HOMEGROWN digital branding and marketing agency Inno Mind Works Sdn Bhd (IMW) is setting a lofty goal as it is aiming to double its revenue to RM5 mil this year from RM2.5 mil last year.
Its founder and MD Datuk Michael Yip Chin Hwee is optimistic that it is an achievable target as the company looks towards the Southeast Asian market, given the resources that IMW now has to back its expansion ambitions.
IMW wants to tap into the markets of Hong Kong, Australia and Malaysia to double the company's revenue this year, says Yip
The MSC status company – which is also an associate member of the Association of Accredited Advertising Agents Malaysia – is part of new media technology group Circle International Holdings Ltd.
Circle International was listed on Australia’s second largest listing market, the National Stock Exchange of Australia in December and consists of Hong Kong-based Circle Corp International Ltd, Circle Corp Mediatech Sdn Bhd and IMW.
“We dare to target 100% growth because of the merging with the [Circle International] group, since we have much more resources and we’re also a media owner now.
“All this while, we’ve always been actively looking at going outside Malaysia. With the [Circle International] group now, we have a presence in Hong Kong, Australia and Malaysia, so we’re trying to tap into these markets,” Yip explains.
On how a Malaysian company attracted the attention of Circle International, Yip attributes this to the power of networking and friendship.
“Circle International came into the picture because they were scouting for a company to acquire in terms of customer base and our business model is very similar to theirs.
“We were introduced by a friend and once we sat down for a chat, decided to inject IMW into it and go for listing, instead of going it on our own,” he says.
The goal for IMW, from the start, was always to float or list the company.
Yip adds that the initial plan was to work towards listing the company in London’s Alternative Investment Market, but that the potential of a merger with Circle International was more attractive due to the larger amount of resources made available.
In the long run, however, he says the vision for the company is to take IMW private and list it again, this time as its own entity.
Strong and steady
IMW started out as a traditional media agency with a core focus on creative design and marketing planning. Its first breakthroughs were smaller projects, such as creative designs from various retailers.
A year after its incorporation, it completed cross-border advertisements for Hangzhou, Zhejiang in Malaysia and Singapore.
One of its larger projects was for LBS Bina Group Bhd’s three-storey semi-detached home units Balvia @ D’Island Residence in Puchong which was launched in mid-2015. The company was among the first few in the market to incorporate augmented reality technology, with the help of an Indonesian associate company, into a mobile application for the project.
Other prominent projects it has undertaken include Hatten Group Sdn Bhd’s Capital 21 retail concept mall and names such as Mitsubishi, for which it created a mobile app for internal training purposes.
It has dipped its feet into the international market as well, with a foray last year into a project for Turkish Tourism.
In 2015, IMW received a shot in the arm from Salcon Bhd’s Tan Sri Tee Tiam Lee via his eldest son Patrick Tee, who also played a large role in setting up the financial trade line for the company.
“When the investment came in, it boosted the value of the company to around RM5 mil. It gave us a great boost in terms of business, branding and networking. He was among the first to come in to lend a helping hand,” Yip points out.
It also undertook an augmented reality mobile app for LBS Bina's Balvia@ D'Island Residence, Puchong
Two years ago, IMW applied for the MSC Malaysia status due to its numerous benefits – it is one of the last of the breed of MSC status companies that enjoys full tax exemption for 10 years – and is still in the process of activating it. The three pillars of the business was then crystallised into brand, media and technology activation.
At the same time, all the profits made in the first two to three years were channelled back into acquiring an MSC-status office in Bangsar South, which Yip says was a risk he took on as part of being an entrepreneur.
IMW’s revenue for the first year was about RM800,000 to RM1 mil, but it has been registering a steady RM2.5 mil for the past few years.
“We were over-committed and didn’t have enough cash flow because we pumped money back into purchasing the property; we put in RM1.2 mil with no credit facility,” he says.
Cash flow was one of the largest obstacles the company faced at the time, he admits, especially when it came to approaching media owners as a small agency. That said, he tried various means to ease the issue, such as negotiating with other agencies to provide credit lines to the company, instead of approaching traditional financial avenues.
Despite the large projects it has undertaken, however, IMW keeps its team lean with less than 10 staff as Yip believes in outsourcing the creative aspects to external experts.
At one point, the company had up to 15 personnel on the team, which was unsustainable due to the gaps between the peak and dry periods during the year. Furthermore, keeping the creative design equipment up-to-date would have required costly yearly investment, with each computer costing around RM6,000 to RM8,000.
He explains, “We still keep a lean team. There are a lot of freelance and creative agencies out there and we’ve realised over the years that it’s more viable this way. We also have in-house creative expertise to ensure the quality of the work is up to par.”
DATUK Michael Yip Chin Hwee started his entrepreneurial journey when he was 23. After his father passed away in an accident at the age of 55, he had to immediately take over the reins of the family business, which was involved in property development in the Klang Valley and oil palm plantations up north.
When push came to shove, Yip took on the responsibility to turn the company around within a few years.
As a result, his father’s company – along with a team that still manages it – remains smooth running even today. While the company does not undertake property development in Malaysia currently, it does have ongoing boutique developments in Australia as a nod to his father’s business roots.
“I had to buck up as I was the eldest in the family. My dad was the sole breadwinner of the family [at the time], my mom was a housewife and my two sisters were still studying.
“One of them had just gone overseas to study and we were struggling with not just her school fees, but also the household income. Everything happened at too fast a pace and I just needed to keep going. If I had failed, my family would fail,” he shares.
Describing it as a "crazy" learning curve for the first few years, Yip says it was his first venture into running a business.
His second venture came after nearly four years, following a chance conversation in the bar with friends in mid-2013. Leveraging his background in the media and signage industries, it led him – along with several co-founders – to the idea of establishing digital agency Inno Mind Works Sdn Bhd (IMW), focusing on brand, media and technology activation for its clients.
Another key reason he attributes to the encouragement of the late Cheong Chia Chieh, a family friend. Cheong was the founder and MD of integrated marketing company Resource Holding Management Ltd (RHM) and the MD of the then PUC Founder (MSC) Bhd (now PUC Bhd).
He says, “In those days, we worked closely with the late Cheong and RHM. He was the one who told me to start a company if I was interested in the media industry and I decided to give it a go. We started slowly taking on small jobs and slowly pick up our footing there.”