Phillip An: Vietnam Property Financing, First Vietnamese Y Combinator Startup, Cofounder Firing & Probabilistic Thinking - E295

· Founder,Vietnam,Start-up

“In the early stages of a startup, it’s not your monetization or competitors that can kill the company, but the team. Most of this is due to cofounders’ conflicts. When you have tough times, it's up to you to actually survive through them, so finding a cofounder whom you get along with and who serves as your anchor is the most important thing to do.” - Phillip An

“My mentors pushed me towards probabilistic thinking. When I have a really tough decision to make, I think about it as an expected value equation where if you take two choices, within each probability, what is the expected value of success that could drastically change your outcome?” - Phillip An

“It's very hard to run a business. During the COVID-19 pandemic, we explored other business models that solved the needs of the market at the time and we survived through it. We have the kind of mentality that regardless of what happens, we can power through and we can be the ones that prove everyone wrong. It's almost like having that chip on your shoulder. It’s such an important experience to have that conviction to just go for it and not look back.” - Phillip An

Jeremy Au and Phillip An, the founder of Homebase touched upon the challenges and opportunities in the Southeast Asian property sector, the journey of building a startup, and personal experiences in entrepreneurship. Phillip shared valuable insights on navigating complexities within the organization, balancing financial sustainability and market needs, and the importance of a strong founding team. He also discussed the significance of home ownership in Asian culture and how Homebase aims to address the growing home price crisis. Additionally, Phillip shared a personal story of overcoming adversity during the early stages of his company.

Key Topics:

  • Challenges and opportunities in the Southeast Asian property sector
  • Building a startup and the importance of a strong founding team
  • Balancing financial sustainability and market demands
  • Addressing the home price crisis and the significance of home ownership
  • Overcoming adversity and personal experiences in entrepreneurship

Jeremy and Phillip provide valuable insights into the real estate industry, startup journey, and the importance of resilience in building a successful business.

Supported by Pollen

 Pollen is a private B2B liquidation marketplace. The startup connects sellers carrying excess inventory with bulk buyers across the world. The platform incorporates pricing, algorithms, dashboard analytics and sustainability metrics to find great liquidation outcomes. Hundreds of tons of usable products that would've been incinerated or gone to landfill are now used by happy consumers instead. Manufacturers get more revenue, buyers get cheaper, and the world benefits Learn more at

Jeremy Au: (01:14)

Hey, Philip, really excited to have you on the show. You are building the first-ever company from Vietnam funder in YC, but more importantly, you're tackling the property tax space in Southeast Asia, which is an again, hot and emerging category. So please go ahead and introduce yourself.

Phillip An: (01:29)

Yeah. Hey, thanks, Jeremy. Really excited to be here. So yeah, my name is Phillip An. I'm the founder and Chief Operating Officer, COO of this company called Homebase. What we do is we try to empower homeownership across Southeast Asia, starting in Vietnam, and I think a bit of high-level introduction about myself. I would say that I'm mostly from the United States. I grew up across the world in countries like the US of course, but also in China and South Africa, and have been mostly in the US my entire life, and prior to living in Vietnam for the past several years, I also lived a little bit in Singapore and have worked across the entire gamut of different careers and professional service organizations as well. And yeah, definitely happy to dive a little bit deeper into what we do and also my personal history as well.

Jeremy Au: (02:14)

Awesome. So, how did you get started in your career? You know, you were at Goldman Sachs. You were at McKinsey. What were some of these early decisions around working at two really great companies?

Phillip An: (02:24)

Yeah, of course. I think when you know you're younger, you really just don't know what you want to do. And so it was the same thing for me. You know, when I did undergrad, I was at a university called Caltech and I studied Computer Science, and I think I was really fortunate at that stage to be very close to the entrepreneurship ecosystem and to have worked in a lot of these industry players. So, I had the opportunity to intern at startups and also at Venture Capital funds, investing in technology, being a part of the ecosystem, working with operators and entrepreneurs, and seeing how companies were built. And I think that really early exposure gave me that kind of sense that I also wanted to be an entrepreneur. I wanted to do something entrepreneurial in the future as well.

And so as I progressed through my internships, I kind of had a lot of mentors that gave me some really valuable advice and sometimes not-so-valuable advice. And after working in an industry like venture capital, some of the more traditional investors told me that basically, Hey, you have a really solid foundation in computer Science, maybe it's time to supplement that skill set as well. So that's actually what took me to more, I would say, professional service organizations and, trying to build that credibility in not only regards to your understanding of technology and being immersed in that ecosystem, but also having the financial skillset and aptitude in order to be a good investor. But I would say that, after having worked in those organizations, I'd much rather prefer these smaller entrepreneurial organizations better. I think it's just a lot more fun, and I also like the culture better as well.

