Chang Wen Lai is the co-founder and CEO of Ninja Van which is a tech-enabled express delivery firm serving businesses across Southeast Asia. The company has raised $400 million from YJ Capital, B Capital Group, Abraaj Group, Monk‘s Hill Ventures, Grab, DPD Group, Geopost, Bangkok Bank, Intouch Holdings, and Carmenta Capital Management to name a few. 

In this episode you will learn:

  • Why bootstrap and embrace dilution
  • Why not to leave your day job
  • How to avoid giving up 25% of your company out of the gate
  • The different phases of the hiring

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Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.

About Chang Wen Lai:

Chang Wen Lai is the co-founder and CEO of Ninja Van, an express last-mile courier service offering door-to-door deliveries to consumers. Alongside Shaun Chong and Tan Boxian,Chang Wen Lai set up Ninja Van as a reliable courier delivery service for consumers in Singapore.

Ninja Van has since expanded regionally. Chang Wen Lai is dubbed a “serial entrepreneur” for launching a string of start-ups despite the high risks involved. Chang Wen Lai founded Dapaola.sgGet Fitted (an online shirt fitting tool), Marcella Holdings (a bespoke men’s clothing brand) and Ninja Van (a digital express courier company).

Connect with Chang Wen Lai:

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FULL TRANSCRIPTION OF THE INTERVIEW:

Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we have a founder that is doing great stuff in Singapore, and I think that we’re going to really understand the market; we’re going to understand, as well, the fundraising environment and ways to think about it and the opportunities that are opening up with COVID, especially for companies operating in the logistical space. But without further ado, I’d like to welcome our guest today, Chang Wen Lai. Welcome to the show.

Chang Wen Lai: Hello, Alejandro. Thanks for having me on the show.

Alejandro: So, originally born in Singapore, Chang Wen. How was life growing up there?

Chang Wen Lai: Singapore is a pretty easy place to grow up in. You have fantastic infrastructure. [2:03] capital is high. Everyone is quite comfortable and quite well educated. When I applied to some British universities for my college, they asked for an English proficiency test, and I was like, “English is our first language. We may have a different accent, but I can guarantee you, I understand English better than most.”

Alejandro: Very cool. That’s awesome. The entrepreneurial mindset and this drive for perhaps seeking possibilities where others see problems, how do you come across that? Was anyone in your family an entrepreneur?

Chang Wen Lai: My dad was an entrepreneur, as well. But I’m not sure entrepreneurship necessarily comes from the family. I don’t think anyone has the answer of what drives entrepreneurship. Governments have been trying to figure out how to make their population more entrepreneurial. I don’t think anyone has found any great answers yet, but I guess it always helps to say that my dad, at some point in his life, was an entrepreneur as well.

Alejandro: Very cool. You went at it; you studied business and finance. Is there anything interesting? Why did you go for it? Were you attracted into business growing up? Did you have your lemonade stand, or how did that happen?

Chang Wen Lai: Well, I don’t think I’ll lie about this, but I don’t think I’ve ever had much artistic or musical talent. I’ve had friends tell me to please stop and hand over the mic. So, that path was definitely closed off to me. Again, I think it’s not valid again. On the humanity side, my literature was always okay, and I never had that much interest in it. I think numbers always appeal to me more, numbers and science. When I was younger, I was thinking about being a rocket scientist. I was into physics. I learned a lot about relativity, super-sting theory, the whole bunch before college. I think when it came down to choosing which path I would take, regretfully, I must say that what shaped my decision was the fact that a certain career pays more. That’s probably general knowledge, which is: finance pays more, so if I’m good at math, and finance pays the best, then why not take a finance path?

Alejandro: Yeah, and you did an exchange program, too, in the U.S. You came here to Wharton, so that gave you the possibility to take a look at and compare what’s happening here versus what was happening in Singapore. So, how was that? Was it a big culture shock, or not?

Chang Wen Lai: No. To be honest, I think the culture in Singapore is not too different from the culture in the U.S. or even the UK. I’m sure there are no small answers, but it’s not altogether that different. To be honest, it was not that much of a culture shock. I think when I was in the U.S. in 2010, the biggest shock I had was the fact that you could buy anything on Amazon, and it came so quickly or so conveniently. I guess the only real difference was the fact that you could buy things online, and it came easily. Trust be told, even the U.S., if you just wind back 15 years, I don’t think people were taking e-commerce the same way they expect it now. 

