The Harbinger recently interviewed Dr. Fan Ling, founder and CEO of Tezign. Tezign is a Sequoia-backed startup that creates platform-based design and creative talent solutions. In this interview Dr. Fan shares insights on what led him to start his company, the unique cloud-based solution Tezign offers and the role of AI, different trends in the “On-Demand” creative economy, and how Tezign plans to continue to innovate.
Adam: Today we have joining us Dr. Fan Ling (范凌), who is the founder and CEO of Tezign (特赞), a VC-backed tech startup. Tezign is a platform-based design and creative talent solution. Dr. Fan, or as we call him, Fan Lao Shi (Teacher Fan), is also a World Economic Forum Young Global Leader and part of the Aspen Institute China fellowship program. Fan Lao Shi holds degrees from Harvard and Princeton, and he previously taught for seven years at the University of California, Berkeley, and the China Central Academy of Fine Arts. Today with Fan Lao Shi, we learn about his journey from China to the U.S. and back, how Tezign evolved from being the Uber for designers and creatives to creating a holistic platform for enterprise clients.
Fan Lao Shi, thanks so much for joining us. Before we get to learning about Tezign, could you please tell us more about your personal story: what brought you from China to the U.S., and why you started a company?
Dr. Fan: Sure. Thank you for having me. Before I became a startup founder, I taught at university for seven years, first for four years at an art school called the Central Academy of Fine Arts in China, followed by three years at University of California, Berkeley teaching design and human computing interactions. My research is on how online platforms can help highly-skilled people like professionals, designers, creatives, programmers, and consultants; how the Internet movement and data platforms might emancipate knowledge workers.
Very naturally, at the end of 2014, a group of VCs from China were very eager for interesting new people and projects and tried to bring [these knowledge workers] back to China. At that time, I met some of my angel investors. Also internally, I did have the motivation to become an entrepreneur. I ran my first company between 2007 and 2011, so Tezign is actually my second venture. At the beginning of 2015, after I got my angel investment, I came back to China and started Tezign.
Timeline (Source: Tezign.com)
From UC Berkeley to the “On-Demand” Creative Economy
Adam: Could you tell us a bit more about the process? You mentioned there were people who wanted you to come back and create something really cool, so it seems like there was interest on the investment side before you started something. What was that process like for you?
Dr. Fan: When I was still teaching at UC Berkeley, I realized that Silicon Valley had a very strong tendency to combine design and technology. As we all know, AirBnB, Pinterest, WeWork, lots of other companies actually have very strong design cultures. Some of them were even founded by designers. Subsequently, I started my own design community called Tezign - tech plus design - to help bridge design and technology in a Chinese language context. We grew to a quite large community based on WeChat.
Some angel investors actually found our community and saw that perhaps something could happen in China as well. We actually got pitched to by investors, and they helped me better understand what this generation of Chinese investors and startup founders want and what the environment in China was at the time. That was very attractive to me. So when I started to talk with them, I said I didn't want to just build a community – I wanted to extend to the core of the business, which is to bridge design and technology companies.
Adam: So the first step was to create the WeChat account and generate content, which created a community around it. But then once you started to create an actual business, what was the first step? Was that the platform we see today, which has a community of designers and Fortune 500 companies as the clients, or was it something else?
Dr. Fan: At the beginning, it definitely wasn’t clear what the business would be. Fortunately, we had two resources. One is that at the time, everybody was talking about the sharing economy. Car sharing would happen, and designers or creatives sharing would happen as well. So we thought we should probably do an Uber for designers and creatives such that human talents and creative talents could also be on-demand.
One of my cofounders is one of my first students I taught in Beijing, and we have already worked together for seven to eight years. The other cofounder is an expert on on-demand labor. He used to work for WorkMarket in New York, with WorkMarket being one of the largest freelancer management systems. So we immediately started to collaborate. Designers and creatives are the best-suited group of people that can work on-demand. They want freedom, they want their own recognition and their own community. They want to work on their own.
We realized that in China, there are around 17 million designers and creatives and 3 million more currently studying design in universities. It’s a big market and this market could be the first group of professionals that go online to be “on-demand”. And gradually, when we started Tezign, we realized that our advantage compared with lots of other first-generation platforms for laborers, or the so-called “gig economy,” was that because of our WeChat community we were better at attracting high quality professionals. I also always believe in the importance of technology, so we "datafied" (digitized) those professional talents to match them to companies.
Technology (Source: Tezign.com)
The “datafication” of talents and matching is actually our core technology. We realized that the clients who cared most about quality are our larger clients, so gradually we moved from the Uber of designers and creatives to a more on-demand creative talent platform solution for large enterprises.
