TimothyTiah.com

How telling our biggest investor about how I’ve fucked up made him double his investment in Colony

A few months ago, I was sitting in our big boardroom in Colony across from ODV, our biggest investor in our seed round. J who was the CEO of the fund was in KL for the first time in years to visit Colony after his team told him that he had to come to experience Colony to really understand what they were investing in.

I watched him happily nod as I presented our business performance. The business was doing way better than expected and we were growing rapidly in all four of our key metrics: Revenues, Profits, Occupancy and Price per workstation (which affects margins). At the same time we were getting offers from other investors who were keen to buy a stake in the company at more than four times the valuation ODV had invested in six months before.

Things were looking good until I paused the presentation and said “If you look at all our business metrics, everything is looking good. But I think it’s important that I show you what’s under the hood… and we do have some serious problems”.

I explained to them how revenues, profits, occupancy, price and even financial statements are all “lagging indicators”. Meaning they’re numbers based on past performance and are no guarantee of future performance. My job as CEO though isn’t to celebrate past success but to look at problems I’ll have in the future and fix them before they happen. For those I need to look at “leading indicators”. Numbers that will tell me something is wrong before they actually lead to bad financial results.

There are a number of leading indicators I set up early this year. For sales it’s just pipeline, number of tours, number of leads etc etc. That’s easy and common. But I needed a way to measure future customer retention (no point winning customers if we can’t retain them) and because I believe happy employees lead to better business performance I needed to measure employee happiness too.

My solution for this was to adopt what we call a Net Promoter Score. Here’s Wikipedia’s explanation of that score.

The Net Promoter Score is calculated based on responses to a single question: How likely is it that you would recommend our company/product/service to a friend or colleague? The scoring for this answer is most often based on a 0 to 10 scale.[4]

Those who respond with a score of 9 to 10 are called Promoters, and are considered likely to exhibit value-creating behaviors, such as buying more, remaining customers for longer, and making more positive referrals to other potential customers. Those who respond with a score of 0 to 6 are labeled Detractors, and they are believed to be less likely to exhibit the value-creating behaviors. Responses of 7 and 8 are labeled Passives, and their behavior falls between Promoters and Detractors.[4]:51 The Net Promoter Score is calculated by subtracting the percentage of customers who are Detractors from the percentage of customers who are Promoters. For purposes of calculating a Net Promoter Score, Passives count toward the total number of respondents, thus decreasing the percentage of detractors and promoters and pushing the net score toward 0.[5]

In Asia it’s particularly hard to get a positive Net Promoter Score because we’re more conservative. To us if we were asked “How likely are you to refer <brand> to a friend?”, giving a score of 7 or 8 would be us giving a good score. But in NPS surveys, that’s a passive (neutral) score. Not a promoter. In any case it’s not just the score that matters but the feedback we get later on why we got those scores that give us a good insight about what we need to improve.

I took the time to explain all this to J and then pulled out a slide to show him what our NPS for customers and employees are. On a score of -100 being the worst, to 100 being the best, our customers rated us -6. For employees? We got a -44, a disaster for me since I have every intention to build a company that puts employees first. I thought everyone was happy but the data says I was wrong.

I went on to say that these were worrying numbers to me and if I did not fix this soon, it will eventually lead to declining business performance (Those 4 metrics? Yeah they’ll be going down). After I finished I sat back down on my seat and waited for J to give it to me but he didn’t. He just nodded. We ended the meeting shortly after and I went back to work while the ODV team stayed in the room to discuss other matters.

A couple hours later I went back to see if they were ready for me to bring them out to dinner. As I walked into the room, J asked if he could bounce an idea off me.

He then explained how whatever he has invested in Colony so far is already at the limit of his fund’s mandate so he didn’t come to KL with any expectation nor intention to further invest in Colony. But after listening to my presentation, he found that Colony was a very good business and he appreciated how honest I was about our shortcomings.

He explained

“You know… we’ve invested in many companies and very rarely are the CEOs so forthcoming and honest with the problems of the business. Your honesty tells me that you really value your relationship with your investors”.

I replied that to be fair, it’s really to my own self-interest because I could hide the mess under the hood or fluff things up, but how long can I hide it for? 3 months? 6 months? Sooner or later it’s all going to catch up to me.

“That’s true. But not many people think that”,

J replied.

He went on

“Anyway… I’m going to tell you that we’ve never done this before for any one company but what would you say if we doubled our investment in Colony?”.

