#19: Managing a Global Workforce with Toby Zhang

Guest Introduction (0:00)

Sean Weisbrot:
Welcome back to another episode of the “We Live to Build Podcast.”

Our guest today is Toby Zhang, the founder and CEO of Shop Lit Live, a live streaming platform that connects brands and merchants to consumers through immersive shopping experiences. Before founding Shop Lit Live, Toby worked as a Venture Capital Investor, investing in over fifteen companies during his tenure. He’s also worked as a product manager for Microsoft for several years.

In our conversation we discussed the benefits of having a U. S. company with a global distributed workforce, specifically in China. How to get them to work well together at a distance including how to manage the time difference, the difference between Chinese and American engineers including their salaries, attitude, and working time, and much more.

So, let’s give Toby a warm welcome.

Intro (0:58)

Sean Weisbrot:

Welcome to “We Live to Build.”

My name is Sean Weisbrot and I’m an entrepreneur, investor, and advisor based in Asia for over twelve years. Join us every week to fast track your personal growth, so you can meet the ever-increasing demands of the company or companies you are passionately building.

Time waits for no one, so let’s get started now.

Toby’s Background (1:46)

Sean Weisbrot:
Thank you for joining us today, Toby. I know it’s late over there in Silicon Valley, thank you for taking the time out off your busy schedule to talk with us.

Toby Zhang:
No worries, glad to be here.

Sean Weisbrot:
You have a very unique experience. You were born in China, you moved to America as a kid, you now live in Silicon Valley. You run a startup that is split between America and China, let’s talk about that.

Toby Zhang:
Yes, so I was born in Beijing, I grew up technically in the States—on the east coast, and you know most of my education and career has been in the US. Now, I went to school in Michigan for my undergrad and Master’s in engineering, went to get an MBA from UPenn—the Wharton school, and previously had led technical teams at big companies like Microsoft, and also have started multiple startups, and have also worked in venture capital for about six years just before my most recent start up.

So yes, so my most recent start up it’s a company called Shop Lit Live, and we essentially are a social live shopping platform, and we help users and shoppers to discover very interesting and innovative products and brands personalized to them and we help them to engage with sellers and brands through live shopping experiences. And this is something that’s very prominent in Asia already, particularly China; in the US it is just starting, and we are pretty excited about being in the space, especially pretty early in the US market for live shopping.

Working with teams in different countries (3:14)

Sean Weisbrot:
Talk about, if you will, what it’s like having a team—not just a remote team but specifically a team in China, and what it’s like hiring them and training them, and you know as compared to western employees or American employees.

Toby Zhang:
Almost all of our development team is in China; our business admin team is here in California. So, first of all, there’s a unique advantage for being able to hire and run the team in Shanghai, in China and that particular advantage is cost, right. So, an average engineer here in the Bay Area costs about four to five times the salary of one of equal caliber in Shanghai, and these are just quite frankly unfair.

So, from our perspective is that we love to hire capable engineers who worked very, very hard and who are very, very motivated and we actually pay them above market price in Shanghai. But we still, you know, leveraging that different cost structure there, it’s a lot more cost efficient for us to run engineering teams there, than hiring locally here in the Bay Area.

And the other advantage there is it’s actually a time difference. So, as you can imagine right now at 6:00PM Pacific time, it’s actually 10:00 AM in China, so it helps our team to actually run around the clock where our business development team is not very active during the day while you know our engineering team is very active in the evening—local time here in the Bay Area; for their time it’s you know, daytime in China. So, that actually give us quite a bit of, you know, the efficiency of being able to really quickly turn around features, fix things in the evening while, you know, people are sleeping, and users are not active during the day when we’ll have things ready to go in the morning, etc., you know when the day starts here in the US. So, that time difference, we actually use that to our advantage.

Sean Weisbrot:
So, when you hire people in Shanghai, are you only hiring Chinese nationals, or are you also hiring foreigners living in China too?

Toby Zhang:
Great question. We hire anyone that’s capable. For example, we have iOS developers, Android developers, web developers, back-end developers, etc. Now, we have a list of, you know, roles we need to fill, and we go through recruiting channels to acquire the best talent. So, some of these talents, you know, are expats returning to China, some of them are foreign natives, some of them are, you know, natives based in China. And particularly for what we are doing is that we’re looking for folks who have experiences in social media—building live streaming or e-commerce apps before and have experience operating in the space.

And quite fortunate, that we’re able to put together a kind of a stellar team while having those pretty strict requirements on what we needed. And some of our team members are expats who has studied and lived abroad for many, many years and has returned to China and we’re very fortunate to be able to have them joining our team.

(6:20)Sean Weisbrot:
Would you say that your China operations uses English as the language of instruction and communication?

Toby Zhang:
That’s a really good question. Actually, most of our engineering team meetings are actually done in Mandarin, but as you can imagine our product is actually English native, so our developers and development team are very capable in English and are fluent in the language. So that despite the fact we conduct business in Mandarin when we build our Product it’s completely English. The team in general is more familiar and more comfortable communicating day-to-day in Mandarin.

