Conversations with Daryl Neo

By Yu Han

We speak to Mr Daryl Neo, founder and CEO of Handshakes, a network analytics platform, about his career and some of the challenges that the industry faces today.

Could you give a brief overview of what you do?

We are in the business of providing information. The main reason for our business is to help our clients do business safely.

We sell information products and information systems.  Our offerings make use of artificial intelligence and data analytics to reduce two types of business risk for our clients.

The first is counter-party risk, this kind of risk arises when you work with a third-party that you do not know well yet.  For example, a customer, supplier, partner, or even your employee.  We provide information about them, so that you know whether you can trust them, whether there are any problems.

The second is process risk. For example, when people want to take a loan from the bank, the bank needs to check on who owns the company, so they have to dig through a lot of records. It’s a very manual process, so there’s a lot of chance for human error, and because it’s very slow and takes a long time, information can get outdated. Our systems automate the information collection process, reduces human error and turnaround time.

What do you think are important considerations in this VUCA (volatile, uncertain, complex, ambiguous) world?

I will speak about it from 3 angles.

So starting from the most basic, is the people that we hire. When you hire a person, the job advertisement will have a description and you will read it and decide whether you want to join the organisation. Most of the time when you hire people, they already have another job. So there’s a notice period. One of the problems in a VUCA world is that by the time I post my job advertisement, meet and interview you, and you serve your notice period and join me, 3-4 months would have already passed. By that time, the job description of your job would have also changed, which means it’s very difficult to hire, because the person coming in already has certain expectations of what they will do, but very often the job scope has already changed before they even step through the door. So I think it’s quite a challenge for us, in this aspect. For us, we made the mistake of using job descriptions and people will be upset when the actual job is different from the job description. So now we tell people upfront that when you join our firm, your job scope will change, and odds are, in three months it will be different from today. We also try to teach our people that, at the end of the day, your job scope is to solve problems. So the problems will keep changing, but as long as you have the mindset that you are here to solve the company’s problems, then, to you it will not feel like it has changed. People become upset only when the problems change and they only want to solve certain problems.

The second layer would be on our products; there are disruptions everywhere. Everybody’s digitizing, transforming the way they do work. Our products disrupt other people’s products; we disrupt traditional information business – they sell by reports, whereas we sell using AI, technology. However, I think very soon, we ourselves will be disrupted. I’m actually particularly concerned about large markets, where they have start-ups that grow much faster. By the time they come into Singapore and we get to see them, they will be too big and we still are too small. It’s very hard to fight. Because our business is information-driven, there’s a lot of privacy concerns and changing regulations – that’s the part that makes it ‘VUCA’ for us as well.

Finally, the third layer would be on the whole market. In Singapore and Malaysia, the two countries we’re in now, the cultures are quite similar and they’re quite intertwined. However, as we expand into more countries, I think it’s becoming a challenge for us to understand the dynamics of all these countries. Their drivers are different, and the way VUCA works for them is also different. So I don’t have a good answer for that yet, we’re still trying to figure out, what exactly it means from a macro-perspective.

Thank you. Did you always know you wanted to be in this profession, or work in the financial sector for that matter?

No. I wanted to be a doctor first, so I went on a lot of mission trips, giving medicine with doctors to try and learn a bit. However, my grades weren’t good enough, so I decided to go into law school. I did an internship with the Academy of Law, just to be sure that’s what I want, but then I decided it wasn’t what I wanted. After that, I was already serving in the Army, so I needed to switch course halfway, and I decided I’ll go for whichever one had the shortest and quickest payback. Which is the three-year Direct Honours Business Programme, which is how I ended up in Finance.

Before you set up Handshakes, you used to work at Singapore Exchange. What was it like?

It was a fantastic job. I always tell people I left a job I loved to build Handshakes. It was not because I was upset. My work at the Exchange was very meaningful because, basically, I was a corporate finance regulator. My job was to regulate the listed companies, so when they want to initiate an IPO (Initial Public Offering), and they want to raise money, I will have to regulate and say whether or not they can do so. Second, we have to make sure whether they released enough information into the market so that it’s a fair market, and third, if they break the rules, we have to decide how best to penalize them.

