Cheo Ming Shen sued me and lost. Then he appealed, and lost again

For the past 2 plus years, I have been defending a lawsuit that Ming filed against me in the Singapore High Court. The trial took place last year and he lost the suit. Then he appealed the judge’s decision. Last week was the appeal hearing in the Court of Appeals and he lost again.

Alas justice and the truth prevails.

Click here if you’d like to read the judgement of the case.

I want to thank the people around me who have supported me in my decision to stand by my principles to go all the way with this case and not settle. From my friends and family to the really great legal team I have in Pradeep and Simren of PRP Law.


If there’s one thing I really enjoyed, it was going through this journey working with Pradeep and Simren. I would highly recommend them for any litigation issues you may have in Singapore.

The end of this journey marks a closing of a chapter for me. I feel thankful that I’ve been able to move on to a happy place in my life now. Grateful that I had the confidence to take a plunge on a new startup called Colony that is now thriving.

Thank you to the people who have supported me.



Subscribe to the mailing list to get updates on new articles and giveaways that I may get from brands. I promise no spam!

Penny’s longstanding stance of not loving Daddy

Penny and I really close. Whenever I’m around she sticks to me like glue, forcing me to play all sorts of games with her and do things with her. Amid all that though she has this longstanding stance of openly saying that she doesn’t love Daddy.

To understand the sound rationale behind that let me bring you back to a conversation I had recently with her.

Me: Penny why you don’t love Daddy?

Penny: Because you are a boy.

Me: Does that mean you don’t love Koko also?

Penny: No because Koko is a small boy. I only don’t love big boy.

Fighter: What if I grow up to be a big boy ? Will you don’t love me then?

Penny: Yes.

Fighter: Awww…..  No I want you still love me.

Penny: Ok I still love you if you big boy.

Me: And Daddy.

Penny: No. Just Koko.

So every now and then we’ll have a conversation like this:


Penny: NO!


Penny: NO!


Penny: NO!


Penny: NO!

Me: HAHA!! *leaves and shuts the door*

Anyway just yesterday we were at a furniture shop picking out fabric for Colony 5. Here’s how our conversation went.

Fighter: Ok Daddy if you and Penny want to come in here you need to give me your password. Here is the password. *whispers into my ear the words “Daddy has a Huawei Phone”*

Me: Ok!

Penny: I want to go in. What’s the password?

Me: Okok the password is “I love Daddy”.

Penny: I love Daddy.

Fighter: No that’s not the password.



Fighter: No that’s not the password.

Me: *whispers to Penny* “I really really do”.

Penny: I really really doesn’t.

Me: HEY!

10 minutes later.

Penny: Daddy can you spin me on this chair?

Me: Yes sure but for me to spin you must say “I love Daddy”.

Penny: Can I just say?

Me: Yes.

Penny: I love Daddy/

Me: OH YOU DO?!?!

Penny: No I don’t. I just say. I don’t love Daddy.

At the end of it I always tell Penny that it’s okay if she doesn’t love me. Love can’t be forced and isn’t an entitlement. That I will always love her whether or not she loves me.

There are times when she lovingly tells me she loves me though…. so I guess she’s just keeping me on my toes.

How to decide which “loser friend” to drop

Not long ago I watched this video from Gary Vaynerchuck about how we should “drop one loser friend“. He suggested that we do an audit of the friends we have today, spot the loser and then just stop hanging out with him (or her). The theory goes that we are the average of our closest 5 friends so if we hang out with better people, we become better ourselves but if we hang out with worse people, we become worse.

That’s rough. It’s tough because this approach forces you to be judgmental and to some extent ruthless when it comes to auditing the kind of friends we should have. The challenge doesn’t end there though.

The big question is “How do you differentiate a winner from a loser friend?”.

It’s certainly not by who has more money, or power, or fame or anything like that. We can to some  extent look at how driven or motivated people are but how can you really tell? I’ve seen people talk the big game like they’re really driven or motivated but actually have little to show for themselves after years.

So I really struggled with trying to define what Gary considers a loser. What about a friend of mine who doesn’t have any ambition to do great things but is really really happy with life. He can’t be a loser… because hey he looks happier than me and that’s one thing he’s winning at.

After some time I sat down and put together the things that define a “loser friend” or just someone I don’t want to hang out with. At the risk of sounding judgmental, I’m going to share with you my unfiltered checklist I use to filter out “loser friends”.

1) He always talks about himself.

