From always living in the shadows of his sister, with multiple failed ventures in between, to leading Carsome to become the largest online used-car auction platform in Southeast Asia, Eric Cheng shares with us how his pursuit to find fulfillment led him to where he is today.
In this episode of our Thought Inspire Series, in collaboration with CGS-CIMB, Eric Cheng talks to financial journalist Khoo Hsu Chuang about his entrepreneurial journey. As the co-founder and Group CEO of Carsome, Eric not only teaches us about strategic planning and execution but also shares valuable life lessons that will resonate with a lot of our readers.
How does a guy who once was known as David Copperfield, because of your disappearing act from school, and a college dropout became who you are now?
Determination Is Everything
“If I could answer your question with one sentence, it would be that it had a lot with that determination”. Eric shared with us his story of always living in the shadow of his sister, who set the bar high by achieving straight A’s and being one of the top scorers in STPM. Eric on the other hand wasn’t a straight A student and spent a lot of time playing games. However, Eric had a very clear vision of where he wanted himself to be and wanted to achieve great things in his career. He took a chance on himself when he decided to drop out of his accounting course which wasn’t in line with his vision, catapulting him into thinking about what he really wanted to do in his career.
Eric was very persistent and determined to find his ultimate career goal and seek fulfillment. Having dropped out of college, he was eager to leverage his peers, to take shortcuts in building his business. He wanted to get to a point where he could be on the same level of playing ground, if not exceeding, with the rest.
Failure Is The Seed Of Growth And Success
Eric’s success did not come without failures where prior to Carsome, Eric had two failed ventures. He initially started “Media Focus”, a household magazine delivered straight-to-mailbox. He also had early successes with his second venture with World of Warcraft before it took an opposite turn. Eric admitted that it got very demoralizing for him, seeing his peers progressing in their careers and making money, to a point where he isolated himself from his friends. However, it was these failures that played pivotal roles in him building his suit of resiliency armor. Every single part of his failure taught him valuable lessons on how to build and execute a successful business.
One of the best executors, a member of the board from Endeavor, called Eric the best executor of business. Can you talk through us about how you become an amazing executer?
Strategy Without Execution Is Useless—Execution Without Strategy Is Aimless
“I emphasize execution a lot during my conversations with many people, and that's why our business is successful. In order to really get to somewhere, you need to dive deep into your business and understand the ins and outs of it before you can craft a strategy that is on point.” Eric and his team share a common goal, offering a product or service that will make customers better off. From this end goal, they work backwards on methods of execution to deliver the promised product, creating a frictionless transaction service for used-car. Finding solutions to the problems faced by customers in the used car market, such as low trust and lack of transparency, and coming up with different scenarios and solutions, provides a roadmap for Carsome to scale and optimize everything in between.
Prior to Carsome, you spent eight years as an employee at Innity. Can you share some of the lessons that you have learnt in those early years that allowed you to make those informed judgments before building Carsome?
Building Solid Business Foundation For Exponential Growth
Eric highlighted the importance of having solid foundations in building a company before scaling, where understanding the core mission of Carsome was important to amplify the company’s growth. He related this to the failure of his previous ventures where he thought far ahead but was aiming to reach it as quickly as possible. This led him to take shortcuts and not spend enough time focusing on details and different scenarios that could contribute to the building blocks of one’s company.
Preparation For Execution Is Key
“A lot of people would not realize the amount of preparations needed before execution,” said Eric. He emphasized that Carsome’s practice of mapping out different scenarios and possible execution strategies contributed a lot to Carsome’s outstanding performance regionally and globally. Carsome found the silver lining during the pandemic where the company used this time to plan ahead, testing out different scenarios and strategies moving forward and developing further skills of employees. This preparation allowed themselves to execute when the lockdown was lifted, which led Carsome to outgrow everyone within the market today. “It is like a hundred-meter sprint. The preparation and how quickly you plan to finish the hundred-meter sprint is completely up to you. As soon as the lockdown was lifted, we were the first ones out of the gate. It's like a reset, everyone starts from ground zero.” Relating his philosophy of business with football, Eric shared further. “The 90 minutes that you see players playing during the weekend match comes down to their trainings on Monday to Friday. The 90 minutes is just a testament of that training quality.”
Can you share further on your learning experience for the benefit of aspiring entrepreneurs who want to build businesses with e-commerce, to regionalize and solve pain points?
