TiE Talks Podcast 01 | From Idea To Execution W/ James Chan, ION Mobility | EV, Hardware

In this episode, we talk to James Chan, founder of ION Mobility, about the challenges and triumphs of building an electric motorbike company in Southeast Asia. We discuss everything from the inception of the company to the unique challenges of hardware development as well as the secret sauce that makes them special.

Discussion Points: From Idea to Execution w/ James Chan, ION Mobility

• Inception of ION Mobility
• Finding a co-founder
• Assembling the early team
• The day things started to get real
• Doubt and uncertainty
• Thoughts on fund-raising
• The unique challenges in hardware
• Next steps for ION Mobility
• Advice for angel investors and founders
• Innovation vs other EV companies
• ION Mobility through an investor lens

Transcript: From Idea to Execution w/ James Chan, ION Mobility

TiE Talks brings to you leadership and venture-building lessons from founders, investors, and experts in the TiE Singapore network, a vibrant eco-system of Asian entrepreneurs, angel investors, venture capitalists, and industry professionals.

Ritu G. Mehrish: The theme for today is ideas to execution and, and it says it all. So I want to, during our conversation, discover, what have been some of your key milestones as you’ve walked this journey from idea to an execution?

James Chan: It’s funny because we started just before the pandemic and we switched over to full Stack Development during July, 2020, which is in the heart of the pandemic lockdown.

And, I think one first major milestone for me was, I mean, obviously deciding to incorporate a company in October 19 and subsequently having the team come together for the first time up until we stopped travel in March 2020 and then later on, deciding to ditch the original OEM strategy and build everything in-house ourselves.

That’s when we reached the next level of the milestones where we had to form the core team to build the product. That was another key milestone.

Uh, we were having calls from our China team that we formed remotely and subsequently the Jakarta team, from that point on, getting the po every subsequent build that we had coming out from the garage, you could say. and then later on the fundraise, the subsequent series seed raise, and then the series A raise, and in between the unveiling of the bike in Singapore and then the launch of the bike in Jakarta end Okay, great.

Inception of ION Mobility

Ritu G. Mehrish: So let’s step back. Let’s start with the idea. How did the idea come

James Chan: I’ve been traipsing around Southeast Asia initially as a venture capitalist and later on as a serial entrepreneur building my team in Vietnam. The Vietnam team was eventually sold to Grab. We, I mean, obviously Vietnam being such a big market, there are about 60 plus million population. They have 60 plus million motorbikes. It’s basically one, one per pax. And, then it’s hard to not notice in Ho Chi Minh City the density of motorbikes. 

When I was doing FinTech later on in Jakarta, 2017, again, you have motorbikes in Indonesia outselling cars six to one. So between these two, I noticed the prevalence of motorbikes as the first transportation medium in Southeast Asia,

And, it is a way of life. It’s a way of culture. It’s nuanced differently in Southeast Asia – Thailand, Indonesia are more similar, Vietnam being a bit different. So it was hard to ignore that.

And when you merge the upcoming waves of ESR CSR that I was noticing, I mean, back in 2018, 2019, Indonesia was already talking about accelerating electric transition when all these factors came together. Also I had the need at a personal level, the need to go back to something less ephemeral. As an innovator, as an entrepreneur, I want to touch what I’m making. And I saw the trends and I was like, Hey, I gotta get into the environment as well. Yeah.

Ritu G. Mehrish: Oh good.

Finding a co-founder

Ritu G. Mehrish: So that was the idea. Once you had the idea, you looked at the trends, you figured out that, you know, this is a big thing here. What was the second step?

James Chan: When I decided to go into this space, I think, like any other founder would, I figured that it made sense to find and look for a co-founder.

In spite of my 16, 17 years of experience on all three sides of the table, having worked as a civil servant, having worked as a venture capital angel investor, having been a serial entrepreneur, I still felt like I didn’t have all the ingredients that I thought I needed, and I went and looked for a co-founder That I think was the second step.

It ended up eventually being the wrong choice.

Ritu G. Mehrish: What are some of those ingredients that you went out looking for in a co-founder?