Alejandro: Got it. You, then, did a bit of investing banking; you were a trader, as well, in derivatives. I think that perhaps gave you access to companies too, especially on the investment banking side, and you could see what were some of the trades of the companies that ended up doing something meaningful. Were there any specific insights that you got into what makes companies great during those years?

Chang Wen Lai: Well, I think that’s interesting. You look at investment banking, and you realize that you go where the money is, not necessarily what the media likes to hear or what is very interesting. You realize that the buck of investment banking yields was in very traditional businesses and very unsexy businesses. But well-run businesses, businesses with focus, businesses which executed well, and those are the ones, which I think did quite well, post-IP as well. I think that was quite illuminating to me that it isn’t always the sexiest company in the media headlines, which necessarily did the best financially, but companies which really stayed their cause, focus, and did what they’re doing well. There were very few magic bullets. I mean, we were running the pitch deck and so on. As bankers, then, we always ask, “What’s the magic bullet? What’s the magic bullet?” You want to find a great marketing story. The reality is, in most of the best companies, there’s no magic bullet. It’s just a combination of many good things done well, neither of which could stand alone and prop a company up, but together, they created great companies, which I feel will help [7:22].

Alejandro: Got it. Here, after Barclays, you spent a couple of years doing the e-commerce route as an entrepreneur before you actually found the segue into Ninja Van, which is what you’re doing now. We’re going to talk about it in just a little bit, but I want to understand. At what point do you decide to give your notice at Barclays and say, “It’s my time to go at it and take the leap of faith as an entrepreneur.”?

Chang Wen Lai: You wouldn’t believe it, but I think that point came when – you know, as a student, when you’re younger, you’re always a bit frugal. Buying a MacBook has quite a big advantage. You save up for it and so on. It came when I was at Barclays where after I got a new laptop, and I thought, “Yeah, sure. Why not just buy it. Who cares?” That made me realize that I was completely losing track of the value of money at that point and time. Almost anything was just a by-the-way thing. Something that used to cost thousands of dollars, which you would save up for; now, you lose track of the value of that. It made me think deeper as to why am I working, and what do I want in life? The lesson I learned during that moment of realization was that banking is comfortable. Finance is very comfortable that I could get so used to this life that I might actually lose track of what was important to me. What was important to me was, I wanted to leave a legacy of sorts – to do something, to build something, and to be a bit different. I realized that if I stayed longer in finance, I might get so comfortable that I will never dare to venture out and do something like that ever again. Maybe one day, when I’m 50 years old, and I look back at my life, yes, I might be comfortable and so on, but I realized then that I never took the risk to try something different, to build something, to push myself in a very different way. I think that was the breaking point or the point when I realized that maybe I shouldn’t be staying in finance at this point in time. Maybe one day, I’ll come back. 

Alejandro: So, here you are questioning yourself and questioning what you want to do in your life and in the future, but there was one event that really pushed you over the edge to say, “I’m going to go at it.” What was that?

Chang Wen Lai: The fact that I bought MacBook without thinking twice.

Alejandro: Okay. So then, what happened next?

Chang Wen Lai: What happened next? I asked myself what I really wanted in life. I used to think that maybe I wanted money and to earn good money. Once I realized what I wanted was a fulfilling life in which money was – it’s not unimportant, but it’s not the most important driving factor. I wanted to do something that I would remember; live certain life experiences which exposed me to more of the world. On the back of those thoughts, I decided maybe I should just tender. I had a small e-commerce company running then. I said, “Why don’t I go ahead and try it. Never try, never know. Right? And if it fails, I can always go back to finance. 

Alejandro: Yeah, and this e-commerce company was like a side project that you had there going on that you did with someone else, or how did you have that e-commerce on the side.

Chang Wen Lai: Yeah, there was a company on the side. We were doing men’s fashion. It was quite interesting.

Alejandro: What happened there because, obviously, you realized that you didn’t want to be another e-commerce company. You actually wanted to serve e-commerce companies. So, walk us through, and what was the experience with this business, and at what point did you realize that maybe you need to shift a little bit the way that you’re looking at this?

