guy, this guy, this guy.”
Andrew: I was going to ask you. That’s pretty impressive you’re going to get 15. It was you and your friends. So what failed then?
Arrif: So what we realized very early on . . . So we built this system and we called it table management system. You mentioned this in your intro, that one thing Chope does is we have both the consumer-facing side and the restaurant-facing technology.
Andrew: Chope Book.
Andrew: And it was called something else before.
Arrif: Yeah, sure. It’s gone through a host of different names. Today it’s called Chope Book. Basically, it’s a system that the restaurant uses as a sort of operating system. So we can do everything from identifying that users have come back a bunch of times, or no shows, so we don’t want to take a reservation from this guy. It’s communications suite, so it can . . . Instead of having the guy call each diner and say, “Hey, are you sure you’re coming tonight?” You press one button and it does that automatically.
Andrew: This was from the beginning?
Arrif: No, no, no, no, no. That’s where it is today.
Andrew: You had booking systems from the beginning beyond . . .
Andrew: It wasn’t just like a fancy Excel spreadsheet for them.
Arrif: Well, it was.
Andrew: It was.
Arrif: It was at the beginning. It was at the beginning.
Arrif: And we still packaged it as a table management system.
Andrew: Got it. Okay.
Arrif: Yeah. And that was kind of the problem, right? We built something that was a bit too sophisticated, because coming out of our backgrounds, we tried to finesse it. And so we built something that was really over-engineered for the restaurant business, which is, again, a very traditional business. We thought the main problem we were trying to solve could be solved with product. What we realized when we launched with nine customers on June the 15th, six of them within a week, they shut their laptops, put them to the side and say, “Thanks, guys. Great kids. I love the dream. Stuff doesn’t work. Get the shit out of here.” Right?
Andrew: Got it. Yeah.
Arrif: And six of them were like, “We don’t need the product to do our jobs because our jobs doesn’t involve computers. It involves seating guests, serving food, getting bills paid. So we don’t need your stuff. We have a pencil, that’s fine.” And that was, of course, super demoralizing when six of your nine first customers tell you that, “You’re great kids, but the dream ain’t going to work.” And that was demoralizing.
But then the three that were left would come back, or they came back to us and they said, “Product is terrible, horrible. What you need to do is you need to make this faster. You need to make that . . . We need it to be like this.” And we were like, “Wait. Hold on. So you’re using it?” They’re like, “Yeah. This stuff is . . . Like we need this thing to work.” So then we were like, “Oh, wait. So it solves a problem, but obviously, there’s a lot of problems with it, but it solves a problem.” They were like, “Yeah. And you need to get this to me by tomorrow.”
Suddenly, you realize that there’s a segmentation that works for you. And what worked for us was the really big, busy restaurants that needed a technology to manage their restaurants better, versus the other six guys who were sort of quiet cafes, and, for them, they were just trying to fill the seats, fill as many . . . They had 10 tables and they had maybe 5 of them were full and they were trying to fill 5. Those guys, they don’t need technology, they need marketing.
Andrew: Oh. So that’s the chicken and the egg thing. The part that I wouldn’t have thought of till later makes a lot of sense. You’re saying, you didn’t have enough users to say to a restaurant, “Look, I’m going to bring you new reservations.”
Andrew: But you did have software for people who did have reservations already. So even though I thought of the first product as being the reservation booking system, it’s the table management part . . .
Andrew: . . .that was what they wanted. Got it. And that would stand on its own. Even if you couldn’t bring them any new diners, if you could just help them organize all the reservations without causing chaos, they loved you, and then the diners would come late. Got it
Arrif: Exactly right. You hit the nail on the head there, because these guys were so busy that if we could make them 1% to 5% more efficient, we would increase their revenue by far more than by just bringing one or two reservations or one or two tables in per week.
Andrew: So that’s how you solve the marketplace issue. Which would we go after?
Andrew: You went . . . You took it away from marketplace, you helped them, you started improving it. What were some of the needs that they had?
Arrif: A really simple one was online availability 24/7. So, for example, a lot of these reservations that we get, in fact, is I think something like 27% come in when the restaurant is closed, which is just not a user behavior that you’re used to. You don’t call up United or whatever airlines and say, “Hey, sorry, you guys are closed right now. We’ll wait till morning to book your flight.” You want it now, right? That’s life now.
