Rachel (00:00)

Welcome to Simple Chats by Simple Ventures, the place where we explore insightful ideas and startup journeys with members of the Canadian tech and business community. Today, we are chatting with David O. Yang, former co-founder and CTO of Flip, a retail marketing technology used by over 90 % of retailers in North America. Today, David is the co-founder and managing partner of Collective XP.

David, thank you so much for joining us. We're thrilled to spend some time with you to dig into your background, learn about you, and share some advice for anyone listening.

David (00:33)

Sure, yeah, happy to be here. I would say I've always been entrepreneurial, but I think the first thing is I'm very family and friends oriented. So if you look at my background from school all the way until now, I index towards working with people I know. I co-founded FLIP a long time ago, and those were with three other classmates of mine back at University of Waterloo, and now I still work with all my friends. It's just easier to work when it doesn't feel like work.

Rachel (01:02)

So we're going to dig into a lot of things you just mentioned there. Specifically, Flip will come back to you. But let's go all the way to the beginning. So elementary school, like 12 to 20, what were you like as a kid?

David (01:11)

I grew up in Hong Kong, so we moved here when I was nine. My dad, he was actually working for a company in Hong Kong that he helped take public back in the 80s. It was in manufacturing. And I witnessed my parents take us from that to Canada to give myself and my brother a better life. He just picked up anything he could have done in Canada at that point. There were no opportunities similar to the one he had.

So one very vivid thing I remembered was when we were in high school, he asked me, I have opportunities in Hong Kong, but would you like to have a lot more money? But I have to be away from the family for a long time. Or do you choose me here? But hey, we may be struggling a little bit more. And I chose the latter. And he just never went back to work. Yeah, he asked me. I was 15 or 16.

Rachel (02:03)

So he posed that question to you.

David (02:09)

So that's why family and being together is quite important.

Rachel (02:14)

And so

from that time up until university, how did you, what were you exploring and how did you choose to end up going to Waterloo?

David (02:23)

I wanted to, so in my family, to my aunt's also an entrepreneur. So I think growing up, I didn't see people in my family work in the corporate setting. We were all very resourceful. So the whole time I knew entrepreneurship was something that was destined for me. And it's funny, I looked at the programs and I saw University of Waterloo, computer engineering is one of the hardest programs in Canada. So I decided, love.

problem solving, so I should pick at least one of the hardest ones. And I also have a huge fascination with cars. So I was going to go into mechanical engineering, and I realized mechanical is really hard to create companies. It's easier to do in software. And that's how I applied.

Rachel (03:11)

Pulling back to one of the things you started with there around resourcefulness, were there certain experiences that you had or observed with your aunt or otherwise that really cemented that idea of resourcefulness for you?

David (03:22)

Yeah, so she hired me when I was 13. So she's in real estate. And I remember she had multiple listings and she had open houses in many different locations all at the same time. So she couldn't be there. So I put on a suit. She told me, you know what, you're fine. Just pretend you're much older than you are. And here's a suit, put it on, and I manned one of the open houses.

Rachel (03:50)

Did you sell the house?

David (03:51)

No, I think a few people came in, bro.

Rachel (03:54)

Working from a young age is very polarizing. Some folks do it. Like I had a job, I think, also at 13. I had braces, could barely see over a counter at a retail store, but it's incredibly formative. Yeah, what retail did you work?

David (04:03)

I retail too. worked

at Forzani's at Fairview Mall in North York. I just, I played a lot of basketball growing up. So I wanted the coolest shoes for 50 % off. And the only way to do that was to get a job in a store. And, but that, that was interesting because I think I was employee of the month, one month, because I had the highest like sales per hour out of everyone.

And I realized I was making 20 something dollars an hour back in 1995. Let's get money. Yeah, because it was $6.85 minimum. So my friends were doing that and I was getting $20 an hour.