Have you ever been in a group of friends where there’s always one particular person that constantly dominates the conversations the group has. Even when the topic isn’t about him, he’ll make it about him. If you talk about something totally unrelated to him, like say how your friend got mugged, he’ll bring it back to talk about how he once thought he was going to get mugged too.

Now it’s not that this kind of friend never listens. Sure… during the span of a two hour outing with a friend there may be a few minutes where he quiets down and listens instead but in proportion of all the time spent.. you would notice he dominates the conversations some 90% of the time.

This kind of friend too often doesn’t take kindly to friendly debate. If he believes in something like “Trump is the best President the USA has ever had”… no matter how you argue with whatever data you can prove, you will never win the argument. It’ll only make him angrier.

2) He’s boastful and arrogant.

In my experience, arrogance is often caused by deeply set insecurity in someone. That person may feel that he’s not good enough so he needs to brag, show off his wealth or put down someone else in a group. It may not be about material wealth. I’ve seen people who have a lot of wealth but have insecurities that lie from their own abilities.

One particular person I’ve known comes from a rich family and does reasonably well at business but constantly puts down the success of his other friends. You’ll see such a person try to find a fault in a particular business (which isn’t hard because every business no matter how perfect has a fault). Things like “My other friend bought his product and he thought the service was terrible”. Or if he hasn’t had the time to find something bad to say, he might go with “At least I sleep well at night without having the stress he has”.

3) He treats people differently based on who they are in society.

I personally can’t stand people like that. If you really want to know what someone is like, don’t base it on how he or she treats you. Pay attention to how he talks to the security guard at your condo, or a waiter at a restaurant, or any of his employees that work under him. That… is how you can really tell what someone is like.

If you know someone is an asshole from how he treats people he considers “beneath” him, then chances are… one day if you’re nobody to him… he may treat you the same way. Life is too short for friends like that. But if you feel that you still enjoy such a person’s company then go ahead and mingle with the full realization that this is a “fair weather friend”.

4) He never fails to tell someone else what to do but never practices what he preaches.

This kind of loser friend often has a lot of opinions not just about world affairs or about himself but also about how you should live your life. Pay attention to whether he holds himself to the same standards or does the very same things he tells other people not to do. Don’t bother calling them out if you see inconsistency in their behaviour. They’ll likely get offended and have some reasoning anyway on why his situation is different than yours was.

Don’t bother. Just drop the loser friend and walk away.

5) He talks about all the great things he has done only for you to learn that he had little contribution to that.

Loser friends are constantly talking about their past successes. It works very well because people generally don’t suspect everything that someone says is a lie or exaggerated or taken out of context. We don’t because we just don’t have enough mental capacity to be suspicious of everything everyone tells us.

By some chance if you do dig deeper though and find out that someone played a small role, or even took things out of context then you know he’s bullshitting you. But even if it’s true. Even if he did do certain things, losers constantly get hung up on their past successes. Winners always look for the next success. Which brings me to my next point.

6) He always talk about things he’s going to do but never does it.

This is pretty straightforward. So I won’t elaborate.

7) He blames everyone but himself for his mistakes.

Have you ever heard someone say “It’s because of him that this happened to me” or they sometimes come with a partial concession like “Yes sure I made a mistake BUT it wouldn’t have been like that if it wasn’t for what this person did”.

Losers blame others over themselves because they can’t help it. It’s too much weight on their insecurity. Winners on the other hand always blame themselves, even if it’s not totally their fault. It’s only when you acknowledge that you made a mistake that you can start working on what to fix.

8) He talks bad about other people all the time.

This again is one of the things contributed by insecurity. The need to put other people down so that he comes off better. Gossip can create bonds and can be exciting at times but we can’t ever forget that if someone talks bad about other people with you, at some point he’ll be talking bad about you too.

I’ve used these 8 steps to identify what a “loser” friend is. Since then I feel like the quality of my life has improved tremendously. I have friends that I can count on, deeper and more meaningful relationships and more importantly I don’t have to put up with the negativity that “loser” friends bring. I guess Gary Vaynerchuck is right on this one.

Notice that at no point does any of my definition include how rich, how powerful or how famous anyone is. In recent years, I’ve learned to choose my friends based on who they are rather than what they have.

The additional benefit I derive from this kind of thinking is that I reflect upon myself every now and then to see if I fall into any of the 8 points I just mentioned above. Sometimes I do… like maybe I’m dominating conversations with friends in a group and when that happens I spot myself becoming a “loser” and start arresting that behaviour of mine.

It’s true that we are the average of our closest 5 friends but it’s also true that when we’re our own hardest critic, we become better.