(6:56)
Sean Weisbrot:
You have this Chinese team taking essentially Chinese concepts trying to localize it to America and to the West. What makes you think that a Chinese team is the right one to do that, why not an American team since they understand America?

Toby Zhang:
So, we are a U. S. based company and actually our business development team is all U. S. based— local knowledge local operating team, local business development team, it’s essential for building this in America and we have that, and that’s how we build our business development team and our operations team, our merchant partnership team, etc. (7:34)

Sean Weisbrot:
Is your business development team responsible for telling the engineers how to develop the function and the feel of the application or are you leaving the UI/UX to the China side team?

Toby Zhang:
Our product management, our product design, our design team, UI/UX is all done here, you know, by people who have basically well-versed, deep-rooted backgrounds in the US. (7:59)

Sean Weisbrot:
So, how does that work if they’re not physically in the same place?

Toby Zhang:
Our design team and our product management team, you know, these folks are mostly active in the late evenings, their morning starts later than our business development team. So, the collaborative hours between our product team and the development team in Shanghai are actually quite like, overlapped quite well in the evenings. So, just to give an example, right, we have our daily team meetings at 6:30PM Pacific time which is 10:30 AM in Shanghai. So, something between 6:30 to roughly like 8:00PM that’s where we have meetings every day that goes through all the development progress, we think on different issues, bugs or features, et cetera, releases and all that. And then even after that meeting is done, you know, into the late evening until like 1:00 AM to 2:00AM, etc, which is roughly 6 PM by 2AM it will be 6PM in Shanghai. All that time it’s the collaborative time between our product development team in Shanghai and our product management folks here.

Progress of Globalization (9:04)

Sean Weisbrot:
You’ve figured out a really smooth way to make that work. I guess that’s how the world is going to be going. Globalization over the last few years kind of hit fever pitch, companies are trying to figure out how to get the best talent and now that everybody is able to work remotely, you literally can hire wherever, and I think it’s good for the world because it gives people in developing nations an opportunity to really grow their career and improve their skills and hopefully add value, especially when you’re paying them well enough that they can not only survive but also thrive. And when you have people thriving then their local communities and their families thrive. I’m all for globalization, and let’s talk a little bit more about globalization and kind of what you’ve seen especially on the Asia side.

Toby Zhang:
There are some really interesting underlying trends in globalization that I think is making today’s world, you know, more collaborative in one or more or another in most recent years. TikTok for example, you know these are companies that no matter where they’re based, they actually provide products and services to audiences around the globe. And there are other companies in other industries that does similar things for example, you know, in the cryptocurrency or in the blockchain space, there are many companies that are not based in North America, they’re based in the Southeast Asia, Asia, or maybe even a remote island country that are running their business there, but really providing products or services to audiences globally. That is something that today is pretty prominent, companies that are either globally distributed or companies that are specifically located in the particular locale, but be able to provide products and services globally.

Sean Weisbrot:
When I look at the startup ecosystem in a given country, let’s say Vietnam for example. They generally are not building for a global audience. I don’t just see this in Vietnam, I also see this in Japan, and Korea, and Philippines, and in most southeast Asian countries that I look at. Do you think that’s going to change, do you think we’ll see more countries in Southeast Asia trying to take on a more global role?

Toby Zhang:
I think so. I think it really comes down to kind of the business opportunities that’s available for them to capture, I guess, in the near term versus mid to long term, right? So, if say in the local market where there is a tremendous amount of opportunities, they should grab those local market first, thrive and do really well, and continue to expand to kind of more distant markets, right? So, I think one of such examples is a company called Shopee. So, Shopee is a company that focused quite a bit in their local market first before expanding to kind of more widely in Southeast Asia, and I think we’ll start to see more of those companies emerging.

Sean Weisbrot:
Globalization is something that is starting to permeate different parts of the world and being in Asia, I think it’s the most fascinating place to be right now and makes it the easiest place to see these things actually happening in real time. And so, as we were just mentioning that kind of reflects in the salaries changing, so let’s talk a little bit more about what you said before that you pay your people in China above market rates. So, let’s talk about the markets in China, the different tier cities we mentioned earlier and how salaries are different in each of those places.

Toby Zhang:
Those prices have also increased from year to year, but it’s still significantly less than what it is here in the Bay Area. So, if we take a look at salary levels for engineers in Shanghai, say someone was maybe seven to eight years of experience. Let’s just take the example of an iOS developer, typical salary range for this person assuming, you know, if he comes from a tier one or tier two school, their salary range can range anywhere between 15K RMB to like 30K RMB, or the median probably falls somewhere around like twenty 20k-25k. This is roughly like three thousand dollars, one thousand dollars all in. There’s something China called like 9-9-6 type of work style which means they work from 9AM to 9PM, six days a week. Many companies have these kinds of policies around employees working on weekends. It’s more commonplace than rare, and if we look at a similar an engineer who has probably eight years of experience as mobile app developer in the Bay Area either work for a big company or already say startups, their starting salary is somewhere like $200K-$250K all in, so this includes you know, employee benefits and things like that. And quite frankly speaking, a lot of engineers in the Bay Area are very, in my opinion, spoiled.