James Chan: I am a straight laced guy. I thought I needed someone slightly grey. I have never built a motorbike before. I don’t have a motorbike licence. He had a motorbike and he was from the first electric motorbike company in Singapore, Scope Electric.

So, in that perspective, I, I felt that it was important to fill the gaps. But when we had a shift in our go to market technology models when we no longer wanted to depend on China as our OEM supplier, and we had to pivot towards a full stack in-house development, build up the team members for that, I think my technical background, my triple hats, started kicking in.

And, interesting enough, I think we were able to pick it up. The team we built allowed us to go forward and build, on that

Assembling the early team

Ritu G. Mehrish: Did you also build the initial team or co-founding team as sometimes called?

James Chan: Yes. Yes. In fact, We quickly added a bunch of folks that were critical because it was just two of us and I’m technical. He’s not.

And we needed to fill the rest of the holes and we quickly poached and hired from and hustled to look for people from all kinds of places We poached from the OEM partner that we used. That didn’t work out. We, poached from a Beijing electric motorbike company, moved him from Beijing to Guangzhou and later to Singapore.

We hired from Bangalore. Right. We hired in China, hired in Indonesia, hired in Vietnam. We hired as broad as Kazakhstan. So, the company was very distributed by nature because of the fact that we were working on an atoms first, bits later company.

It’s a physical object. So it’s atoms first. Okay. And it’s bits business later. Bits later business because, when you have a hardware platform, they can build all kinds of digital products on top of it.

Ritu G. Mehrish: And was it difficult to get your first set of hires? How did you sell that vision? Because that’s what you conceptualised, right? Like to your team?

James Chan: When you say you want to try to undertake a full stack, end-to-end build in Singapore, which historically does not have an automotive ecosystem or supply chain. And you’re trying to do it amidst the pandemic, people think you’re crazy.

You have no licence. You don’t understand the product. you’re trying to do it in a country that isn’t the market. We don’t have the natural talent admittedly. But It didn’t feel that difficult. It didn’t feel that difficult when I was in the midst of it, because you just don’t think. Blinkers, right? On the race course. But in hindsight, our people ask, wow, what are you into it? How do you do it? When TBSM was talking to us and they were like, wow, you should not exist in Singapore, I didn’t take it badly.

I said, I understand what you mean, and I did not take it bad. I think that that in itself, in hindsight felt really hard. but when you’re crazy enough to try and do something, the world somehow inspires to help you out.

We put out a job ad for a senior industrial designer for electric motorbikes. There was a Singaporean from Yamaha who reached out. He was the only applicant for that job. And he was hired on the first call. He could not believe his eyes that there was a job posting for such a role in Singapore, and he was looking to come back during Covid.

So, it’s odd. You have to stretch in all kinds of ways. We have to pay a premium in some instances. We found gems along the way and we made it work. We have 13 nationalities in the company today. In a five country-four office setup, with only Indonesia as our first market and maybe Vietnam.

So to pull this off during this period, I mean, it’s very people dependent.

The day things started to get real

Ritu G. Mehrish: I can imagine. So well done on that. So here’s the idea. You’ve got the team, you’ve convinced the team. What was the tipping point and where did you think, okay, this is where it seems like, you know, something is happening?

James Chan: I think the moment that became very real was when we saw the subsequent builds of the motorbike prototypes come together. When I saw the teams working together in spite of the distance, I saw the tenacity of getting supply chains to support us in spite of factories generally being logistically constrained or just really movement tough.

I only visited my Shenzen office after three years. first trip a month plus ago, two months ago. When you could see the thing come together for the first time when you could see firmware engineers dialling in remotely when we’re working on the remote test bench that we had set up to enable.

So I don’t have to ship the bike to every single remote engineer I had or the parts. That was when everything became very real. We knew that we wanted something. It still felt very garage and, not quite industrial scale. And then I think the next step was when we had our pilot battery pack and vehicle line come up in Singapore to serve as the underpinning of our digital twinning with the eventual line that we’re setting up right now in Jakarta, It became even more real that, we now have a line, we now have teams operating it, that we were commissioning it during the whole period.

Doubt and uncertainty

Ritu G. Mehrish: Before even the physical product came into being, what was a point where you thought this was going to work? And the reason I’m pressing on this point, is because when you have a tech, you know, you’ve got a bunch of people who agree on it, but then to be able to really take that idea in and say, yeah, I think this is gonna work.

