Lessons learnt in expanding to the US - We interview Sealand CEO Yu Sun

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Sealand’s 2nd generation of cleaning device; on shopping mall

Interviewed by Krisha Shandon, Managing Editor, of TopRobScientist. Aside from overseeing the editorial and video teams, Krisha can be found in far flung corners of the world capturing the story behind the science on behalf of our clients.

Sealand Tech - a carbon neutrality based cleaning device provider, has expanded its business to Asia countries of South Korea, Japan and Singapore, where the accumulative selling volumes are over 2million USD, with totally 6 local customers in these 3 countries.

For Sealand Tech, US expansion is a fairly common growth strategy to deploy, and Sealand is actively testing the US market then make the leap to establish permanent premises in the US. We talked to Yu Sun – Co-Founder and CEO of Sealand Tech – to find out more about some of the lessons they’ve learnt.

Sealand’s new generation of cleaning device; working on our door

You already established a strong business area in Asia countries such as South Korea, Japan and Singapore. What is differences between markets in USA and in Asia countries? What special experiences you learnt in expanding your business to US?

Yu Sun:

For our featured products - the carbon neutrality integrated cleaning devices, it’s natural to expand to Asia developed countries such as South Korea, Japan and Singapore, where environmental protection have been utilized for more than 50 years, resulting in clean and beautiful societies. That means we do not to tech the market. They naturally accept our idea of carbon neutrality based product design. Take Japanese market as an example, the environmental protective product design is mature enough throughout numerous areas like foods, toys, industries, etc. Our advantages of new carbon neutrality design successfully strengthen their needs for environmental protection, with cheaper selling prices. Similar situations happen in South Korea and Singapore.

Each country’s market is different; thus, we must respond accordingly. We want our company in China to run independently because that kind of market is complex. With regards to Japan and South Korea, both countries share the similar emphasis on environmental protection, and our cleaning devices have strong advantages on both carbon neutrality performance and product quality. Thus, we have close collaboration with customers from the two countries. With regards to Singapore which is our hub to enter the Southeast Asian market, we currently have 2 customers there. We will then transfer our accumulated know-how on cleaning services, carbon neutrality solutions, repair and maintenance, and everything else combined to Singapore. We will establish local manufacturing facilities around these emerging countries.

In my experiences, USA market has similarity with Japan and South Korea, but with more developed market and customer’s needs. Firstly, the cleaning devices will work more on outdoor instead of indoor like parking lots and outlets. In this aspect, we have designed cleaning devices with longer battery life and stronger water purification systems, along with a more advanced cleaning brushes that are able to handle more complex outdoor floors. Secondly, the security standards are stricter in USA. In this aspect, we have designed an innovative anti-collision system combined with new sensors and algorithms that is able to warn the users for the incoming passengers and vehicles.

On the other hand, US has more sophisticated financing and venture capital markets, but the competitions are more intensive. US harbors world’s most outstanding companies, with topmost technologies invented. For us, we can just patiently expand our customers starting from California, and then we will naturally attract attention of venture capitalists. At the starting points, everything is new for us in US market. The good things are that I have 1million USD collected as the starting funding to open my business in US, and I personally has strong relationship to California local venture capitalists and customers. We already have successful experiences in business in South Korea, Japan and Singapore, that will help us as a quick start in US opening of business.

It’s a reasonable experiences shared. You obtained PhD from University of California, and you already start to test the US markets from several years ago, when Sealand had business exhibitions in Las Vegas. To be more general, what experiences can be learnt from you to expand the business to US?

Yu Sun:

To be more general, I think first of all, you don’t just decide to go to the US. I’ve heard so many Chinese high-tech say, “the US is so big, we must go there.” There are always going to be businesses that want to go, because they think it’s this huge opportunity. But the US is first of all not one market. You have the West Coast and the East Coast and they are very different from Middle America and Southern America. So while they all might speak the same language, they are definitely not all the same. It’s less diverse than say China, but you don’t just arrive and it’s all hunky-dory and everyone wants the same thing. It’s not like that at all.

