Who: Alex Chen, CEO and co-founder of EZTABLE.
What: Founded in 2008, EZTABLE is a 24/7 online table reservation service for restaurants and diners. Reserving a table can be done in three easy steps.
Why you should read it: EZTABLE is one of Taiwan’s hottest start-ups with over 100,000 users and 350 restaurants. Expanding to Hong Kong and Singapore this summer, it currently generates over 15,000 reservations per month. Cited by entrepreneurs and investors as the rockstar of the Taiwan tech industry, EZTABLE demonstrates that a tech start-up can find great success in Taiwan. Alex shares his perspective on the early stages of transitioning EZTABLE to Taiwan, the expansion into other Asian markets, and the hopeful future for Taiwan’s start-up industry.
WORK HARD, PLAY HARD
“This is the library.” Alex gestured for me to come in.
I walked into the room and looked down a long table which was covered with laptops, monitors, keyboards, and stacks of documents.
“You have to be quiet in here because this is where our team works,” he whispered to me.
Not a single person lifted his or her head; fingers busily tapped away on keyboards.
A young man, who was scrunched in the corner couch, wiped the sweat from his forehead and took a big swig from his water bottle—all while his eyes were intensely fixated on the screen.
“We work hard here.” Alex motioned me out as we tiptoed out to the Break Room, and I sighed in relief as the cooler air greeted us. In stark contrast to the library, this room had plush red couches and snacks lying around. College interns lounged on the couches and casually chatted with laptops open on their laps.
“Here’s our Break Room. Over here, we take breaks and have fun. We also have group meetings in here.”
As we rode the elevator downstairs for the interview, little did I know that these two separate rooms would serve as the perfect introduction to our interview. Work hard, play hard is the mainstay of both Alex’s entrepreneurial personality and EZTABLE’s work culture, that has helped elevate the company into one of Taiwan’s hottest start-ups.
In a ruffled pink Lacoste polo and slightly distressed blue jeans, Alex laughed as he shared stories of his childhood: at school, he’d been constantly scolded by teachers for selling items to his classmates. With business in his blood, he entered the financial industry after graduating from UCLA. But as an investment banker who loved fine dining, he couldn’t ignore the tempting opportunity to take advantage of Taiwan’s entrepreneurial consumers and their love for food. EZTABLE was born and the rest was history.
Today, EZTABLE is used by over 100,000 Taiwanese consumers and 350 restaurants. Despite its runaway success, Alex remains humble and attributes many of his achievements to Taiwan’s tech industry. Citing affordable talent, the well-developed Internet industry, and the demanding Taiwanese market, he shared his contagious optimism for the future of Taiwan’s tech industry. He also takes on the responsibility of shaping that future: “Success today will tell the traditional capital markets that the Internet is the future and hardware is the past.”
After the interview, it was clear how Alex—a person who was easygoing yet hard-working, realistic yet optimistic, focused but intently aware of the bigger picture—successfully infused efficient technology into man’s most beloved industry.
The full transcript of the interview can be found below.
THE VERY BEGINNING: AN ENTREPRENEUR FROM THE START
TO: Thanks for sitting down with us. You’ve had incredible success with EZTABLE throughout the past few years. We are incredibly excited to feature EZTABLE as it’s one of Taiwan’s hottest start-ups.
Alex Chen: [Laughs] No, no.
TO: You started EZTABLE in 2008. Before that, you had a great and secure job as an analyst with Deutsche Bank in the US. Can you share a little about that moment when you realized you needed to go to Taipei to develop this start-up? Was there some sort of lightbulb moment?
AC: I’ve always wanted to be an entrepreneur ever since I was very young. My dad was also an entrepreneur. He founded a small business company and as a child, I watched him do business everyday.
My interest in numbers and math initially led me to finance. Along with starting a company, investment banking was always one of my dreams. So after graduating from UCLA, I decided to gain some real experience before becoming a true entrepreneur. I worked at a hedge fund in LA and then with Deutsche Bank.
The most important moment that started EZTABLE was when I found my co-workers. Founding a company is really, really hard. If you try do it alone, you won’t be successful. You will always have challenges, like emotional problems, along the way so if you have a team to support you, everything will be much easier.
My current co-workers are actually my junior high school friends. Before a reunion in 2008, we hadn’t seen each other since college. But at the reunion, I discovered that though they all worked at great companies, starting a company sounded like a great opportunity for them.
TO: At that time, were you happy with your job at Deutsche Bank?
AC: Actually, I was very happy. I’m still very interested in finance but entrepreneurship makes me feel more alive. But finance will always remain my hobby.
TO: You mentioned your dad was an entrepreneur. How did this affect you?
AC: Because my dad was an entrepreneur, I was motivated to come up with several business ideas when I was in school. [Pauses and then laughs] I sold stuff to my classmates… you can consider that I made a business of some sorts.
But you know, there’s actually a great cultural difference between Taiwan and the US. In the US, people won’t judge you by your business. Making money is OK. But in Taiwan, teachers judged me. Teachers complained, telling my mom that “Alex shouldn’t take money from his classmates.” Or something like that.