How we sold the most expensive offices in Malaysia

About a year ago, I was sitting in a cafe with my colleagues Nitaya and Ching Ern. We had just visited a potential Colony location in Subang and trying to decide if we should take it up. I like Subang but the problem with the area was the vast availability of office space there at very cheap rates that could undercut us if we were to open there. Colony after all is expensive.


To fit the location, we discussed having a lower-end version of Colony but if there’s one thing I’ve learned in my past years is that I need to focus. If Colony is about high-end coworking, then we have to go for high-end all the way until we’ve really made it in that category.

Then Nitaya came up with an idea. “What if instead of going for cheaper and cheaper like the rest of the market, we go for more and more high end?”.

What if instead of just the typical cramped private offices we have in coworking spaces or serviced offices, we had Suites. Big luxurious rooms that really feel like a hotel room. Over time that idea slowly evolved with more and more suggestions on how we can up the game. Today these Suites are built luxuriously and fully decked out with technology. From a Google Home controls everything from the lights to the curtains, to flatscreen TV, to standing tables, to lights that change to whatever colour you want to a butler service.

With that concept in mind we started a prototype called the Jamestown Suite in Colony @ Eco City. With our 3rd location in KL Sentral we had 5 of these Suites. It was a huge risk because the renovation costs for these suites cost a lot more. On top of that because they’re so much more spacious and take so much more real estate, the offices would be really expensive.

I know there’s a market for super luxury high-end bags, cars, clothes, food and experiences. But is there a market for super luxury high-end office? Would someone pay RM13,000 a month for a one person office?

You’re probably wondering now how cheap is cheap and how high end is high end?

Let me give you some reference points. In coworking spaces, a private office can cost anywhere from RM400 per head to RM1,000. Why the range? Because sometimes the published rate can be RM1,000 but if the space is desperate enough they can offer you up to a 60% discount. Colony holds pretty steady about RM900-1,000 per  workstation depending on the location.

So RM13,000 per person per month would be 32X more expensive than a low-end coworking space or 13 times more expensive than what Colony already charges in the past.

What’s amazing is that Colony @ KL Sentral just opened a month ago and we’ve already sold 3 out of 5 of our Suites. Our upcoming Colony @ Star Boulevard is going to have more of these Suites.

I feel a sense of relief that this new product seems to have found validation, but also a sense of joy. We took a risk to invent a new category and it didn’t end in disaster. More importantly we’ve created a huge point of differentiation for us among other coworking spaces that will last well… for a while.., until someone else copies the idea.

When I look back at what really made this possible. It wasn’t really me. The idea didn’t come from me. It came from Nitaya and was built on from a collection of ideas and execution from everyone else. My only role was to create a culture in the company where everyone has the space to come up with ideas. We then match these ideas with vigorous debates by other members in the team in the pursuit of the best ideas. Sometimes these debates can get really intense but it’s all part of our commitment to let the best ideas win. We have many other ideas apart from this which we get into arguments for and eventually call off.

I’m glad this one paid off.

How I eliminated my hot temper

Growing up there was one characteristic of me my mom never liked. That I just like my father before me and my grandfather before him, had a very bad temper. If something didn’t go as planned, if someone attacked me or if I felt that I wasn’t getting a point across, I would erupt.

The funny thing is that this behaviour of mine was in stark contrast with how I normally was. At my steady state, I’m normally very cheerful, I smile a lot, I laugh a lot and I joke a lot. But when that temper gets the better of me, I am another person.

I’ve heard all sorts of advice growing up from “count to ten before you erupt like Donald Duck” to “try not to take things personally” but it never ever worked for me.

Then two years ago, change came from a very unexpected place. It wasn’t from some self-help book or therapy or a huge incident or anything. It was from reading a book called Sapiens by Yuvan Noah Harari, about our evolution of human beings from our cavemen days to where we are today. According to the book, human beings in our current form have been around for over 200,000 years. That means that even assuming if we lived a 100 years, our lifetime would equate to a tiny 0.05% of the time human beings have been on this Earth.

During this period of 200,000 years, many human beings have lived and died. Some Kings, some nobles, some rich men, some peasants, some great men, some not so great men. Yet no matter how important a particular person was during his time, that person’s name is rarely uttered in our daily conversations today. When was the last time for example you talked about King Henry VIII?

If even King Henry VIII, the man who is responsible for splitting the Church and them being Protestants and Catholics today so that he could marry another wife is not talked about by us on a daily or even monthly or yearly basis…. who the fuck then am I… Timothy Tiah, some boy from Penang, an island in a small country of 30 million, in the world of 6 billion people.

