Episode 7

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Published on:

13th Jan 2021

Ep007 - Ideas are Cheap, Execution is Expensive - Linh Le

[00:00:00] Linh: So the more you talk to the people that you want to serve, the more ideas you have, and they actually can even tell you to do different things. And at first, as it's kind of the mother of your idea, you'll be like, "Oh, I'm not going to do that." But if you, if you ask ten people and eight of them tell you to do certain things differently, then maybe there's something you need to consider.

Laura: That was Linh Le, founder of AYA Cup, a startup changing the way we drink coffee all over Vietnam. Linh is building a system that encourages coffee drinkers to use and return their coffee cups to eliminate single use plastic. She reminds us to approach potential customers with an open mind, to do our due diligence prior to launch, and that ideas are cheap, but execution is definitely expensive.

Take time to challenge your big ideas and collaborate with the people you're serving to make sure your solution [00:01:00] actually aligns with their needs.

Clement: You are listening to The Spaceship Podcast where we'll be speaking to entrepreneurs and global thought leaders to highlight the theories we cover in The Spaceship masterclass.

If you are set on solving some of the world's biggest problems, check out thespaceship.org. Now let's give the mic to our guests:

Thanks, Linh, for being here today. So I wanted to introduce you to Laura. You had a previous call, but I'm really glad that we have this podcast all together and that we have you as a, as a guest. We actually met online during this coronavirus period. And we discussed, uh, sustainability in Vietnam, where you're based and where you founded AYA Cup. We would love to learn more on your journey to become an impact entrepreneur and, um, what has been the, the challenges.

And [00:02:00] also,I would like maybe to start with one question to you, which is... so AYA Cup uh, we can introduce it a bit more and you can explain, but why do you care so much about reducing plastic waste in Vietnam?

Linh: Uh, uh, the story is quite long, but, if I can answer that in three or five sentences, I will say when I first heard about one statistic, which is Vietnam is the top five country polluting the ocean the most, the moment I heard that news, I got really, um, shocked, mixed with shame.

Uh, ashamed because as a Vietnamese, we always heard quite negative facts about our country. So we are the most populated country in the world. The top 13 most populated. We're also one of the most, quite poor country compared [00:03:00] to other countries. Our money value is not the best. It's quite low. So lots of things that make us not proud as citizens.

And then when I heard that, like we are top five country polluting the ocean, the most... about two, three years ago, I was really ashamed. And then there was like, Oh, people are not going to change, nobody is going to do anything. It is what it is. I just carry on with my life. So then one day, uh, I used to work for a golf construction company in Vietnam.

We, um, put out irrigation system for golf courses' development, and I went up for a check up North of Vietnam. And I started to see people cutting off trees in the small slope of mountains to make golf courses. So after that, I told my boss, like, I've had enough of seeing my country destroyed, [00:04:00] and natural resources not used to the optimum... and I don't want to be part of the problem anymore.

And I want to change. I want to be part of the solution. And also at that moment I was quite lost. Because I've been changing jobs quite often. I'd say every two years. Not sure about the millennial problem or is it because I can't find what actually I want to do. Most of the jobs, I find they are quite cynical.

So they say one thing, they want to do the good thing for society, but then they don't actually keep their word when it comes to business conduct and within the team or towards you, the customers. So I don't really believe in those values from big corporations. So that's why I keep changing my job.

Either to find myself or either to find a job that I like, I couldn't find anything, but I knew inside that I wanted to have my own business. [00:05:00] So I was also lucky that the job at the golf course, was giving me quite a good salary and I saved up a lot before I quit this time. This time I quit and was like, I made a plan for this time to quit, I don't just quit and then I don't have enough money and then have to go back to work.

 So I save up a lot, after two years working for the golf construction company. Also before I quit, I also launched a small business. So I provide single use packaging for food and beverage restaurants, but made from sugar cane fibers.

And I was lucky to have my master supplier agree to let me do kind of a drop shipping business style. But, uh, at the beginning I still had to go to do all the legwork, which was meeting all the restaurants. For me to introduce them to all these products. And I feel [00:06:00] very good with that because I actually ease...

I'm actually the solution of the problem, which is plastic packaging. But before even working with that new material packaging, I wanted to work on solar energy because I see that they have so much potential for the sun and we don't really see much of any initiative happening in Vietnam. Then when I looked more into the solar energy industry in Vietnam, it's quite challenging.

Um, because EVN the electricity provider in Vietnam is quite a monopoly. And even though there's some regulations and rules to promote the solar energy plants in Vietnam, it's still quite political. And again it involved a lot with construction, which I don't like to work on. And I really get intrigued by [00:07:00] technology and being a startup.

And I really enjoy to have a lean team. Um, but they're efficient. So. That's why I decided to, to have a small company, just to test out how running a company with all the taxation and paperwork and documents and how to run an actual company. Because I felt that like, if I can make the previous company, building a team from two people to 26 people within two years signing a $4.1 million for them, I might be able to launch my own company. So I tried. And it's harder than I thought, especially when the internet is open and people can search for pricing.

