Swimming with Asian Sharks - Business Secrets from the Pacific Rim

How to Learn a Business Rapidly

ECMR would partner with LoyalPlus and handle the collection of interest and principle, as well as other aspects of loans, such as making sure that all the papers are signed correctly.  ECMR would be the framework and what it really needed from LoyalPlus was a warm lead to the merchants who need loans.  This meeting itself was a tactic.  If you want to get into an industry, you find the leader and court them to really understand the depth of the field, and either partner with them or buy them out.  It was also the fastest, cheapest way to evaluate their business because they are the best at the craft; and, if they are open, can show you how deep it really can get.  Truly skilled people are not afraid of sharing because they know that any task that takes skill takes years to master. If a person can pick up your skill simply by talking to you, it is unlikely that skill has value.

Money Lending Model in Depth

In talking to the CEO, I found that he was quite a straight shooter, very direct, and looking for a model for this Merchant Cash Advance (MCA). Funding wasn’t a problem because ECMR had cash. What they really needed was the channel to reach the merchants. The mechanism behind this is based on common business trade volume-based Accounts Receivable (AR) based on a six-month forecast, and they basically use the POS to collect the loans.  The process would be as follows: install a POS system that also takes back money per transaction. In that way, the loan would get paid off automatically. This has many advantages that save time and effort. The only issue would be that you need some way of processing payments and the payment processor itself also takes a cut. This means there are quite a few moving parts that you need to align before doing a merchant cash advance with a POS technology.

I ended up spending the next three days at Science Park. Science Park is a technology zone that the Hong Kong government set up to help with innovation, though essentially have made it very easy for large companies to come in and set up shop for cheap rents. But, it is not very easy for small companies to enter.  I've noticed this problem in Hong Kong: there’s a lot of bureaucracy and a lot of forms and papers you have to sign to get anything done.  At Science Park, I learned more about LoyalPlus and how it was configured. During this time when I set out to consult for LoyalPlus, one of the suggestions I had was to improve its online portal.  To reposition itself as the centre for online consumption, essentially becoming an E-Commerce portal or at least like a Yellow-Pages-style directory. To get this up and running, it would need technology and people.