“When you feel pressured to make a target, what do you do? One, you can distort the system. Two, you can distort the data. Three, you can improve the system. Depending on your context, these actions will be easier or harder, so if you feel like you can't change the system and you're being held to a target, you probably have the incentive to distort the data and it is the fault or the responsibility of the people who set up that system to know that they were gonna create that issue.” - Shiyan Koh
Koh Shiyan is the Co-Founder and Managing Partner at Hustle Fund, a venture capital fund that invests in pre-seed software startups in the U.S., Canada, and Southeast Asia. Prior to that, she was the VP of Business Operations and Corporate Development at NerdWallet, a fintech startup that helps users with a range of financial decisions through content, community, and tools.
Jeremy Au: (00:29)
Hey Shiyan, really excited to do this weekly show about the latest and the future of Southeast Asia Tech. Could you introduce yourself real quick?
Shiyan Koh: (00:38)
Yeah. I'm Shiyan. I'm a GP at Hustle Fund, a pre-seed fund based between Singapore and San Francisco and I'm excited to have an opportunity to share my unfiltered thoughts every week. Welcome all of you who are along for this ride with us.
Jeremy Au: (00:57)
Welcome to the dungeon where you cannot escape our rants and monologues. I mean, we, obviously had some great, guest interviews and profiles of you. And you also talked about, VC Winter when nobody else was talking about it. So I think this is gonna be great because now we finally get a catch up all the time, like those, like dinners and coffees, and share them a little bit. I think maybe just at a high level, just set things off. I think people are like you said, new year, new start. What do you think about this transition between last year's VC winter globally too, I guess, 2023? What do you think are the big thoughts? Any resolutions you would make for Southeast Asia Tech, or what do you think is gonna happen?
Shiyan Koh: (01:41)
I think in 2023, we're gonna continue to see, a big reset. So, I tell people 2023 is the year of the markdown, and my prediction is that there'll be more layoffs, they might not be as well publicized. Coinbase just did another 20% cut, globally, and I would expect similar things out of our local ecosystem as well, especially, companies that raised a ton in ‘21 and early ‘22 with the expectation that they were gonna grow a lot and they staffed up. Although we heard about some layoffs in Q4. It still doesn't feel like enough relative to how much hiring there was, and the state of the economy, so that's I think, one prediction, I think on the markdown side. Q4 is over, so we'll start seeing people, having to report to their LPs, to their boards, and starting to get real basically, and I think, the markdowns, so then the layoffs go hand in hand, right?
With your runway evaluations and things like that, I think valuations will come down, as an early-stage investor, this is a correction that was much needed, there'll be some reality. No more 20 million post caps on, pre-product, pre-seed companies, and I've lost count of how many people have said given the current economic environment, we will be focused on profitability and unit economics. That is like music to my ears, my favorite words, are unit economics, and cash flow. Positive cash flow, please. Yeah, I think that's, I'm excited about 2023. I think it's gonna be a great year. Lots of people are starting stuff. I think there's been a good sort of reality check, but yeah, there's still gonna be some pain working its way through the ecosystem. How about you, Jeremy? What are your predictions?
Jeremy Au: (03:31)
Similar to that, I would also say that startups are gonna start dying, right? So a lot of them raised in 2020 and 2021, and then they made those cuts right in last year because of VC winter, and they started being more thoughtful about their burn. They try to cut maybe not enough. I think this year is a year where, a lot of founders are this gonna make a decision, right? They're just like, we can make it break even, but it's not growing or it's not working the way we want it to be. So either they're gonna return capital to investors, nice to say, a winding down, or they're gonna be forced to wind down, right?
Because it's taught. They go out fundraising, they think winter is over. Or the investors, honestly, a lot of them are gonna string them along. I've met a lot of founders who tell me, sunny perceptions of how investors are speaking to them about the process versus if I double click on it into what they're actually, doing them right.
Or moving them through the process. I think there's a very big mismatch. Like you said, the reset hasn't really happened, where it is like, investors always say, oh, that's good. We are really interested. And you can be really really interested until the company goes to zero. I think that's a big shame. I think where I feel like not enough investors are being frank about whether they're actually interested or not and I think that's causing a lot of founders to really count on the fundraising process which may not happen.
