This is our first interview with one of the participants of one of Microsoft’s international accelerators, which is officially called the Microsoft Asia Pacific R&D HQ. We talk with PengFei Chen of Atom, an Azure-based solution that offers corporate services to companies via the cloud.
We asked Chen, who was the CEO of MySpace China, to talk about the challenges of running a startup in China and how his group manages the hits and misses that come from usability testing, formulation of the app, and developing a customer market for their work. Here are his thoughts on what it means to start from scratch in the world’s largest Internet market, by customers.
Microsoft BizSpark: What was the most difficult challenge your business faced this year?
Chen: We grew from a really small team of 6 people to 15, which is still really small, but we’ve more than doubled. For the new people who came to our business, there’s a lot of re-education, bringing them up to speed, and also, you can’t be overly affected by them. You need to know what you want to do. When new people come in, they bring new expertise and can flood you with information. It’s easy to get confused, but as CEO, I know that managing a company and developing according to one unified vision is important. Growing too fast has its risks.
Microsoft BizSpark: How do you know when you are failing in product development and how do you make a correction – do you make the decision on your own, or do you consult your team?
You know you’re failing in product development when you try to explain to your mom or your friends, or people a little older, or 10 people at random, and 5 people don’t really understand it and another 4 are hesitantly like “yeah that’s a good idea.” That’s not good. And when you don’t feel excited about it, it’s definitely headed south.
I had an idea, and I’m not an engineer, I think more in terms of “how does this help my life” and then I hired a bunch of engineers, who said, this is a great idea, but this is how you should do it, and it became too technical and it didn’t really solve my problem anymore. And I just couldn’t get up in the morning, because you just don’t see the point. You know you see it, you understand it logically, but emotionally, you know that it’s not what you want. I got back on my feet, took a step back, asked myself ‘what problem are we trying to solve, what customer are we trying to serve?’ Now I get up at 6 in the morning, and I found my direction again by spending a lot of time trial and error and a lot of time thinking, if it was worth it or not.
The biggest thing that we’re investing, as young people, is our youth. I was talking to my investor and he was like “I want to give you more money” but I was like “I don’t want it. We don’t have a solid product yet; can you wait until we have some customers, some validation?” And he was like “Nah, we wanna get in right now” and I was like “you know there’s big risk right?” and he said, “well, compared to the risk you’re taking, a couple million dollars is nothing. You’re basically betting your youth, you can’t get that back. So if you’re willing to spend the better half of your 20s doing this, then I’m willing to invest.” So yea, the thing with startups is you gotta constantly think, “Is this worth my time, am I building something valuable? What impact does it have the on rest of the world? I don’t want to spend 5 years building something that nobody uses. It doesn’t even have to make money; it just has to be useful to even myself. So we were working on this really big project and I couldn’t really see the point. We were trying to disrupt a huge industry; financially it made sense, but there were too many assumptions. Those assumptions were too optimistic, and for me, it was betting yourself on hope and that wasn’t solid enough for me. If you spend enough time on talking to friends and thinking about things, then you’ll figure it out.
It’s like walking in a desert – if you walk in one direction constantly, then you’ll eventually get out. Problem is, sometimes you run out of water, or food or whatever and you die and sometimes you get lost again. But if you have enough time, water, food, you’ll get out – if you’re lucky. I feel like I’ve been very lucky. A lot of entrepreneurs if they were in my situation a couple of months ago might’ve gotten really lost but I was lucky I walked out.
For every type of product, there is a buyer. There are 6 billion people; there’s got to be someone who wants your product. If it’s too hard to find those people, then it might mean the market’s too small, or you’re not reaching the right audience. And you never know what’s the case.
Microsoft BizSpark: Has starting your own company provided any answers about your life? Have you discovered something about yourself that you didn’t know before?
Chen: I think starting my own company made me realize more aspects of this world. When you’re at school, you only see part of the world. When you’re running a business, you’re managing a couple guys and you realize that they’re very difficult to change. If you’re trying to change him, it’s very difficult. It’s about you seeing the talent and the strength in him, the weakness in him and applying that to a task. So some people are just good at something, and some people are not, and you have to find the right match. My original idea was that everyone was the same. We’re a bunch of smart guys, we can just figure it out. Without really trying to figure out peoples’ strengths and weaknesses. I mean, I’ve been trying to change my brother for 20 years – hasn’t changed. Changing people’s hearts, changing your employees’ hearts, changing consumer’s hearts – try not to touch consumer behavior. You try to satisfy them they have an innate need for something, although they probably don’t know sometimes; if you explain to them, they don’t get it. If you tell them when you do this, what if you do this, and they’ll be like “oh yea this is so much better” then that’s good because it’s behavior they already have, but you’re giving them a better solution. So don’t try to change people. You can’t tell people to change, but they can change themselves. If you get them to change internally, that’s more effective.
I realized that I like to sell products. I thought I was a designer, I liked to design projects. But no, I like to be passionate about a new technology and get other people passionate about it too and sell it to them. I like to communicate ideas to customers, almost the same as what we’re doing right now.
I get excited by companies like Instagram and Kayak.com. The fact that they were able to identify a pattern inside something as big as Google was inspiration. What I do for inspiration is I look for patterns. I do a lot of puzzles, play a lot of games. Everywhere I go, I try to identify patterns. Just recently I was in New York to visit my girlfriend, and she’s very fashionable. I thought I would have to read a lot of fashion magazines and articles to catch up with her, but I was so far behind I couldn’t catch up. I looked instead for patterns, so I looked in her wardrobe for a few minutes, and there were all sorts of bands, clothes, different colors, cuts, different shoes. I made a mental note and went out shopping; the whole time I was trying to find a match. Using past experiences and data to predict the future, and I was able to fairly accurately predict what she would like. So I like to do that and it helps me with stuff; so identifying patterns in nature and in work and life not just on the internet. Its interdisciplinary – you can’t be that innovative if you focus on just one field. I get inspired by everything.