Arrif: So guys who were used to booking hotels, airlines, whatever online all the time, restaurants you have to wait till morning. Now we see 27% of reservations coming in when the restaurants are closed, so we’re solving that problem for you already. That’s incremental business that you would have missed otherwise, first of all.
Andrew: And so they were getting calls coming in and what they would do I’m imagining is on the answering machine say, “We’re closed right now. If you want to book, you can go to . . .” and they give a URL. Is that what it was? No.
Arrif: Well, today, yes. Today is actually a lot more sophisticated than that. We actually redirect them directly from the phone call to making a reservation, so we’re able to link to their phone and direct them that way. But back in those days, if you tried to call, honestly it would just go on ringing. No one would pick up.
Andrew: So how did you solved that for them? Or you didn’t at first.
Arrif: Well, we got there. And so we built the table management system. We got all the inventory in the restaurants. We put it online. If they had 10 tables, we know how those tables would join up and how many seats they would have. And when people tried to make a reservation online, if there were seats available, it would yes and it’s instantly confirmed. And if there was no seat, it would say, “No. Nothing is available. Try again for the next day or the next day or the next day.” Yeah.
Andrew: Got it.
Andrew: Wow. All right. How long did you go based on that before you were starting to actually get real customers?
Arrif: Yeah. I . . .
Andrew: I mean, diners.
Arrif: Yeah. There were a couple of breakthrough moments that I remember. The first I think was when I saw a reservation from a name I didn’t recognize, because you’re looking for Melissa, Chris, Mike, Terry, whatever, and you’re like, “Who’s this person?” And then I’m looking around the office because there’s few friends and I’m like, “Your friend?” “No.” “Your friend?” “No.” You’re friend.” I’m like, “Oh, my God. We have a real user.”
Arrif: Right? And so that happened a couple of weeks in, but obviously, it didn’t explode from there. It was just a milestone where we were like, “Wow, people are really adopting this stuff without doing it for sympathy.”
And then the second really important milestone was when we cracked this one restaurant sometime in December. So this was six months after we launched the website. I would say December of that year. And up until then, we’d seen it was kind of like drops of reservations, one here, one there, one here, one there. So I think this one restaurant, which we couldn’t predict, it was an all-day dining, so it was all-day breakfast kind of play. It’s very, quite chic, quite hard to get into. And they really knew what we were trying to do. So they put the links on their own website and everything.
So we woke up the next day, we were like, “Oh, my God. What’s going on? The system is . . . It must be wrong, because there’s just numbers of reservations coming in that we can’t understand.” It had gone from 10 to 1,000. And we were like, “What’s going on? This doesn’t make sense.” And so we were like, “Check the system.” And we were like, “Oh, these are real reservations.” And I just didn’t believe it, really. I’m a pessimist that way. But just that one restaurant really suddenly drove so much of our business. It was scary. It really was scary because nothing else mattered than that one restaurant, which is great and terrible at the same time.
Andrew: Terrible because if they go away or if there’s a problem, everything goes away and there’s a problem.
Andrew: And they distract you from taking care of everyone else, so you’re even more invested in them.
Arrif: You got it. You got it. Yeah.
Andrew: Wow. Were you charging at the time for the software?
Arrif: No, we weren’t. We weren’t. But shortly thereafter, a couple of months later, we started going back and really started telling restaurants that, “You’ve been using it for a few months now. It is something that you get value from. We’re going to charge you 60 bucks.”
Andrew: A month.
Arrif: Yeah, 60 bucks a month. And the most restaurants they were like, “We’re doing this as a favor. It feels a bit like you’re trying to . . .” And then we’re like, “Okay, fine. We get it. You are doing us a favor. Let’s call it the list price is 60. We’re going to give it to you for a few more months for free, let’s say six more months. Is that okay? And after that . . .” Every time you go back, you tell them, “Look, we’re delivering value to you. At some point, we got to get paid. Maybe not today, when?” because I truly believe that if you are providing value, you shouldn’t undercharge.