And when products, let's say single use packaging is [00:08:00] not a good, but it's a commodity -- it's not a product, but it becomes a commodity, everyone's going to go with price. So if I don't have the best price, even though I have the best service, I am not able to keep clients and clients can find pricing easily online if they try to.

Laura: So what you're talking about right now is the cups, right? So, so the product, the main product that you wound up deciding to pursue for your first iteration of your business after supplying these, um, did you say sugar cane, sugar cane replacement.  (Uh-huh)

So after you tried, that you decided to focus on cups... correct? That's what you're talking about.

Clement: If you can maybe introduce to us like the first idea that you created with AYA Cup and how it came up and also how you decided to start focusing on cups.

Linh: Hmm. So with launching of the, um, single use packaging made from sugar cane fiber, it was too [00:09:00] expensive to work with smaller vendors.

I decided to find a better way to create the system that one product can be produced once and can be reused hundreds of times. So that, at the end of the day, if the system goes well, the cost can be even cheaper than plastic. So I looked into the circular economy and I looked into different startups in the world.

And I see that there's a way to do that, which is what I did with AYA Cup, to put reusable cups at different coffee shops so that people can borrow them at one place and return it at the other location.

Laura: So this is really interesting. So you, because of the price issue, realizing in your first experience trying to replace single use plastics with just a better material... Realizing that, Oh wow, price is still, it's really interesting what you said around, you [00:10:00] know, all of these single use items are just thought of as commodities and not products. So, you deciding on a cup that is reusable that's cheaper, at the end, than plastic, is something really interesting. What was your first step in even testing out whether or not this was an idea that worked in Vietnam?

Linh: Um, the idea, um, the first time I tested it, was to see how the general attitude of people around me think about reuse of plastic. So me and my cousin, we would throw a party. She's a DJ. And so we thew a party of 100 people, quite a small one on a rooftop. So I bought 100 plastic cups. I tried to find good products.

And then everybody coming into the party, I asked them to place $1 to get the cups in order to get inside the party. So first people was like, "Oh, [00:11:00] what is that?" Most of the foreigners say, "No problem, they will do it. This is such an amazing idea." Then this is for me, I check that point, like foreigners in Vietnam are okay with this idea. Then with the Vietnamese, with the locals, for them first, it was like, "Oh, why do we have to pay for this? But then because of the peer pressure, because their friends has paid for that, they have already paid for that, they have to put that $1 for the cup in order to get in to the party. Then we collected data.

So 100 cups out, how many cups back? We got only 70 cupd actually returned to us, but then we started to find 25 laying around in the party uh, after the party, and then we lost about five cups. So we took all these notes and we made some money.

Laura: So only five cups were not found or not returned out of the entire hundred.

Linh: Yeah. And one thing was that the party organizer [00:12:00] was like, Oh, I have never seen my party so clean without a massive amount of plastics, because before we used only plastic cups and this time we don't have any plastic cups. So, at some point we ran out of cups because more than a hundred people showed up.

And then we had to use plastic cups but only like five or 10. And then another exciting thing is that I was going to collect all the cups and bring back to my place and wash  (them)  but then the cashiers and the bartenders, they even wanted to wash them for us and they were super happy. They'd be like, "Oh, I'm very happy to wash the cups so we don't have to throw more cups away.

So please, next time please come back." And I was like, yeah, sure, no problem. And two days later, the organizer called me to buy all the cups that I have so that he can prepare for the next party. So for us, we make some money, we get the money back and we test out of the project clearly. And what's most important was that we took all the numbers, take photos, make it in to a nice presentation, [00:13:00] and we went for raising money. So we went for a pitching competition in Vietnam for accelerator program, up to Hanoi. Surprisingly with this data alone and with the samples, with a test, we were able to raise $20,000 for the idea.

Laura:  Again, reiterating this was your first test, right? This was your first proof of concept.

Linh: Yeah.

Laura: Wow. It's pretty incredible that you were able to collect all of that data right away. It's such a great idea to do it immediately upon introducing your new idea because yeah, who would have thought you'd be able to raise money immediately just with your friend's party and this proof of concept. That's really, really amazing.

Linh:  I didn't expect to raise that amount of money. For me, to even go to the pitching competition is something very new for me. Funny thing is that when they gave me the term sheet, I had no idea what is it. I understand, I heard about the term sheet then had to call like five of my [00:14:00] friends who were already startup founders, came, sit down in my house and asked them every question, like, what does that mean, such term?

I have no idea what is convertible notes. And I have no idea what... even equity, I had to look it up in Vietnamese. It's took me a lot of time to understand the term sheets. And it took me a lots of time to, to understand VC mindset and how to deal with them. Yeah. It was quite fun.

Clement: It's amazing how you prove the concept so quickly. And I'm curious to understand what are the challenges and how did you solve those challenges from the moment you proved the concept to, uh, and maybe with this 20,000, how did you scale that business or kind of really launch your actual product after that?