Chang Wen Lai: Well, I think e-commerce is interesting in itself. We learned a lot about the various nuances in e-commerce. I think it was more coincidental that we started in a logistics company, as well, to service our own e-commerce company. It was a realization that as e-commerce unless you are an Amazon or a huge platform, you always have a certain niche, which in itself is profitable. It could be a very decent business. But if we were betting on an inflection point between online and offline retail, wouldn’t it be better to bet on providing travel to the gold rush instead of being a miner in the gold rush? I think that realization made us change our ethics, and it made us realize that perhaps we could go into a more unsexy part of the business, of the value chain, and of e-commerce, but possibly be a lot more important in that part of the value chain.

Alejandro: Got it. What was that process of bringing that part of the value chain to live?

Chang Wen Lai: I think, first of all, is understanding the various parts of the value chain in e-commerce. I think, obviously, one part is the e-commerce website, which is selling the goods to consumers. The other part would be the logistics and physically moving those goods. 

Alejandro: Okay. This was the segue into Ninja Van, and Ninja Van is your biggest success when it comes to building and scaling companies so far. In terms of Ninja Van, especially like putting together, and once you understand the part of the value chain that you want to tackle and servicing all these e-commerce companies, then how did you go about building the team around you?

Chang Wen Lai: I think building the team – many phases. The first phase when you build a company, I think what you do is, you go to what is familiarity and trust. You work with the higher people whom you’ve known for the past one to two decades, and the initial people who joined, and people whom I knew, people whom I trusted, people whom I respected. I think that’s the first phase in hiring up for a company. The second phase, which came a bit later, was more on the professionals who still have the right heart. They were experienced. They knew the industry; they knew the sector, or they knew how to run a much bigger team. But, at the same time, I felt that they were also able to empathize, and they had the right heart for the business at a point in time. I think it’s a certain phasing in a business. But something that never went away was the requirement that people had the right attitude, had the right characteristics. 

Alejandro: Got it. There’s one point there that I would love for you to expand: having the right heart. Can you expand on that?

Chang Wen Lai: There are many people – maybe not many people. There are people out there who are very career-driven, very CV-driven. It’s always about building up your CV. It’s always about doing the right thing, which gives you a higher salary for the next job. These are people who constantly pad their CVs, find the best job, which gives them the CV, which allows them to get the best and high-paying job thereafter. I think such people may not be a good fit with a growing company, with a company which is a startup, which may have problems meeting payroll at times – meaning you work seven days a week. The reality is, nothing is worth it. It’s never going to be worth it in your CV. You’ll never pay enough on the risk-adjusted basis. You probably may never earn more than your previous job in a comfortable big corporate, but you join it because you want to work with like-minded people who are working hard for vision. And at the top of the priority list is doing the right thing for the company and making sure that everything they do is to grow the company. I know it sounds like it should always be the case, but in many professionals out there, that’s not the case if their intention is not to grow themselves and have a great experience if it’s about building up their CV and getting a next paycheck, a next higher paycheck. I think it’s a very different mentality altogether. It’s just a very different mentality.

Alejandro: Yeah, absolutely. I hear you, and for the people that are listening, what ended up being the business model of Ninja Van?

Chang Wen Lai: Ninja Van is essentially the FedEx and UPS in Southeast Asia. We’re not the sexiest business out there. I wish I could tell you that we Uberized everything and are extremely asset-light, and parcel magically moves from one place to the other without anyone lifting a finger, but the reality is UPS or FedEx, we think we may be a bit more tech-forward in terms of how we look at technology. But I think it’s more a function of the fact that we started in this year, rather than 50 years ago, for example. So, we’re more tech-forward, but that doesn’t mean that it makes a huge difference, necessarily. The reality is as much as you like to make the business sound extremely sexy, it is a lot of work on the ground – a lot, and it’s extremely laborious, very operational, very physical. Technology definitely helps. Technology is very important to us, but people management, operational management is equally important.

Read More: Andrew Smith On Raising $53 Million To Redefine One Of America’s Biggest Industries

Alejandro: How many people do you have now?

Chang Wen Lai: I know we have more than 30,000 employees, fulltime employees.

Alejandro: Wow. How do you go about managing so many people? How do you think you’ve grown yourself as a leader, too, and kept up at the same pace of growth with the company?