The other part of this is if you’re charging zero for the service, the client themselves is not going to value it. And we saw this happened with competitors. A bunch of them came in when we started trying to charge and they’d say, “Hey, these Chope guys are trying to charge you 60 bucks a month? I’ll do it for zero. You can use mine instead.” And sure, we had a bunch of clients told us that and we were like, “Okay. We’ll keep it at zero because competitor X is doing it.” But what we realized is not only did it mean that we were all not making any money. On top of that, the restaurant was like, “The stuff is worthless anyway. Everyone is giving it away for free. It’s not actually worth anything.”
Andrew: And so what were they doing when they got it for free?
Arrif: They’d just sign up for multiple systems. They’d have nothing . . . They’d use none of the systems. But when the boss comes in and said, “Hey, guys, I’m paying 60 bucks a month for this. You better be using it.” That’s when it starts to create this sort of pressure internally for the guys to be like, “Yeah, the boss is paying for this stuff.” Yeah.
Andrew: I heard in the beginning, you talked to your wife about . . . This is kind of personal. But I know you’ve talked about it a little bit. She was your girlfriend at the time. This is before the website.
Andrew: You told her about the problem. You told her about what was going on in the business and you then stopped. Why?
Arrif: Wow. Yeah, it is personal. Not that personal. I’ll definitely talk about it. Why? As an early-stage founder, you bring your work with you everywhere. And I don’t just mean, you talk about it all the time. I mean, even when you sleep, it’s there. It’s like a cloud hanging over you. And the ups and downs, it’s like the weather for you. You can’t have a great day. Food is tasteless. Your family . . . You don’t even hear stuff people are saying if you’re having a bad time and your startup isn’t working out. Or maybe that’s just me. I don’t want to speak for everyone.
But like I mentioned, that moment when we lost six of our nine restaurants, that period was super painful, and it was difficult to do anything else except talk about it and keep maybe whining about it. In hindsight, I can say that. And that creates so much stress in a family, in a relationship because those guys have to be there for you without really knowing what they’ve signed up for. I think that’s the problem. A lot of spouses and families think, “Okay. Startup, sure. What’s the worst that can happen? We lose a few bucks.” They don’t realize that they’re going to lose the person that they love mentally, emotionally, for a period of time.
And it was a couple of years I think of this when eventually we decided, “You know what? We need some ground rules around this. We need to say that, if we want to talk about work stuff . . .” And my wife is super smart. She also went to Stanford Business School, and we learned a lot from each other, I think. Well, I learned a lot from her. I don’t know the other way around. But I value her advice a lot. And in that context, when I do want to speak to her about it, we almost treat it like a business meeting. We’re like, “Okay. Let’s not do it at home in front of the kids or whatever. Let’s go out, sit down, talk about it. Let’s have an agenda for this meeting.” And it makes it a bit weird, but it also makes it much easier to separate arguing about work stuff and just living together.
Andrew: When you say arguing about work stuff, you mean when you’re talking to your wife it’s more like, “I can’t be here for this because Andrew is coming to my office with a tape recorder and I’m going to be distracted.” Or are you talking more like, “Here’s the problem that I’m having. I can’t deal with this right now and this is why it’s distracting”? What are talking about?
Arrif: The latter.
Andrew: It’s that.
Arrif: Definitely the latter.
Andrew: That’s what I thought.
Arrif: Yeah, it’s much more. She has opinions about how Chope should . . . So the logo really was the first time I think that this came up, right? Interestingly, you mentioned . . .
Andrew: Because you showed it to her and she didn’t like it.
Andrew: And that crushed you, the first physical manifestation.
Arrif: Yeah, that’s right. That’s what happened. I had the first logo design,and it was . . . I thought it was okay. I’m not a designer, I don’t really care, and so I just showed it to her. I was like, “How’s this?” And she was like, “Oh, it’s terrible. It looks like a stuffy old website,” whatever she said, and all I could hear was like, “This is not going to work. This is not going to work. This is not going to work. This is not going to work.” And the person that you respect most in the world, one of the people you respect the most is telling you that . . .
Arrif: A lot of what drives me to do what I do is because I want to do it for my family. I want them to be happy, and I want to build a . . .
Andrew: Not just financially, but also to see pride in my wife’s face.
