This was an old interview I did back in July 2011. It wasn’t perfect, but it was very genuine.
Allen Loh – the CEO of YoFroyo frozen yogurt/ forerunner of Taiwan’s frozen yogurt market
By CHRISTINE H. CHENG
Photography EVELYN YANG
“Vision – You must have a vivid picture of what exactly you want. My vision is to create a shop where I can combine ‘healthy’ with ‘tasty’ together, a new generation desert choice, where customers don’t need to worry about health issues. – ALLEN LOH”
June 11th was a bright summer day in Taipei, my photographer Evelyn and I arrived 12 after 12. YoFroyo’s gate was half open. I phoned Allen, one of the founders of YoFroyo, our interviewee. Before the phone was answered, Allen quickly made his way out through the half opened gate and kindly led us in. It wasn’t hard to see that Allen and his two employees were busy starting the day, making sure everything was ready before they rolled up the half opened gate. 12:30, the gate’s now rolled up all the way. As we were about to start the interview, Allen noticed a dying moth on the counter, he calmly and skillfully removed the moth with a spare yogurt cup and a piece of paper. What a win-win situation, I thought to myself, none of the parties were injured in this operation! Before my thoughts wandered off, Allen guided us to the store’s innermost seat. There, I was about to conduct the most inspiring conversation in my recent encounters.
CHRISTINE H. CHENG: Let’s talk about how YoFroyo started. You were a bioengineering major from UCSD, what made you jump from being a potential engineer to selling yogurt?
ALLEN LOH: It all started as a joke, then it just snowballed. Yogurt World [a frozen yogurt store where UCSD students frequented] was very successful in San Diego. Back in freshman year, me and my roommate Austin had a joke of how we could do this in Taiwan, but it was just a joke. As we were graduating and preparing for our LSAT exams, we realized this was not what we wanted to do. So the idea of combining our professional bioengineering background with our interest surfaced. Austin took a part time job in Yogurt World and we started incubating yogurt from our little apartment.
CHENG: Did you make everything from scratch?
LOH: Yes, we made everything from scratch in our secret lab.
CHENG: Why did you choose to start your business in Taiwan?
LOH: Back then, Taiwan’s frozen yogurt market was not yet developed and we saw the potential.
CHENG: Creating your own business is very tough. I’m interested in the kind of difficulties you faced.
LOH: When Austin and I just came to Taiwan, it literally felt like we left home. We had no connections here in Taiwan, only very distant relatives. We didn’t have enough cash to buy US$20,000 yogurt machine so we rented Taiwan’s ice cream machine. In Taiwan, business is all grey area, everything was negotiable. Kids who grow up in America are usually more naïve, especially when we didn’t speak Taiwanese. A lot of vendors took advantage of us and charged us ten times the market price when we did local sourcing. We had to consult a lot of mentors and seniors to help us make it through that period.
CHENG: When was that?
LOH: Austin and I moved to Taipei in November 2008 where we graduated from UCSD in summer 2008. Our first store opened in May 2009 at Shida Night Market. It took us half a year to prepare. Our parents were against this idea initially, they wanted us to pursue law degree when they learned we got into law schools. It was during financial crisis, people thought we were crazy to give jobs whereas most people were out of jobs. Our parents even cut off our money supply. For three months we ate red bean breads. Our parents wanted to test if we could persist.
CHENG: You two were very young, how did you manage to raise the capital?
LOH: Step by step. We did a lot of market research whereas we bought ice cream reports from Taiwan’s Ministry of Economic Affairs. Taiwan’s ice cream market had four billion business opportunities, 80% of them ranged from ice cream under NT$100. So we needed to go for low-priced products. We did local sourcing and localized the taste to tailor to our customers. We did three yogurt samplings in total. We spent three months to compose a complete business proposal. We put everything in our proposal, including the market’s margin, ROI, etc. They say to start your own business, there are “3 F’s – family, friends and fools.” So we took our business proposal to friends and family, this is where we found our shareholders. Our first capital was NT$5,000,000. After that, our parents started being more supportive.
CHENG: What was the hardest part in doing this business?