Jeremy Au: (03:48)

Amazing. And how did you end up deciding to take on an entrepreneurial path, especially in Southeast Asia?

Phillip An: (03:54)

Yeah, of course. That's a great question. So when I was working in venture capital, some of the funds I worked at had an emerging markets focus, and so, one of the funds I worked at called Lumia Capital, we invested in Series A to Series Cs, companies. The primary focus was emerging markets, 40% investing in the Middle East and North Africa, and Brazil, and Latin America. And so when we were evaluating those business models, it just really struck me how fundamental some of these companies were in terms of the entire infrastructure of these countries and these opportunities. And it just struck me that, if you're building a company in these emerging markets, opportunities are such that you can change the underlying financial infrastructure of that entire country, of that entire region.

Or you can help millions with healthcare or basic access to education. Whereas, when we were looking at more US company pitches a lot more were, I would say B2B enterprise, SaaS, or dating apps for dogs, some of the more, you know, I would say tail end of some of the business models just because the market was quite mature, right? So a lot of the ideas that were very groundbreaking at that time were done very well. And at the same time, I think for me, I also had this international background growing up. So I really wanted to contribute towards developing economies and making sure that we could actually help these people grow as well.

So, after working for several years, I was fortunate enough to have this, basically, blank check offer from Harvard Business School at the time when I graduated, and so after several years I kind of took the leap of faith, and I was like, Hey, what's the worst thing that can happen? So yeah, decided to apply for a bunch of different programs, considered different options, and Southeast Asia was probably one of the most exciting markets, and where else better to really dive into Southeast Asia than Singapore? And so that's what actually took me to Southeast Asia as well.

Jeremy Au: (05:40)

So can you tell me how that happened? So you landed in Singapore and you said, I want to build something. So how did that process land up to Homebase?

Phillip An: (05:49)

Yeah, of course. I think, you know, once you arrive in Singapore, it's very overwhelming, right? Because at first you know, you have this impression that you're going to a new region, but in some sense, it's actually very familiar as well because Singapore is such a cosmopolitan city, but at the same time, I was very lucky to meet my co-founder, JY. We were at the same startup incubator called Antler Together, and we kind of really instantly clicked a lot of the fundamental principles that we, discovered that we shared in common about building companies really resonated with both of us, right? So we each like to watch Y Combinator's videos about talking to customers, building products, iterating fast, and getting a product out there and I found that he actually had a lot of operating experience applying these principles. So I think for me it was more important to actually find someone who had shared these principles and had that experience before.

And so after we got there, we were brainstorming on different ideas and trying to find problems that we could resonate with, but we could also face ourselves and we could solve, and I think after talking to a lot of consumers and just reflecting back on our own experiences, one of the biggest things that stood out about the pain points that he faced in his life was actually just access to a consumer mortgage.

And his background was quite interesting as well because he had lived in Vietnam for the past several years operating two or three different businesses. Some of them were venture-backed. He had a team of engineers, and 40 different startups, so pretty successful career, and pretty successful guy but despite that, he actually could not buy a home because of a lack of financing options as well. So we kind of took this idea of this pain point. We ended up just going out into the field and interviewing hundreds and hundreds of customers, asking them, Hey, do you actually face this problem as well? Is this something that you also would want to solve? And the overwhelming resounding answer was actually, yes, this is a huge major pain point.

Of course, this was an industry that I would say none of us really had super deep experience in directly. Yet, you know, we felt like this was a big enough problem. It could create a really big social impact. It could drastically change the life of millions of people, and so that's why we actually decided to try to tackle this problem and try to find a solution for it.

Jeremy Au: (07:50)

So, tell us more about what it means for property tech in your perspective, in Southeast Asia. What are the major trends and the major issues?

Phillip An: (07:58)

Yeah, of course. I think property tech in Southeast Asia and an emerging market context is quite different than that of a more developed market like the US or even Europe. We like to think about the phases of PropTech, and there are different waves that come about.

I would say that the first wave in the US that we saw was a very basic kind of listing platform. So in the US, you had companies like Zillow, like Trulia, and these kinds of platforms where you can go on, you can buy a home, maybe you can connect with agents. Later, you saw the second wave of PropTech, which maybe somehow empowered agents or facilitated that transaction, and make it easier. So there are brokerages like Compass, it makes investment easier as well so you can invest in other opportunities. And then now there's this third wave, I would say, where, you know, there's a technology side of things where there are companies like Matterport that make 3D viewing of listings very easy.

