In this episode, we had the pleasure of having Chih-Han Yu, CEO and co-founder of Appier, a leading global AI company in digital marketing and business intelligence. Appier is one of the very first unicorns in our portfolio, and went public earlier this year. We covered their journey in this short case study, but in this podcast, we dive deeper into Chih-Han’s perspective on the company’s growth from a group of academics developing AI solutions to a now public, global AI company, developing AI-as-a-service for various applications, and his approach as CEO to building a world-class engineering team and scaling across markets.
Highlights and Timestamps
- 00:48 Yinglan introduces Chih-Han Yu;
- 01:11 Appier’s first two quarters on the public markets; “With all our Appier’s great efforts, collective efforts, we have achieved very good results. And I would say that we have exceeded market expectations of Appier and delivered 50% year on year growth, a 77% gross profit year-on-year growth. We pretty much exceeded all the KPIs. But actually, this journey as a public company is actually a very long journey.”
- 03:41 Mindset and thought process behind listing in TSE and the timing of the IPO; “With us starting up things like eight or nine years ago, along the way we have found ourselves wanting to build Appier into a long enduring business. I think that’s the most important reason why we considered becoming a public company.”
- 06:17 Key milestones that made Appier the company it is today; “Back then, we didn’t even know how venture capital works. Then through the eyes of those great venture capital investors, we started seeing how the capital market works and how it could help our company to grow to the next stage.”
- 09:22 Shift in mindset needed to go public; “Going public is not for all companies or entrepreneurs. There are a lot of routes through which you can exit, and then only when you feel so motivated that you want to build this business for many years, and then also make it a long-enduring business, and you have a very clear vision, I think that’s the right route for you.”
- 11:25 Benefits of going public; “So all these aspects have built up a strong discipline for the management team to think about the future and also plan about the future.”
- 12:49 Appier’s view on AI applications in enhancing business intelligence and their recent acquisition of BotBonnie; “Everyday, we are always thinking how we can further help to automate and also even make it even better for businesses to communicate with their end users.”
- 16:15 Building the “Autopilot for Digital Marketing”; “It’s very similar to how self-driving cars work. A lot of the technology we use is like that.”
- 17:39 Why Asia presents a compelling opportunity for AI-as-a-Service; “The number of AI scientists versus population in Asia is the lowest to a degree that is far behind America and Europe. At the same time the digital economy growth in Asia is so strong. We accumulate even more digital assets than any other continent.”
- 20:25 How Chih-Han has balanced building both a world-class engineering team and leading go-to-market expansion for Appier; “Every day you’re learning and it also costs the company. You have to learn fast otherwise the company’s resources might be drained out.”
- 23:12 Chih-Han’s view on Appier’s next ten years; “That’s actually not so easy, but if we can achieve this for all our customers so that no matter in which corner of the world they are, we can always help them to utilize AI, and we can help them to best utilize their data, and also democratize AI capabilities to every corner of the world.”
- 24:41 Rapid Fire Round;
About our guest
Chih-Han Yu is CEO and co-founder of Appier, a technology company for businesses to use artificial intelligence to grow and succeed in a cross-screen world. Under his leadership, Appier has grown from a five-person startup to a rapidly growing company with employees throughout 11 countries in Asia. Appier has raised 30 million USD in total funding and is the first investment Sequoia Capital made in Southeastern Asia.
Before founding Appier, Yu founded and ran Plaxie, an independent game studio focused on developing intelligent mobile and social games. Chih-Han Yu graduated from the information engineering department at National Taiwan University, and has a master’s degree in computer science from Stanford University and a doctorate in computer science from Harvard University. He also served as a researcher in Harvard’s AI laboratory. Yu has authored dozens of research articles in the field of artificial intelligence (AI), robotics and machine learning, and has been awarded two US patents.
Yinglan: Thanks Paulo for the introduction. And thanks Chih for taking time despite your busy schedule running a public company to join us on the call. I’m really happy to see you and I think it’s the first time we sat down since you’ve become CEO of a public company. So it’s great to catch up.