Arrif: Yeah, exactly. I want them to be proud of what the son, husband, dad has built. So to get that disapproval, it’s like, “Oh, man.” That really . . . It’s one thing if some stranger on the street says, “This is a stupid logo.” But you’re like, “Well, what do you know?” But when somebody so close to you says that, it really hits home.
Andrew: I find that my wife is smart too. She’s in the space somehow. She went from being a do-gooder to now helping tech companies with their do-goodery.
Andrew: And that’s really good. She has opinions. She has experience to do it. I don’t need it all the time. Sometimes I just want to vent. I don’t need the solution this second, and I don’t need the solution to be exactly the opposite of what I just did. I like the idea. You literally will do this, the idea of saying, “Let’s go have a business meeting at a restaurant. We’ll sit down. We can have this conversation.” You do that.
Arrif: Yes. Yes, we do.
Andrew: How often?
Arrif: It used to be more often to be fair. I think we owe it to ourselves to go back to doing that more often, but it used to be breakfasts, not lunches. So we sort of send the kids to school and then sit down, have breakfast together and then chat about it.
Andrew: And did I hear that you show up late?
Arrif: Often, yes.
Andrew: You do. I heard that. Like, you’ll start the today at 10:00 or something.
Arrif: Yeah. Well, actually, our office hours actually start at 10.
Andrew: The whole company does at 10.
Arrif: Yeah. Let me tell you why.
Arrif: Restaurants only open late in the day. Obviously, they do lunch and dinner service, generally speaking. So restaurants tend to run from 10 a.m. to 10 p.m. at night. And so to match those hours, we go from 10 a.m. to 7 p.m. Most meetings, most restaurant meetings happen about 3 to 5, 3 to 6, so we need people to be working and fully function in those hours. So we can’t end at 5.
Arrif: So that’s one reason. And the other reason is because I’m a night owl, so I get most of my work done like . . . It used to be like between 10 to 2, but these days it goes up . . . It kind of stops at 9.
Arrif: Well, kids.
Andrew: Got it. How old are your kids?
Arrif: Two and four. Three and four, sorry. And so a lot of the culture of the company actually match from my own sleep habits. It’s just kind of weird.
Andrew: I should say, a second sponsor, it’s a company called Toptal. You might actually want to hire from them. I like that you guys hired developers early on because you didn’t have it on board. There’s a sense that you have to have everything internally. And the interesting thing about what Toptal does is they say, “Look, you bring us whatever your big problem is.” Even if it’s like a side thing, you decided that you’re going to add artificial intelligence, plus a neural network, plus voice-activated assistant to do this whole reservation. You don’t have anyone on your team to go do it, but you believe this is important.
Arrif: That’s a side thing. That’s not a side . . .
Andrew: Maybe you say, “You know what?”
Arrif: That’s so central. Yeah.
Andrew: “I need a single thing. I can’t distract my people.”
Arrif: Yeah, absolutely.
Andrew: “This could be completely be stupid or maybe it’s great.”
Andrew: You go to Toptal. You say, “Here’s what I need. I need somebody to do this.” They find people who’ve done this before for other people. Now, obviously, I came up with a Michigan nonsense here. It could have been as simple as you want to do it on a . . .
Arrif: No. I want . . . Hey, can we redact that off the web. It’s such a great idea. Can you not share this publicly, please?
Andrew: Let’s go with the simpler idea. Your Echo device is there in everyone’s living room. People are going to want to book through it, but your people don’t have time to get distracted by that. And it may be a stupid idea that doesn’t go anywhere. You go to Toptal, you say, “This is what I need. Booking system on smart speakers. Get me two people who’ve done this before who could do it fast.” They get you those two people, you get on a call with them, see if you like them. If you like them, if they did it before well and you like the output, you hire them.
Arrif: I love it.
Andrew: They do the thing on the side. Then you look and say, “You know what? Actually, this does make sense. These guys have done it well. We’re going to invest in this through them and build. Or, “Guys, thank you. Go back to Toptal. We’re not hiring you full time. We’re just going to take this on ourselves. You transition my people over. Goodbye.” Whatever it is, you bring it over the Toptal . . . Brilliant, right?
Arrif: We do that all the time.
Andrew: With outside developers.
Arrif: Yeah, we have to.
Andrew: What’s an idea that you’ve dumped?