While I didn’t realize that entrepreneur part of my personality existed at that time, I see now that those events ultimately showed my career path.
TO: You slightly touched upon the differences between Taiwan and the US. In the US, OpenTable was founded in 1999 and has been the premier online table reservations company for the past few years. In EZTABLE’s initial stages, did you look to OpenTable as an example or did your team want to create something completely original and different?
AC: We were definitely inspired by OpenTable. I was a frequent and loyal user of Opentable. OpenTable had a lot of five-star restaurants and as a former investment banker, going to dine at five-star restaurants happens a lot. I’ve been using OpenTable for so long, I’ve got a lot of points there. [Laughs guiltily to himself] I haven’t spent all of them yet.
TO: From using OpenTable so often, did you see a big need for online table reservations in Taiwan?
AC: I found that you could book a flight or a hotel in Taiwan but there was nothing dealing with restaurant booking. I found it ironic because when most foreigners think of Taiwan, the first thing that they think about is food. Everyone knows that in Taiwan, the best thing to do is go to restaurants and eat. So why wasn’t there a service giving online table reservations to its consumers?
TO: Did you need to tweak anything to bring over the model to Taiwan?
AC: I remember my first ever business plan for EZTABLE. Looking back on it now, everything was wrong. In bringing over the OpenTable model to Taiwan, I can say that only the basic idea was successful. But the execution, the operations, the business part… it was all different. Completely different from the US market.
When we first came out with our initial version, we couldn’t sell it to restaurant owners and diners. It really didn’t work. So we had to start all over again and ask the restaurant owners and users what kind of software they needed. Today, EZTABLE’s business model is getting further and further away from that of OpenTable’s. But the basic idea is still very much the same. A 24/7 online table reservation service.
TO: What were some of your early difficulties?
AC: Off the top of my head, two past issues stand out to me. First of all, pricing was a big problem. OpenTable charges high up-front subscription & installation fees for every new restaurant. But Taiwanese restaurants don’t buy the idea that they have to pay first before using the product. We had to get around that issue.
Secondly, OpenTable requires all participating restaurants to fully utilize its total package (both the hardware+software), but Taiwanese restaurants, due to limited space and labor resource, prefer only the software without having to deal with implementing the hardware.
AC: I always make the analogy that Urbanspoon is more like Yahoo as it’s more of an entrance website. OpenTable is more like Google as it’s a tool website. A lot of people are currently doing stuff like Urbanspoon… Internet entrepreneurs love gathering data.
But at EZTABLE, we chose to focus on CPA so we concentrate solely on transactions. Of course, a business model like OpenTable and EZTABLE can give restaurants a lot of exposure through advertising. But exposure doesn’t mean a lot to restaurants if the consumers don’t really go, dine, and spend money there. EZTABLE concentrates on bringing real consumers into the restaurants. We want to make it a more enjoyable experience for everyone.
TO: From all the online table reservation competitors around the world, is there a specific quality that separates EZTABLE from the others?
AC: Of course. These past two or three years, we’ve made a lot of mistakes. A lot of mistakes. We are convinced that our know-how, our knowledge of the restaurant industry, our software, our entire infrastructure can really generate a new version of the online reservations model for restaurant owners and diners around the world.
FUTURE PLANS: EXPANSION
TO: In early 2009, it was reported that EZTABLE had 11,000 users. Today, EZTABLE boasts more than 100,000 users. Do you expect membership in Taiwan to continue growing or do you envision a point at which it’ll remain steady?
AC: I think the growth rate in Taiwan will accelerate even faster. In 2008, online restaurant reservations were a completely new idea. Not only for restaurant owners, but for diners as well. Nobody thought it could be possible to book a table through the Internet. They thought the only way to book a table was to call.
The even bigger issue was the fact that a lot of Taiwanese people don’t even reserve tables.
So in 2008, we had to educate the market. We had to tell the market that “Hey, you don’t have to spend money on phone calls or be limited by the restaurant’s open hours.”
TO: So how did you go about educating them?
AC: It was all about branding. That’s why it took two or three years to let the market know that this is something they should use. We had to convince them that they deserve to get this service from restaurants.
TO: In last month’s Penn Olson article, you mentioned that you had plans to expand to Hong Kong and Singapore in early July. Are you still on schedule?
AC: Yes.
TO: How is the competition?
AC: In which market?
TO: Let’s start with Taiwan and then you can explain a little bit more about the other ones.
AC: Taiwan used to have a competitor but we don’t have one now. It seems that they are exiting the market now. In Taiwan, we don’t have a direct competitor.
TO: How about OpenTable? Are they looking to expand into Asia at all?
AC: As far as I know, no. They are not doing China, not Hong Kong, not Asia. I only know that Japan currently has a market for online table reservations. There are some companies in Singapore, but not many.
TO: Any plans for a mobile application?
AC: Yes. It should come out next month. We also expect that an English version of EZTABLE will be coming soon.
TO: Any thoughts on entering China at all in the future?
AC: Every Internet entrepreneur wants to go to China. But like I said before, EZTABLE needs to find a niche. We have to find our core value. In such a big market like China, it takes a lot of different resources to build up a great and successful Internet company. But I’ve been flying back and forth between Shanghai and Taiwan. I’ve been researching the market. Chinese people love to eat. As long as a business model centers around food, it has great potential in China.
