TikTok Trump vs. Biden Ban Resurrection, Grab "Too Big To Fail" Debate & ShopBack Best-In-Class Layoffs with Shiyan Koh - E401

Shiyan Koh, Managing Partner of Hustle Fund, and ​​Jeremy Au talked about three main themes:

1. TikTok Trump vs. Biden Ban Resurrection: Jeremy and Shiyan delved into the USA political establishment's snowballing momentum to nationalize TikTok via divestment due to national security, anti-China, social media regulation and moderation of public opinion concerns. China is most likely to veto a forced sale of the TikTok algorithm and team, thus leading to a possible total market exit of TikTok rather than the sale desired by American legislators. They concluded on the low likelihood of a ban before the US election to avoid turning off Gen Z and millennial Democrat voters but speculated on the higher likelihood of an eventual ban in the Biden 2024 electoral victory scenario since Trump is now against the Ban. They also touched on the negative impact on mental health, and the importance of encouraging in-person interactions outside of digital platforms.

2. Grab "Too Big To Fail" Debate: Jeremy and Shiyan critiqued the recent media speculation of Grab being "too big to fail," arguing that this concept traditionally applies to financial institutions with systemic importance, rather than tech companies. They also debated Grab's competitive position, its eventual profitability after years of market subsidies, and how fast Gojek would be able to substitute for Grab's logistics, mobility, and consumer operations.

3. ShopBack Best-In-Class Layoffs: Jeremy and Shiyan discussed ShopBack’s layoff and commended the professional handling by the founder and executive team. They highlighted the transparent communication regarding their prior decision-making, comprehensive support package (e.g. severance, immigration support, job transition services, etc.), and the surrounding tech industry's boom and bust cycles. They discussed whether this was comparable to Silicon Valley packages and whether this approach had been best-in-class in terms of process in Southeast Asia.

Jeremy and Shiyan also discussed the impact of rapid scaling on startup sustainability, the regulation of social media platforms, and the nuances of employment and layoff policies in different jurisdictions.

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(01:43) Jeremy Au:

Morning Shiyan. Shiyan.

(01:44) Shiyan Koh:

Morning, Jeremy. How's it going?

(01:45) Jeremy Au:

Good. Well, you know, we want to talk about three big companies today. If we can get to all of it, obviously the big ones would be TikTok, ByteDance, the potential ban, which is also quite linked to ShopBack and the recent layoffs. And thirdly, you know, there was a recent headline that came out, which was, is Grab too big to fail?

So we can see what we can touch on and see what we can go for. But let's talk about TikTok first, since everybody uses it. Well, to commemorate the US potential ban, I started using TikTok again, just to kind of like, feel. And I think the first video that came up was some sort of US representative house. He is very popular at TikTok, and then he apologized for voting for the ban of TikTok. So it was quite interesting because again, he's on TikTok. He's popular on TikTok. He's got millions of views. And you know,

(02:26) Shiyan Koh:

Well, so, I guess it's not so much a ban as the forced sale, right?

(02:31) Jeremy Au:

Ooh, this is really interesting. Yeah. So, it is effectively a divestment or nationalization bill, which is, I'm starting to get more comfortable with nationalization, which is the US government wants to nationalize the TikTok US operations by forcing them to sell to the US, acquire a right US data centers. So, which is interesting.

(02:49) Shiyan Koh:

Yeah, I mean, I don't know. I know people are putting together consortiums to bid, right? Steve Mnuchin is putting together a bid, and all these various other folks are trying to bid on it, and I don't know. I just don't know whether this thing is gonna pass.

(03:01) Jeremy Au:

Well, yeah, I mean, first of all, I don't think China is going to allow TikTok to be sold to a US site because he effectively created a competitor to ByteDance. That's one. Two is, that China has also local laws that allow it to prevent the sale. So, algorithms are now one of those protected technologies. So effectively they have an equivalent of the US side. So, you know, even if TikTok wants to sell itself, I think the Chinese government may just be like, no, you're not allowed to sell. So just market. And I think there's a little bit of a game of chicken as a result, right? Because I think the US government would be best served.

Like you said, by a nationalization of tech talk under us by and then everybody continues to use to talk, you know, your teenagers and young adults, but I think if TikTok is really forced to be banned or is not allowed to be sold by the Chinese, you know, but blame game, but I think removing a hundred million Americans is going to be electorally unpleasant for I think President Biden.