LOH: The hardest part is staffing, human resource. I believe the hardest part for catering industry is staffing. At first, Austin and I had to do it ourselves. Since our store located in a night market, and we wanted to do the Mc Donald’s style, we started preparation from 9 until the store opens at 11. Then the store closes at 12, but we had to stay until 1am for the closing. After that, we had to incubate the next day’s products until 4, 5 am, then woke up 8, 9 ish. This lasted three months. Shareholders had their own jobs, couldn’t help us. For two months, Austin and I hadn’t touched our beds. We slept on gunnies. Slowly, income came in, then our life became better.
CHENG: I noticed in the past three years, a lot of frozen yogurt stores opened in Taipei. How is YoFroyo different from the rest?
LOH: One, product differentiation. We insist on making our own products including bacteria species. Two, pricing differentiation. We want to do mass expansion, so we lower our cost. It will be hard to survive for other competitor outside of Taipei City because of their high cost. Three, our spoons. We manufacture our own spoons. Some customers even collect different colors. We once did market research, we found out a lot of customers came to our store because of our unique spoons. No one else has done that.
CHENG: Is YoFroyo making profits now?
LOH: The first store’s ROI achieved fairly quickly, but we are always reinvesting. We’ve opened 6 stores in Taiwan so far. We invested on center kitchen and corporate office. We competed for government’s funding and gained a capital. Now the company’s total property is worth NT$45,000,000, nearly 9 times our first capital.
CHENG: What are YoFroyo’s future plans?
LOH: Since our target audience is 18-to-28-year-old urban females, we will open our next stores in Hsinchu and Taichung. I’m looking into Tainan, Kaohsing, and Kenting where they’re urban areas with more tourists. Hualien and Yilan might not be suitable; I’ll have to do more market research. We have to do regional expansion from cities. We have to stabilize Hsinchu and Taichung first before we do further expansion. My plan is to open 8 stores by end of the year, 15 next year. After that, I will start doing franchise and start going in to China.
CHENG: Any suggestions for young entrepreneurs?
LOH: I was invited to a couple of speeches for National Taiwan University’s ASES and TEN OUTSTANDING YOUNG PERSONS’ FOUNDATION. I had four key points, but now I only remember three. ONE, vision – You must have a vivid picture of what exactly you want. It cannot be “I want to make big money” nor “I want to open a yogurt store.” That’s simply not enough. What I mean by vision is you have to see exactly the details. For example, TVBS founder Chiu’s vision was to see a family watching TV at 1 or 2 in the morning. Back then, there was no 24hr news channel. Before he started TVBS, he already had this vision. For example, when Walt Disney was drawing Mickey Mouse, he already saw Disneyland coming. So it’s important you see your end results.
CHENG: What is your vision?
LOH: My vision is to create a shop where I can combine “healthy” with “tasty” together. Traditionally, these were two opposing ideas. My vision is to create a new generation desert choice. I would start from yogurt, later I will add more baked products such as cakes. Customers don’t need to worry about health issues.
CHENG: The other two suggestions?
LOH: TWO, you will face endless unknowns, so you not only have to think outside the box but you must also have a very strong will.
THREE, you have to find a team. Everyone has to specialize in something. There’s no way one person can do it all. Division of labor is very important. Everyone has to specialize in something such as accounting/ finance, law, marketing, know-how, operation and one CEO to unify everyone’s specialty.
CHENG: Which is the most profitable store?
LOH: Our very first store, Shida.
CHENG: How many employees does YoFroyo currently have?
LOH: 50-60 (including PT)
CHENG: How many cups do you sell daily?
LOH: Average 500 cups; summer 1000 cups.
CHENG: What are your work hours?
LOH: 24/7 basically. I sleep on an average of 4-5hrs each night.
CHENG: You’re interested in reading and movie watching, what have you read/watched recently?
LOH: Book –Blue Ocean Strategy and Onward
Movie – 3 Idiots
I cried watching 3 Idiots.
1) When interviewing, “I can’t change” reminds me of a lot of rejections back in the US
2) When asking for Dad’s forgiveness. When Dad asks “how much is a camera?”
3) When the professor handed him the pen.
As the interview came to an end, Allen treated Evelyn and I a cup of “Mango Madness,” emphasizing even the mango flavored mochi was self-made. This delicious tasting desert really was Allen’s vision come true. Rich in taste, low in calories. As we said our goodbyes, I began to wonder, “When will this healthy desert be accessible in my neighborhood?”