Secondly, you can do so much online to complete your business. Going to the US is expensive offline. And it’s a great market, but you need cash. For our business, it wasn’t like opening up a little hole in the wall and seeing if it works for you, like you can in China. You need something big in the US, and it’s got to be impressive. My experiences would be to try it out online. We started with our first customer in a college in Boston, where they bought a cleaning device to serve the cleaning task in their college building. We keep looking at online market trends in industrial cleaning in US, and try to understand why sales were increasing month on month to the US. When it come to a point where it was such a big market for us, we felt compelled to go. But it’s not easy – for the customers in LA there is a sixteen-hour difference from us here in Shanghai. When I need to talk to someone, it’s the wrong end of the day. While calls are fine, we are also all still human, and sometimes you just need to get on a plane and go there. But I think overall if you feel your products and services would be attractive in the US, you would better to try it.

You are now leading international businesses, with footprints in a number of countries like South Korea, Japan and Singapore. How do you and your leadership teams manage this?

Yu Sun:

I lived in China and ran 3 agencies around China, as well as 6 customers from South Korea, Japan and Singapore, controlling 27 markets for our cleaning devices. I did a lot of travelling over this time and it taught me a lot – most importantly that the casting of your business, particularly the leadership team, is absolutely critical. You need people who can communicate and empathize and adapt.

We just had a global sales meeting two days ago, and we had a guy coming in from Seoul, and the customer engineer travelling to Tokyo. Getting people together was magical. But if you’ve got someone who is too local, who’s never travelled, you’ve got real problems. They might be as American as you want and know the US market inside out. But they need to be open and able to communicate with other people all over the world. For instance, when we are in Shanghai, many of those assembled are Chinese. Everybody speaks English, but they are all different. You need people that are open to that – they can’t be closed. Countries are very different. And even though we all more or less speak English these days, there are still huge culture and cross-cultural differences. Respecting this is extremely important. It’s of huge value to the company, that you have the right people in the right place, who can advise you and take you forward.

In all honesty, I think this has probably been one of our biggest challenges – and Covid made it so much worse. During the pandemic we ended up hiring a lot of people because we were trying to grow quickly. About half our workforce had never met anyone in the company and everything was done on Teams or email. And people just don’t seem to have those same personal relationships that they did before Covid. They tend to be a little bit sharper maybe in their email communication, and that is quite a big challenge. So last year we spent a lot of money on getting everyone from our offices together. We’ve got three offices in China – one in Shanghai, one in Hangzhou and one in Foshan. We have 6 customers Seoul, Tokyo and Singapore, and then in the US we plan to have an office in California. We flew everyone to Hangzhou and we hired a hotel for a week, and we did kind of a company overview – introducing everyone to each other and team-building exercises. We got motivational speakers in and all sorts. It was a really positive kind of company relaunch. It’s really important to create deeper personal relationships between employees, so they are working as one unit – one team.

So do you think it’s important that when you’re considering the US, you position yourself as offering a localized service from an international company?

Yu Sun:

I think it depends very much on what you’re offering, and to whom. We’ve talked to a number of investors over the years, and one of the things we know makes us different, is that we are not typically all about a Chinese local company. A lot of high-tech products are simply not exportable to other countries, due to different product standards, different security needs, and different product interfaces. At Sealand, we have come up with a cleaning devices that works across markets in Asia countries. Very few high-tech products can do this. And I think our cleaning device has shown pretty early that whether we are in the US, South Korea, Japan, Singapore – what the high-tech product stands for works, and what the product offers, works. I mean our products are very functional, with product design that compatible to all markets. We offer a very global concept without actually having designed it in that sense. We came up with something we wanted to do for ourselves - carbon neutrality design, lower product weights, smaller product size, longer battery life, less emissions, and less water consumption - that are attractive to most of the countries. What have to be customized are different security standards, different technological pipeline, etc.