Weee!: Larry Liu

If you told 19-year-old Larry Liu that his hobby re-selling used electronics “for fun” would someday help him build a multi-billion-dollar company, he probably would have laughed. He was an electrical engineering student in Shanghai at the time. His goals were to land a corporate job and go to grad school in the U. S. He did both, starting with a job at Intel. But his passion for e-commerce stayed with him through his MBA and other corporate jobs. And when he moved to Northern California, Larry noticed other Chinese immigrants using WeChat to source what they needed locally - even organizing in groups to buy familiar foods and products. Larry immediately saw this as a business opportunity. And in under ten years, after facing down bankruptcy and re-orienting his business, Larry grew his e-commerce platform Weee! into a company now valued at over $4 billion. This episode was produced by Kerry Thompson with music composed by Ramtin Arablouei. It was edited by Andrea Bruce with research help from Katherine Sypher. Our engineers were Gilly Moon and Josh Newell. You can follow HIBT on Twitter https://twitter.com/HowIBuiltThis & Instagram https://www.instagram.com/howibuiltthis, and email us at [email protected] mailto:[email protected]. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Guy Raz?

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• 0:46Guy Raz?

  build the prototype, analyze the market, maybe even come up with the idea, what separates the people who actually build something from everyone else? I don't have a clean answer yet, so I've been sitting with it with Claude. There's hope in hard questions. Ask yours at claude.ai/hibt. We get support from U.S. Bank. A question I love asking founders. What's the one decision you almost didn't make? The one that changed everything? Because it's never the obvious stuff. It's never, I decided to start a company. It's the small, boring, Tuesday afternoon decision you barely remember making until you realize it's the reason everything after it either worked or didn't.

• 1:32Guy Raz?

  Say you're 18 months in. Business is growing. You've got expenses coming from six directions. Gas for the van, office supplies, your phone bill, team lunches that are actually client meetings, and you're putting it all on whatever card you grabbed in year one. You're not thinking about it. Why would you? You've got bigger problems. But here's the thing. Path A, you keep going like that. End of the year, you're sorting through statements, trying to figure out what went where. You've left hundreds, maybe thousands, on the table in rewards you never earned, money that could have gone back into the business. Path B, you pause and get the US Bank Triple Cash Rewards Visa Business Card. Now, you're earning 3% cash back

• 2:16Guy Raz?

  on gas and EV charging, office supply stores, cellphone service, and restaurants. You pick up an extra $750 cash back as a bonus. And you've got a low APR on purchases and balance transfers for 12 months while you're scaling. Same business, same expenses, two completely different outcomes based on one small decision. Visit usbank.com/business to learn more. The creditor and issuer of this card is US Bank National Association, pursuant to a license from Visa USA, Inc. Some restrictions apply. If you travel often, you'll want to hear about this unprecedented offer. For the first time ever,

• 3:00Guy Raz?

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• 3:45Guy Raz?

  or bring a guest to the Delta Sky Club. Make every trip feel more rewarding with the car that upgrades your travel. Apply today at delta.com/cardsocial. Offer ends November 4, 2026. Minimum spending requirements and terms apply. Flights are fulfilled as flight certificates valid for Delta Comfort or Delta Maine to select domestic destinations. Book 21-plus days in advance. Up to $80 per person and taxes and fees apply. Other restrictions apply. When I pull up to a gas pump to fill my car, I'm not thinking about chemistry or engineering. I'm thinking about getting in, filling up, and getting on with my day. And it reminds me a little bit of the founders I talk to on this show, because the best

• 4:27Guy Raz?

  ones obsess over things their customers will never see. Tiny details, invisible improvements, relentless iteration. And not because anyone's watching, but because it makes the product better. That's what the mobile brand does. It engineers fuel the same way great founders engineer their products. Mobile Supreme Plus Premium Gas helps keep engines three times cleaner, which can mean better performance and improved gas mileage. It's for people who care about what's under the hood, even if they never see it. Three times cleaner compared to mobile regular gas in port fuel-injected engines. Actual results may vary. Visit mobilefuels.com for details. Hey, it's Guy here.

• 5:12Guy Raz?

  And before we start the show, I want to tell you about a super exciting thing we are launching on How I Built This. So if you own your own business or trying to get one off the ground, we might put you on the show. Yes, on the show! And when you come on, you won't just be joining me, but you'll be speaking with some of our favorite former guests, who also happen to be some of the greatest entrepreneurs on Earth. And together, we'll answer your most pressing questions about launching and growing your business. Imagine getting real-time branding advice from Sunbums Tom Rinks, or marketing tips from Von Weaver of Uncle Nearest Whiskey. If you'd like to be considered, send us a one-minute message that tells us about

• 5:57Guy Raz?

  About your business and the issues or questions that you'd like help with. And make sure to tell us how to reach you. Each week, we'll pick a few callers to join us on this show. You can send us a voice memo at [email protected], or you can call 1-800-433-1298 and leave a message there. That's 1-800-433-1298. And that's it. Hope to hear from you soon, and we are so excited to have you come on the show. And now, on to the show.

• 6:39Speaker 01

  It's probably the darkest moment of my life. We were running out of money, and I couldn't do anything about it. But like many things, it turned out to be a blessing in disguise. For the first time since I started, I had a lot of time to think. I tried to replay everything in my head. What started as something really promising, how come it went horribly wrong?

• 7:12Guy Raz?

  Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

• 7:23Guy Raz?

  I'm Guy Raz, and on the show today, how Larry Liu went from being an eBay reseller to building the online Asian grocery platform, Wee, now valued at over $4 billion.

• 7:40Guy Raz?

  Imagine you start a business, and you pour your heart and your soul into it for a few years. You watch it gain early momentum, and then, shortly after, you begin to see it spiral and flail. At a certain point, you have to come to terms with the reality of that failure. Now, if this sounds like you, or something you've experienced, today's episode might be particularly helpful, because Larry Liu failed. He started a business that seemed really promising, and about three years in, He had to shut it down and start all over. But the failure of that business and the painful process he went through was almost like an act of God or fate or whatever power you want to believe in.

• 8:24Guy Raz?

  Because it led to a much better and much bigger idea. And that idea is called We. That's W-E-E-E. It's now one of the leading grocery delivery brands that specializes in Asian products. If you're looking for A5 Kobe beef or a pint of perfect white strawberries from Saga Prefecture in Japan, We is where you can find it. But you can also find staples like dish soap from Taiwan or vinegar from China. Larry started We in 2015 as a completely different company. The original idea was a platform to help people buy large purchases as a group and save money. But that idea nearly sunk the business

• 9:07Guy Raz?

  and it left Larry with barely a month of funding just before he made a hard pivot into grocery delivery. Larry actually came to the US in 2003 to work at Intel. It was always his dream to live and work in the US. In fact, as a kid growing up in Wuhan, China in the 80s and 90s, Larry was obsessed with American culture, in particular, basketball and the NBA, which is actually how he got the name Larry.

• 9:37Speaker 01

  My legal name is actually Min, M-I-N. Last name is Liu, but I go by Larry. I started learning English when I was 12 years old. So our English teacher asked us to pick our own English name. So we got to choose. So I chose Larry because I was into NBA at the time. And I really like Larry Bird. That's why I chose Larry.

• 10:04Guy Raz?

  Oh, as a Lakers fan, I really wish you would have loved the Lakers because then I would be, I'd be talking to Magic Lou right now. You would have said, I want my American name to be Magic. And that would have been your name. You'd have been Magic Lou. So Larry Bird, the great Celtic, that's how you became Larry. I love it. And this was like right around the time when you were a kid and probably so was the NBA, American basketball, like, were you really obsessed with it as a teenager?

• 10:35Speaker 01

  Yeah, absolutely. That was the first years that China started to broadcast NBA. So a lot of kids became really fascinated about NBA. And there was not other American sports broadcast, right? There was no baseball, no football. It was just basketball. So that's kind of our impression of America. And we all felt like, oh, these players were just so amazing and best in the world. And yeah, a lot of people were like me. We really admired those stars.

• 11:13Guy Raz?

  Did it feel like, do most kids growing up in Wuhan dream of like one day living in Beijing? Like, you know, like a kid who grows up in Omaha might think of moving to Chicago or, you know, New York is, or obviously LA. Growing up in Wuhan, is it like, I'm getting out of this place. I'm getting out of this town and I'm going to Beijing or to Shanghai or something. Is that how you thought growing up?

