Lin Hwang, Co-founder and CEO of Damogo has a great nose for business and a keen ability to spot opportunity.
His entrepreneurial skills were born and honed working for his father in the seafood processing industry. This brought him to Korea in 2015, just when the startup scene began to balloon.
His experience in the food retail sector in Korea, his own social conscious and a great introduction gave birth to Damogo.
As Lin explains, “For example, Dunkin Donuts, or a bakery, at the end of the day, there’ll be tossing those donuts away that they haven’t sold. And it’s obviously a huge waste. So, what we would do is we will partner with these kinds of bakeries and restaurants, hotel buffets that have breakfast, lunch, dinner services and at the end of each day or service, they would upload it to our app at half price. And any user that’s on our app can browse. It’s a direct improvement to their bottom line in two ways. Extra cash from the sales, and less money spent on waste disposal.”
Despite this idea, Lin found it a tough sell, to convince bakeries and restaurants to list. Korea is drowning in food apps. Most owners saw Damogo as just another app wanting their slice of pie.
Then came the two pivots. The other Co-founder of Damogo, Muhammad Farras, and Lin had been building an Indonesian connection. After a visit or two, both saw the opportunity to maximize their capital and enter one of the world’s largest consumer markets.
The moved Damogo to Indonesia and switched from a B2C business model to a B2B model. The reborn Damogo connect retail food stores with their suppliers through an app that is convenient efficient and guarantees no more lost invoices.
Today’s episode is brought to you by Eastpoint Partners, offering you an unparalleled Asia-wide network to connect you with corporates, governments and investors.
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Alex Jenson 0:08
You’re listening to career biz cast with the KBLA it is now Wednesday, March 16. I want to say thank you very much to Eastpoint Partners for making today’s episode possible. And if you haven’t heard about Eastpoint Partners, they offer an unparalleled Asia wide network of relationships with corporates, governments and investors. Let me also introduce myself, your host today, Alex Jensen, I’m really excited to talk about waste in the food industry. It’s been a big problem, I think across the board, whether we’re talking restaurants, supermarkets, whatever it happens to be, as if these industries weren’t struggling enough as it was. Lin Hwang is the co founder and CEO of Damogo, which has created a solution to the problem. Lin Hwang is Korean American but has managed to integrate himself into the business scene here in Korea, and in fact, built a close friendship with Jonathan Moore of Podium Star fame who we recently heard from, for not the first time on the podcast, as he had one of his big startup pitching events that we heard about, you can go and check out our past podcasts. If you go to your favorite podcast provider and search koreabizcast. It’s a great way to listen to some of our most recent episodes and go even further back, we’re now well over 80 episodes in with all that said, Lin Wang, thank you so much for taking the time today.
Lin Hwang 1:30
Thank you. Thank you for having me. I’m happy that I’m here.
Alex Jenson 1:34
Yeah, we’ve been talking about getting your now for a few days. So I’m glad the stars aligned. I think we’d better start with your story, though, as we often like to do before getting into your company. And what prompted you to come over here, rather than continuing your journey in the US, for instance?
Lin Hwang 1:51
Sure. So yeah, I was born and raised in the States, strictly, I’m Korean. I started my career after university in banking, I worked for an investment bank just in operations. One thing led to another, my father had been in the food industry for a while in the US. Um, I visited at that time, he had a small seafood processing factory in rural Maryland. And we’re originally from the New York area, I visited him for the first time before I finished my MBA, after I did a little bit back I was doing my MBA, and I saw some opportunity, I saw actually a lot of opportunity to come in and change things, I forced my way into his company. And I kind of took over made a bunch of changes. Long story short, I grew the company about 700%, in a few years, we ended up having a second seafood processing plant in Louisiana in New Orleans. And that led me into working closely with American government trade groups. And they started asking me to help other American food manufacturers and brands and exporters export into Asia, because that’s what that’s what fueled our growth. So, um, that, you know, I ended up going to consulting, and I want I need to get more importers and buyers in Korea, which was our main market at the time. So I decided to move to Korea to be closer to the importers and buyers and to meet more to import, you know, to American these American products and, and agriculture as well. And brands. So that’s why I moved to Korea. That was a I guess it was about seven years ago. Um, and as I just moved to Korea, ended up negotiating an American restaurant franchise called the Hello guys. I started in New York, super big in the US now. And it’s in different parts of the world ended up negotiating the rights for that for South Korea. And I dropped everything else I was doing to focus on that brand. It was a field, one of my favorite brands, and it was a big, great opportunity, ended up finding an investor and building that. So after I built that, um, I started to work on bringing in more restaurant franchises from the US. And I had an intern, and that intern, had a he was a university student at Korea University in Koryeodae. And he had a classmate that was from Indonesia, that was studying at a university. And that classmate wanted to enter a food waste competition. I mean, that was competition story or startup competition. And he had concerns about food waste. And because of my background, and all these levels of the food industry, I got introduced to him and he asked if I can advise him in this startup competition. I said, Yes. We, you know, went this competition ended up in the semi finals with two weeks of preparation. And I said, You know what, we can probably do this for real, I can raise some money. Let’s do this. For real. Let’s make this for real. And that’s how we started and that was the kind of the start of Damogo which was a b2c app. And that was 2018. When we actually raised some money and started building our app.