It’s been almost 10 years since you, Joe, and Winnie founded Appier. It’s a long, but ultimately very rewarding journey. And first, congratulations on the IPO and second, congratulations on the great Q2 results. I want to start with that. How have the first two quarters on the public markets been for you personally as the co-founder of the company, having reached this milestone in slightly less than eight years?
Chih-Han: Thanks Yinglan for having me here and it’s a great pleasure. I’m very happy to finally have this type of opportunity to join your very popular show.
I think it’s been years since we first met and also since you first invested in Appier almost eight years ago. I think that the journey — roughly, since 2012, this is the ninth year of Appier since its inception. And then, we went public in March 2021. And just now we just finished our second quarter. In the first quarter, the results were pretty much the same as when we were a private company. And now we just concluded our first quarter operating with a public company’s results.
With all our Appier’s great efforts, collective efforts, we have achieved very good results. And I would say that we have exceeded market expectations of Appier and delivered 50% year-on-year growth, a 77% gross profit year-on-year growth. We pretty much exceeded all the KPIs. But actually, this journey as a public company is actually a very long journey.
In Appier, we aspire to be able to continue to deliver. And this is just the very beginning of a very long journey, a long marathon. We would like to use it as an analogy when every, every mile we have to perform consistently well, and at the same time, set a very clear goal for ourselves and constantly challenge ourselves and then continue to become a better version of ourselves every day.
So it’s definitely a great milestone for everyone in Appier and also for investors who have backed us for many years. At the same time for Appier we feel like we’re just like a freshman in college. There is so much excitement being a public company, at the same time, we have so many things to learn. But I think we will continue to make a better version of ourselves and learn every day and then hopefully we can also achieve the results as those great companies, at least in the poppy markets.
“With all our Appier’s great efforts, collective efforts, we have achieved very good results. And I would say that we have exceeded market expectations of Appier and delivered 50% year-on-year growth, a 77% gross profit year-on-year growth. We pretty much exceeded all the KPIs. But actually, this journey as a public company is actually a very long journey.”
Yinglan: Congratulations, once again. Thanks for giving us an opportunity to invest in every financing round, ever since the seed round, all the way to pre-IPO and the IPO round. So let’s segue to that.
Great companies like Appier have many options, but what was the thought process on deciding to list on the Tokyo Stock Exchange? Obviously, you know, there was a lot of consideration of many other options, and we had a long conversation about that, but to the extent possible, I would love for you to share your views with our listeners. And the other thing was you did your IPO during the pandemic, which was quite interesting. I remember that there was a miniature bell, which was manufactured in Taiwan, which was the exact replica of the bell on the Tokyo Stock Exchange, so that was very interesting. How did [the pandemic] change the dynamic of the thought process behind going public?
Chih-Han: With us starting up things like eight or nine years ago, along the way we have found ourselves wanting to build Appier into a long-enduring business. I think that’s the most important point why we considered becoming a public company. We also had a very clear roadmap that we wanted to achieve for the next few years. At the same time, being a public company, we have the freedom or flexibility to have access to different types of financing tools that will fund our company’s growth. At the same time, we also want to build a large business and with a long enduring influence.
So that’s the most important factor that made us decide to go public and upon the time that we decided to go public, we were discussing where we should go public. Everybody has different ways of choosing the destination and the timing. We found that we actually feel like we have to choose a market that knows our industry, has the right ecosystem, and at the same time Appier also has relevance in the market.
Since we have business in Japan, and Japan is a good industry for AI, that actually drove us to eventually decide to get it in Japan. In terms of timing, it’s very hard to say when is the right time. From two to three years ago, I remember that we also went into discussions together with an investment bank, that was a starting point. Then we started preparing and when we were ready and then we could just go. So there’s no particular timing considerations, and also thanks to all the Appiers and also all our stakeholders’ support Appier has grown to the scale that is right for the market.
That is also a very important consideration: at what scale do you want to become a listed company, because when you’re too small, maybe the overhead will be too high, and when you are too big, maybe you have taken too long for this process. There’s no fixed answer for that. I would say that it is our aspiration to build a long-enduring company. And also we have a very clear roadmap ahead of us to guide our decision to become a public company.
“With us starting up things like eight or nine years ago, along the way we have found ourselves wanting to build Appier into a long enduring business. I think that’s the most important point why we considered becoming a public company.”
