Samson Chen is an inspiration for technical entrepreneurs in Asia. He pioneered free wifi as a service back home in Taiwan when founding Wishfi after many years mastering Internet technologies and living abroad in California.
During our conversation over tea in a Taiwanese restaurant in the center of Taipei, Samson told me about his startup story. In 2009, I had the chance to work with him, but only discovered during dinner how fascinating and challenging his experience has been. Startup journeys are usually nonlinear and Samson’s is no different.
In the corporate world, promotions, pay raises and interesting projects come in gradually as you “do your time.” In the startup world, this time might never come or come in a way you never expected after a “roller coaster ride.”
Here’s the scoop:
1) How did you start you career?
In 1999, I felt that I needed to move forward from my operating role in a carrier company in Taiwan. I had learned a lot but needed more excitement. One day, I quit and flew to Port-au-Prince, Haiti, to visit my brother. I stayed there for a month, had a great time, and then flew to Miami and then to California while on vacation. Being in California was a great experience. I was telling myself: ”I want to stay here to leverage my operational experience and have the opportunity to work on new disruptive technologies.” But, getting a visa to work in the U.S. was challenging. I sent resumes but without success.
I decided to go back to Taiwan, and, then, finally heard back from a company from Dana Point, California, who hired me and sponsored my visa. I discovered that working in a startup was not that easy, especially when managing cash. At this startup, I was astonished when the company controller told me: ”we only have $500 in the bank account!” However, the founders figured it out. We were fortunate that the company was in the same VC portfolio as Bitfone, founded by one my mentors Gene Wang. Because we had a product, while Bitfone had money and solid management, the VC decided to merge both companies.
2) But I thought you had started up your own company?
My startup career really took off when we were merged with Bitfone: I started as an engineer and became a Chief Architect after 5 years. This is when I started to feel ready to do my own thing. I left on good terms with Bitfone, which later got acquired by HP, in order to pursue my dream.
The path was not without obstacles. For example, two ex-Bitfoners invited me to join their start-up, which obtained investment from 3 guys who claimed to be early investors at PayPal. They brought us in to build their idea of a web 2.0 chat service for Asia. We even opened an office in Beijing. At some point, the company had burned all of its cash, for unknown reasons, after which the company closed down. We had never seen the shareholder agreement. This is where I learned to be more careful. I told myself that everything happens for a good reason.
This is where I met my partner Paul. We were two technical guys with a great idea of building Wifi as a service, which was disruptive then. I immediately got my mentor Harri Okkonen, someone from Yahoo, and former Bitfone employees to join the business. In the first 11 months, we bootstrapped with our own small investment and spent all of our precious energy on product development. That’s all we needed to move forward. A lesson learned is that you just need to start building your product if you want to make it. It’s not that complicated.
3) How did you manage to get traction at Wishfi?
Historically in Taiwan, startups have been focused on delivering custom projects to customers (outsourcing). I have never been fond of this strategy because it’s hard to build a scalable business and even reinvest into developing an innovative product. On average, the outsourcing margins are razor thin at about 20%. Also, it’s more difficult to focus as you’re solving problems left and right, and you often end up getting stuck. At the end, it is practically impossible to match the investment of your competitors, which is necessary if you compete in a large market.
I suggest that you think scalable and global from day one. This is what I did for Wishfi with my mentor Harri and it worked. This global mindset was one of our major strengths at Wishfi. Because I had connections in the US, through Bitfone, and in Europe, through Harri, I could expand my business internationally.
Things started to unfold at the Nokia Mobile Rules event a year after founding. In fact, we obtained a significant investment after being selected as one of the ten most innovative companies. We also acquired our first customers then after showing a demo that looked quite simple and revolutionary. Going out of the building to meet people really opened the global market for us. We even obtained customers from Africa, which ended up being an important market for us because people tended to pay lots of money there for precious WiFi access.
4) Do you have an interesting anecdote about an early customer?
Our very first big citywide installation was in a Finnish city. This was a critical milestone that enabled us to scale worldwide but it was not easy.
Our main business model was to make money on banner advertisements and this industry was new to us. It was a classic chicken and egg problem. As a new ad network, we could not get much attention from the big advertisers because our user base was still small. To make matters worse, the owners of local stores did not understand the value of creating ads on our network even if it were free. At the end, we learned a lot from the reactions of our end users in the trial. We were worried at the beginning that they would not like the ad space on their browser but it ended up not being a problem. Most users seemed to like getting free wifi service in exchange. And some people even hoped the ads would help growing their business. This learning motivated us to continue gradually growing our user base. We just had to try.
In part 2, we will give the end of the story and provide more advice from Samson. Stay tuned!