Rachel (04:46)

It's so interesting hearing you talk about certain threads that were very formative, like preschool, pre, like very early on. Curious to fast forward to Waterloo, where it sounds like you made some really important and lasting friendships. Talk to us a bit about that experience. Like, how did you find this group and what was the Waterloo community like?

David (05:07)

Yeah, so we only had 90, maybe 100 students in the same class. And the way how Waterloo worked, and I believe they still do this, is that those are the people you're with for five years. So you get to know everybody in a very intimate way in terms of how they studied, how they prepared, and whether or not I think the most important thing for me is around like ethics and in terms of how people conduct themselves.

And so it's very important to think back and go, hey, those were the guys that didn't cheat. And these were the ones who were very helpful to each other. Yeah, so we hung out. We did school projects together, played together, partied together. And then after graduation, a few of us decided to just meet up every Saturday and to talk about what we want to do. And we didn't want to work for anybody.

Rachel (06:05)

So let's go down this path, because it's such a fun founding story. So those Saturdays, you start meeting up, you're thinking about different ideas.

David (06:13)

Getting together and just talking about opportunities and technologies.

Rachel (06:18)

So tell us about that. So you were meeting up on Saturdays and then how did you go from a Saturday hangout pizza to flip?

David (06:26)

So the origin story, we weren't called Flint, it was another name in beginning. I got married in August 2006. I had three co-founders. The first one quit January 31st, 2007. I quit around two weeks later. The third guy quit during the summer of that year and the last guy quit the year after. He was a little hesitant. We had to recruit him from Microsoft in Seattle. It took him a little longer. But yeah, we just thought, hey, we're young.

We don't really have any great ideas, but I think if we just spend more time together, something may come up. So we decided to quit our jobs. I had to tell my wife, my fiance at that time, hey, after the marriage, I think I'm going to start a company. And she asked me what ideas we had and I said, we have too many yet, but we'll figure it out. We had some really bad ones. We were into exercising.

So we thought it would be great to allow people to track their workouts at the gym. Cause that was our problem. This is back in 2007, six, you had to print a workout. had no iPhone. So we thought, Hey, maybe we can tell the gyms to install like a kiosk and all this stuff. And no, it didn't work. This one actually had adoption. We were on the path of creating the whole fine deals for you. It didn't really work out that well. So for fun, we created a personality test on Facebook apps.

Remember those things? Back in mid 2000s. we were the most downloaded app in Europe. Cause we built in a virality loop in there. So people would do the tests and they have to invite and share with their friends and their friends would do it. And then we just saw the traffic spike. So we didn't make any money. We had a lot of users, but that trained myself and another co-founder of mine about technical scaling. This was before AWS.

Rachel (08:20)

So Saturday Hangouts convert into several different ideas. Some good, some OK.

David (08:27)

So

in between, we actually had one that worked out the problem. So back in the late 2000s, remember those comparison shopping sites? You go on, you figure out, for this camera, where can I buy it from? And lists everything. But at that time in Canada, there were nothing very good. All the best ones were in the U.S. And as Canadians at time in the late 2000s, the dollar was at par. One USD was one dollar Canadian and we were...

actually buying stuff for a lot cheaper ourselves. So we had this idea of taking all of the sellers that were selling hard goods, indexing everything, estimating brokerage duties, shipping, landed costs, and taxes. So you can compare down to the cents in Canadian dollars. So that was actually useful. with that, we partnered with Canada Post. During that time, I think they wanted to

explore digital. So they were like, hey, you have the technology, we have the distribution. Why don't you let us white label that? And we were actually the official shopping experience for Microsoft in Canada, because they didn't have anyone on their team to do anything. So I wrote, myself and two other guys wrote the whole thing for Bing Shopping in Canada. And we had a revenue share model back to those partners. And that was our first kind of, I would call it,

not success. It gave us a glimpse into some kind of revenue. And then eventually we realized, the people, retailers that were listing on those platforms didn't really want to pay us. They were all smaller. And we realized that big money came in the flyer distribution and promotion. So we started to explore that. I remember in 2010, I, so one of our co-founders, he was working at Microsoft.

before he left and he worked on Bing Maps. So he knew about the whole technology, the tiling technology to zoom in and out like Google Maps. Like everyone knows this now. So he goes, hey, Dave, why don't you explore using that to take flyers and create an experience where it doesn't take a lot of bandwidth to create high resolution view into the flyer. So I hacked that together over a week during Christmas. My co-founder, the sales guy, he went and started talking to retailers.