James Chan: I think any entrepreneur who tells you that they think that it’s really gonna work is lying. I don’t agree. I think the only way to get out of this jungle is if you constantly doubt that you’re gonna make it okay. But yet be able to deal with the doubt and find a way out and not let it get you down.

There’s never a certainty in making it work. Even till today. I mean, we’ve just signed a lease on a 46,000 square feet factory. We’re putting the plans together to commission the line. It’s very surreal to be signing off the lease and know that we don’t have enough people, but we’re trying to get there.

So at every step of the company’s journey, we’re always having these moments where we’re saying, oh no, are we gonna make it? Are we gonna crash? Are we gonna make it okay? But then that’s what you do. You overcome every single challenge. You forge forward as a team. try and break down the tower of Babel and find all kinds of ways to hack your way around this.

Ritu G. Mehrish: Okay. Yeah. So can I just double click on this moment of doubt? Because a lot of the audience here is gonna go through this moment of doubt, like multiple times. It’s not like one time, you know, once you think, oh, we’ve made it.

It’s like the next round, the next round. What do you, as a founder and a successful founder, do to manage those doubts?

James Chan: I don’t think I’m successful yet. Sure. Success is when I can pose an IRR for myself and my team. We’re not – we’re far from it.

Having said that, I think it’s about having the perspective that you don’t get contented with the one that you just nailed. You gotta keep going. Don’t get too OCD about trying to get perfect with what, how you’re trying to nail the target each time.

You’re never going to come up as planned. It’s always different. It’s always constrained. There’s always all kinds of faster, cheaper, better trade offs to be very uncomfortable for most people. But that’s what I think makes entrepreneurs a bit different. We are, we’re constantly looking to, we prevail in the discomfort to push ourselves to grow.

At least for me, I think the pursuit of truth is key. That motivates me. And when you keep seeking truth, let me start out the way to, to move forward and move the challenges forward. That’s when you keep going. Right? Otherwise there’s nothing to really reinvigorate me at every step.

Ritu G. Mehrish: Great. Really great answers.

Thoughts on fund-raising

Ritu G. Mehrish: I wanna move to the third part of the third key milestone and any entrepreneur’s journey is the funding. What was that like?

James Chan: We started a company amid two terrible periods. The two biggest terrible periods were trying to fundraise during the pandemic on hardware products in a region which historically does not have hardware companies succeed with no hardware funding. Along the way I invested nearly half a million US. We’ve raised two rounds, part one, part two Seed, and series A with a bridge round that became converted into the series A round. 

Fundraising, I think, is generally over glorified. It’s a shit show generally speaking. Most founders don’t get to raise the money that they want. I did not get to raise the amount I wanted right? I wanted a bit more, and investors always want cheaper. They always wanna put less, and they want your valuation to get lower. Having been on that side of the fence, I completely understand what they’re trying to do.

Which is why it is over-glorified because not every business needs to be venture backed. Angels are different, VCs are different from strategics, are different from <inaudible>, are different from, you know, families. The list is endless.

And when you get in this game and you try to fundraise, for us it was really difficult because we did not have our product. We didn’t have enough money. We have been extremely capital efficient, living off 3.3 million Seed Part 1 notes, 3.2 million Seed Pref Part 2 and 18.7 Series A, which we only just received the bulk of it two months ago. We’ve lived off less than nine, 10 million, less than 9 million the whole time across three years prior.

I think for every entrepreneur it’s about being capital efficient. I think from a fundraising perspective, you gotta try your best and you have to figure out which set of investors is the best audience you’re gonna have. I had a very fragmented Seed round. That’s a function of people not believing James can pull it off, I think, and, and then using my reputation to raise the money. It helps because I’ve never lost money in my life so far.

A lot of it is not just about the clarity that you present, but also about the team that you have, about the approach that you take, about the timing. It’s luck. I think luck is 60, 70% of the raise. No one else was crazy enough to try to race with an end-to-end play and we were able to break the raise up into two parts so that we could show progress along the way. When I was fishing for Series A checks starting from February 2022, I struggled to find investors that were appropriate. Not that there weren’t investors. But, the timing was bad. 

