Smash Notes
Growing a B2B Marketplace to $40M/Year, with Terence Tam of Reflow Hub
Terence Tam (@terencetamau) is the founder of Reflow Hub, a managed marketplace that facilitates mobile device returns, buyback & trade-ins and insurance claims from their vendor partners. In this episode of the Failory Podcast, learn how this driven entrepreneur went from launching an MVP in the food delivery space to having his company ring in as the…
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Notes
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Terence Tam is the founder of Reflow Hub, a marketplace that moves returned and trade-in phones between vendors and buyers. On The Failory Podcast he says he earned a bachelor's in economics and, in his second year of university, got a full-time job at JPMorgan. He had applied without telling them he was not a graduate. At the last round he promised his studies would not get in the way, and he became the youngest employee in Asia Pacific. He stayed about two years, went back to full-time study, and opened a placeholder company to try ideas. One that stuck was inventory software for consumer electronics. Ross & Zane, the lunch service, came later.
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Terence was still a graduate student and technically did not quality for his position at the time, but he really wanted the job and managed to get through most of the interviews without ever disclosing that he was still in school. They saw his drive and desire to be at JP and he got accepted.
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Startups were just too exciting. One can always go back to a law firm and keep working at a stable job, if a startup does not work out.
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Ross & Zane was Terence Tam's lunch company in Sydney. It sent a menu that changed, Monday to Friday, on a subscription, in the years before Uber Eats, Deliveroo, and Postmates. He started it while an earlier inventory business was already running, after watching food startups in the Valley such as Sprig, SpoonRocket, and Blue Apron. He wanted a spin that was not another cafe or a traditional restaurant. He describes the idea showing up once that first business had a little traction and he developed what he calls a wandering eye. Friends who were also leaving corporate jobs were having the same kind of conversations.
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Terence Tam built Ross & Zane in Sydney before Uber Eats, Deliveroo, and Postmates. He describes Australia as about 24 million people spread over a great deal of land, which made Sydney feel small for a delivery business. An office worker could only reach the restaurants and cafes nearby. Many of those kitchens bought from a handful of wholesalers, so the wraps and sandwiches were very much alike. That sameness is why a lunch subscription seemed worth trying. The opening was not a missing courier app. It was that the food within walking distance often came from the same few suppliers.
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Terence Tam says starting a company in Australia was hard because the surrounding system was missing. He compares Sydney with Silicon Valley and with New York, which he calls developed markets for startups. Americans he meets in this world are optimistic. They may doubt one company and still be eager about the attempt. Sydney is smaller, and he says people there do not take the same moonshots. The difference he wants heard is the mentality, not a single rejected check. Building Ross & Zane and then Reflow Hub meant doing the work without the energy he was used to hearing about from those American cities.
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Terence explains how Ross & Zane's user base was growing slowly, through the word of mouth. Their chefs would prepare lots of meals every day and constantly experimented with packaging. Through all of this, it was crucial that food that was ordered looked exactly like the food which was prepared. Customers wanted to eat exactly the meal that was shown to them in the pictures. If they got this part wrong, everything else did not matter.
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Terence Tam says getting attention for Ross & Zane was not the hard part. The Monday-to-Friday lunch subscription was new, competitors were not really there yet, and coverage from a few outlets put something like 10,000 hits on the page. Conversion was tiny, and churn was the problem that mattered. Customers tried the service for a week or two and then did not come back. His team sent a Typeform survey each week on food quality, delivery time, and ordering. Price was one reason people left. He was also surprised that they kept changing lunch choices and delivery times. He had expected a subscription to settle into a habit.
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Terence Tam, founder of the Australian lunch-delivery startup Ross & Zane, remembers deciding to shut it down in an office lobby converted into storage. About five fridges and freezers were full of food while Ross & Zane served only 30 or 40 people, far below the model he needed for scale and profit. Margins, how fast the food turned, and the storage a larger operation would need convinced him a small team could not run it. Incumbents with infrastructure might. Ross & Zane also lacked subscription stickiness, and the churn was too high to justify the funding required to continue.
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Terence Tam, who shut down lunch-delivery startup Ross & Zane before founding Reflow Hub, says food has always been a hard business. Margins are thin, inputs spoil, and an operator has to know regular customers well enough to manage what gets used. Venture-backed startups such as Sprig still failed. He argues the innovation is too small for price-sensitive buyers: a new delivery method still ends in a meal, and someone expecting a $10 lunch will not pay $15 unless it is dramatically better. Unlike software, someone still has to carry the food, so weather and other physical limits set the cost.
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After Ross & Zane, Terence Tam's company Meredo liquidated nearly new consumer electronics for large distributors and retailers: slow or redundant models, and opened returns after Black Friday and Christmas. Buyers showed up in price-sensitive markets such as Malaysia, Indonesia, and the Philippines. Spreadsheets could not keep up, so he spun the work into Reflow Hub, a managed marketplace. The name adds "re" for reuse and recycle. Reflow Hub connects vendors and buyers and handles shipping, payment, and know-your-customer checks, staying useful enough that neither side cuts out the middleman.
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The operating lesson Terence Tam carried from food-delivery startup Ross & Zane into Reflow Hub is that Reflow Hub is still a physical operation. Like Uber, the agreement happens online. A distributor agrees to offload phone inventory. The work happens offline: shipping pallets, export compliance, trade documents, payment, and insurance. Ross & Zane taught him to run that side as a tight, process-driven operation rather than treating marketplace software as the whole job.
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Terence shares the challenges he's currently facing in Reflow Hub.
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Terence Tam says Reflow Hub earns its place by simplifying a back-office chore. Telcos and retailers take in used phones, often 1,000 to 10,000 units, and must liquidate them. A spreadsheet with that many attributes is hard to price. Reflow Hub maps the sheet, groups models and grades, and lets buyers price at street level. Longer term he wants more than an eBay-style marketplace. He wants to finance trade-ins inside carrier stores, using Reflow Hub's price and supply data to show a shopper what a phone is worth as it depreciates, and to run a global system for reusing mobile devices.
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Asked what he would tell his younger self, or any founder in the middle of shutting Ross & Zane down, Terence Tam says everything will be okay and the first job is to look after yourself. He borrows the airplane rule about putting on your own mask first. Founding is lonely and the odds are bad. People will doubt Ross & Zane and poke holes in it. Take some of that lightly, and listen sometimes, because the criticism is training. His real point is health: mental, physical, and what he calls spiritual. Breaks and mindfulness matter. Working without rest, he says, produces a negative yield, because founders are not machines.
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