As co-founder and CEO of the retail intelligence platform Wisy, Min Chen is solving a $1-trillion problem in the consumer packaged goods industry, while centering her company's founding values. She speaks with Elian and Juleyka about raising a historic $1 million in her native Panama, achieving the right product-market fit, and the shock of relocating Wisy to Silicon Valley. And our Latino Business Moment of Zen illuminates our purpose by turning our attention inwards.
Elian Savodivker:
Hello and welcome to Scaled, the Latino business story. I'm Elian Savodivker, director of engagement at LBAN, the Latino Business Action Network.
Juleyka Lantigua:
And I'm Juleyka Lantigua, SEI-Ed alum and the founder and CEO of LWC Studios.
Savodivker: On this show we invite Latino business owners from all over the country to share stories from their journeys as entrepreneurs to help us contextualize the world class research we do here at LBAN.
Lantigua: Today we welcome Min Chen, SLEI-Ed alum and co-founder and CEO of the tech platform Wisy.
Savodivker: We're so thrilled to have Min on the show today to talk about her incredible journey. She started her tech company in Panama and raised over $1 million in funding before stepping foot in Silicon Valley. And she has so many amazing insights that she will share with us.
Lantigua: As a fellow Latina entrepreneur, she really, really gave me chills. This woman is so clear about what she's out to accomplish, who she wants to accomplish that with, and how she's going to accomplish that. Inspiration from beginning to end.
Savodivker: Agree, an absolutely inspiring story. And with that, here's our conversation with Chen. Min, please tell everybody who you are and what you do.
Min Chen: I am one of the co-founders and CEO of Wisy. We are solving a problem that everybody has experienced. It is an out stock problem that is causing $1 trillion of annual losses in the consumer packaged good industry.
Savodivker: Wow.
Lantigua: $1 trillion?
Chen: Yes.
Lantigua: That's insane. Can you talk a little bit about how we experience that as a consumer?
Chen: Yes, so let's say you're looking for your shampoo, and you go into the pharmacy or the grocery store and it is not there, what are you going to do? You're either going to buy another product, so the brand is going to lose your business, or you're going to go to another retailer to look for that product. So in that case the first retailer lost your business. It is a bad customer experience for us, very inconvenient, but for the companies behind it, so the manufacturer, the brand, the distributors, and the retailer, it is $1 trillion of annual losses combined in industry. And the flip side of that, imagine this happens for any kind of packaged product from shampoo to milk. Those that are not sold on time before their expiration date, they're going to the trash. So it's not just a financial problem, but it's also a sustainability problem.
Lantigua: Okay. So Min, how does one decide to solve this very specific problem? How did you decide to take this on?
Chen: Yes, so Wisy is my second company. In my previous company I was doing consulting, digital transformation for a lot of industries, including the consumer packaged goods industry. So I knew from my previous experience that doing coordination for field work and getting data in the field, so outside the office where we don't even have computers, is a challenge. And over the years we focused in the consumer packaged goods industry because that's the one that had a huge problem. I am one of four co-founders, each one of us has over 20 years of experience in the industry. So we knew the problem, we experienced the problem from both sides, as a consumer and as executives and advisors in those companies, before we started Wisy.
Savodivker: So originally you developed a product that was used by different companies and organizations. We know that in tech industries the pivot is so important as you get user feedback. What made you realize to change your strategy?
Chen: Pivot is an interesting term, because for me pivot is that I started towards the left and now I'm going towards the right. For us it was more narrowing of our focus. We started with a platform that would allow any company to collect data in the physical world with mobile devices, because we knew that this was a challenge from, we had our earlier customers were in the oil and gas industry, construction industry, as well as consumer packaged good industry. Which was a good problem to have but a very difficult problem to solve, because where are you going to focus? Especially with limited resources. And we had to do many experiments to see where we would get the most recurrent use case, in which use case we will be the aspirin and not the vitamin.