So if I am nobody, do my opinions or thoughts or wants matter? If they don’t, what is there to be angry about? If I am nobody, why do I feel entitled to lose my temper and hurt another person?

This is hard to accept because all our lives we are brought up to think that we are special. That we are somebody because everyone wants to feel important.

This now brings me to the next part. My first revelation was that I am nobody and then I realised that everybody wants to feel important. So what if I decided to practice this on a daily basis. That I accept I am nobody and that everybody else is important.

Here’s what I would normally lose my temper on in the past and how I deal with it now.

  1. When I have a disagreement with someone because of a different point of view.

If you think about how all arguments start, it’s always because both parties feel that they’re not being heard. That’s why they end up raising their voices and speaking louder and louder until it reaches a shouting match.

Now when I feel that someone is raising their voice, I try to catch myself from raising mine in return. Instead I remind myself that this person feels like he’s not being heard. So I change my posture. I stop doing anything else, lean forward, look that person in the eye and sincerely ask questions to try to understand where he’s coming from. Once he’s answered those questions, I ask more clarifying questions until I find that I fully understand how he feels. I resist the urge to respond even to any accusations he may have of me. I just focus on listening to him. Why do I do that? Well if I am nobody, and if I know he wants to feel important, shouldn’t I make it a point to listen?

I find that in most situations once I follow this process, the other person calms down very significantly. Here’s the amazing thing though, once he does that and have said their piece, I find that he’s wholeheartedly waiting to listen to what I have to say. I no longer find the need to be angry or to lose my temper and we resolve things very constructively.

2. When I don’t get what I want…

We live in a time of “ME”. We are constantly reminded on social media or marketing messages that we need ME time. That we need to do things for ourselves, go for holidays, buy things for ourselves.. whatever it takes to make ME happy. Sometimes we justify this by saying we work so hard or sometimes some of this stress come from work. That things at work don’t go the way we want it to go and it pisses us off.

Let me give you an example of how I overcame this.

In the past say if I went out for a event with Audrey’s friends and the event drags on that it encroaches on the ME time I had allocated for the day to play games or go for a run, I would get angry and sometimes lose my temper. I don’t get angry about this anymore. Whenever I feel like getting angry I would remind myself that hey… I am nobody. Why do I feel like I deserve ME time.. and on the other hand, Audrey is IMPORTANT. So even if she event drags on till night, deal with it because that’s more important than my run, or games or whatever else I have that may seem important.

3. When people talk bad about me…

In the past this would have me justify some reaction because hey, again we are thought by society that we have to defend our name if someone attacks us. In my case though, now that I have established that I am nobody and nobody apart from my own family and close friends give a shit about me, why do I feel the need to get angry about it or defend myself?

This has lifted such a huge burden off of me. Even if I were someone of importance, say a prominent corporate figure… do people really really care? Does anyone still even talk about how Mark Zuckerberg kicked Eduardo Saverin out of Facebook?

Now this mindset is really easy to adopt but there is one thing that really gets in the way of being able to do it consistently. That is the ability to control our emotions. Sometimes I have lapses too whenever I can’t control my emotions but hey… on aggregate I’ve done it.. and it has worked really well for me.

My relationships with friends, family and wife have improved.

I find it easier to manage teams at work. Heck try applying this at work. Treat all your colleagues, vendors, partners, investors like they were the most important people in your life and you’ll find they’ll go further for you. I attribute a big part of the modest success Colony has had to this.

Most important I find myself a lot happier. It’s liberating to feel that you’re nobody and you don’t have to defend anything about you. On the flip side it’s exhausting to feel that everything is about you. We all have that one friend who feels that way right?  That everything is about him (or her). If someone does something that affects him, that someone must have done it because of him. That he is entitled to strong opinions and that he must defend his ego. That in any social setting he talks the most, always about himself.

It’s exhausting being that person because this normally stems from a deep insecurity. But it would be great if we could also have the empathy to understand that there are many reasons why someone like that might feel like that. Make that person feel important and maybe that might help. For me though, hanging around people like that tend to exhaust me too so I tend to just fade away from their orbit.

Anyway I digress.

All in all I think this change for me has been really significant.  People who I’ve met in the past two years can’t imagine me losing my temper. More importantly my parents, my family and my wife realise that I am no longer hot tempered. I still have a long way to go because eliminating hot temper isn’t about just doing it for a month or a year… but doing it consistently for the rest of my life.

