Two weeks ago our COO, Tommy Chieng gave at talk at True Digital Park, Bangkok. In this event he shared his thoughts on growth strategies and business scaling. Here is a summary of what he covered during the talk.
Tommy Chieng and SEAGM
As the co-founder and COO of SEAGM, Tommy has lead SEAGM on a profitable journey throughout these years. The company is currently boasting an achievement totaling to MYR 1.2billlion (USD 280 million) in revenue growth. This figure has been increasing since 2010. From 2010 to November 2019, SEAGM has been experiencing a Compound Annual Growth Rate (CAGR) of 41.30%.
Additionally, Tommy launched and spearheaded the Digital Good and Services Marketplace, KALEOZ. The online marketplace for gamers has grown from MYR 1.5million (USD 360,000) to MYR 38million (USD 9million) since its first inception back in 2017. That’s a 2500% increase in growth. Besides that, Tommy also had a hand in the company’s growth and scaling – expanding the SEAGM team from 12 to 140 employees.
Topics covered at TDPK
During the Q&A session, Tommy gave tips on expanding in another country, venturing out of SEAGM’s market and preparation for phases of growth. He also touched on topics such as competition with big players and shed some light on building a team.
Below you can find the full excerpt of the interview:
Question: SEAGM started in a small town called Sitiawan in Malaysia. Over the past 12 years, SEAGM has expanded both in company size as well as having several offices. Right now, you have four different offices in Kuala Lumpur, Thailand, China and Indonesia. So Tommy, when do you think is the right time to set up offices in other cities/countries.
Tommy: Due to the nature of our digital businesses, we focus on the payment gateway. Right now, both our platforms are able to accept 35 different currencies, and we have more than 100 types of payment gateways. We ensure that all the interested customers can make purchases on our platform. Our team in Sitiawan can support back-end operation support. The trigger point for us to consider opening oversea offices is that we need local customer supports. We faced difficulties understanding the Thailand and Indonesia customers as they don’t speak the same language as us, this leads to local customers having trust issues with us.
That is when we start to consider settling oversea offices to support the local customers.
Tips: If you would like to set up a company outside of your home country, make an effort to travel down there personally and hire someone there.
We also took an unorthodox approach – we approached our resellers in Thailand and Indonesia and I have also made the effort to arrange video calls and offer them to be part of the SEAGM family. Together with the reseller we valued, we have opened and manged the oversea offices with them.
Salary wise, we do not stop offering basic package alone, we also allow them to have the opportunity to earn a commission from the sales made from the country that they are working in.
Our strategy is to work with reseller whom we have partnered with and worked before. by doing so, they understand what we do and what are the problems our customers will face as well as the questions they will ask. With this approach, they can help scale oversea offices in a short period of time.
Question: When we are scaling a business, cash is a crucial element that we need to have or manage. Is cash an issue for SEAGM when looking to scale its business?
Tommy: We don’t encounter any problem with cash except for the year 2015 – our revenue jumped more than 100% during that year. What we did was we ask our shareholders for funds and not from external parties. We always reinvest our profits back to our business every year – with a minimum of two-third of our earnings. Also, we always look for ways to minimize losses from foreign exchange.
Tips: Do not seek for external funding if your able to fund internally. Do remember to reinvest the profits gained into your business as your scaling initiative.
Question: Since 2010, the company has grown about 41.3%, do you think you can achieve the same target next year – as many have forecast-ed or warned that a recession is coming?
Tommy: To be honest, I am quite optimistic. This is most likely due to the up and coming growth in mobile gaming. Many factors contribute to the increase in mobile gaming, such as mobile phone prices and their capabilities to run 3D games . Secondly, SEAGM is doing international business, not just locally or SEA region alone. We can keep our operation lean while serving our global customers.
Question: When you are running a business that is doing so well, have you ever thought of seeking for a new initiative such as doing something different from what you are doing right now?
Tommy: Actually, we launched KALEOZ, a C2C marketplace, in 2017, that was something we were unfamiliar with, in terms of running the operations and other systems. Our strategy is based on word of mouth to gain awareness and we have spent zero dollars on advertisement. We do strongly emphasize on free traffic – SEO as free traffic is very important for any online business.
We are doing to have some new initiatives which are going to be something different from what we are offering to our gamers now. Our gamers also do other things with their life other than gaming such as eating, travelling and etc. We also noticed that many (of) our users have been following us since 2010 when they were only teenagers back then.
Right now, we are thinking beyond that – other than launching KALEOZ. Without a single cent spent on marketing, we can grow KALEOZ to MYR 38million (USD 9million) since it first started. It would be best if you can look at the assets that you have and leverage on it.
Tips: After gaining constant growth over the past years, look for other opportunities and leverage on your assets (Eg: customers’ needs/wants; partners; network) and prepare for the next phase of growth.
Question: You have mentioned a few keywords such as eating and travelling. We do know there a few big players over here in SEA that are already offering such initiatives. Do you think you can compete with other big players?
Tommy: I’m not looking for head-on competition with them. In fact, I would love to partner with some of them. Many of our customers still come to us although the items that we’re selling are not cheap (PS: gamers, they are suckers for cheap goods). We always go for the extra miles for our customers.
For our new initiatives, we are thinking of how to add value to all of our gamers in the ecosystem. We do not compete directly with all those big brands. With the trust we build over the past few years with all our stakeholders (gamers, gamer publishers and partners), we will be launching new products targeting at our current stakeholders’ needs rather (than) tapping on a new pool of stakeholders.
Question: How are you going to into this vertical – are you going to do it by yourself or build a new team?
Tommy: Our headquarter is based in a small town, Sitiawan, Perak – it is not easy to find talents around this area. There are certain areas that we do not have internal capabilities to work on. Hence, we have to take a different approach by starting small and seek for external parties to fill up internal gaps and identify the actual potential of our new business units. Once we have achieved the desire results that we want, we will bring it to the next level in terms of commitment.
In summary, don’t be afraid to launch something that has already existed in the market. Start the whole process by looking at your current customer – ask yourself what can you proved to them. If something cannot be done within your capability, ask yourself whether if you have the network of people that you can work with to launch this initiative. If it works well in the future, you can spin off your business and consider to do revenue sharing with your partners.