I’ll give you an example. A US investor took umbrage at the fact that we had a Chinese subsidiary. And, and we are like, no, but it’s a subsidiary. They’re like, no, no, no – I don’t have anything to do with China at this point in time. And so you get all kinds of weird signals and along the way you just have to zoom into who you know is the one and take the discount on what you hope you can get.

The unique challenges in hardware

Ritu G. Mehrish: Okay, I’m gonna move on from funding to the last part of the journey, which finally comes to execution. You know, seeing the product, selling the product. What, what’s been that like? Because, I think your journey is also unique in the sense of the product, right? Like the physical product, the hardware.

James Chan: It’s extremely hard to be agile in hardware. You can MVP and launch SaaS services when, you know, the plumbing has not been sorted out because you can put on good front end skin and put lipstick on the pig, right. But for hardware it’s really hard. We’ve had to temper the way we sell with the polish that we’re currently at and wait for the inflection point in our build quality as we head towards production this year.

So that’s been hard to deal with. That’s unusually awkward compared to the software background. You can have daily pushes, daily releases of your product. I’ve once released, an update twice in a day. You can never do that for hardware. 

That means that you have to plan better. That means that you have to understand the time delay, to the physicality, to the market segment, customer segment. And then you gotta find all kinds of clever ways. We, we, we did not spend much on marketing so far, but we’ve been generating significant reach on the basis of organic content as a new brand.

But yet you don’t want to be chest thumping, telling the world that you’re awesome because I want to underpromise and over deliver as a founder, as a brand. and hence we have to temper that selling acceleration. In fact, the irony is that the investors who get it will tell me to go slower. Not too slow, but go slower so that you don’t screw up because you only often have one, two shots at the consumer confidence. Whereas for software, you can aim for a test. You can catch different pockets of customers and then ditch them and change audience sets. That’s been tough and challenging.

Next steps for ION Mobility

Ritu G. Mehrish: What’s next?

James Chan: I, I think there’s a lot more to be done. 2023, we have to commission our plant batch to pack and vehicle plan. We have to ship the bike by q4. We have to release the product, the demonstration unit for our second and third models that we have in our pipeline.

We have to remain capital efficient and maintain, spend in spite of, the funding round. Because you never know, imagine, know when the next round’s gonna happen, right? The macro signals of the economy, global economy, regional economy is looking a little south, in general. And, we’re seeing this BRICS versus, the world and, this impact on supply chain.

But having said that, on the back of that, I think you have three 50 trillion Rupiah of fuel subsidies that will be transformed into initially 800 billion Rupiah this year, 4 trillion next year. So you can imagine that they definitely want to save money. I would wanna save at least half if I’m the minister, so you can imagine from 4 trillion towards 100 trillion. 25 x. 

Having said that, I don’t think any business will survive long term being built on subsidies. That is why we started in premium mass market, cuz our customers don’t ask for subsidies, even though we qualify. So a lot to be left to be done.

In 2024 we hope to enter and launch in Vietnam and Taiwan. We hope to improve further on our products and, I hope to be entering another vertical, not just motorbikes.

Advice for angel investors and founders

Ritu G. Mehrish: Great. One piece of advice for the TiE Angels?

James Chan: How much time do you spend if you’re not interested?I think that’s the hard part about being nice. And being clear and articulate that clearly to the other party. And then the advice for founders that you’re asking. I think likewise, I think on the founder’s side, be cleverer about sizing up the angels. Be clever about asking them the right questions quickly to leave an impression.

Because you have to assume that everyone knows what they’re doing. And, if you’re trying to hide behind fancy numbers and labels, then they’re gonna ask you to get straight to the point. Okay, great.

Ritu G. Mehrish: Questions from the audience?

Innovation vs other EV companies

Audience Member: I would like to talk more about the product and your production line. So what fascinates me about Tesla, for example, they innovate. It’s not just another vehicle, with an electric motor. Do you have the same approach and could you just give some tidbits?

James Chan: We innovate everywhere. We do the cell sorting, spot welding, in-house. And, the packing in-house. We build our bms, we do our firmware. We do our own software. We build up, we do own industrial product design. We do our mechanical frame swing. We, we tool, we release files for tooling ourselves.