Linh: So remember, first we we just bought plastic cups at the supermarket, hundred of them, right. 100 of them. So we want to prove another concept of how to bring these ideas [00:15:00] to coffee and restaurant for take away. That's the way I wanted to solve the problem. Then I tested using the cups and talked to different people.

Um, actually I, way before that, I already was in contact with a supplier from Alibaba and ask them to send the samples to us. So every other week I will receive two or three different cups from China and we paid $50 for every sample. And then I go to people who are in the same mindset like me, I say, Hey, which cup do you like?

How do you feel about this? How much will you be willing to place a deposit for these cups? And after all the cups are there, say maybe 50 of them. There's one cup that went to the final list, which is made from bamboo fiber and melanin with a silicone, uh, lid. Actually the cup surprise me because it's very, it's quite sturdy. .

It's quite heavy in a way that you feel is quite a premium feeling. [00:16:00] And I say, ask people, what do you think about that? How much were you willing to place a deposit? And they say $4. I said, okay, how about $2? And they're all excited. So that kind of research took us, took me like eight months, six to eight months to prepare.

And when I received the money from our investor, actually I maxed out my credit cards another time to place an order of a thousand of them. Uh, they actually got stuck in the border for two months. So we were late to launch the project for two months. Yeah. So it's about to launch in June. Uh, I had like three interns come from England to support me.

We have lots of preparation for, for Facebook, for social media, we prepare everything but we can't even launch because the product is not in the country. So in August we launch and, uh, both me and the shop owner,  (were) surprised [00:17:00] that after the first day we put the cups out. 10 cups at a location, one smoothie  (place) , there were four people that came in and asked to place a deposit, go get a drink and come back and return getting money. I was surprised, everybody was surprised. I was crying a little bit because, Oh my God, finally people actually do that. And, uh, we started with three locations where the owner, kind of my friend, because I go there very often to talk to them.

After that, I just. Again, take the numbers from one location. And then I keep going to different locations and we launched to about 10 to 15 locations within a month. So the concept proof, again, people started to text one of my shop owners. Saying, "Hey, can you bring me two coffee latte in the reusable cups?" So my guy bring the coffee within our cup, AYA cup, bring it to them, get the money, bring [00:18:00] back, or get the two cups from them and bring back.

So. The system actually works. Uh, I see that, I know that, and that's how I prove another time.

Laura:  I have a quick, I just have a quick question because it's always better to bring something into the world and see what, you know, how it reacts with real life. So real shop owners using your cups. Um, as you said, people calling in and asking for these cups, all of that are, these are great proofs that something is working. For me, I've always found it kind of this interesting dynamic between letting go of my expectation of how things will look and feel and react in real life and just observing what actually happens. Do you have any advice, or I don't know if you also have. Ever felt the same where you just, you had a plan as to how it would unfold.

Do you have any advice for entrepreneurs who are testing things out for the first time to really keep your eyes open, to notice how the dynamics might shift or different [00:19:00] possibilities that might arise or different ways you might want to apply your product?

Linh:  I think the best way is to talk to so you... your products need to be certain customers or target audience.

And if you can define them, let's say in my case, 25 to 30  (year olds) , who understand about being, want to be, to go green. They already have their own tumbler, I would say. Then those, find those people, talk to them and ask, tell them about your idea. Don't worry about that people are going to steal your idea. Because ideas are rather cheap, execution is more expensive. And, and ask them like, "Hey, we're thinking about this idea. What do you think about that?" Just talk to them. So the more you talk to the people that you want to serve. Um, the more ideas you have. And they actually can even tell you to do different things. And at first instance, founder, or the, the, the mother of your idea, [00:20:00] you'll be like, "Oh, I'm not going to do that."

But if you, if you ask 10 people and eight of them tell you to do certain things differently, then maybe there's something you need to consider, but still test your idea. And if it doesn't work, then you go and check out the other idea that they suggest you.

Laura: That's great. I, it's a great reminder. And even just to be open to, I don't want to say criticism, but just, just be open to what people have to say, whether you think it's positive or not, because there might be insights in there that can unlock a whole new world for your mission.

Maybe a completely different idea.

Linh: Yeah, absolutely. And don't ask them like, "Hey, I have this idea what do you think?" Rather ask them. "Do you find that this is a problem?" Like I find it is a problem. Do you find it is a problem? This is something that you want to, to change, really something that you would change.

How do you change that? What would be your other way to change the way you're doing it [00:21:00] right now to solve the problem that you see. I think come with a problem first, because the moment that I say, and that's a mistake that I made, actually, that I just was so excited by ideas of my idea, and then I'd tell them,

"Hey, I want to do this. Let's do the cups and people exchange it's going to be fun." Yeah. It's actually a very beautiful idea and been testing a lot. But I think the best, the better question I should ask them is, "do you find receiving plastic packaging is something annoys you or something you feel you want to change?" And most of them say yes, and then we're going to just brainstorm different ideas.

But at the end, I come back with the initial idea that I have with a cup exchange. So my idea is what I tried to say that just. Don't come to them with your solution, just come to them with the problem...

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