My 2018 and the year I became proud to be Malaysian

As I lazed around in my family home in Penang, the one thing at nagging me at the back of my mind was to write my customary year end review post on my blog. It did cross my mind about why I would do such a thing. It’s not like many people would read it. It’s an article about myself, and who cares about me.

Then I remembered why. I do it because the process of reflecting on my year helps me to remember the failures I’ve made and appreciate the success I’ve had in whatever things I’ve done. It’s also perhaps something that one day Penny and Fighter could read back to hear what his Daddy was doing with his years.

So here goes.

1. Colony closed another round of funding in the first half of this year valuing the barely 1 year old company then at over US$15-20m.

When I first started Colony, I didn’t expect to grow this fast so quickly but I’m grateful that it did. The best part is that a chunk of this new round of funding came from a PE fund that was introduced by one of our existing investors. I’ve learned that if we do a good job, treat our own investors with respect and radical honesty, they’ll be our strongest advocates in introducing new investors.

2. Colony continues to grow

We opened Colony @ Eco City in July 2018 with a huge anchor tenant deal and as I write this, we’re about a couple of weeks away from opening our 3rd Colony @ KL Sentral. We’ve also signed two more deals for two more locations. One at Star Boulevard and one more that hasn’t yet been announced.

The company is a good place, growing well but of course not without our own set of struggles. The best part though is that I enjoy every day at work. I once told a colleague of mine that I can’t believe our job is to build beautiful offices and work in them.

3. I’ve built many new relationships.

I don’t know if it’s because of Colony or serendipity but this year I’ve had the opportunity to meet and build strong relationships with a lot more people. I pass on the favour best as I can too, introducing people I know to others so they too can maybe start something.

4. I’ve picked up my reading habit again.

I’ve always been reading books all my life but sometimes I go into periods where I fall out of the habit. This year I’ve quite consistently had a reading habit and I’ve learned that it has come at the expense of Netflix and iPad games. Though in the last month of the year I’ve just picked up PUBG with some enthusiasm so lets hope that doesn’t get in the way.

5. I’ve never been skinnier thanks to intermittent-fasting.

Somewhere in the middle of this year I hit 75KG which was my peak weight. So I started intermittent fasting and I don’t know if it’s the fasting itself or that I stop doing my late night munching while watching Netflix (because I watch less TV), but I went down to as low as 69 KG. Now I’m about 69-70KG and I’m trying to stay around 70-71.

6. I’ve learned how little I know about managing people.

Before this year I think I belonged to a group of people who thought we knew how to manage teams because of our past experience. Well this year, thanks to my reading habit I’ve read a lot about management and it became obvious to me that I was doing a lot of things wrong in the past. That really whatever success I had with managing teams in the past were a fluke.

I’ve learned so much and implemented the things I’ve learned in Colony and I think that’s a big contributing factor for the success we’ve seen this year. The thing about learning though is that the more I learn, the more I realise that I don’t know. So it’s still a work in progress to me.

7. I’ve learned to truly be proud to be Malaysian

I’ve always loved my country which partly explains why after graduating in the UK, I wanted to come home. Loving my country and being proud of it is another thing though. I used to love my country but hate what the leaders were doing to it. The corruption in the ruling government and the regular stupid things our ministers would say that would make me feel so embarrassed that these leaders were meant to represent my country.

Then 9th of May happened. Our country showed that against odds and a rigged electoral system, we threw out the corrupt ruling government at the time. It’s hard to describe that feeling but I felt a sense of camaraderie with my fellow countrymen who worked together through the ballot box to say no to the way the country was being run.

Since then, every day that passes has been a delight. News about politicians in the past that we suspected were corrupt being charged and scandal after scandal being dug up. Our new government was given a daunting job of repairing a damaged country but looking at the way they were handling things, I was and still am happy. For the first time in my life I am able to say now that I love my government. Yes I sometimes disagree with some of the new leaders on some issues, but in aggregate I’m happy and proud of the new government in aggregate.

I realise that I wasn’t the only one experiencing this newfound pride. My friends, family and fellow countrymen were all experiencing it as well. For the first time, in spite of the situation our country’s finances are reportedly in, I feel hopeful. For the first time in my life I’m thinking that maybe I don’t have to have a backup plan for my kids to migrate overseas and have a better life. For the first time I am truly truly proud to be Malaysian.

That is something I never expected 2018 would give me. And that is something I am so thankful for. May 2019 be a great year for us all.

Why I think we should disagree with our bosses

Not long after Ching Ern picked up her phone with a “Hello?”, I went into a passionate argument about why I disagreed with one of the decisions she made at work in Colony.

