Elliot Leung from Gaifong in Hong Kong shares his insights in how he consistently gets a ton of media exposure as a small startup. Incubated in Hong Kong-based Cyberport, he shares the advantages and disadvantages of being incubated there. These and other insights in the new GrowthKungFu podcast!

Transcript of the Interview

Elliot [Leung], let's start with the obvious here. Connecting people through item sharing, what does that mean exactly?

Elliot: Item sharing is basically, rather than buying something from the store, you just borrow something from your neighbour. Let's say, I want to go camping this weekend. Rather than spending 8,000 HKD (around US$1,000) on a tent, I can just borrow from a neighbour. There will be a small fee, 100 or 200 HKD a day (US$13 to 26), whatever it is.

On the other hand, I have something my neighbour needs. I have a Playstation I haven't touched since last Christmas or an electric guitar I haven't touched since last Summer, someone in my building might actually find that useful.

We're building a tech platform that makes all this happen in a networked manner. In a way, it's like knocking on doors, but on steroids because you can knock on 10,000 doors at the same time.

Sometimes we have discussions with founders about what's unique about their product and what separates them in the market. I don't think there's any question here when it comes to your startup. How did you come to this idea? Before you started at Gaifong, you were a researcher at the University of Hong Kong. How did that serve as a jumping off point to this?

Elliot: My background is kind of geeky. I started with research at the University of Hong Kong and then I moved over to a think tank. What I did a lot of was sustainability research. Basically: how to get space ship earth, because we're essentially on a space ship. How to get space ship through the next hundred years, without crashing it?

We talk a lot about recycling and renewable energies. But the elephant in the room is that we're over-consuming. What I mean by that is that we're buying a ton of things that we only use once or twice a year and then it ends up sitting on a shelf gathering dust. 

Now the West does. Imagine now if Asian consumers do it as well! We can talk about solar panels all we want but it's not going to solve the problem. I started thinking about what kind of other ways we could solve this. That's how I came to item-sharing.

Item-sharing is a way for people to lead very good lives. Still very abundant lives, just without spending the heck out of the earth's resources. That was kind of my research background.

One day, I went to a friend's house and it was just a normal dinner party. And we wanted to play Tgoh-Day-Dee, which is a Chinese card game, very common. We didn't have a pack of cards and we thought: "Somebody in this building must have a pack of cards. This is ridiculous!"

And yet, we didn't know any of the neighbours. Fine, we could knock on doors, but even if we had the courage to knock on doors, we do not know which family has what. Family A is a no, family B is another no and we just ended going to 7-ELEVEN and I ended up feeling like an idiot.

That, combined with my research, made it clear to me that I needed to do something about this. I researched the market, saw what was out there and what was missing and yeah, that's basically it. That's how we got started.

Recycling and sharing aren't exactly a big part of the Hong Kong mindset, right? How do you go about educating and stimulating demand in the market?

Yeah, as with a lot of startups. It's all about packaging. In the beginning, we packaged it exactly as you said. Environmental recycling and sharing, it didn't fly at all. The environmental, tree-hugger community loved us, but they didn't use us. 

The reason is that tree-huggers actually tend to be late adopters. We kind of broke it down and took the focus to the individual consumer, saying, you have senior A and you need items B and C. Guess what, your neighbours have it. Kind of making it relevant to the person.

Then, at the end of the month, we send them a report, showing how much tons of carbon emissions they saved etc. That kind of comes later. It's just about finding the entry point to your consumer.

Right, recently you've been running an Instagram campaign. Tell us a little bit about that.

Elliot: It's actually a piece of internal research. We're running a month long simulation with our team, currently 6 people, where we take turns living in an empty flat with nothing but a suitcase. A personal flat, you go in with your personal items and a few change of clothes and that's it.

Everything we need during our simulation, we try to get from the platform. Let's say, one particular evening, we want to watch a movie, we borrow a projector and a DVD player or just link it to my laptop, from a neighbour.

Another day, I'm hosting a few friends over and I'll borrow a couple of chairs from the neighbour as well as a big pot for hot pot. Every day we do different things and we log this in a journal.

The purpose of this is not so much marketing. It's really for us to have a feel what it is like to live in a world where item-sharing is part of everyday life. The only way to see that is through a simulation, because it's not happening yet.

The inspiration for this is actually from NASA. A bunch of astronauts basically lived for a year in an enclosed environment to simulate the Mars mission. They know how it works on a technical level, the oxygen tanks, the food in powder form. They know all that, but they don't know the human and emotional level behind all this. Will you go crazy or will you have insomnia? Will you have relationship breakdowns?

We're learning a lot and it just so happens that the press are really interested in this. We've got a lot of press requests about this. It ended up being a marketing thing, but it really started off as just internal research.

What has been the response?

Elliot: Great. Someone is actually doing a documentary about it. It's coming out next Monday in Hong Kong. We're very busy preparing for that, because we're expecting a big traffic peak there.

It's fantastic - is this a TV channel?

Elliot: It's one of the big TV stations in Hong Kong. It's part of a big series, kind of like 60 Minutes in the United States. It's been running for over 30 years. Everyone watches it. They do stories that have a relevance to Hong Kong people's lives. It could be technology, public policy... This segment is more on innovation and future city life.

