Fireside Chat with Steve Chang, Founder and Chairman of Trend Micro

7 min readFeb 4, 2021

It’s a privilege for AWS Taiwan to host Steve Chang, founder and Chairman of Trend Micro, and a small group of entrepreneurs for a 2-hour interactive fireside chat session in AWS Office in the morning of Feb 3rd of 2021; following by an afternoon session with bigger group of people in the startup community consisting of sharing from Jonathan Chang, General Partner of Trend Forward Capital , the venture capital arm of Trend Micro, another 1-hour fireside chat with Steve, and a 30-min mini-panel with Andy Liu, Partner of Unlock Venture Partners based in Seattle, and two Taiwanese entrepreneurs in US, Jay Hsueh of Roby, YC Chang of Lubn. Trend Micro was founded in 1989, while the startup environment changes dramatically in the past 30+ years, still, there are a lot of common challenges in front of the entrepreneurs, and the whole day experiences sharing across the founders in different generations generated tons of sparkles in AWS Office.

The note below is mainly based on the framework Steve described in the morning sessions incorporating example and sharing from the rest of the day, complied in order of startup journey: from early stage to mature ones.

Starting Point: about WHY, WHAT, WHO. Not about HOW.

Building a startup company is about building something people love. And to build a successful startup company, the founder(s) typically will be able to answer three questions: What problems are you going to solve? Who is the customers going to buy your service and product? Why it’s you to start the company?

Why it’s you to start the company?

The founders typically have stronger motivation to solve problems. Quite often they feel and see the pain and can’t find the right solution in the market, and they have the passion, existing expertise or access to certain critical resources that can create unfair advantage that will end up become the foundation of the core competence of the startup.

What’s the problem are you going to solve?

Most of startups fail as they don’t really spend time with the customer and understand the customer problem. They are too obsessed with their products and forget that the startups should build product to solve problems instead of find problem that their product can solve.

When a problem is identified as market opportunity for startup, a lots of surveys should be conducted with the customers in depth. Dig dip so that the right product and solution to the problem can be built.

A Trend Micro example is about whether a total security solution should be built. At the time, lots of Trend Micro competitors built total solution including antivirus software, firewall, etc. Trend Micro sales’ feedback from customers were that the products were not competitive as there was no total solution. Should Trend Micro build firewall solution or buy a firewall company? After a more in depth survey, Trend Micro realized that customers weighted more about the speed accuracy of virus code update. Thus, Trend Micro stayed focus with the antivirus software and the strategy worked in the end.

Who is the customers going to buy and/or use your service and product?

Startups need to know the pain points of the customers, either they are purchase for someone, they are users and people who purchase for themselves, or users. This is extremely critical to stay obsessed with customers and build products and services to make their life easier. Example like Amazon’ One-click purchase, recommendation system that uplift purchase experience, or, like Zoom, thinking through the business usage scenario and use technology to keep the concall quality stable and unbroken even when users walking into elevators.

Not about HOW

HOW to solve the problem or serve the customer is just the result after you answer the why, what, who questions. A VC can already hear thousands of similar “HOW” from other startups. The differentiators would be from how startups can answers the why, what and who questions.

Team Alignments: on the vision, on the core competency, and on customer obsession to solve pain points

Those alignments are tightly related to the three questions listed above. The consensus within founding team not only is the glue holding everyone together but is the North Star whenever a strategy discussion happened.

Founders should be able to build honest, transparent and open communication mechanism within the founding team and waterfall to broader teams when company grow. Interview process and team communication process are both important. Founders should interview at least the first 100 employees regardless how busy they are. And don’t make that into single person decision as bias will happen. Better to have a group discussion before finalizing hiring decision. There are lots of great companies to learn from like Amazon’s Leadership Principals or Netflix; while each company should evolve and build its unique process based on company culture.

A characteristic Trend Micro has been focusing on when hiring is the ability to adopt change. It requires constantly self-reflection, be curious about what’s happening outside and be willing to adopt quick. This will also help the team keep evolve while maintaining alignment on the core values.

One additional tip to enhance trust across the team is to build personal bound beyond work. For example, a 1–2 min personal life sharing in meeting before jumping to work-related topics.

Strategy to Flywheel: Validation, Positioning, SaaS and Scalability

Validation, segmentation and positioning

Product-market fit is the number one thing in the whole process. Make sure lots of survey and critical hypotheses validation have been done. Founders should try best to stay focus on a smaller market first and focus on certain segmentation, instead of trying to address many different segment in the beginning. Amazon started with book only. Trend Micro focuses on anti-virus. Tomofun focus on dog. 保力達B is another example. There are constant temptation for founders to do more, but staying focus is critical in the early stage.

The other critical mindset here is don’t assume you know everything. Lots of time the customers will teach you more than you can offer to them.

SaaS

SaaS model not only brings in recurring revenue, but also create opportunity for startups to create data loop to collect feedback from the customers so as to know deeper about customer pain points and provide update/better solution; as well as bringing in growth hacking metrics including active user trend, customer retention rate, bounce rate, etc and Life-time value of the customers.

This leads to DevOps mechanism that break down the traditional waterfall software development process from months to days when launching new services and features; which would further strengthening the entry barriers when competitors show up.

Scalability

Most of startups from Taiwan see international expansion as their key challenges. From Trend Micro experiences, for a B2B software startup focusing on large enterprise sales, that’s extremely difficult due to the complexity of sales cycle. Only SAP, Trend Micro, People Soft, etc can do software companies with >$500M revenue as software companies outside of US.

There is no easy way, but in general, if you really hit the pain point and make the customer on-boarding process extremely simple, this can still happen. In AWS example, there is no sales head until revenue has grown to certain amount as it only requires credit card to open an account. Similar story for Zoom. Both solve critical problems of the business users and build a simple purchase process even for enterprise customers.

Again, getting the product-market fit right is the foundation. For global market, there are tools to do international surveys as well. So validate the hypotheses and be nimble on adjustment before trying to scale.

When hiring locally, better to make sure the hiring decision can really bring in local customer perspectives. For example, Trend Micro has learnt that an executive in Asia, if is born and educated in US then returned to home country recently, won’t be able to have real insight to local grown executive candidate. And an online support plus local office collaboration mechanism are necessary when expanding globally.

Final words: focus and bird-eye view

Steve led an exercise asking 20 participants, each of them to balance a piece of peacock tail put vertically on palm. First try is to look at the bottom. Second try is to look at the top. All participants found that by looking at the top, they can keep the tail balance much more easily. Although the ask (keep the tail balance) was the same, the result was different when participants looked from different perspective. Quite a lot of time, viewing things from different angles would save lots of energy and effort for the whole team. Final suggestion from Steve is that founders should try to allocate 50% of the time to have bird-eye view on vision alignment, organization, customer needs, market trends and opportunities, instead of spending all the time in reacting to daily request.