Ching Ern is one of my colleagues at Colony Coworking Space. Before joining Colony, she was an engineer for a Korean firm in Seoul, having landed the job after she finished her university there in Korea on scholarship. After her many years there, she speaks, reads and writes Korean fluently.

Our heated debate carried on for a while until finally she remained quiet for a while and said she understood. At that point, sensing she wasn’t fully sold on my reasoning I asked her to tell me why she still disagreed with me. I said

“I hate it when people just agree with me because I’m the boss. Agree with me instead because you really think I’m making the right decision”.

I pushed her a few more times until she finally let out a few more points she had inside her until I felt like she was finally fully convinced.

Why did I go to this extent when she seemed to agree with me the first time round?

One of the biggest traps that I’ve seen leaders fall into is the trap of confirmation bias. That we believe in a business decision so passionately that we only want to look at reasoning that supports it, ignoring the reasoning of those that does not.

How often do we see in companies where we think the boss is making a mistake but we keep quiet because we’re afraid to stick our neck out and offend the boss. Worse still, how often do we know he’s making a mistake but continue to openly support his decision because we’re afraid to get scolded for not being a “team player”. That isn’t culture that will lead to a company making lots of good decisions.

How do we prevent this? The answer to me is to have a culture where people are willing to argue against any decisions even by the boss. The tricky part though is forming the culture to do so especially in Asia where people are non-confrontational and in many companies for better or worse, it’s almost seen as disrespectful to argue against the boss.

I disagree with that. At Colony I take great pains to make sure people feel safe enough to voice out their thoughts especially if it’s in contradiction to my own. How do I do that?

  1. Before I make a decision or answer how I would handle a situation, I normally ask my colleague what they think. I hear out their thoughts first before I deliver mine. I do this because it helps them commit to a position without being influenced by my position.
  2. I have never said to anyone in the team “I’m the boss so when I say do it, just do it”. The problem with pulling the Nike (ie Just Do It) is that it imbues a culture where the leader isn’t up for debate anymore. It turns the whole organisation into one that takes orders rather than one that thinks on their feet. So no matter how painful the process, I take it upon myself to convince my colleagues on the merits of my decision or ideas.

But… don’t leaders have to be decisive?

I think being decisive and never changing your opinion once you commit to it is overrated. We must always be open to changing our opinions when there is new information in play and the way to have new information is to create an environment where people aren’t afraid to give their thoughts and opinions. A leader’s role isn’t just to make a decision and stick to it forever. It is to curate an environment where the best ideas win based on merit and not because the boss says so.

A lot of my time as the leader of Colony is spent trying to find the best people and then coaching them to peak performance. What’s the point of having the best people if we’re going to tell them what to do?

I’m going to end this article with a quote from the late Steve Jobs,

“It doesn’t make sense to hire smart people and tell them what to do; we hire smart people so they can tell us what to do.”

To my team at Colony, we owe it to ourselves to always argue against me if I make a decision that you think is wrong. Always have the courage to convey the merits of your argument and stay true to the commitment to let the best ideas always win. I can tell you often that my ideas, and my decisions… are often not the right ones. Your role is to show me how they aren’t.

How I once again resisted the temptation to “fake it till you make it”

I’m constantly paranoid about how well Colony does as a business. Since we started we’ve been lucky, constantly beating targets. Every quarter that passes we break new occupancy, average prices, revenues and EBITDA records so things look like it’s doing very well but I’ve always told people internally and externally that some shit will happen eventually that will cause us to miss a quarter’s numbers.

That quarter is this quarter. How do I know even though we’re not even 1/3 through the quarter?

At Colony we set up these things called leading indicators that are meant to tell us in advance how our business is going to do in the next 2-3 months. The idea behind this is to see a problem before it happens and fix it before then. This has worked very well for many aspects of our business. There is one problem though where the leading indicators started showing cause for concern as far back as 6 months ago, but while I took some steps to solve it, I didn’t do what needed to be done.

The unfortunate thing about this problem is that the solution isn’t something that I could fix before the quarter ends. It’s something that will probably take 3 months to fix, so that’s how I know we’re going to miss our targets this quarter. To add to the problem, this last quarter of the year is especially important to us because we’ve been having talks with some parties on a really big fund raise next year. Missing targets in Q4 would make us look bad and may scare away the potential investors.

So for startups in my situation there are 2 potential way-outs for this.

  1. Even if it comes out bad, just sell on the other metrics that are growing and easier to fluffFor coworking spaces, when revenue, average price per workstation or EBITDA numbers are bad, coworking spaces can just rely on talking about how many “members” they have or “occupancy rates”. Both metrics that are easier to “pump” and “fluff” and could be used to show some growth story. I didn’t want to do this because I believe in having a consistent set of metrics that we share with investors and with the team so the team knows exactly what we’re going after every quarter.