But there are also more financially oriented solutions that help consumers either buy, sell, or own a home, or even invest in a home. And some of these companies that come to mind are more recent companies, like companies like Divvy Homes, which focus on the rent-to-own model, which is similar to what we do. Also, companies like Opendoor, and Fly Homes. Unison for that focuses more on home ownership and investing in homes and unlocking liquidity. And I would say that this third wave of PropTech in the US has really unlocked a lot of value because not only is it focused on real estate, but it also combines capital markets, it combines the real estate and also the technology side of things.

I would say in Southeast Asia, because of the nature of the technology adoption curve, we're more on the earlier side of things. So a lot of the bigger companies that you see that are more successful for example, like Property Guru or in Singapore, are more on the first wave of PropTech, and we're slowly but surely actually developing towards the second or third.

Jeremy Au: (09:37)

What's interesting is that you've chosen Vietnam as your target market out of all the Southeast Asian countries, right? So obviously there's Singapore, there's Indonesia, there's Vietnam, and you mentioned obviously a prior founder linked to Vietnam, but how was it that you thought about it from a country selection and targeting perspective?

Phillip An: (09:51)

Yeah, of course. I mean, for us, first and foremost, part of our decision process was just talking to hundreds and hundreds of customers across Southeast Asia, not just in Vietnam. So we talked to customers from India, we talked to customers from Indonesia, talked to customers from the Philippines Thailand, every single market almost. And I think, by far, actually, in Vietnam, it's one of the most crucial needs that young people have in order to access home ownership, where interest rates are very, very expensive, where traditional banks are not very affordable as well. So there was an overwhelming market need. But on top of that, when you look at kind of our own expertise in the market, you know, JY had been operating his business in Vietnam. He had a lot of different connections in the country. He had a lot of. Different employees were from Vietnam already. So there was already that kind of local connection and local context that we would already have that we maybe didn't have as much so in different countries. And I think finally, when you just look at the macroeconomic picture of Vietnam, There's a very compelling picture, right? Vietnam is one of the fastest growing countries in Southeast Asia, if not the fastest, where, you know, GDP growth is between 5 to 7% for the past 10, 15 years, and it's projected to be like that. It's a huge number of very young people, 30 million middle-income young people by the year 2030. And a lot of the conditions for home ownership are actually very, I would say, a fit as well, right? The aptitude towards home ownership is that, this is a traditional kind of investment that you must do, you must have before you get married. Whereas if you go to more progressive markets, maybe the US or even Singapore, maybe you don't even need a home. Maybe you can just rent and you don't get married, right? And you can still get married. But this traditional attitude towards home ownership, where homeownership rates traditionally were upwards of 80 or 90%, and is such an important part of your life, right? That made it very compelling. And then I think on top of that, there's a very strong macroeconomic picture as well. A lot of people compare Vietnam to maybe China 10 or 15 years ago, and even now we see this kind of China plus one strategy because of the geopolitical tensions that exist in the world as well. So we also thought it was that this specific geography would be very oriented to capture a lot of the upside and growth that Southeast Asia manifested and Southeast Asia continues to develop in the next several years as well.

Jeremy Au: (11:59)

So how does that impact the Vietnamese property sector?

Phillip An: (12:02)

I would say the Vietnamese property sector is, again, it's one of the fastest-growing sectors within the country as well. Partially because of kind of that affinity towards home ownership that I just described, but also because, when you look at capital markets as a whole in Vietnam, compared to Singapore, compared to the US, liquidity and the stock market or the number of options available for investors to invest in is not very high.

So the traditional investments for Vietnamese are more traditional investments like cash or gold for example, or real estate, right? And probably these are the two major sectors. At the same time, the country has capital controls, so it's very hard for you to actually move large amounts of money out of the country.

So real estate traditionally is one of those avenues where a lot of young people or a lot of you know older people who even have a lot of money put their money in, and because of that real estate as a sector is just exponentially growing. It's growing very fast. You also see this phenomenon, which is quite interesting, where, you know a lot of people from the rural areas where the provinces are moving towards the major cities as well, so if you look at Hanoi and Ho Chi Min City, which are the two largest cities and the commercial and capital of Vietnam, respectively, all of the young people are there and the cities are quite big. They're around like 10, 11 million people right now. So property prices also have gone very high, and so, if you're a young person, you're just getting started with your income or even if you know you already have a lot of property available, but you know, you're holding a lot of that in equity. It's very hard for you to access these very basic financial services cause they're not very developed at the same time, property prices are really climbing very high and if you don't get in now and you're just spending money on rent, then it's going to be harder and harder for you to do so. So, I would say that it's a very exciting market, but at the same time, things are getting very expensive. And so that's why, there needs to be more accessible financing services to actually solve this problem.

Jeremy Au: (13:47)

What are some myths or misconceptions about the Vietnamese property space?