It was very meaningful because firstly, you see a lot of different companies, so you will learn about different businesses. You get to meet the CEOs, the CFOs, and you can talk to all these very experienced people.

The second thing is that we’re actually serving a public good, because our work makes the market safe for the common man on the street to invest. And a lot of people invest their CPF money inside, so because of that, it was a very meaningful job, with very good managers. It’s just that when I was there, I saw that there was a need for information to be more available, in a more innovative way, so that’s actually where the idea from Handshakes came out. It was after a lot of contemplation before I decided to leave.

How has it turned out for you?

Well, I think it’s been a worthwhile journey for me. When I started the business, I had a principle of “triple bottom line”. Meaning, if the business makes money, fantastic, there’s a financial value to me; if the business makes a social impact, then I feel that the work was meaningful. So even if it failed, but it had a lot of social impact, I would still feel that I didn’t waste my time.

The third is my own personal growth. When you run a business and build it from scratch, you will meet a lot of people. You will meet a lot of friends, you will make some enemies, but you’ll learn a lot of lessons. Especially when you build a business that gets to our size, you’ll meet a lot of decision-makers, you’ll meet other entrepreneurs that are very talented and gifted. That part of the value where I get to learn and meet these people – which contributes to my personal growth – is also very good.

So in a sense, I must say, on a financial bottom line, the company value is growing, which is great; I think it has also paid off because we’ve made a lot of social impact, as our company’s products has been used to prevent and detect fraud, protect people, and finally, I personally feel that I’ve grown. So, I’m very happy with how it’s turned out.

Do you think that your qualifications mattered in applying for your previous job, or setting up your company? Because in this society of ours, it’s very paper-driven.

I will talk about about qualifications for the founders. Marcus, who is my colleague who does talent development, he can talk a bit more on whether it’s relevant for employees. So for the founders, I will say it’s very relevant, because if you look at most of the start-ups in Singapore, what do they normally do? F&B, fashion, or blogshops, and if not, then it’ll be something to do with e-commerce, buying and selling things online. Why is it that case? Because they have no work experience. When they were students, these were the things they understood, so typically these are the things they’ll start their business on. If you did not have qualifications, or if you did not have a profession first, I’m not saying that’s bad, but, to build something like Handshakes, definitely, I would not have been able to do it as a fresh graduate. However, because I had spent some time working in the finance industry, and my co-founder had been in the industry for 11 years before he joined, that gave us the empathy to understand how to build a business like ours which is more business-to-business, more corporate, more information-driven. So I think the experience and the qualification of the founder very much drives the type of businesses that you intend to build. Why I say it’s important is because, obviously, there are a lot of fresh graduates, so if you’re only a fresh graduate, then you can count on it that your idea will probably be one of many that are very similar, which will make it harder to succeed.

For the qualifications for the employees, I’ll let our Talent Development Director have a say.

Marcus (Talent Development Director): Well, the short answer is yes, it would matter. But it’s a lot more complicated than that. If you look at paper qualifications, it doesn’t show us the person’s experience, doesn’t show us his/her skill, in particular, problem-solving skills. So we do have to put them through trials to see whether they’re suitable to join the company, but the qualifications, is of course, a bit of a front-door. It does not guarantee you your place here.

We try our best not to even penalise people based on their resume, and when we meet [a prospective employee], one of the things we try to do, as much as we can, is to test a person’s “fluid intelligence”. Fluid Intelligence means your ability to adapt things you’ve learnt to solve a new problem, or changing situations. One of the things we do is we like to play board games in the company. So for example, if I want to test your fluid intelligence, we’ll play Sushi Go with you. I’ll teach you the rules. So I’m giving you new knowledge, which is the rules, of how this game behaves and what to do, right? Okay, then when we play the game for the first time, basically you have to take the knowledge, and apply it to a new scenario that you’re facing. And every time you play a next round, it’s basically a new scenario but the same rules apply. So whether or not you can take ‘old’ knowledge, and apply it to a constantly changing problem situation, is fluid intelligence. Board games are an interesting way to detect it, especially if it’s a board game you haven’t played.