“I still remember the conversation that I had with my co-founder in a car fare seven years ago about the pains that you see in the market when it comes to selling and buying a car. I was buying my first car, a used Proton Wira,” said Eric. He shared the challenges he faced which included going through a number of dealerships due to limited inventory and the lack of price and car condition transparency due to no centralized database. Other challenges included additional fees and the lack of after-sale support.
Three Pillars Of Building A Good Business- Good Team, Market Size And Making An Impact
Eric reflected on the fundamentals of building a really good business that can last 20 years and more. He identified that firstly, the market needs to be huge enough for them to navigate and continue to scale larger. They also wanted to provide a service or platform that could contribute to people’s daily lives. He also highlighted the importance of having a really good team to build the foundation of the company.
“Carsome was from a team of five but now we have close to 4000 people across five countries. Relating to football philosophy, a team of 11 players have one ultimate goal, winning a match. Knowing how to read a match and realizing that different players have different roles is in the team and being able to execute that will make you a champion today,” said Eric.
Utilizing the strengths of each employee is important in amplifying the foundational strength that the company brings, allowing exponential growth in the company. Recruiting people who share the same mission and prioritize the business is just as important as how a team puts priority on reading a match in football.
You took seven years to get into a multi-billion dollar pre-market valuation, making your worth more than many other bursa companies. How do you solve the skilled personnel problems in finding talents in Malaysia?
Learning From Good Mentors, Implementing Good Qualities
Eric believes that Malaysia has a lot of talents and Malaysians are very versatile. The environment and exposure to different languages and culture allows one to capture things and become an expert in that category. Eric saw growth within himself by interacting with experienced mentors, locally and internationally. Having a learning mentality was key for the company, where Carsome emphasizes on implementing good qualities learnt from good mentors, which eventually contributes back to the team and the business.
Focus, Focus, Focus
Being focused is key in getting Carsome to where the company is today, reaching Unicorn level after seven years, Carsome still returns to its core value of solving customers’ pain points, whether it is offering a solution to sell or buy a car or providing ancillary support, like financing insurance. “We have such a large market that we are penetrating. Carsome is always trying to focus on creating an easier experience for more people. A lot of people in Southeast Asia are still experiencing very painful processes of buying and selling used cars. And that's why being focused brings you really far because we have been consistently pursuing the same outcome. We want customers to be better off.”
Does it pose a challenge for Carsome to scale into the region considering the company is more people-centric rather than a technology skillset?
To Eric, data and technology definitely come hand in hand. Data plays a role in understanding the demand and supply and technology plays a role in helping the company accelerate the process of launching into a new market by sharing a similar code base across all countries.
A Company Driven By People
According to Eric, the company is always looking for better talents to increase the bench strength of the company. He reminded us that every business is driven by people, where the better skillset and talent the company has resulted in a better quality of services offered.
Technology Providing A Frictionless Process
Technology plays a huge role to enable a more efficient and frictionless process, from the evaluation, providing predicted and transaction prices, to making payments. By understanding the whole funnel, constant improvements are also being made in applications used among the back office and customers.
Data Plays A Role In Execution
Data is extremely crucial in helping optimize the whole process of consultation, inspection, and pricing. Data provides evidence and smoothens the process while providing a fair price to customers but at the same time, allowing the cars to go to the wholesalers and at auctions because of Carsome’s technology that bridges the supply and demand. Data plays a role in giving the company more insights and analysis before execution.
Coupled with data and technology, Eric also mentioned that Carsome has a really strong infrastructure support, from physical centers to inventory hubs for car storage before cars are being moved to interstates and cities.
How do you respond to your competitors?
Prioritizing Customers More Than Competitors
“Carsome is customers first, always. We are always focusing on how to deliver a better service and a better experience to our customers. In terms of internal innovation, we are working relentlessly on creating a lifetime value with our customers that goes beyond the moment when you sell your car,” Eric replied.
Having competitions where similar players are trying to replicate the same thing, Eric believes that the moment of truth lies in the small difference that the customer will experience. Staying focused on building the foundation, being able to execute and to continue leveraging has allowed Carsome to have a competitive advantage. Carsome is leading by a really wide margin in terms of market share for all countries that they have tapped into, something the company is truly proud of.