And so I think there's gonna be a lot of gliding departures in the next, this year, for winding down. But I think there's also a lot of people just running to a wall and being very disappointed this year as well, and I think these founders are gonna enter, like you said, a tough job market, right? Where there's a lot of layoffs and there's a lot of less folks, a lot of folks on the market, and not that many, absorption as well. So, I'm not sure. It's going to be a tough time.
Shiyan Koh: (05:19)
Yeah, I mean, I agree, but also, when people ask me about like my doomsday prophecy or whatever, I'm like, it's not clear to me how my doomsday prophecy helps you. Like it doesn't change what you need to do. Like you still need to raise the money. So like, even if I tell you some doomsday thing, does that actually change anything for you? No, so I think like, you gotta do what you gotta do, it doesn't change what you have to do, but I agree with you, right?
I have a lot of soft commitments, I'm just looking for a lead. And it's like, well, it's not a real commitment until it's wired okay? Until it hits the bank account. Not a real thing, and so really, we do try to encourage founders in our portfolio. Like the moment someone says yes, send them the paperwork. Sign and wire, don't delay for any reason, yeah. Reality is a great thing. We should all endeavor to live in reality.
Jeremy Au: (06:10)
Yeah. And I think, I wouldn't be so bearish on why we're saying it. I think we're saying it because a lot of VCs are not saying it right. I think it's just, There's not much time, right? And people have to make a decision, up or down, sell the company or sell harder to customers, or stop talking to investors and focus on the business, right?
Shiyan Koh: (06:27)
Or cut people. I think people are very reluctant to cut and I think as you saw with the Coinbase layoffs in general, people cut too little the first time. And it's actually worse because from a moral perspective, having two successive layoffs is worse than having one big layoff, because once you have the second one, then everyone's like, well, is there gonna be a third one? I thought you said that was the last one, but clearly, it wasn't. I had a founder run a layoff early this year and he felt really bad about it, but he was decisive and, has extended the runway on his business, and I think put his business on a better footing, And, I always tell people there's no such thing as a good layoff.
Like no one's happy about it, but there are a million bad layoffs, and so if you were gonna run one, I would just say have compassion, be a human being, and don't try to hide the truth from people. I think that's what's most exasperating if, you're the one being laid off.
Jeremy Au: (07:30)
Yeah, I think the case example is, I think like the better.com, right? The housing, and tech, a startup that, did massive layoffs and I think two parts of it, right? I think the first part of it was the execution of it wasn't as strong as it needed to be like you said, right? You didn't have the compassion and the approach that we expect in a layoff.
But also I think, one thing I do think about is like they were the very first startup to ever do layoffs at that scale, at that size, at that effective unicorn stage. They're the first person to do layoffs. And so I think they stuck out and I think the media and everybody jump on them, but now it's like there a're layoffs every day. Right. It's just so normal.
Shiyan Koh: (08:09)
Were they the first? I don't know. I mean, they did it over Zoom, which I think was like pretty terrible. And then, I think the CEO had his own issues, Which did not make people particularly like well disposed to painting it in a positive light, especially given how much money they'd raised. I think this is always the challenge, right? Which is like when things look great and when you've just been raised around, the temptation is to go out and fill every open rec and people underestimate how long it takes to make new people productive. And generally, their projections are too rosy about when you know you're gonna get the benefit from all that additional spend you've just loaded onto your company.
So I don't know whether people will learn their lesson. I think the boom and the bust continue, but I think for like repeat founders, you'll notice don't hire as many people, so I always tell people more people, more problems. You're supposed to be a software business, there's supposed to be operating leverage. You shouldn't have to like hire linearly with your growth, but yeah, I think people kind of get carried away sometimes.
Jeremy Au: (09:20)
Yeah, I think there's a great point, and I think there's even worse in Southeast Asia because I think Brian Ma at Iterative put it nicely, which is, the cost of labor is lower in Southeast Asia. And so companies that, pound for pound right in the US versus seed in Southeast Asia and Series A in the US and Series A in Southeast Asia, there's like, 1.5 to two times small people because they're just hiring, right? And so you have these like, founders that are still early in their learning curve, their experience, and suddenly they're like having to learn how to be managers or managers or managers. And so I think this era, it's actually almost like 2x speed actually, honestly, from a management perspective.
Shiyan Koh: (10:02)
Yeah. Come on Jeremy. Give me something cheerful to talk about. Well, you're making me depressed.