• 11:38Speaker 01

  Not really. I think most kids were not like the kids today. They didn't know what to do. When I was a child, I did not know what I want to do. So we all kind of followed this pattern. Our parents or teachers told us, right? You just be really good at school, then you apply for a good college, then.

• 12:04Speaker 01

  It it it seems the past was drawn for everyone. So we we as kids, we didn't really think a lot about what we wanted to do in the future. If if you really ask the kids, they all told you, oh, I want to be a scientist. Um, yeah, this kind of generic answer, right? So so it's very, very different from America where kids from early age are encouraged to think about what they want to do.

• 12:31Guy Raz?

  But from what I understand, you did really well in school. You and and then you ended up getting a bachelor's degree in electrical engineering. And I guess you were planning to go to the US for for graduate school. But I but I guess nine eleven sort of got in the way and and sort of derailed your visa. Is that is that right?

• 12:50Speaker 01

  Yeah, so nine eleven happened. So the year after, the visa rejection rate was extremely high. I I don't know if it's true everywhere, but in China, it was extremely high. So my visa application got rejected, like many other people in that year.

• 13:09Guy Raz?

  So, all right, so you stay in China. This just coincides with the the beginning of what in the US became the dot com boom and bust, right? But it was early days for things like e-commerce and like eBay and and I guess there was a similar kind of site in China, or there might still be called EachNet. And and like it was like an eBay.

• 13:32Speaker 01

  Right.

• 13:33Guy Raz?

  And you started to sell things on like you like buy things and then sell them. What tell me what you you would do?

• 13:39Speaker 01

  Yeah, so so EachNet was created by one of the alumni of my university. So they went to campus to recruit. But I didn't apply. Instead, I became a seller on EachNet. I thought it was fun. So we we didn't know what to sell, so we started by just. Posting, putting posters in those apartment buildings, asking people, oh, do you want to sell some used, used goods? And then people call us, for example, they would call us, oh, I have this microwave I want to sell, or I have this refrigerator I want to sell. Then we, we listed on each net and yeah, sold those secondhand electronics and appliances.

• 14:23Guy Raz?

  You basically buy these things, whatever they were, secondhand microwave ovens. What, what else would people sell?

• 14:30Speaker 01

  It was a very small scale. We, we were just a bunch of kids. We didn't know what we're doing. Uh, we were just having fun. We thought, oh, this is, um, interesting. We have never seen this kind of thing before. And there was no e-commerce in China, only each net.

• 14:46Guy Raz?

  Were you, were you making money by doing this?

• 14:48Speaker 01

  Not, not, not much. We didn't make money. We didn't lose money. It, it was more like a hobby. It never, we never thought, oh, we're creating a, a business or anything. It was more like, oh, it's, it's interesting. Oh, you can sell things on the internet. It's cool. So let's, let's try it. Uh, at the time, three of us, actually all now they are all the co-founders of We. So that was like more than 20 years ago. Three of us, we were just, we were just having fun.

• 15:15Guy Raz?

  So, all right. So you're doing this on the side and this is just something that you're doing. Um, meantime, you graduate, you finish university and you couldn't get to the U S because of visa challenges. Um, but you did get hired by an American company, by Intel, to work in their, in, in an office in Shanghai?

• 15:35Speaker 01

  It's actually in Intel's, uh, factory in the suburb of Shanghai. My first job was to write test programs for semiconductor chips.

• 15:45Guy Raz?

  So, all right. So you're at Intel and you start there in 2002. Within a year, you get an opportunity to move to California and work for Intel. Um, which of course you, you, you took out that offer. Paint a picture for me. It's 2003. You moved to Folsom, California, which is closer to Sacramento. Uh, you know, you were 23. How was your English? Did, I mean, you'd studied it since you were 12, but you'd never lived in the U S, probably didn't have much interaction with English speakers until that point.

• 16:17Speaker 01

  Yeah, my English was pretty terrible. I remember going to McDonald's. I just couldn't understand what they were saying. They asked me a question for, for here or to go. They said it very quickly, just for here to go, for here to go. I asked five times, they repeat, they repeated, the employee repeated at the same speed for like five times, I still didn't get it. So I had to like learn the practical English. And also when we were in China, the English we learned was like, I don't know, it was British English or, or something, just a lot of expressions were very different from the American English today.

• 16:59Guy Raz?

  So when you got to Folsom, I mean, I'm assuming that Intel probably helped you out, they helped you find an apartment and kind of helped you get a driver's license. What did you make of it? I mean, this 2003, what was your impression of the place?

• 17:14Speaker 01

  It was very quiet and very clean. That's my impression. People were super nice and polite. Intel took very good care of us, so I didn't feel like the generations of immigrants from China before me, right? They had to probably went to New York City and got into the basement on the first day. The only thing I felt a bit uncomfortable was about my inability to find the food I like to eat. So the only thing, you know, remotely Chinese in Folsom is a single Panda Express.

• 17:53Guy Raz?

  One Panda Express, okay.

• 17:55Speaker 01

  One Panda Express. Yeah, I actually had my very first meal there in Panda Express because one of my colleagues, the day I arrived, he said, okay, let me take you out to a Chinese restaurant. So we went to Panda Express. I actually like Panda Express food, but it's just different. And also the selection is very limited. Any Chinese restaurant, you walk in in China, they offer you at least hundreds of choices, right? Any Chinese restaurant.

• 18:25Guy Raz?

  Hundreds.

• 18:26Speaker 01

  Yeah. Then you walk into Panda Express, everything was pre-cooked and you can choose from like 10 different options. It's just very different. And the closest Asian supermarket, Chinese supermarket to Folsom was in Berkeley, the 99 Ranch in Berkeley, which is about two hours away. There was a Vietnamese supermarket in Sacramento. It still took us 40 to 50 minutes. To go there so that Vietnamese supermarket became the place I went a lot.

• 19:01Guy Raz?

  All right, so you're working as basically as an engineer at Intel. And this there's kind of a side project from what I understand that you started kind of engaging in while you were there. Which was similar to something you did in China, but this time you did it with eBay. You basically became an eBay seller on the side to make extra cash. Was that the reason that you just were like, hey, I can make extra money selling stuff on eBay?

• 19:27Speaker 01

  I learned about eBay already when I was in China. So when I came here, I started to to sell things on eBay. I remember I went to Costco and I saw this backpack, Jen's sport backpack. These backpacks were super expensive in China. And I saw, oh, it's only $15 in Costco. Then I looked it up on eBay. Oh, the lowest price on eBay is around $40. So I just bought that I bought that backpack and sold it on eBay for about $40. That was my first transaction on eBay.

• 20:04Guy Raz?

  Instant arbitrage.

• 20:06Speaker 01

  Yeah.

• 20:07Guy Raz?

  Instant arbitrage. Wow.

• 20:09Speaker 01

  I remember after I bought the first one, I sold it. Then I went back to Costco, I bought like 10 more.

• 20:15Guy Raz?

  And from backpacks to what else did you start to sell on eBay?

• 20:19Speaker 01

  So I started to sell a lot of electronics, for example, digital cameras, even iPods, Nintendo Wii. I sold a lot of Dell computers.

• 20:31Guy Raz?

  Where would you buy them from? And where would you buy them cheap and then sell them for more on eBay?

• 20:36Speaker 01

  So I bought them either online or in local stores. That's that's very early days of e-commerce. So a lot of the companies were not very savvy. So they would give you. Coupons that can be reused many, many times. For example, I remember Office Max had this coupon fifty of two hundred fifty dollars and can be used over and over and over again. I bought online, I didn't even need to go to the store. They had it online. So I bought online. I would, for example, buy two cameras. That's like a hundred thirty dollars each, right? So I would apply the coupon and then sold them on eBay.

• 21:18Speaker 01

  And the coupon can be applied to on-sale items also, right? So when they were on sale, plus the coupon, you can make a profit.

• 21:28Guy Raz?

  I love it. And were you making like a marginal profit or were you making significant profit? Because you still had to deal with the shipping and handling yourself, right?

• 21:36Speaker 01

  Yeah, I think it was decent. It was not insignificant. And I was, I was pretty good at it. So, so pretty quickly I became one of the top sellers in the Sacramento area. And eBay even sent me a plaque, yeah.

• 21:51Guy Raz?

  A plaque?

• 21:51Speaker 01

  Yeah, yeah, yeah.

• 21:52Guy Raz?

  Wow. Top seller, that's amazing. How, can you estimate like how much money you, you would make a year or a month from eBay? Like, like fifty grand a year, twenty-five grand a year, more? Like in profit for you?

