01:21:07 · Jack Zhang, Henrique Dubugras
The next decade is probably just really increasing the brand equity and then try to build this brand that people trust and businesses and entrepreneurs trust to be partnered with. And then, you know, there are very few things in life creating compounding value over a decade longer. I think relationship and brands are the sort of most important part of that. And also your relationship, including your life partner as well, so then hopefully that you can find your true life partner that build a a very strong relationship for the rest of [01:21:40] S0: your life. So kind of like, you know, the first decade of Airwallex was this, like, massive sprint to get it off the ground. Right? And now it's in a path to compound. So I think a lot of the questions for you from what I understand is, like, okay. How can I compound this for a long time and how can I keep doing this job for a long time, right, in a way that, you know, if it keeps compounding for the next ten years, it's obviously become, like, massive? Right? Like, if it's compounding even at 20, 30, 40% a year. That's super interesting. And, you know, you you talked about 2021. I'm curious, you know, the ZERP era. How did that feel for you? And, like, tell tell tell us a little bit about that experience, and how did it change till today? I think ever... All of us went through it. So
01:21:40 · Henrique Dubugras, Jack Zhang
[01:21:40] S0: your life. So kind of like, you know, the first decade of Airwallex was this, like, massive sprint to get it off the ground. Right? And now it's in a path to compound. So I think a lot of the questions for you from what I understand is, like, okay. How can I compound this for a long time and how can I keep doing this job for a long time, right, in a way that, you know, if it keeps compounding for the next ten years, it's obviously become, like, massive? Right? Like, if it's compounding even at 20, 30, 40% a year. That's super interesting. And, you know, you you talked about 2021. I'm curious, you know, the ZERP era. How did that feel for you? And, like, tell tell tell us a little bit about that experience, and how did it change till today? I think ever... All of us went through it. So [01:22:18] S1: Yeah. It's very unreal. Right? So in January, we we did around at 2.6. In mid of the year, we did a round at four. And in September, we did a round at 5.6. And in December, we got an offer at eight. It's kind of ridiculous. I mean, I actually didn't accept the $8,000,000,000 offer because I thought, you know, the company is going to grow triple next year. You know, we're going be a $15 business. Why would I take an offer for $8 But then, obviously, didn't know that the market is going to crash, The multiple is not real. You know, we went from 100x of revenue in terms of our multiple to, you know, 13x, 14x of gross profit. That's not like... [01:23:07] S0: Yeah. Very different.
01:23:07 · Henrique Dubugras, Jack Zhang
[01:23:07] S0: Yeah. Very different. [01:23:07] S1: That's not like a... It's like a more than 95% compression in terms of multiple in the last couple of years, right? But that's the reality. You know, that's every company has gone through. And as I said, we just have to have the resilience and build efficiency and heads down and keep keep scaling. [01:23:25] S0: When you're going through it, did you believe you were worth 8,000,000,000? [01:23:29] S1: Yeah. At that time, I thought I'm actually worth more. [01:23:31] S0: Yeah. It's crazy. Right? Like, how to go through these things. It's like... It's that kind of thing where you, like, adjust a certain lifestyle or mindset. You know? It's very hard to come down versus, like, you've never came. Right? Like, if someone told you ten years ago that Airwallex is gonna be, you know, I don't know, $5,000,000,000 business or 6,000,000,000, 7,000,000,000 after ten years, you would have probably been really happy. Right? [01:23:53] S1: Yeah. The best outcome of my initial sort of idea, I thought about building Airwallet is $100,000,000 I actually told all my co founders it would be great if we can get to 100,000,000 in three years' time when we started the business. But we obviously got the acquisition offer at $1,000,000,000 after three years, which we feel like just shocked. You know what I mean? But then, like, because of 2021, you'd be like, oh, even that's kind of how every business is valued, I mean, you should be worth, like, multiple billions and... Which is not the reality.
01:23:53 · Jack Zhang, Henrique Dubugras
[01:23:53] S1: Yeah. The best outcome of my initial sort of idea, I thought about building Airwallet is $100,000,000 I actually told all my co founders it would be great if we can get to 100,000,000 in three years' time when we started the business. But we obviously got the acquisition offer at $1,000,000,000 after three years, which we feel like just shocked. You know what I mean? But then, like, because of 2021, you'd be like, oh, even that's kind of how every business is valued, I mean, you should be worth, like, multiple billions and... Which is not the reality. [01:24:26] S0: No. Totally. And, you know, now, obviously, having to come down from that is always hard. Right? Like, I'm thinking, hey. You know, as you said, like, multiple compression and all that, you say, well, you grew so much and you did... Business did so well, but because of multiple compression, you know, it's still you're anchoring yourself to the benchmark of the eights that you had the offer or whatever it was. [01:24:48] S1: We're not even there yet. We we we barely growing out of our 5.6. And Yeah. Hopefully, we'll get to eights sometime next year.
01:24:48 · Jack Zhang, Henrique Dubugras
[01:24:48] S1: We're not even there yet. We we we barely growing out of our 5.6. And Yeah. Hopefully, we'll get to eights sometime next year. [01:24:56] S0: Yeah. Exactly. Exactly. And, you know, now almost a decade in. Right? Like, you know, you hire people and build things around the world. Like, what are... What what do you think are some of the lessons that you think you learned from the Chinese world that you think there will, you know, other entrepreneurs around the world should learn? And what do you think are some of the lessons you learned from around the world you think the Chinese entrepreneurs should know?
01:25:19 · Jack Zhang
[01:25:19] S1: I think what China is really good at is engineering at scale and at the execution intensity and velocity that no other economy have... I've seen. Right? So I think for global entrepreneurs, especially in Silicon Valley, figure out a way to leveraging these great engineers in China would be kind of a huge advantage, right? I think Zoom did that, and we did that. I you know, Snap had a team in China. And a lot of, you know, Microsoft software have more than 10,000 engineers in China. Not many people talk about it, but that kind of become like a huge sort of productivity boost for all of these global companies. And the key to operating is that you hire the engineering leadership in The US or Australia, then you kind of relocate them back to China so you have kind of a consistent culture and then just try to... The Chinese engineers are very good at execution, but not the best sort of innovators and just try to leveraging the strengths, not the weakness. I think just overall, I've been seeing a lot of the Chinese entrepreneurs, they're just working extremely hard to the extent that it's almost not much of a lifestyle. And that was kind of how I've been operating for a long time. But until I've been hanging out with entrepreneurs in The US, everybody have a lot of family, a lot of life, a lot of focus on their health, building a sustainable sort of lifestyle while you're doing this business, which I think is probably a better or more sustainable way of building a business. It's not right or wrong. It's just that your life shouldn't be just about work and just about intensity and execution. So now I'm probably in the middle of, like, obviously, you need to work hard and executing with intensity, but also you need a more balanced sort of lifestyle, and you need relationship and friends. I think for Chinese entrepreneurs, what they wanted to do is always try to enforce that Chinese culture, work culture intensity to the West and globally, which is what I try to do in Australia early on, actually doesn't work because fundamentally, the culture is different. You cannot build a culture in a country that which is fundamentally have a crash value.