There’s an awful lot of interesting data out there on the internet. More often than not these days, the issue isn’t whether or not useful information exists, it’s how that information can be collected, organized, and presented in a way that’s useful. TreeCrunch is a Hong Kong-based startup that aims to solve this problem, offering customized data mining, organization and presentation solutions to businesses the world over.
Data can come from the companies themselves, from publicly-available posts and comments on social media sites like Twitter and Facebook, or from surveys conducted by the TreeCrunch team. Clients then get reports on their data — that is, after they’ve paid subscription fees of between $500 and $2,000 per month, depending on how much data they want analyzed. It’s a pricy service, to be sure, but the product could be extremely valuable, and I don’t doubt there are plenty of companies willing to pay it.
I wanted to learn more about TreeCrunch and the startup experience in Hong Kong, so I got in touch with co-founder Patrick Kosiol, who was kind enough to answer my questions quite thoroughly. What follows are his words and links verbatim, with the exception of my questions (which are in bold).
What inspired you guys to found TreeCrunch?
For that I have to go a little back in history. While still based in China my business partner Boris and I started with Skylab Mobilesystems Ltd. and later we co-founded S4BB Limited which both focus on mobile applications mainly for BlackBerry, but now also on Android and iOS. In total we have launched about 5,000 products to market which are all owned by us (no commissioned work). We have always been product creators that are passionate about bringing new products to life. About a year ago Zane Moi came to us with the business idea of TreeCrunch. He was then Director for North East Asia at Research In Motion (the company behind BlackBerry) and therefore we knew each other well. Based on his idea of analysing open-ended data and visualising those results, we sat together and created a business concept around that. We analysed the market, our competitors and came up with a proper business plan that involved self-funding, raising capital, accessing subsidies and focusing on creating a top-notch product that allows us to monetize as quickly as possible.
We have a long-term vision for TreeCrunch which we are happy to share with the right people who share our passion.
Can you share any user numbers or financial data with us so we can give people a sense of how the company is doing so far?
It terms of financials, we are still at a pre break even stage. We three co-founders have personally funded TreeCrunch initially with a substantial amount that allowed us to have a decent runway. We then entered into the CCMF competition at Cyberport and got awarded the HKD $100,000 grant that came with it. While in CCMF we have built a team and worked hard on our project. We managed to close a pre-seed round with 8 Angel investors which brought an additional HKD $620,000 to the table. After graduating from CCMF we applied for the Cyberport Incubator and got in. This now allows us to access additional HKD $530,000 in subsidies. We are also part of the Microsoft BizSpark program and have recently joined a startup subsidy program with SoftLayer. In terms of financing we are now looking at additional options like a seed investment round as well as other incubators like the ones from Amazon or SAP who we are in talks with.
From a business perspective we have positioned TreeCrunch as a B2B service that allows companies to “visually summarise open-ended data.” Such data can come from Twitter tweets, Facebook comments, NPS data, or open-ended surveys, which allows a very broad application of our service.
Any customer cases you could explain for us to give our readers a good “case study” type look into what TreeCrunch does?
An example for an open-ended survey would be the campaign we did with Air Asia’s CEO Tony Fernandes a couple of weeks ago. It was a very successful campaign and gave a lot insight in how Air Asia customers would like the company to improve their service. I wrote a more detailed blog post about that, please feel free to check it out here.
Another example would be our blog post about Forever 21’s fashion trends. Based on comments of their 7.5M Facebook followers, we were able to identify fashion trends. Apparently “Big Sweaters with Tights / Skinny Jeans” are popular these days. The complete article can be found here.
More demos of real data we analysed can be found on our website (hint: there are interesting insights in why smart people like to work at Facebook).
How has it been running a startup in HK? What do you like/dislike about it as an environment for startups?
Hong Kong is a great place for startups and for life. Besides the high costs for office space, wages are somewhat affordable, the infrastructure is incredibly good, and the low amount of bureaucracy required paired with our experience of running businesses in Hong Kong allows TreeCruch to grow quickly. Compared to Singapore there is not much government-driven startup funding in Hong Kong as the local government has always believed in the “Laissez-faire” principle. In the beginning that makes it harder for local startups to get access to funding, but in the long run I personally believe it pays off, because the startups that make it, are sustainable businesses that are profitable and make a difference in the world.
Hong Kong has always been a place of entrepreneurship; it is practically founded on that. So the spirit of starting business and making it successful is very strong here. While there is a bit of a contradiction with Chinese traditions and principles that prefer security over risk, we believe the opportunity to bring a new great company to live that solves real people’s problems, is worth investing in. Investing not just money, but effort, passion and devotion.
There is a fairly small startup community in Hong Kong which people might argue is too small. I believe the fact that it is small creates opportunities to get involved and share experiences and help each other. The best place to start is StartupsHK.com which hosts regular events where entrepreneurs, fresh and established ones, people who are interested in starting their own startup as well as investors come together. Cyberport and the Hong Kong Science are the most established ‘official’ startup support institutions that have their own incubation, funding and mentorship programs. Surprisingly, there are more and more incubators popping up in Hong Kong these days; probably one a month. Some offer financial support, others office space, others mentorship, and so on.
Like I said, it is a great place for a startup.
Any advice for others running startups in Asia or in Hong Kong specifically?
While starting a startup in Asia and especially in Hong Kong is very much related to getting profitable as quickly possible (compared to the way it works in Silicon Valley), I believe starting your own startup just for the reason of making a lot of money quickly won’t work. Running a startup at the beginning means sacrifice; it is way easier to earn a lot of money in Hong Kong in banking. At TreeCrunch we get up every morning because we know we can change the world, we are driven by a passion that allows us go beyond borders and explore new ways of creating a great product.
One piece of advice: Fail quickly. Failure is good because it teaches you what you did wrong and how you can get better at what you’re doing. You must be open to learn from your mistakes. The best mistake is the one you only do once.