Arrif: Localizing some of the website. So we operate across five different countries, so it’s five different sets of parameters.
Andrew: Let me close this ad out, because I can see we’re about to go into different conversation. Anyone who wants this, including you, you get 80 hours, let me emphasize that, 80 hours of Toptal developer credit when you pay for your first 80 hours, in addition to a no-risk trial period. Who lets you hire with the trial period and you don’t have to pay if you’re not happy? By the way, they will Toptal pay. If you say, “Listen, we’re not happy here at Chope with these two people. Get these guys away.” Toptal will still pay them, but you don’t have to pay. All you have to do is go to toptal.com/mixergy, toptal.com/mixergy.
All right. You were saying that you had a side project with localization.
Arrif: Right. Yeah. So Chope exists across a number of different countries, each with their own sort of different ecosystems, slightly different, right? For example, here in Singapore, Instagram, Facebook, very popular social media platforms. In Thailand, Line is a lot more used. In China, it will be WeChat, for example. And so something simple, like having Facebook login. Let me give you a very simple example, Facebook login button on our website, so you can pull up your account details. That might not apply so much in Thailand, and it might not apply at all in China where Facebook is blocked. So you want to do things on your website like suppress the Facebook login button, some adaptation. And so using outside developers to do simple projects like that, build micro-sites, reskin certain things, those are all things we’ve done with external developers.
In the early days, we use external guys to do even major projects, the stuff I was saying that you were saying is very core. External developers can actually do a lot of that stuff already. Everything is core in the early days. You shouldn’t be doing anything on the side, right? So they were doing things like redesigning our . . . We built . . . Oh, here’s a great one. Back in the day when phones started to become really popular. I don’t know if . . .
Andrew: You launched in 2011.
Andrew: So, you’re saying that especially over here, it took a little bit longer for everyone to have two cell phones in their pockets.
Arrif: Wow. Yeah. You’re familiar with the two cell phone stereotype. Yeah. So, back in the day, when we launched the website, it was all landscape features, because everything was on a laptop and wide screen. And we weren’t thinking about screen at all. So we hadn’t done anything mobile-friendly. And sort of two years in, 2013, ’14, I guess it must have been around then, we were like, “Guys, we got to get this thing like sorted out.” Everybody is busy. We had maybe 10 people in our tech team at that time, and we said, “I know everybody is busy building new features. Who has time to go redo the website mobile-friendly? Outsource.” Brought somebody in. Perfect example. Core. Today, we have more mobile site reservations than desktop site reservations. But the first version of that, you better believe, we didn’t know it was going to work.
Andrew: Did that help . . . I was trying to like put together sets of milestones. Is that one of the milestones that helped you grow your user base?
Arrif: Yeah, absolutely. Going mobile I think was one of the early bets that today, looking back on it, they’ll be like, “Why was that even a bet? It seems so obvious. We should . . .”
Andrew: It should have been maybe the opposite. Right. So here’s what I’m trying to piece together where the growth leaps happened. One of the first leaps seems to have been the Time Out Singapore partnership.
Arrif: Oh, partnerships as a whole I think was an entire thread that got us into new markets. I’ll tell you the three most significant partnerships, right? I think you’re reading some material that probably are a bit dated, I guess.
Andrew: Yeah, totally.
Andrew: I even read, like, Time Out said that they were working with a bunch of other people even like you . . .
Arrif: Yeah, sure. We had press releases.
Andrew: . . .was, they said, you guys had the top restaurants that are more aligned with the ones they recommend.
Andrew: Okay. So partnerships was one area of growth? Well, you tell me. You take me through it.
Arrif: Well, yeah. We had a bunch of partnerships, and Time Out was a great partner. And today we work with some of the biggest traffic and partners in the world. So TripAdvisor, for example, right? Tons of people are using TripAdvisor to find restaurants when they travel. So that’s one example. Google, which a lot of people have heard of, is a great . . . It’s a great website, if you haven’t been there, google.com.
Andrew: Good name recognition. Yes.
Arrif: So, when you search for a restaurant in Singapore, Indonesia, Hong Kong on whatever, on Google, and you’ll see a restaurant card pop up and it says something like, “Get directions. Call.” and then the third button says, “Book now.” We power all of that.
