H@H: Ep 8 – Wei Zhu (EWMBA ’22) joins hosts Sean and Ray to talk about his previous entrepreneurial pursuits. We immediately dive into his lessons learned in founding a karaoke bar and a startup incubator. Then we discuss why ignorance is both a blessing and a curse in the early stages of forming a company. Finally, Wei tells us how he has applied these learnings in helping mentor others on their path toward entrepreneurship at Haas.
Episode Quotes:
“I can build something from 0 to 1, but going from 1 to 100 requires a totally different skillset” – Wei Zhu
“Many people we talk to only have succeeded because [they’ve] failed so many other times in so many other ways.” – Sean Li
“I see data not as just a bunch of numbers that you can run math on…it’s an abstraction of human behavior.” – Wei Zhu
“Axe the status quo!” – EWMBA ‘22 Axe
Show links:
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Transcript:
[00:00:00] Sean: Welcome to another episode of the one Haas podcast. I’m Sean Lee and I’m joined by my cohost, Ray Guan.
[00:00:08] Ray: And today, we’re joined by Wei Zhu and all-star of the acts 2022 class. Welcome, Wei.
[00:00:19] Wei: Great to be here. Thanks, guys for having me.
[00:00:21] Sean: Wei, why don’t you start us off and give us a little bit about your background, where you’re from, and where you grew up.
[00:00:26] Wei: So yeah, I was born and raised in China and the came to the States about 10 years ago. I went to U of M for a computer science and economics, and now I’m part of, Ray mentioned, part of EDW 2022 at Berkeley.
[00:00:40] So go blue and the gold bears. So outside of the class, I work at a startup company called the Clearbit, based out of SOMA, but our company is globally distributed. It’s right now, I serve as say, a data product manager. They essentially manage all of the data related to the product and the company.
[00:00:57] And before Clearbit, I was at Crunchbase as a data solutions architect, essentially helping out scale the data engineering team and also building out customer-facing solutions. And before that, I was at another company that got acquired by SoFi in 2017 and I helped build the engineering team there. And before that I was at Michigan, spent two years there, building out a couple of companies on myself.
[00:01:21] Definitely had some great learnings there. It was also kind of a traumatizing memory, but yeah, that was one of the reasons I really wanted to come to the Bay area, really learn from the Bay areas, successful entrepreneurs, and startups.
[00:01:36] Sean: Got it. You know what, you’re the first guest ever go through your background in reverse. Why is that? Is it because of just how you’re thinking about it, or was there like a clear path that led you to where you are today from your past experiences?
[00:01:50] Wei: I guess I always try to lay out my stories in fact, and then reason, right?
[00:01:56] So now I’m here because, you know, I came from something else, and before that I came from something else. So, the reason there is that, you know, you always make a step, right, into a direction because of something.
[00:02:07] Sean: Maybe we should start interviewing in that order. Yeah, I liked that. Actually, it made a lot of sense. Okay. I guess the immediate question is, you know, what brought you to Haas?
[00:02:17] Wei: So, I’ve been working at startups for four or five years, getting close to two to five years. And, right now as a product manager, you know, I realized are so many different skills that haven’t yet learned from before as an engineer, right. As an engineer, you’re supposed to just, you know, face a computer monitor type Ricco, right, solve a problem that is very specific. But you know, as a product manager, the skill set is much more broader. And also, part of the reason is because, as I mentioned before, I did a couple of companies back in Michigan. Did not do well, at least at the second company. It was totally traumatizing. And that gave me a lot of great takeaways about, you know, what I needed to learn, because I knew, you know, as an entrepreneur, as an engineer, I can build something from zero to one, right?
[00:03:06] But building something from 1 to 100 requires a totally different skillset, and that is something I really want to learn from the MBA class.
[00:03:15] Sean: That was very insightful. Yeah.
[00:03:17] Ray: Yeah. Wei, you and I have talked before on some of the companies that you’ve built. I heard from our talkings of course, that you’ve started up your own karaoke company.
[00:03:26] Sean: That’s the one I want to hear about. I want to hear about Midnight KTV.
[00:03:29] Wei: Yeah, of course. Well, so the time was 2012 and I was sitting in a micro econ class and intermediate micro econ, I was econ major, and the professor was talking and I was so bored. I was like, how do I even make sense of anything with this? How do I even use them? I’m sure all of you have that kind of similar struggle at some point during college like, I’m learning psychology. I’m learning, micro econ, learning social science, but can’t seem to find a reason for those
[00:04:00] Sean: Might have been every day.