I let those words sink for a while and I thought about it. It’s a good thing to have our investors want to put in more into Colony but I had one worry. If I took this extra money there would be a significant oversubscription to the round I intended to raise. Which means I’d dilute my stake more and I intended to give a chunk of my personal stake to key employees of Colony so they could all own a part of it. I’m not greedy for economic rights of the shares I own. What I do care about is control of the company because I’ve had ventures in the past that have failed because I didn’t have control of the company and couldn’t do things the way I thought was best.

If I diluted too much, I would fall below 51% voting rights of Colony. I conveyed these worries to J and he said

“Do the math. If you end up with less than 51% voting rights, you can have our voting rights”.

I was stunned. What did I do to deserve such a great investor. It turns out I had other great investors too, most of whom doubled down or more than doubled down on their initial investments. On top of that we had new investors too that contributed to the war chest we have today to expand Colony.

Still I had to fix the problems we had. So after that meeting I hunkered down to work on our NPS. I’ll explain the steps I took maybe in another article but fast forward today here’s what the team at Colony managed to pull together:

  1. We just reported a customer NPS of +40.
  2. 51% of respondents were promoters that means they gave us a 9 or 10.
  3. 37% were passives meaning they gave us a 7 or an 8 out of 10.
  4. 12% were detractors meaning they gave us 6 or below.
  5. Employee NPS also went from a -44 to +33.

Does it correspond with business performance? Hell yeah. We reported 91% increase in Profits (or more specifically EBITDA) in Q2 vs Q1 in our first location. Our second location at KL Eco City is expected to open next week and we’ve already sold 56% of the space even before opening.

This key takeaways from this is:

i) People who have millions to invest have millions for a reason. They aren’t stupid and they know when you’re trying to fluff then. It’s just a matter of whether they bother to look or not.

ii) Be radically honest with investors or shareholders. It builds trust and if business ever takes a downturn (which all businesses at some point do), trust is the currency we’re going to need the most.

iii) Being honest with the bad metrics forces you to act to fix it. Perhaps I’m the type that work better with pressure but hell did I get my ass working on fixing the NPS.

As for J? I sent the investor update with our latest results for Q2 this week and he replied

“Thanks so much for this update Tim. Looking good :)”


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My Biggest Weakness

Today I just got rejected by someone. And it hurt.

My first reaction to that rejection was anger. I started thinking about why this person would not give it to me when it’s a really small thing and we were family. Then as the anger sunk down and I reflected upon myself I realised that the real problem… was me.

If I had asked a favour from a man on the street and got rejected, I wouldn’t have felt any pain nor anger. I would have just nodded in expectation and moved on. The only difference with this other person is that he’s family and that I expected him to do it for me.

Therein lies my fucking problem: Entitlement.

Here is the problem with having a sense of entitlement:

If I dig deep into my sense of entitlement, this is how I would put it in words.

I feel like people are meant to treat me a certain way because they are _____ to me or because I have done ______ for them.

The list for this goes on throughout my life. I’ve felt entitled that someone should be a good friend to me because I think I was a good friend to that person. I’ve felt entitled that a colleague should be loyal to me because I was a good boss or manager to him or her. I’ve felt entitled to the way my wife should treat me because I am a good husband to her.

The problem with that is that it puts UNREALISTIC expectations on everyone else. Why unrealistic? Because I am not the universe in which other people happen to orbit. I’m not even a star in the universe. I’m just a speck of cells on a planet that is on one of those stars.

So when I have these kind of expectations of other people, I:

1) Get hurt when they don’t respond the way I want them to respond.

2) Lose the opportunity to change because feeling entitled also means that when I don’t get what I want, it’s not because of me but it’s because of this someone else that wasn’t acting properly.

Instead here’s what I should be telling myself:

Yo Tim,

NOBODY… and I mean NOBODY owes you SHIT. Not your parents, not your wife, not your kids, definitely not your friends, or your colleagues or your business partners or even the waitress at the restaurant taking your order for a long black. NOBODY.

Why does nobody owe you shit? Because everyone else has got their own shit to look out for and your shit ain’t important to them. So nothing is yours unless you get it yourself.

Oh and fuck you Tim!

Why we spent another RM40K to improve a product that was already selling very well

I’ve made a lot of mistakes building the first Colony @ KLCC. Sure so far it’s looking like a commercial success but boy the list of things that I felt like I could have done better is long. An example would be our cafe area. I underestimated how full the cafe would get during lunch hour now that we’re at higher occupancy levels… and now the cafe gets so full, during lunch the team would sometimes just eat behind the reception.

