About two weeks ago, Hong Kong-based music app Sensbeat set a local record to become the first student-found startup in the city to secure US$500,000 in seed funding.
Investors include Big Bloom Investment (Hong Kong), PradoSV (Silicon Valley), an executive from a social media firm (Silicon Valley), PYJ-Dynasty Venture Fund (Bay Area), and two other Hong Kong-based investors who wish to remain anonymous.
Sensbeat is a social-sharing app that allows users to connect emotions with music and media. To share a ‘beat’ (feed item), users take a photo in the app’s camera, select a ‘mood’ from a list of about 90 options, add a song clip from Sensbeat’s internal search menu (partnered with iTunes), write a message (including hashtags), and select a colour for their ‘beat’ (geotagging is optional). To browse shared content, one can do so through a ‘home’ area that shows trending shares, or a more detailed ‘explore’ area that lets users browse beats within a specific mood category (happy, anxious, romantic, calm, angry and sad).
Curious to find out more about these seven students and their journey, e27 spoke with Leo Wong, Co-founder and CEO, Sensbeat.
How did you go about seeking your first round of funding?
It has been about six to eight months since we started reaching out to investors. We first started in Hong Kong. Basically, there are a few ways, but the easiest is through friends of friends, then advisors and professors in school, and judges in competitions we took part in.
We got to know some of the early investors that we met and it became easier for us to connect with other investors too. So this is how we approached our Hong Kong investors.
For the Silicon investors, there was a trip in late March to early April that I went on behalf of the team thanks to the Cyberport incubation programme. One of our advisors is usually based in Silicon Valley, so she showed me around and we talked with a few investors and VCs.
Have you dropped out of university to pursue Sensbeat?
No, we haven’t dropped out. But most of us are graduating this year. There will be a ceremony in November. I think we will all graduate, as despite skipping classes, we did OK in the exams.
Of the three founders, I’m studying a double major in Marketing and Information Systems. Conrad Lo has studied Finance, but he’s a product guy in our team. He does everything related to design, UI and the front-end coding as well. Ben Chan studies a double degree in Computer Science and Business.
The other team members are from CUHK. One is Calvin Chan, who studies Information Engineering. He’s our iOS guy. The Android guy is Roy Tang, he’s studying a double degree in Computer Science and Business, the same as Ben. Vincent Wong studies Quantitative Finance. At the early stage of development, he was learning programming from the very basics, and then started to contribute.
Vincent and I have been on the non-technical side related to marketing roles as well as finance. So he’s now the finance and growth guy in our team. The last one is Vanessa To. She is the only female in our team for now. She studies Business, but she is on the engineering side.
How did you find the non-founding members?
I just reached out to friends who wanted to get involved in a startup and do some interesting things during college.
What do you do about work space?
We have had two big stages. The first was the early stage where we had no rooms, no accommodation in school, no dorms or any of that. In our school, there is no space for startups or even group meetings, so the library was the only thing we could use.
We asked all our friends to book the library rooms for us so we could have constant meetings without interruption. There were limitations, so we had to trick it.
That lasted for many months. Later, we rented a space outside campus.
Do you find Hong Kong affordable as a startup?
Rent is definitely a problem. But that cost isn’t too high for us since we’re not in a prime location. Then there’s also hiring salaries, marketing and technical equipment. These are the four major costs or expenses that we associate with for now.
Do you rent a co-work space?
No, it’s a standalone space. Since we are the incubatee of the Cyberport incubation programme, they offered us off-site or on-site, and we chose to be off-site. (They don’t cover rental costs), but they have financial assistance that covers hiring and some marketing-related events that we can use. The financial part (of the programme) works by reimbursement.
How did you get the idea for the Sensbeat app?
The idea came to me when I was on an exchange programme to Spain. I travelled around other countries. I was listening to Goodbye by Air Supply in Switzerland, and that got me really sentimental. I wanted to share those emotions with my friends in Hong Kong.
I was thinking that we have Twitter to share messages, Instagram to share photos, but what about the emotions associated with music? That was the first epiphany that I had on this idea. I found it really hard to share those instant emotions. Most of my friends at the time were in Hong Kong, which is why I started thinking we needed a way to share this.
Are there any other similar apps on the market?
There are music services, but our focus is on the emotional part of it. We think that the closest one may be Meipai, Soundwave in the UK, and PingTune. But most of them focus on the music listening part, not much on the associated emotions. So the use case is quite different.
What was your reaction to receiving your first round of funding?
We received it step by step. As investors came in, it became easier to attract others. The hardest part was in the early stage because this is our first startup and we had no experience, no track record. At that time, the app hadn’t launched yet.
When we received the investments, it was just awesome. It means that we can do much more in terms of hiring, putting more resources into the developing of the product and marketing as well.
In the beginning, we made a lot of mistakes but to us, entrepreneurship is also about the learning process.
What we believe is that if we make a good product, then investment will come; it’s just a matter of time. So I think, having this mindset did help.
In the early days, we found it hard to start the conversation because not all investors are active, and some had been investing for a long time. We had no experience, we had to learn all the financing and the terms sheets, so that was hard work.
But things are always hard before they are easy. I gradually picked it up and tried to talk more with investors. One of our advisors who is based in Silicon Valley, taught us a lot on the financing side, so that helped us with well-rounded growth.
When we received the complete investment and saw that some of it had come from Silicon Valley, we were just thrilled.
This conversation with Sensbeat’s Leo Wong continues in Part 2.