Alex Jenson 5:06
That’s such a great story. And you’ve laid all the foundations, in fact, the seeds for your interests. So effectively as well. I would like to trace some of the steps again, though, for example, this background in finance, and then moving through your father’s experience, Were those the main things that prepared you for the experience coming to Korea, or whether other cultural aspects that you had to be ready for, do you think?
Lin Hwang 5:33
Yeah, for sure. You know, growing the growing our seafood processing business, and exporting, one of the things I did was start exporting, exporting led me to we’re exporting to probably about six different countries, but Korea and China was the main market. And so I made trips, often to Korea and China, mostly to Korea. And, um, I started, you know, I grew up speaking a little Korean and knew a little bit about the Korean culture growing up in the US, but not not a lot, not a whole lot. And I did learn a lot more traveling back and forth. So it kind of prepared me for the move when I did make the move in in 2015. The business culture, just a culture in general. Um, I had definitely allow me to be more prepared.
Alex Jenson 6:18
And then this Hello guys franchise idea. I mean, I find that fascinating. I didn’t know that before. But I’ve eaten there. I know that branch, and Itaewon pretty well, is it quite authentic? I’ve never tried it outside of Korea, do you get the translation of the taste pretty well?
Lin Hwang 6:36
Yeah, we actually had to, you know, we had to pretty much make everything locally, which was a challenge, but I think we did a really good job. And to be honest, it’s not 100%, the same exact taste, but it’s very, very close. So you know, I think that the person that has traveled to maybe New York and had the original one, a couple of times, if they had it in Korea, it’d be very difficult to kind of know the difference. But if you are a regular New York, and suddenly you come to Korea and tasted, you will taste a little bit of a difference, but it’s not that huge. So it’s it’s pretty, it’s pretty close,
Alex Jenson 7:13
Because there’s a few franchises in the UK where I grew up that I’d love to see here in Korea that I think would do well here in Korea. But yeah, I mean, I’ve never felt really like I’ve had the time to even attempt to make it happen. But even if I had the time, I wouldn’t really know how to go about it. What a lot of making a restaurant franchise work from one country to another, would you say, especially here in Korea?
Lin Hwang 7:35
Yeah, I think especially in Korea, it’s the ingredients, if you’re able to import the exact ingredients or not, if you’re not, you got to find something comparable in Korea, that’s cost effective. That’s probably the biggest challenge is, you know, trying to get it as close as possible to the original taste. If, if you can’t import the exact, you know, exact exact ingredients are exact products. That’s that’s a major challenge. And then of course, you do have to localize a little bit. So and I’m pretty sure you’ve seen it with the big major franchises today have localized a little bit, maybe not the taste of the exact product, but adding, you know, adding different things. For example, for us, we definitely had to add Pickles. Pickles is a big site condiment, especially for kind of a little bit of greasy heavy food in Korea, as you probably know. And you know, the whole lot guys, it wasn’t one of the things in the States. And also, they only had two sizes in in New York. And the portion sizes, if you’re familiar with the states, portion sizes are huge in the States. So we had to make a smaller individual size as well. So we have to localize a little bit. But yeah,
Alex Jenson 8:48
by the way, on the pickles front, I love it when you get real pickles in restaurants in Korea.
