At 19, this Singapore Polytechnic student runs a US$25 million tech start-up

SINGAPORE: Computer geeks often dream of building that killer app that stands out from the competition — like Harsh Dalal, who co-created one of the first screen recorder apps at the age of 13.

It recorded 5 million downloads within a few weeks.

This app the Singapore permanent resident built with his teenage friends did not make them millionaires, however, despite their first-mover advantage back in 2014.

“We didn’t make any money out of it, foolishly because we didn’t expect it to actually take off,” recalled Harsh. “It was a missed opportunity. We didn’t know how to monetise the app.”

Instead of hosting it on Apple’s App Store, as they could not afford the annual fee of US$99 (SG$131), they uploaded the app to a free hosting provider. And the five million downloads busted the bandwidth provided.

“It was a very novel product that no one had actually done before,” said Harsh. “I was quite shocked … We were just five kids playing in the corner, experimenting with our iPhones and how tech works.”

But the app’s success paved the way for this Generation Z tech entrepreneur. The 19-year-old is now chief executive officer of software development company Team Labs, whose clients include the Coca-Cola Company, Google and Hilton.

The youngest in the company, he manages 120 employees in eight cities while keeping up with schoolwork at Singapore Polytechnic, where he is taking a diploma in business administration.

Young entrepreneurs are shaping this country into a smart nation with their start-ups, but what does it take for teens like him to be successful? The programme On The Red Dot finds out.

WATCH: I’m CEO at 19 of a US$25 million tech company — while still in school (8:12)

SHY CHILD, JAILBREAKING TEEN

Growing up, Harsh was uprooted from flat to flat until his family bought an apartment in the east of Singapore a few years ago. He was six years old when his family moved here from India.

Against this backdrop of upheaval, this shy only child struggled to cement and maintain long-term friendships with the neighbourhood children.

“I lost all my friends every time I moved houses. It was daunting for a socially awkward kid to go around looking for friends every time we moved,” he told CNA Insider.

“So instead of being at a playground, I’d be at home on my laptop, coding or doing other stuff.”

Formerly from Zhonghua Primary School, he picked up coding at the age of 11 by spending hours watching YouTube tutorials.

Bored with his Android phone with only one game, he tried hacking into it, albeit unsuccessfully, to install another operating system to download more games.

After his Primary School Leaving Examination, he got a cast-off iPhone 4 from his mother. This time, he managed to jailbreak the device.

He relishes the freedom of a rooted phone, he said. “I have an aversion to being controlled. It’s difficult to be myself if I have something constraining me.”

Intrigued by the iOS system, he started scouring Apple Developer forums for more information and made friends with four strangers, aged between 14 and 17, from the United States, Russia, Norway and Singapore.

Joined by a common interest, the teenagers — who would eventually become business partners — exchanged tips on coding, app development and jailbreaking iPhones. Their discussions about jailbreaking, however, got them banned from the forums.

“I didn’t know there was a rule that you couldn’t talk about all these kinds of things (on Apple Developer forums),” said Harsh. “Luckily, I managed to get their emails before we got banned … and we were able to collaborate.”

TECH "MERCENARIES" EARNING LITTLE

In 2014, they developed their screen recorder app.

“A lot of teenagers wanted to record (on their iPhones) … and we wanted to make a screen recorder that wasn’t jailbroken. That’s what made it successful,” said Harsh, who was in Secondary 1 at Temasek Secondary School then.

“We solved a problem that hadn’t been addressed.”

The app’s success showed them that they could “do things without being adults”. He added: “It gave us even more confidence going forward … that (although) we’re just teenagers, we could build stuff.”

They also created an alternative app store called iDownload Pro, where developers could upload apps rejected by the App Store.

Despite seeing more than 3 million downloads, they shut it down in 2015, as it was getting too costly to maintain. Apple was also cracking down on third-party app stores.

Keen to “become mercenaries to lend our skills to the world”, as he put it, they started offering web and software development services priced at upwards of US$99, which they advertised on their website and on Google Ads.

Too young to register their company then, one of the teenagers convinced his father to do it for them in the United Kingdom, and their first client paid them US$299 to develop a website.

They had to keep their rates low, however, because of competition. “The profit margin was, like, non-existent,” recalled Harsh. “If I went and worked at McDonald’s for the same amount of hours, I’d probably have earned more.”

WATCH: The full episode — Inside the life of a teen app developer (22:40)

"NEVER SEEN SO MANY ZEROS"

They hit pay dirt, however, when they tendered for and bagged a US$100,000 project to develop a marketing app for a multinational company.

The five of them took home US$10,000 each and poured the rest of the money into the company. “I’d never seen so many zeros in my life until that point,” said Harsh, who was 16 years old then.

He put most of his takings into the company and spent the rest on computer games.

He also bought three bitcoins at US$400 each and later sold the cryptocurrency at its peak for a five-figure profit, which he channelled into the business.

“That was when my mindset shifted also. I was taking my O-Levels and making this kind of money. So I wondered if it made sense to keep studying,” he said, acknowledging that business commitments had increasingly affected his grades.

It was hard to deal with (both) at the same time. Obviously, the teachers are unaware of what we do outside school … They only care about you submitting your assignment on time.

While some of his peers were wondering what to do after the O levels, he had already crafted his post-secondary school plan and secured a place at the Singapore Polytechnic via the Early Admissions Exercise.