Chang Wen Lai: Wow! That’s not an easy question. I think first, the realization that technology is not the be-all and end-all. Truth be told, when I first started Ninja, we thought that technology was everything, and that technology solves all problems. But the reality is, technology helps. It’s not a single solution. So, the realization that people-management, that organizational structure, that community – it’s all very important in building a very cohesive, efficient workforce, which is aligned, and you get work done well. Adding that, increasingly, the realizations started coming to me more and more, that the magic bullet in your business is your people. I know this sounds like a broken record – most people say that. I actually do believe in that.

Alejandro: That’s amazing. In terms of fundraising, how much capital? All these operations and all the people, it sounds capital-intensive. How much capital have you guys raised to date?

Chang Wen Lai: We’ve raised about 400 million U.S.

Alejandro: Got it. What have you learned about fundraising, because I’m sure that during all these different stages, obviously, there have been different expectations? You’ve done from seed all the way to Series B. How would you say that those expectations have been changing from financing cycle to financing cycle? What have you learned?

Chang Wen Lai: I have learned that dilution is not necessarily a bad thing. [Laughter] 

Alejandro: You know, it’s interesting that you say this because most of the founders that I speak with, they’re like, “Oh, my gosh. I don’t want to give equity away in my business. How much should I give away?” Expand on this a bit if you can on why it’s important, the dilution, and thinking about it from the lens that you’re thinking about it.

Chang Wen Lai: Let’s go back to the first principles. Why did I do this business? Did I do this business to have the biggest financial reward, or did I do it because I genuinely believed in a vision which I wanted to learn along the way how to grow with my colleagues and my team, and just have a great life experience while letting down as few people as possible? The reason why I started this business was the later, not the former. The point in doing this was not to earn the most, and truth be told if you are thinking of earning the most money in your life, and you are in finance, it’s a very good chance that you stay in finance because risk-adjusted, you probably earn more in finance. So, the reality is, if I started the business because I wanted to do something to build memories, to build a legacy of sorts, should I be over-optimizing on my cap table? Over-optimizing on the cap table leads to a few outcomes, in my opinion: 1) you get richer than you could have been, which is, I guess, a good outcome, but the downside to that is you raise money from investors who may not be the best partners in the long run. You raise money in valuation, which may not be sustainable in the long run, and eventually leads to down, the hurt is real, and it could lead to a vicious cycle in a company. The reality is if you keep fundraising, and you fundraise every six months, and you take a smaller check so that you get less diluted upon the valuation again, you go for a small check again, are you really valuing your company, or are you just running an investment banking process, and you are constantly having roadshows?

Alejandro: Yeah. And it’s a massive distraction as well. I totally get that. Now, there’s the topic that everyone is talking about is coronavirus. I guess that for logistical companies, it presents a different set of challenges that they’ve never seen that their parents have never seen, and even their grandparents have never seen. Can you tell us about the opportunities ahead with COVID for you guys?

Chang Wen Lai: I can only speak from my point of view. I think there are so many things, which obviously, I’m not seeing. I think the biggest [22:37] and something that you are seeing in our business, the first is a very strong conviction to move from offline to online. I think the conviction has never been stronger. We’ve seen people explore and moving from offline to online, and every time we push them and say, “Why don’t you do more? Why don’t you be more innovative?” The answer always is that online is [23:01] of our business. I will put some effort in, but it’s not that important. It really takes an unprecedented event like COVID to change people’s mindset that we are screwed if you only have retail. You do need to think of something else, and you need to meld the two experiences together well. That’s the first thing I’m seeing. The second is quite interesting, which is, we are seeing an increase in SME sellers trying to sell online. So, maybe one could argue that it is the last job of [23:42] out there and that people are more afraid of their jobs that they are willing to take a small risk and be a small-medium enterprise. They are trying to hock their wares online instead of having a day job. So, we are seeing a twofold change in the e-commerce landscape. The first is, the big retailers are paying a lot more attention to the online channels. The second is that we’re seeing a growth in a number of people trying to sell online. 

Alejandro: Very interesting. Obviously, there is a big shift happening. One thing, as well, that happens is that perhaps big companies may do better in the short run, but perhaps not so well in the long run as compared to other companies that may be up and coming and really embracing innovation. So, can you expand a little bit on that?