Andrew: That’s a partnership that . . .
Arrif: We have . . . We build APIs, they built APIs. Our teams work very closely together to make sure that this thing is seamless. They’re pulling inventory from us. And it’s a great partnership. It has delivered so much value to users.
Andrew: But I’m wondering when you realize that partnerships was going to be big for you, because most people don’t think of partnerships when they’re starting out. They think, “How do I get publicity? How do I get users? How do I buy ads?” Partnerships are very effective, but they’re not a natural thought for new entrepreneurs.
Arrif: Well, I think we’re victim of the circumstances if nothing else, meaning the ecosystem, the tech ecosystem in Southeast Asia, in Singapore was very, very undeveloped when I first started the company, right? We were lucky to get some seed funding, mostly the government grants. That was great. And some high-net-worth individuals and so on. But it wasn’t the same as in the Valley, where, obviously, having spent time in business school there I’d seen other classmates go out and start up a company and the series A, we’d raise 5 million at a 25 pre-money or whatever. No such thing here. We were all laughing and we’re like, “Oh, there’s no such thing here.”
So what we ended up having to do, we had no money to do marketing, right? We could do some guerrilla marketing. We hand out flyers in the street, but, obviously, that didn’t reach a wide enough audience. So we had to think around the problem. We thought, “Who has traffic? Let’s go to those guys and try and figure out because they also don’t have money to go do that much. We’re all trying to figure out how to build ourselves up without much funding, so let’s go to partners like your magazines and so on. They don’t have the reach in Singapore to build restaurant technology. We don’t have the reach to reach out to diners. Let’s work together.”
Arrif: So we were really . . . We had to do it because we didn’t have money.
Andrew: I’m looking at where you get your traffic. I see Google as a top referring site for you.
Andrew: Marriott is the one that stands out.
Andrew: What’s the deal with Marriott?
Arrif: Interesting. I had not seen that.
Andrew: Do you guys have a partnership with them?
Arrif: No. I guess they just contribute to a bunch of our restaurants. I mean, Marriott is one of the biggest hotel groups in the world.
Arrif: And I don’t know if it’s unique to Asia, but a lot of great restaurants here are in hotels.
Andrew: Oh really?
Arrif: Yes. So I would say it’s almost an even split. If you want to eat out, you’re as likely to find a restaurant in a hotel that’s great as one that just freestanding.
Andrew: Okay. And so one thing that got you one leap was going mobile. Another leap was partnership.
Andrew: Another, the significant one was going outside of Singapore.
Andrew: You knew from the start you’d have to go outside of Singapore.
Andrew: What’s the first country you went to? Indonesia?
Arrif: No, Hong Kong.
Andrew: Hong Kong.
Andrew: Further out. Why?
Arrif: Well, it’s not so much the geographic distance. I think culturally it’s more proximity to Singapore, right? If you look across Southeast Asia, it’s a strange mix mash of different stages of development. You got the mature markets like Singapore and Hong Kong. And look out the window here. This might as well be outer space, right? This is high-tech stuff going on outside here. We have Gardens by the Bay, which is an entire biosphere that’s covered. Have you been there?
Andrew: Guns by the Bay?
Andrew: Garden by the Bay. No, I didn’t.
Arrif: You can see it over there. It’s this sort of giant dome. Right over there. It looks like a seashell. This is like . . . And it’s an entire ecosphere indoors. I mean, we’re talking about acres of indoor gardens.
So we’re really high tech and we’re really sophisticated as a market. Hong Kong is very similar, right? They’ve gone very far. Then you have places like Thailand, which are a little bit . . . I don’t want to say behind, but I would say that they’re a bit messy or I suppose they’re still mass transport VTS systems and so on, but it’s definitely not as organized as Singapore and Hong Kong. And then you have places which are super exciting, but just haven’t reached that stage of development yet. Indonesia, Vietnam, right? And those are really exciting markets because they’re at the start of that tipping point.
And so you have to cater your product coming back to the localization. It’s not just language. It’s you have to cater your product for these varying types of markets. So we didn’t have those resources in the early days. So we looked for markets that were most like Singapore, places which have the Mario Batali restaurants, which have the Marriott Hotels, which have great Google user penetration. Those are the things that caused us to say, “Hong Kong is a great market to go into. Let’s go there.” So it was almost a no-brainer for us to go there rather than an underdeveloped market, like Indonesia where we’d have to start from scratch and really discover product-market fit there again.
