Inside the growing pains at smartphone rental unicorn Tink Labs

Seven years ago, 20-year-old Terence Kwok was at the Hong Kong International Airport. The young founder and CEO of Tink Labs – a startup now valued at US$1 billion – stood ignored amid the crowds milling about.

He had leased a counter and was trying to rent out smartphones to tourists. “We quickly realized people just want to get the hell out of the airport. We only had two customers. It was a failure,” he said in a previous interview.

Plenty was at stake for Kwok. He had dropped out from the University of Chicago to become an entrepreneur, so running Tink Labs was practically his first job.

Needing a win, he retooled the business. Instead of marketing the phones – which came bundled with city guides and cellular data – to travelers, he offered them to hotels that would, in turn, provide them to guests for free. Called Handy, that service turned Tink Labs into a darling of the Hong Kong tech scene.

From that point on, Tink Labs hit a steady growth spurt. It raised a US$125 million round in September 2016 from the likes of Apple contract manufacturer Foxconn, driving its valuation above US$500 million. A year later, it raised another round to surge past the billion-dollar mark.

But like the proverbial duck that seems calm but is furiously paddling away, Tink Labs had undergone many overhauls, about-turns, and management shake-ups as it aggressively pursued growth.

Drawing from conversations with Kwok, an investor, and eight ex-employees who asked to remain anonymous because they’re not authorized to speak to the media, Tech in Asia has put together an account of what happened.

The company took off around 2016. With Tink Labs’ vision of selling phones to hotels set, sources say it truly surged after Kwok brought in senior executives, who understood how hoteliers think, to overhaul operations.

A new business plan was written, and the sales pitch was redone to appeal to hotel managers. A template contract and price book were created to expedite negotiations. Salespeople with extensive industry contacts were also brought in.

As a result of those changes, ex-workers claim that the sales and onboarding process for each hotel – which once took many months – was cut by a third of the time.

More importantly, customers started to arrive by the busload. Enticed by a free trial, more hotels signed up with the company in a few months than the previous years.

People struggles

Hitting the reset button