(03:55) Shiyan Koh:

Well, he just kicked the can down the road, right? till after the election to deal with it.

(03:58) Jeremy Au:

I think that's, that's the optimal strategy is I think wait for after the election to deal with it, just keep quiet about it. So I don't think the sale will happen or the nationalization attempt will happen before. It's just too scary. I mean, like the last election was like 40,000 votes between Trump and Biden, right across the swing States, and there's a hundred million people using TikTok you know, 40,000 votes is quite swingable. If people feel like their TikTok got taken away.

(04:21) Shiyan Koh:

I don't know. the research on social media just continues to pile up on being pretty detrimental to teenage brains and mental health. And so, I mean, this is a bit tangential to the, you know, national ownership question, but just as an addictive good that is probably not good for young people. Maybe it would be better for people to take it away from, know, a hundred million Americans, but it's your right. It's our freedom to choose how we want to assault our brains. You know, God forbid that anyone should advise us differently.

(04:50) Jeremy Au:

I mean, it goes back to what your previous stance was, in the previous episode that we had that we'll link to it, but you were advocating for more across-the-field industry regulations, for example on parental locks or guidance or restrictions, right? Similar to, I think the Chinese actually, the Chinese have restricted the amount of time that people can use, you know, gaming apps. They've regulated away the use of a lot of gamification or gambling-like mechanics in various games. And they require age verification ID, right? In China too.

(05:20) Shiyan Koh:

Yeah. But I mean, I'll send the article up, but there was a recent article that did a lot of research on this, which is it's not just the social media itself that damaging. It is also The opportunity cost. It's what you're not doing when you're just down the social media rabbit hole. You're not engaging with other people. You're not developing your social skills. You're not moving your body. You're like stationary. And so those, all those things, the cumulative impact of all those things is actually pretty negative for teenage development. And so, I think there is a national interest Hey, how do you leverage the power of the internet and connection, but also not, I mean, create people who can self-radicalize themselves into thinking they want to commit hate crimes when they're sitting in Singapore? I mean, some of it is just insane.

(06:04) Jeremy Au:

Yeah, yeah. We were discussing the story about this, secondary school Chinese kid in Singapore who self-veriticalized himself into white supremacy. But the thing is, we don't know what platform he used though. So,

(06:15) Shiyan Koh:

Yeah. That's what I'm saying. It's an across-the-board regulation question, right? It's not a platform, right? you know, they say, Hey, you need to go touch grass. I believe that, right? People need to go breathe fresh air. Yeah. Yeah.

(06:25) Jeremy Au:

Sorry. That's the funniest. It was like we mandated a minimum requirement of going out into nature and going for a walk. Sorry. That's the that's against my right to watch YouTube.

(06:33) Shiyan Koh:

I actually think people would be much better off if they spent at least an hour outdoors a day.

(06:38) Jeremy Au:

So funny. No, I agree. I agree. As we're both parents and I think we both would be like, Hey, let's have some restrictions on screen time. And we want to use that, like you said, opportunity costs to go do something fun, right? Something like educational.

(06:51) Shiyan Koh:

But it doesn't even have to be educational. I even just think running around and interacting with other kids, and adults is in and of itself beneficial. It doesn't have to be structured like, Hey, let's learn how to multiply,

(07:02) Jeremy Au:

Yeah, yeah.

(07:03) Shiyan Koh:

So, but yeah, it's, I don't know. I do think it is very interesting.

(07:06) Jeremy Au:

I think we're both aligned that in general, if the industry can self-regulate, but if not, we have to regulate.

(07:12) Shiyan Koh:

It cannot, the industry has no capacity to self-regulate. Its incentives are against self-regulation.

(07:17) Jeremy Au:

That's why every industry's incentive is against self-regulation, right? But yeah, I agree with you that across the board, if you're really concerned about social media and its impact on the youth, I think you should have consistent legislation. I just feel like they said,

(07:28) Shiyan Koh:

I just don't think the American Senate is famed for its consistency.

(07:32) Jeremy Au:

Yeah, I just think they're not going to catch, it was like they say, right? It's like the worst thing for the dog that chasing a car is to catch the car.

(07:39) Shiyan Koh:

To catch the car.