There are some mistakes that I’ve made that are obvious and some that aren’t. The trick is trying to figure out the latter. So we relentlessly seek feedback from our guests and put them all in an action plan. Some of the things are small so it’s easy to fix, some.. not so small which made me ponder a little longer.

Here’s the story of one of those things that were expensive to fix but we did anyway.

One of the feedback we got from two of our shorter term guests was that the chairs in our reserved desk area were not ergonomic enough. Not comfortable. Here’s a picture of how the chairs were.

reserved-dedicated-desk

These chairs are common office meeting room chairs and they aren’t necessarily uncomfortable when used in meetings. But they’re not ergonomic too. I was really torn.

On one hand, I like these chairs because they’re low profile, so they look nice in our overall setting and it’s a common coworking space chair. But I agree with the feedback, it’s not great for long hours of sitting. So I had a huge debate. Do we go for something that looks nice but isn’t as good to use, or something that looks less nice but is great to use.

To make a decision I asked all our guests there about the chairs and 98% said they no problems with the chair. It was only with the 2%.

A part of me was tempted to just let it be then… and accept that I can’t satisfy everyone. Besides, the other piece of data I got was that our reserved desk area was operating at 100% occupancy. It was fully sold and we didn’t have anymore left to sell. So if it was already sold, and 98% of the people using it weren’t complaining… why change it?

One thing stopped me though, and that was acceptance of mediocrity.

I felt that if I start accepting that something less ideal was okay in Colony, where does it stop? Will we start to get complacent? Will we slack off in our standards?

So I went back to our mission as a company as a guide. Our mission is to empower life at work. To create the Ritz Carlton of the workspace.

What does that mean though? Well… in a good 5 star hotel, the bed is one of the most expensive parts of the room and it is so because it’s where a guest spends most of his time. What’s the bed equivalent of a coworking space? The chair.

We went out on a journey to seek the most ergonomic chair we could find. We tried so many and tried them over weeks until we found one that we really liked. It also happened to cost more than double than the first chairs.

When we found it, we decided to make it the standard chair for the new Colony locations too. So because we were ordering these chairs in such large quantities we could custom make it, even add our logo on the chairs.

2018-06-29_04-03-36

The new chairs arrived this week and the guests were all really excited. I watched as they adjusted headrest, armrest and the likes.

The response? They were all like “You guys didn’t have to la”… but were happy that we did.

I believe that just because a product sells well, doesn’t mean that we should stop improving it. In fact if we stop improving, then the only direction we can go is down. I found it helpful too to reflect on our mission as a company when it came to making business decisions.

Our focus is on the relentless approach to make sure our guests and/or customers are happy. Even if it takes investing more on an already fully sold product.

This year I aspire to be a better husband and father

Every June my EO forum of 7 members get together and have an important meeting that charts our next 12 months as a forum. Our forum is a place where 7 entrepreneurs get together every month to share their personal, work and family ups and downs, and presentations of any issues that we may have. One of the things on the agenda is to list what my personal goals are in the next 12 months. What I wanted to achieve.

In previous years, my goals have been very business focused. I want the business to grow this much, or to make this much money. This year though I realise that those priorities have changed. Yes… business is important but this year… my main goal is to be a better husband to my wife, and a better father to my kids. Now I’m cautious about this of course, it’s not that I’m taking for granted that Colony is doing well that I don’t have to make Colony my primary goal in life this year. It’s more that I’ve come to a self-realisation last year that there’s a lot of room for me to improve on when it comes to being a husband or father.

How? Well I’ve quite recently managed to change my mindset when it comes to doing things for my wife. I sometimes used to find it a chore to fetch her somewhere, or run errands for her. I’d still do it.. but sometimes I might grumble. Then just recently I started thinking about this. I love my wife right? Then why is it.. if i love my wife, and I want her to be happy, would I grumble about doing little or big things for her? So I’ve stopped doing that.. and I’m gonna make sure this continues.

I’ve also learned to listen to her more, to anticipate her needs and help her especially when it comes to the kids. I used to sometimes be blind to her having her hands full with the kids. Now I pay attention and when I see her struggle I automatically chip in to help.

When it comes to the kids, I look to spend more time with them. Not just playing with them or taking them out but sometimes doing things for them. Shorty used to be the one to take Fighter to the toilet every time we were out and he needed to go but now that’s because my thing with him. Every time he needed to go he would turn to me and ask.. and I would bring him. In the cubicle where he sits to pee or poo, we would often have our own little conversations.