Jeremy Au: (10:07)
I think the other thing that's the big news of the week, which unfortunately is not less depressing, I guess, would be, the passing of our Creative founder. Right. One of the first, unicorns effectively of Southeast Asia, who invented the first Nasdaq IPO?
Yeah. Crazy, and that was like so many years ago. And, I actually remember buying Creative sound blasters. Because I was a gamer kid. And so it was the thing to get right, growing up in Singapore, that Creative stuff everywhere.
Shiyan Koh: (10:40)
It's probably, I mean, I wonder how many, of our sort of current batch of, founders can remember that because he's sort of like our Steve Jobs, well, they just won that a hundred million settlement from Apple, right? Finally admitting that Apple infringed on their patents. So I think that clearly, he was a sort of technology visionary. He was before his time, but, I love the story of him because he's so unSingaporean in a way, right?
He doesn't have any fancy degrees. He went to poly. He was a tinkerer. He made things cause he liked it. He enjoyed it. He was like a self-taught musician. He liked, loved, and was like obsessed with audio, and he made it happen despite, if you think about the eighties and nineties, right?
Like, that was not a period of time when Singapore was encouraging people to be entrepreneurs or to do creative things. and I think he actually coined this term like the no U- turn syndrome in Singapore, which is like in other places you can make a U-turn unless they tell you you cannot. And in Singapore, it's the reverse.
You can only do a U-turn when they say is okay. And that is a metaphor for how people operate, where they're just kinda like always looking for permission to do stuff. And I think, he's not a guy who ever looked for permission, he just did the thing that. interesting and fun for him. And, I think fortunately, he was able to build a business that turned all those things that were interesting to him, into, actual RA revenue, cash, and all that good stuff. It's hard to like imagine how little technology innovation activity there was in Singapore during that period.
That was the period when Singapore was still producing storage drives. Do you remember we used to be the number one producer of storage drives? Like obviously now our labor is way too expensive for that. So yeah, I mean I think we all owe a debt to him for putting Singapore on the map. For older listeners, you know the little menu that came up when you booted up your computer and select your sound card, but yeah, it is sad. I think he's only like 67, and a pretty healthy guy at least, so pretty friendly. I think everyone who knew him was like, he was like a super nice, genuine person and you can look up videos of him doing marketing of Creative products and you totally feel the like, dorky nerd energy. I love it. You know there's this one where he's like playing a keyboard that has been adapted to doing drum sounds and he just is like rocking out on it. And it's awesome.
Jeremy Au: (13:28)
I need to find the video for this.
Shiyan Koh: (13:29)
I'll send it to you. You can put it in the show notes. It's great someone showed it to me at a dinner party last week and I was like, this is the best video ever.
Jeremy Au: (13:37)
Going back to it was just like, I feel like I missed nerd founders instead of all these like glossy really good at sales, I think there's his vision of the world, right? Like you said he's a Singapore Poly guy. He is a co-founder of his classmate and I don't know if he just was this really good as one thing and like you said, he's a dork, right? And I don't know, it just felt like there was like a goat rush over the past few years.
Shiyan Koh: (14:06)
Well, you need both, right? You need to have the technology visionary and you need to pair it with, like a strong kind of business and product team. And, I think when you look at Creative, they crushed it on the sound cards, right? That's what, drove the IPO, but then you kind of smirked when I said the Steve Jobs thing. But, it feels like it could have been so much more, right? Like they actually created that, what was it? It was like a nomad jukebox or something. Like the first MP3 music player, right? That's the first patent that Apple clones. That apple in French fries and they did it better. And they, I mean, they've had an explosion of like SKUs, right? They did all this sort of like speakers, like headphones. They did all this like random stuff. But, I watched an interview of him from a couple of years ago and he said like his big learning was that he needed to focus more.
That he was, he had all these ideas. He wanted to build all this stuff, but it was very distracting for his company. It was hard to like sell all these things as far as Apple was like really focused. I think he even made the reference, he was like, apple just had one iPod. They were selling and he had multiple skews of his jukebox thing that he was trying to sell. And it was like very distracting, and so I think that's like an interesting sort of like time thing too, which is that he grew up in an era where there weren't a lot of people who had experience building public technology companies in Singapore.
He didn't raise any money from Silicon Valley. And you could make the argument that he was a great CTO, and maybe not a great CEO.
Jeremy Au: (15:42)
Steve Wozniack.
Shiyan Koh: (15:43)
Yeah, yeah. Okay. I'll give you that.