Phillip An: (13:51)

That's a good question. I would say that generally from a Western perspective, the misconception about Vietnam is this legacy of communism as a country, right? And I think maybe it's the Western perception that because there's a communist system within the government that the market is not investible or it's very hard or very risky to invest. But I think actually if you look at the track record of China, in the past 20, 30 years and compared to Vietnam, it's almost the same picture. And I would say that property itself is one of the fastest growing assets, and it's actually quite safe right now for both domestic players within Vietnam, but also international players, even major, I would say, real estate companies like capital land from Singapore, Maple Tree. They actually build pretty big projects that are quite investible and then also traditionally a lot of more adventurous investors actually from Korea, from Japan. Taiwan actually has poured a lot of money into Vietnam. So I think maybe the perception within the Western context is a little bit more biased or skewed, but definitely, within the Asia environment and economy, there has been a lot of investment within Vietnam.

Jeremy Au: (14:53)

I mean, taking a step into the business, I think one of the interesting parts obviously is the kind of interplay between, you know, developers, obviously between agents, between platforms such as yourself, obviously as the buyers. What are some unique aspects of the Vietnamese property system that might be non-obvious for someone who's coming in from the outside?

Phillip An: (15:11)

Yeah, I think the biggest non-obvious thing and the challenge that we try to actually tackle is just almost how hard it is to get financing to buy these properties. If you look at, you know, ho Chi, the city as a market, prices have gone up, they've gone up maybe 10 or 15% every single year. The average apartment price has climbed that fast, right? So now if you're buying maybe, let's say a two-bedroom apartment, it could be something like 200k USD, right? In a traditional market like Singapore and US, maybe you would put 20% down payment or even 10% in some schemes, and then you get a bank loan, and maybe your bank loan would be something like 30 years, maybe your interest rate would be just one or 2% every single year.

Vietnam is very different, right? If you go to a traditional financing option like a bank right now, you have to put something like 40% down, and then you have to borrow the rest. So maybe 60% of the property value if you go to a traditional bank, right now, the floating interest rate is probably anywhere between 12 to 14% a year. A year. So imagine how that is because you're just putting so much money into servicing interest costs. And on top of that, even if you're a young person, you want to buy, right? Actually, almost 90% of customers get rejected by the bank because there's a lack of a credit scoring system. There's a lack of an MLS system, which is a central database repository for the valuation of properties. So a lot of people, maybe they even have a good job, but it's not very stable income, or they don't have enough income history, or maybe you're an entrepreneur, you own a business, and one, one month your income is very high, the next month is very low. Most likely the bank won't even approve you. And on top of that, you know, Vietnam has a legacy system of zoning different properties. So maybe the property that you're buying, your house has partially agricultural land, and in some cases, the bank can't find into at all for that. It's a great investment for a lot of people and for a lot of young people as well. They can save a lot of money on rent, but it's almost impossible for those people to actually get into that market, unless you have a lot of cash or your parents are willing to support you. So I would say that's probably the most frustrating part for a lot of people, the lack of accessible financing if you're actually wanting to go into the market.

Jeremy Au: (17:13)

And what's interesting about that is that, obviously it's not obvious for so many folks. How do you think that situation is going to play out over the next 10 years? I mean, obviously, I think Vietnamese people will get richer on a per capita basis. The economy will continue to be stable. So property prices in terms of demand could go up, but how do you see the factors play out over the next 10 years?

Phillip An: (17:33)

Yeah, that's a great question. Well, I think, definitely people will get richer. But you know, a lot of times as people do get richer, as you saw in China, property prices get even higher, right? So that doesn't necessarily solve the problem. In the US and other markets, we do see the emergence, of a lot of these kinds of third-party capital providers or other financial ecosystem players that are able to extend credit or bridge credit in some cases. And this will help actually the kind of I think over time as well as the economy develops and the economy matures, bank interest rates inevitably will come down. Same thing in the US in the 1980s where, you know, bank rates were actually, you know, 15 to 20% every single year as well. Right now from the US, that seems impossible. That seems super, super high, but that was actually a matter of fact, and as volatility of the market comes down, as the market develops, as investors have more confidence in Vietnam and also the Vietnamese dong, I think interest rates will be stable, stabilize a little bit and make homeownership more accessible as well. But, in the meantime, that's exactly what we're trying to solve, right? How else can we bridge this gap? How else can we make these. Solutions more accessible and fit the needs of the market basically in this Vietnamese context? In the meantime, before a lot of these macroeconomic factors come in. And of course, I think there is, sometimes governments will have good policies. So I think in the UK, or in Australia, or some other countries, governments have these rent-to-own schemes, especially focusing on home affordability and low-income social housing as well. So I think the Vietnamese government is slowly but surely starting to focus on some of these factors too.