• 22:08Speaker 01

  It's probably between thirty to fifty grand a year at the time.

• 22:12Guy Raz?

  Wow, wow, that's, that's, that's pretty impressive. I know I'm, I'm kind of fast forwarding a bit, but I know that, that, you know, eventually your girlfriend from China moved out to the US and, and you guys got married and were together. And she, I guess, was a grad student at UC Davis. And you decided to pursue an MBA at UC Davis outside of Sacramento. And also in the meantime, the two of you would have a kid, which was probably going to change the way you started to look at life.

• 22:43Speaker 01

  Yeah, it was a scary thing because all of a sudden you are not just responsible for yourself, you're responsible for this human being. I remember I was thinking to myself, what do I teach this child? That's the thing really got me thinking about my own life. Up until that point, I still felt like I was pretty much following the playbook for a lot of Chinese immigrants, right? Just apply for a graduate school here, you know, find a job. But having the child really made me think what I wanted to do for my life.

• 23:27Guy Raz?

  So when you graduated, when you finished, when you got your MBA, you kind of, I think you kind of pivoted because you had really been doing engineering work at Intel. But from what I read, you went and worked for a computer networking company initially, but you worked in finance, right? That was your job out of business school?

• 23:48Speaker 01

  Correct. I worked for two companies, three years each in the finance accounting function after I graduated MBA. I chose finance for the reason which is I need to have visa sponsorship if I want to stay in the US. So I could have chosen marketing, but at the time, if you chose marketing, your chance to get a job in the US was almost nothing because no one would sponsor visa for a marketing position.

• 24:24Guy Raz?

  Meanwhile, you still continued to sell things on eBay, right? Like at a certain point, and I'd love for you to explain how you do this, you started to automate, like the arbitrage, like buying things from one site and selling it on eBay or vice versa?

• 24:40Speaker 01

  Yeah, I kept this hobby up. Fast forward to 2012. I had this idea that I realized, oh, how about just automating the whole thing? Because it's very easy to write programs to scrape the internet. You can find the price on Amazon of the same thing, you know, on eBay, on Walmart.

• 25:02Guy Raz?

  Wow. You wrote a program that would scrape Amazon and eBay and vice versa. And if it found a lower price for the same product on one of the sites, it wouldn't buy it, it would just list it on the other site. Somebody would see it for lower, buy it from you. It would automatically order it from Amazon or eBay, depending on where it was ordering from, ship it, and you would just get the difference.

• 25:26Speaker 01

  Correct.

• 25:26Guy Raz?

  After the commission was paid.

• 25:27Speaker 01

  Yeah.

• 25:28Guy Raz?

  That's brilliant. I mean, I wonder if you could still do that today. Is there still that kind of arbitrage between Amazon, eBay, Walmart, Target? Like, I wonder if that still exists.

• 25:41Speaker 01

  Absolutely.

• 25:42Guy Raz?

  It must, right?

• 25:43Speaker 01

  Absolutely. You can still do that today. And you can do like even more, right? So now there are like cross-border companies. You can actually scrape those companies and list on eBay.

• 25:56Guy Raz?

  Yeah, I mean, people must do this all the time.

• 25:58Speaker 01

  Yeah, at the time, I thought my idea was quite original. But after I did that, I realized, oh, some people were doing exactly the same thing.

• 26:08Guy Raz?

  How? I mean, I'm just curious, like, at its peak, like, how much money were you making from this?

• 26:16Speaker 01

  So at its peak, we were doing about $2 million in sales and a little more than 10% net profit.

• 26:25Guy Raz?

  And we say "we," it was you and a couple of friends, right, from China?

• 26:28Speaker 01

  Remember those two friends? I sold second-hand things in China.

• 26:32Guy Raz?

  In Shanghai?

• 26:33Speaker 01

  Yeah, so they, I recruited them. So one of them came to the US also to pursue PhD. The other one stayed in Shanghai, got his master in computer science. So the three of us, two were in the US, one was in Shanghai. We were doing this together.

• 26:52Guy Raz?

  And what happened to the business?

• 26:55Speaker 01

  So we thought this was a fun project, but deep down, we knew that this was not going to be something significant. It's a good vehicle to probably make some money, but we fundamentally did not solve any problems or create much value.

• 27:14Guy Raz?

  Larry, you were working in finance for a different company at this point called Atmel, which was a semiconductor manufacturer.

• 27:26Guy Raz?

  And at what point do you remember thinking, you know, I don't want to do this anymore. I want to start my own business. Like, I want to do my own thing. Do you remember when you started to feel that way?

• 27:38Speaker 01

  Yeah, I did. I actually remember exactly which date I had this epiphany. It was January 2 of 2012. I had this epiphany that I really wanted to start my own company and I wanted to pursue e-commerce specifically.

• 28:01Speaker 01

  Yeah, I remember watching this video by Jeff Bezos. It was a very early, I think you can still find it, very early TED Talk Jeff gave, right? He made the analogy, he said, oh, now the e-commerce is like the electrical era in the early 1900s, right? So he just basically said e-commerce was in the very, very beginning. So I really believed that. So I felt like e-commerce would have a really bright future. And I also remember I read this book, Good to Great. So it had this concept called-

• 28:39Guy Raz?

  Oh, like Jim Collins?

• 28:40Speaker 01

  Yeah, yeah.

• 28:41Guy Raz?

  Classic book.

• 28:42Speaker 01

  Yeah, yeah. It has this concept called hedgehog concept, so-

• 28:46Guy Raz?

  The hedgehog concept, yeah.

• 28:47Speaker 01

  Right. Like a business, you have to choose something you're passionate about and you're good at. So for me, I think it applies to your personal career choice as well. I wanted to choose something I'm really passionate about. I also wanted to choose something I'm good at. And also, the third factor is this industry I'm choosing needs to be-

• 29:12Speaker 01

  So much bigger and has a really bright future thirty, fifty years down the road. So e-commerce.

• 29:19Guy Raz?

  Something you can make money from it.

• 29:20Speaker 01

  Exactly.

• 29:21Guy Raz?

  I think that's a third principle.

• 29:22Speaker 01

  Exactly, exactly. So the three things just converge to e-commerce for me.

• 29:27Guy Raz?

  So basically, you came to the conclusion that just like doing this arbitrage thing, you could have a nice, small lifestyle business, but you couldn't really scale it. Like, you hit, you were making two hundred grand in profit a year, you and your partners, but you kind of realized that you might have hit the limit of it.

• 29:45Speaker 01

  Correct, correct. We can probably tenx it if we're doing it full-time. Again, deep down, we didn't feel like we created much value.

• 29:54Guy Raz?

  Yeah. So, all right, so you were searching, it sounds like you're searching for ideas. And reading, I mean, so clearly you were, and reading like business books, right? You're reading Jim Collins, and were there other books that you got a hold of, that you started to read?

• 30:10Speaker 01

  Yeah, I started to read books when I was twenty-five. So in two thousand and five, I started to read a lot of books. I actually listened to a lot of books. I like, you know, business books. I like entrepreneurial stories. So I also started to get interested in US history. I really like Robert A. Caro's The Years of Lyndon Johnson. That became my favorite.

• 30:38Guy Raz?

  What was it about reading about or learning about him that was interesting to you?

• 30:43Speaker 01

  I think Carroll is just this amazing author. So he wrote Lyndon Johnson's life more interesting than a novel, right? And also, the complexity of him is really fascinating. I felt like, by reading the book, I felt like I was living the life. And also, I think Carroll basically wrote the entire US history from like the thirties to the seventies, right? I remember.

• 31:19Speaker 01

  Any character that appeared in the book, it was a huge chapter about it, right? Sam Rayburn, you know, Dick Russell, people I have never heard of and were not like known by probably non-Americans at all. But I was able to learn their stories as well.

• 31:37Guy Raz?

  I don't think most Americans know who Sam Rayburn or Dick Russell is, by the way. Really, like, most Americans don't even know who those guys are. So it's just fascinating because here you are just like really, really curious about this new country that you have adopted as your home. And I guess you were still, even though you were now in the Bay Area proper, with a pretty significant Chinese population and a historic Chinese population, right? San Francisco, the center of kind of Chinese life in the United States for really, arguably even to this day. You had a hard time getting the ingredients and the products that you missed from home.

• 32:22Guy Raz?

  Is that, is that right?

• 32:24Speaker 01

  So I was able to get Chinese food, but I had to drive like 20, 30 minutes to a Chinese supermarket. The closest American supermarket was always one minute away from me, right? But the closest Chinese supermarket was like 30 minutes away. Quite inconvenient.

