Preface
Do you know who Taiwan’s first new unicorn is? (Definition of unicorn: a technology company that has been established for less than 10 years but has a valuation of more than US$1 billion and has not yet been listed on the stock market)
From its establishment in June 2012 to its listing in 2021, Appier Peixing Interactive Technology only took 8 years and 9 months to become Taiwan's first AI unicorn company invested by Sequoia Capital. Compared with technology giants Google, which took 6 years, Facebook, which took 8 years, and Uber, which took 10 years, Appier achieved IPO achievement in a very short time.
“Making AI easy by making software intelligent”
Making AI simple and making software smart has always been Appier's goal and the core philosophy of the company.
Starting from Taiwan and targeting the world, what exactly is Appier selling? Who is the founding team? What did they do right?Today I’m going to share with you the story of Appier Peixing Interactive Technology!
3 Takeaways to Take Away If You Only Have 1 Minute
- Successful AI business application cases:
Appier uses powerful AI and machine learning technology to analyze consumer data and achieve customized marketing.
This kind of AI commercial application not only improves corporate advertising conversion rates, but also effectively utilizes first-party data under strict data privacy regulations to achieve a win-win situation for consumer privacy and corporate customer experience. - In the early stages of starting a business, take failure as a supplement:
Founder You Zhihan and his team were not discouraged even after eight failures in the early stages of starting a business, and continued to test and adjust the business model.Finally find the right market corner.
Sometimes starting a business requires not only luck, but also perseverance in the face of difficulties.
Just like Appier's core culture: open mind, precise communication, and ambition to challenge the world. - You must have the courage to face the global market on the first day:
Appier has been targeting the global market since its establishment, not only to solve problems encountered in the Taiwan market, but also to solve international problems.
Although Appier's business footprint has spread all over the world, it is far from enough for the founding team, because Appier's ultimate goal is to become "TSMC in the software world" and become a world-class company to implement Appier's artificial intelligence technology around the world.
Founding background
The founding of Appier began in a Harvard University dormitory more than ten years ago. When founder You Zhihan was studying for a Ph.D. in computer science, he often discussed artificial intelligence, the research topic at that time, with his roommate Su Jiayong (currently Appier’s Chief Information Officer), which paved the way for them to start a business together.
"The idea that sprouted in my mind at that time was that I wanted to do something that could quickly change human life and business models," You Zhihan said. However, although the founding team were all top students from Harvard and Stanford, there were still many difficulties at the beginning of the business.
Courage after failing 8 times
You Zhihan and his team have tried to enter the game industry, but failed eight times at first. He revealed that there was a shortage of funds in the early stage, and even when team members wanted to enter a commercial exhibition, they could only take turns holding tickets to visit.
But they did not give up. After testing the market many times and not giving up even after falling, they finally settled on the field of digital marketing and established Appier in 2012, starting a successful entrepreneurial journey.
heavyweight shareholders
Taking stock of the heavyweight shareholders behind AI unicorns
In addition to the founder's personal shareholdings, shareholders behind Appier include Sequoia Capital, Japan's SoftBank, LINE, Naver, and the Singapore Economic Development Board (EDBI), of which Sequoia Capital has the largest shareholding.
(Sequoia Capital is the world's largest venture capital investor/VC. It has invested in a number of well-known technology companies such as Apple, Cisco, Oracle, Yahoo, Google, Paypal, etc., and once caused the "Silicon Valley Technology Company"redwood phenomenon")
Sequoia’s first investment in Asia brings Appier to the international stage
Appier's growth is inseparable from its investors, especially the addition of Sequoia Capital, which has brought international attention and resources to Appier. In 2014, Sequoia Capital was actively looking for new venture capital targets in Asia. Appier's AI technology moat and excellent team immediately impressed Sequoia Capital.
What’s interesting is that You Zhihan originally had no idea about Sequoia Capital and just made investment presentations in a relaxed manner. Unexpectedly, he brought in an investment of US$6 million, which was also an important turning point in expanding the scale of operations and standing on the international stage.
You Zhihan mentioned that Sequoia Capital’s investment became an accelerator for Appier at that time. There were significant improvements in product visibility, talent recruitment, and even the founding team’s familiarity with the capital market.With the red shirt experience in 2014, Appier can face the challenges of the capital market with more confidence.
The backstory that gave birth to Appier
What exactly is Appier selling?