(07:39) Jeremy Au:

So I think, you're chasing this TikTok thing. I think they want to force China to divest and ByteDance. I just don't think China will allow a divestment. I think it does exit. So effectively, I think China's giving that signal to say Hey, he would ask us to do this when I'm just going to block the sale by ByteDance. ByteDance was to say, Hey, I'm just following and made a corporate decision from there. And then, what the cost of that is like I said, I don't think it'll happen before November.

(08:03) Shiyan Koh:

Then we could just brainwash the rest of the world. Forget the Americans, you know? There are seven billion other people that, you know, except that the ARPU is much lower, so

(08:11) Jeremy Au:

Yeah, I think that it's a valuable market to give up for the Chinese. I mean, you know, they're making about $120 billion worldwide and 16 billion of that comes from the US alone, but it's also the advertisers that are in the US market, that would find it very difficult to advertise on the platform. So I think it's not the 16 billion in terms of consumption, but more into the advertiser revenue. But still, yeah, I just think TikTok will just exit. I mean, they just left India as well. They just said, you know what, India banned it. They just walked out and just never sold anything.

(08:36) Shiyan Koh:

But it's interesting, right? TikTok is probably the famous or the one that everyone knows, but there are actually tons of other live media sites that are actually radar and pretty big share in lots of markets. And so I don't know what the authority's position is gonna be. Do they just ban all of them?

(08:50) Jeremy Au:

No, I think they're just going to ban slash force the divestment of the Chinese one, which is TikTok, right? As you said, it's an alliance between the conservatism around, the concerns around national security, China Hawks social media folks. I don't think it would converge into a broader ban on all international or non-US social media live apps.

(09:11) Shiyan Koh:

I don't know. I don't envy their position.

(09:13) Jeremy Au:

Yeah, but actually this is an interesting conversation. So we don't think it's going to happen before the elections, both of us. It's just not going to happen. But the question is, do you think it's going to happen next year? I mean, after the election. No?

(09:22) Shiyan Koh:

No, because nothing changes, right? China does not want to allow the divest, the sale. And so then does this topic continue to, like for whoever's trying to push it? I'm not really sure who is winning here. They can all try to bash because it seems to be popular with constituents until it really comes to taking things away from constituents. I mean, all of these states that have passed social media bans and stuff, they haven't been effective. Are you telling me that no one in the state of Montana is using TikTok? I just don't believe it.

(09:47) Jeremy Au: Sorry. It's like, why are you in jail? It's I'm in jail for murder. I'm in jail for using TikTok. But I think, let's talk about it because right now, the US election is 50-50. So it's effectively 50% betting odds on Trump and about 50% on Biden. So it's swinging left and right a little bit, but that's where the current political forecasts are. And it's interesting because I think that if Biden wins, I think there's a good chance he'll just let the legislation go through and he'll just sign it as a bipartisan piece of legislation next year, but what's interesting is that Trump has actually come out against this legislation.

(10:18) Shiyan Koh:

Of course, he has because he's not a logical person.

(10:20) Jeremy Au:

Well, I think there's an electoral logic that he has, which was like, I was for the ban when it was more popular four or five years ago. And now, I am against the ban because a hundred million Americans really like TikTok, right? So, I think Trump is probably not going to ban TikTok because he realized that everybody enjoys TikTok.

(10:38) Shiyan Koh:

I don't know. I find speculating on US politics to be very unproductive.

(10:43) Jeremy Au:

Yeah, I'm, but I think it's productive if you are like a ByteDance employee or executive, right? Probably every day is, I mean, obviously got to handle 90% of your revenue and growth for the rest of the world, but the US side is also, like you said, in the past is that anchor legislation, right? A lot of people look at them for public policy leadership as well. So I feel like it's one of those existential risks that you have to spend a lot of time thinking about, oh, and it showed you, you know, basically send out that message and push notification to every TikTok person, saying you got a lobby or congressman. So, it was a super viral. Obviously, it was like a button that was pushed on TikTok HQ. I mean, it was like the Uber, right? Uber did it. FanDuel, for the gaming side. Airbnb also did it. Everybody has been activating their user base.

(11:23) Shiyan Koh:

Yeah. I mean, it makes sense. You've got the audience, but I find it hard to believe that there will actually be a sale.

(11:28) Jeremy Au:

I don't think there'll be a sale for sure. I think it was either exit or stay. I don't think there's a sale. So that was a game of chicken, will be interesting, what a negotiation parameter, right? And I think it's important because there's so many ByteDance employees now in Singapore and Southeast Asia, so.