With more work responsibilities, however, maintaining close friendships became another challenge, as he had trouble keeping appointments with his friends.

“There’s a level of commitment required for these relationships that I sometimes am not able to live up to,” he said, adding that few of his schoolmates at polytechnic know that he is a start-up founder.

“I felt like there’s no point in telling anyone about this kind of stuff. It doesn’t change who I am as a person.”

SHIFTING FOCUS, RAISING CAPITAL

On the business end, while the money was good and the work enjoyable, Harsh disliked taking directions from clients.

“Because the client is king, you have to listen to exactly what they want,” he said. “(There were) a lot of limitations and a lack of freedom.”

In 2017, the company shifted its focus to software development. It was developing an internal tool for its staff to collaborate, as they were in different time zones, and this led them to develop their first software platform, Xenon.

The platform allows developers to collaboratively design, build and deploy their digital products in the cloud. Today, Xenon has close to 70,000 users.

To raise funds for his company’s growth, Harsh sent hundreds of emails to venture capital firms, but few responded. One venture capitalist told him that he was too young for his start-up to be considered for funding.

“I was crushed and demoralised. I wondered if it was worth struggling this much for funding,” he recalled. But such comments do not bother him any more, not after the company attracted the attention of a US investment firm.

He remembers fumbling the first call with the firm when one of its senior executives questioned him about Team Lab’s annual recurring revenue (ARR).

“I pretended to have technical difficulties (on the phone) and was googling what ARR was at the same time,” he recounted. “I was just a teenager. I didn’t know what was going on.”

But the investment firm later invested a six-figure sum in his company, and that senior executive became his mentor.

“Since he was one of the first investors … I was very close to him, going to him with my problems,” said Harsh. “He was a very firm and straight-talking kind of person.”

They used to talk every week until May, when his mentor died from COVID-19. He is “still coping” with his loss.

“I was initially devastated … I wanted to, if possible, go to his wake,” he said. “The problem was that (I) couldn’t (because of the pandemic). And that’s why it sucks.”

AIMING TO TURN A MISS INTO A HIT

Since 2017, Team Labs has raised US$9.8 million in Series A funding, and it is now headquartered in San Francisco for strategic reasons. Its investors include Grand Canyon Capital, Startup Capital Ventures and sovereign wealth fund Korea Investment Corporation.

Only the interns are younger than Harsh, and many of his employees are decades older than him. Everyone in the company, he stressed, has an opportunity to be heard.

“Most of the time, we have little trouble reaching a unanimous consensus on issues,” said the teenager, who declined to talk about his equity in the business.

Out of the five co-founders, only Harsh is left. The rest have exited the company for different reasons, for example to further their education or start another business.

“It’s sad that I can’t really speak to the same people I was so used to,” he said. “We were just focused on what was fun and interesting to us rather than what made money.”

Last year, the company was going to launch its third product, Argon, a project management tool, but had to hold off the launch owing to the pandemic.

Instead, the company is pouring US$400,000 into its redesign and relaunch of Silicon, an AI-based software that integrates voice, video calls and group chat, to take advantage of the explosion in demand for video conferencing software.

It was launched in 2018 but did not do that well, said Harsh.

“Nearly every single company has moved their weekly meetings to video calls now …. We see this pandemic as an opportunity to revitalise or relaunch this product that we thought we’d messed up,” he added.

“A successful relaunch … will definitely open a lot of doors for us.”

The global videoconferencing market is projected to hit US$10.92 billion by 2027 and is growing rapidly amid the pandemic. But he will be going up against the big boys, like Google, Microsoft and Zoom.

Much will depend on the product. While his company was valued at US$25 million before COVID-19, it has not been profitable, he disclosed.

That’s the case with every start-up, especially so for us, since we’re fighting listed companies and companies with hundreds of millions in funding.

MUM STILL GIVES HIM POCKET MONEY

To manage costs, Team Labs gave up its office space in Raffles Place last year. All its employees now work from home, and some of the executives have taken a pay cut.

A COVID-19 relief fund was also set up for US employees whose family members are affected by the pandemic, to help them with their home rental payments.

Harsh said he takes home a nominal S$100 to S$200 a month — he will stop channelling his CEO salary back into the company only after it turns profitable. So he depends on his mother for pocket money.

“My family can support me; I don’t have much living expenses,” he said.

While he lives like a normal teenager — playing computer games or going to the cinema with friends — he is “twice as busy as I am”, said his mother, Manju Dalal.

The financial journalist had never quite understood what he was doing because it seemed like “one company after another”.

“I didn’t know what was happening until one fine day when he walked up and he said, ‘Mum, I want to monetise my business.’ And that’s where I got the shock of my life,” she added.

“I started taking him seriously … and I realised that he’s been trying to do a lot of things in the background.”

When asked if he harbours IPO ambitions like many other tech entrepreneurs, Harsh said he is keeping his options open, like whether to go public or exit following an acquisition.

After he obtains his diploma this year, his plan is to study at a university here or in the US. But before that will be his National Service, which means time away from his company for two years.

“It’s very difficult to even think about leaving everything and doing something else,” said Harsh, who gets four to six hours of sleep a day. “The good thing is that there are other talented people at the company.

“The Basic Military Training at least can be a decent break that I deserve after so much time working on the company.”

Watch this episode of On The Red Dot here. Also, read about this 18-year-old chief technology officer of a start-up and a 16-year-old who can rake in S$30,000 a month reselling sneakers.