To sum it up in one word:AI digital marketing tools.
A one-sentence introduction is:In the more severe digital advertising and marketing environment, use smarter ways to accurately capture consumers at every stage of the marketing journey.
Why is the digital advertising environment so difficult? What's the difficulty?
Let’s talk about the conclusion first, that is, there is less third-party data and less information about consumers.
Popular science time: What are the first-party and third-party data?
– First-party data:Think of it as your company's own notepad. It records all the customer's actions on the website, such as what products they bought, how long they stayed on the website, or their feedback on the service.
- Example: The restaurant collects the customer’s name, contact information and reservation time through the customer reservation system
– Third-party data:Market news revealed by others. For example, companies and market research companies purchase data in order to understand the overall market situation and gain a better understanding of potential customers.
- Example: overall catering industry market trends, customer analysis of the overall catering market
Rising awareness of privacy rights, the tension between consumer privacy and corporate advertising
In the past, companies could easily obtain a large amount of user behavior and preference data from third-party data to facilitate precise advertising and target high-potential customers to achieve high conversions.
However, with the trend of privacy protection, corporate advertisers have begun to suffer from a "data shortage" when placing advertisements.
Apple launched a new feature in 2021 that requires user consent before allowing apps to track personal information. (This is what pops up every time! Have you noticed it?)
At the same time, Google also plans to gradually remove third-party cookies from Chrome after 2024, making it more difficult for the company to obtain user online activity data.
Everyone disagrees with tracking data, so how do companies understand consumers?
"Whether it is used for external advertising or to improve customer conversion rates, companies now want to use their own first-party data.""Customers with a high degree of digitalization are beginning to consider first-party data advertising solutions." You Zhihan said.
The rise in privacy protection awareness will make the advertising advantages of the past disappear, but new digital marketing opportunities will also appear.
What kind of opportunity? It is to find an effective method to process the existing first-party data of the enterprise and gain insights into consumers.You should have guessed what effective method is smart, it is the AI artificial intelligence that You Zhihan has been cultivating for decades.
AI artificial intelligence achieves a win-win situation for consumer privacy and experience
Use AI for big data analysis and machine learning to effectively process and utilize the company's first-party data. In this way, companies can not only provide more personalized advertising and services while complying with privacy regulations, but also improve user experience and increase customer loyalty based on consumer preferences.
Products
What products does Appier have?
As mentioned in the previous paragraph, Appier sells AI digital marketing tools to accurately capture consumers at every stage of the marketing funnel.
From acquiring new customers to accelerating customer purchases, Appier is everywhere in the consumer journey
Appier has three main AI product lines: Advertising Cloud, Personalization Cloud, and Data Cloud
Corresponding to the four pain points of the enterprise: customer acquisition,Interactive retention marketing, transaction conversion, online order transfer, and customer insights.
Because these AI products can play different roles according to the enterprise's industry, needs, and application scenarios, in order to simplify the length,Here are two or three sentences each explaining how Appier responds to the four pain points companies encounter in digital marketing:
Customer Acquisition:Forecast end-user lifetime value and acquire the most valuable end-users at scale, turning marketing spend into predictable returns
Interactive retention:Proactively enhance customer interactions through AI personalized messages across all channels and at the best possible times
Transaction conversion:Anticipate and offer incentives only to hesitant buyers to maintain profits while increasing revenue
Customer Insights:Integrate consumer data and use data visualization and machine learning to predict end-user behavior
To put it simply, it means using powerful machine learning models to maximize the use of data and embrace the era of highly customized AI marketing.
To give a vivid example, the Appier AI personalized marketing platform can analyze customer behavior on the website. Once it detects the user's intention to leave the website, the system will automatically trigger a pop-up window to provide promotional information. Taking Burger King as an example, this feature successfully regained consumers who were about to leave the station and attracted them to place orders, achieving a conversion rate of up to 31%.
Incorporating generative AI modules into the battle, Appier still delivered 33% revenue growth in the off-season
In addition to the existing four major product lines, appier is also constantly launching new features. In Q2 of 2023, generative AI will be added to the product line to help companies improve productivity. In addition, although Q1 2024 is the traditional off-season for the digital content and e-commerce industry, Appier still delivered outstanding financial performance due to its strong operating performance and strategic development of a diversified customer base.
core competitiveness
There seem to be many companies doing digital marketing Saas, but where does Appier win?
