19 Aug Five things we can learn from Naval Commander turned startup founder Terence Zou
On their admissions webpage, prospective students to Harvard are asked, “What difference will you make in the world?”
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Dressed in a dark shirt and fitted jeans, Terence radiates a youthful energy. Greeting us with a firm handshake and affable smile, he apologised for being slightly late after rushing from another meeting. A fairly late entrant into the corporate world, he served with distinction as a Commander in the Republic of Singapore Navy – rising to take command of a warship at a young age in a difficult time during the post-911 days of terrorist threats and maritime piracy.
Fast-forward to today and he finds himself the founder of carpooling startup RYDE. ‘What took him so long?’, I asked after the pleasantries were over. Pausing to think before replying, he mused that he would not have done anything differently as life should be seen as a whole and not in parts. It was the sum of his experiences that shaped his thoughts and convictions to finally step out to be an entrepreneur. But looking back, the journey to where he is now only really began after he left the military service and enlisted into the crucible that is Harvard Business School.
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The Masters of Business Administration (MBA) has been the de facto qualification required for C-suite executives in business, finance and consulting. Among the Colleges that dispense this piece of paper, no where else comes close to the gravitas of Harvard Business School (HBS). HBS counts in its alumni notable executives like Michael Bloomberg, Henry Paulson (former CEO of Goldman Sachs and U.S. Treasury Secretary), Jamie Dimon (current Chairman, President and CEO of J.P Morgan), Sheryl Sandberg (COO of Facebook and author of Lean In) and Mark Pincus (founder of Zynga), among others.
Not only does the guy sitting next to you in class have the potential to end up being the CEO of a Fortune 500 company, HBS also brings together a diverse group of individuals from all across the world to leverage on the collective experience of the class, further enriching the learning that students receive.
“When I got to Harvard, I realised that the world is a much, much bigger place than we believe it to be… In Singapore, we sometimes think too narrowly and thus end up being constrained by our own beliefs.”
At Harvard, apart from receiving formal business school training, he had the opportunity to meet many people, including the legendary billionaire investor John Paulson.
In the years since, he has taken his B-school training and put it to good use, first in private equity, and now as the founder of car-pooling startup RYDE. He shares with us the five things that he’s learned on his journey to being an entrepreneur.
1. Timing Matters
Victor Hugo was wrong when he said that there was nothing as powerful as an idea whose time has come. Made in reference to the French revolution – it was the combustible mix of a restless proletariat, a tyrannical monarchy and copious amounts of bad wine that gave rise to vive le revolucion. That chapter fizzled out badly primarily because although replacing the Monarchy with a Republic was a great idea, the leaders of the coup had badly misjudged the timing of its execution. And so with that historical precedent in mind, Terence knows that even the best idea has to be executed at the right time.
Ridesharing is not a new concept, with carpools popularised in America during the 1970’s when OPEC member states flexed their muscles by imposing an oil embargo on the developed world. But even the idea of using technology to connect drivers and riders is not new – French city-to-city ridesharing startup Blablacar has been in operation since 2006 (only raising their first serious round of venture financing in 2014 with US$100mn to scale operations).
Terence believes that time is now. What with the confluence of various factors – a maturing digital economy where mobile applications, digital payments, GPS systems and using your phone for everything is a way of life; the rise and acceptance of the sharing economy with startups like Uber and Airbnb blazing the trail; and social networks allowing startups to reach many people in a very short space of time by tapping into the networks of their users.
2. Surround yourself with the best
“The privilege of learning in an environment like Harvard convinced me of the value to be surrounded by good people.”
While most of us will never have the opportunity to get into Harvard, Jim Rohn’s theory that ‘You’re the average of the five people you spend the most time with’ applies to seizing our own opportunities to get out and meet people who inspire us. Aside from purposefully engineering his own serendipitous encounters which resulted the dinner with John Paulson, Terence also takes great pains to get the best advice that he can get and spends a significant amount of time recruiting.
“While the big idea is important, when investors put money to work, they are essentially putting faith in the entrepreneur and his team. A great idea amounts to nothing if exceptional people are not behind it to see it through to its realisation..”
3. Be irrationally exuberant (yet also ruthlessly rational)
The sharing economy pre-Airbnb was the equivalent of a no-fly zone – the idea that people could share their home or kitchen floor with a stranger elicited a lot of skepticism, but it was to those pioneers that Terence drew his inspiration from when he decided to go all-in with RYDE.
“Disruptive ideas seldom make sense to most at first, so one has to be irrationally exuberant to convince the market. At the same time, one should not be so absorbed as not to take criticism and listen to feedback.”
The first version of RYDE was built for real-time use, where riders and drivers would match instantly whenever a rider needed a lift. But after deploying this model, the feedback that the team received made Terence realise that it made more sense to allow people to book trips in advance, thereby allowing drivers to adjust and plan their routes beforehand.
“It’s a fine line [between being optimistic and being pragmatic], at the end of the day, it comes down to experience or just having fought more wars.”
4. Sweat the details
It’s always the little things that trip you up. One of the most valuable pieces of advice Terence received was given by Paulson. Dispensed over a private dinner at Sparks Steakhouse in New York city, “while the big picture strategy is important, the eye for detail is absolutely necessary.”.
Paulson used the example of a mega merger between two companies that was being brokered in a particular industry. There are many considerations that a merger and arbitrage strategy investor would have to take into account when making the trade. The financials and economics of the deal would have to be worked on, yet the failure to consider the finer details could derail the best laid strategies.
A deal this size would be subject to antitrust laws that prevent uncompetitive behaviour. So Paulson took great pains to not only crunch the numbers but also consider the scenario where the deal attracted regulatory scrutiny. He made sure he looked into which court would hear an action by the Federal authorities and further, which judges would likely be called upon to decide if a merger would be in breach of those laws. He then studied each of these judges’ previous decisions to discern if the probable outcome would be favourable to his proposed strategy. This attention to detail is what makes Paulson a great investor.
When applied to the context of a startup, details matter even more. An easy way to build RYDE would have been to simply have drivers post their trips up and let people get in touch with one another, but Terence decided early on that not only did it have to be a mobile application, but that it must be thought through from the perspective of the driver on the road. Together with the technical team, he worked on not just the concept, but also the user experience, design interface and backend algorithms, constantly fine-tuning each part even to this day.
5. There is no right age to start
Young founders worry that they lack the relevant experience before starting out – that their ideas are less refined and only capture the market segments that they understand. Older founders have to worry about opportunity cost, especially those already in a corporate environment –
“Twenty-one is not too young nor is fifty-five too old. So long as you’ve done your homework and possess the requisite entrepreneurial DNA, then there is no ‘right time’ to start.
You will fall a few times along the way but you need to bounce back even stronger, this is the necessary rite of passage for a successful entrepreneur.”
Terence reflects that the decision to jump was one that was made after intense research into the market but also, relying on his judgment as a private equity investor. After all the analysis – there was only one thing left to do and that was the gumption to take the plunge – giving up everything to pursue his conviction and dreams. Today, RYDE has raised more than $1m dollars of investor funding and a subscriber base of nearly 6000 users.
But more than just numbers, is how ride sharing has the potential to lower the number of cars on the road and give people an eco-friendly option above and beyond public transportation. Or as Terence foresees “..where city dwellers in the future will have more choices while owning less”. That is the difference he is trying to make in the world.