In June 2022, Singapore-based cashback reward platform ShopBack raised US$80 million in an investment led by Asia Partners.
The raise is to support the Group’s vision to build a leading shopping and rewards platform across the Asia Pacific region.
In a panel discussion at last week’s Tech in Asia conference, Joel Leong, co-founder of ShopBack and Nick Nash, the co-founder and managing partner of Asia Partner, came together to talk about ShopBack in its early-stage days, its hiring strategy, as well as how it’s staying resilient in times of crises.
He had an entrepreneurial streak since young
During Joel’s first week in Primary One, his Arts & Class required the use of some drawing blocks. Some of his classmates didn’t have any drawing block, so he charged them S$0.20 for a single sheet.
Joel managed to sell a couple of sheets, and was really happy that he managed to earn some money off it. He went back home happily and told his mum about it, who ended up telling him off for selling it to his friends instead of sharing it with those in need.
Then when he was in Primary Six, it was the peak of the dot-com bubble and many companies were being created at that time, mostly by young entrepreneurs. The interesting thing was that the enterprise value then was based on how many “eyeballs” their website could get.
This sparked his interest in the tech arena, which eventually prompted him to join the NUS Overseas College (NOC) programme during his university days. NOC allowed students to intern in a tech startup and take up part-time courses in reputable universities abroad.
Joel went to Shanghai for a year under this programme, and he found it fascinating that his teammates and other interns expressed that they don’t wish to work for a multinational corporation (MNC) or the government. Instead, they want to join a tech company.
It dawned on me that entrepreneurship is actually pretty interesting and with that, it allowed me to take a different lens on it. For them, I think they saw how these startups grew huge and they want to be a part of that journey. And at that time, I think China was way ahead, and very different [from the startup landscape] in Singapore.
– Joel Leong, co-founder of ShopBack
Roping in their ex-colleagues to build the company
In Silicon Valley, there’s the ‘PayPal mafia’, and in Southeast Asia, we have the ‘Zalora mafia’. Following in the footsteps of its ex-corporate sibling and rival Lazada, Zalora is now a leading fashion e-commerce platform in the region.
Since its inception, it has produced a long line of entrepreneurs and executives — Joel being one of them. He used to be the regional head of partnerships at Zalora SEA before starting up ShopBack in 2014.
All the other co-founders of ShopBack — Henry Chan, Shanru Lai and Josephine Chow — were also from Zalora. Some of their early hires, such as its Chief Commercial Officer Candice Ong, also used to work at Zalora.
There’s no special coffee served at Zalora that helped spawn these entrepreneurial bunch, joked Joel. Rather, it was the timing then.
“At the time when Lazada, Zalora and the rest of the companies were setting up, [e-commerce in] Southeast Asia was at a very nascent stage. I remember when I was trying to join Zalora, I had to convince my parents that it was not a blogshop, but a real e-commerce [platform].”
He added that many of them were lucky to be a part of that e-commerce boom, and had the chance to be trained under companies such as Zalora, Lazada, foodpanda and the likes — to be a part of that growth, and learn all the things firsthand.
So when we wanted to start something on our own, we have two advantages. One is that, we understand a little bit [more] of how to run a startup. They taught us information that they learnt from Zalando in Europe, and brought it over.
The second part is that it helps us get early co-founders and people to the team — because you have worked with them before, so you know who’s good and not-so-good. And you also know who you want to partner and work with. So it really helps a lot on the people front. For early startups, people are everything.
– Joel Leong, co-founder of ShopBack
He also shared how it was quite difficult for them to get others to join their startup in the early days.
They had to convince them that their idea works, that someone bigger won’t come in and “squash” them and their idea, and lastly, that they are the right person to work with.
“There are many permutations to convince them for, and I think what we noticed was that if you work with people that you’ve worked with before, they can give you some discount on the idea — but they trust you. So they’re joining because of you and having worked with you before, they see that maybe there’s some chance,” he added.
This explains why many of their early hires were ex-colleagues, which really helped them to build a strong team. They brought the same learnings and culture, and since they have worked together as a team before, working at ShopBack is almost like a “part two”.
The fact that they’ve worked together before also meant that they have established some sort of trust with the other person.
“You trust that the guy is coming from a good angle and position, and that allows you to make a lot more unpopular decisions, and helps you to make a lot more decisions faster. You don’t second guess and stuff like that, so that helped a lot,” said Joel.
“Great talent helps attract great, or greater, talent”
ShopBack was first based out of BLOCK71 by NUS Enterprise, where other startups like Carousell and 99.co were also incubated.
Back then, they were given a small room to work in. It could only fit four to five people comfortably, but they decided to squeeze in 13 people instead to maximise the space.
But one thing they noticed was that every time they did job interviews in that office, the conversion rate was very low. This led them to start taking interviews at a nearby Starbucks outlet, which proved to be a much better choice.
A lot of the time, people join a startup because of the startup idea itself, but also because of others who are in it. So why we were very successful in hiring — even though we were early-stage at the time — was that people were coming because they trust the people that were inside.
– Joel Leong, co-founder of ShopBack
Often times, when they ask job applicants how they heard about the company, many of them said that they joined or noticed ShopBack because of its existing employees. This shows a lot about the “credibility” of the company.
“That really helped us to bring in talents that we otherwise would not have gotten for our size and stage, and that really helped us grow much faster. It’s all about the people. We track our growth and every time we bring someone good, you notice that helps to change something in the company.”