Finding a Market Focus
Adam: That makes sense. It seems that design and creative work is just one part of this so-called gig economy. There are a lot of other types of services that can be rendered, and there are also other large freelancer platforms. From your perspective, how was Tezign able to launch with a focus on just one area?
Dr. Fan: This is a question we always get asked. In China, even a small part of a section of profession is large enough to be a recognizable market. Design is obvious one. On the other hand, when I was raising Series A funding that was eventually led by Sequoia Capital, the way I convinced the partners at Sequoia to invest in Tezign was by arguing that there is consumer upgrade in a growing market.
When you think about this increasing market, you have to recognize the value of design and creatives. The supply side needs to be upgraded. The service needs to be redesigned, the product needs to be redesigned, and the advertisement, the information, all need to be redesigned. Therefore, it's not going to be digested or solved by one single agency or company. This solution has to come from a large number of individuals who will create the kind of diversity that we need. That's how we think about the market and about design as a starting point.
If you zoom out a little bit from this pure design industry, in the past 10 years, all the innovation was really on the consumer side, and consumer data is currently all on cloud. I believe that the next 10 years will be, at least in China, focused on enterprises. Very few assets from enterprises are currently on cloud. The workflow is not on cloud, that's why SaaS has potential. One of the most important assets for enterprises, talent, is not yet on cloud. I believe that in the future, cloud-based talent is the way to go. And then if you think about which group of talents that will be on cloud first, it will be the ones who have seasonal changes, the ones who react to immediate consumer needs, the ones who produce information that reacts immediately to customer needs. And so designers and creatives seem to be the right entry point.
Cloud-Based Comprehensive Enterprise Solutions
Adam: Let's get to Tezign a little bit further. So, at this moment, we have some idea of what Tezign is. It is a platform for designers and creatives on one hand, and for corporate clients - potentially C-level users as well. The key components you describe are community and content. I also noticed that you were leveraging the potential for artificial intelligence to improve the overall user experience. Can you talk us through that?
Dr. Fan: Yeah, sure. On one hand, there are individual designers and small studios, which we call hyper-specialized individuals with very special skills and their own styles. On the other hand, there are large enterprises. Large enterprises have multiple levels we need to work with. At the project level, we work with the marketing departments and product departments that use designers and creatives. We also have to deal with the procurement level. Then the topmost level is the C-level management team, maybe the CEO or the CIO. Different levels want different things. The marketing level wants to solve the problem, so we’re there to help them solve the problem on time, with more skill and efficiency for less and at a higher quality.
On the procurement level, it’s really about the challenge of creating a vender list or vender pool that is constantly mobile. Let’s imagine that Tezign is a pool of water, and our customers want us to build something with both a private and a public cloud system. In other words, they want the system to be part of the company.
Let me give you an example at the management level. During a recent conversation I had with Belinda Wang, the CEO of Starbucks China, she said that she is in charge of 50% of Starbucks’ growth globally, which means that the China market needs to deliver 50% of Starbucks’ global growth. Simultaneously, she does not anticipate increasing the headcount. So she needs a holistic solution that can increase revenue on one hand while not increasing expenses on the other. Given these needs, Tezign is the perfect solution. When you’re looking at the fragmented needs of big enterprises, you will see that the centralized management team can't control or even touch every small project, which means that they need a centralized dashboard or management database. This database has to be embedded in the corporate intelligence enterprise.
What we do to help them is we quantify and "data-fy" the talents, projects, clients and industry. By mapping the creative projects and talents we can discern the various relationships. Artificial intelligence, or machine learning, in the product will help the C-level management team see the larger picture. Although executives cannot manage every project, they can use AI or machine learning technologies to make better decisions. Sometimes, even with creative projects, executives need to be conformists and conform to the general tendency. At other times, executives need to be mavericks in the sense that their decisions don’t quite follow data results. Machine learning will be useful for making these kind of decisions.
Adam: If I understand this clearly, there are two major trends that come out of this. On one hand, Tezign is a community of creative designers who are sometimes leveraged to supplement a company's existing staff, but in general they are counted on as on-demand talents. On the other hand, Tezign seems to be a platform or a project suite that a large company can use. So, from the perspective of large companies, what do they see? How does Tezign work for corporate clients?
Dr. Fan: As a principle, our enterprise clients have advanced thinking. But the way that they do things still has a lot of barriers. Although they’re trying to revolutionize their workflows, it’s easier said than done. So our baseline is delivering solutions to clients – we’re not challenging their current way of working. If they need a consultant, we’ll provide consultants. If they need training, we’ll provide training. It really depends on the client.
We’ve even seen some of these changes in our own office. Large enterprises will send some trainees to our office to learn our style and about the way we work; not only learning about how our product works, but also about how a start-up team works. Our clients are really interested in using our product and embedding this kind of entrepreneurial mindset in their existing teams. This is a great trend we’ve observed, although it only counts for a small portion of our client base, about 1%. But we do see this interest growing.