Jeremy Au: (15:46)
Hey, I wasn't smirking, I was just saying, I feel like, attacked. Just saying like archetype- wise is a little bit closer to that.
Shiyan Koh: (15:54)
Yeah. I agree. And so I think, the idea that the founders have that initial, spark, right? That momentum drives things forward. But as businesses grow, you actually need to bring more different skill sets and types of, archetypes to your team to help you and to push back on you to tell you like, hey, this is fun, but no one's gonna buy this thing. Or this is fun, but we don't have the sales team or the channels to sell this thing. I think that's actually an important role for investors and other sorts of executive team members to play. Like you just can't have your founder. Do whatever they want all the time because they might not see all the different aspects of the decision.
So yeah, I think that's like, a reflection I think, on it, which is like, I think he did awesome. I mean, he clearly crushed it but you kind of also think about like, well, what more could that have been given there early in audio, and in technology. I mean, it's like, it's the early nineties, and none of this stuff had really come out yet.
Jeremy Au: (16:58)
Yeah. They had an IPO, they were Nasdaq, and they had hundreds of millions of dollars of revenue. In fact, I think over like, what, almost 2 billion, of revenue. and they lost that lead. They could continue, I think now that a market cab's a couple of hundred mils. They could have been, one bill, 10 bill.
Shiyan Koh: (17:16)
Could have been like, well, they missed the shift, right? Which is like, you go from the gamer nerds who love to customize to like more of your average consumer who wants everything integrated and like, doesn't need amazing sound or like can't tell the difference.
Jeremy Au: (17:33)
I mean, it's delisted from the Nasdaq, right? And now it's only on the Singapore exchange. I think that's interesting, right? I mean, I think there are a lot of lessons there, right? I think about, it's just like such a prototypical founder story that's like universal across the world, Southeast Asia, Singapore about, I don't know, just, I don't know. Technology gives, and it also takes away, because of the shifts.
Shiyan Koh: (17:55)
Well, it moves fast, right? So whatever advantage you have, it doesn't stay forever. So you like to try to think about moats or whatever. Consumer behavior changes really fast. And so if you're not on top of that, and not anticipating that, it can be really abrupt.
But, I was chatting with my mom this morning. She was at Vertex. Vertex was in series B of Creative and she was telling me stories about doing diligence on the company before they did the investment and she's like, oh yeah, I went to Egghead software. It's like a retail store that sold software in boxes to chat with people who were buying stuff and like understanding why they bought things and things like that.
And it was fascinating because I didn't know any of this, I was pretty young at the time, but companies started in Singapore, had success locally, and wanted to break into the US market, which had been really challenging. Wound up partnering with a sort of distribution.
And they had challenges because no one knew what this product was. There wasn't any marketing on it, nobody heard of this thing, and eventually, the breakthrough was the market leader at the time was ad-lib like a Canadian sound card business, was huge with gamers and so they figured out like, okay, this is a segment that like really cares about sound and is a little bit more open and willing to try something new.
And so they adapted the product and market it as ad-lib, compact. And that was sort of like the little thing that got them, that foothold and then people got to experience the product and they're like, wow, this is great, and it took off from there. And, I love this story because going to market is as important as narrowing the customer segments. It's not like, hey, everyone who uses a computer just down to the gamers is so important. And then finding that like behavioral thing, that thing they care about and trying to market and drive your message around that. I think a lot of people don't pay enough attention to that.
They just think like, well, my thing is awesome. Best thing since sliced bread. Like, why isn't everyone buying it? No one knows about you. No one knows. It's great. No one has any incentive to try it. Like why would they buy this thing? And so yeah, that was my little, technology history tidbit from the morning.
Jeremy Au: (20:17)
Yeah. I mean, it's crazy how we're kind of recurring the same era slash, learnings right from the 1980s to now the twenties. And I think, is this interesting because it reminds me actually of a parallel. Founder Han, was the founder and inventor of the USB thumb drive like you said.
So Singapore has been the number one producer of thumb drives and a Singaporean actually invented a thumb drive. I mean, he was just a guy, he heard about other people trying to make MP3 players and he said, let's simplify MP3 player. Let's make it a thumb drive. So he did product simplification. It's this is way too bloated. Let's just do the thumb drive. He invented it. And similar to Creative, the big difference is that this guy, the thumb drive guy, had lost control of the patents, right? So he registered in Singapore but didn't really register in the US or in China.