Andrew: I wonder if the reason that the U.S. companies didn’t come here is because of the stuff that you’re mentioning. It’s not a unified culture. Money is different, right? So it’s different currencies, different place, different software needed. Different everything. And maybe that’s too scary. And it feels less developed. And if you conquer Singapore, you conquer how many people here? Under 10 million?
Arrif: Oh, God. Six.
Andrew: Six million. Yeah. Right? And so why bother? “Why not instead add another feature to the U.S. audience?” is the way that they were thinking.
Arrif: Yeah. Like, Singapore is what? Population of 6 million is the size of, I don’t know, San Francisco maybe? Like, San Diego, maybe? Who knows?
Andrew: So Australia is 22 million. People think about Australia before they think about . . .
Arrif: That’s fair. That’s fair.
Andrew: . . .Singapore, right?
Andrew: I do think also culturally it feels too different.
Arrif: I think your analysis is right. The country is . . . So leaders in the U.S., tech leaders in the U.S. often look to Southeast Asia now with a lot more excitement to be fair, because we do have unicorns of the like of Grab, Go-Jek, Traveloka, Bukalapak. These guys created giant companies just serving the local markets.
But when I rewind to 2011, ’12, ’13, there weren’t any of these. And all those demographic problems, macro problems that you just mentioned, exactly right. They look here and say, “This is hard. We can do this across all the U.S. It’s a homogenous market. We can do that much more easily. Why do we want to do this?” Right? There’s an old stereotype that VCs only invest within 30 miles of their office. And so let’s not even talk about Singapore, let’s talk about like, if you were a startup based in Idaho.
Andrew: Idaho, yeah.
Arrif: New York. New York is maybe different, but some of the Midwest. Same smart guys, same markets that you would eventually want to cover, but they say, “You’re not in Palo Alto. You’re not in Sand Hill Road. It’s kind of hard for us to do board meetings. Maybe not.”
Andrew: And that ended up being the advantage that because they weren’t here, because they weren’t picking up on this, you could with an idea that wasn’t the most novel, but one that you could have time to expand before they understood the value.
Arrif: We have a couple of core principles. We call them vectors here. And one of them is . . . We’ve written on wall over there. It says, “If it was easy, someone else would have done it already.”
Arrif: And it is hard work. It is hard work covering a diverse set of markets with slightly different products and localizing down to, like, country, city level. Yeah, sure, it’s harder. But that is the opportunity, the window that we have, right? And so we saw that. And to your point about it not being the most novel idea, I mean, it’s true. When we started out, I was heavily inspired by what else I’d seen in the world. But as the journey went on, we realized that actually, that analogy made less and less sense. Let me explain why exactly.
Andrew: You mean the analogy of this is the Asian version of it.
Arrif: Yeah, yeah. That analogy of saying, “We just want to be like them. We want to just copy-paste it here and build a successful business.” We realized it made less sense for a couple of reasons. The first of all, is that, yeah, you cannot have a homogenous product across all markets here the same way you can in the U.S. So we had a lot more adaptation and localization, right, which was first thing a sort of investors didn’t quite understand. Like, why do you need so many people in each market? Because each market is different. You have to treat it differently. That’s the first thing. And then I think the second . . . Sorry, I lost my train of thought here.
Andrew: You were saying that if it was easy, other people would have done it, and it turns out it is actually difficult.
Arrif: Yeah. So the other difficult part was that there were no investors at the time, there were no ecosystem, so competition actually became less of a problem for us. If you could cross a certain barrier, which wasn’t that low, we found that we were playing in a space that was relatively uncompetitive. And that was a great place to be in, right? We weren’t racing against a competitor to do crazy things and be irrational, which I think has destroyed some value elsewhere in the world. I think if you look at sort of ride-sharing this way.
Arrif: We were able to focus on creating stuff for our customers.
Andrew: And not have four other startups with $5 million A rounds competing against you.