• 32:44Guy Raz?

  I want to, I want to sort of, it's a bit of a digression, but it's important because there's some, there's a part of your life at this time and maybe even to this day that is almost uniquely Chinese in that you were on WeChat. And WeChat is and was and is a huge Chinese-based messaging platform. It's e-commerce sites. It's an everything platform, right? Which is, it's like, everybody in China uses it and in the US, fewer people know. But This was, I mean, you used it to communicate with people, to like have, you know, sort of text chains with people. And WeChat was also a place where people, certainly like Chinese expats, would talk

• 33:26Guy Raz?

  about like things going on in the area, or, oh, you know, if you're looking for this product, you can find it at this store. Is that right? Is that, am I kind of describing that accurately?

• 33:36Speaker 01

  I remember in 2014, early 2014, seemingly overnight, WeChat became super popular among Chinese immigrants. And WeChat in the early days allowed you to add people to groups without their consent. So not only I was on WeChat, I was added by my friends to so many different groups. For example, I was in this added to like a San Jose Moms group by my friends. And then I saw something really interesting. I saw people were trying to buy things together in those groups. I remember one night, a mom in the group posted some information.

• 34:21Speaker 01

  She said, oh, I went to this harbor called Half Moon Bay. There was a fisherman's market, right? She said, I talked to this fisherman because I really like the fish, the Pacific black cod. And if you guys want to buy together, I can actually ask the fisherman to go out and catch the fish and then deliver to our local community. And then in one night, right, she got an order of like $10,000, like hundreds of people.

• 34:53Guy Raz?

  So people were like, I want some of that. So people, is she gonna be getting $10,000 to the borders for, to go to this fisherman in Half Moon Bay and say, hey, can you catch, we'll give you 10,000 bucks, can you catch all this cod for us and we'll buy it?

• 35:06Speaker 01

  Yeah, so she named the price, you know, roughly how much per pound, and, you know, the Pacific black cod is like 10 to 20 pounds each. So she asked, okay, do you guys want any, right? So people just texting the group, I want one, I want two. And just, you know, more than a hundred people sign up.

• 35:27Speaker 01

  Very, very new to me. So I was, I was very surprised to see that. And it was like just incredible. And then after people got the fish, the whole WeChat group exploded again because everyone loved the fish. They said, wow, this is the best fish I've ever had in the US. When can we buy again? People posted recipe, posted pictures. It is such an incredible experience.

• 35:54Guy Raz?

  All right, so, so, so you, so this happens and, and she did, she wasn't like making money off of this. She was just organizing the purchase, right?

• 36:02Speaker 01

  Correct, correct.

• 36:03Guy Raz?

  But this, I guess, got you thinking about group purchases. Like, maybe there's a way to like organize big group purchases around big items and create a business around it. How, is that what you started to think about?

• 36:19Speaker 01

  So, so first of all, I saw this happening in many different groups, right? Not just this one group. And also I talked to my friends in other cities in the US. People were doing this in Boston. People were doing this in Seattle. So Chinese immigrants were doing this everywhere. And my eBay experience taught me something about e-commerce, right? My understanding of e-commerce was always it's going to be a search-based model. What I mean by that is as the customer, you have to know exactly what you want. So I thought that is a completely different e-commerce model.

• 36:56Guy Raz?

  Yeah.

• 36:57Speaker 01

  This really intrigued me because this is something new, like no one was, was doing this. So I thought, wow, this could be a, a big opportunity.

• 37:07Guy Raz?

  So how, I mean, you're still working for this company, right? In finance at the time, you still have a job. But as you started to kind of think about it, I, how were you going to turn that in? Like, it's not clear to me how you were going to make money off of it. You would, what you would create like a platform where people could organize, self-organize, group buying things, but then because it would be on the platform, you would get like a 10% commission or something?

• 37:32Speaker 01

  We didn't know how to make money at all. So first of all, I saw a lot of pain points in the group buying process. The organizers had a lot of work to do and they didn't make any money. So they couldn't just do this as a volunteer for very long, right? So our initial idea was, okay, let's create a platform to solve these pain points, to make order super easy, to find vendors for the group leaders, to enable the group leaders to make some money. And by making them match, we can also make some money in the process. That's what we thought we could do.

• 38:15Speaker 01

  But we didn't think through the business model at all in the very beginning.

• 38:19Guy Raz?

  And it was when you say we, it was the same friends that you, your friends from China, from college?

• 38:25Speaker 01

  Yeah, correct.

• 38:26Guy Raz?

  So, all right, first of all, how are you going to finance this idea? Was it, I mean, could you do it with the money you had?

• 38:33Speaker 01

  So, you know, living in Silicon Valley, obviously, everyone was familiar with startups and raising money. I remember at the time, I knew that my background was not strong enough. I'm not this whiz kid from MIT or Stanford. You know, my track record was not impressive enough to raise money. So we decided to run the business using our savings from the eBay days and to self-fund the business until we see significant traction. Then we can try to raise money. That was the thinking at the time.

• 39:12Guy Raz?

  And at what point were you comfortable quitting your job to pursue this idea full time? Like, how did you get to that point?

• 39:19Speaker 01

  I couldn't quit my job because I didn't have a green card. So in 2014, I was very fortunate that I finally got my green card. So I quit my job in September of 2014. When I quit my job, we still had no product at all. We didn't write a single line of code yet for the group buying thing.

• 39:43Guy Raz?

  But also, your wife was still working at Yahoo at that point?

• 39:47Speaker 01

  My wife still had a full-time job. I think by the time she probably was working at eBay or LinkedIn. I don't remember which one.

• 39:55Guy Raz?

  All right. So you basically, you were going to depend on her salary and her health insurance and all those things while you started this thing. Were you nervous about it? Were you like, was any part of you worried?

• 40:08Speaker 01

  I think so. I think deep down, you know, by the time we had three kids already. So we didn't just have one kid. We had three kids. It's expensive to live in the Bay Area. But we felt like, I think it's important, my wife and I are very aligned all the time is that we, what kind of life we want to live, right? What kind of adventure we want to have. So we were aligned that we wanted the opportunity to do something significant and meaningful. So we were willing to take the risk together.

• 40:40Guy Raz?

  When we come back in just a moment, how Larry, with a brand-new green card but no job, leveraged his eBay and WeChat experiences to build a new kind of group buying online business. Stay with us. I'm Guy Raz, and you're listening to How I Built This.

• 41:04Guy Raz?

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• 43:15Guy Raz?

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• 44:00Guy Raz?

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• 44:42Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So by 2015, Larry and his friends figured out how to leverage the group buying experiences on WeChat into a streamlined e-commerce platform. But they needed financing and a name.

• 44:58Speaker 01

  So we wanted to create a different type of e-commerce experience. We felt like there were two important components. One is it's a social thing, right? People didn't buy alone. People buy together. So that's why WE means social. Then the second thing is people were super excited. And I have three kids. Whenever they slide down a slide, they were like, "Weee!" So I thought, oh, that's a very exciting sound. So that's why we picked this name. So we want to create a company that's social and exciting.

• 45:37Guy Raz?

  All right, so you've got this name. And by the way, when you say group buying, was it going to be for food only? Or was it going to be for anything?

• 45:45Speaker 01

  So for group buying, we didn't set to just do food because people were buying different things. People were buying pianos together. People were buying mini vans together using our application. So we rolled the first version of software by using our own money that we made from the eBay business. So we gained traction very quickly. So we released the software. I remember it's January of 2015. By mid 2015, we had tens of thousands of users already using our software to organize group buys.

• 46:24Guy Raz?

  All right, well, how may I understand how you would connect a buyer to a seller? Like, for example, let's say somebody wanted to buy a minivan with a bunch of people that they would share, right, which sounds really complicated to do, but all right, people want to do that. You guys would find, you would find the minivan for them, you would find the deal for them?

• 46:45Speaker 01

  Yeah, for minivan, for example, we just call all the Honda dealers in the Bay Area. We just call, hey, we can have an order of 20 minivans. What deal can you give us? Then.

• 46:57Guy Raz?

  Oh, 20 minivans, oh, so like a mass order of a bunch of minivans together, like almost like a scaled order to get a group discount?

• 47:06Speaker 01

  Yeah, exactly.

• 47:07Guy Raz?

  Okay, got it, okay. So you call the dealerships and say, we can get, we can buy 20 minivans. What's the best price you can give us?