He used to do a meeting and then he'll call me. I learned all this new stuff. I would code it and then he'll go back to the next meeting and they'll be like, wow. It is you. Me and a bunch of other typical entrepreneurial startup engineers. It wasn't built scalability, right? Because initially you just have to do what it takes to prototype something to get someone to go, yes, I want to be using this.

Rachel (11:04)

behind the scenes.

So I'm sure most people listening have heard of FLIP, used FLIP. My grandmother used it, my mom used it, I used it. I'd love to dive into a specific part of the journey, which is you had a very unique role. I don't think I know anyone else who has held two very important functions within our organization. I believe you led both people and the tech team, right? Yeah. So talk to me a bit about that. What was the perspective that you had?

David (11:47)

Yeah, I think most founders are going to relate to this. A lot of times you don't have defined positions. At a certain point in time, you just do whatever the business needed at that time. Right. Sometimes it's sales, sometimes the product building, sometimes it's team building. For me, engineering was a huge part of our company. So I was already recruiting and I realized recruiting was something I was very good at. And.

So the whole HR function initially was just recruitment. So up until a hundred people, we had no HR person. And I think I was telling everyone at FLIP at that time that, hey, we're just going to run the company like how we want to work. Create the company that you want so that we're happy to go in on Monday. So that kind of drove the culture and the policies. And I think eventually I just took on the role.

But I would say I'm not an HR expert at all, so I then brought in the right people to help me. So I was more focused on the culture of flip versus deep HR knowledge and execution.

Rachel (12:57)

And if memory serves from our past conversations, a lot of the folks you brought on were from Waterloo. They were like your former classmates. Can you maybe speak to that and how the importance of some of those early formative relationships carried through?

David (13:08)

Yeah, as I was saying earlier, I remember almost everyone from our class. And most of those guys who ended up working at Waterloo, it took us a long time to recruit. We had to first tell them, hey, we're quitting our jobs. And they thought we were crazy. To, hey, I think something good is happening. They weren't ready yet. I think we had around up to 10 people from our class work at Flip. And I think ultimately at the end of the day, it was just fun to work with friends.

Pay was good, but that wasn't the only thing. And I don't think that's the only thing people look for now. Right? I think it's about building something cool together. That initially helped us hire a lot of people through referrals. So referral was a big thing for us in the beginning of scaling.

Rachel (13:56)

Talk to us about the culture, the early days culture from Flip.

David (14:00)

Sure. Yeah, I think culture is about what people do and what you observe. And I don't think we came in and said, hey, here are our values and let's just do that. We came up with it along the way because we were observing how people were, like type of flip team members fit the way how we worked. And we needed to qualify it to scale. So we had six cultural values. Number one is the three H's. So it's humble, hungry, and highly intelligent.

Right. So these are the things we look for in individuals that really fit working with FLIP. And then the other cultural values on a team and a company level is called the ABCs. So A stood for Always Reinvents. So with that reinvention mindset, B is B team first and C is coaching others. So we came up with those in partnership with some of the early people at FLIP and we used all six of those in

terms of how we hired, the questions we asked, the way how we evaluated and everything that came out of HR came out of those six things.

Rachel (15:09)

You built an incredible company in Canada and that's obviously a hot topic right now, the choice to build in Canada versus going to the US or going to another market. And for anyone listening, curious to hear why you chose to stay in Canada and then your reflection on just that general choice for founders today of building here versus somewhere else. So yeah, building in Canada, any thoughts there?

