Entrepreneur Timothy Yu has turned his passion into an in-demand solution that is enabling the future of education. His startup has already raised $80M and has doubled its team size in the past year. Snapask has attracted investment from top-tier investors like Asia Partners Fund Management, InterVest.Co, Taiwan Startup Stadium, and Xie Zhan.
In this episode you will learn:
- Important books for entrepreneurs
- Doubling your employee count in just 11 months
- The pros and cons of COVID for tech businesses
- Timothy’s top advice when starting your own business
For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
The Ultimate Guide To Pitch Decks
Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400 million (see it here).
Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.
About Timothy Yu:
Timothy Yu is the co-founder and CEO of Snapask, a Hong Kong-based edtech company that offers online tutorial services. Snapask is dubbed as the “Uber for tutoring,” as students can instantly connect with qualified tutors to receive on-demand academic support around the clock
Connect with Timothy Yu:
Read the Full Transcription of the Interview:
Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today our guest is really remarkable. I think that we’re going to be learning quite a bit when it comes to building and scaling, and also when it comes to turning things around from being like literally one month away from bankruptcy, recruiting over 120 or so in just 11 months. I think that it is going to be full, full, full of adrenaline stories. So without further ado, let’s welcome our guest today. Timothy Yu, welcome to the show.
Timothy Yu: Hi. Thanks for having me, Alejandro.
Alejandro: Let’s do a little bit of a walk through memory lane here, Timothy. You were born and raised in Hong Kong, so how was life growing up?
Timothy Yu: I would say it was quite normal and neutral. I won’t say it was a really amazing childhood, but like most Asian kids, you spend most of your life in tutorial centers. That’s basically for over 90% of the kids within my community. My whole life, I would define myself as a math student. I studied math in high school, theory into math for the whole time, and even in university, I studied math and statistics. It seems like it’s quite narrow as a skillset, which is quite natural that the only thing I knew how to do in college life was to tutor students. I started my first job as a tutor when I was in high school, actually, which eventually we built it into where we are today, Snapask in nine markets serving about 4 million students on the day-to-day site. So it’s quite a journey for us.
Alejandro: In your case, math and statistics were what you went to study at the university. You were alluding to it that you got into it quite early with math, so what do you think got that interest and attention for you so early on around math and statistics?
Timothy Yu: I guess the passion is always about finding truth and finding solutions. Solving math problems, solving these conundrums and puzzles, it’s always fascinating for me to make sure my head I clear. I’m always putting together the pieces I have, and if there was always a missing puzzle, I find out how we can fill that in. It’s problem-solving skills that we have acquired along the way, which led it to what it is today. Yeah, being a math student actually helps me a lot into building companies as well. It’s quite a similar logic as in you know something is not working. Students are not coming in. Users are not paying. There are always problems that are happening in a company 24/7. So, myself, as a trainer, with this kind of problem-solving skills and mindset, I think it’s really valuable for me as a skillset of bringing up from a young childhood era.
Alejandro: Also, growing up, you probably experienced the incredible growth that Hong Kong has experienced, the region. That was probably remarkable for you, as well, to see that, and perhaps at some point, you made the decision, “I’m going to do something of my own, too, in the future.”
Timothy Yu: Yes, definitely. Back then, when I was in college, there weren’t a lot of opportunities. Actually, having a startup was not a thing yet back then. It was 2008-2011 when I was in university. That was the age when Lehman Brothers, the whole financial crisis during the couple of years when people were in deep trouble. Back then, I was studying math and statistics, and I also had a major in finance as well. So my family always pushed me to become a financier somehow. I don’t know why, but being a banker or having a professional job in the financial world has always been one of the priorities for me in my career to be upstage. It was quite natural for me. As my first job, I joined a bank, but it didn’t feel right for me. There was always this passion about building something, not necessarily education back then, but building something for myself that can represent my own creativity, my own passion, as well as there was always this component of having a platform or playground for me to test and find solutions. I guess education, as a starting point for me, was almost like something that’s by chance. It so happened that I started my first career as a tutor, which eventually led to what it is today.
Alejandro: In your case, after university, you tested out the corporate angle, and you were working at this bank as a clerk, so managing that when at the same time really perhaps exploring what would eventually become Snapask. There are a lot of people listening now and watching, and they’re wondering: “When should it be the right time for me to maybe jump ship and finally allocate time to my startup full-time.” I’m sure that you were also dealing with that, so how was that time for you?