Investors always love to ask. Angels always love sometimes to ask, what patents do you have? What, what IP knowledge do you have? I think a lot of this is actually know-how. The know-how of integrating all these things together.

Like for example, we’re, we’re deploying our factory line. Now how do I ensure that my ERP system still gets clarity of item masters and builds materials going out of my ERP storage warehouse into the factory line to be consumed, tracked against warranty systems that needs to be had, back to who? Is it an operator error? Is it a parts error? Back to the supplier for warranty claims? I mean, it’s not rocket science, but you’re gonna have to innovate on how you implement it without calling for NetSuite, Oracle, or SAP cuz we can’t afford them. Right? We are gonna have to couple things together to make it work.

We only have five mechanical engineers. How do you work with five mechanical engineers to do a complete vehicle integration with 70, 80% of the parts custom? So, there’s a lot of processes, methods, and corners that we take at higher speeds, knowing where the debt is and going to clean up. It’s hard tech, it’s not deep tech.

We have no knowhow of our battery pack line. So we’re gonna have a transplant knowhow from China. We design our own battery pipeline, we optimise the process ourselves. So all of these things, I think, come together to make it difficult to compete against what we’re doing.

Anyone can go to China and point at a bike and say, I want this and I want a badge on it, and I want this volume and I want to go sell it in another country. But to really then take a very volumetrically constrained product and then trade off the way we want to trade off to design, achieve the trade off between performance, design, specs, and then to deliver it, in the hands of the customer takes as you, as you rightly pointed out, a lot of nuance at micro levels.

Audience Member: And your go to market strategy?

James Chan: Direct to customer, not traditional dealership. Completely disrupting and avoiding where the puck would normally go.

ION Mobility through an investor lens

Audience Member: How would you look at ION Mobility if you have, you were on the other side?

James Chan: Mm. I think cash flow management is key. I think the capital structure is key. I think the customer loyalty, customer acquisition costs, conversion funnels are key. And when I can demonstrate all these numbers as an entrepreneur to my next round investors, I’ll be bringing on the PE numbers, private equity money when we get there. So it’s, it’s unfair advantage to have as an entrepreneur, to think as an investor, and then think as an entrepreneur and then use that information unfairly.

The challenge is then in the execution. How, how do you get this ragtag bunch of people to come together to execute and make this happen? Because they’re never always gonna be as motivated. How do you create incentive structure to incentivize them to play this journey? Then all these numbers will then have to prove itself. 

And then what’s the exit? Right? What’s the initial exit for the short exit window guys? So I’ll have to look at my investors’ fund life/ exit secondary expectations. And then look at my cap raise structure. That’s what an investor would be thinking, right? Like, can he make it, does he have enough luck, magic, touch, charm ability, randomness to make it happen.

So talk to the next layer of people, right? As an investor you have to see is it just a James one man show, or is it much more? Because sometimes investors think James is just one man show because he’s, he’s CMO, CFO, CEO at the same time.

Right? Then talk to the next layer. Otherwise, you’re not convinced. Right?

Ritu G. Mehrish: Okay with that, once again, thank you so much, James.

James Chan: Thank you. Great. Thank you.

Our Guest: James Chan

James Chan is founder and CEO of ION Mobility, an electric mobility technology and lifestyle brand focused on Indonesia and Southeast Asia. ION’s products combine advanced hardware and software with human-centered design to deliver smart electric motorcycles and charging and energy storage solutions. The company launched its inaugural “Mobius” M1-S electric motorcycle for Indonesia in November 2022.

James started his career as a public servant with the Singapore government, then moved on to become a venture capitalist and angel investor. He subsequently switched hats to become a venture builder and serial entrepreneur at Silicon Straits, GreyOrange, and Wecash before founding ION Mobility amidst the pandemic.

A recipient of the EDB Singapore Inc. scholarship in 2002, James holds a Bachelor of Science (Double Major) in Electrical & Computer Engineering and Engineering & Public Policy from Carnegie Mellon University (Class of 2005) and a Master of Science in Management Science and Engineering from Stanford University (Class of 2006).