David (15:31)

Yeah, think Canadians were very unique and very different. So my wife and I, travel a lot and we go different places around the world. And she always goes, Hey, how come you're so happy to go back to Toronto? I go, you know what, when we come back to Toronto, I can go to a different part of Toronto, I see different people. And I don't think we look at people differently and treat people differently. So I think with that diversity, you can build pretty interesting products. You can be a lot more inclusive.

in terms of how you think about products and empathy for just end customers. So I think that's like uniquely Canadian that I think we need to use a lot of. Even my own personal experience when I graduated from Waterloo, I remember I had an interview with Google and Google was only 400 people at that time and they didn't even go public yet. I remember telling the recruiter, yeah, I don't think I'm going to fly down to California to do the interview.

And she was like, why wouldn't you do that? I go, yeah, I want to stay in Canada. My friends are here, my family's here. I think we can build something here. And at that point during the early 2000s, we had a lot of consulting type of software companies, and I worked for one. It was fine. I think there are a lot of talented people everywhere. Investors and VCs look for North America global scale. I think we can still build global scale companies.

large scale companies, but I think there's something that's unique to Canadians and building products for Canadians is pretty cool thing to do.

Rachel (17:07)

So that's a good segue into Simple Ventures. We're so grateful to have you as an LP and we've known each other for a while now from our past lives working in the venture building space. So grateful that I've been able to soak up so many lessons from you over the years. Talk to us a bit about why, like what's attracted you to our thesis and the team.

David (17:24)

I've known you for a while back at EF and how you left Toronto. I saw your leadership and your character and that's very important to me in terms of partners. So it's beyond just the investor return. I think a lot of times we over index on result and return and we don't index on the values and what we're building together. So I think what you did there was pretty cool and you were such a wonderful person to work with. That's a large part why. But the second part is also, I think,

there are interesting ways to invest in Canada that are, there's probably like a vacuum where the top VCs in the U.S. won't touch. But given the right fund size, I think here it's pretty interesting, right? Companies that reach a 50 million, but with minimum investment and not needing to race is a cool thing to do. Build sustainable businesses that cashflow and focus on sustainability. We've all gone through the whole fundraising cycle and it's pretty,

As an entrepreneur, it's pretty tiring to spend a lot of time thinking about sustainability through outside capital.

Rachel (18:31)

First off, thank you for those very kind words. And the feeling is super mutual. And then secondly on the thesis, maybe one thing we can touch on, because we've always talked about this shared passion for unsexy, ignored, legacy, sleepy industries, and the excitement and opportunity to bring technology to drive innovation in those sectors. Talk to us a bit about that. I know you spent some time looking at older businesses and search funds. What's your perspective there?

David (18:58)

Yeah, so let's start with search funds. People don't know that's usually that's an area of micro cap buyouts, right? Where a entrepreneur who wants to take over an existing business comes in and raises capital from other investors. So myself and my team, we invest in that category and we help with tech enablement. I think that's really cool because there's so many businesses that are like that. In Canada, a lot of businesses are SMBs.

and there is a huge wave of people who are retiring. So who's gonna help extend that legacy, right? And also give it that professionalism. So I think that is really interesting. Again, VCs, VCs won't look into that space.

Rachel (19:46)

So to wrap, it's been such a pleasure hearing your stories from wearing a suit at 13 to recruiting all your friends for Flip and to wrap any good content recommendations. It could be fiction, nonfiction, podcast, fun, business, tech, anything you'd recommend to anyone listening.

David (20:05)

I stay pretty out of social media. I'm not on any of that stuff, but I do listen to podcasts. I know everyone listens to the acquired podcasts. I've been listening since a long time ago before their production is super high quality now. I also listened to a few other Canadian business podcasts. One's called the Canadian Real Estate Investor Podcast. I listened to those guys. I like to listen to Canadian perspective on investments and economics.

Rachel (20:35)

David, thank you so much for the time. Really appreciate it.