[00:04:03] Wei: So, we struggle with that. So, that was a kind of a snapshot, right? With that kind of frustration, I also had, at the time, I was an international student. For international student, you pay a public university, you still pay upwards of 50 grand every year.
[00:04:15] So the ROI there was not very obvious to me at a point. I got a little bit frustrated; try poking around different ways. I tried to build my own independent study. It didn’t quite pan out and towards the end of it I was like, might as well just use that money for a higher ROI and just build a company myself.
[00:04:32] I got excited about that. And then at the time, I was also a computer science major square. Back then, it was this tiny startup that just came out with a little square reader and I was amazed by it.
[00:04:43] I was like, you can optimize a credit card transaction by that much by with just this little innovation. I wonder if I can use that to optimize a small business. My mom had her own small business, which was a lot of struggle back then so I always have this in the back of my mind, always wanting to see if I can build something for small businesses.
[00:05:05] Essentially, I came up with these small bins in a storefront management system. This idea, just essentially using square card reader with a bunch of other things to manage your inventory, your customers, your day to day operations, anything. And back then, there wasn’t quite such an integrated solution yet.
[00:05:22] There was QuickBooks, there was like a bunch of other solutions, but nothing is so integrated yet. I was like, God, that must be a really good idea. So, let me just give it another try. I built the initial version of that. And it’s starting to test something now, local small businesses how to do with maybe 50-60 local small business owners.
[00:05:40] And they were all excited about the idea, but none of them were really willing to open up their business for someone to come in and start testing it. Because I mean, I understand the way, if you own a business, you don’t want someone to just come in and change everything. So very quickly I realized, it was probably not going to work out.
[00:05:59] So I changed my plan. I was like, if they can run a business, I can start a business myself. At the time they’re looking at, and our is population, there’s something around the 20,000 Asian population on campus. Hey, there may be something that I can do just by building a karaoke.
[00:06:16] I’ve been to karaoke before. I do like karaoke. Essentially, like my parents don’t tell them. I lied to my parents to say that I need a little bit of tuition money and events. That’s basically how I got my first seed and they used that money and it was just pitched to my friends, Hey, I got this investment 50 grand, right.
[00:06:34] Do you want to just come in with me? And all my friends join and the three of us put together this pile of money, 150 grand, and we just essentially rented this place. We’d rented this 2,400 square feet place, it was a vanilla box, essentially four blank walls, nothing in between, retail space, and then we just converted it into kind of a private room, karaoke, the Asian style karaoke lounge. It was kind of your typical figuring out a story. That was my second year in the States. I couldn’t really speak a full sentence of English properly. And at the time I didn’t know, what is a drill, what is a two by four, and you know, what is, you know, high voltage, low voltage and kind of that thing. But I guess in retrospect, even the words, there’s a kind of a blessing in that way because had, I know how complex it is to set up a small piece, I probably wouldn’t have done it.
[00:07:24] Sean: Yup. Ignorance is bliss.
[00:07:26] Wei: Exactly, right. The universe of blessed air and just kind of took us about a year and a half to really just put everything together. But by the end, because there’s such a pent-up demand in Ann Arbor, and especially around the West campus, even if you have been to Ann Arbor, the North campus of Ann Arbor is this engineering school.
[00:07:43] Yeah. A lot of people don’t really have a good way to spend their nightlife there. A lot of Chinese population come in and they enjoy their nightlife there.
[00:07:53] One thing that I think is brag-worthy is actually the second year in operation, the karaoke bar was doing well. Three couples got engaged in the karaoke bar, so they liked it that much. I’m happy to report that all three of them are still happily married where they got this order.
[00:08:11] So I guess that’s good.
[00:08:14] Ray: That’s good branding.
[00:08:16] Sean: Should we call it double happiness? KTV yeah.
[00:08:19] Wei: Probably the worst handing his name, but yeah. Good thing is, the karaoke bar did well. Bad thing is, the small business management system didn’t quite pan out. I was terrible of a coder and build everything just to customize for the karaoke business and it wasn’t quite suitable for other types of businesses.