Chen: So for the industries that were using us like once a year, or for example, marketing purposes, that was like the vitamin use case, but we want to be the aspirin, we want to be the painkiller. And in that process we realized that the consumer packaged goods industry had the frequency, the urgency, and the volume that we needed to scale this factor. So we narrowed our focus to specialize in this industry, we created specialized artificial intelligence models to address unique needs. And that's how we made a huge jump and also achieved the product market fit milestone that is quite difficult to achieve at the beginning of a startup.
Savodivker: I think it's great the way that you found that product market fit. When we look at capital and from our research, we see that minority owned businesses continue to experience lack of capital, and Black and Latino founders only obtained 2.6 of total funding allocated in 2020 from VCs. What has been your strategy for financing Wisy and what have been the challenges that you've had to overcome?
Chen: Yes, we have experienced a lot of challenges, even in Silicon Valley where you have a lot more capital than other countries in the world. We started the company in Panama because that's where we were living at at the moment. Right now we have expanded to Silicon Valley. But when we started there, we knew that there was no funding for startups. There is little funding in the US for Latino founders, but there is no funding at all in Panama. So we knew that we had to expand to Silicon Valley or in other ecosystems, but we became the first startup to raise over $1 million dollars there.
Savodivker: Wow.
Chen: We focus on the product and the customers first. So instead of doing it the way Silicon Valley tells you to do, you build a product, you buy a lot of users, and then you raise capital or you raise capital to do that, we bootstrapped, we built a product, we started selling the product when it was just a concept just to see if somebody would pay for this. And that's when we got these Fortune 500 companies in these different industries wanting to use the technology. So we built it having customers already, but then we couldn't find the scalable use case. So after we had customers and also based on our personal traction, again, we're four cofounders with 20 years of experience, each one of us, through our network we got buy-ins from established organizations to help us find investors. Most of my investors are family offices or former executives at these companies that I sell to.
Savodivker: Yeah.
Chen: And for them, we are the first startup that they invest in.
Savodivker: Wow.
Chen: And then we expanded to Silicon Valley, and that's when one of my biggest professional lessons happened. In my late 40s, coming here, giving up everything and coming to Silicon Valley, where I used to work here. My last job was here actually 15 years ago, and I did not expect the amount of resistance and passive resistance that a Latino founder and a woman founder faces. In my previous company I had to deal with corruption, I had to deal with indecent proposals. I lost contracts that I worked so hard just because I didn't accept the conditions. And I thought, "Well, it shouldn't be that difficult in Silicon Valley." This is so progressive and it's in California, it wouldn't be as bad as what I experienced. And I'll say the experience has been worse.
Savodivker: Wow, really?
Chen: Because it's not explicit. If somebody comes to you and say, "You're not winning this contract if you don't give me anything," you know how to address that. But if you come here and you start pitching and people start saying, "Oh, I don't think this is going to work," and just from the way they start asking questions it's just disqualifying, how do you deal with that? And especially if you don't understand the cultural background here. So that was a big lesson for us, that we wanted to fit in. We wanted to, "We have to be a Silicon Valley startup because that's how you become a unicorn." And after learning and getting some really incredible feedback in the first year we realized we don't want to be just another Silicon Valley startup. We shouldn't give up who we are and what made us special and what make us come here. We already made the impossible possible, raising more than $1 million in Panama.
Chen: That is a bigger achievement than becoming a unicorn in Silicon Valley. How many unicorn do we have in Silicon Valley? A lot. How many companies have raised over $1 million there? Just us. So we learned that, at the end of the first year, this was in 2019 right before the pandemic, we realized, "You know what? We don't have to give up who we are. We have to be proud of our roots, Latinos and Asians and women and men. And this is what makes us unique." We want to stand out. We shouldn't want to fit in. In 2020 we decided to change our strategy and not play the Silicon Valley playbook. You know what, we want to build a great company that actually delivers great things, that has happy customers, happy employees, team members, that we embrace the value that we stand for beyond the business that we are building.