Chang Wen Lai: Let me try to venture something quite brave here, but I think there are three main drivers in the equalization of the democratization of retail. Retail has always been in the space of large retailers. Large retailers always do better than small retailers, generally. That’s because their economies are skill and supply chain. Economies are skill in the retail space. Economies are skills in marketing. Arguably, that’s why a big retailer does better than a small one-shop retailer. It’s logistics, retail space, and marketing, brand building. But when you see two forces converge, one is social, the prevalence of social and the influence it has on people. The other is the ease of setting up online shops and connecting to the consumers and giving the consumers an almost equivalent experience with a big retailer online. These social and e-commerce forces are driving a very big democratization in a big retailer versus a small retailer kind of paradigm. What we are seeing is that if you can help equalize the supply chains of retailers and if social is a great and easy way to market where people do not have to spend millions to just build up a brand, but it can build it true in smart, intelligent, thoughtful, personable, social channels. The fact that you can create an online shop on chat, on social platforms, on Shopify, for example, I think all that is a great leveling in the retail space. You cannot just use size to [26:43] anymore, but you really have to find a way to collect your consumer’s hearts. Whether you are big or small, it all boils down to how you connect your brand to the consumer. You cannot use money to boot those away on supply chains, on retail space, on marketing anymore. 

Alejandro: One hundred percent, and I think that’s very profound, Chang Wen. Imagine you go to sleep tonight, and you go to sleep and wake up five years later. An unbelievable snooze – imagine. You wake up in a world where the vision of Ninja Van is fully realized. What does that world look like?

Chang Wen Lai: That world looks similar to how Shopify is imagining it in America. That world looks like a world where every small seller with a good engagement with his consumers on multiple platforms, his website, his social media platforms, his email CRM systems. That seller focuses on his consumer, and he leaves the rest to us. We handle his micro supply chains from anywhere in the world to his small warehouse, his home office, his small retail shop. He gets economy of skill, which is similar to what the big retailers are getting, and the entire supply chain process. He gets access to the best distribution network to all consumers at a price point which is not too different from what Amazon gets, and he leverages on the multiple channels available to him: social, Facebook, Instagram, Rechat, Line Chat, his own website, and he connects deeply with the consumer, and he focuses on the connection while we settle the rest for him.

Alejandro: Very, very cool. One of the questions that I typically ask the guests that come on the show is if you had the opportunity to go back in time and have a chat with your younger self, with that younger Change Wen that was coming out of Barclays and perhaps thinking about doing something an being an entrepreneur and starting a business, knowing what you know now if you had the opportunity to go back and give yourself one piece of business advice before launching a business, what would that be and why?

Chang Wen Lai: You wouldn’t believe it, but I think that advice would be, stay in Barclays for a few years more and fund your seed round and Series A yourself. I’m not saying overoptimize the cap table. I’m saying if you have the opportunity to and you believe in yourself enough, save up so you can skip a round because that makes a big difference to your ownership. But I didn’t work long enough, I didn’t build enough a nest egg that I had to raise external financing, and this amount I raised, which I will not disclose, is actually not too big that if I had stayed in Barclays for a few years, I would have done it myself, and would have saved at least 25% dilution on the start.

Alejandro: Very cool. You know, funny enough now, we’re seeing more and more companies that are either doing that or even bootstrapping all the way until they have a lot of leverage for raising money, so thank you for sharing that Chang Wen. For the folks that are listening, what is the best way to reach out and say hi?

Chang Wen Lai: I think you could share my email, and they can reach out. I think that works.

Alejandro: Wonderful. Do you have any social media, LinkedIn, Twitter, or anything like that?

Chang Wen Lai: You know, with any logistics company, even if you perform 99.9% happy customers, you have to zoom in on that 1% who are slightly upset. So, imagine if you’re doing more than a million parcels a day – that’s a lot of partially upset customers a day. That’s the reality of it. Honestly, the reality of it. So, I don’t use social much anymore because it’s just a miserable time of people scolding me, “Why is my parcel late for an hour? Why? Tell me why? Why can’t your driver come on time?” “I’m sorry you have spent some time.” Even [31:03] 1% of times of millions a day – that adds up.

Alejandro: Yeah, I hear you. Well, Chang Wen, thank you so, so much for being on the DealMakers show today.

Chang Wen Lai: Thank you. Thanks for having me as well.

 

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