Jeremy Au: (19:02)

And you know what's interesting is that you grew up in the US and China, so what was it like transitioning to that Vietnam culture and learning all of these areas, aspects?

Phillip An: (19:12)

Yeah, definitely a steep learning curve. But honestly, I would say that, and I've been trying to convince all my friends to move to Vietnam because I honestly love this place. I think Vietnam is just one of the most exciting kinds of markets to be in right now, in the world as a young person. When you just go there in the streets of Ho Chi Min City riding a motorbike, the energy is very palpable. You know, you see all these construction sites, you see things growing, you see the country developing. So it's not only just these high-level macroeconomic statistics, but you also feel it in the air in some sense. And I do think that in Vietnam's context in terms of where it is in the world, there are only a few times where you see this arc of development that is growing so fast. It's almost like these several years where Vietnam is actually growing at this pace and maybe for the next century it might be in Africa or something like that. But in Asia, I think it's Vietnam's time right now. That being said, for us, to go there in the market, we actually made like, we had a lot of friends, of course, and a lot of connections in the market, but my co-founder and I actually, we did our best to actually learn Vietnamese take classes, go to the local places to meet customers and talk to them as well. And then, that also shows, in terms of the composition of our team as well. Because what we do is quite, we actually have people working in capital markets, but also in legal, in valuation, in sales, in marketing. So across the entire board, most of our team are either local Vietnamese who are very talented young people, very eager to learn and emerging to the startup world, but we also see a lot of employees who are Vietnamese. Maybe they studied abroad or they even grew up abroad, but they're coming back to Vietnam because they believe in the potential of the market.

And you know, they kind of really want to be here as, as well. So I think for us, it's a combination of just trying your best to actually immerse yourself in terms of local context, but also bringing people on board who are aligned with your mission and actually can help you bridge some of these gaps as well.

Jeremy Au: (20:57)

So, you know what was interesting is that as you made the transition you actually also chose not to continue with your Harvard MBA. So I want to hear a little bit more about that.

Phillip An: (21:06)

Yeah. Well, the way I think about it is that there's definitely an opportunity cost of doing anything. For me, when I started the business with my co-founder I think it's one of the few times in my life where I really felt that something really just clicked. That this is something you wake up every day and you're very excited to build something that has just so much impact, and that actually really drastically improves someone's life. And I think I was in a bit of a unique situation because I got this offer from Harvard through this program called two plus two, where I was guaranteed a mission and I could go back anytime.

So I kept on delaying and delaying the offer, and when I went back to the Harvard MBA, I really loved the experience. There were a lot of classmates that really are quite inspiring from Olympians, NFL athletes, and NBA athletes, like people you don't see every single day. And some of your professors, they've built billion-dollar businesses and are massively successful. But I think in regards to my own goals, I felt like the experience was more suited towards a, you know, more generalist exploration towards someone who maybe is kind of transitioning in their career where is, or wanted to find something. But for me, I woke up and I felt like I was really missing entrepreneurship, right? That I wanted to be there in the market talking to customers, building products, and shipping things and just go. And we'll see what the future holds, but for now, I'm still really loving the job, loving the role. And I will say that the really good thing about Harvard and the MBA network, the HBS network in Southeast Asia, is that people are just very tight-knit.

I think in Vietnam there's only like maybe 20 or 30-something alumni basically from Harvard, from HBS there. So we know we really, pretty regularly get drinks. We catch up. A lot of them are startup founders or are quite successful as well. So I think that network has already been very helpful. But I think my parents definitely want me to go back and, you know, get the Harvard degree. But we'll see. We'll see where that takes.

Jeremy Au: (22:52)

Good thing you can defer for a bit longer. I think obviously you've made some decisions, some of them conventional, some of them non-conventional. What would be some of the criteria that you used to make those decisions?

Phillip An: (23:02)

that's a great question. I think the more I have experienced and learned, a lot of my mentors have really pushed me towards this theme of probabilistic thinking and thinking almost towards expected values. So I think Charlie Munger and Warren Buffet and a lot of these value investing kind of people, or even poker players, right? Professional poker players use this framework, so I think whenever I have a really tough decision, I like to think about it as an expected value equation, where if you take two choices, what is not only the probability of success of every single outcome but within each probability what is the expected value of success?

So I think one very stereotypical example is for example, maybe you're trying to meet someone, and you're single and you want a date or something like that. And then you see a really attractive partner that you find very interesting sitting alone in a cafe. So from a probabilistic thinking perspective, the chances of you actually getting rejected or whatever, maybe, it's quite high. But actually, the outcome of success actually could really drastically change your life. You could meet a partner for the rest of your life, or you could even meet a friend who you guys have common habits that could make you drastically happy. But even if you do get rejected, what's the downside? At worst, you'll be stuck in the same position. So from a probabilistic thinking perspective, the optimal decision is just to go for it and just start a conversation and see where it goes. Obviously, that's a very trivial example, but you can actually apply a lot of these to your life as well.

