Like many stories of successful Filipino-Chinese entrepreneurs, Eric Yu – chief executive officer of CellPrime, the maker of Cloudfone, one of the leading mobile tech providers in the country – found himself naturally drawn to business. In his world, matters of profit, investment, innovation and service are subjects discussed freely and boisterously around the dinner table.
“I grew up surrounded by uncles, friends, and family, who loved to talk about business, so from a very young age, I grew adept to ideas about entrepreneurship and such,” says Yu, head of CellPrime, maker of Cloudfone.
“Even my peers and classmates (at Grace Christian High School) were all children of entrepreneurs, so there was no escaping talking about business – at home and at school,” he chuckles.
Then, Yu’s family owned an aluminum company, which manufactured window frames. And as is typical in most family enterprises, he was made to spend his holidays and extra hours learning the ropes. “In high school, I had to collect from our customers, talk to suppliers, work on the factory floor.” But aside from the aluminum business, his parents had him spend vacations working in other companies to have him absorb more skills and experience the varied rhythms of the different industries. “I hated it,” he reveals with a laugh, “because while all my friends were having fun during the summer break and holidays, I was there stuck working.”
“I didn’t understand it. But as I grew up and I started my own businesses, I realized that those were valuable experiences that really ingrained important lessons and skills in me as an entrepreneur.” At a young age, Yu already knew how to audit, calculate profit and even how to build lasting relationships with customers and suppliers.
Taken by tech
After high school, Yu pursued a degree in Economics at the University of British Columbia, with hopes of delving into e-commerce and telecommunication in the future. “I was an Economics major, but I was very interested in computers. I was curious about technology, and had always wanted to have what was new at that time such as pagers and the latest computer. I also spent time learning how to code, and all my electives were related to computer science,” he says.
In Canada, Yu’s eyes were opened to the bigger world. “I saw how things worked – and how differently they worked – from the Philippines. I got to understand how other people thought, listened to other people’s ideas and learned how to look at the world from a different point of view. I think my experience there was pivotal for me in becoming an entrepreneur,” he says.
Yu returned home inspired, his mind filled with a raft of exciting ideas. While his parents expected him to settle back into the family concern, Yu had other plans. “They wanted me to join the company right after, but it was tough for me because as a young kid in my 20s, the last thing I wanted to do was get stuck in an aluminum factory.” So breaking his parents’ hearts (while following his own), Yu established a number of different businesses, one of which was an e-commerce site in the ‘90s.
“But that business failed,” he laughs. “The e-commerce site didn’t make it because it was ahead of its time. In the West, we saw the beginnings of online shopping, but here in the Philippines, the concept wasn’t fully formed yet. At the time, it was still dial-up.”
The site sold Globe Telecom prepaid cards, where customers would pay via credit card. He continues: “The prepaid cards were one of the highest-selling products, and our second highest-selling was flowers. But since I didn’t want to be in the flower business, I focused on the load.”
Selling Globe and Smart load became his brick and mortar, and profits soon began to roll in. “After that, I knew that I had to progress and grow my business in the world.”
He established CellPrime in 2003, initially as an exclusive vendor of Globe phone cards and SIM cards. And then over time (with the growing trend of cellphone usage), Yu acquired new businesses, taking on the Motorola distribution in the Philippines and becoming the service partner of Nokia, two of the biggest cellphone brands at that time.
In 2010, the determining moment came when Globe approached Yu asking whether he could work with them in developing a low-cost mobile phone. “Globe had the foresight, and they wanted to expand their revenues through data. But for that to happen they needed more affordable data-capable phones, and so we launched Cloudfone,” says Yu with pride.
Two models – Cloudfone Ice and the Qwerty Touch – were launched exclusively for Globe, and they were an immediate hit. The devices retailed at an astonishing P7,000, a mere fraction of the cost of the available phones in the market.
“You have to remember in those days, we didn’t have the variety you have now. The typical smartphone then was priced at around P20,000 to P30,000, which was out of budget for the average Filipino,” explains Yu. “So that got me thinking. Let’s make technology more accessible to our customers.”
Cloudfone then became one of the first local brands to offer affordable devices and phones. Over the years, it has evolved, and today, Cloudfone has become one of the fastest growing brands in the market. In just the past year, the young company has grown 199.8 percent (in terms of volume) from 2015 per the latest GFK (Growth from Knowledge) report, and 163.8 percent (in terms of value).
“The way we position our products is we usually have a device for every 500-peso increment. We want to offer choices and want to cater to the different budgets of each customer. More than bringing down the prices, we try to fit in the best possible configuration and specs for each particular price point.”
Yu quickly clarifies: “We’re not cheap; we’re affordable. We want to correct the thinking that if you pay cheap, you get a cheap product. No. What we offer are premium phones at affordable prices because we believe that mobile technology should be accessible to everyone.”
While there are many players in the local industry, Cloudfone differentiates itself in its approach. The company understands what the consumer wants and needs, and creates products to satisfy those needs and elevate the mobile experience. “We create products based on mobile user personality and which complement their different lifestyles.”