    Which brings us to the alternative solution…

  2. Spend to pump the metric we need just to get us over Q4 and finish the raise.This would mean if I need to pump revenue I cut prices, or spend more on advertising just to boost occupancy even though I know it’s a short term game because cutting prices means taking on customers that will leave us eventually when we try to normalise prices. That means we’d be spending money on acquiring the wrong kind of customer.The problem with this method is that this isn’t what anyone would do if they had their own money at stake. For example say my problem is that our website has below average conversion rates because of the way it’s built. Before I spend a boatload of advertising money, it’d make sense to fix the website first right otherwise it’ll be an inefficient use of marketing spend. But in this scenario, if you’re chasing a Q4 number, you do it anyway because you have to hit that number right now to show consistent quarter to quarter growth all the way. In other words you fake it till you make it.

To be sure I called up two of our biggest investors at Colony: Oak Drive Ventures and Cornerstone Partners (a hospitality sector focused private equity firm).

I explained the problem I faced and then told them that if it were my own money, I wouldn’t spend more marketing money to pump the metric for Q4. Instead I’d rather take a miss in Q4 so I can fix the problem and then spend the money next year when I’m ready. I also explained that even after allocating all the investments for all the new locations we’ve committed to open next year, we still have millions in the bank as a safety net so even if we don’t raise money, we’re not going to go broke.

When I was done explaining, Cornerstone’s CEO asked me

“Tim. Do you know why we invested in you, when we have the chance to invest in so many other coworking spaces? We invested in you because of all the spaces we’ve seen, you’re the only one that makes money. You’re able to do so because of a combination of financial discipline, to picking the right locations, to negotiating good landlord deals and executing the business well. That is the value of the Colony and I think the type of investors we want would value that beyond just what you report in metrics”.

Oak Drive too agreed and explained that they were in this for the long term. So any decision I make should be for the long term. That was settled then. I would just focus on fixing the core issue and not throw good money after inefficient results.

At the end of this whole episode it really made me realise how important it is to have the right kind of investors with us. It doesn’t matter whether we’re selling coworking space, serviced office, event space or virtual office in KL… the end goal is to do it in a profitable and sustainable manner.

Why having high barriers to entry in your business doesn’t matter as much as it used to anymore

In the startup world, before any VCs invest a typical question they ask is “What are the barriers to entry for your future competitors?”. Often the answer is scale in which the entrepreneur will then explain is why they need to raise money, grow fast at all costs and achieve that scale before anyone can beat it. That’s how I always thought of business. That’s not how I think about it anymore.

First let me argue against the notion that barriers to entry make a business unassailable. There are two types of super high barriers to entry that businesses can have: Government licenses /concessions awards to a company or companies with an immense network effect.

  1. Government Licenses / Concessions

I know this guy who’s very wealthy and made most the money in his life from getting government jobs in a developing Asian country. I used to tease him about how great it is to have a business like his with the license to print money. Unlike many other companies, he doesn’t have to worry about sales or how big a market is going to be. He’s already got all that covered in the form of a concession.

One day I decided to open my mind and ask him if indeed his business was difficult and he said yes. Why? He explained that while has had the concession to do what he did and print money for many many years, there is always someone else trying to get it from him. Someone else who can give a better price or if a bribe is necessary pay more or someone else who always knows some other powerful politician or all of the above. This is made harder because politicians come and go all the time so he has to constantly stay on top of it.

What happens if he loses it? He loses a lot of money. In many concession businesses like him, it requires a huge upfront investment to build something big that will have a long payback period. To come up with the money he often has to both find investors and take on a lot of bank debt. Now if something happened midway and his concession was canceled or renegotiated, he would stand to lose a lot of money and these things happen too.

So while government concessions from highways to power producers have turned our well for some people and made some rich, it’s still a business that is constantly challenged by others who want to get into the game. The barriers to entry aren’t as high as one on the outside might think it is.

2. Strong Network Effects like Google or Facebook

Okay what about companies that don’t have high barriers to entry because of government but just because they have an insane network effect. They have far more pricing power, far more distribution, far more everything. How would you compete with that?

I remember some 10 years ago I was sitting in the audience in the Web 2.0 Summit in San Francisco. Up on stage for a fireside chat was Mark Zuckerberg himself. Facebook then was getting a lot of press for its immense growth and people were saying the network effects they had were unassailable. I mean who else would join another social network if everyone was already on Facebook?

