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Entrepreneurship

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SCMP Education

A Business Mind: Steven Lam Hoi-yuen, co-founder of GoGoVan

PUBLISHED : Monday, 13 October, 2014, 12:28pm
UPDATED : Monday, 13 October, 2014, 12:28pm

Steven Lam Hoi-yuen, co-founder of GoGoVan, was running a lunchbox business with his partners when they discovered the potential of van transport service.

Every day, Lam would ring the call centre for vans to transport lunchboxes to restaurants.  It was never easy to get a van via the call centre, but Lam noticed that the street was full of parked vans waiting for jobs.

This led him to think that there had to be a more efficient way to call for vans. Everyone has smartphones nowadays, and it is intuitive for people to use the device in connection with their work. Creating an app to order van service was too good an opportunity for a young entrepreneur like Lam to miss. 

I don’t think Hong Kong had a start-up culture until the beginning of this year

How has the app revolutionised the van service market?

Before GoGoVan, drivers, especially those who were self-employed, paid call centres a monthly fee to get jobs. 

The operating environment was hard for many drivers. Orders and income were not guaranteed and the fierce competition drove prices down. 

With GoGoVan, when a customer calls a van through the app, a driver will respond in an average of 10 to 15 seconds, compared to a 20-to-30 minute wait via a van calling centre. 

Drivers spend less time idling. Some have told us that their income has increased by 20 or 30 per cent since they began using the app. 

Following the launch of GoGoVan, it seems that ordering van service via an app has become the trend. Now all van call centres have an app. 

What is your business model?

We approach drivers, ask them to sign up with us, and get them jobs via the app. We will take a percentage of their pay as commission. 

We now handle up to 20,000 orders a day and expect the number to keep rising. There are 70,000 vans in Hong Kong, half of them self-employed, and they need to get eight to 10 jobs a day to stay profitable. There is certainly a lot of room for growth in the business. 

How do you stand out from competition?

Only good ideas are copied. We can’t worry about the others; we can only improve ourselves.

When we were building the app, a competitor who was pretending to be an investor stole the idea from us. We met a few times to discuss the investment plan – then they vanished.  A week later we saw a similar app on the android market. It was then that we realised we had been exploited. 

There are many apps similar to GoGoVan, but none are as customer-focused as we are.  Many call centres outsource their app design to a third party. We created the app on our own and we can adjust it quickly. If a client or a driver alerts us about a problem we can fix it right away without having to go through another party. 

Who are your teammates? 

There are five core members in GoGoVan. My two co-founders are Nick Tang Kuen-wai and Reeve Kwan Chun-man. We have been good friends since our student days. The three of us are in charge of business operations. Reeve is now in Singapore, developing the business there. 

Since we are not technical people, we invited two friends – a programmer and a graphic designer – to build the app and create the visuals. 

What do you think of the start-up culture of Hong Kong?

I don’t think Hong Kong had a start-up culture until the beginning of this year. 

Our culture educates kids to play safe, to get a job with a steady income and not to take any risks, which is absolutely the wrong mentality for running start-ups. 

When I first got started with the business, my family did not understand what I was doing. They kept urging me to look for a job, like all other graduates did. 

It was until they saw media reports about my company that they realised I was working on something serious. 

Fortunately, things are getting better now. Hong Kong people know more about start-ups, and more people are in the business. 

What are the company’s future plans?

In every dense metropolitan city, there is a large fleet of vehicles offering last-mile logistics solutions. I think GoGoVan will work in the big city, and we now plan to expand to other regions in Asia. 

Singapore is the first place outside Hong Kong to have GoGoVan. The situation there is different; there are no call centres for ordering vans, as there are in Hong Kong. People need to contact logistics companies if they want to transport goods. We plan to introduce a one-stop logistics solution to clients in Singapore. So far we have signed up more than 200 drivers. 

We also launched in Taiwan recently, and we plan to launch in three or four more Asian cities by the end of the year.