We know a lot of startups who would die to get that kind of media attention. How did you guys make that happen exactly?

Elliot: I had lunch with someone and that person also had lunch with a reporter the day before, back in 2015. The reporter happened to be doing a piece on Hong Kong startups. In 2015, it was just me kind of with a few Google spreadsheets. It wasn't really a startup yet.

This reporter really wanted to know the process at the beginning so they interviewed us. That was kind of our first piece of press coverage and it snowballed from there.

As reporter B saw that reporter A kind of had a good story, so requested us for an interview and it went on and on from there. I think the key to getting good press coverage - and this is not tech press, for us tech press doesn't really matter, because our customers aren't the tech community. We're not in Tech in Asia and others for this reason - the strategy is to tell a good story and make it relatable to people. We don't talk about the tech so much. Instead we talk about people's lives and why this matters to them.

It does help that our product is item-sharing, which has this cozy fuzzy feeling. A lot of reporters say: "This reminds me of when I was a kid!" This resonates with people. It helps that we have a good story but at the same time, you need to know how to tell it.

First contact was 2015, we're now late 2016. How did you maintain that relation with the journalist?

Elliot: Be very good with responding to requests. All of these are cold calls mainly. We don't actually reach out to journalists. That might actually be helpful. Builds a good reputation. These guys aren't desperate to do your PR. But they're very happy when you just send them an email. I guess that's how we've been operating.

The other aspect of you is that you do end up speaking at a number of conferences and moderating them. What's the hack there? You get the word out that way.

Elliot: I don't do a lot of conferences. I did two big ones recently. The first one was through SEO. This conference was about the future economy and one of the panels was about the sharing economy in particular.

If you google 'sharing economy Hong Kong', you'll find us. The organizers found us and they did a few background checks and found that we've been running for some time, an early startup with lots of stories to share. This guy has a bit of researcher background so he's probably alright on the stage. That's how they got us. This was actually an event from a private bank. Two months ago. From that, we got a few good investor leads for our seed round. One thing leads to another. That was pure SEO.

The second conference was basically a local Hong Kong startup get-together, all in Cantonese. I wasn't good enough to actually be one of the speakers. The speakers were all amazing. Running 8-digit annual run-rates so I was a moderator. I was the early stage founder asking the questions.

Luckily, people knew me and because of that, they also found me as the moderator. That was good. There weren't any conversions from the second one. That wasn't the purpose. It was just fun.

How does the next 12 months look?

Elliot: We're now ending the concept validation stage. We're based on a mobile app and I didn't know this but mobile apps are really difficult to build. You've got both sides and especially on the iOS side, the code-base has changed and now you've got to deal with Swift 3.0, whereas it was 2.3 before. There's a lot of changes.

We'll still maintain a software focus, but we're going to start doing some promotions. Basic things like videos, where we interview a few of our members. We're going to get a promotional videos out there. We're also going to do few growthacks, software-based, we're also going to launch an overseas pilot. It's all well and great in Hong Kong, but in order to be a successful startup, it needs to be global.

What's the next market?

Elliot: Singapore. Because...Singapore. It's similar size with Hong Kong, people are great, relatively densely packed. It has very clearly defined neighbourhoods. Similar dynamic, lot of young professionals trying to seek alternative consumer models. And we've got a lot of friends there so that helps.

You have been incubated by Cyberport. What are some pluses and minuses of the program? Cyberport, obviously, one of the biggest government-funded incubators in Hong Kong, lot of startups incubated here. If you come into Hong Kong, this is probably one of the first places you look to coming.

Elliot: Our experience has been great. Cyberport is actually related to the government but not part of the government. It's a private company wholly owned by the government. Meaning that it's actually profit-making. It actually has a shopping mall and office space, which it leases out at regular market rates to normal companies like Microsoft, Samsung and McDonalds

Any profit they glean from that, they put to use by helping startups. You can apply to this incubator. If you get accepted, you get a free office - you have to pay management fees, but it's pretty cheap - or you can apply for an even earlier stage grant, which is just a check that gives you a certain amount, around US$12,5K, which goes into your concept development.

The cool thing about this is that they don't actually take equity. Unlike other incubators who take maybe like, 10-12 percent,  Cyberport doesn't take equity. It's really just helping local startups get started. It's been amazing for us.

In terms of advantages and disadavantages, what does that mean?

Elliot: Advantages, it's great, free office space and there's some cash involved. That's definitely good. In the beginning when we were just starting out, we didn't have anything to show. We couldn't raise any funds yet. It was really just a spreadsheet. With this spreadsheet, I got that small check of 12,5K, which allowed us to run a few MVPs.

Disadvantage, if you ask ten people who've applied, ten people will tell you that the application procedure is pretty bad. You actually have to submit a bunch of forms and the deadlines to meet nor the questions are that user-friendly. To their credit, they're actually reforming this right now in the coming batch. That's the main disadvantage though.

If you were to start a new startup today, in Hong Kong, what tips would you give yourself?

Practical tip, don't do native mobile app. Do something like a hybrid or web app. Huge advice. Secondly, do MVPs and MVPs, if there's a cheap way to validate your concept, it can be something like putting up a stall on the side walk. Or getting your friends involved.

If there's a cheaper way to do something, do that instead. Don't spend any money on it.