How I switched from working in a VC firm to being a SaaS entrepreneur in Southeast Asia？

This article is written by Jennifer Zhang, co-founder and CEO of Wiz AI, a voice AI company in Southeast Asia. Before starting her own business, Jennifer worked in VCs in China and the United States, and traveled the world during her college years. This article is translated by the Momentum Works team. It was originally published in our WeChat channel. 

 

With the global wave of digitization and intelligence, the rise of SaaS platforms has become a trend in various industries. The impact of the pandemic, specifically the push for digitalization and remote working, has further catalyzed this rapid development. Many companies have continued to increase their demand for various SaaS services while integrating them into their  daily operations. 

Take audio customer service in Southeast Asia as an example. Because of infrastructural constraints (network quality) on remote working, as well as data security concerns, many companies have turned to SaaS services to actively fill this gap.

Moreover, SaaS also provides a more efficient space for collaboration and consolidation during remote working. With the gradual improvement of internet infrastructure, the iteration of online SaaS hardware is expanding to encompass almost all areas of our lives. Such changes can be seen not only in China and the United States, but Southeast Asia as well. The region is constantly innovating to adapt to this new tech and business environment.

As far as audio AI services are concerned, there is a lot of market potential in Southeast Asia, especially when it comes to chatbot services. Wiz AI hopes to apply advanced AI technologies such as Audio Speech Recognition(ASR), Natural Language Processing (NLP), and Text To Speech(TTS) to daily scenarios across Southeast Asian countries. These technologies will definitely achieve more efficient customer communication and business expansion in various fields. 

 

The development of audi AI in China and its applications

From a macro perspective, audio AI – as a globalized industry – has transformed from era 1.0 to era 2.0 in China. It is ahead of Southeast Asia in terms of the overall process and the maturity of AI technology. In the era 1.0, the players focused more on the growth of customer size, hoping to expand their user volume as much as possible. Thus, the industry experienced unbridled growth. 

However, when it comes to era 2.0, the key differentiating factor becomes user experience. Higher standards are required, whether it’s in terms of details or recognition rate, to create stickiness and brand loyalty. Therefore, the competition now revolves around brand differentiation and repurchase rate. 

I went back to China and participated in some industry forums recently. I feel that AI audio is generally favoured by the Chinese market. Yun Zhi Sheng has just received their D round of financing. Yitu, Megvii, Yuncong and Shangtang – collectively known as the “Four Dragons of AI” in mainland China – are also planning to venture into this. Therefore, it is apparent that potential is huge in this sector. 

 

The difference between the Southeast Asia and China regarding audio AI

Although the Chinese market is one step ahead (in intelligentization)of Southeast Asia, they remain two regions with vastly different circumstances and target audiences. Thus, directly transferring Chinese strategies will not work. 

Furthermore, although there are gaps between the communication infrastructure in SEA and China, it will be a sweeping statement to conclude that audio AI services in SEA are 5 to 10 years behind China. 

Southeast Asia – being  one of the global customer service export centres – has its own advantages in adaptability and diversification when it comes to customer service using AI technologies. 

The Philippines, for example, has long exported a large number of customer services to various MNCs and has accumulated a lot of global experience in the process. Conversely, most of the customer services in China are geared towards  the Chinese market. There are very few Chinese companies that focus on doing software services for global customer service centres. 

Another obvious trend is the rising popularity of “cloud + call centers”. Amazon has been pushing for the promotion of AWS cloud customer service centres since the epidemic. Salesforce has launched Service Cloud too. As a member in this ecosystem, Wiz AI has gradually expanded with this trend. In fact, there is yet to be any successful penetration done by large companies in China. On the contrary, Southeast Asian companies are more familiar, flexible, diverse and specialized in this area

 

1. The difference in application scenarios and habits

Firstly, customer service is an essential part of the customer experience. In China, there is  only one superapp – WeChat – to navigate traffic both in the public and private domains. With this large-scale platform, the customer service and relationship can be generated on a single avenue.  In other words, expansion and online traffic management of various services including audio AI can be done simply on WeChat alone. 

The ecosystem and traffic management strategies are very different on apps such as WhatsApp. Online platforms in the States are more diverse and their functions are relatively more targeted and vertical. For us, we will also choose the appropriate ecosystem to launch different strategies in order to cater to different customers and to suit different time periods. 

The channels for online marketing are vastly different too. Most of the companies in the Westernworld are still accustomed to implementing promotion plans through email marketing. In China, such public relation strategies seem to be arelic of the past. Different types of services will generate data of different dimensions and latitudes. Hence, there will be solutions generated according to these differences, which will then be analyzed in detail according to each industry. Once you are under a different online environment, adjustments and adaptations such as Newsletter need to be implemented.