Yinglan: Actually looking back, I can recall two interesting things. I think one was, as you mentioned, the visits of the investment banks in Japan, and that was actually quite a number of years back, which underscores the reality that going public is something you have to plan for, and prepare for it way early in advance, which is actually a lesson for a lot of the listeners or entrepreneurs in the audience.
So that’s one. The second one is the aspiration to go public. A lot of founders sometimes don’t think that far, but observing you for many, many years for the past seven, eight years, you always had that ambition from very early on.
But if you look back at the past eight years, what would you say are some of the key milestones you had to prepare yourself for, prepare the company to IPO last year, even though it was a pandemic and it was not an easy business for the ad industry in general, but you managed to do it so well. What were the key milestones that prepared you for that?
Chih-Han: As you know, before founding Appier, we were from academia. So pretty much we knew nothing about business and we started learning everything from scratch. But we were also happy that we followed our first principles, and then learned everything and that’s a characteristic of the Appier founding team, and also the subsequent whole Appier team.
There are a lot of great milestones. I still remember the first time we met, when we decided to take the investment from external capital. Back then, we didn’t even know how venture capital works. Then through the eyes of those great venture capital investors, we started seeing how the capital market works and how it could help our company to grow to the next stage.
That was an important milestone. I also remember the first time we opened our first overseas office. That was in Singapore. We were in a SAM building, we only had one float-in seat. We didn’t even have a full or organized office.
Then we also tried to fly to Singapore and also Tokyo, at the same time every other weekend. And then in Tokyo, we borrowed a cafe. We didn’t even have a float-in seat. We borrowed a cafe to interview candidates, and also meet potential partners and customers. Then in Singapore, we had one floating desk. That was also a very important milestone that we started thinking about how do we expand out into an international business? That was very ghetto, I would say, but that was the starting point.
And that also made us who we are today…I still remember, 2016 or 17 was also very important turning point for us because we had to reorganize the way we operated and then subsequently we had to grow up and not only just take care of business, but we had to take care of regulation, compliance and everything else. Now we need to be responsible for the market. And that milestone was also a very important step for us, so there are many aspects that make today’s Appier. I would say every day there’s a small milestone.
“Back then, we didn’t even know how venture capital works. Then through the eyes of those great venture capital investors, we started seeing how the capital market works and how it could help our company to grow to the next stage.”
Yinglan: It brings up a lot of good points for our listeners, some of whom are portfolio companies and entrepreneurs. So many of them are thinking that they eventually want to go public, and some of them are thinking of doing that sooner rather than later. How is life before and after? Often that’s one of the things they are trying to figure out, you know. Is it worth the effort? How has life changed for you before and after you went on the Tokyo Stock Exchange?
Chih-Han: Going public is not for all companies or entrepreneurs. There are a lot of routes through which you can exit, and then only when you feel so motivated that you want to build this business for many years, and then also make it a long-enduring business, and you have a very clear vision, I think that’s the right route for you. Only when that motivation is so strong and then a lot of effort in the process that you feel it’s worth it. So that’s sort of what’s different about us.
Because in the preparation process, we have to set up compliance for the company. We have to follow the regulations. We also have to forecast and practice for one year with all these things where we have to keep the numbers that we forecast. We were already in practice mode. That helped us to transition to become a public company well, but in the past, we still needed to learn a lot of things because in the past, as a private company, we just needed to talk to the investors or venture capitalists who invested in us, but now everyone can be our investors.
Now we have to make public announcements properly. We also have to take care of fair disclosure principles. At the same time, we also need to consistently engage with different stakeholders and also different sets of investors at the same time. In the meantime, we also have to set up compliance with regulation — compliance that helps us to efficiently and also thoroughly comply with the regulation that’s required by the stock change.
Because, for the Appier management team and the founding team as well, and the whole company, we feel strongly that we want to build this as a long-term business. With that focus, we feel the efforts are worth it. So there are so many different routes and once you figure out what is the best, then you would just go all-in on it.
“Going public is not for all companies or entrepreneurs. There are a lot of routes through which you can exit, and then only when you feel so motivated that you want to build this business for many years, and then also make it a long-enduring business, and you have a very clear vision, I think that’s the right route for you.”
