BuzzCity Interview

Dr Lai Kok Fung is the Chief Executive Officer and Co-Founder of BuzzCity.

Constantly breaking new ground on mobile internet, he is instrumental in growing the company into an international powerhouse, having successfully raised three rounds of venture funding. Prior to founding BuzzCity, Kok Fung conducted research in Singapore's renowned Kent Ridge Digital Labs (now known as Institute of Infocomm Research), specializing in pattern recognition and text retrieval.

His research results have been widely applied by major industry players, and recognized through accolades such as the 1998 Tan Kah Kee Young Inventors' Award.

He graduated with First Class Honours in Electrical Engineering from the National University of Singapore and obtained his Doctorate in Electrical Engineering from the University of Wisconsin-Madison.

The following is the interview with Dr. Lai on the success of BuzzCity.

1. On the 21st August 2006, BuzzCity was named one of the Red Herring 100 Private Companies of Asia. Companies like Google and eBay were spotted in their early days by Red Herring editors as those that would change the way we live and work. Do you foresee BuzzCity growing into a corporation on the scale as large as Google and eBay impacting the way everyday consumers live and work?
We hope that we would grow into that particular size and it was also the original intention when we started the company 8 years ago. We have always wanted to change the way people work and live. I think we have a good chance to do that in terms of how people use mobile internet.

2. BuzzCity’s success relies heavily on solid wireless infrastructure and high mobile penetration rate. This would include the more developed countries. Is BuzzCity attempting to go into markets where wireless infrastructure may not be as developed?
I think this is a misconception from the question. Just last Friday at a talk at NUS. Wireless is growing the fastest in the developing countries such as Africa and some parts of south Asia. When the broad band infrastructure is not as well developed but its a lot cheaper to roll out wireless infrastructure. And handphones and mobile phones are a lot more affordable compared to PCs. These are the place that we see quick take up on wireless internet for example if you take for example countries such as Bangladesh, after 8 years there’s only 1% internet penetration but today, their mobile phone penetration is about 20% and 98% of Bangladesh is covered by wireless internet infrastructure. So the primary growth potential of wireless internet actually lies in a developing country rather than a developed country.

2a. If so, how different would the market strategy be?
We basically look at market readiness of the particular market. Our service works the best when the market satisfies two or three conditions and one of them is a big mobile internet usage. Usually this means that a country that has a huge mobile phone penetration and also data cost that being cheap and affordable in that country. Even if you take south East Asia as an example, the data costs is very cheap in places like Thailand and Brunei but it’s relatively very expensive in Singapore. Even after adjusting for the earning power difference mobile phones, data costs is very cheap in places like South Africa some parts of South Asia as well. Also, in the market where by mobile operators are not too dominant in position. When we talk about it we means about a lot of off portal traffic. That will means that the user surf outside of the carrier portal so we look at all these markets that is most ready. The markets which appear to be most ready are south Africa, some parts of Africa such as Kenya, Kenzania, Nigeria, South Asia, India, Bangladesh, even in south east asia, is Thailand, which is the most ready for us.

Our revenue is derived from three sources from the users that come to use our mobile community service and who pay, and users who pay for mobile content to use that we have allocated for third parties. The part that is growing the fastest is actually the mobile advertising, from advertisers who want to advertise to this audience. So the partners to look in these countries in these markets are either advertisers, mobile content providers, or people who have huge mobile internet sites that other people are visiting because this are the people who will carry (something) our advertisements.

2b. Could you name some of such markets that BuzzCity is looking at?

3. BuzzCity’s primary offering is myGamma ( http://www.mygamma.com), an international wireless networking community with paid membership. There are currently many prominent social networking sites out there and it may be just a matter of time they start offering wireless features as well.
What is BuzzCity’s strategy to outshine other companies that may be vying for a piece of the pie in the wireless technology marketplace?

That’s another point that we want to bring out to the industry. People who use the PC for mobile social networking are very unlikely to move into the mobile social networking. On the other way round, people who use their mobile to access social networking sites are people who don’t have the PC in the first place. Take you for an example; you are an upwardly urban professional who is very used to using the pcs. You are very used to all the wonderful features that the PC can offer you. Quick speed and very good graphics; structure and features. The only way that I can convince you to use the mobile phone on the social networking is when you are not around the pc and with a very much reduced functionality.

You can see most of the attempt of moving people from PC into Mobile social networking has failed. So we are going after the people who are primarily use mobile phones to access the social networks. They have no developed any brand loyalty with other brands, or big social networking sites. More importantly we know that the application is made to cater for the mobile especially the blue collar workers, in developing countries so the service must be suitable to them.