• 47:14Speaker 01

  Exactly. But for minivans, we don't make any money, right? We basically turn around and just tell the groups that, hey, you know, here's the deal. It's a way for us to attract users. So people, oh, see, oh, you can buy minivan in such groups. We love pianos, you know, we talk to like Yamaha piano, we talk to Kawhi piano. Chinese people like to buy pianos, so a lot of pianos that way.

• 47:45Guy Raz?

  And you would basically source the deals and then initially you weren't making money off of this. It was just to generate interest, right?

• 47:54Speaker 01

  We made some money when the wholesalers didn't want to deal with the group leaders. For example, I remember one of the things we sold really well is pork belly. You wouldn't imagine, we can sell pork belly this way, but you know, you walk into any American supermarket, you cannot buy pork belly, they just don't sell pork belly. Then during winter time, you know, Chinese immigrants make sausages, they need a lot of pork belly. So then we talked to a wholesaler of pork belly. We say, okay, do you want to sell to these groups? And they said, no, we don't want to sell to these groups, but we can sell to you. We said, okay, then you sell to us. We resell to the group leaders.

• 48:36Speaker 01

  Right, that's how we got into like handling some of the products ourselves. So we started to have warehouses. We can just be the intermediary between the wholesalers and the group leaders.

• 48:50Guy Raz?

  Right, so you would store things at the warehouse?

• 48:52Speaker 01

  We started to have physical warehouses in later part of 2015.

• 48:57Guy Raz?

  And this was entirely through WeChat? You could promote it through WeChat and word of mouth?

• 49:02Speaker 01

  Yeah, yeah, exactly. And because we add value to the group leaders, so we basically pitched to the group leaders. Hey, you don't need to organize group buys. You know, the old way, you can use our software. You can create a very simple HTML5 page. Then you just send the page to the group chat and people can click your link. People can place order on the link. And we also help you find suppliers. So once one group leader sign up, hundreds of users in that group became our users. Right, so we had this pretty strong growth engine in the beginning.

• 49:43Guy Raz?

  All right, tell me how you raised money from investors? I mean, was there enthusiasm for this idea? It's, it seems like a novel idea and interesting. This is 2015. There was a lot of money going around, certainly in direct to consumer, the direct to consumer space. What did investors say when you brought then this idea?

• 50:02Speaker 01

  I didn't want to raise money until we achieve some scale. So my first investment actually came to us. She reached out to me on WeChat. She said, do you want to talk to my husband?

• 50:17Speaker 01

  He may be able to invest. I asked him, who is your husband? She said, he's the, one of the co-founders of Hotmail.

• 50:24Guy Raz?

  Of Hotmail, oh wow.

• 50:25Speaker 01

  I was like, yeah, Hotmail, right? I grew up using Hotmail. So I was like, wow, that's, that's huge, right? So I said, yeah, of course. So I went to his office. When I walked into the meeting, I felt like he probably wasn't very interested in the beginning. But two hours later, he committed to write. The first check we ever received, $250,000, because he really liked the scrappiness and the creative ways that we approached this. I also asked him, I said, but Jack, his name is Jack Smith, but says, Jack, $250,000 is not enough. I want to raise more than $1 million.

• 51:09Speaker 01

  Then he taught me a lesson, right? He said, look, Larry, raising money is the most, one of the most important skills a CEO needs to have. So I'm not going to give you more money. You need to raise the rest to prove that you have the ability to raise money. Just do cold email and cold phone call. That's exactly what I did.

• 51:35Guy Raz?

  Huh, the cold email?

• 51:37Speaker 01

  Yeah.

• 51:37Guy Raz?

  You just go on their websites of venture firms and just email their like, you know, information at whatever capital.com?

• 51:45Speaker 01

  Exactly. I just, I went to like all the early stage investors website. I tried to find their email. If I couldn't find the email, I tried to guess their email and just send bunch of cold emails out.

• 51:58Guy Raz?

  And I guess eventually you started to pitch some of them, including, I guess, one called amino capital. And you did, you were able to raise a little over a million dollars in seed funding.

• 52:08Speaker 01

  Yeah, seed funding, we were able to raise that. Amino was not from cold email, was also from a customer who used we. So you see that like our seed round was all from the husbands of customers. So we were very lucky.

• 52:25Guy Raz?

  All right. And tell me a little bit more about what people were, what, I mean, pianos, minivans, but was it still mainly food that people were buying in large quantities together?

• 52:37Speaker 01

  Yeah, mainly food, fresh vegetables, fresh fruits, restaurant food, some imported food, not a lot, but mostly food.

• 52:49Guy Raz?

  And it was still mainly Chinese expats who were using it initially?

• 52:54Speaker 01

  Yeah, more than like 99.5% of the users actually use Chinese language on our application. So almost all Chinese immigrants.

• 53:05Guy Raz?

  All right, so you managed to show enough momentum that by April of 2016, you raised a very big round, seven and a half million dollars. And that was led by Goodwater Capital. And you, at this point, you know, just a year and a half in, you raised a $35 million valuation. So tell me about what that enabled you to do. I mean, this business looked like it was heading in the right direction at that point.

• 53:33Speaker 01

  Yeah, at the time, we thought, oh, it's not so hard to start up a company, right? A lot of stories were like, oh, you raised some money and then boom, you became a huge success. That's what we expected. So we just kept doing. We didn't really think a lot about the more fundamental things. We just, okay, let's just keep doing what we're doing. But then, all of a sudden, things start to slow down. It felt like we couldn't find enough group leaders and the growth just very quickly slowed down to a halt.

• 54:11Speaker 01

  So by early 2017, we were really feeling the pressure that the growth was a lot slower.

• 54:21Guy Raz?

  I would imagine that at this point, like, one of the things that you might try, right, is, okay, well, I mean, maybe we need to just expand beyond the Chinese XPAC community. But clearly, that wasn't, it turned out that it wouldn't be enough. But was, what were some of the things you were thinking about on how to, you know, get the business back on track? Because you say, two years in, it starts to grind to a halt. So how were you thinking about, I mean, were you panicking? Or were you just kind of calmly going through a list of like different things you might try? What were you doing?

• 55:03Speaker 01

  Now, looking back, we were doing the exactly wrong thing, which is when something is not quite working in a smaller geographic area, we try to make it work in more.

• 55:18Speaker 01

  Area, right, wider range, right? So we were, oh, maybe we need to find more group leaders outside of California. Maybe we should, you know, try to bring it nationwide and even internationally. Or maybe some people do group bias in Singapore or Australia, right? When we didn't know what to do, we just, we just tried to bring it to a wider audience, hoping to sustain that growth or momentum. But that, that didn't work at all. So, yeah, I was, I was trying to raise money. Also, by the time, by, by mid of 2017, we, we were running out of money. We, we had less than $1 million left.

• 56:00Guy Raz?

  Well, tell me what your costs were. I mean, presumably you had to hire employees, you had warehouses. Where were you spending your money?

• 56:09Speaker 01

  Mostly people. So we, we had to hire business development people. These are basically people to recruit group leaders, right? We also had a small warehouse. We had people who have to deliver some orders. And we didn't think hard enough about the business model. So we didn't try to make money. We just thought, oh, you know, we just grow the, the users and we, we, we can raise more capital. And then with the more capital, we have time to figure out monetization.

• 56:44Guy Raz?

  But meantime, you're, that seven and a half million dollars that you raised was, was, you were burning through that fast.

• 56:50Speaker 01

  Right.

• 56:50Guy Raz?

  Because you're saying by the, by the middle of 2017, you were close to bankruptcy?

• 56:57Speaker 01

  We had, yeah, less than $1 million left and we, we needed cash immediately. So I was trying to raise money. Again, I, you, you, you know, I'm, I'm good at cold email and cold calls. So I reached out to almost all the investors I could find in the Silicon Valley. I remember just driving up and down Sand Hill Road like every day, right? Meeting investors, but I had no luck to to raise money in the US.

• 57:27Guy Raz?

  Investors were not interested in giving money to the business because it looked like it was it was about to go under. Is that what was that what they were saying?

• 57:35Speaker 01

  Yeah, I think partly the momentum was slowing down a lot. Partly, most investors couldn't understand the phenomena. Most investors couldn't understand why people would buy things in WeChat groups. It just something sounded so absurd, right?

• 57:56Guy Raz?

  So you could not raise any additional money. You were you were like, it sounds like you were like on the precipice here. Tell me about your own, the stress that you were feeling about this. Did you feel like this is not going to make it? Or were you convinced, absolutely convinced, you could save the company?