Andrew: Got it. All right. You know what? Actually, I was going to close it out with that, but I’m going to close it out with this. I noticed you said somewhere that one of the things you try to do to avoid worry is live in day-tight compartments.
Arrif: Oh, yes.
Andrew: That’s a Dale Carnegie thing. I used to teach Dale Carnegie. Is that where that came from?
Andrew: You did. So you read that book.
Arrif: Yeah, sure.
Andrew: Because . . . When did you worry?
Arrif: Man, when do I not worry? Right?
Andrew: Still it’s a . . . Give me an example of the problem and then teach people who don’t know what living in day-tight compartments means. It’s his lesser-known book. Everyone knows him for writing “How to Win Friends and Influence People.” That’s why I went knocked on their door to try to work with them.
Andrew: And I didn’t. I got to work with them in college, with the organization. His lesser-known book, really a good book. What was an example of a worry that you had, and then how would you today handle it with this concept of living in a day-tight compartments?
Arrif: Wow. I feel pressure to get this answer right now because . . .
Andrew: Don’t. Get it wrong. It’s okay.
Arrif: . . .you’re the expert on it. So I’ll give an example that’s kind of, I call it topical for me. So let’s say . . . So these last few days, in particular, I’ve been writing down what’s been happening each day as a series of to-do’s on my list, right? And it’s an endless list. Okay? If I’m worrying about finishing every to-do by the end of the day, I will never get any sleep. It’s just unreal, right? It’s just not going to happen. And neither can I keep working till I drop dead, right?
So, at some point in my life, I have to stop. And I told you it was 9 p.m., right? So, thereabout, so I close the book and I say, “Whatever.” And the rest of the stuff, frankly, it’s important stuff. It’s not stuff that I don’t want to do. I have to do it. But I just have to draw a line and say, “This is stuff. I’m going to move to a different compartment, a different date.” So all my worries that I’ve worried about today, I’m sealed up. I’ve locked it up. I’ve done the follow-ups. That stuff will come back to me in some future date, like they’ll respond to my email or whatever. That’s done.
There’s a bunch of stuff that I’m going to put in tomorrow’s compartment, and I’ll deal with that tomorrow. Now I have this space. I have the space between these two days where I can go and do stuff with my kids. And it’s very important to make that, I want to say airtight, but really it’s worry tight, right? Like, you don’t let the worry seep in from the compartments into that because then that becomes that cloud we were talking about that I used to suffer from. So having that day-tight compartment idea really has helped me compartmentalize the sections in my life and the to-do’s in my life and the work really. Did I get it right?
Andrew: You did it. And it seems so . . . It seems too simple and almost like it’s not going to work because you’re just tricking your brain into saying, “Don’t worry about it tomorrow,” but does really help. And it’s the guilt sometimes that I feel when I do this about, “Well, I shouldn’t be worrying about it now. I should do it.” The fact that I say, “I’ve accepted this. This is the framework I’m living by. I’ll worry about it tomorrow and I’ll accept the consequences tomorrow, but today I’m not letting it penetrate my brain.” It’s really good. It makes my wife feel like I don’t care. Right? Because it’s really, “Don’t you have all this stuff going on even the stuff that I need to do for her? I do care, I promise, but not at this time. Between now and the time I’m asleep or time I’m awake, I’m not going to worry about it.”
All right. The website is chope.co. That’s chope.co. And, man, I was looking forward to talking to you, and now that we’ve had this conversation, I feel really good about it. How do you feel about it?
Arrif: Yeah, great. Thank you. It’s been a great chat.
Andrew: Yeah. And I want to thank the two sponsors who made this interview happen. The first, hosting a website, even if it’s an idea they don’t think it’s going to go anywhere, take it to hostgator.com/mixergy. And if you want to hire a developer, maybe for a skunkworks project or a core idea, really, many of the people I’ve interviewed have done this. They’ve gone to toptal.com/mixergy. And I’m looking forward to going all over the world here.
Andrew: The last continent is Antarctica. That’s a tough one.
Arrif: Are you kidding?
Andrew: I’m going to find a way and run a marathon on every continent. It’s a goal.
Andrew: Yeah, man.
Arrif: Well done.
Andrew: Thank you.
Andrew: Thanks. And thanks for inviting me to your office.
Arrif: Great. Thank you.