That’s when I learned that we don’t bond with our kids from just playing with them or just with the good times. We bond with them by doing things for them. I don’t know if they know how to “appreciate” these things yet… but I do know that they get closer to me when they feel that can depend on me more on even the small every day things.

I’ve always wanted at least one more kid in my life. A family of five at least would mean we could all fit in one car and go out to the mall on weekends. I grew up in a family of six and I had great memories the four of us kids crowded at the back of the car while my parents took us to Komtar on Sunday to eat Taiwanese beef noodle.

That may not be an option for me in this life though because of Shorty’s pregnancy complications. Shorty’s pretty settled with two. I’m grateful that I’ve already got two… and now I just want to be a better father to these two.

I don’t know what my goals will be this time next year. But I hope by then I would feel that I’ve achieved this year’s goals of being a better husband and father.

I nearly signed a deal today that I would have regretted…

In the past few weeks I’ve been negotiating a number of concurrent deals at the same time for Colony. One particular deal today was due to be signed today but I decided not to do it at the 11th hour. I shouldn’t go into the details of the deal so let me just say that it was like we were going to buy something.

Here were the mechanics of the deal

  1. This was something I really wanted for Colony. I think “buying” this would have been a huge win for the company and we would have grown to be an even more profitable company in the medium to long run.
  2. The seller though knew they were in demand. They told us shortly after we showed interest that there was someone else willing to buy them for about 10% more than what we were willing to pay. Still they decided to go with us because we came first and they could settle the deal quicker.
  3. The seller sent us a binding offer letter where if we signed, we had to pay a substantial amount as a deposit. This deposit will be forfeited if we didn’t execute the final sale & purchase agreement in a month (which is a really short time for due diligence and more).
  4. Because they were in demand, the draft terms I saw in the sale & purchase agreement were really harsh and demanding. Very against our favour.

I was eager to do the deal and I shared it with our board and investors. They were willing to do it if I was up for it and I was. The one big concern I had was that once we pay the deposit, we would have a short time frame to close the deal. That would put us at a disadvantage when it came to negotiate the salient terms of the agreement because the longer we took to negotiate, the sooner time runs out and we lose our deposit. Time then works against us, and works for the other side which puts them at a strong advantage.

The precaution I took of that though was before I signed the offer letter and paid the deposit I wanted to see the first draft of the sale & purchase agreement. I only got that draft the day we were supposed to sign the deal and boy the terms were so harsh I knew we were going to take a long time to negotiate to a middle ground. A part of me had come so far and just wanted to see the deal through, but I knew I was in trouble. I wanted the deal too badly to be able to negotiate effectively.

So I took a step back and looked at the whole situation in a macro point of view. The first question I asked myself was why this seller would hold out for us, when they have another buyer willing to pay more. I thought of two likely scenarios:

  1. The seller wanted to sell quickly, by the deadline stipulated in the offer letter. So they’re willing to give up a bit of money to get the deal done sooner.
  2. There is no other buyer. It’s a bluff.

As I sat to think about this I reminded myself of one rule in a negotiation. DEADLINES ARE ALL MANMADE. When faced with deadlines we choose whether a deadline is going to be used to our disadvantage or our advantage on the negotiation table. Clearly if I had gone ahead and signed the offer letter, I would be using it to my own disadvantage.

After some thinking I came to a conclusion that if either 1) or 2) were true, then the seller wouldn’t mind me not signing the offer letter and just signing the sale & purchase agreement by the one month deadline. Because they don’t lose time either ways. Although the big assumption here is that we’re doing with a rational seller. If emotions play a bigger part of the seller than rationality then these two points above need not apply. In fact it becomes very unpredictable.

So I went back to the seller and said “Sorry we can’t sign your offer letter today because that would put us in a huge disadvantage on the negotiating table. You are free to negotiate and sell to any other party you want, but if you’re willing, we will endeavour to continue this process to negotiate the S&P terms and sign it by your initial deadline.”

After I told the seller that I felt a huge weight lift off my shoulder. I realise that I had tunnel vision for a deal I wanted closed and that really buying them would still entail a risk. We were not necessarily better off, or worse off from forgoing this deal.  I realised that I’m willing to forgo this deal altogether.

Now that I’ve accepted that I’m willing to lose this deal, I think I can negotiate better. Of course I don’t know the outcome yet… and I’ll probably know in a few weeks time. One thing I know for sure… I would have regretted doing this deal on these terms if I had signed them today.

The complication of life…

I just got home from a night out with a couple of my childhood friends. Once whom I’ve known since I was 7 years old (Gin( and another since I was 14 (Rayvin).