And then China, just like ran with it, right? Because back then China did not give any hoots about it even if you had a patent anyway as well. Since then, and it was just a commodity, right? It's just about the cheapest thumb drive it just ran with it. And like you said, Singapore's number one for a while, but after that it became China, right? It was just a crazy story where similar creative, haha creative, similar creative inventive slash r and d dynamic there, and then struggled the go to market, it's crazy.
Shiyan Koh: (21:42)
Well, I would also posit that, something that we are not as good at or we don't emphasize as much as a society is storytelling. Which is actually essential to branding and marketing, and if you're gonna make a commodity product like a thumb drive, I do think that branding and marketing matter, right? Like why do Apple iPhones sell for so much more than the comparably equipped Android phone? It's the story that we tell about consumers who buy Apple, how do they visualize themselves?
Jeremy Au: (22:17)
I feel attacked as an Apple user.
Shiyan Koh: (22:18)
Hey, no, I mean I'm an Apple user, right? But like you look at it from units and profitability, Apple is the most profitable, manufacturer, right? Way more Android phones are sold, but the profit margin on those is like so much smaller. I do think like this ability to have some sort of narrative around the products you're building, and to sell them is a key skill that we often undervalue. As a market, we need to be able to do more, if we're gonna run global businesses.
Jeremy Au: (22:51)
No, it reminds me of this, the reviewer called NKBHD MKBHD and he did a tech review, basically like a blinded test of all smartphones, cameras, the photos. And he took millions of votes that were totally blinded. And basically turned out that all the best cameras were, in terms of photo quality were Android phones, right?
And it's so funny because it's so far apart from how people think about who takes the best photos, right? Looks like people think it's iPhone, but it actually turns out to be, Android Pixel by Google. Crazy. I think on a similar note about what Singapore is not good at, it's not good at storytelling, but it seems there's an interesting story where some Singapore companies seem to be good at, is metrics reporting. So the story of Henn Tan, unfortunately for Trek is that he's now in jail so he was.
Shiyan Koh: (23:47)
What happened?
Jeremy Au: (23:47)
He just inflated his revenues for years as a publicly listed company. He's in jail now, which is so sad. Isn't that crazy? I know, right?
Shiyan Koh (23:57)
I mean, yeah. Hey, kids following on at home? Fraud is bad. Don't do it. I dunno if it's much more complicated than that.
Jeremy Au: (24:10)
Yeah, I feel like there are a lot of folks who got stuck, right? We have a Singaporean in, FTX, called Constance Wang, and the problem with her is that she was trained at the National University of Singapore. She was trained as an accountant so she's fully aware of all the various legal requirements, around disclosure, et cetera, and she rose to become COO of FTX, and I think at some point she must have known. I mean, when you start Junior, you don't really know what's going on, right? But then she became COO, she was living in The Bahamas with them and now she got to the point where she knew, and she didn't report, right? So that's kind of sad there.
Shiyan Koh: (24:54)
Yeah, you're not gonna talk about SPH, Jeremy? That's our biggest recent fake reporting story.
Jeremy Au: (25:01)
I was this cycling past it. Let's talk about FTX, which was a month ago. Let's talk about, Trek, which was like in jail like half a year ago, SPH, you know what the facts are still, the issue is still under evolvement. What we do know is, there has been double counting of newspapers apparently. Tree folks have been who have left the building, but we don't know who they are. We’d know who they are. We don't know what else. Fired, taken to task. That's, which is, the nicest way of saying it. And I think the question now is, is this negligence? But it doesn't look, I think the news is, seems to be like, it's more the negligence, right? It's, potentially fraud, right?
Shiyan Koh: (25:45)
I think the more egregious one was that they printed things and then destroyed them, like, that's just freaking wasteful. Apart from the fraudulent part.
Jeremy Au: (25:56)
This is like you're saying, the worst part about this is the trees that died.
Shiyan Koh: (26:00)
I mean, kinda. And I would imagine advertisers if they thought the reach on their ad was gonna be X, but it was actually 0.9 X, I'd be a little pissed that I was paying for that.
Jeremy Au: (26:15)
I think it is destructive of the public trust as well, which is that The Straight Times is seen a least as, a reputable, publisher and journalist, it's kind of weird that, you know, who watches the watchmen in that sense, right? Who's watching the journalists in terms of their own stuff?
