The thought of folding their struggling e-card business, Pencake, had crossed the minds of Terry and Terence Tsang every now and then since they set up the venture in 2008. “For more than 18 months, we didn't earn any income from it,” says Terry, the elder of the brothers.
With innovative minds and a dose of tenacity, the duo changed strategy and successfully carved a niche by helping companies - both local and overseas - promote their brands, products and services on Facebook, a social networking site with more than 500 million users worldwide.
Pencake also develops Facebook applications such as games, photograph albums and video clips. It has so far created 12,000-plus applications that are used by more than 1.8 million people in Hong Kong and a total of seven million netizens across Asia.
Terry is the marketing director for Pencake, while Terence oversees research and development.
Why did you become entrepreneurs?
Terry: Terence and I graduated from Hong Kong University of Science and Technology in 2006. I completed a master's programme in civil engineering that year, while Terence obtained an undergraduate degree in computer science. While I became a salesman in a bank, I had always hoped to do what I really wanted to - set up a business of my own.
Some people are smooth and tactful, but I'm not too good at office politics. And I prefer to be in control of things, and setting and steering the direction, so being an entrepreneur fits my personality.
Terence: I became a programmer upon graduation and really enjoyed my work. In fact, I had no intention of becoming an entrepreneur until February 2008, when Terry told me about his idea of starting a business. When I was in Form Six, I ran a [rather successful] e-card website and had been thinking of doing it again. It also made sense to take the step when I was still young as it would be harder when I had a family. I resigned in April 2008, and Terry in June.
Why did Pencake's e-card business fail?
Terry: It was very difficult to compete with key players armed with plenty of resources. We overestimated the ease with which we could capture a slice of the market.
Terence: The idea was to encourage people to create their own e-cards - “Pencake” means it is a piece of cake to design your own greeting card. However, as it turned out, not that many internet users were interested in the idea.
Didn't you do market research before launching the start-up?
Terence: You simply cannot think too much. As a matter of fact, we should, to some extent, be led by our guts. I live by the saying: “If you wait to do everything until you're sure it's right, you'll probably never do much of anything.” Many people have good ideas. But few are able to implement them because they have too many things to consider. You have to be confident in yourself and believe that you will make it eventually.
How did you survive the tough times?
Terry: Terence used to blog about Microsoft's Silverlight technology, demonstrating the various ways it can be used. He received the Microsoft Most Valuable Professional award [that recognises technology professionals working outside the company]. There are only about 20 awardees in Hong Kong. The blog attracted the attention of an entrepreneur in the United States who offered us freelance jobs and proffered free advice to us on how to run Pencake. He is a great mentor.
Being selected to join the incubation programme at the Hong Kong Science and Technology Parks last year was also a boost to Pencake. We enjoy privileges such as rent-free space in our first year at the site.
How did you come up with the new strategy?
Terry: Although the e-card business was struggling, we didn’t want to give up our dream [of running our own business]. Sometime mid last year, Terence and I and a few part-time staff came up with the idea of developing Facebook apps at a sauna. Perhaps it was the heat that got us thinking! There were very few such developers then. We created a Chinese app called “Hong Kong Polling Station”, which allows Facebook users to put anything to a vote. The most popular polls include: “Which is the top university in Hong Kong”, “Which school is the best in the Central-western district”, and “Who is the best contestant in [a local singing competition]”.
What are your upcoming plans?
Terry: We offer a consultation service to companies wishing to promote themselves on Facebook in this part of the world. Many overseas businesses are particularly keen to enter the Asia market, particularly Thailand, Taiwan, Indonesia and Hong Kong, but there is a shortage of professional services catering to the rising demand.
At this stage, however, rather than looking for capital to expand our business, it is more important for us to set the right business direction. We have been active in finding mentors and seeking advice.
What is it like to work with your brother?
Terry: We didn’t talk to each other that much before working together. It’s really nice now that we are communicating a lot more.
Terence: I think we complement each other. For example, Terry is responsible for sales and marketing, while I am in charge of the technical side of things. Of course I have my own views of management, but I always respect Terry.
Tips from Terence
- Stop thinking you are too busy to find your dream
- Prioritise what is important
- Cut down on non-productive activities such as dating and playing video games