Rayvin and I were telling Gin about how in St Xaviers where we used to go to school, there were two table tennis tables that everyone would play every morning before class started. One of it was reserved for the school team. The other though was open to everyone. There was an unwritten system on how everyone took turns to play. There will be two queues, one on each end of the table. Each person playing will get to play until they lose one point. The winner stays and the loser goes on the back of the queue again.

Table tennis was a sport I was good at because my Dad signed me up for coaching in my earlier years. So I remember the first time I played there. I did one heck of a rally, winning each person I came across, feeling all proud of myself. My friend Rayvin was one of those really good players as well so he had the same experience as I did.

We eventually joined the school team and graduated to the school team table where we didn’t have to line up anymore. We could play full sets and we would go to school at 6.30AM just to play until the bell rung at 7.40AM. Then we would rush to class, all sweaty and go through the day all sticky but feeling like it was worth it.

“I miss school”, Rayvin said. It hit me then that I didn’t share his sentiment. For many reasons I’ve never really enjoyed my school years. In school I didn’t feel free. I felt like I had to do things that I didn’t like, study things that I didn’t like. Now in the working world though we have options. If you didn’t like your job you could find another one.

Then I looked back at my past and wondered if there was at least something I missed of my school years and there was. I missed the innocence I had. Not knowing how big the world around me was (back then I used to think Penang was the world). Life was a lot simpler then too but at the moment it didn’t feel like it. If people in school talked bad about me, it felt like a negative FB posting about me had gone viral. Yet when I think of myself as a kid I can’t help but wonder what I would have told school-going Tim.

Would I tell him the life that he was going to have ahead of him. The mistakes he was going to make, so he wouldn’t make them? Or would not making those mistakes make me a weaker person. I find life very complicated. It’s complicated because at every point in life there are always things to fix, challenges to face and issues to solve.

Don’t get me wrong, I’ve been blessed. Career wise Colony seems to be taking off really well and I have enough money to live a decent life. I have a wonderful family and enjoy the company of both my parents who are still healthy and well. So why is life complicated?

Life is complicated because on one hand we always want more… we want something or another to be perfect while knowing that perfection is an unattainable quest. So we chase something better. Better financial security, better house, better car, better holidays, better friends, better relationships better everything. But each time we achieve that better thing….. we realise that we need to go even better.

When do we stop? When do we stop trying to be better? Trying to outdo ourselves or anyone else around us. When do we just stop and say “I am totally okay with where I am now”. How does that feel? Is happiness achieved then?

I don’t know… and sometimes I feel like I’m afraid to find out. Afraid to find out if not going for better means I’m not getting better. And not getting better might mean that I might get worse….

Life is complicated…

How listening shaped my past and is shaping my future in business.

This article was written in partnership with HP

Starting and building a business (Nuffnang) at a young age was the best decision I ever made in my career. It’s not the money I made (I’m far from what anyone would consider wealthy in this day and age), it’s not the memories (because I think I would have great memories in whatever I did). No… it was the mistakes.

In those 9 years of business I’ve made so many mistakes. Mistakes in trusting the wrong people, in managing teams, in making decisions or even in handling situations.

That all came useful about a year ago. After 9 years in Nuffnang, I left the company post-IPO, and decided to start a different business. I wanted a model that was able to be profitable in the short term and my dream was to build a P&G rather than a Facebook even though the latter is worth more today.

My ambition after all these takes is to build a profitable company. The thing about building businesses that focus on profit in the short term though, is that they tend to take heavy capital investments. Starting Colony took a scary 7-digit investment. Not just that, we also have to commit for leases that go from 9-15 years because any less than that and the window to make money and a return on the initial investment is just way too small. So, what made me make that leap of faith?

One of the biggest things I’ve learned though is how to listen more. I resist the mental block of thinking “Ah he’s saying what I already know” because I’ve learned there’s a lot more to listening than just what people are saying. There’s always something to learn from a conversation and the worst thing I could do is shut out any form of learning.

That is after all how I stumbled into the co-working business. I was in Jakarta one day when a friend of mine asked me to come visit his. A part of me wanted to be lazy and close my mind to it… that I’m familiar with the concept and I didn’t necessarily believe in it. But fortunately, that fateful day I didn’t and I learned that knowing about it and experiencing it is something completely different.

There I learned about how co-working spaces addresses the needs of not just start-ups, freelancers but anyone who needed office. Months later I came back and started a co-working space that was very different than the one I visited, but I would probably not have started it if I didn’t go that day.