I can give you another example about why these large corporations are, on principle, trying to embrace new ways of working. The consumer base has changed enormously in the past decade. Consumers easily shift from product to product and from platform to platform. Consumers are very knowledgeable and well-connected. So it is the 2C brands or 2C companies that are trying to catch consumers. We are still in an economy of scarcity, but it is the scarcity of attention. We need to attract consumers' attention through different ways. Thus, the biggest change for 2C companies right now is this mindset of massive personalization. Before, only one or a few selections were provided for each product, and consumers had no choice but to buy it. Now, there are so many options available such that every product needs to have a personalized story to engage consumers.
When you think about that, the limit is the supply side. You don't have a diversified range of products, you don’t have enough supply for to have a diversity of information, services, etc. One very interesting project we worked on was for the Taobao Maker Festival. As you know, Taobao is a place where you can find diversity. The Maker Festival is an offline annual Taobao event that anyone can attend. This year, Taobao’s Maker Festival used data mining to select 108 very different sellers from various categories ranging from selling calligraphy to selling chemical colors. We realized we could also use data mining to select 108 different designers and creatives. Each designer or creative had a certain unique characteristic, which matched well with different sellers. For instance, one seller sells panda figures. The designer we picked has a profile saying he wants to be a white, circular-shaped lazy animal, in other words, describing a panda. So, in general those 108 designers and 108 sellers will create very localized and individualized stories, such that each story will influence a small community that shares this kind of story. In this sense, there is no one general solution, but 108 solutions for 108 individuals. This can only happen platform by platform, ecosystem by ecosystem.
Where does the idea come from? Notes from Fan Ling (Source: Tezign)
Adam: We see this overall trend happening across industries. For example, in commerce, when you think about supermarkets back in the day, products were basically made for everyone. But now, it’s much more specialized. Now, you have razors with Dollar Shave Club. You have Bonobos, Warby Parker …lots of examples of that. With Tezign, you’ve built and designed this creative community and had a very ideal experience. But what about the future? Currently, the biggest ecommerce platforms are Alibaba and JD, and they focus on physical goods. However, when it comes to providing services, we see similar companies that not only have design but also business development and consulting, other types of services.
Dr. Fan: There is definitely a trend. A recent McKinsey Global Institute report said that in the next seven to eight years, the market for highly skilled knowledge workers will be worth $2.7 trillion USD. We’ve seen that millennials prefer to work freely and more independently. The percentage of knowledge workers will also increase dramatically in China. So, I do view that as a trend. A platform for goods already exists, and there will also be a platform for knowledge workers with skills. But the problem is that skills are not 2C service, but 2B service.
Whether there will be one dominant platform for different skills that serves all companies or if there will be multiple vertical skill platforms that serve different fragments of the markets is unknown. But, we do see this in the U.S. and China. For example, when we work with Alibaba and PingAn - the largest insurance company in China - in their solutions, they want something called the talent cloud, meaning they want the talent to be cloud based so that they can hire based according to project, time, skill, etc. They can achieve results assembling team online. This trend is happening, though not everywhere. So far it is only large, experimental companies.
Growth of B2B, C2C Models
Adam: You’ve mentioned the importance of the cloud and the B2B model in China, which is emerging but not quite as developed. Can you tell us a bit more, in term of the situation in China versus in the U.S., why that is the case?
Dr. Fan: Before, the market was still very large, so growth was more important than efficiency. Therefore, companies spent more effort in marketing and sales to realize growth. Gradually, the market became more saturated. Thus companies began looking into how to increase efficiency, how to improve competitiveness. This is the time for companies to invest in their internal processes, things like IT services, software, cloud services, etc. This is the exact pivot point we are currently facing – the structural changes.
But how China’s B2B market will be different from that of the U.S. or from other places in the world, that is still unknown. We still need more successful 2B businesses to emerge in order to find the right model. We haven’t seen any large 2B company yet.
Adam: Right. These things need time in order to be developed, and we need a little bit of a push not only in terms of entrepreneurial interest and consumer demand, but also investor interest as well. So I think from a Chinese VC perspective, they are all very interested in this space. Back in the day, there were a lot of opportunities in mobile. These days, AR, VR and AI – these spaces are emerging. B2B isn’t very developed in China, but we know it will develop. It’s just a matter of the timing.
Dr. Fan: Ten years ago, when Chinese investors were looking at the 2C model, they were looking at what we call C2C, or the “Copy to China” model. Gradually, with the emergence of mobile, more and more Chinese investors are developing their own perspectives on investing in 2C companies. Some 2C companies are more advanced than their U.S. counterparts in terms of their business model and technology.