ShopBack is currently still on a hiring spree of trying to get really good talent — these good talents do not only have the work capability, but they also have some form of acquiring prowess. “Great talent helps attract great, or greater, talent,” he quipped.
One thing that they look out for when hiring talents, especially for the more senior and managerial roles, is that the individual needs to have a good strategic and operational sense.
“If it’s all just strategy and you can’t implement it, then you are just a really good PowerPoint designer, and that’s not what we want. One thing we try to do is really to ask a candidate like, ‘what was the project you are most proud of or most successful at’,” explained Joel.
Every time they give an answer, they try to understand deeper and hit them back with another ‘why’. The ones that are really operational can go quite deep in understanding the ‘whys’ and the trade-offs, but for the high-level strategic guys, by the second or third ‘why’, their answers become very broad.
“It’s how far they can go into the ‘why’ that really shows how much they really know about their stuff. They don’t have to be the one doing it, but they need to know how that’s done. They must be able to guide their team and say ‘this is the direction that we’re going for’ and ‘this is why we’re doing it’.”
Staying resilient in times of crisis
The past few years have been a challenging climate for businesses. Beyond the COVID-19 pandemic, there’s also the threat of a global recession, rising interest rates, increased energy prices, coupled with the raging war in Europe.
So how does ShopBack adapt and stay resilient in a time like this?
We try to think from the other side of the table. [By doing so], we’re able to come up with solutions to the situation or the problem. One example would be to firstly understand the people that we have — how likely are they to look at the strategy that we have, be able to change with that, and that entails making mistakes.
That is something I think we also try to ascertain quite a lot for. The main reason is that people are most likely going to make mistakes all the time. If you don’t, then maybe you’re not trying too much. When that happens, then we need to be able to say ‘we made a mistake and we made a change’.
– Joel Leong, co-founder of ShopBack
This is why ShopBack also tend to not hire candidates who have an ‘I’m always right’ mentality.
To suss this out, they ask candidates on some of the mistakes they’ve made before. It’s surprising to learn that many people will say that they have never made mistakes before, or even if there were mistakes, those mistakes were attributed to someone else.
On that note, he stressed the importance of being nimble and to constantly reassess the situation.
“Are you making the right move? If you are, continue. If you’re making the wrong move, quickly make a change. I think that’s a real important skillset that we need our teams to have — both on the senior, as well as junior level,” he said.
Ultimately, ShopBack looks out for people who make mistakes and then move forward. This group of people tend to start the slowest because they don’t head-dive into something, but when they look at the trajectory — six months or a year later after the crisis is gone — these teams tend to perform the best.
Aligning interests with consumers and merchants
This mindset of “thinking from the other side of the table” does not only apply to hiring, but also in terms of its product development.
Since they hailed from Zalora, they would often ask themselves if they would ever use ShopBack’s service or whatever new product they are building, if they were to assume their previous roles.
“If I wouldn’t use it myself, then no amount of business development or whatever is going to move the needle. So that’s one part that is super important that we look at,” said Joel simply.
Secondly, ShopBack makes a conscious effort to look at other parts of the world to see who else has done it before, and try to learn from that.
Like with Rakuten’s investment in previous rounds, ShopBack was able to get a lot of learnings from it. After all, the e-commerce firm has been around since 1997, so there’s definitely a wealth of experience and knowledge that the team could tap on.
In a way, this acts like a “crystal ball” — it tells you what others have done and the outcome of it, and if there’s any mistakes that have been made along that journey, they can learn from it and avoid falling into the same pit.
Sharing more about how ShopBack develops consumer-centric products, Joel said that it also lies in their business model itself. He cited an example of how Google is adopting a lucrative model of doing cost-per-click.
“To give a numbers perspective, we sent 400 million clicks and shopping trips to our merchants in 2021. Imagine if we charged for all that — we will be richer, but the interest is not aligned with the merchant.”
For example, during the pandemic, Joel observed that there were a lot of cancellations on transactions. Although more people clicked on websites and added to their carts, not many follow through with their purchases.
The interesting part is that you still have to pay your marketing partner for the clicks they brought in. What happens is, you pay for the clicks upfront and then you get the sale. After that, if the customer doesn’t order or want to buy anymore, or do returns with the free return [policy], you still have to pay the marketing agency.
But for us, we charge on a cost-per-sale model. If the order is cancelled, we don’t get paid. So our interests are extremely aligned with the merchant. And if we are able to think from the merchants’ point of view, we are confident we can build a [good] product that [both consumers and merchants] will like.
– Joel Leong, co-founder of ShopBack
The end goal is to build a holistic shopping ecosystem
Moving forward, Joel expressed that he would like ShopBack to become a “shopping ecosystem”, in which they help users in their shopping journey. The goal is to help them in the rewards space, both online and offline.
Although they have a clear focus in helping users with shopping, they would not explore things that they are “not great at”, such as logistics. But when it comes to shopping, ShopBack must be able to help its users across the different verticals to shop smarter and better.
To achieve this, ShopBack is very much focused on the ‘now’.
My tennis coach told me this, ‘don’t focus on the end goal of just winning’. Focus on the play, because it helps you to win the points. Every point helps you to win the game. Every game helps you to win the set. And when you win the set, finally, you win the match.
To me, I think the most important part is really what plays we are making now that’s helping to bring us closer to [our end goal]. So we’ve done online cashback, offline [cashback], and now, we’ve gone into Buy Now, Pay Later. We hope to piece that up together and bring it to more markets.
– Joel Leong, co-founder of ShopBack
Featured Image Credit: ShopBack