4. The new SBS Transit’s IRIS (Intelligent Route Information System) NextBus service is a new project that BuzzCity has helped implement and launch successfully. What are the steps taken and how long did it take to do research and development before BuzzCity moved forward to pitch this project confidently with SBS Transit? (t = 7:21)
Actually we have all the platform in place, our primary technology and primary offering is to bring information from other sources to mobile phone. That’s our primary competence we do not have to do anything extra for the SBS project. What we need to convince them is to basically release information to us. It helps that SBS has developed the information and they are releasing to multiple sources like LTA to be used on all the bus stops. They are releasing to various other portals so that the users can make use of that. So basically we worked out with them a mutually beneficial relationship. So we can take the information they already have, also benefiting the end consumers while (who are) using the phones. By the way the relationship is based on their/we’re offering this service free to consumers and we are expecting advertisers who want to reach the consumers while looking at the bus information and sharing their advertising revenue

5. What are the challenges, if any in the development of IRIS NextBus project?
We have all the technology in place. We worked with SBS and the relevant people in SBS basically making sure we can interpret the data that they given to us.

6. As of right now, only the younger generation are more mobile-device savvy. What would be the strategy to also bring BuzzCity to the older generation?
We can release you another data that states that people who use mobile internet are not really the very young people. The largest group is actually 20-35 – the first jobbers. If you talked about developing countries there is almost all kinds of people who use the mobile phone to access internet. Simply because they don’t have any other choice. For us it is very difficult for us to get used to mobile phones because we are getting used to typing with ten fingers on the computers. Doing the little screen is very difficult. But for those people who had no other choices before that’s the only device that they could get. So we do not see that its primarily youth oriented. But most Singaporean and other companies still make the same mistake of thinking that mobile internet is a very juvenile product, that means they go after the 16-20 years old . these people have too many entertainment choices that they are not using the mobile phone to access the internet.

7. Which are the countries in the world that BuzzCity has already been successful?
Our largest market today is in south Africa, India, Thailand, even in the eastern European nations we are pretty successful in places like Romania, baltics, and also we begin to see a lot of blue collar people from the UK, US and developed economies such as Singapore and Malaysia.

As for today, not a single one market account for more than 30% of our revenue. Almost 15 markets or so, will account for 2-3 % of our revenue. So the revenue spread is pretty wide because of the same product being adopted by different people all around the world.

8. Which countries do BuzzCity see high potential in growth?
Some parts of the African continents, south asia, some parts of eastern European nation, even in central asia, places like ex-soviet republic countries, these places are the right pickings because of the poor pc infrastructure. And in a developed market, it’s a different challenge. Basically we are looking at the new group of users primarily blue collar that are not using the computer too much. These people have higher spending power than their counter parts in the developing nations also an audience of online brands such as google, yahoo have not reached yet. Our value proposition is to be able to build this audience both in developed and developing nations. Audience that nobody has touched. We don’t want to go and vie for a small pie, in developed nations where the managerial professional people, where u have already 5-6 very successful companies cornering that particular audience.

9. Different countries and regions have different cultures. How different are the users in the different regions and how does this impact BuzzCity’s strategies in penetrating the various markets?

10. How big is the BuzzCity team here in Singapore?

11. What are Buzz City’s plans in Singapore?
We are based in Singapore although Singapore revenue accounts for less than 5% of our total revenue and we not expect Singapore revenue to grow faster than the rest of the world so our plans here basically is to build up our technical infrastructure, hiring good people, and exploiting good infrastructure, and good environment for doing business here. Although it does cross our minds that one day we might move to some other country where we place our whole team there. Currently our roots has sunk too deep in Singapore. Although it a much more expensive place to operate for technical infrastructure and the big challenge for Singapore is to date is in fact, I think the quality of our engineering graduates has been declining for the past few years. This is the same concern being voiced whenever I talked to the universities and people in the industry. so we do have a problem we attracting and finding people with good technical skills to be able to do the programming and the infrastructure needs for the whole world. One primary chance that it will happen in singapore (t = 13:59)

12. How could potential Singapore partners contact BuzzCity?
We have a website and we have a partner associate network which we are looking to work with publishers as explained, with people who have good WAP sites that have good traffic, they can choose to monetize the traffic by putting advertisements that we could actually get for them. Our business is such that we have too many advertisers that we tend to. In fact we don’t have enough inventory to play with the ads. So Singapore companies that have good applications that we can attract people to their sites. We can work with them to monetize the traffic using advertising. Singapore companies that have good online content, digital media content that they want to sell world wide they can tap into our billing network that we have in over 40 countries we can export their content worldwide. Last Friday we were just in NUS, inaugurate BuzzCity digital media forum and we also give out awards to Singapore companies that have good product to serve worldwide we actually either give cash or give advertising credits for them to market their product worldwide. So they can come to the website and then there’s the partner.buzzcity.sg that will explain all the ways that they can participate.

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