Reading & Meditating (13:53)

Sean Weisbrot:
So, what’s something that you’ve learned recently that you want to implement?

Toby Zhang:
I guess two things. I thought it’s really interesting that I’ve been doing— one it’s meditation, something that I just picked up and it helps your day to be really efficient. Essentially 20 minutes in the morning, 20 minutes in the afternoon, it’s kind of like a big energy booster. Yeah, and I actually think meditation is really, really fun, it’s a lot more than I initially anticipated. And the second thing I think is reading. So, growing up reading it’s something that you know we’re all very familiar with. I think Elon Musk said something where like you can be an expert in anything that you do, it just requires three things: read more books, right? So, I’m a firm believer in that actually, now if I want to get smarter about marketing, if I want to get smarter about human resources etc., there are plenty of kind of literature and books that’s out there that actually helps me to get smarter, essentially absorb a lot of the experiences from folks that came before and that is really cool. So, I would say the two of the things that I’ve been doing more recently is reading and meditation.

Sean Weisbrot:
One of the guests I recently interviewed said that he uses an app called Headspace to learn how to start meditating and now he uses something called Insight Timer to help him stay focused during the meditation, so it might be something interesting for you to try.

And reading is fantastic. I try to read all the time. I’ve got a book in front of me right now— Homo Deus, A Brief History of Tomorrow by Yuval Noah Harari. I always will go and when I have time to go to the bookstore, and I look for books to buy, I’ll buy three-for-five Bucks at a time, I’ll read one and I’ll hand it to my fiancé or if I know I’m going to be meeting somebody and I know that he like that book, I’ll just give him the book and I’ll say when you finish this book give it to somebody else. Just keep spreading the knowledge you know; I find that to be a really good way because not everybody has the time to go to the bookstore or they don’t have the means to afford buying the book. Giving them access to knowledge is a great way to improve them, and if you spend time improving the people around you, then, you’re making the world a better place.

Toby Zhang:
Agreed.

Take Risks (16:15)

Sean Weisbrot:
What is the most important piece of advice that you could give the audience something that you’ve learned in your life?

Toby Zhang:
Take risks. Take as much risk as possible to be able to have a chance at more outsized rewards. So, I mean, don’t take risks just for the purpose of taking risks, but take risks for those that may have an outsized outcome. We were to then think about someone’s life and then one of the concepts that we were taught in school and about our parents which I think was taught incorrectly, is that you can get rich by getting a big salary. Actually, in the world, other than celebrities and movie stars, no one is able to become very wealthy by taking a salary.

The only way to get wealthy or to build wealth is to actually trade your salary for equity, so, take ownership in things that has the opportunity to grow quickly and grow big and that’s something that’s a misconception that was being taught over the last few generations I think in schools and about our parents. I think that I would really motivate our younger folks to really think about that deeply, right?

I mean, let’s just take for example, you know, someone who makes a $100K US dollars a year salary— that’s very decent salary, probably twice the median income here in the US, taking out taxes, that’s roughly about fifty percent left or if you take out your rental costs or your expenses and etc., what’s left is probably twenty percent of that. So, on the year a $100K salary, you probably save around like $20K dollars. And in order for you to save a million dollars, you have to essentially work for fifty years at a hundred-thousand-dollar salary and that’s roughly the entire working life of an adult. You have $1M dollars in savings and that’s not even factoring inflation.

So, you know, I really can motivate young folks to think about if you have a chance to take a risk to work for a smaller business, to take an ownership on the upside, while, you know, taking slightly less salary or taking just enough salary to be able to live and be okay. You may have that opportunity to be able to actually have a much bigger result, but that’s something I wish when I was younger that school or you know teachers would have taught more.

Sean Weisbrot:
Well, unfortunately the school doesn’t prepare us for life, and those teachers can’t teach you that because they’re trading their time for money, too. So, they didn’t have that life experience, so how could they teach us something that they haven’t known. Anyways, that could be a totally different episode all on its own. You know, this has been a very interesting conversation. Let’s end it with you telling everybody how they can find you online.

Follow up with Toby (19:04)

Toby Zhang:
Thanks everyone for tuning in. You know I’m on LinkedIn, so you can find me on LinkedIn, just Toby Zhang. Happy to connect and share more about what I’m doing, what I’m up to. You can also, you know, tune in to our exciting startup, it’s called Shop Lit Live, so if you go to the Apps store you should be able to find under Lit Live, so L-I-T-L-I-V-E, and then tune in to our exciting live shopping shows. So, yeah, looking forward to stay connected.

Sean Weisbrot:
Great! Thanks again for your time, really appreciate it, and don’t forget entrepreneurship is a marathon not a sprint. So, take care of yourself every day.