Shiyan Koh: (26:30)
Well, they haven't responded yet, right? Like there hasn't been anything.
Jeremy Au: (26:34)
They have, I think a lot of press statements. But it's also like crisis management, right? It's like crisis management 10 right? Which is, to get in there, get ahead of it, and say everything as fast as you can. Do it on a Friday.
Shiyan Koh: (26:48)
Are you channeling the Johnson and Johnson case, Jeremy? With the children's Tylenol issue.
Jeremy Au: (26:55)
Yeah, you wanna talk about the children's Tylenol scenarios so that folks know what that means.
Shiyan Koh: (27:01)
Well, there's a sort of famous case study where people were reporting that, some of the children's Tylenol bottles had been tampered with and that they were poisoned. And is a big sort of, of course national uproar about like, is my stuff safe? Everyone, retailers like start taking it off the shelves, all that kind of stuff. And so, I guess it's a classic kind of case for business school students on like, what do you do in that scenario, right? Like, how do you handle both like your channel partners, the retailers, your end customer, the parents, restore the public trust, et cetera?
Jeremy Au: (27:40)
So you're saying we need more MBAs at Singapore Press Holdings?
Shiyan Koh: (27:47)
I don't think you need an MBA to have common sense, but if they're an MBA, you should definitely remind them about this case study. Like they should have a mental model for it anyway.
Jeremy Au: (27:57)
Yeah, I think the issue is they were sitting on it for a while, right? That's the thing, right? Like the departure?
Shiyan Koh: (28:03)
Well, it was broken by like an Instagram account. That's the crazy thing. There's this Instagram account called Wake Up Singapore, and I guess they were the ones who broke the story.
Jeremy Au: (28:12)
Wait, who runs Wake Up Singapore? That sounds very new, I have no idea. I find like, kinda link I wouldn't refer to, but if my mom told me it's like, Hey, there's a wake-up sheeple Singapore account. I would be like, that's probably like a scam, right?
Shiyan Koh: (28:26)
Yeah. So I think we should bring that person onto the podcast. Jeremy. We should find Wake Up Singapore. Yeah, we'll put that behind a screen and like change their voice so they can stay anonymous.
Jeremy Au: (28:39)
That’s so old-school. They have all these IG Instagram filters these days that make you very pretty and very perfect looking. They look nothing like who you are. It'll be just way more palatable. But I mean, like you said, yeah, it's crazy how long the timeframe has been because I think the departure, which we know for sure was several weeks ago, which means that there was an internal process, probably months, before that.
And so this has been under wraps for a while, which is quite material, right? And so I think, I don't know. I think there's gonna be an interesting chronology that's gonna be built up. Well, I hope that is hopefully built up, I guess, to understand what went wrong here and what went there. But I, think, actually, one thing that you and I have always talked about in the past is like, to some extent, it's really about this fiddling with the numbers thing is a, it's like a recurring thing in tech, and startups, right?
So it's not really a surprise I hear this is happening, but, we wanna talk a little bit more about metrics and what happens there.
Shiyan Koh: (29:38)
Well, I think, conventionally people say like, you can't manage what you don't measure. And I think the flip side of that is if you measure the wrong things, you get wonky behavior. I was trying to find the name of it and was like, Good Hearts Law or something. Like, when a measure becomes like a goal, it ceases to be a good measure, because everyone will try to game the system to do that. But then that's like not super helpful as well.
When you feel pressured to make a target, what do you do? One is, you can distort the system. Two is you can distort the data. Or three you can improve the system and, depending on your context, these actions will be easier or harder. And so if you feel like you can't change the system and you're being held to a target, you probably have the incentive to distort the data and it is the fault, or the responsibility, of the people who set up that system to know that they were gonna create that issue.
And this is a case, it was just like someone was like, gonna pay 10 bucks per, pest hunted or something brought in. And what happened was actually people started breeding the pests and killing them, right? So it actually increased the pest population rather than decrease the pest population. I think it's one of these things where, like incentives are such a powerful thing, and I think people often don't consider them. Jeremy, you cited two public company examples of like people who had fudged the numbers. I think this is like not uncommon on the private side either, right? People always say, what do investors wanna see? And they try to aim themselves toward that. And so if you say you want top- line growth, founders will deliver top-line growth, right? And you're like, no, no, no, actually I want profitable top-line growth. Actually, I want this. So I think, you gotta pick the right metrics to aim your company at, you also need to think about the system that you've put in place for your team to achieve those and have checks and balances to understand like, is this actually working? Like is this the right number to aim or, and that takes discipline. That's a hard one.