Yinglan: You talked a little bit about the difference in mindset, but tell us about the positives. I’m sure you find it easier to hire people, and I think customers have a sense of knowledge that working with Appier as a listed company. Tell us a little about the positives that will encourage some of our listeners to consider thinking about that as well.
Chih-Han: I think the positive side is that it helped to lift the brand image. Then for the employees, after working for so many years, they finally get a chance to have some liquidity. I think that’s really a very important aspect. And then having the right image lift actually helped to recruit good talent at the same time. Your customers also feel that you are more compliant with all the regulations. When they work with you, they also feel more comfortable with that.
At the same time, it also helped the company to establish operational discipline. Because as a private company, I would say that you just need to focus on the business at all times, maybe it’s not as thorough as being a public company, but being a public company, your responsibility is to all the shareholders. Anyone on the street can actually buy your shares. You have the responsibility to make your budget and also to try to meet it, and exceed it.
So all these aspects have built up a strong discipline for the management team to think about the future and also plan about the future. I think these are good aspects to make your organization and also the founding team and management team become more mature.
“So all these aspects have built up a strong discipline for the management team to think about the future and also plan about the future.”
Yinglan: Okay. Enough about going public and let’s shift to AI, which is another of your favorite topics. When I first met you, AI wasn’t even a conversational piece but right now it’s becoming widely adopted, even becoming a way of life. Tell us a little bit about how you are positioning Appier’s technology for, not only your current industry but for other industries as well. By the way, congratulations, I saw the BotBonnie acquisition which was probably a few months back. And I see that Appier is going into the conversational marketing space. So I’d love for you to give a sense of the opportunities ahead for artificial intelligence and its applications.
Chih-Han: Okay. So for our team and myself, we have been in the AI industry for almost 20 years. The first 10 years in academia, and the recent 10 years in the industry. Our vision is to make AI easy by making software intelligent because we’ve seen that all the software will become different versions of certain functionalities, but with intelligence, and we are just in the very beginning of this revolution.
We believe that because all the software you can collect data and once that data has been collected, then we can actually use that data, and past operation metrics, then they predict about the future, how it can operate itself. This can be applied in many industries.
We started from consumer marketing and went along the top of the funnel, we helped our customers to acquire the most valuable users autonomously rather than manually. Secondly, we help our customers to retain those users effortlessly through extreme personalization. After you have a loyal customer, we help them to become a paying customer by finding the right timing to give the right incentive. After the company has accumulated for the first three stages, that data is the most valuable asset that they have accumulated and we’ll help them to utilize that data and predict the future.
These four stages became the four product lines in Appier. We become an end-to-end that from the very beginning acquire variable customers, and then focus on the future, how you want to interact with these customers and we’re the end-to-end solution for that. This is actually just the very beginning. And then we think that there are a lot of places that we can further enhance with this communication channel between business and their customers.
One is the funnel process. Customers are also everywhere in addition to traditional web and apps where they interact with businesses. First is that they started from offline then moved to online and they moved to web, that then became apps. Now customers also engage with a lot of brands and e-commerce and a lot of stores actually on messengers.
They interact by talking to their friends, and then they can also perform a lot of inquiries on official messengers. That’s where we think that eventually, these can be also powerful channels for these businesses to engage with their customers. So in addition to web and app, which traditionally we have been strong with, then we have the addition of conversational channel messengers to be the next element.
Then we can become an omnichannel and be able to help our customers and those businesses leverage and utilize all the data across all the channels, and then be able to know the customer’s intent and also how to serve their customers even better. So that’s our original motivation and how we think about business and eventually leads to our recent acquisition. I think it’s a very natural expansion because everyday, we are always thinking how we can further help to automate and also even make it even better for businesses to communicate with their end-users.
“Everyday, we are always thinking how we can further help to automate and also even make it even better for businesses to communicate with their end users.”
Yinglan: Currently, how are you thinking about expansion in terms of how you’re prioritizing some of the use cases and solutions?