• 58:18Speaker 01

  I was not absolutely convinced, that that much I know. But I wasn't giving up because I, from the very beginning, I started the business. I I always told myself, I'm not going to be the one who who shut it down. I will I will give my last ounce of energy to to to make it work, right? So we were in danger, so I didn't give up. I couldn't raise money in the US. I thought, oh, maybe I can raise money from investors in China. So I I flew back to China. I tried to raise money from Chinese investors.

• 58:57Guy Raz?

  And what did investors there say?

• 58:59Speaker 01

  They said a bit different things. So so US investors said, oh, this is a a social thing, a Chinese thing that we don't understand, right? Chinese investors said, oh, this is in America. We don't understand what's going on in America. Although it's it seems promising, but you know, we don't know about America. So yeah, I had no luck. I couldn't raise any money from Chinese investors either.

• 59:27Guy Raz?

  Wow. So you're in Shanghai trying to raise money, no luck, probably feeling pretty pretty low, and then it gets worse.

• 59:38Speaker 01

  Yeah. So it was a rainy day. I I probably had something on my mind, so I didn't pay attention and I slipped and hit my back on the stairs. I couldn't get up for a few minutes and it hurt really badly. But I didn't think much of it. I just went back to my hotel room. The next day it hurt even more, right? So so so I went to the hospital and they found I fractured three bones around my my spine. So my co-founder then just took me to the airports. I was flown back to Wuhan then because my parents lived in Wuhan. So I stayed in my parents' house for for a whole month, laying in bed and couldn't move.

• 1:00:23Guy Raz?

  Wow, because there's really nothing you can do. There's no like you can't you just you just have to lay lay there and rest when you when you break a bone in your in your back, in your spine.

• 1:00:33Speaker 01

  Yeah, exactly. It's probably the darkest moment of my life. We were running out of money and I couldn't do anything about it. But like many things, it turned out to be a blessing in disguise. For the first time since I started, I had a lot of time to think. I tried to replay everything in my head. What went wrong? What started as something really promising, how come it went horribly wrong? I also read some books, you know, I reread Sam Walton's book. I read the IKEA story during that time.

• 1:01:16Speaker 01

  And all of a sudden, I don't remember which day, but I started to realize what was wrong about our approach was that we tried to make this group I thing work better.

• 1:01:33Speaker 01

  But the fundamental reason why people were doing these group buys in the US was actually not because it was fun. It was not fun. The fundamental reason people were doing this was because they couldn't have easy, affordable access to the food they love. I remember that's what I felt like the fundamental problem people were trying to solve using these group buys. But it was not the right solution. It was not the best solution. The best solution is to address the issue at its core, which is to give the Chinese immigrants easy, affordable access to the food they love. That's the most fundamental problem we need to solve.

• 1:02:19Guy Raz?

  And when you say it was a low period of your life, or maybe even the lowest period,

• 1:02:26Guy Raz?

  because when your health is affected, of course, that can really, I mean, that takes over everything.

• 1:02:33Guy Raz?

  I don't know, did you just think, were there moments during that period of time where you just kind of wanted to give up entirely? And just fold the thing and start over, start something different?

• 1:02:47Speaker 01

  After I started, we, I start to understand this word, faith, the meaning of this word. You know, China, most Chinese people don't believe in God, right? So when we grew up, we never spent, you know, it never occurred to us, or nobody taught us about this word. But I started to develop my own sense of faith. So I felt, okay, since this is something I'm really passionate about, I started it. So I'll do my best. I'll give my all. And let the outcome to show itself.

• 1:03:32Speaker 01

  But I'm not going to question so much every day whether I should continue or not. So I start to develop this faith. And also, I didn't know this. I knew this later from a very wise mentor from me. I asked him the question, I said, when should I give up? Right? What's the criteria? If I pursue something, he said, it depends on whether it's the right thing to do or not. So he said, there are two ways to look at things. One is, is this the right thing? The second question you ask yourself is, are you doing it right?

• 1:04:14Speaker 01

  So if it's the right thing and you are just not doing it right, you should not give up. You should try to find a way to do it right. However, if it's not the right thing, you should not try to make it better because it's not the right thing. You should stop right away. You can never make it right. So I think, deep down, I knew that, I couldn't summarize as well as he did, but, deep down, I knew that it was the right thing to keep up.

• 1:04:47Guy Raz?

  So, all right. So you are thinking about what to do. And you realize that you're not really solving a problem that many people have. Because the group buy was interesting and maybe fun, but it wasn't really the problem. The problem was access to the things that you needed.

• 1:05:06Guy Raz?

  And how did that translate in your mind to, okay, we need to completely change the business model here. We need to completely change what our business does.

• 1:05:16Speaker 01

  Yeah, so, once I realized making group buy better is not the solution, then I asked myself, what is the ultimate solution? So I think the ultimate solution is to deliver the food to people's home. And we have to dramatically expand the selection to cover not only the hard-to-find, exciting products, but also the more staple products that can be found in Asian supermarkets.

• 1:05:49Speaker 01

  But it's very, very different from what we knew, how to do. So we have to completely change the business and restructure the team, everything.

• 1:06:02Guy Raz?

  When we come back in just a moment, how Larry reinvents his business to save it, even driving forklifts and delivering orders, all while serving as the CEO. Stay with us. I'm Guy Raz, and you're listening to How I Built This.

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• 1:07:58Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2017 and Larry realizes that on top of having to completely reorganize and change his business, he also needs to offer more food and products, free delivery, and the best prices around.

• 1:08:15Speaker 01

  We believe that to become the go-to grocery shopping app, we cannot be more expensive than brick and mortar stores. We had that belief very early on, maybe because, you know, the Chinese communities, people in that community is very price sensitive. We knew that no one wants to pay 20, 30, 40% more to get the product delivered to their home. So, so we couldn't follow the InstaCar model because that model will...

• 1:08:47Speaker 01

  Be more expensive than you buy from brick and mortar stores.

• 1:08:51Guy Raz?

  Right.

• 1:08:52Speaker 01

  So we had to create a new model.

• 1:08:55Guy Raz?

  So the idea was you had the warehouses, but you would basically have a bunch of products, food products in those warehouses, and then people could go on a website and order what they want, and then you would deliver it.

• 1:09:06Speaker 01

  Correct. That's the new model.

• 1:09:08Guy Raz?

  All right. So you're still, you still have not raised the cash to save the business. I mean, you're still teetering on the, on the brink of bankruptcy. This is the summer, because in the summer is the summer of 2017 when you break your back.

• 1:09:22Speaker 01

  Right.

• 1:09:22Guy Raz?

  You come back to the US. I have to imagine the first thing you need to do is get more money just to stop, stop the business from going under. So how did you do that?

• 1:09:32Speaker 01

  Right. So I, I tried, I think I tried a, a couple new pitches to new investors. Obviously, as expected, no one believed me because the old idea didn't work. We had no credibility that the new idea would work, right? So my only hope was to turn to our existing investors. I pitched this new direction. Our investors were highly skeptical, of course. And I'm really appreciative that they decided to put in some capital, partly because, you know, they're, they want to give us a try, partly also because otherwise

• 1:10:14Speaker 01

  all the investment they put in just went down the drain. The three co-founders, we also put in some capital to, to show that we had faith in this new direction. So, so with that, we were able to raise a little bit of capital from existing investors.

• 1:10:36Guy Raz?

  So this was your, one of your investors is Goodwater Capital, right?

• 1:10:41Speaker 01

  Yeah, Goodwater Capital.

• 1:10:42Guy Raz?

  They agreed to give you more money. But I think that you, in exchange for that, you had to give, there's a major dilution, right? You had to give up a significant percentage of the company to them.

• 1:10:54Speaker 01

  Yeah, yeah. So, so by the end of 2018, they ended up owning more than 50% of the business.

• 1:11:01Guy Raz?

  Wow. And that was your only option. You had no, no other choice. That was the only way to save we at this point.

• 1:11:07Speaker 01

  Yeah, we had no other choice. So I, I'm really appreciative what Goodwater did to us. That's kind of the cost we have to pay by not able to realize our ideas the first time.

• 1:11:23Guy Raz?

  Yeah, but it was still risky. You also put in your own money, right? Can you explain this to me? I guess you guys had like a investment property that you rented out and you sold it or something?

• 1:11:39Speaker 01

  Yeah. So we had two houses. We lived in one. We had another one. So I was making very little money still from We, even after I raised the $7.6 million, right? I still made very little money from We.

• 1:11:56Guy Raz?