Lin Hwang 8:53
Exactly. You’re talking about the sweet ones, right? Yeah.
Alex Jenson 8:57
You know that they wouldn’t make money if they only catered to my taste as far as Dharma goes concerned, so it started with this startup competition. Was that podium star or a different one to start off with?
Lin Hwang 9:09
No, it was city printers, which is also a the UN is above net, there were a federation United Nations. So it was a global event. But it was based in Korea. And I think it’s because 3d printers main office is in Seoul. So it was actually event was offline in Seoul. But you know, there were potential participants from all around the world that flew in for the competition. And it was a social impact startup competition.
Alex Jenson 9:38
And because of your experience with dealing with a waste your father’s company over in the US and seeing a transformation as you described, was that what allowed you to see the vision or was there something else about the idea as well that you’re not mentioned so far that that made you really want to take it on it perhaps even in a country like Indonesia that maybe you didn’t have much experience with?
Lin Hwang 9:59
Yeah, it was definitely my experiences working as a food processing, at food distribution, import export, and then owning a restaurant franchise, at every single one of those levels, we threw away, you know, perfectly good food. So to give you an example, at our small seafood processing facility, we would, you know, at times have a 510 20 tons of frozen seafood in our freezers, in our big walk in freezers and, and the prices are so low for that product, it’s, it’s it’s blast blows and good quality, it’s great for up to over a year, well over a year, you know, it’s sitting there for one or two months after it’s caught, it’s still really good to eat. But the but the maybe there was so much catch over the last couple of months that the prices are so low, it’s hard to sell. And then we have more incoming different products that we need to, we need to space for a freezer. So, you know, we would throw we would have to order a big dumpster, to get hauled in. And we will literally take our forklift, into the freezers, get the product and dump it into into these big, you know dumpsters, and then they will get hauled out to the landfill. And you know, this is 510 tons of frozen fish that somebody could eat. And I myself, I’m pretty environmentally conscious and socially conscious. And I hated doing it. But I literally had no choice. And I always wanted to figure this problem out. But I was just so busy operating the business, and I couldn’t. So at that level, you know, at distribution level, at the restaurant franchise level, we are throwing away a lot of good food at the end of the day that you know, you maybe you over prepared it, you know, so you know your baker’s over, prepare, and you want to stock the shelves, and at the end of the day, they don’t all sell and you got to throw it away. So yeah, I had a huge self interest. And from my, my own experience, and this was a kind of a chance when I met my co founder. And when we did this competition was kind of my, my chance to actually do something about it. We’re using Tech because now we kind of developed this idea for competition. And now the idea was there. And we did the research. And I was like we did the research. I think we could do this real and then let’s just kind of start and let’s do it.
Alex Jenson 12:19
Did you or your co founder have much tech capabilities in terms of creating an episode?
Lin Hwang 12:24
None. That was another. It was a difficult part in the beginning because we had no experience in app development or programming and coding. So we had to, you know, use what we couldn’t use our resources, use our connections to find people that can help us out. So yeah, so when we when I was able to raise some, some of our first round of funds to family and friends. You know, the first thing we did was yeah, we hired outsource the company and then eventually hired our own in house developers to kind of work on that. And again, we started as a b2c. But we pivoted over to b2b.
Alex Jenson 13:01
Right, which obviously was an important pivot later. But I also want to get to the heart of the idea like how this app works to streamline and bring efficiency to reducing waste.