Some people think that being an entrepreneur is not a sustainable career – too risky, inability to earn a liveable wage, etc. What is your advice to teenagers who are interested in being entrepreneurs, or to those who are undecided?

In my opinion, I actually believe the converse is true. Being an entrepreneur is the most sustainable way for a career path. That’s an oxymoron, so let me explain why.

There are three reasons: the first, if you look at the cost of living and housing, it’s increasing faster than most people’s wages. It’s an equation that doesn’t make sense. Entrepreneurship allows you to change that equation.

Second reason, is if your business does well, then you definitely don’t have to worry about financial security.

Third, even if your business fails,  and you go back to the workforce, I believe that the ceiling in your career path is higher. At some point, all of us will hit middle management, and then the company chooses who will be senior management, and they’re always looking for someone who has managed a P&L (Profite & Loss) before, who has built something from scratch before, who has managed suppliers, bankers, employees, all these types of problems before. If you climb up through a typical career path, what you have done will have been too specific and too narrow to be chosen as a senior management. However, if you had spent some time as an entrepreneur earlier in life, you can use that to your advantage. So for three reasons, I believe that it makes more sense for all young people to be entrepreneurs.

Harvard University has compiled this list of 42 professional competencies. In your opinion, which of these are the most relevant to your work?

Definitely “adaptability”, because as was already stated in the second question – we’re in a VUCA world. We need fluid intelligence.

I would say – definitely – “negotiation”, but I would replace it with persuasion, because even if you work in a back-end office,persuasion is still required.

“Building a successful team” depends on your role in the company, but for me, personally yes, this is a key thing. In fact, as the CEO of Handshakes, I actually dedicate 30% of my time every week just to this statement. I’m either interviewing or I’m spending time with existing colleagues to understand how I can help them do their work better, solving human issues, or, if I still have spare capacity after that, I will actually go and meet people I either want to hire now or want to hire next time. So for example, if I think this person is fantastic, and I want to hire them, next time, I would start to have coffee with them every few months, keep in touch, know each other’s lives, and then when the time comes and we have the position for the person, I already have a relationship with them. That’s actually part of building a successful team.

Risk-taking – I would actually phrase that as making strategic choices. I think the more important thing is to decide what you want to give up. It’s related to risk-taking, which is what you’re prepared to give up. When we run a business, there are so many things we can choose to do as a business, but we should spend more time thinking about the things we don’t want to do. Otherwise, your energy gets dispersed to too many places, you can’t concentrate on what’s really important.

Building trust, absolutely. Especially in a young company like ours, where change happens so much, we need to build the trust of our colleagues because they need to trust that we’re going to look after them. And of course to customers, especially since we’re a young company, they’re always worried that you’re a ‘fly-by-night’; that you’re not stable, or you might collapse at any time, or someone might buy you over, then things will change, etc.

Valuing diversity – the problem when you’re the founder is that people seldom say ‘no’ to you, or ‘I disagree’. After a while, you get used to it, then when someone comes along and actually says, ‘I disagree’, you get very uncomfortable. Essentially, diversity, whether it’s gender or education, you’re looking for people who think differently, but that’s not enough. You need to let them speak up and give them the feeling it’s safe to speak up. So I think that’s hard. We haven’t solved it in our company – there’s a few people who are naturally inclined to give feedback, but we haven’t tapped into the collective wisdom of everybody. A lot of our colleagues are still, well, your traditional Asian, so we’re still trying to figure out how to tap into all of that. So far, some are still very quiet.

Other than these, what other skills or qualifications do you think is necessary in your role?

What’s important is – as I said just now – we need our young people to think in terms of the “triple bottom line”. If you choose your career path based only on financial well-being, then you will make very biased choices. It may not give you the best choice possible. So the three should be the financial impact, the social impact of your work, and of course, the development of your own potential, your own personal growth. We need to teach them how to think that way.

The second thing we need to teach them is, really, the concept of delayed gratification. Some people call it perseverance. It’s quite sad when someone takes a job because they can start with a higher base, but they don’t think in the long-term – that their high base also means they get stuck very fast. At the end of the day, that also links back to the triple bottom line, because I can start with a lower base but the job may give me a higher growth potential. Hopefully, parents will think that way as well, because parents have great influence over their choices.