Today, Colony is the most luxurious co-working space in the country. We’re looking to redefine not just the way people work but change the experience of work. A decade ago, we wouldn’t have sat in smaller spaces or in open offices or not in an office at all. We’d also expect to have technology evolve together. As businesses are forced to change with society, so do offices – in order to not be left behind.

And it’s not just where we work, it’s also how we see work that has undergone a transformation. The blurring between personal and work time is propelled by a generation who doesn’t draw a line. We see people using whatever device or app fits their location, who’s with them, even their mood state.

Now of course my job as the leader of this company isn’t to celebrate on past successes but is to look at the problems we’re going to have 6 months or a year from now and address them. And boy I can tell you there are many!

I don’t exactly sit down and try to have visions of what problems I have. A good part of this process is actually talking to people, so it really helps that I make it a good point to listen these days. So recently I’ve had the opportunity to speak to some reps at HP and learned of their new PC and a need they feel will become increasingly important in the short to medium run. Security.

The belief is that as we live in a world where we work in open areas like co-working space or the neighbourhood cafe… people more than ever are going to have be at closer proximity to our hardware. And now, security for devices have been an importance for not only big companies but SMBs as well.

So, they created a PC that addresses that need. A convertible laptop that has privacy screen that can hide your screen at a tap of a button to finger print censors to unlock your computer. The HP Elitebook x360 series reveals some key security solutions such as the HP Sure View, a built-in privacy screen, that delivers protection against visual hacking instantly as well as the HP Multi-factor Authenticate which allows for controlled access with fingerprint censors, facial recognition and a login password. Privacy is more important in today’s society, especially if you’re always on-the-go and travelling.

HP Security Solutions is embedded across the entire spectrum of security needs for companies; from Pre-Intrusion Features (e.g. Device Protection to Theft Prevention, Identity Validation, Information Protection) to even the Post Intrusion Features to help companies recover from cyber-attacks quickly.

(You can get one for yourself here!)

I found their vision of the future really interesting and it inspired me too to think about how I could address the need for data security among our guests at Colony. Making the right choice of devices for businesses has never been more important. Every PC decision is a security decision.

In the past we’ve done it by limiting physical access to room, CCTVs and heck even providing laptop locks that lock a laptop to a workstation. But maybe there’s another level… maybe HP’s on to something….

You can check out a video HP made with me in it on this. I think it’s awesome. Click here.

How the fear of openly supporting the opposition disappeared with GE14

I woke up this morning and like all mornings I reached for my phone. This time though I had purpose beyond just checking messages. I wanted to know the final tally of the election results.

When I pulled out the Malaysiakini page, I breathed a sigh of relief when I saw that Pakatan will be taking over the federal government but that feeling was quickly replaced with disbelief. Disbelief that this managed to happen in my lifetime. Just the day before I was telling my friends that it was impossible for BN to lose given how the odds were so in their favour and even though the opposition had all the urban voters on their side but because of the gerrymandering it wasn’t enough. But now it had happened. Pakatan is no longer the opposition.

I didn’t know what to feel. On one hand it’s too early to tell if our new government will be uncorrupt, allow freedom of speech and restore the institutions we have in this country be it the police or judicial system. But on the other hand I felt something lift: a fear, a burden that I’ve had all my life. The fear of speaking out against the (previously) ruling government.

My parents have always taught me that a businessman must avoid politics unless your business depends on politics. The fear is that if a businessman or entrepreneur stands up openly against the ruling government, we could be punished via our business. I realise this is a common fear among entrepreneurs though to be fair, it’s a fear that is not necessarily material especially if we’re business owners of small private companies. Still it doesn’t help that we’ve seen examples being made of people in the past.

Over the years though I found it hard to not care about the country I grew up in. It became increasingly difficult not to be passionate about certain issues or angry whenever I see Malaysians being let down by the government. My wife too shared my sentiments and we would talk about it behind close doors but publicly, I acted like I was indifferent to politics.

Then the issues our country faced got worse… and worse and finally I caved.

First I started donating money to Pakatan parties since two elections ago, and even then I was afraid to do it in a manner that could be traced back to me. I would draw out cash, and then do anonymous cash deposits into the party bank accounts. Or I would donate via other people like more recently through my friend Tim Teoh who started Pulang Undi. We ended up chartering two busses with the money and sending voters (regardless of whoever they were voting for) back to Malacca and Kedah to vote.