  What was your salary, under $100,000 or under $200,000?

• 1:11:59Speaker 01

  Yeah, definitely under $100,000. So I discussed with my wife and she was very determined. She was very supportive. So she, you know, with her together, we said, okay, let's do this. Let's sell the house and so we can have our personal finance in order for some time.

• 1:12:24Guy Raz?

  So this was a, there's a lot going on in your life at this time. And with this new model, what did it mean for, like, you had people working for a company that was designed for group buy. So did you have to reorient everyone around this new direction or did you have to basically lay people off and find new people?

• 1:12:49Speaker 01

  Yeah, we had to lay people off because all the people that were, whose job was to recruit group leaders, we had no jobs for them.

• 1:13:01Guy Raz?

  Yeah.

• 1:13:03Speaker 01

  So that was pretty tough. I remember flew to LA.

• 1:13:09Speaker 01

  And I had to deliver the news. I said, we're, I'm here to close down the site. And it was, it was really, really tough.

• 1:13:20Guy Raz?

  Yeah, I'm sure. Because obviously, you know, you were reorienting the company. So when you, when you, you know, when you began this, this kind of massive pivot, how many, once, once you had to do the layoffs and restart the company, how many people were working for We at this point after the layoffs?

• 1:13:42Speaker 01

  We had about thirty to forty people, including all the warehouse workers and drivers. So very small already. And everybody had to do everything. I remember every day around eleven AM, I would come to the office and would say, "Okay, everyone, drop everything we're doing. Let's go to the warehouse to pick orders." So everyone picked orders for, for two, three hours every day. And in the afternoon, we do deliveries. So I, I delivered a lot of orders. I delivered more than a thousand orders myself.

• 1:14:25Speaker 01

  Because I had to figure out how to do delivery, how to write the, the software that, how to design the driver experience, and how to figure out the, the delivery part. And so, so it was a very, very tough period of time.

• 1:14:42Speaker 01

  I worked in the freezer, in the cooler. Sometimes, you know, I was in a meeting, for example. Then someone in the warehouse came in and said, "Hey Larry, we need you to receive the order because you are the only certified forklift driver still on site." Everybody went out to deliver. So I had to like stop the meeting, go drive the forklift to get the, the pallets from the truck and receive the goods and then come back for a meeting.

• 1:15:13Guy Raz?

  And how did you know what the, you know, what to keep on site? Like, how did you know what the most, I don't know, five hundred or a thousand most popular products were?

• 1:15:25Speaker 01

  This is when our own experience as Chinese immigrants comes in, right? So every day, we just gather everyone, say, "What do you guys want to buy? You know, what other people are selling, but we don't have, right? What do you guys want?" We basically just ask our employees, "What do they want?" And we felt like if we serve ourselves well, we actually serve the customers well. So I think that is a very important advantage for us. Like, we are serving people just like us.

• 1:16:00Guy Raz?

  So you had a sense of what the most popular products would be and what you could store. Now the question is, how were you able to offer it at a lower price? I mean, there were Chinese markets around, places that presumably had some scale and could offer pretty good prices. How could you compete on price at this point?

• 1:16:23Speaker 01

  We compete on price by being more efficient. Our purchasing price was definitely higher than these larger supermarkets pay, for sure. So we could never compete on the purchase price. But what we could do is, we could run a more efficient operation, so...

• 1:16:43Guy Raz?

  So your markup was lower?

• 1:16:44Speaker 01

  Yeah, markup was lower. Our warehouse operations, we were very few people. And from day one, we knew that we couldn't do the on-demand delivery. Because on-demand delivery is so expensive. So we did what we call scheduled delivery. That way, we can aggregate a lot of orders and we can do the route planning. In the beginning, we only delivered once a week. Then as the demand picked up, we started to do twice a week, three days a week, five days a week. Until 2019.

• 1:17:20Speaker 01

  We finally was able to do seven days a week delivery.

• 1:17:24Guy Raz?

  So this pivot really happens, it starts in the fall of 2017. I imagine it didn't turn around right away. You still have to get users, you're still targeting mostly Chinese expats, right? That was still the target market at this point.

• 1:17:40Speaker 01

  Correct. So the thing that did keep us motivated and hope very high is the moment we pivoted to this new model, the business started to grow and started to grow very steadily. Even once a week delivery, people start to embrace that, right? And also couldn't really had any hiccups in the process, right? Every month, we had to rise to a different level. Otherwise, the capital would dry out.

• 1:18:13Guy Raz?

  You had to grow, you had to grow every month?

• 1:18:15Speaker 01

  We had to grow every month. And our model did work. So our model did work. So the growth did happen. I remember summer of 2017, we were only doing $100,000 a week in sales.

• 1:18:32Guy Raz?

  Not bad.

• 1:18:33Speaker 01

  A year and a half later, we were doing half a million dollars a week in sales.

• 1:18:37Guy Raz?

  Wow. So you were, you basically are hitting $2 million a month in sales, which is pretty great. I mean, that's, so that, and that growth is fueled almost entirely by Chinese expats? Or was it, did you start to see it growing beyond the Chinese expat community?

• 1:18:59Speaker 01

  I don't think they're ask backs. They're, they're, they're Chinese, mostly first generation immigrants living in the US. A lot of people have been here for, for some time. But their most comfortable language is still Chinese and their diet is primarily still Chinese food. So in terms of language of choice, right, almost all the customers we had at the time prefer Chinese language over English language when they order food.

• 1:19:28Guy Raz?

  And was WeChat mainly the sort of the platform on which people learned about We or were there other places that people found out about it?

• 1:19:39Speaker 01

  So WeChat was our main user acquisition channel. We did not have money to do any advertisement, so we had to rely on word of mouth. So the foundation we built during the GroupBy days paid off because we still had those groups, right? We still had those group leaders who, in each of the groups, there were hundreds of people. So they just help us to advertise to those customers, say, hey, now We does delivery. And so we developed a feature, we called Order Share feature. So for example, if I place an order, I would be prompt to share the order with my friends. Usually people share into WeChat, right?

• 1:20:21Speaker 01

  So Guy, you are my friend, you saw in WeChat that, oh, Larry just purchased these products. Click the link to get a coupon. So after you click the link, I would get a little bit of money back as incentive.

• 1:20:36Guy Raz?

  And so what you're saying is people, you would get a, if you made an order, you'd get an email that said, hey, if you share your order on social media or WeChat or wherever, we'll, you know, we'll send a coupon, like people who click on it will get a coupon to basically order and save money and we'll give you a refund of your purchase if you do this.

• 1:20:59Speaker 01

  Yeah, we call it WePoints. So we give you some WePoints that can be used as cash for your next order. Basically, this is a way to acquire users. People, other e-commerce companies spend probably fifty to a hundred dollars to Google and Facebook to acquire a new user, right? So instead of giving the money to Google and Facebook. We leverage our communities. We give our benefit to our customers and it's it's much more authentic and and our customers appreciate, you know, this kind of incentives. And they genuinely recommend we to their friends.

• 1:21:37Guy Raz?

  Huh. And I guess around this time, that that momentum allowed you guys to expand really for the first time outside the Bay Area.

• 1:21:47Speaker 01

  Yeah, we expanded to Seattle in 2019, early 2019. So 2019 compared to 2018, we grew 2.5x in one year.

• 1:21:59Guy Raz?

  And that year, I know that that 2018, you were doing about 2 million in revenue a month, you know, 24 million in revenue a year, but but but not, I have to imagine you were not yet profitable.

• 1:22:11Speaker 01

  We were not profitable, but we we didn't burn a lot of money either. So so without burning money and grow 2.5x year over year, it was it was a good result.

• 1:22:22Guy Raz?

  All right. Now comes 2020, which we know what's about to happen, which was the pandemic. And I guess even before the pandemic kind of started or became clear, it became clear that it was a thing in the United States, you already knew what was happening in China. You were following that. But I guess you even started to see an uptick in purchases by Chinese Americans or Chinese first generation Chinese in the US who already before the pandemic were not kind of started to avoid going to the to the markets. Is that right?

• 1:22:58Speaker 01

  Yeah. So Lunar New Year every year was always the pick, right, for us every year. But the week after Lunar New Year was the really worst week for the first half of the year.

• 1:23:10Guy Raz?

  Because it would slow down. Everything would slow down.

• 1:23:12Speaker 01

  Exactly. But that that year was really surprising. The week immediately after Lunar New Year was even higher than Lunar New Year week. So we were like all surprised. How could this happen? Then we we we knew just by reading the data that, oh, our community, people in our community is probably worrying about the virus.