(11:41) Shiyan Koh:

You should do a poll of them. If any of you are listening, free to write in anonymously. Tell us what you really think.

(11:47) Jeremy Au:

I do have friends who work at TikTok as well, in the US as well. So it'd be interesting. It's like every year, you're basically under threat of getting banned. It's kind of an existential business continuity risk. Well, talking about other companies that also are going through existential questions I thought there was a fun piece by The Straits Times, and they were talking about the provocative question, is Grab too big to fail?

(12:09) Shiyan Koh:

I hate these. I hate these headlines. I feel like we normally say too big to fail in the context of banks or utilities, things that are actually existential. I don't know if your right to food delivery is in the same bucket, but I guess I'm willing to debate it. Jeremy, make the case to me. Why, why is it too big to fail?

(12:27) Jeremy Au:

Well, the writer, which is uh, Lee Kwok Hao, kind of makes the case that in general, there is a strong market position in food delivery and transportation. It's about the everyday app, the super app but he does make, at the end, kind of a very strong counter argument to his own argument, basically saying that he believes that Gojek would be very happy to take over the whole system if Grab was forced you know, exit the market, right?

And so I think his argument at the end, in conclusion, is maybe not? Again, the question is, is Grab too big to fail, right? If he really thought that Grab was too big to fail, the headline would be, Grab is too big to fail. So, you're making a question as part of that rhetorical statement, but yeah, I thought it was just a provocative headline.

(13:03) Shiyan Koh:

Yeah, mean, like too big to fail is generally like the cost of them not existing would be so great that is in the national interest to support them. And I just don't think that's true, which is at least, I mean, I don't know about the region, but from a Singapore perspective, there's ample public transit, the taxi system existed before Grab came. I don't know why they renamed it to Zig, but there is an app, you can call taxis. Food delivery existed before. And I think there's another dynamic, which is like a lot of restaurants actually resent the cut that Grab is taking, and the markup. And if there were an alternative they would use it. You could say Grab actually did the education, that and the pandemic right to consumers about the delivery that more people are now willing to pay for it. It's not as hard probably, hey yeah you can just order from me direct, we won't pay Grab such a big cut so you'll get a better price and i'll get better profits. You'll get the thing you want which is food delivery. I don't know that it's that much a required resource. It's not like saying your savings are going to zero because my bank has failed. I think it's a good, shaking the fate of the ecosystem I just think it's a different kettle of fish.

(14:01) Jeremy Au:

Yeah, I love what you just kind of defined which is that classically too big to fail has been used for US financial institutions, I would say, and to some extent, global financial institutions. So for example, Credit Suisse and UBS, for example, there. So obviously banks have a multiply effect with the the fact that they're handling loans .They're handling the multiply effect of the capital piece and so forth.

So I think banks have the unique ability to be too big to fail because of the multiplication effect to the financial system and the plumbing, but, for a company like Grab or Gojek, honestly, if Grab closed tomorrow, for some reason, Gojek would take over immediately. No questions asked. It wouldn't even blink an eye or vice versa. If Gojek closed tomorrow, Grab would take over immediately. I don't even think there would be an interruption in service. So I just don't see a ripple effect at all. And I think it's interesting because Grab finally posted a profit of $11 million, the fourth quarter which is, you know, finally.

(14:54) Shiyan Koh:

Great improvement from the last.

(14:56) Jeremy Au:

I mean, people are complaining about a cut, but it turns out that that cut of the transaction fee that has been increased over the years, plus obviously it's various bets and so forth. I mean, effectively Grab was subsidizing a lot of different players in the ecosystem for so many years and now. I think this year, effectively, the fourth quarter 2023 is the first quarter has ever posted profit. So, I don't know, it feels like it's been a net subsidy for many years, I would say to the ecosystem, but also I think looking more broadly the really standardized logistics and travel and food delivery experience. I mean, I don't know, but pre-Grab, it was a real dicey thing to get from point A to point B in Southeast Asia. I mean, Singapore's fine. It used to be pretty dicey in Indonesia or Vietnam to get from Point A to Point B. And now we've got Grab and Gojek.

(15:39) Shiyan Koh:

Don't forget TADA.

(15:40) Jeremy Au:

Okay. Why don't you plug TADA? Because I've never gotten to appeal TADA, which is I don't know. It feels like not even the black sheep. It's like the orphan kids in the corner, but talk about TADA.