So for me, when I think about making a career decision, is it the expected value of something that could drastically change your outcome? I love this quote by Sam Altman, where, and just paraphrasing him, he says that, for every single next career move, he wants to make the career that he's achieved so far look like a footnote on the book. And I just love that because it just shows the skill of your ambition and shows how much impact you could make, right? And it just keeps on building more and more on one another. So I try to aspire to have that kind of framework of thinking when I make these really tough decisions.

Jeremy Au: (24:53)

Yeah, and speaking of Sam Altman, you were also, as we mentioned earlier, the first Vietnamese YC startup. So could you share a little bit more about what your experience was at Y Combinator?

Phillip An: (25:03)

Yeah. Yeah, YC was great. So my co-founder and I have been fans of YC for such a long time. We read probably all of Paul Graham's essays. We read all of Sam Altman's as well, his blog, and we watched a lot of videos and we were really inspired by a lot of these YC companies like Dropbox, Airbnb, Stripe, that basically came from nothing and hustled their way into billion-dollar successes. It was, I would say a really interesting experience because we were the batch where we actually did it during COVID, so we were remote. So maybe there wasn't as enough in-person interaction, but the entire program is great because you go in and you're kind of assigned a series of group partners, and these are people who had built very successful businesses, exited them or sold them, or they were executives at pretty major tech companies. We were with a cohort of other startups that were at a similar stage, but they were quite diverse, so they were in every single other kind of space. I don't think there were any in prop tech for us.

And every single week, you have a lot of these lectures by very esteemed people like J House, J Halton from Dropbox spoke with us, and Airbnb founder spoke with us as well, and they talk about different topics that are relevant in terms of building your company. And every single week, you're also working with your partners to scale your company against certain metrics. So you're always aiming for this 7% week-on-week growth. And you feel this energy and excitement because all your other group startups are also competing in some sense, for growth. You're not competing against each other, you're kind of competing against yourself. But you know, over time you see this exponential curve and I would say YC is very helpful for us as well because being from a Southeast Asia company and working in this space of home ownership of real estate, of a bit of capital markets finance as well, we really have to build credibility not only among equity investors, but also debt investors, right? Because we partner with debt investors like family offices or institutional debt funds to raise capital, to actually provide capital to our fundamental investors. So through YC, we were able to meet quite a bit of investors from that side. We were able to partner with them and also build that credibility as well. And then I think since then, after YC, we raised some more funding rounds. They were very helpful in actually introducing investors as well. And also the network in Southeast Asia is great because there were not so many companies at that time, I think there were no Vietnamese companies before us.

Maybe there were like 8 or so, Singapore companies. Now there's a lot more I would say, but you know, since then, the network has really expanded, and even within that network, we try to help each other. We try to refer people, we try to, and if someone is raising, we try to share the deck with our investors. So that's a really great network as well.

Jeremy Au: (27:27)

What would you say were some of the misunderstood or misunderstood parts about YC from the outside in that you now understand is different, now that you've been inside?

Phillip An: (27:36)

Yeah, that's interesting. That's a great question actually. I think maybe even for us, we applied to YC as a more non-traditional business in some sense. A lot of the stereotype of YC companies is oh, it's very early stage, like software focused. And then you're, you're doing those, right? Like for us at that time, we actually had already raised a seed round. So we came in a little bit later. We already had several employees. We had already been operating for I think a year or something like that and we were operating in Southeast Asia, in a space that's a little bit more non-traditional as well. And so, a lot of people when they asked us, Hey, are you sure you guys want to do YC? I thought the scope was a little bit different or I thought the value add would be a little bit different because they're mainly in the US and they can introduce you to customers in the US but they're not going to be very helpful in Southeast Asia.

So I think that was a lot of the perception around that time when we were doing YC. I think now it's changed a little bit because YC's investment criteria have been a lot more global and the Continuity Fund also invests in Series A, series B, series C startups, and so on as well. But at that time, I would say the scope was maybe a little bit more limited. But yeah, I think for us, it was massively helpful because of our ability to actually build credibility among investors. And even, talent, hiring. I mean, normally I think an engineer would go for an AI startup. It's very exciting in San Francisco, but to move to Vietnam and join a company that you know is on home ownership, most people will be a little bit more hesitant to do that. But since then, because of the YC network and because of that credibility and that stamp of approval, we even had talent move overseas, right from Germany, from the US from Korea, to join our company too because they do feel like that endorsement by YC is quite important as well. And even some customers actually know the YC kind of logo as well, so that's also been helpful too. Yeah.