Appier has two core competencies: strong AI technology that has been cultivated for decades, and a one-stop product line.
The one-stop solution enables Appier to meet almost all B2C customers' marketing and data needs and solve a variety of problems.
Appier's three major product lines (advertising cloud, personalization cloud, and data cloud) each solve different problems in the consumer journey and cover a wide range of areas, making it difficult for Appier to be directly challenged by a single competitor.
Chief Operating Officer Li Wanling also said: "Brands and consumers will go through different stages in the 'consumer journey', and if a brand wants to 'stick' to consumers forever, it needs to meet user needs at every stage."
From a financial perspective, Appier’s irreplaceable advantages bring a healthy company constitution
Rule of 40
Seiichiro Iwamoto, a fund manager at Asset Management One in Tokyo, said Appier is one of the few companies that meets the "Rule of 40" used by investors to evaluate software companies.
(Rule of 40: It stipulates that the sum of the company's revenue growth rate and profit margin should be equal to or exceed 40%)
Net Revenue Retention Ratio NRR
And what about the net revenue retention rate (NRR) that subscription software companies value most?
(A simple explanation in one sentence: NRR net revenue retention rate refers to the payment changes of the same customer group. The willingness to renew the contract, pay for more products, and not cancel the purchase of services can all increase the NRR value.)
Appier's NRR in 2023 comes to 120.3% (based on USD), and the churn rate remains low at 0.604%.
On behalf of Appier, not only did it retain old customers, but its revenue from old customers increased by 20.3% compared with last year.It means that customers not only renewed their subscriptions, but also purchased more features. The eye-catching numbers are enough to show its stable growth and overall momentum.
Appier’s inspiration for Taiwanese entrepreneurs
Appier's success is not only a rare and huge success in the market (that's why it's called a unicorn!), but it also injects more enthusiasm and confidence into Taiwan's startup scene.
existBaoju's reportIn the interview, You Zhihan was asked: What exactly is Taiwan’s talent shortage?
He replied:Talent is good, but what is lacking is an "international ambition."
I think this is a kind of persistence, mental persistence.
For example, if companies in the United States or other countries can develop cool technologies, you can have several mindsets:
One type claps his hands and says how awesome he is;Another one will talk about how we can copy;
But what’s more positive is that he has already done this, so how can we improve or even make breakthroughs next?
If more of us think from this perspective, I believe Taiwan can also become a software center.
"Internationally oriented" meansAt the beginning of the business, we immediately faced the global market, not only to solve the problems encountered in the Taiwan market, but also to solve international problems.
"Ambition" refers to seeing the existing technologies on the market and having the ambition to break through and improve them.
3 Takeaways for this article
- Successful AI business application cases:
Appier uses powerful AI and machine learning technology to analyze consumer data and achieve customized marketing.
This kind of AI commercial application not only improves corporate advertising conversion rates, but also effectively utilizes first-party data under strict data privacy regulations to achieve a win-win situation for consumer privacy and corporate customer experience. - In the early stages of starting a business, take failure as a supplement:
Founder You Zhihan and his team were not discouraged even after eight failures in the early stages of starting a business, and continued to test and adjust the business model.Finally find the right market corner.
Sometimes starting a business requires not only luck, but also perseverance in the face of difficulties.
Just like Appier's core culture: open mind, precise communication, and ambition to challenge the world. - You must have the courage to face the global market on the first day:
Appier has been targeting the global market since its establishment, not only to solve problems encountered in the Taiwan market, but also to solve international problems.
Although Appier's business footprint has spread all over the world, it is far from enough for the founding team, because Appier's ultimate goal is to become "TSMC in the software world" and become a world-class company to implement Appier's artificial intelligence technology around the world.
Conclusion
Through the entrepreneurial story of Appier, we see a group of enthusiastic Taiwanese who still believe in themselves after many failures, and finally find the right business model after many stumbles, so that Taiwan, this treasure island, can have the confidence to face the world.
Appier is still growing and going strong, and the company behind today’s $1.4 billion company is also an entrepreneurial team that has been rejected many times.So I want to use Appier's story to encourage you to see this side of the world. No matter how many setbacks you encounter, you must calm down and face failure calmly. As long as you can learn from it and iterate, I believe the road ahead will become clearer and clearer.
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