Lin Hwang 13:14
Sure. So initially, our b2c product. Like I mentioned before I bakeries, or, you know, if you’ve been to Dunkin Donuts, or something like that, or a big donut, donut shop, at the end of the day, they’ll be tossing those donuts away that the ones they haven’t sold. And it’s obviously a huge waste. So what we would do is we will partner with these kinds of bakeries and restaurants, you know, hotel buffets that have breakfast, lunch, dinner services. And this is pre COVID, when there was a lot of them. And at the end of each service, they’re dumping the dumping this into you know, the bin. So we would partner with stores like this restaurants and f&b businesses like this. And, you know, to give you an example of a bakery, say a bakery closes at 8pm at roughly an hour before closing 7pm. You know, they have a decent idea of what’s what’s going to be unsold. And they would upload it to our app at half price. And any user that’s on our app can browse and see it, or if they’re near the location, they can get it, you know, they can get a notification. Or if they follow that favorite, maybe they marked it as a favorite restaurant and they follow it, they get alerts immediately that it’s available, and they can just purchase the right on the app. And they can just go you know, if since they’re nearby and they know the location is you can just go pick it up before the closing time. So it’s kind of like a flash sale at the end of the day where you know, some bakeries have this kind of flash sale. But it’s you know, it reaches more people because it’s based on the app and by location. And obviously it’s a huge win win because the the store partners are getting more revenue on something that they would have paid to throw away because you know as an incentive You’re you’re paying by kilogram of food waste, right? So you’re making extra income. It’s a immediate effect on the bottom line, you’re reducing waste, that’s obviously better for the environment. And the users are getting a significant discount on food. That is the same day food. It’s not old food. It’s not like expired food, it’s the same day food. So that was that that was a concept. And that’s how we initially started in Korea.
Alex Jenson 15:24
But it makes me wonder why there isn’t more of that going on, for example, in the food delivery, takeout delivery industry towards the end of the evening, but the price is generally seems to stay the same all the time.
Lin Hwang 15:37
Yeah, yeah, they’re not they’re not doing that. I’m sure that some somewhere some some of these delivery apps and stuff like that. But then again, you have apps like, like ours popping up that’s doing this all around the world. And there’s some big ones around the world that’s doing this. So they’re kind of grabbing that market now.
Alex Jenson 15:56
Yeah, well, hopefully, your idea is going to continue to strengthen with your own app and and encourage more people to reduce waste. But I got the impression that the focus was mostly on Indonesia. So can you describe that evolution, if like, why Indonesia became such a big part of it?
Lin Hwang 16:13
Sure. So yeah, we actually had two pivots, we our first pivot was to Indonesia. And our second pivot was from b2b, b2c to b2b. So my co founder, and who ended up being my co founder, he was a international student from Indonesia. He was in Korea at that time, probably about four or five years, five years or six years. And, um, I, at that time, I did not know much about Indonesia, I’ve never been to Indonesia. And, you know, he started telling me about Indonesia and the market. And one of the big things was the Indonesian ambassador to Korea became one of our advisors. And, you know, he would invite me to a lot of these business embassy events in Seoul. And at these events, it was for a lot of, you know, the Korean business people, and to kind of inform them about the the market opportunities in Indonesia, I would go to these info sessions and conferences, and I would start seeing the numbers and I would start learning more about the Indonesian market. And I found out I had no idle time that it was the fourth most populous country in the world. And I think it’s about 70% of the population is under 30, really young population, tech savvy, the, and the middle class is growing very quickly. And there’s all this opportunity there. And he, the ambassador, also put myself and my co founder in a couple of one pitch competition, and then just opportunity to present and give a presentation about our, our app and our mission in Jakarta in Indonesia, two times in 2018, and 2019. So I had opportunity to go actually go to Indonesia, and I saw the potential. And, you know, I saw the opportunities. And I’m slowly started learning a lot about Indonesia. And so we launched and then back in Korea, we launched our app, it was May 2019. We operate for about eight months. And then we’re looking at them we started fundraising, we were fundraising right before we started launching. And you know, we’re really looking to start really getting to fundraising, after about a month six of operations. Initially, we had some decent traction, we were fundraising, our seed round. And as we’re funding raising a seed round, I thought about the opportunity cost of not being in Indonesia now. And this was 2019, then I thought, hey, we have to raise a significant amount of money for a seed round, much of it is going to go to user acquisition and merchant acquisition. At the end of the day, we’ll get probably a small piece of relatively small market compared to Indonesia. Whereas Indonesia, opportunity is much bigger, we need probably 1/3 or 1/4 of the money that we need for Korea to operate for more than a year. And And another reason was also, one of the one of the things that one of the kind of barriers that we came across that I didn’t foresee was the merchant acquisition part, you know, acquiring the restaurants. Initially, it was super easy, because I use my personal network of restaurant owners. But after when we started cold calling and cold visiting these places, we thought it would be easy and because, you know, it’s extra money for these restaurants, right, and they’re reducing waste. But one of the things was in Korea, as you know, there’s tons of food apps, tons of delivery apps. And, you know, it was really saturated. They’re charging high fees. So when we approach these restaurants owners or managers, their first kind of thought is oh my god, another food app to cut to take our money. So that was something we didn’t anticipate. And it became, really, we realized that it would be a really uphill battle to start acquiring these, these these restaurants. And then when we explain what we have, then they go, Oh my god, okay, it’s different, okay, we can make extra money. But just that initial getting through that initial barrier was super difficult. So that was another reason why we said, You know what? In Indonesia, there’s less food apps, it’s gonna be much easier to get these merchants and restaurants. And and, you know, with the the bigger market in Indonesia, the less money we need for fundraising. We thought we said, hey, well, I told my co founder, you know what, maybe we should just pivot to Indonesia right now, we know that the opportunity cost of not being in Asia is probably gonna be too high. We don’t need to prove anything Korea, let’s just go to the big market. So that’s what we did you know that, then that come that that decision came within two hours, we sat down on a white front of a whiteboard, after everything out, immediately called a meeting with our developers for localization of our app, or how long it would take. And after we realized it wouldn’t take so long me that you made that decision right there. And then we started making changes to pivot to Indonesia.