Chen: And for that we don't need investment. We can be choosy. And right now, instead of talking to any investor we can get introductions to, which is what happened in 2019, and we were lucky that we got a lot of introductions to investors, now it's like I don't want to talk to most of the investors. I want to know who this investor is before I talk to them, because I know we are going to have a decacorn because we already did the unicorn level. And I want to choose who I want to make rich and who I want to make successful. Are these people ...
Savodivker: I love it.
Chen: Do these people have the same values that we have? Are they in the game to build a great company and not just to get their money out in the next round and rush us to raise the next round and have a really bad customer experience? Which is what we hear from customers? No. So our strategy has changed. We're not following the standard playbook, we're doing our own playbook. And of course we have to be savvy in how to play along as well, because we cannot change the rules unfortunately, but there is enough space to make it work for people who don't fit in.
Lantigua: Okay. First of all, I am giving you a standing ovation.
Savodivker: Yeah.
Chen: Thank you.
Lantigua: As another Latina founder, first of all, because the point of realizing I don't have to follow the same playbook is transformational. It's absolutely transformational. And your point about, "I want to choose who I want to make rich," girl, you need a t-shirt for that.
Savodivker: Yeah, I'll buy it. I will buy it!
Lantigua: Because that is exactly what you're doing as a founder. You are in so many ways allowing people to invest in your good ideas and your hard work to their benefit. And that is such an incredible way to think about it, so thank you for that. Expect that I will be quoting you liberally for the rest of my life. But let's talk pragmatically, because that realization that you and your cofounders had a year in is profound. What were some of the ways that you adjusted and that you thought, "Well, let's reprioritize how we go about this"?
Chen: Yeah, so the first thing we had to adjust was our own expectations. We have to recalibrate, because Silicon Valley is like the world class training facility for the Olympics, but we don't have that outside Silicon Valley, we didn't have that in Panama. So actually we were training in the jungle, basically. So we had to recalibrate. Do we want to be the players that only train in this facility where everything is controlled? Or do we want to keep trying to make, not trying, actually making things in the real world, the jungle and the ocean? So we had to recalibrate with it. You know what, at the end this is not about the investors. Of course we have to give returns to our investors and we're very thankful to the ones that jumped to help to support us.
Chen: But this is about building a great company, a company that is profitable, a company that has a great team that people are happy and want to be part of. So once we did that, we were laser-focused in the customers, talking to them, obsessive about them, doing on-site business to see what else we can do for the customers. Because a lot of the times we don't even know what we want. If you ask a fish, "What is water?" The fish won't even know that there is water because it's so common to them that they don't even see it. So we became customer obsessive again, we narrowed our focus to that industry. We laser-focused on creating the latest technology that will solve problems that other companies have not been able to solve. That is on the execution-operation side.
Chen: And then on the fundraising side, I am not actively looking for investors to meet with. And if I get introduction to investors, I do a background check before meeting that investors. And there are investors that have contacted us and I said, "We don't have a good fit." Or sometimes I even say, "You don't have a good fit," depending if I already met with them before. "No, you don't have a good fit with us." And in the next funding round that's what we're going to do. Instead of trying to get as many introductions as we could get, because they say it's a numbers game, we are going to do a lot of filtering and choose a handful of investors we want to meet with. And of course most of them will not invest, that's part of the game, but some of them would invest.
Chen: And if we do a better job, I'm sure we can find those investors because I have seen those investors already. They are maybe 10% of the ones that actually know how to build a business that understand that building a business is not about just fundraising and increasing the value with the rounds. And it's a lot of hard work, a lot of risk, and that they embrace the values we embrace. We are customer obsessive.
Lantigua: I love that.