Timothy Yu: There was this moment when I knew I should start something, but it wasn’t like, “I have to start, so I throw everything away in my life and just start.” I think it’s quite similar for most people. You cannot just wake up one day and think, “I will start a company.” You almost would have a job that you’re still on and duties and responsibilities that you have. So, it was quite similar for me back then, having my job in the daytime in the bank. I wanted to try something out, so I applied for some programs in Hong Kong. There are programs that support people to start companies. So I submitted my proposal. I got a call from them, “You should come to our office and do a pitch.” I went there. I still remember that I went there in the morning. I got a day off that day to just pitch them my idea. I got *** quite badly. People don’t like the idea of being so young, first of all. First and foremost, you are not experienced at all. You are just one or two years out of college. There is no reason why you would have a much better pitch than any other people doing what you are thinking. What you have is just an idea. But eventually, I got in, luckily. I asked a manager of the program, “Where was I on the whole list?” They told me I was almost the last person on the list who got in, but then eventually, they helped me on some seed funding as well. So I started. I had a small office in the center. I started recruiting some interns from the university. So that’s how we started. It was 2011 at that time, my first year out of college. I guess for most people who are thinking, “I should start my own company,” my recommendation would always be don’t immediately start something until you have researched enough. I think there are lots of truths nowadays that you can definitely do it on the side to support and test out your ideas and do it scientifically.
Alejandro: About testing the ideas, at what point did you realize that this idea had legs.
Timothy Yu: The first version of Snapask is actually not Snapask. It was just myself teaching online. When I was still in the university, I got a couple of friends because we were all doing tutoring, having it as a gig, as a side job. I gathered a couple of friends, and we started a very small tutorial center. We split the rent, and we each had a classroom, and we started tutoring, having our own students in class, materials, and everything. But it was the second year when we found out—it was just myself being a lazy person. I feel like I am repeating myself a lot with the lectures that I’m teaching, so why don’t I just do a screen recording of me teaching online? And people should pay for my classes. I had that idea in mind. I thought, “Online education should work like this. I should not be repeating myself, but I should put this video online and charge for it.” It was a huge failure when I first had my first 20, 30 videos. It was just me teaching all the topics in the curriculum. I don’t know why, but I did everything I could. I taught the classes, and I uploaded them. It’s something I still remember until today about don’t do everything before you have a proper plan to test things out or execute. You have to know exactly what you’re testing, and you have to have the right amount of resources put in. If something works, you should put in more, and subsequently, within all of these steps, linking it; it’s not just a linear process. It branches. It branches out to a level that every step is a test, which comes back with results that drives you to the next step. This is something my team and I have been holding onto a lot during the whole process. But after the first stage, when we did videos online and started gathering some students, we had some students, but then no one was paying for the service, which means it’s a failing business, but then we got some traffic. So we pivoted. We knew this was not something that worked. If what I did back then was, “If the first 30 videos didn’t work, I should make 60 more.” Or “If the first 60 didn’t work, I should make another 100.” It will become a bigger and bigger failure. So the first thing I did was I went back, I studied what happened, and I talked to users and the students. One thing quite interesting that came out was students every day after they watched the videos, it’s different topics, so students left comments and they sent messages to my inbox and started asking questions. So I think it was only a month or two after the first batch of videos were accumulating on the platform. It was just a Facebook page back then. I started seeing a lot of messages in my inbox coming in asking questions about those videos. Then I started answering those questions, and more students came to ask questions, so I ended up having my friends lock into my account to help me answer questions. That’s almost like a version zero of Snapask of having a bunch of tutors on a platform just answering questions. l
Alejandro: What ended up being the business model that we know today of Snapask, and how do you guys make money?
Timothy Yu: Based on the first version of students watching videos and asking questions based on the topics that they have doubts about, now what we’re doing is we connect students with questions about their homework, study, exam preparation, and we connect them with qualified tutors in the local market. Now we are serving over four million students with over 350,000 tutors around the world. Our primary focus right now is mostly in the Asian markets. We started off in Hong Kong. Now we’re in Taiwan, Singapore, most of the South Asian market, and the newly-developed markets like Japan and South Korea, also one of the fastest-growing regions that we’re in.
Alejandro: Obviously, you’ve had tremendous growth. How much capital have you guys raised to date?
Timothy Yu: To date, including the first couple of rounds, I think we have raised over 80 million in total since 2016, our first round. And currently, we are also working on new financing activities to keep up with the growth opportunities that we have seen in the pipeline.
Alejandro: Got it. The first round that you did was you and your professor investing, and that amount didn’t last long. In fact, you were literally one month away from bankruptcy, so tell us what the sequence of events was and how did you turn it around so that you were able to survive?