Alex Jenson 21:22
I’ve been to Indonesia on a very limited basis to Bali for my brother’s wedding. So I don’t think I’m able to comment at all. But when I was there, they were talking about moving the capital from Jakarta. And there was a lot of upheaval, but but I thought a slight insight into the world of apps with the with the taxis and, and Grab and things like that. But have you found like.
Lin Hwang 21:47
I’m not in Jakarta. I’m in. In the middle of Java Island, the same island. And it’s a it’s an area called, Yogyakarta or Jogyakarta, um, so I’m in the middle of the island. And it’s very, very different from what I’m used to. It’s very different from the big cities. I’m used to of New York and Seoul. But it’s still a great place. And yeah, I mean, I’m liking it. It’s only been I tried to get out to Indonesia earlier last year, but because of COVID, I couldn’t get a visa. So I was finally able to get a visa in October, and I’ve been here since I think it’s five months now four or five months.
Do you see yourself transitioning back to Korea either to have another crack at the food waste, cherry or perhaps to go in another direction?
Now, for right now our focus is solely here in Indonesia, if we’re able to get, you know, get some success and grow here, later on we do plan on, you know, adding other features and getting into other areas of the food industry and you know, supply chain, supply chain efficiency and reducing food waste. And after that’s done, if there’s an opportunity in Korea would love to go back and also do it there.
Alex Jenson 23:03
A quick final question, because I think Southeast Asia has been fairly underrepresented on this podcast. We haven’t spoken to many people who had doing business either between Korea and Southeast Asia or who have made the similar move that you have while retaining interests in other parts of the world. What would your advice be to people who’ve either neglected that or who are hesitant in some way?
Lin Hwang 23:26
As far as Indonesia is concerned, it’s definitely a huge market. Lots of opportunity. There’s still a lot to be done here. Especially in tech startups. It’s it’s starting to grow now. Where I am, there’s not much of a startup presence. There’s a lot of university so I think it’s probably going to probably going to happen. Um, but yeah, I think one of the big things I guess, especially if you’re coming from Korea is the speed of things that happen here is very, very slow. It’s an island country, much like I think other island countries, compared to Korea take anyone anywhere, it’s pretty slow because Korea, as you probably know, things move very, very, very fast. So that was a one of the things that had to get used to as slowing down a bit and you know, things taking a bit longer to get done.
Alex Jenson 24:14
Well, Lin Hwang, I really enjoyed speaking with you. It’s so cool to hear this endless variety of stories among people who’ve either come to Korea to do business or who have got the experience that you’ve picked up before moving on to Indonesia in this specific case, we wish you all the best with Damogo and whatever the future may hold.
Lin Hwang 24:32
Thank you so much. Thank you for having me, Alex. It was awesome.
Alex Jenson 24:36
And we’ll have to check in again on the next chapter there and Indonesia and or beyond. I want to say thank you again also to Eastpoint Partners for making today’s episode possible. And if anyone else wants to get in touch with us with your story, find us on LinkedIn search KBLA. See you again same time tomorrow.