Bowei Gai, the founder of the World Startup Report, was the protagonist of the last Startup Grind at NXTP Labs and shared with the audience great stories about his life, experience in entrepreneurship and learnings , interviewed by Gonzalo Costa.
In the interview Bowei shares key insights useful to every entrepreneur, arising from how he succeeded to become the founder of the renowned Cardmunch and the World Startup Report, beginning the moment of having the idea to its execution (and exit!). You can watch the complete interview here.
About Bowei Gai: a serial entrepreneur renowned for founding Cardmunch and selling it to LinkedIn in 2011, he also played very cool roles with some of the giants of Silicon Valley, such as Apple Computer, Oracle, Hewlett-Packardand Advanced Micro Devices. Now he is travelling around the world to find the next Silicon Valley, along with the help of Valley heavy-weights Dave McClure of 500 Startups and Brad Feld of the Foundry Group.
About the World Startup Report: Gai and a small team of Silicon Valley entrepreneurs will travel to 29 different countries to assess the startups, founders, “big players,” the challenges locals face, and the culture of that region to create a report on what it’s like to start a company there. The reports will serve as a guideline for entrepreneurs all over the world, with information about what kinds of people there are there, investment opportunities, and how the culture perceives startups.
GC: How did you start your entrepreneur life?
BG: I was very lucky to get into very big companies before my startup career, namely Hewllet Packard, Apple, Oracle. These companies I worked for gave me some credibility. But the reason why I really got into startups is that they kicked me out of a job in Apple. The boss I had at the time said “you have way too many good ideas and it’s gonna be wasted if you stay at Apple, so you need to leave right now and start your own company”, so that’s how I got kicked out of Apple and started my first company. I started a few startups before that gave me enough confidence to start my next company, that I’d sell to LinkedIn.
GC: Tell us about CardMunch, how did the great idea come?
BG: So, the real story is actually very interesting. I walked into a VC’s office, actually a very close friend of mine, to tell him about this other startup idea I had, an advertising company and he was so upset at me that he wouldn’t even let me pitch the idea, he said “no you don’t want to get in advertising, why don’t you look into the problem of business cards”? And I went like “Ok, but you’re wrong, I worked at Apple, I know how good the camera is and there is no way you’ll be able to read a business card through an iPhone. It’s not possible”. He just stared at me and he was like “can you read it?”. And then I realized, “oh my god! He invested in one of the largest crowdsourcing companies!”. There are platforms which allow half a million willing users around the world to work for pennies. We can do it for few pennies and sell it for 20 to 30 cents and eventually your cost will be significantly lower and we could do this service for free! That’s a brilliant idea! So, finally this guy said: “if you’re willing togop through with this idea, I will invest on you today”. So that’s how I got invested on Cardmunch on day 0!
GC: How did the application look before and after the sales process?
BG: Before, I had a lot of different features on this application what would not change the world. Apparently, people don’t really need that. So when we got into LinkedIn they literally took all of features and threw them out of the window. They said “you don’t need anything, just be able to take the picture of the card and transcribe it, that’s all you need!”. After that change, the application became a lot more intuitive and a lot more people liked it. I guess the moral of the story is not to try to put every single feature, just build the more basic features, the MVP, because your customers are gonna tell you what they really want and surprisingly they usually want something really, really small.
GC: When you started the company, did you imagine you would end up selling the company?
BG: I think for any entrepreneur, you always have to think about your exit strategy, because your life is very, very short. The way I look at it there are only have a few years in your life when you can do really crazy stuff so you really have to spend your time wisely. We always were looking for ways to exit. For us, the two exit opportunities were LinkedIn and SalesForce. If they hadn’t bought us, or goal would have been to build a business network on top of business cards. But if any company came along the way saying “I wanna buy your company” I’d say “yes! Let’s talk about it”.
GC: What can you highlight of the sales process?
BG: I was clueless about what was going on. Having picked the first deal would have been a third of the final price and I wouldn’t have known, I didn’t know what the market rate was, don’t know how to negotiate, so having a good mentor is absolutely critical. If you’re gonna go through something like this or negotiate with a VC, go talk to someone, go get some help. Don’t try to sit in a room and figure out an idea by yourself. There’s a lot of help out there.
GC: How did you start with the World Startup Report?
BG: A year and a half ago, I was in China and I actually didn’t know anything about China, even though I was born in China. So having a little bit of fame from selling a company I wanted to leverage it in China, talk to some entrepreneurs and understand what was going on out there. I reached out to my 500 Startups network and within a week I got a hundred introductions to a lot of people, I got to talk to the small entrepreneurs and then people who had exited at billions and billions of dollars and everything in between, the journalists, the lawyers, and I got this interesting view of what China is all about. When I came back I wanted to thank all my friends so I wrote this “China Startup Report” and mailed it to my friends in a Slideshare. I went to sleep at 2am and by the time I woke up, at 8am, it was the most popular slide on the internet that day! And I figured out that it is still the only place you can find all information about the entrepreneurial environment in China. So when I left LinkedIn I said “I’m gonna do this World Startup Report”, so I reached out again to my 500 Startups network explaining I wanted to do this project and within 2 weeks I was invited to 50 different countries! So now my original plan turned into this big project and I’m travelling for 9 months, 29 countries and 36 cities and it looks like it’s just the beginning.