Then I started going for rallies starting with ceramahs, then Bersih. At first not posting about it, then eventually posting about it openly on social media. I wasn’t sure if Bersih was effective but this election proved to me that it was. It created a lot of awareness of how one could cheat in elections, so everyone was prepared for it this time round. Still I stopped short of openly saying that I support the opposition.

This morning though that fear dissipated. It’s the first time in my life that I’m openly blogging about politics on my blog. When I think about this new start we’re given I can’t help but feel gratitude for the collective of people that made this possible.

From the opposition politicians that joined up as the underdog party and risk being prosecuted like Lim Kit Siang and Rafizi, to people like Ambiga who fought for free and fair elections to even Sarawak Report or The Edge for exposing one of the biggest financial scandals of our time. On the ground too the polling and counting agents and to voters that made it in the middle of the week to cast their votes. One paragraph will never be able to do an exhaustive list of all the people who made this possible, but it happened. To all these people I owe my thanks and gratitude, for giving our country this new chance.

In the beginning of this article I said that it’s not certain yet that the new government will be uncorrupt or keep their promises of fixing our broken country. But I do know two things: I feel less afraid now and more importantly, Malaysia finally has a two-party system. Some people ask me how I can support Mahathir after what he has done in the past but the truth is that I don’t necessarily vote for parties or people, I vote for country. I ask myself if our country is better off with one dominant party, or two equally strong parties. The answer I found is the latter and that is what we Malaysians achieved yesterday.

That in itself is a big win for me. That in itself, makes Malaysia a better place for us and for our children.

Thank you Malaysia for making me so proud to be Malaysian.

How to Inspire Confidence in Your Investors

I’ve never been CEO of a company until Colony. Well to be precise, my name card in Colony states “Executive Director” because I’m not big on titles, but I carry the responsibilities of its CEO. I work out the vision and strategy of the company and I find a way to execute it.

One of the important roles of a CEO though is to manage relationships with the company’s investors, something I’ve never done before. My saving grace though is that I’ve been a board member and shareholder before so I’ve learned how it feels to be on the other side. So when it came to managing investor relations in Colony, I’ve had an idea of what to do and what not to do.

We don’t have many investors in Colony but the ones we do are very sophisticated. They’re very discreet too so we don’t publicly talk about who they are but they’re among the wealthiest families in SouthEast Asia. So they’re very savvy investors who have invested in many things before and know bull crap when they see it.

Why is this important though? It’s important because investors who trust you, tell their friends about you and recommend their friends to join in subsequent rounds. It’s important because there are times you need an investor to help you pull a string, or back you on a risky business decision or invest more in you and they’ll only do it if you have their confidence.

So here’s how I do it.

  1. Nail down 4-5 key metrics in your investor reports to make it easy for your investors to understand.

In Colony those metrics are revenue, profit, occupancy and average price per workstation. Every quarter, we report these numbers and they’re supposed to grow. The good news is that since we started, all 4 metrics have been growing consistently every quarter so they’re a joy to report.

But what if they don’t? What if suddenly one or two metrics fall.. or all four fall? When that happens, we know there’s something wrong with the business and something has to be done. Everyone in the team is accountable for these four metrics one way or another.

I know there is a fear some entrepreneurs might have of pinning down these metrics. A common reason is that “our business is unique” or “our business can’t  be pinned down to four metrics”. That’s not true in most businesses. Every business performance can be pinned down to four key metrics, it’s just whether we want to do it or not. And if we can’t pin down four key metrics then how is the organisation going to be clear on what matters in the business and what doesn’t?

The thing about metrics is that they force you to be consistent and they take away any avenue you have as a CEO to bull crap your way out of a bad investor report. If you miss your numbers in a quarter, it will be very clear. You can’t fluff it otherwise and you can’t just pick another metric to make yourself look better that quarter.

Yes this means that you’re more accountable as CEO. But hey if you want to be CEO then you HAVE to be accountable. CEOs who don’t want to be held accountable or don’t take full responsibility for their own failings don’t make effective CEOs. Besides if you’re a shareholder of the company, then wouldn’t you want that?

I’m a majority shareholder of Colony so I want what’s best for the company. If the company does well, then so do I right? And if I fail as CEO then wouldn’t I be better off if I let someone else take on the role and achieve what I wouldn’t be able to achieve on my own?

2. State FACTS in your investor reports. NO FLUFF.

What are facts? Well facts are whatever your 4-5 metrics are. Or that something tangible has been done or achieved.

What is fluff? Fluff is using bombastic words to sell an intangible immeasurable point.