“Carsome looks at our global peers very holistically but it still has to come down to one single priority, which is focusing on delivering what the customer wants. Deviating away from this only brings short-term results. We prioritize our customers more than our competitors,” Eric mentioned, sharing Carsome’s key winning point of constantly being able to convert more customers.
Can you talk through the integral intricacies of trying to raise capital in a very different environment now where things are changing very quickly, guided mainly by the central bank policies, inflation, supply chain issues and military conflict in Ukraine?
Building Trust By Delivering Results
“Carsome is a business that does not necessarily have to raise a lot of money but we raised enough to really get to where we should be. Comparing our growth, we have always been able to deliver good results for a lot of our investors. Due to this, the trust has been building and becoming stronger among people to have an interest in investing in Carsome.”
Eric emphasizes that Carsome has a thorough plan on the allocation of the investments towards execution and delivering the desired outcome which then builds confidence in investors.
The Importance Of Execution At A Pivoting Point
“At the end of the day, you can't really control where the market is going. However, we are confident with our methods of delivering results. We constantly look at our business performance, on a month to month, quarter to quarter basis to measure where the business health is. We try not to let the market affect us too much where we have a mindset that even if the market environment is bad, as soon as the market turns good, our business would be one of the first ones to shine. This has allowed us to rise up quickly during the COVID times,” said Eric. The foundational blocks of Carsome’s business and being able to amplify it have allowed Carsome to use the window of opportunity as a pivoting point for the business to scale, capturing more market share and units sold in the market. Carsome is gaining a lot of momentum from investors as their confidence in the company builds up. Eric reiterated that the market cannot affect how investors think about the business and the potential of the company in the next couple of years.
What advice can you give to aspiring entrepreneurs at all stages of their growth path?
Eric mentioned that the path that he took wasn’t a straight one.
Passion Acts As Prerequisite Towards Success
He emphases how being passionate about what you do is the first prerequisite towards building your empire as it creates a cascade effect of having determination and perseverance, to be more forward-thinking and ambitious in reaching the end goal. Finding the answer to the problem that you are trying to solve creates the thirst for knowledge but without passion, it is impossible to drive that.
Eric defines his passion by finding fulfillment in different aspects, including financial freedom and achieving career success, but what is more important to him is the fulfillment in being able to deliver a promise to people. “The people that you build a business together with are on the same journey, pursuing the same mission. Carsome is a mission to a lot of people and that is something that I want to continue to drive,” said Eric.
Eric also added, “and that's the reason why I joined Endeavor, because of how much fulfillment I could get by being able to share and inspire people. Sharing my mistakes as learning points to others, being able to make an impact, that is how I pursue fulfillment.”
Past Failures Does Not Define You
The sibling rivalry, past failures and trying to prove to people who doubted him were powerful flames that were ignited and continued to burn bright for the rest of his business life. What doesn’t kill you only makes you stronger. People must encounter hard times and massive resistance before they find the inner strength and Eric could relate to this.
“During my first year at Carsome, a lot of people around me, including my former boss, thought that a year later Carsome wouldn't be there anymore. I have experienced some of the lowest lows in my life. I really have nothing much to lose. I was more focused on my pursuit of making Carsome successful. I told myself to not be afraid of failing again, because it's just a phase. What’s more important is who is going to be there for you when you are in this phase, is there going to be anyone around you who still continues to believe in your abilities, capabilities and to want to be on the same team as you? To me, that's how I want to build a business, that’s how I want to build my team, and I want to be associated with people of similar mindsets.”
“Always adapt to the market environment, especially during downturns and crises, where the opportunities become a lot more obvious. The improvement for your business, if you nail it, is going to be a lot more tremendous compared to a good market environment,” Eric also added before finishing the talk. Carsome is set to grow, moving towards delivering their service on a larger scale. Eric shared his hopes for the future. Simply by staying focused, he hopes that Carsome is able to extend the business from just a transactional relationship to a car ownership journey relationship. There is a whole new ecosystem Eric and his team are trying to create.
The content of this article is summarized from our ‘Thought Inspire Series’, a series of six exclusive physical interviews with world-class & established company owners highlighting their entrepreneurship journey organized in collaboration with CGS-CIMB. The series is aimed to inspire, entertain and motivate all aspiring and existing entrepreneurs in the Malaysian entrepreneurial ecosystem. Follow us on our social media pages to get the latest news on upcoming events and key learnings.