(15:51) Shiyan Koh:

I just think it's an alternative player and it's a decentralized network and there's just, there'e no sort of platform cut fee. And so, there's people who drive for it because they make more per trip. So I don't, I don't have a lot of loyalty, right? I check the price and then I, if it feels high, I cycle through the others. And if all of them feel high, then I take MRT.

(16:09) Jeremy Au:

Yeah.

(16:10) Shiyan Koh:

I'm not a totally price-insensitive consumer, right? I, I do make decisions based on how much they're charging.

(16:16) Jeremy Au:

It's true. I feel like TADA is, sorry, then you might as well add RYDE to it, right? R-Y-D-E as well. This is in the Singapore market. But yeah, I think in general, I just don't think Grab is too big to fail. I just saw it as a spicy headline, but it feels like the company has finally hit break even after so many years. And then now we're like jumping on them and be like, oh, it's too big to fail. And I'm like, you know,

(16:35) Shiyan Koh:

Well, I mean, it's a subsidy from all the investors, right?

(16:37) Jeremy Au:

Yeah to society, right? And I think there's a huge amount of social positive impact that we talked about. Again, standardizing or improving the customer experience for so many verticals like transportation, logistics. I will also say that is a huge talent piece because I think what we've seen and I've spoken with some stakeholders in the policy side, but you know, when we looked at the MNCs, kind of like the big tech majors, so a lot of them, when they are expanding the HQs in Singapore, obviously there's some engineering roles, but a lot of it's like marketing and business, market expansion, the engineering teams. And the leadership teams are really based in the US but you know, your homegrown domestic champions, I would say like Grab, for example but you can also make an argument for like Xendit and other kind of like Southeast Asian companies is that they are actually have the leadership team which is key, but also the engineering team, so there's actually a talent ladder and elevator. And so, when there's cutbacks or layoffs, the domestic ones are laying off less in Singapore, but also they are training a stronger generation of executive leadership compared to multinational corporations, but what do you think about that point of view?

(17:36) Shiyan Koh:

I think we would have to see the data. I don't know what the mix is on the headcount. So I would have to see the data to sort of opine on that, but I do think that the boom and the bust cycles are part of startup and innovation and technology. It's that, and I think people need to think about this as a feature and not a bug, Which is the reality is if you look at the data, the vast majority of startups will fail. And that is a feature. We want people to try more things because we don't know what's going to work. Obviously, if we knew what was going to work, we would do that all day long, but I think the point of innovation is that, you have a hypothesis that something could work, you try it seven, eight, nine times out of 10, it is not going to work, but that doesn't mean no value was created along the way. It could have been it doesn't work as a venture scale company, and you had staffed it that way. You'd funded it that way, but then the realization was like, no, it doesn't. So you cut back and you run it as a, going concern.

Or you thought it could be a standalone business, but actually the thing you developed is more of a feature and not a company, and you get sold, but some intellectual property was created. People learned a bunch of stuff along the way, and there was value created. And so I think accepting that reality is part of the maturation of this ecosystem to say this boom and bust is a normal part of it. Obviously it is very painful to be laid off, like no disputing that, but I think a mark of a really robust ecosystem is these people will all find jobs and get recycled through and their past experience is actually going to be super beneficial. And that will happen faster and faster actually. So I think the stat, the last time I checked it, average tenure in the Valley is under two years. And partially that's failure, but partially that's like people finding better opportunities, all these sorts of things happening. And so, I don't think people join startups with the expectation they're gonna be there for 10 years.

(19:11) Jeremy Au:

I think that I said it's a learning cycle, especially for Singapore right? um, Asia, you know, boom has probably been most rewarding for tech workers, I'll say in Singapore, Indonesia and Vietnam, definitely I think Singapore, of technology, I think, like through. This is the first big down cycle I think Singapore's experience since the technology kind of like kickoff, of like cultural learning, like you said, around failure slash layoffs, um, saw that the ShopBack layoffs that he had was done and you know, all over the news. It was on Reddit as well. and I were just chatting a little bit about it, you know, thinking that quite professionally well-run, I thought the layoff, uh, I thought had a clear messaging, he apologized, he very decent package that he had put together for the

(19:54) Shiyan Koh:

I thought the package was really well done. It was like a valley style package, actually, with like severance, acceleration of vesting immigration support, job support. I think that stuff was all like compassionate and respectful.