THE TAIWAN TECH INDUSTRY: “THE INTERNET IS THE FUTURE AND HARDWARE IS THE PAST”
TO: As a successful homegrown Taiwanese start-up, what do you think the greatest strengths about working in Taipei are? Would you recommend an entrepreneur or investor to come to Taiwan and more importantly, why or why not?
AC: To the outsider, Taiwan is home to a lot of electronic goods like notebooks, PCs, cellphones. But I still think Taiwan is a great place for a start-up.
First, We have a great workforce here. And the important thing is that it’s cheap. Start-ups can get really good and young talent at a much cheaper cost than those in Silicon Valley. Taiwanese talent is even cheaper than Chinese talent. This is one of the biggest advantages of Taiwan.
Second, Taiwan is very well developed in the Internet market. If you ride the MRT, everyone has an iPhone. Facebook penetration rate is almost over 50% right now. So Taiwan has a well-developed market for start-ups. You can throw a product here and have a market test. For example, take our business. A completely new business idea in Taiwan—online table reservations—wasn’t difficult to gain traction. When we ask our first users why they used EZTABLE, they said that they had found the business through Google and wanted to try it out.
Taiwan is a very entrepreneurial market—not only in terms of producers but also in its consumers. You can throw a lot of creative services out there and not be worried that nobody will use it. Taiwanese people love to try the new trend. That’s another great advantage for Taiwanese start-ups.
Third, small business owners in Taiwan are extremely picky. Because Taiwan only has 23 million people, everyone out there is trying to make a better product for the market. If you can build a successful product here, your product can satisfy anyone in any market. It definitely has the potential to be successful globally.
TO: Great points. I agree when you say that the Taiwanese people are very entrepreneurial. In China’s recent trend of cloning other start-ups, what do you think the future holds for Taiwan’s start-up industry? Will the Taiwanese be innovators or followers?
AC: So far, Silicon Valley is the innovator in the entire Internet industry. But recently, the Internet is becoming more and more local. Today, importance is centered on consumer behavior markets. Compared to the Western markets, Internet consumer behaviors here are very different.
So I would say that Taiwanese entrepreneurs will come up with ways of optimizing and revising existing business models in the US. They’ll make them fit for the Asian market.
TO: Talking with Groupon Taiwan’s Andy Kuo last week, he was wary of Taiwan’s startup industry, citing the dominant hardware industry, talent recruitment, and the difficulty in raising capital. Do you agree with his sentiments or are you more optimistic?
AC: [Smiling] I agree with a lot of what Andy said. I think the capital market for Taiwan is very, very small. Investors or funds here don’t understand the Internet market. They don’t know how the Internet works. They are trained to analyze the hardware industry and they are very good at knowing how to make money. But the Internet industry is much more idealistic and thus, the risks are much higher.
However, funding incubators like AppWorks have been leading the way. Pioneers are always coming out of those kinds of incubators. This is extremely important to grow Taiwan’s Internet industry and raise exposure. Success today will tell the traditional capital markets that the Internet is the future and hardware is the past.
So today, I totally agree with Andy’s points that fund-raising is extremely difficult. But I expect that in three years, those traditional capital market funds that used to invest in the hardware market will shift and start investing in Internet companies.
TO: How about the recruiting process for start-ups?
AC: Human capital… yes, it’s very hard. In the past ten years, everybody bolted to TMSC or Mediatech. Because those companies offered a lot of money and stock options, many Taiwanese students wanted to study in areas geared towards the hardware industry.
But because EZTABLE is one of the pioneering Internet companies in Taiwan, we know we can make a mark on the future. We want to set a good example here so that maybe in several years, high school students will want to choose computer science as their majors. [Smiles wistfully] I have a lot of hope for the future.
TO: This question is on the general topic of entrepreneurship. Imagine you’re transported back three years when you first started EZTABLE. Is there one main piece of advice that you would tell your old self?
AC: You mean by learning from my mistakes?
TO: Yep.
AC: [Long, long pause] The reason why I’m thinking so long is because I’ve made so many mistakes. I’m trying to think which mistake was the biggest. [Laughs]
Focus. Focus is most important.
Entrepreneurship is really tough and you will face a lot of challenges during that time. A lot of different people will give you advice during that time. A lot of your potential customers will say that they will give you a lot of potential business, but those might not be aligned with your core value or the core mission of your company. Once you become too worried about your company’s survival, you will make wrong decisions. You may focus your limited startup resources on too many things. You will think you are hedging your risks, but that is not the case. You might just be wasting time and resources on different things that might not fit your original vision.
Give me back my three years, and I will focus on doing what I am doing now. I won’t listen to all those clients who said they would give me extra money for doing random side projects. I would say no to them now.
TO: Great advice to all the young entrepreneurs out there. Alex, thank you so much for your time.
{ 1 comment… read it below or add one }
Wow, this paragraph is good, my younger sister is analyzing these kinds of things, therefore I am going to let
know her.
{ 2 trackbacks }