Furthermore, we need to take into consideration the difference in scenarios in which audio AI services are applied. In China, using Meituan and Ele.me to order takeaway has already become daily common practice for all. However,  in Southeast Asia, where electronic mobile payment has not yet been fully popularized, telephone ordering is still the norm for a large number of people. 

Perhaps we may say that the market for food delivery in Indonesia or Singapore is very popular currently.  But the main problem is Southeast Asia is not a homogenous land with identical habits. Different countries within the same region have very different norms and practices. 

For example, in the Philippines, constrained by its hardware and software, many people still keep to phone ordering for food.

 

2. Differences in data security regulations and culture

For any audio AI startup that wants to settle down and grow in any of the Southeast Asia countries, a crucial issue that they will bump into is data security. For foregin countries,  understanding the local information security laws and labor policies has become the primary concern for avoiding pits.

On top of that, ASEAN countries are complicated. The concept of information security is very sophisticated and tricky both from the legal viewpoint and the customer standpoint. This results in complexity in terms of company management as well. Cultural quotient is critical. 

On the bright side, this also makes the Wiz AI team more diversified. After all, we need talents with diverse backgrounds to have in-depth insights into the cultural habits of various countries– this is part of our comparative advantage. 

 

3. Pain points can’t be solved overnight

Many friends who are into the field of audio AI may have such a doubt: Since the advanced AI technology in China is ahead of Southeast Asia, we should just bring the technology to the targeted area and bridge the gaps. What is so difficult about this?

Based on Wiz AI’s experience over the past few years, the actual operation and implementation is much easier said than done. 

In addition to the obvious difficulties such as our unfamiliarity with Southeast Asian languages, local ASEAN front-office facilities are mostly underdeveloped and it would be unfeasible to directly plug-in advanced AI technologies. 

If their front-end platform is still in era 0.8 , even if you move over the technology from era 2.0, it simply will not work. As a newcomer, it is nearly impossible for foreign companies like us to make major changes at too high a cost when its market volume is limited. It will only slow down the adaptation process. 

The solutions for these pain points require in-depth exploration, integration and adaptation. In other words, there is no overnight solution.

 

The current competitive landscape of audio AI in Southeast Asia

Anyone with a discerning eye can see that audio AI has a promising future, so competition in the industry is  inevitable. Wiz AI often faces fierce competition from major manufacturers for orders. However, our small and compact size gives us some comparative advantages too. Our communication is often relatively quicker, allowing us to make agile adjustments with little delay.  

Undeniably, this is an emerging market after all. For traditional companies, there are obstacles and it takes time for them to accept and get used to audio AI services. 

For small and medium-sized tech companies, they will also consider factors such as internal management. Growing the market takes patience. Trust building through constantly improving our product is the key to scaling up. 

 

In the past two years , WIZ has managed to cover the top customers in Southeast Asia across various industries, including banking, insurance, telecommunications and e-commerce. While we started out with a product that caters to a single scenario, we managed to derive more diversified products now. Some of the scenarios we encounter do not even exist in China or the United States. But the feedback we got from local enterprises is very promising. Wiz has begun to expand our business in the United States and Australia as well and the Talkbot solutions are well-received by local SMEs there. 

 

Currently in Southeast Asia, the audio AI landscape consist of mainly three types of players:

1. Chinese companies that venture overseas. More and more companies are beginning to pay attention to the overseas audio AI market.
2. International companies like Amazon and Salesforce. With their own platforms and  advantages with the ecosystem, these big companies are strong competitors in audio customer service, and it is easier for them to receive large orders.
3. Local companies and companies from India.

 

Moving forward with ambiguity 

As a team with global talent, more than 70% of WIZ’s core team members come from outside China. Regarding cross-border management, WIZ strives for integration, respect, effective communication and inclusiveness. We strive to ensure that every member in the team is involved in all aspects of the company.  

For example, when having a meeting with an Indonesian team, if we encounter timing that clashes with their prayers, we will start 15 minutes later. We also encourage colleagues to learn new languages and culture. The experience of studying and working in China, the United States, Japan, Europe and other regions in the early years led me to be more   culturally conscious and educated, hence  paying more attention to the construction of an inclusive corporate culture.

The transition from investor to entrepreneur is actually very interesting for me personally.  Let’s use a basketball game analogy. I used to be the coach and cheerleader sitting on the bench. Now I play directly on the court. Sometimes, I reflect about the times when I tried to understand an industry based on data and reports. But now, I am putting my feet into the mud and on a journey of creating and recreating new products that could potentially affect the industry in one way or another. The sense of accomplishment from this is unique.