• 1:23:35Guy Raz?

  You could see that. You could see in how and how people were using the.

• 1:23:40Speaker 01

  We could see that clearly from our data. Yeah. And then since then, every day, sales just went higher.

• 1:23:48Guy Raz?

  I mean, I I read that you saw 700% revenue growth year over year, that pandemic year, which is seems just unsustainable. Like, I mean, how did you manage that?

• 1:24:03Speaker 01

  So it was very hard. So we had to add capacities constantly, meaning warehouse capacities. And wherever there's a warehouse, we just couldn't wait. We have to get the warehouse and move in to that larger warehouse immediately. And by moving the warehouse, we actually did not shut shutting down the business, not even for a day. We we ship today's order, then we put away the inventory. We disassemble the shelves. Then overnight, we move the shelves and inventory to the new warehouse. We reassemble the shelf, put the goods on the shelf and deliver from the new warehouse the next day.

• 1:24:46Speaker 01

  And people from our community, they were, they really appreciate what we did because they they were like, OK, this is the only place we can actually get the products.

• 1:24:58Guy Raz?

  And I guess at a certain point that year, you started to notice that that it wasn't just Chinese folks who were buying from you. It was many other Asian communities and even non-Asian communities, Latino, Hispanic populations, communities who were.

• 1:25:17Guy Raz?

  Who are ordering? How did you start to notice that?

• 1:25:20Speaker 01

  Actually, in the process, I asked myself why nobody was doing online Latino food delivery. So I start to remember, I'm a student of US history. I learned that actually there was a very important piece of legislation passed Congress. It's called the Immigration Act of 1965. So that Immigration Act actually changed the demographic shift of the US completely. Before 1965, only people from European countries can more freely immigrate to the US. For example, people who were born in China, before 1965, the quota was 100 per year to immigrate to the US.

• 1:26:02Speaker 01

  So that's why before that, there wasn't many immigrants from Asian descent or Latino descent in the US, right? But that Immigration Act changed everything. So people from Asian countries, Latino countries start to come. And by about 1980, all these offline brick and mortar, ethnic brick and mortar stores start to emerge because there were enough immigrants to support some offline ethnic stores. So after I read the history, I realized that the problem Chinese immigrants were facing was not unique for Chinese immigrants. It's actually the same for every immigrant group. They're the same.

• 1:26:47Speaker 01

  They are even more underserved than Chinese, right? For example, Koreans, Japanese, Vietnamese, Filipino, Indians, they face the same thing. It's a complete, very, very diverse group of people. They're not just Latinos. They are very diverse and they all want to eat their own food. They all want easy, affordable access to the food they love. That's when I started to feel like, oh, this actually can be a lot broader, much bigger business and can have much broader appeal. So we start to expand to other ethnicities to solve the problems for more than just the Chinese people.

• 1:27:27Guy Raz?

  This really, I think, in a sense, kind of was a third pivot because it was, it had begun really as a Chinese-focused brand. I mean, not only were you starting to understand that you had this huge opportunity to serve all kinds of communities, it was almost like you start to think about making this website hospitable and familiar to any ethnic group that came there.

• 1:27:54Speaker 01

  I think it's a very important expansion of the concept. I think for a startup business, one of the biggest challenges, you can't have product market fit among a small group of people. But how can you have a product market fit with a bigger group of people, right? Eventually, any startup who wants to, that wants to grow to a bigger company, you have to consistently tweak your offerings so you have the bigger and bigger product market fit. So for us, we accomplished that by expanding to more ethnic communities that share the same struggle, same problem as the Chinese.

• 1:28:35Guy Raz?

  All right. After that COVID year, even during that COVID year, you had to raise tons of money to fund the expansion. And I think you actually hit profitability in 2020 for a period of time.

• 1:28:47Speaker 01

  Yeah, correct.

• 1:28:49Guy Raz?

  I know that you probably, I mean, anyone doing anything, I mean, you know, most of, I think, most of us are focused on where we've been, where we've come to. Most of us are focused on where we are at the moment and the anxieties ahead. I think that's just normal. I have anxiety all the time about

• 1:29:06Guy Raz?

  things coming around the corner or unfinished work. But I wonder if you ever did that by 2021. You raised $315 million that year. I mean, your valuation that year was $2.8 billion. Did you breathe a sigh of relief? Were you like, ah, now we're good, we're in a good place? Or did you still, as a CEO and a founder, still feel anxiety?

• 1:29:34Speaker 01

  I use this analogy when people ask me that question. I said, when we were small, we were kind of like, like, let's say, a basketball team, right? We were playing with other regional

• 1:29:50Speaker 01

  Basketball team. Then when we get a bit stronger, we start to play, say, national college basketball. Then we become a bit stronger, we play NBA. Which one is harder, right? Is it harder to play NBA? Is it harder to become NBA championship? Or it's harder to play a regional player? I think it's always, it's probably harder when you raise your game to the next level. So all the success we have basically only earned our ticket to play the next game. And the next game is going to be harder. That's, that's how I felt. I felt it's definitely harder than the early days.

• 1:30:31Speaker 01

  Simply because we have bigger vision, we have bigger dreams. And we are competing at a different stage with much stronger players.

• 1:30:42Guy Raz?

  Tell me about, I mean, when you kind of reflect on your story, right? Here we are in 2024. You got here a little over 20 years ago to the US. And you built a billion dollar brand. I mean, I guess it was a multi-billion dollar brand. And here you, you know, here you were, a kid from Wuhan, who really didn't speak much English when you got here 20 years ago. And now you're running a company that is very successful and could go public. I mean, I don't know. Do you ever, do you ever reflect on that? Or do you just feel like everything's just moving forward?

• 1:31:25Guy Raz?

  And I just have to keep my head down and keep, keep grinding?

• 1:31:29Speaker 01

  It's very amazing that we were, we were able to do what we, what we did. I, I ask myself this question when I listen to your show all the time. I said, okay, what made these people successful, right? My summary, after listening to so many episodes is, I think each of them were uniquely positioned to see the opportunities that they saw. It doesn't mean that they were the smartest people or. You know, they were the best problem solver. They were uniquely positioned to see the problems and they did something about it. So in a sense, you can say they chose to do those things, or you can say history chose them to do those things.

• 1:32:14Speaker 01

  So it's kind of how I feel, right? I feel like, looking at me, right? An immigrant coming to this country, I had no idea what problem I was going to solve here in the US. But it's kind of, this thing chose me to do it. And I was lucky enough to assemble a team that are passionate about solving this problem. So it's an amazing feeling. It's the feeling that you felt like your life is meaningful. You were brought to this world to do something that's meaningful. That's a really good feeling.

• 1:32:49Guy Raz?

  So when you think about where you are now, how much do you think it has to do with the work you put in? And how much do you think has to do with luck?

• 1:32:59Speaker 01

  My dad once said, "I'm the luckiest person in the world." Because he went through cultural revolution. He didn't have the opportunity to study, right? So he felt like my generation was the luckiest generation in China. And among those people, I was the luckiest person in the world, right? So I think luck has a lot of impact. Or maybe it's the destiny. You know, hard work is a given. So to me, I feel like maybe the hard work and the talents are just necessary. But how high you can go, how far you can grow,

• 1:33:41Speaker 01

  really has a lot to do with the situations you are in. What happened to you? What people you met? And you can loosely say those are all luck, or fate, or destiny.

• 1:33:56Guy Raz?

  That's Larry Liu, co-founder and CEO of We. What's your favorite thing on We?

• 1:34:04Speaker 01

  I love dumplings. I love dumplings.

• 1:34:07Guy Raz?

  You get the frozen ones?

• 1:34:08Speaker 01

  I get the frozen ones, although they're not as good as the ones my mom made. Unfortunately, you cannot buy.

• 1:34:14Guy Raz?

  No, you can't ship your moms. Yeah, can't ship those out.

• 1:34:18Speaker 01

  But those frozen ones are pretty good.

• 1:34:21Guy Raz?

  Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And as always, it's free. This episode was produced by Kerry Thompson with music composed by Ramtin Arablouei. It was edited by Andrea Bruce with research help from Katherine Seifer. Our audio engineers were Josh Newell and Gilly Moon. Our production staff also includes Alex Chung, Chris Messini, Carla Estevez, Casey Herman, J.C. Howard, Niva Grant, Sam Paulson, John Isabella, and Malia Agudelo. I'm Guy Raz, and you've been listening to How I Built This.