(20:07) Jeremy Au:

Best in class in Singapore, probably at least from what I've seen. I had a Lazada layoffs early in the year and it was very much uh, in alignment with the you know, tripartite uh, for layoffs. uh, that this is like probably best in class I would say

(20:21) Shiyan Koh:

Yeah, I took a scan through the Reddit notes. I think there were a bunch of people who were like, why do you need so many people? Is my cash back at risk?

(20:28) Jeremy Au:

The real question is, is my cashback at risk? What's for me, buddy? And I'm sorry.

(20:33) Shiyan Koh:

Yeah. I think there is that. But you know, I think this is back to the earlier conversation, which is if you think you are on a really good growth path you think you see opportunities to invest ahead to drive that, it is the rational thing especially if your investors are funding but I think it's also a very classical growth mistake. I think founders often underestimate the complexity of running multiple initiatives at the same time. And those things can get out of hand. And so, I think he handled it in a pretty classy way. I think the package was good. And hopeful that all those people will actually stick around and get recycled back through the ecosystem, maybe they're going to start a new company. That'll actually be really great for the ecosystem.

(21:06) Jeremy Au:

Yeah. And I thought the way that they explain everything, they also talk about what was the business logic back in 2021 and 2022, right? So he said that, Hey, we scale a team from 550 people to over 900 shop backers, which is, almost like 60% hit con increase and then in Q2 2022, the market sentiment shifted, they tried to do a bunch of measures to avoid layoffs, but and stop hiring and try to do cost controls but now, after the past effectively, one half years, they basically said, we got to do and cut. So I just felt like the whole rationale I think the headline is straight. The straight times obviously can't describe the layoff as every other layoff. But I feel like the corporate letter, the logic, and like you said, the package that they put together, including like pay for the notice period, a one month severance for every year of service.

You get your bonus paid out. Even if you're a junior, you get cash. You get learning and development, a healthcare coverage extended, you got your career transition support. This is probably, was just saying best in class, I would say in Singapore, maybe even Southeast Asia for layoffs. It's very valley-esque and it's expensive actually, this process.

(22:10) Shiyan Koh:

They're going to take a charge, right?

(22:11) Jeremy Au:

Yeah, yeah, you know.

(22:12) Shiyan Koh:

There's a big, there's going to be a big charge on this, but you know, you're, you're sort of pro former, forward looking be a lot leaner.

(22:18) Jeremy Au:

Yeah. And I think it's not an easy piece for them, but I think also how he did it was he announced the whole thing, probably the exact same letter to the team. But then he also posted it publicly at the same time as well. So I think a lot of startups in Southeast Asia have learned that, if you do it privately, the layoff is going to go public anyway. So you might as well just go public immediately and get the whole story in front of people. I thought that was a well done set of layoff, but I think it reminds me that I was recently on the Channel News Asia, I was on Talking Points to talk about layoffs, right? I was on live TV and, you know, it was kind of an interesting learning lesson for myself, but one of the interesting things that they talked about was like, Singapore actually has the most pro-business layoff policy in terms of guidelines across Asia, right?

So obviously, Japan is on the other end of the scale by far, which is that, you have to do multiple amounts of notice. It's pretty difficult to let go of people. Now, obviously I think the argument they were having is that Thailand and Malaysia have stronger labor laws than Singapore on employment and layoff practices.

(23:11) Shiyan Koh:

I think this is like the flexibility and dynamism of the economy question, which is, I think we have to walk a balance and there's tension there, obviously, but if you took the extreme examples like Europe, right? In Europe, it's really hard to let someone go which means that a result is that people don't hire. I think that can work if you're sort of running your sort of SMB or whatever it is where it's very steady, year to year, week to week and then the contrast, I mean, the other issues like the US right? So the US has, hey, you know, we can ramp up and we can fire people. Although it's not totally true. In the US there is the WARN Act. If you have over 50 employees, there's actually a bunch of legal requirements associated with the layoff. But, but I think if you sort of conceptually thought of those as two extremes, it's like, where do you want to live between those things? How do you want the loss to play for smaller companies? you want to create more flexibility so that people can innovate and try things, or do you want stasis? Because not everything is going to be a gigantic, steady cashflow business, right? That's just kind of not, and I think a lot of the rhetoric that we have around building an innovation economy requires us to build that flexibility