Chen: And a lot of investors will say, "You know, you shouldn't be focusing so much on selling right now because you have to focus on building your product and then growing your product, and later you will find a way to monetize that." I actually had many investors saying that, but that is the Silicon Valley playbook, right? When you have money, you can afford to not talk to customers and build something that hopefully customers will want to pay for. We are going the other path. I want to make sure customers will pay for this and I want to make sure customer loves us.
Savodivker: We know from our research that Latinos and Latinas are equally as likely as their white counterparts to own tech companies. As a Latina entrepreneur, you've been in this industry for a while, what are some of the misconceptions…And I know you're going to get a lot of listeners that are going to be following you. For those that are interested in getting in tech or have just started to get in tech, what is that advice that you'd give them? What are the things, the challenges that they have to go through?
Chen: I think the first challenge is ourselves, that we have to believe and behave the way that we think we can do. If we think we can be the next unicorn, then who says we can't? We are the first one that we say we cannot do it. Our fears, our insecurities, our judgment of other people, that's something we had to work on in 2019 when we moved here and we wanted to fit in. Why do we want to fit in at all? We want to stand out. That's how you raise money. You don't fit in. They give money to the ones that they think will stand out, not the ones that just fit in. So that's the first challenge, and it's quite a hard challenge because you are your best ally and also your worst enemy. And then the second thing is just, build your network, build your reputation, build your own brand. And if the standard playbook doesn't work for you, then do your own game. That's why we are here, right? Otherwise we'll get a job.
Savodivker: I love it. I love it. How has LBAN and how has the scaling program at Stanford helped you help Wisy on your journey and where you are now and moving forward?
Chen: Well, in many ways, so first, LBAN is affiliated to Stanford and Stanford is the mafia in Silicon Valley. That's the network. "Oh, you have some affiliation with Stanford? Oh, you must be part of that unicorn club." So that's the first thing, is the branding. Second is the connections that you make. And in my cohort I was adopted by the food and beverage club, because a lot of my customers are in food and beverage. Now we are friends, we are doing business together, we're finding business for each other. I am learning a lot from the industry, because again, we started the company in Panama and the US market is quite different. So my friends are sharing their challenges and their connections and how to segment the industry and where to go first. So that has helped a lot. I made new connections that we're already talking about doing business. So it's great.
Savodivker: So Min, tell us what's next for you, what's next for Wisy?
Chen: Well, we're preparing to raise a VC round in Silicon Valley and actually have to put our invented playbook to test, where if we have reached a point where we're ready to have that rocket fuel, because the rocket is already done. Our exit strategy is to IPO, which is something we decided during the LBAN program before we were thinking of selling to a company. But when we were in LBAN our mentor asked, "So why do you want to be acquired? You are solving such a huge problem, building breakthrough technology. You are a candidate for IPO." And I was like, "Well, tell me more about it." And he gave us a master class to me and my co-founders how they evaluate whether IPO or not.
Chen: Besides the financial reason, it's also because we realized that if we want to be a role model for the new kind of company that society needs, companies that are not just there to be profitable, but in addition to do good and do well, to embrace diversity and inclusion, to show the world that both men and women are important in the office and also at their homes, we cannot be sold. Because once we sell our company, our values will not be there any more. So the only way for us to ensure that we will prevail is by going public. So that was another realization, the sky is the limit.
Lantigua: Amen.
Savodivker: When's the book coming out?
Lantigua: Yes, and the speaking tour.
Savodivker: Right, the speaking tour.
Lantigua: We need a speaking tour, we need a book, we need a master class.
Savodivker: I need everything.
Lantigua: All the things.
Savodivker: What is this?
Chen: Maybe that is my personal exit strategy after we do what we did at Wisy. What would I do when I retire? I want to do that.
Savodivker: Min, great job. And thank you again for being such an inspiration to all of us and to our listeners. You're onto so many amazing things and I'm happy that LBAN could be a part of that journey. So thank you so much for being with us here today.
Chen: Thank you so much.
Lantigua: Honestly, I'm so inspired by you. Thank you so much.