Jeremy Au: (29:17)

Yeah. You know, what would you say are some of the challenges of building and operating in a business in Vietnam? Because you're obviously comfortable in multiple geographies, right? The US, and Singapore as well. What are some unique aspects of that?

Phillip An: (29:30)

Yeah, of course. I mean, there's definitely a lot of challenges, and I think for us it came in the lesson of some painful lessons, but also I think it gave us the capability to grow as well. So, I mean, in Vietnam itself, the fundamental ecosystem is very different than that of the US or that of Singapore, and sometimes things are not very clear at the same time because maybe the startup ecosystem or even the FinTech ecosystem is not as developed, a lot of the things that you're doing are kind of being done for the first time and like, you actually have no idea, oh, will this work, will this not work as well?

Also, I think for a lot of these business models that entail working with regulators or are deep into the financial system, you actually need to build out a very skilled team that's very not traditional for the traditional software business, so for example, if I'm building an exercise, enterprise task business, maybe my main team would-be engineers.

But for us, even at a very early stage, we actually had to build out internal team evaluation of legal, of corporate development people that a normal startup, maybe a series startup would not have at our stage. And so for us as managers and executives, it was learning how to deal with this complexity with both within the organization on how do you actually balance these elements. How do you actually make sure that you're also not burning too much money, but also responding to outside market needs and also dealing with that external market complexity as well? If for example, the regulatory framework with Sandbox is not so clear, how do you actually adjust? How do you pivot based on the market demand, the environment, and what you're hearing in the market as well? So having a lot of these factors play out at the same time and yet still being able to balance both sides of things and build a sustainable business is probably one of the hardest parts.

Jeremy Au: (31:06)

I think globally, obviously, we've seen a lot of home ownership prices go up because of the interest rates. You know, there's a global phenomenon. I think we've also heard about that happening in Southeast Asia and in Vietnam as well, obviously. So how do you see that playing out from your perspective?

Phillip An: (31:19)

Yeah. I think homeownership is again, one of the still very important things for not just Vietnamese people, but also for Asians as well. Just because it's such a fundamental part of the culture and it represents the sense of stability. I think even now when you talk to a lot of young people, they still feel the need and feel the urge to actually access home ownership.

I think now it's, increasingly difficult because of the factors that we discussed, like growing property prices and those kinds of things. In Vietnam alone, I think the price the home price income ratio is something like 30 to 32 to one or something like that. So it takes you an average of 32 years of your salary to save up for your first home. Whereas even in San Francisco or New York, it's more like 25 or something like that. So on a relative basis, it's even more expensive. So I think for us, I guess our primary mission is to be able to combat that problem and provide and equip consumers with solutions to be able to access their home ownership, and really elevate their lives through real estate and through innovation. And for us what that means is fundamentally tackling the homeownership crisis, but also unlocking other solutions to be able to do so as well. So since then, we've been able to roll out a suite of products that actually address that kind of entire cycle from buying to selling to owning to investing as well, right?

I think over time, usually when you see very fast-growing countries I think home prices will probably stabilize right? But it'll be an inflection curve that you will need time to stabilize as well. But in the meantime, because of the really exciting macro fundamentals in the market because of a lot of these things coming in, they'll probably continue to grow for a bit. And you know, we'll see where that goes. Yeah.

Jeremy Au: (32:54)

And, on that note could you share about a time that you personally have been brave?

Phillip An: (32:59)

Yeah, of course. I think for us, one of the hardest parts of starting the business was actually in the very, very beginning. I think this is a story that my co-founder and I like to tell, but not a lot of people actually know about it. In the beginning, we actually, were actually thinking of bringing or we actually had a third co-founder that we were working with. And we did this program. We met, all met together and at that time we were raising our seed round of funding and so, basically after, when you reason third to see the founder, you're actually going out to investors. You're doing the pitch and you're scheduling like eight-hour, eight hours investor meetings every single day because you're just trying to get out there and sell your idea and convince them that you're actually a good team.

You went to one investor meeting. Our third co-founder at this time, he had to go back to the US. Apparently, he had, was selling his company, his previous company. So he had to go back to get signatures. So one of the investor meetings, we go with the guy who looks our deck and he's very interested in the business and he actually looks at our third co-founder and he says, wait, actually I think I know this guy. And we're like, wait, how do you know this guy? I thought he was American. He just came. Here he is he was here yesterday pitching another business. And we were like, wait, what? No way. That cannot be him, right? This guy's very trustworthy. We really like him and those kinds of things. And turns out apparently he was actually working with another startup at the time. And when another investor actually dug further he actually did due diligence on this third guy. He actually found that this guy had a criminal record, so he actually had been convicted for monetary crimes or something like that before.