(24:13) Jeremy Au:

Yeah. I think the tricky part is what's the line, what's the spectrum that we have here. And obviously I think the line that we have here is what is the business practice law around retrenchments and layoffs in the country, which defines legal versus illegal. I think there's one threshold. And then the other threshold is irresponsible versus responsible. And I think that's a much fuzzier subjective guideline. I think that's where I think there's a lot of public anger. I think I would say, so I think everyone's very clear. Like we don't want illegal practices and we want legal practices, but then I think the line between responsible and irresponsible layoffs, that definition, it almost becomes like a moral argument judgment. Yeah. I would say so. You know, would you. I mean, I mean, now we're saying is a responsible layoff by management could come across as irresponsible to somebody who is not part of management. That's what they were saying.

(25:01) Shiyan Koh:

Well, I mean, you have to meet the legal requirements, but it's also it's a tough decision. So here, would you have rather they laid you off six months earlier?

(25:09) Jeremy Au:

Yeah. Not everybody would want to hear that.

(25:11) Shiyan Koh:

No, no, no, no, no, no. I mean, so it's or would you want them to like, try to keep fighting and figuring something out and then the package wasn't as good because there's less money left. That's the reality of the situation, which is you're like, can I afford to keep these people? Well, it kind of depends on how this month comes in or this quarter comes in, but I don't know what the answer to that is going to be. Should I lay them off now? But then I'm shooting myself in the foot because I'm not going to have enough staff if the growth comes in the way that I, that's actually the conversation people are having. What is the sustainable version of my business? And you just don't have all the answers and not everyone. I mean, shop X raised a lot of money, right? Not everyone has so much cash cushion to like wait. And so, so I think there's this sort of Hey, it's actually a hard question. Then the second part is I think this is where actually people screw up a lot. Is it like, because people feel bad about the layoff, they communicate it really awkwardly

(25:55) Jeremy Au:

Yeah.

(25:56) Shiyan Koh:

and they often try to like, say this like official to try to make it feel like less awkward, but it actually makes it more awkward because you're like, Hey man like I'm a human, I work with you. Like, why are you saying weird corporate speech to me, right? So, I think there's some of that, which is just if you don't treat people humanely and with compassion, then they will feel badly treated, separate from the legal requirements and separate from what package.

(26:19) Jeremy Au:

I think the crux of it is just that, it's just layoffs are tough, right? Nobody wants to do it. I mean, everybody would rather hire and promote, rather than lay off. So, I think management are responsible and they should do it professionally, but I think labeling management layoffs as irresponsible is not the same right? So I think that's a fine nuanced definition.

(26:40) Shiyan Koh:

I mean, I could see someone's well, you shouldn't have hired all those people because hiring all those people results in a situation where you had to fire.

(26:46) Jeremy Au:

Yeah.

(26:46) Shiyan Koh:

Right? I think that's probably what people are thinking.

(26:48) Jeremy Au:

Yeah.

(26:49) Shiyan Koh:

I mean, the flip side is, what if we'd hired all those people and actually supercharged growth? And now your stock is worth way more and then you're happy. Right? Like don't know. I think everything always looks a lot clearer in hindsight.

(26:58) Jeremy Au:

Yeah, I think not an easy situation. Well, hopefully good times come back. You know, everything's easy, but you know, the truth is, it's not like that. And on that note, let's wrap things up. I think the three big takeaways we got was first of all, we got to talk about TikTok whether there's going to be a nationalization and divestment versus the exit of the US market. and the electoral dynamics of it, but also what the alternatives to it in terms of regulation would be, but also obviously impacts executives and employment of the ByteDance folks.

Secondly, I think we talked about Grab as a position where it is truly too big to fail. And our point of view is that too big to fail as a phrase primarily applies to financial institutions and that Grab is actually in a highly competitive position, highly substitutable market that has finally turned a profit finally after subsidizing the ecosystem for a decade.

And lastly, I think we've got to talk about the shop back layoffs and how we think that there's obviously a lot of public debate and frustration around this, but we do think that from professional perspective, we do think that this is a Silicon Valley probably best in class in the region type of layoff. And so hopefully the storm passes and everybody seals through at the other end of it. On that note, thanks so much. And see you next time, Shiyan.

(28:00) Shiyan Koh:

Thanks, Jeremy. Take it easy.