Feature: Finding his pot of gold in data

This article first appeared in Wealth, The Edge Malaysia Weekly, on September 27, 2021 - October 03, 2021.
“Our platform was available only to larger businesses.  But with automation, we can extend our services to anybody who wants to sell products and services online.” > Ho

“Our platform was available only to larger businesses. But with automation, we can extend our services to anybody who wants to sell products and services online.” > Ho

-A +A

It may be hard to believe but Billy Ho, founder of digital marketing solutions provider MCOM Holdings Bhd, was once jobless, living hand to mouth and, on occasion, sleeping on five-foot ways.

Like many rags-to-riches stories of entrepreneurs of his generation, Kedah-born Ho came from a poor family. His father was a lorry driver and his mother, a part-time seamstress. They lived from paycheque to paycheque. Ho, the eldest son among four, had to stop attending school at 16.

Today, MCOM is listed on the LEAP (Leading Entrepreneur Accelerator Platform) Market. As at Sept 15, the company was valued at about RM943,000. Ho and his wife Chew Lee Poh wholly own a private vehicle that holds a 71.63% stake in the digital marketing solutions provider, based on the company’s information memorandum published in 2019.

The long and hard road to success taught Ho many useful and, at times, painful lessons — which is why he holds fast to the principle of the need to earn well and spend wisely.

One valuable lesson was learnt when he was 18 years old. He had borrowed RM2,000 from his mother and aunt to start a car accessory business. He also convinced several car accessory suppliers to let him sell their products without paying them up front.

The venture turned out to be successful initially. Ho saw himself as a street-smart and enterprising person with a strong desire to earn money. But when money started flowing in fast, he began to spend recklessly, mostly on personal wants.

The downfall came quickly — the business failed and Ho owed his suppliers about RM10,000, which he had to repay by working various jobs.

Wiser today, he is careful about his spending and investments. In an interview with Wealth, he says he invested some money in properties as his income grew. “Honestly, I don’t have much to share about property investment. I perceived it as a tangible asset, which is safe and will grow in value over time. It is like an alternative to parking my money in banks.”

Ho does not dabble much in the stock market but it does not mean he is conservative. He likes technology start-ups, especially those that deal with data, and has invested in several of them. Doing so allows him to leverage his expertise as the founder of MCOM.

“I have been in the tech industry, dealing with data-related businesses, for almost two decades. This is where my expertise lies.”

Ho’s advice to people who are planning to invest in start-ups is to consider a key question: How does the start-up spend money to acquire users? “Looking at how start-up founders spend money is more important than how they generate revenue. They can always boost revenue by burning more cash. And the money could flow out of your pocket like water if you are not careful.”

The character and capability of a start-up founder is another factor that Ho looks at. “Eventually, it is about the people, the team that drives the start-up. And part of this ties back to how well they know their business,” he explains. 

Trying his luck abroad

After his first venture flopped, Ho decided to find a job in Singapore, partly in the hope that he could earn more money to repay his debt. He worked at a car accessory shop earning S$300 initially, but this was raised to S$800 a month later.

Two months later, he quit to seek his fortune in Japan. In Tokyo, he very quickly secured a job but lost it a few months down the road. That was when Ho had to line up on the street of Okubo — an area in Shinjuku ward — with many other foreigners for odd jobs.

“Someone would come to offer us a job. They would pick one of us from the line. It was a day job. And we would line up at the same place again the next day for money,” he says. There were times when Ho could not find a job and was homeless because he could not pay his daily rent.

His break came a few months later when he was hired as a cleaner for a night market in Tokyo. From there, he quickly moved his way up to becoming a supplier of cleaners to various night markets. He relied on his network to connect jobless people to his boss, who would pay them a salary by assigning them to different night markets in Tokyo.

“My life became very easy. I was sitting there collecting money as a middleman. I was paid ¥13,000 for each headcount, and I would pay them ¥10,000 each. My profit was ¥3,000, equivalent to about RM60 at that time. I could supply about 20 to 30 workers a day, which meant I was quite well off,” says Ho.

He lived in Tokyo for about four years before returning to Malaysia. Why? While he earned well in Tokyo, he did not have a sense of achievement. 

A new venture called MCOM

After he returned to Malaysia, Ho ventured into the warehousing business. But that failed two years later when the Asian financial crisis hit Malaysia in 1997.

His next venture was selling Motorola brick phones. For each phone he sold, he earned about RM500; sometimes, even up to RM1,000. The good times ended when Nokia 3310 entered the market, says Ho — it was more affordable while the profit margin for retailers was thinner.

“Sometimes, we found a defective product. And that one product could wipe out the profit of many phones sold. It was no longer a good business to be in,” he says.

In 2009, Ho entered the data business. He collected data from the internet — mainly Facebook and Google — and monetised it, including providing digital marketing solutions to advertisers. The business grew into what is known as MCOM today.

Being the CEO of MCOM comes with its own set of challenges. The company’s revenue increased by 16.45% to RM19.29 million in 2019. But the following year, it fell by 47.24% to RM10.71 million.

Ho explains that the company’s earnings fell in 2019 due to stricter data protection policies introduced by US tech companies, mainly Facebook and Google, after the Cambridge Analytica scandal erupted at end-2018. Meanwhile, the previous Malaysian government made amendments to the tax policies in Labuan, which translated into a higher income tax for the company in FY2019.

Then, in FY2020, the world was hit by the Covid-19 pandemic. While Ho saw huge potential in the company’s business that year, it came with a higher risk. What if its clients ran a six-month digital marketing campaign through MCOM and failed to make payments half a year later?

“Various businesses approached us for our solutions. But we were selective to reduce [the business] risk,” he says.

Cash flow was another problem as MCOM’s clients would usually make payments at the end of the marketing campaign, which could be several months down the road. This is unlike the US tech giants such as Facebook, which receive payments up front.

Even so, MCOM remained profitable in FY2020. Ho plans to transfer the company to the ACE Market sometime in the future and is already making preparations.

For one, the digital marketing solutions provider is hiring an experienced chief technology officer from the US to develop a new automated platform that would allow individual sellers, especially e-commerce sellers, to access its digital marketing solutions. The company’s solutions are more targeted than that of its competitors and provide fresh sales leads to advertisers, says Ho.

“Our platform was available only to larger businesses. But with automation, we can extend our services to anybody who wants to sell products and services online,” he adds.

Ho also wants to leverage the internet service provider (ISP) licence that it acquired from the Telecommunication Regulator of Cambodia. MCOM acquired the licence in 2016 and commenced offering wired internet services in the country two years later through its subsidiary, M-Media.

While the Cambodian business only contributed 0.04% to MCOM’s total revenue in FY2020, he is looking forward to partnering with a foreign bank’s private equity arm to develop and offer cloud services in the country.