I guess the 2B space is pretty much following the trajectory of 2C investments from 10 years ago. Investors are looking for copycats of successful U.S. companies with Chinese sales forces. Investors still haven’t developed an investment philosophy or approach regarding the Chinese 2B space quite yet. That’s why I think there are both opportunities and challenges. I look at the market with a lot of passion and enthusiasm. Right now, we’re merely at the starting point.
SaaS vs. Transaction Models
Adam: Back to Tezign, you mentioned earlier that there is an interesting shift towards a more SaaS-based business model. Can talk us through how you think about that?
Dr. Fan: This actually follows what we discussed regarding the enterprise market in China. Companies are very reluctant to purchase something that merely improves their efficiency. They prefer to purchase a comprehensive solution with immediate results.
For us, the first stage of our business was all transaction-based. We delivered the result and got our money. But gradually, when we go deeper, if we have worked with one company, for example Alibaba, hundreds of times already, then Alibaba will begin to discuss with us: Can Tezign design a whole infrastructure system instead of charging for smaller solutions every time? This gave us the inspiration to embed our system into their workflow and charge them as a SaaS model. It’s the equivalent of a transaction-based model, but a discounted transaction. This is the way we think about it, but if we started with a SaaS model, companies wouldn’t accept it. Only when we have enough transactions will clients start to negotiate with us, since a SaaS model is more efficient for both of us.
Adam: Got it. You have a very global background with experience both in China and the U.S. - there’s a following for you and your company not only in China but also abroad. As Tezign builds up this SaaS product, how much of your business is clients based in China? And how much of it is the U.S. and other countries? They may be more willing to accept this SaaS business model.
Dr. Fan: Sure. Our team is very international, and we are always trying to be as international as possible. We believe that this generation of Chinese entrepreneurs and companies should think globally and be connected with international talents.
Although Tezign is still a young startup, we are forced to be global because a lot of our clients are global companies, like Alibaba, Unilever, even smaller ones like ChumenWenWen (Mobvoi /出门问问) or Deeplink. They are either big multinational companies or smaller ones with a global market. So they push us to be global; 80% of our talent is Chinese speaking, but a lot of them are currently overseas. The remaining 20% are global talents. We help a lot global talents connect with local companies and vice versa. Interestingly, the more global a company is, the more localized they want to be. For instance, Starbucks wanted Yunnan designers to design their local souvenir products when they opened shops in Yunnan Province. Unilever want local designers to work on localized packaging for their products when entering a new market to better engage customers. This goes back to what we discussed earlier about large-scale personalization. Companies need to have massive engagement with consumers, and this engagement needs to be both local and global.
Maintaining Innovation and Competitiveness
Adam: One more question for you. How do you think about the long-term future? What sort of things you are doing to lay the foundation for the future growth, whether it’s technology, team building or other core competencies that will help Tezign differentiate itself?
Dr. Fan: As you know, my background is in academia. I was an academic for a number of years and I always enjoyed it. Being an entrepreneur is my career while being a professor is my interest. As I venture further into the business work, I’ve realized that business is more results-driven and I have to worry about whether my company will survive for the next three months or six months. But on the other hand, as an entrepreneur, I also get mentored by other successful entrepreneurs who encourage me to think about the long-term.
I find that collaborating with universities and big companies on research projects is very helpful in achieving a long-term vision. Tezign started a research lab with Tongji University, the Design and Artificial Intelligence Lab, in collaboration with Alibaba to test how data, the internet, machine learning and algorithms can help rethink design as a profession, as a service or even as an object.
D&AI Lab, from Tezign
We started this lab in order to achieve our long-term vision and do two main things. In the Lab, we publish a Design and Artificial Intelligence Report annually. The recent report was published at a major Alibaba event half a year ago, and it’s gotten about a hundred-thousand downloads since as well as a lot of media exposure. We also use the data from Tezign and from Alibaba to think how consumer data and user data can help designers be better at their jobs.
We’re currently working on two projects. One is with Alibaba. Last year, we worked on a banner project and helped developed Luban, an AI-assisted banner generation software. During the Double Eleven (11/11) week last year, the Luban system generated 170 million online banners. Imagine that a human designer produced each banner worth at least 20 to 100 RMB, multiply that by 170 million, and that’s a huge amount of revenue. With that amount of banners, you can push not only different products, but also different brand information to different consumers. I believe this can massively increase the consumer engagement rate. That’s the KPI for Alibaba.
Collaborating with universities and large companies expands our own understanding of design and data. We will keep investing in such collaborations, which will be very helpful for us to sustain our competitiveness in the startup world.
Adam: It makes a lot of sense that Tezign falls into the broader trend of using AI and applying it to specific use cases to make things more efficient. It’s a great initiative. Thank you Dr. Fan.
The opinions expressed in this article are Dr. Fan's own and do not reflect the views of Tezign