Chih-Han: I think there are a few places that we are very insistent about. In addition to the acquisition that you just mentioned, we also launched one product called Iceberg, your AI experts. So we are actually helping to allow digital marketing professionals to save a lot of manual work. In the past, we were seeing that digital marketing is at the forefront in terms of technology, but actually, gradually it has become complicated, and digital marketing has become the new labor-intensive work because of a lot of these digital marketing managers have to go into the office, operate a lot of different platforms, and these products can be automated.
These also come from our internal innovation that after we accumulate a lot of data from our customers, they can actually help to build AI engines that would be able to pass operation data and then help our customers to automate these decisions, what we call the “autopilot of digital marketing”. You can just set a goal and then autopilot is done and, or it can actually augment pilots — it can make suggestions and you make decisions. There are two modes.
It’s very similar to how self-driving cars work. A lot of the technology we use is like that. In addition to having more channels, I think the automation part of our work and still we are very excited about it. And that’s also another [area] we are interested in pursuing and testing.
“It’s very similar to how self-driving cars work. A lot of the technology we use is like that.”
Yinglan: Thanks for sharing that. I also wanted to get your advice on the development of AI throughout Asia. You’re one of the few companies that have operations in most Asian countries. Obviously, Japan is a big focus for you, but other than Japan, how about the rest of Asia? Actually, you can also talk about Japan, I’m quite curious as well. How has the adoption of AI solutions been? And obviously, it’s in different stages in different countries, but I would love to get a sense of each country or whether there are any trends that you’re seeing across Asia?
Chih-Han: I remember around the time we met back in 2013, when we presented to a customer, we were still debating whether we should put AI or how would develop our product in a slide, because people’s awareness at the time was so low to the extent that we were even debating whether we even have to put even one slide in our deck. As time went along because people first approached digital after they had done digital transformation and they have accumulated a valuable asset — that’s data — and after having the data they wanted to translate that into a long-term competitive advantage, that’s where Appier can help.
So in a lot of countries in the industry in Asia, we are still in the stage of figuring out how can we translate data into a long-term competitive advantage. Actually, in Asia, there’s one very interesting metric that compares America and Europe and Asia. The number of AI scientists versus population in Asia is the lowest to a degree that is far behind America and Europe. At the same time the digital economy growth in Asia is so strong. We accumulate even more digital assets than any other continent. So how do we solve this?
That’s where we think that Appier can come in, because we make AI-as-software-as-a-service solutions. So instead of hiring a scientist, you can use our solution end-to-end, scale such capability, but at the same time, using our product, our customer can actually leverage and utilize cutting-edge, world-class solutions that deliver results that can actually not only make it possible for a lot of companies to solve challenging problems they might encounter but at the same time largely decrease the cost of hiring and building their own data science team, which is also great because at the same time some of our customers, they have their own data science team, but they use our products. That also could also work in a harmonized way too.
So that, actually, makes Asia so unique as an opportunity for going forward. In addition to China, I think Japan and Korea are at the forefront of Asia’s digital economy. In Southeast Asia, it’s also emerging and it is growing so fast.
So we are very excited about this opportunity. We think that starting from digital-first companies, eventually every company will adopt such solutions like ours, so that they can translate their most important asset into a long-term competitive advantage.
“The number of AI scientists versus population in Asia is the lowest to a degree that is far behind America and Europe. At the same time the digital economy growth in Asia is so strong. We accumulate even more digital assets than any other continent.”
Yinglan: Switching gears — you’re now the role model of many entrepreneurs. I would not be exaggerating if I were to say that Appier really lit up the start-up scene in Taiwan and actually also in AI in the greater region of Asia. And watching previously as a board member, but now as an investor, I think the two difficult things a CEO has to do, which [you] have successfully accomplished is to bring together deep tech leaders and engineers to build the team at Appier, which is a world-class engineering team.
So that’s one, the second one where a lot of companies falter is going global, as you mentioned, setting up offices in Japan, Singapore, because usually those who can do tech cannot do go-to-market and those can’t do go-to-market struggle with assembling great tech talent and massaging their egos. So I think one of the biggest questions I think the audience would love to learn is how have you managed to do both well? And what are the challenges between doing these rather difficult tasks?