[00:08:39] I was also too involved in the operations and the company. So, towards the end, it didn’t pan out. I think it was time for me to move on to the next chapter. So, it was just a sense when I sold a business to a local entrepreneur, and I just moved on.
[00:08:55] Sean: I’m really curious about 102 Lab. I was reading on your LinkedIn, you sold the business, Midnight KTV, to basically provide the funding to 102 Lab.
[00:09:05] What was 102 Lab like? What were you guys trying to accomplish?
[00:09:09] Wei: I guess 102 Lab was really a continuation of the first business. Essentially, ever since the KTV became a hit, a lot of my friends came to me for advice because of wanting to do something similar.
[00:09:22] Everybody has their passion. You might be passionate about pizza, you might be passionate about yoga, you might be passionate about any sort of thing, and you want to turn that into a real business. But how do you go about starting that first business in the first place? As a first-time entrepreneur, because it seems super intimidating, and like I said earlier, had I known how difficult it would be, I probably wouldn’t have done it.
[00:09:42] So, from incorporating to setting up your finances to interviewing customers, all sorts of activities can seem super intimidating. But the second time around, it gets so much easier. I gave a lot of advice and then very coolly I thought to myself, I could have done better.
[00:10:00] Instead of just giving out advice, I could also help them get things executed. So essentially, with that idea, I wanted to build this small business incubator and no such thing. Really. He says, I just want to provide this environment resource to help passionate local entrepreneurs to have to build our business and at the time also made perfect sense for Michigan because Detroit just went bankrupt a couple of years ago. The local economy really needed the boost. I was like, maybe that was the right idea. Unfortunately, one thing, one big mistake, which turned out to be the thing that really brought us down was the financial model and that we came up with was essentially profit sharing.
[00:10:41] Understandably, customers wouldn’t trust us if they saw someone just come in and say, Hey, I’m going to help you start your business, you may a hundred grand. Right? And nobody will be wanting to do that. Right? So essentially, we came out with the idea of just profit share as they make money.
[00:10:58] So essentially, if they are successful, then we make money. If they don’t become profitable, we don’t see a dime. So essentially that align our interests with their interests. But unfortunately, the one thing that I didn’t foresee was that, the cycle to become profitable for a small business is actually much longer.
[00:11:18] Usually take two, three years for any small business to really break even and start making a real profit, and that was too long for a cycle for us. At least the cash reserve that we had wasn’t able to sustain ourselves for that long. At the time, I didn’t have enough credit history or anything bank that will provide us a loan.
[00:11:41] I went to talk to investor and investors were like, What? Hey, how are you doing? Like small businesses, it doesn’t have that X factor. It’s not going to be your next Twitter or Facebook or anything. I’m not willing to keep your money. By the end, you stop all of the money that I had from selling the first company, and literally it was kind of heartbreaking.
[00:11:59] It was kind of traumatizing. Honestly, it’s just watching my bank balance, drop digital by digit, and then by the end I even owe bank money on my debit account. So essentially my debit account at one point, it had the parentheses behind it. Right? So that was not a great thing. But yeah, there were also some great takeaways from that experience. It was that from the get-go, you need to know what are you trying to accomplish and at the same time also trying to figure out at what point do you need what type of resource. Does your business plan make sense while on the journey? Should you anticipate having to raise funds or anything? Which seems obvious, right, if you’re working at a startup, but at that time, I didn’t have any kind of startup experience.
[00:12:40] I didn’t really think any of that. I just went in and did it anyway. So, in that sense, ignoring it was kind of a curse, but at the same time, it was a great learning experience for me.
[00:12:52] Sean: That’s beautiful. I think that’s the most important lesson; no matter what you have to try, whether you succeed or fail, I think many of the people we talked to, you’ve only succeeded because you’ve failed so many other times, as in so many other ways. I think your message is just so inspiring for any students that want to be an entrepreneur.
[00:13:11] Wei: That’s great. I’m glad.
[00:13:12] Ray: Speaking of that, I actually know that you’ve also been involved in helping people here at Haas in terms of just coaching, giving advice, do you want to speak a little bit of your involvement so far?
[00:13:24] Wei: Yeah. I actually just had our first session as the STeP program that you mentioned.