And he had gone to jail and was prevented from serving on the board of directors of a company for the next 20 years. And so, we were shocked at that time. And at that time, we actually had raised a decent amount of money for our seed round. So we actually had to go back to all our existing investors and tell them, Hey, this is actually the situation that happened. And, you know, we take in all the steps, remove him, sever the relationship reassure the shares, all of those, right? But because you're very early stage, you're a pre-seed company, and you're mainly pitching this idea, this dream of what you want to build. A lot of the investors were scared and pulled out.

So, we basically had to restart our entire round of fundraising. But at that time, all the VCs were kind of scared to invest in us. So my co-founder and I, actually had to really hustle our way through. We would literally ping people on LinkedIn. We ask people for, you know, 5K, 10K check sizes, which is very small by any means. But somehow, we actually managed to actually scrape to a very small pre-seed round. And with that money, we actually went out. We did our first transaction, got traction, and then, did YC, and the history is that, but I think that was probably one of the hardest times for us because when you're an early-stage founder, and this is you, your co-founder and idea of a dream of what you want to build, you're in an almost foreign country, at least for me, and you just, that's all you have. And to see all the traction that you got, we collected quite a few checks.

We had a lot of investors interested suddenly disappear because of this issue. And you have this almost stain on the reputation of the company. It's very hard to actually still have enough conviction and power through that. And I think that was probably for us, one of the hardest points to actually still say, Hey, it's okay. This is something that we're going to get through. This happens to, random stuff happens, right? But you actually just have to keep on believing and keep on powering through that. And I think with that conviction, we actually managed to continue with the company. So now when my co-founder and I have obstacles that came through. For example, when COVID affected Vietnam and it was really bad, the entire market shut down people couldn't even go outside, to get groceries or buy food. And of course, our business where it's very in-person, it's very transaction oriented.

It's very hard for you to run that business. But we knew that if we had gotten through that first issue, that very difficult problem to overcome at the seed stage of your company, we definitely could get through this. And soon enough, yeah. During COVID, we actually explored other business models that actually solved the needs of the market at the time. We launched new ones and we actually survived through it. And even now I can, I think we have that kind of mentality, that attitude that regardless of what happens, we can actually power through and we can actually be the ones that prove everyone wrong. It's almost like having that chip on your shoulder.

I think that's probably, that was probably the hardest part of building the company. But it's something that when we look back now, it's such an important experience for us and to have that conviction to just go for it and not look back.

Jeremy Au: (37:11)

Wow, that's such a crazy story.

Phillip An: (37:13)

Yeah. I wouldn't wish that anyone would have that experience as well, but.

Jeremy Au: (37:17)

And you met this person at Antler.

Phillip An: (37:19)

We did. Yeah.

Jeremy Au: (37:21)

Okay. All right. So, that's feedback for the Antler team, I guess. but he was a totally normal person. Sounds like it.,

Phillip An: (37:27)

Yeah. That's, I think that's why also, when you look at a lot of the YC startup advice, they say that you're, it's in the early stage startup it's not your monetization, it's not your competitors, it's not all of those that actually kill your company. It's actually the team, especially the founding team, and most of it is co-founder conflicts, so, when you apply for YC or a lot of investors now, they look for founding teams that have worked together for 10 years, 20 years. They've known each other since they were five years old. You know, they've gone on vacations together because of a lot of the conflict, because startups are very up and down, right? So when you have these tough times, it's up to you to actually survive through them and stuck summing through them as well. So definitely finding that co-founder who's your anchor, who you guys actually can get along together and build this very hard thing. That's probably the most important thing to actually do. Yeah.

Jeremy Au: (38:14)

Awesome. On that note, thank you so much for sharing. I'd love to summarize the three big takeaways that I got from this. The first of course is thank you for that really informative dive on, obviously the Southeast Asia and Vietnamese property sector. Also, not just in terms of what it means for the consumer, but also the problems that they face, as well as the various players and what the future holds in terms of interest rates and economic growth.

Secondly, thanks for sharing about building Homebase, how you're approaching it, how you're seeing it, and how you got started. Especially I think in terms of your founding story, how you went to Y Combinator, and what other decisions you've made in order to succeed over time.

Lastly, thanks so much for sharing your personal journey. I thought it was very interesting to hear about some of the decisions you made about relocating to Singapore and then to Vietnam to find a company. I also thought it was fascinating to hear about some of the personal transitions you had to make as well as how you think about making decisions about who to build with. In one case, quite a, you know, issue, but also it worked out for you, but also, how you think about taking on risk as well. So I think it was really interesting to hear that conversation going on. So on that note, thank you so much Philip for sharing your story.

Phillip An: (39:23)

Yeah. Thanks so much, Jeremy. It was fun.