Chih-Han: Thanks for your compliment. We are flattered by your kind words, but in general, I mentioned that we were from academia, so we knew little about how to make a successful business so in the very beginning, actually it took us nine different pivots in order to get to our final 10th product that worked. I think it’s all about persistence and continuing to improve.
I think every time when we try to productize our technology and bring it into the form that customers will happily accept and use, it actually takes a lot of iterations, but every time we learn a little bit and then we continue to march forward. Even if it fails, we turn it to a lesson learned and then do better next time. Eventually, we saw massive scale with the product that our customer really wants, and then we continue to replicate that.
I think building a successful product and engineering team is very similar to building a successful business team. I think in the beginning you might feel very clumsy that you don’t know how to do it, especially for technology founders to build out a business team, but you just continue to try it. And every time you have some lesson learned that translates next time to how you can do better.
And to operate the business team across Asia and across the globe is not so easy, but at the same time, there are a lot of great resources, books, or sometimes advisors. They can actually help you to build that knowledge bit by bit, but most important of all for entrepreneurs is to never give up. And also make fast progress every day. Every day you’re learning and it also costs the company. You have to learn fast otherwise the company’s resources might be drained out.
That’s also the most exciting part of being an entrepreneur. Every day is a new learning experience and everyday you are learning how to tackle new challenges and that’s actually helped to also grow into different stages, learning capability, and even stronger mental capability, and also even stronger will. I think that’s something we have learned and also have developed over time.
“Every day you’re learning and it also costs the company. You have to learn fast otherwise the company’s resources might be drained out.”
Yinglan: And I think I learned a lot from you, Joe, and Winnie as well. Last question before our rapid fire round, which is that it’s been 10 years — so you, Joe, and Winnie — the Appier journey so what will Appier look like in the next 10 years?
Chih-Han: The next 10 years we are very excited about that. We will continue to build an even greater company. In the next three to five years, we hope that when people are thinking about finding an AI solution inside corporate people will think first about us. So this is an abstract goal, but actually can be defined into very concrete steps for us. We want to propagate our influence to even more categories. Then also when people are thinking about solving any type of problem in the corporate world, they think first about using AI and think about us. I think that’s our goal for the next few years.
And then geographically, we want to be in even more places. We previously focused on Asia and now we are expanding to America and also slightly expanding into Europe as well. We hope that we can build Appier into a global company, with 24 hour and 365-day operations.
That’s actually not so easy, but if we can achieve this for all our customers so that no matter in which corner of the world they are, we can always help them to utilize AI, and we can help them to best utilize their data, and also democratize AI capabilities to every corner of the world. That’s something that we want to achieve for the next few years.
“That’s actually not so easy, but if we can achieve this for all our customers so that no matter in which corner of the world they are, we can always help them to utilize AI, and we can help them to best utilize their data, and also democratize AI capabilities to every corner of the world.”
Rapid Fire Round
What are the top 3 skills a CEO should have?
Chih-Han: Strong determination. Strong analytical skills, being able to think analytically and strategically. Being able to sleep well in all kinds of conditions.
Who is a leader/CEO that you look up to in your career?
Chih-Han: I would have to pick three. I admire Steve Jobs’ product ability. I also admire Jeff Bezos’ business operation capability. Number three is Morris Chang from TSMC who can build a very big company and a very big business out of a small island.
What is one misconception that people have about AI?
Chih-Han: AI can solve everything — they can cook for you, they can drive for you. Each task requires specialized AI.
Most important advice for early-stage tech founders raising their first round?
Chih-Han: To pick the right partners because that will be very important, much more important than valuation or some rights, and the right partner can actually lead you a very long way.
What advice would you have for couples or partners working together on a startup?
Chih-Han: Be open-minded, be objective. This should be a short answer, but because we have some funding from the scientific background, I think that that’s how to work together as a partner or couples.
What book you would recommend to other founders?
Chih-Han: This book is called “Thinking Big” or thinking bigger, and the second is, “Invent and Wander” by Jeff Bezos.
How do you balance being a father and a founder?
Chih-Han: Actually, I’m very imbalanced. I spend a whole lot of my time at work. I feel guilty that I’m not able to spend sufficient time for my kids but at the same time, they have also grown quite independent, even if one is still on the way and the other is three and a half years old.