[00:13:29] We just had our first meeting last Thursday. If you don’t know about STeP is essentially, this is a student entrepreneurship program where they help bring students together to work on different ideas, to form startups in the ultimate goal of putting them on the track for the next step, essentially, to raise funds and to get their customers, to get your product out there, whatever that might be, right? So, you can continue to develop your business independently or the goal through, you know, WeLaunch or Skydeck or any kind of other accelerators that we have on campus, which is amazing. I really wanted to help out and also kind of perfectly aligns with the 102 Lab idea, is that, you know, I could also be helpful for these students who are going on their first entrepreneurship journey.
[00:14:16] I could have probably just, you know, lend a hand there, share some personal stories on some of experience so that they can go about this journey with a clear mind, with some clear directions in their hand.
[00:14:58] Ray: Got it. Have you been assigned someone to work with yet? Like have you heard any, some cool ideas come out of it? Because I was actually involved in stuff last year and you know, I think the matching process you actually get to cure, you know, as a student being involved in STeP, you actually get to hearing mash with teams that have pretty cool ideas.
[00:15:16] Wei: Yeah, of course. Well, I mean, I don’t know if the founders really want me to share their ideas because they’re working on it, but you know, I am happy to share that there are exciting ideas around your personal finances, new parent, your infrastructure building from a government’s perspective. You know, we all know, the Bay area has spent so much money on improving infrastructures, but we haven’t really seen dramatic improvement. And there was this one team trying to work on, you know, how to provide a little bit of transparency into this infrastructure building process, which seems to me is such a great idea, and you know, everybody can really benefit from it. And that kind of innovation coming out of Berkeley, I think is very important.
[00:15:58] Sean: So, Wei, you’ve been here for a little over a semester, you know, you have another two and a half years to go, really. What do you really looking to get out of the Haas experience?
[00:16:07] Wei: That’s a great question. So, one of the primary drivers that really prompted me to join Haas is, you know, I really want to leverage Haas’ connections and resource till I launch my next startup because you know, the entrepreneur is still in me even though the feeling experience can be kind of traumatizing, I always wanted to do it again because you know, it is exhilarating to see, you know, your first customer coming in, that type of excitement, right? They stick with you and they want to see that again. So that’s my ambition, but at the same time also, I acknowledged the fact that right now I have more to lose, right?
[00:15:53] I have a job, I have a family, have everything. So really want to make sure that this time I do it. Right. So, for that, I definitely need to learn from the amazing faculties, from my classmates, from everybody, right, to get it by the idea of how to take something again from 1 to 100. Right. So that was my primary driver coming into Haas.
[00:16:17] And for that, I’m looking forward to participate in entrepreneurship class, STeP which I’m already part of, and in the future, Skydeck Launch, any type of entrepreneurship-related activities, you’ll see my name on it.
[00:16:32] Sean: Awesome.
[00:16:33] Ray: Very nice. Lastly, Wei, we want to ask you, which defining leadership principle resonates most with you?
[00:16:40] Wei: So, my favorite one is actually challenge the status quo or as we put it, ax the status quo.
[00:16:47] Ray: Way to get our slogan in.
[00:16:49] Sean: Ax, really is that part of ax is, ax the status quo.
[00:16:53] Ray: Yeah. That was this year.
[00:16:55] Sean: That’s my first-time hearing that. That’s pretty good, right? Yeah.
[00:16:58] Okay.
[00:16:58] Wei: Yeah, so I mean, there are so many things.
[00:17:02] Now we can challenge and well, kind of going back to my background a little bit, you know, being working in the Bay area and then being involved in the data field for periods of time, you know, right now serving as a data product manager and before I was there, an engineer and data really fascinates me because, I see data not as just, you know, a bunch of numbers that you can run the math on. It’s an abstraction of human behavior. And from that cm data, you can actually see patterns and find the ways to optimize things, right? So, there are so many things that you can do right now. Everything that’s coming out either is machine learning, artificial intelligence, any type of technology advancement, it means that we have more and more opportunities to really challenge the status quo, right?
[00:17:47] So, not to give out specific examples, but you know, going back to the STeP program, you know, there are so many ideas that I wouldn’t even have dreams about. And people are already working on those and they’re really want to, you know, as MBA or as you know, STeP coach or as entrepreneur to help them or maybe at myself, take a leading role at some point to really challenge that, the school and make the world a little better place.
[00:18:11] Sean: I love it.
[00:18:12] Ray: Awesome. Well, thank you so much for coming on with us.
[00:18:18] Wei: Great. Thank you, guys, for having me.