This is important, Yu explains further. “Unlike other companies like Apple who want to change consumer behavior. They create a product and make you use it the way they want you to use it. With Cloudfone, it’s different.
“Our objective is not to change the consumer’s behavior; what we want to do is understand the consumer, and create a product that will really help solve their daily problems. We aim to make their lives better and easier through our devices.” This means developing products that are built around experiences.
Yu takes their highly successful NBA edition smartphone as an example. Partnering up with the National Basketball Association (NBA), Cloudfone created the smartphone that was fitted with all of the apps and games relevant to die-hard Filipino basketball fans. On their cellphones, they could find everything they needed. They could watch games, read news updates about their favorite players and even play games with other mobile users.
In addition to the NBA edition smartphone, Cloudfone has also partnered with Spotify, Marvel, Star Wars and Disney, offering exclusive content. “All of this is just for Cloudfone. No other mobile tech player has this,” he beams. Cloudfone also works closely with other tech giants like chipset makers, Qualcomm and DK to ensure that their devices are complemented with impressive specs.
For their devices’ exceptional performance, Cloudfone has garnered numerous awards and accolades. In 2016, Cloudfone’s Excite Prime was touted as YugaTech’s Reader’s Choice and Yugatech’s Editor’s Choice for “Best Budget Smartphone.” GizGuide also named it the “Best Entry-Level Smartphone.”Inspired the public’s resounding reception, Yu and his team continually roll out new devices every season, exciting loyal patrons with their award-winning devices. Says Yu: “The bottom line for the business – from my perspective as a maker – is you don’t and shouldn’t have to pay an arm and a leg for great products.”
“We are not like Apple wherein we create new technologies. Our goal at Cloudfone is to democratize technology. What we want to do is to be able to take existing technologies that are really expensive and which regular consumers can’t afford, and create products which make the technology accessible for all,” he explains. “We put the hardware, software and content together into one affordable product.”
At seven years old, Cloudfone is still a very young brand, but it is proving itself to be a strong and enduring player in the industry, battling it out head to head with its international counterparts. Yu excitedly shares with Boardroom Watch that they’re set to introduce a new series of smartphones, which boast impressive new cameras, delighting the generation of avid selfie takers and photography enthusiasts.
Sharing the spirit
Cloudfone is, indeed, on an upward trajectory, and Yu is definitely happy that he has made the right choices. “Even before entering school, I had always known that I’d be an entrepreneur, and it feels good to know that all the decisions, mistakes and failures that I’ve made were worth it,” he says.
One day he hopes to share all that he’s learned, but as teacher, “perhaps in a forum or even in a university, we’ll see,” he says, confident that things will turn out the way they should.
But until that dream becomes a reality, Yu is content to share his wisdom and training with his Cloudfone team. “The way I lead is always grounded on transferring that entrepreneurial knowledge and spirit. My hope is that one day, most of the guys will have their own businesses, and become successful entrepreneurs themselves. At least in that sense, I hope I can contribute to their success.”
Yu’s example is still rare in an environment where companies remain protective of their assets, tying down employees with non-compete clauses in contracts in order for them to stay. Yu, however, encourages his people to work toward leaving the company one day to venture on their own.
He believes that is how entrepreneurship thrives. “I’m not insecure with sharing what I know because that’s how I learned. I learned how to become a leader, a businessman and an entrepreneur from family, my friends and mentors. And so I only wish to return the favor. I hope that the time my employees spend with me, working in my company, is as fruitful and as fulfilling as my experience learning and working from others in the past.”
LESSONS FROM AN ENTREPRENEUR
In the mobile tech industry, even if you dominate the market, one day you can easily be replaced and become irrelevant as brand, Yu warns. Here’s what you need to do in order to survive in a very competitive industry.
LEARN TO ADAPT. You will notice that even big brands can disappear from the market because they don’t adapt quick enough. Take Nokia for example. Its downfall was believing too much in its own operating system and completely dismissed the Android platform.
PLAY THE FIELD. Even if you started and became established in one area, be open to moving the fight somewhere else. In tech, the Android platform became the great equalizer by building the ultimate crowd-sourcing ecosystem. Now, even local brands like us have a fighting chance and are able to compete with other bigger, more established companies by developing our own apps and devices.
ANTICIPATE AND EMBRACE CHANGE. In the same way that I moved from selling prepaid cards to developing smartphones, should a shift occur in technology, I’m very open and flexible enough to move into other technologies and industries.
BE EFFICIENT. We are able to keep our products affordable because in addition to building direct partnerships with key brands, we’re very efficient as a company. I have a great team and the efficiency level of the workforce has helped drive our costs down.
BE OPEN TO LEARNING NEW THINGS. The moment you think you know everything is when you start to fail. It’s important to wake up every day wanting to learn something new. Learn from people; learn new things outside of your area of expertise. This will help you evolve as a businessman and as an individual.