Timothy Yu: There was a stage where we were not monetizing much from our users, so we were testing a lot of things and investing a lot in building our products, and also the content, and all the services. There was a stage where we were building so much. It was my own capital back then and another investor in a very early stage. I guess the first person who was crazy enough to invest in this company when I first met him, he was 68 years old. I met him in a bar. I talked to him in an event about doing social good in a bar in Hong Kong. I told him about the idea of online education and how it can grow, how I’m actually doing tutoring online and getting a lot of students. The next day, he came to our office and gave us a check. That’s our first investor who joined this journey. But even with my own capital and some new capital coming in to support the growth of the business, it’s not enough. In 2016, we started our first round of fundraising, but it was not so successful. It took actually six months longer than we expected to close the round, so by the time the money came in for the first Series A round, we were one month away from bankruptcy. It wasn’t a very big team back then, not a huge burn, but then still 20-30 people in our team in Hong Kong. I still remember that we were writing checks for them, and we don’t know if we would have cash. The month after, luckily, everything worked out. The money came in, although it’s delayed. The round was delayed, but then eventually it was closed, and then everyone was happy.
Alejandro: Why do you think it took longer than expected? And if you could go back, how would you mitigate to avoid that happening again?
Timothy Yu: I won’t say it was something we could mitigate entirely. I would say it was just our first round. We didn’t have much experience in fundraising back then, and talking to a lot of people in Hong Kong about how we built this company and eventually we filtered out who would be the right investor for us. I think, back then, there was also this direction of how companies in Hong Kong can grow to a billion-dollar company or even larger. But then everyone realized the fact that Hong Kong was a very small market in every regard. The industry is small; the market is small because of the population. At the end of the day, we just have to look at the market size. So Hong Kong is inherently having some disadvantages in that regard. Raising money for a business purely focusing in Hong Kong is not easy. I guess that’s also one of the steps that we took early in the preparation of the company that we launched also our operation in places like Taiwan and Singapore. Although the sizes of these markets are not as huge as China, but with our expansion to these markets, we can successfully show our investors how scalable it is for Snapask to grow beyond just Hong Kong to other markets in Asia and how replicable it is to build a business based on all the resources we have on hand.
Alejandro: One thing that is very interesting is how the investor mindset is different from one geographic location to another. For example, in the U.S., investors, especially in an early stage, are big-time into growth and into product/market fit. For example, in Europe, let’s say in Spain, where I was raised, they’re more about profit versus growth. I think that mindset, especially if you’re thinking about marketplaces, could really kill the business because more money today is not going to be equal to more money tomorrow. In terms of the mindset there in Hong Kong and around you in the region, what is the mindset of investors? What gets them excited?
Timothy Yu: It changes from stage to stage, definitely. I would say we went through three main rounds of fundraising. So from pre-A Round and A/B/C Rounds, there were definitely different investor mixes in conversations with, so definitely pre-A Rounds are about how scalable your idea is, how big the market is and what kind of unique selling point your product is actually building. Not necessarily a successful business model that you have already tested out and generated a lot of revenue within that model, but at least testing how well it can monetize and showing some pre-scaled-up metrics that this is, from a unit economics point of view, it actually makes sense. Testing out these smaller components from a smaller scale can get an investor excited at that time and at that stage. Of course, once you have your first ticket coming in Series A and until you get to Series B, it’s about how big the market you have pitched people about and how much you have actually acquired within that market that you’ve imagined yourself in being. I guess some very concrete steps would be how well you are scaling your business with the team that you can hire and how your structure is actually built up for the long haul. For our case, I would say it’s quite unique. The reason being, we have an operation in nine markets at this stage that we are only five to six years into operation. We already have nine different teams in nine different markets operating independently as well as they are global teams with a lot of processes overlapping. I would say at the B to C Round stage, not only do you have to prove the business model works, but it had to work in multiple markets with the same kind of construct, team construct, operation model, as well as logistics. In unit economics, the same model can be applicable to each of the markets. It’s also about the show and return on investment. Not the return on investment on the investors’ money, but more on how well you are making decisions in your quarter-by-quarter. In smaller decisions, how you are investing money to measure your return as well. These are all the topics that I think, although quite broadly speaking, everyone knows what it is. But then, when you are multiplying this topic to four to five markets, it’s definitely more difficult than if you’re only in one market. I would say Asia is unique in that way because everything is so scattered. Each market is quite small, but then the whole market is quite big, per se.
Alejandro: For you guys, the last 11 months have been really incredible when it comes to headcount. Right now, you’re closing in on 300 employees. But in the last 11 months, you’ve experienced adding around 120 or so. There are a few things there that are interesting. One is, what do you think really caused that tremendous growth. Do you think that maybe COVID was something that treated you guys very well?