Chen: Thank you, sister.
Savodivker: Wow, that was absolutely incredible.
Lantigua: I love her.
Savodivker: My new favorite. I'm sorry, Juleyka, but Min's now on top.
Lantigua: It's fine. She could be your favorite. I accept that.
Savodivker: There were so many things in the conversation, but I think to me the thing that stood out the most was, “stand out!”, right? Don't fit in, just stand out.
Lantigua: Yes.
Savodivker: For Latinos and Latinas, and I hear this all the time with LBAN, where we hear people saying, "Oh, I need to be this," or, "I need to look this way." And she's like, "No, don't. Be you. And choose who you get to work with you, who gets to work with you." That's just amazing advice that everybody should listen to.
Lantigua: That is also one of the things that it takes so long to learn. When you think that there is some rubric or some template or something that you should follow, no, actually you can't, because those rubrics and those metrics and those templates were not made for you. But you want to keep up with the Joneses so much that you try to fit your ideas and your vision into a template that was not made for you. And it really can derail a lot of really brilliant people just trying to do that.
Savodivker: Yeah.
Lantigua: Let's not even talk about the fact that coming into a room as a Chinese Panamanian Latina is already blowing people's minds. When you're coming in there with years of entrepreneurial experience, with this amazing revolutionary idea for an industry that is in some extent one of the most wasteful industries. So you come in as a Chinese Panamanian Latina like, "We're going to fix this," you are already blowing people's minds. And so why fit in?
Savodivker: Yeah. Yeah. And I love the confidence, because you're going to get so many nos. And instead of saying, "Oh, I need to keep going until I get there," say, "No, I'm going to be me." And then she gets the yes, and then she gets the things she needs to evolve and to grow. And the other thing I love about her and Wisy as a company is they're customer-centric. They're not product-centric.
Lantigua: Well, they're customer obsessive, okay?
Savodivker: They're customer-obsessive, customer-obsessive. You're right. You're right. But they're customer-obsessive in a way that just tells you that's who they care about. And that's why they're going to be successful, because you're not just caring about your product, you're caring about the people that you serve. If I'm an investor, that's who I want to invest in. She has it down. Absolutely amazing who she is as an entrepreneur and as a person. And I think for those like Jerry Porras, Professor Porras, who started LBAN, who taught at Stanford for decades, his lecture on the first day of LBAN, he talks about mission. He talked about values and reaching your north star with those values in mind. And I think Min just exactly shows you how to do that, because she cares deeply about the values. That's the key to her growth. And I think you see why she's so successful and why she'll continue to be so successful.
Lantigua: Yeah, I'm investing the minute they go IPO.
Savodivker: And now here's our Latino business moment of Zen, inspired by our guest.
Close your eyes if you can and repeat after me:
My vision and purpose are clear to me. I accept myself and I don't need to seek acceptance from others. Now inhale and exhale.
Through our research at LBAN we know that Latinos are just as likely as their white counterparts to operate tech companies. Yes, contrary to popular belief, Latino entrepreneurs are breaking into tech. And while not all tech businesses are necessarily a good fit for VC investment, these findings make us here at LBAN wonder whether the VC industry is missing out on opportunities to invest in the Latino tech sector.
Inhale and exhale. Open your eyes and carry on with your day.
Savodivker: Scaled, the Latino business story, is produced by LWC studios for LBAN. Virginia Lorra is our producer, Kojin Tashido is our sound designer and mixer, Paulina Velasco is managing producer. To learn more about the work and research LBAN is doing in our SLEI-Ed program, please visit lban.us. That's L-B-A-N.us. Thanks for listening. I'm Elian Savodivker.
CITATION:
Lantigua, Juleyka and Elian Savodivker, hosts. “Turning Down Investors Led to Standing Out in Silicon Valley.”
Scaled: The Latino Business Story,
LWC Studios., September 26, 2022. LBAN.us/scaled.