Jeremy Au: (32:01)
And I think it's compounded because, I think Southeast Asia doesn't have really good accountants or really good checks and balances, as a whole, and I think wouldn't have accountants. They always audit and say it's okay. A sign that the refinery report is okay.
Shiyan Koh: (32:18)
Yeah, I mean, accounts are to make sure you follow accounting rules, but that's not necessarily the same thing as saying like you're doing, you're prioritizing the right things in your business. I think those are actually separate things.
Jeremy Au: (32:31)
Well, I think it takes both of them, right? I think it takes, like you said, good strategic understanding to be like, this is what the call the business really is and there needs to be checks and balances with folks who actually wanted to find out when something is going wrong and have the incentive to say when is going wrong. I mean, talking about public companies that, had some level of fraud or scandal. I think High Flux is another example, right? Another Singapore champion, had issues around how they eventually, obviously, had struggles, but they articulated and communicated a struggle. It's I guess this is like you said, this is a very depressing episode all of a sudden. News of the Week, I guess. I think let's circle back a little bit, which is, I think you started talking about it, right? There's an incentive, there's a system that creates an incentive, and that managers who are supposed to know. And I think goes back to it is like, I think what we don't know yet. Who knew what and when. And I think this is gonna be the magic question for, straight times and single press holdings.
Shiyan Koh: (33:24)
It's not clear to me who gained from this. Like, did we all think this was like an amazing growth business? I don't think so and I don't know, 10% on the margin to advertisers, I don't think it makes a huge difference but maybe they felt they couldn't fudge more because then people would be suspicious sooner but yeah, it's pretty confusing in terms of what the goal was here relative to the payoff.
Jeremy Au: (33:56)
Well, I mean, the payoff is clear, right? Because, like you said, it's not a growth business, but The Straight Times has been shrinking, actually, right over the past few years due to, I don't know, the macro as most digital news, et cetera.
Shiyan Koh: (34:08)
As most traditional media has been, right? It's not dissimilar.
Jeremy Au: (34:12)
Instead of like shrinking, like a couple of percents, now you're shrinking like 10%. I think, I think you can see the incentive for the management team to be like, it's 2% shrinking is like, I don't know, you can hand wave and say it's okay. 10% is a harder thing to say, right? I think the ones gonna be interesting as well as who whistle blew on this thing.
I think there's always an interesting story, right? Somebody, I think obviously entered a public trust, right? And ended up looking at the numbers and then you must have done the clean shop, internal review, new people. So somebody actually is a hero of this thing, okay. This is a positive thing, Shiyan. Yes. We're going back.
Shiyan Koh: (34:45)
Someone had a conscience. Someone's a hero. Like someone had a conscience, Hey, this is not correct.
Jeremy Au: (34:51)
They heard it over dinner and then like, like a little rumor over carrot cake. And they were like, oh, maybe the number's a bit fluffy. And you're like, they double-clicked on it. They whatever. And. I don't know, they reported. So we just, I dunno, someone's a hero, right? For finding out more. Definitely true. I know. So that's the thing, right? I wish there was more, at least I'm looking forward to more news coming out, and hopefully, we get to not just, obviously know why it went around the system and so far, but also I think, we should congratulate the people, who found the problem, right?
Shiyan Koh: (35:20)
You better go reach out to Wake up Singapore, Jeremy.
Jeremy Au: (35:24)
Wake up Singapore, indeed. So on that note, this is a wonderful way to wake up the morning and wrap things up, adding that we got the cover, the hidden story behind creatives Creatives founding, Go to Market, the iPod before the iPod, Singapore inventing Thumb Drive, FTX Singaporean financial fraud, measuring the wrong things, Straight Times, things we don't wanna be famous for. And also 2023 predictions. What's the moral of the story, let’s wrap things up.
Shiyan Koh: (36.00)
We gotta live in reality. The sooner we live in reality, the less painful it'll be. Yeah. The more divergent you get from reality when the return happens, then it is very sad.
Jeremy Au: (36:23)
Yeah. I think this, yeah, this is 2023, the year of reality. Not the reality, not mixed reality, the real thing. Reality. The real thing. Well thank you so much again, and I catch you all next week.
Shiyan Koh: (36.40)
Thanks, Jeremy.