Timothy Yu: Yeah. As you mentioned, we doubled our size just within 2021 in the first 11 months of 2021. The team is quite happy about the growth. I, myself, and some of my partners are also quite happy about the growth. But at the same time, it’s quite scary. The reason being, when your organization grows, not necessarily the leaders would grow. So we have to always keep everyone at the same speed, the same expectation, the same standard, and most importantly, I have to also push myself a lot to get up to speed. As a first-time entrepreneur, first-time founder, I would always say I’m learning everything along the way. I don’t have any management experience. I don’t have anything about how to run a 100-people company. I would not have experience in any of the topics that right now I have to be good in, so that’s why I think along the journey, I’m quite grateful. I have very good team members that I’m learning from and learning with, as well as having mentors who are being very helpful. And there is always a community with us in facing these difficult times. Growing the team to 200+ people, right now, very close to 300 people, just within 12 months, is quite scary. The scariest part is, these are people you cannot see. I have more than half of the team who are actually outside of Hong Kong. These are people that I don’t work with every day, and we’ll see some of them that we hired after COVID that have not been flying around between markets for the last two years. It means that there are a lot of members that I haven’t even met in person. This is the part that impacts collaborations a lot, as well as building relationships for us to have a tight-knit team. But then to your point about is COVID one of the main factors in helping the business to grow, I would say yes, in a way because we have set up this whole launch again, the whole platform and technology for online education and digital learning since day one. There is nothing about that change to the new online education behavior at all since COVID started in 2020. But then we had some earlier success since the beginning of the pandemic when school was suspended and students could not go out to tutorial schools anymore. They had to do everything at home, so they were stuck at home, but then exams were still happening. That’s why they came to our platform. Active users spiked as well as usage, and revenue increased a lot during the past two years. One thing we also see is other traditional businesses; although they have been suffering a lot since the beginning of the COVID pandemic, like any other business, we are all finding a way to survive. These businesses are facing impact and disruption during the beginning of the outbreak. They have also found a way to come out of it, to revamp their business, to reinvent some of the components in their business model. Now, suddenly, we have 10, 15 more competitors in the same market, and combining all the nine markets that we’re in, there are almost 100+ competitors on our radar. This is something that always keeps us up at night.
Alejandro: Got it. Talking about being up at night, imagine if you go to sleep tonight—obviously, a tremendous snooze. Nothing is keeping you up, and you sleep like you never have before, and you wake up in a world five years later where the vision of Snapask is fully realized. What does that world look like?
Timothy Yu: Technology has been advancing at tremendous speed for the past decade, so we’re no longer talking about a technology that needs three years to be built. We can see technological advancement almost weekly. New things are coming out every day. I think five years is a very long timeframe. One of the first priorities for us is to make education personalized and available for all. Even though we are only focusing on a small segment of the markets in Asia, these markets have a significant enough representation of the entire demographic in Asia, as well as also students globally. I think education eventually will go to a stage where we don’t have to go to school anymore. School will no longer be on our day-to-day. If we can effectively acquire knowledge online through every means that are available nowadays, we can almost imagine five years from now it will get to a stage where everything you have acquired is already online. Then what’s left in school is no longer applicable to how we imagine the school function is like today. This is something that I think keeps me up at night every day and also for the team. That pushes us to think about how we can build a better product, better service, and also better performance for the entire community.
Alejandro: You’ve been at it now for quite a while, and I’m sure there are a lot of lessons learned. You were talking about it. This is your first company, your first rodeo, and I’m sure that the incredible lessons that you’ve been able to get along the way have been remarkable. So keeping that in mind, if you were able to go back in time. Imagine I put you into a time machine, and I bring you back in time to that moment where Timothy is coming out of school and thinking about building something of his own, and you were able to have a sit-down with that younger Timothy and be able to give that younger Timothy one piece of business advice before launching a business. What would you tell your younger self and why, given what you know now?
Timothy Yu: I won’t just tell him one thing if I actually have a chance to meet him again. But if there was only limited time and I could only tell him one thing, it would be to stay focused. I think it’s the same message for a lot of entrepreneurs, as well. We can always do a lot of things, and every day we have new ideas coming out. But the true ability of an entrepreneur, a founder, or a leader is never about doing more things. It’s about doing less things. Being able to filter what is not necessary in your pipeline, what is not something that you should prioritize now is a true edge for a leader. That’s something I would definitely prioritize for myself, for my younger self, and also for my future self.
Alejandro: For this journey that you’ve had, obviously learning a lot, I’m sure that you’ve read a lot too. What would you say has been one book that you wish you would have read sooner?
Timothy Yu: There is this book, The Hard Thing About Hard Things.
Alejandro: Ben Horowitz. Good stuff.
Timothy Yu: Yeah, Ben Horowitz. It’s a #1 read for every entrepreneur, I would say. Short stories, you can read it within a day, and a lot of life lessons that Ben Horowitz accumulates over his 20+ years of entrepreneurial life.
Alejandro: Amazing. Well, Timothy, thank you so much for being on the DealMakers show. It was an honor to have you here.
Timothy Yu: Yes. My pleasure. Thank you, Alejandro.
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