At one point of the chat, the moderator put up a map of all the other social networking companies that existed at the time. On that list was MySpace, Friendster, Bebo and more. The moderator then asked the magic question:
“Which one of these companies are you afraid might eat your business?”.

Mark Zuckerberg took a few seconds to think and then replied that he wasn’t afraid of all the companies in that list that existed today. He was afraid of the companies that he didn’t know yet existed that may come out of nowhere and eat his lunch. He was particularly conscious of his blind spot.

Years later it all added up. He ended up making some of the most brilliant acquisitions of all the time. Imagine what Facebook as a company would be like today if it didn’t own Instagram and WhatsApp. Or imagine if both these companies were owned by Tencent or Google or if they were large independent companies in their own right challenging Facebook for the social networking pie.

Ok so what about businesses that have no barriers to entry? Don’t they suffer from pricing pressure and increasingly lower margins?

Not too long ago I met someone who owns what he calls a transportation business in Penang. Their business model was to provide factories the service of vans and small busses to ferry workers from their homes to the factories. They started not too many years ago and now have a fleet of hundreds of vehicles to do just this. I was very interested when I heard about this because if anything this was a very highly competitive market with low barriers to entry (anyone with a van). They were not the oldest provider so what made them so big ?

As I dug deeper the answer was simply, they were simply run better than everyone else. That was a lesson to me. That there exist many many companies out in various industries there be it in logistics or F&B or manufacturing that don’t have a moat or huge barriers to entry, have lots of competition and still do very well and make a lot of money. Their secret? They just make sure they run things better than everyone else.

That was a mindset shift for me. From instead of thinking of how to build a moat that would eventually get broken down anyway to how do I make sure Colony is constantly at the top of its game, running things the best?

We live in the world where even huge businesses with far more economies of scale than any of its competitors are falling to disruption. History has shown that the time always comes when the disruptors get disrupted.

Why I can’t buy an iPhone XS for myself

As I was rushing to my gate at Sydney airport I passed by an Apple store. It didn’t escape my eyes that they had a sign up to say that the new iPhone XS was available for sale today itself. Australia is one of the first countries to get the latest iPhones and yesterday was the first day.

I thought of my parents. Both are iPhone users and my Dad has been using an iPhone for 2 years. My mom’s on the other hand is about 4 years old. I quickly decided to buy them each an iPhone XS. An iPhone XS for my mom and XS Max for my Dad. The total bill was something along the lines of RM11K or something.

When I got home later that night, my parents were in town so I gave them both the phones. My Dad was happy and gladly accepted it because he’d been thinking about changing his phone. My mom on the other hand protested strongly. She agreed that her phone badly needed a change (lots of features stopped working) but she insisted on buying an older version iPhone itself. She felt this iPhone XS was too expensive.

I don’t disagree with her. iPhones have gone up so much in price in the past couple of years that it’s just gotten really ridiculous. I no longer find it in myself to be able to buy an iPhone especially when other phones are so much cheaper. I currently use a Huawei P20 Pro which cost me only RM2.8K (and comes with free powerbank and all sorts of accessories) and it’s an awesome phone. It has every high end feature I could expect. It has a really awesome camera, finger print, face unlock, great size and screen, big battery… everything! And it only cost me RM2.8K.

Full disclosure, years ago I used to be a Huawei ambassador but for the past year I haven’t been. I bought my Huawei P20 Pro myself and even though I no longer work with the brand, my personal opinion is that it’s awesome. It’s a good value for money phone.

So when I’m used to paying RM2.8K for a top spec phone, the stretch to pay what… RM7K for a top of the spec iPhone XS Max is really too far. I can get over buying it for my Dad and my Mom because they’re used to iOS and don’t want to go through the learning curve of Android. But for myself… it’s just too much money to pay.

I’m getting messages from people now asking why not I just use it myself. Well the truth is that… it’s just way out of my budget of what I would pay for a phone. There are just other things I’d rather buy with the difference I would have to pay in price.

The good news is that I kinda just convinced my mom to just take the phone. She was looking at the iPhone 8 Plus 256GB which costs about RM3.6K. I worked out the math for her and based on a 4 year depreciation of the phone, she’s better off just taking the iPhone XS I bought her. Even when it comes to value for money and since she’s only limited to iPhones.

I think iPhones are a great phone and I admire Apple’s ability to price phones so highly and still drive demand. I just fell out of their market with the prices they charge for their latest phones. That and that I like an Android phone because it works well with my Google Home.