It’s tempting to fluff things when we miss a tangible metric. An example of this would be a statement like this:
“We didn’t hit our revenue targets this quarter but morale in the company is very high and I believe we are PRIMED for future growth”.

That’s bull crap because the second part of the statement has no proof or data to back it.

Facts of the same statement would be
“We didn’t hit our revenue targets this quarter. I take responsibility for that. The one leading indicator I have that we’ll do better in the next quarter though is that morale has improved. This can be seen from our employee Net Promoter Score increasing from -50 to +30. “

If we’re going to quote an intangible, have a way to measure it and measure it consistently. Don’t NOT have it every quarter and then suddenly have it appear on one quarter when you need to show something.

Why does this matter? Because INVESTORS KNOW WHEN ANYONE IS TRYING TO FLUFF THEM AND IT ERODES CONFIDENCE.

I put myself in their shoes. How would I feel if I knew someone was trying to fluff me?

3. Always make yourself available

Always make yourself available for investors and for any questions they may have. Answer their messages, pick up their calls or return them if you miss them. Never avoid a conversation with them. In fact, avoid answering questions just on email. Pick up the phone and let them hear from you. That’s a lot more effective than what an email can convey.

4. Spend investor money like it’s your own.

We’ve raised quite a bit of money at Colony and while it’s tempting to take a chunk of it and throw it on Google/FB ads, we don’t do that. We count every penny we spend and measure ROI for it. Every project we invest in must have a clear ROI and payback period and if it doesn’t meet our expectations of a good payback period, we don’t do it.

When I travel on my personal expense for holidays I’d stay in St Regis or the Westin., When I travel for Colony work, we’ll stay in reasonably priced but comfortable 3-4 star hotels. Now most investors don’t expect us to slug it out at the doggiest hotels, but unless the company is pulling in strong earnings, no business class tickets and no 5 Star hotels.

5. Always be open to listening

Investors often want to be heard and it’s our job to listen. A capable CEO is one who keeps an open mind and listens, then empathises with the investor. Some investors want to be heard, some have great ideas that they think might work. Our job is to listen to them all and not be defensive or close minded about any of them but to really consider them and if not appropriate explain why.

This is how I’ve done my investor relations this far and the result has been crazy. When the time came to raise subsequent rounds, some of our investors not just followed on but doubled down. The reason they gave? They felt like I respected and valued our relationship and that made me worth the bet.

I hope these learnings help you the way they have helped me.

Remembering where Colony was this time last year….

This time last year, I took this picture with Shorty at the site of what is now known as Colony @ KLCC.

2018-04-12_11-42-35

We had just signed the lease and immediately started work on renovations. If I told you how little we knew then about construction, renovations or even about running a coworking spaces, you may have been worried for me. Heck if you were an investor in Colony you might have had your doubts.

Both of us have been in advertising almost all our working lives. We’ve never ever had to build a project of this scale. Yet some 3 months after we started work we managed to complete it and shortly after launch Colony @ KLCC.

8 months later till today, we just announced that Cornerstone Partners, a company that owns hotels around the region just took a 10% stake in Colony at a US$15-20 million valuation, and our 8 month old startup has raised US$5 million to build more spaces. The best part… business is doing well. We’re firing on all metrics showing consistent growth each month in revenue and profits with March revenues and profits breaking a new record.

I’m not trying to be modest or anything but the truth is that I never expected we would make it this far this quickly. My sincere belief is that by some miracle, we made it in spite of what I am, instead of because of what I am. Perhaps the one thing that helped was openly admitting at an early stage that I really knew nothing and I needed all the help I could get.

So I constantly sought out help by hiring the right people, finding the right mentors and working with the right investors and landlords. Once I surrounded myself with these people I asked questions, and I listened. It didn’t matter if you were a small or larger investor in Colony, if you were an executive or manager in Colony, I wanted to know what you thought about a decision I was about to make. All the guidance I got and the blessing of having such an awesome team is what built this company today.

The truth is we’re still early days. There is still a very very long way to go. Our mission is to empower life at work. To change the experience of work as we know it and we can’t do that with just one location. We need more… and we want to do it not just in KL but all over South-East Asia. There are no short cuts here… I’m not about to take all this money we have now and simply open up Colonies everywhere.

I strongly believe that we have to get things right. That quality is better than quantity. Heck even today I still think we have a lot to work on when it comes to our service levels and hospitality but we’ll get there.

I guess the point of me writing this entry is to make a note in my blog. To remind myself that this is just the beginning, and I’m lucky to have made it this far so quick.

Thank you God for giving me this blessing.