Thomas Yip, the Ipoh-based software founder who could
By Azizul Rahman December 5, 2022
- Siemens' acquisition of Radica a natural progression for both parties
- Yip tapped a deep fear of not making it in life, to entrepreneurial success
In July 2022, a global technology company with a 175 year history, focused on industry, infrastructure, transport, and healthcare based in Munich, Germany acquired a small industrial and design software company based in Ipoh, Malaysia, for an undisclosed amount.
“When Siemens first contacted me, it was obvious to both parties that an acquisition was the most natural thing to do,” said the founder and CEO of Radica Software, the soft spoken and unassuming Thomas Yip (pic, above).
Siemens already had an industrial and design software offering. Its portfolio includes mechanical, electronics, product lifecycle management, simulation, wire harness, and industrial automation. Adding Radica’s Capital Electra X to their repertoire was only natural.
Capital Electra X is a cloud-native computer-aided design (CAD) software for electrical schematics. It is among the first software of its kind in the world that only requires a browser log in to use. It comes with all the features that are expected of a cloud service such as sharing and collaboration tools.
It can be used to design electrical circuits, automatically generate a terminal listing, bill of materials and a host of other benefits.
The idea that became Electra, as it was originally known, ran around Yip’s mind and took life in his computer 19 years ago, when he was 35. Back then, Yip was independent systems integrator (SI) in Kuala Lumpur, and has been for 5 years. He was responsible for creating control systems for machines and Electra was created for that purpose.
“I was very interested in software and learned to program myself. I thought the available software back then was very difficult to use and expensive, and therefore wrote some scripts to help myself,” said Yip. As this was before the era of cloud-based services and he was still a budding programmer, it was developed on Microsoft Visio.
He enhanced Electra two years later when pitching for a large project. Although he didn’t get the contract, Yip was confident enough of Electra’s capabilities that he listed it for sale online. Nothing happened immediately but after three weeks, came the Eureka moment. He made his first sales from customers all the way in Mexico and the USA. Thus started his journey that culminated with the Siemens sale.
The dream that remained a dream, and the will to never give up
To be sure, it was a bold move back in the early 2000s for a Malaysian software company to dare dream that its solution would find global buyers just through the internet instead of the usual software sales method of appointing a distributor, but Yip was no stranger to taking his destiny into his own hands,
“Having grown up in Ipoh, Perak in a regular family, my mom attended 3 months of night school and my dad was a carpenter, there was this deep fear of not making it in life. And of course, surely there were dreams of a better life,” Yip shared.
At 17 (in 1985), he thought up his first business plan built on his fascination with bamboo and love of eggs.
“It was to open a restaurant called Bamboo House. In Chinese culture, you will see many drawings with bamboo, and a bamboo plant will grow a foot in a year irrespective of strong winds or a lack of resources,” mused Yip. “So the plan was to have a menu with a ton of eggs, like fried rice with eggs and whatnot.”
He never opened the restaurant. Instead, between 1982 to 1988 Yip worked a string of menial jobs ranging from washing dishes at a coffee shop, a gardener, selling windshield wipers at gas stations, going door to door selling English improvement books, carpet installer, and even a factory worker in Singapore. All the while though, he was putting in effort to improve his grasp of English through books.
The move to Singapore was crucial as the fear of being caught in a cycle of rotating from one menial job to another that would inevitably smother his dreams of a better life, gave him the motivation to enrol in the French Singapore Institute in 1988 pursuing a diploma in Electrical and Electronics.
“I took the course as it offered a monthly S$300 allowance, though that came with a five year bond that required me to work in Singapore,” he said.
After graduating in the top two in his class in 1990, Yip turned down the opportunity to get a Master’s degree in France as that came with an eight year bond. “I had to start working and take care of my parents and siblings,” he explained.
This desire to take care of his family led him to quit his Singapore MNC factory job after two years, pay off the remainder three years of his bond and return to Ipoh in 1993 to establish a systems integration (SI) company with a partner. His maiden entrepreneurial attempt eventually failed however and Yip took his technical skills and became a consultant in 1998 at age 30.
Learning “humble audacity” in Silicon Valley
The entrepreneurial bug was still with him, however, and seven years later, in 2005, Yip founded Radica Software with Marcus Woo in Ipoh, Perak which then had a population estimated at 600,000 and has since grown to approximately 842,000 (according to Macrotrends).
One key lesson that he was determined to get right in his second attempt as an entrepreneur was talent development. Being in a small market with an even smaller talent pool required a concentrated effort at building and retaining talent.
“This will be a persistent problem, especially given the niche that we are in. To solve it we had to grow our own talent, and a key part it was to design and implement a highly successful internship program. We cannot afford high salaries, but instead built a culture of performance, camaraderie, and communications. Our people eat together, play together, and celebrate every little thing together. It bonds us to a common mission and lets us achieve the impossible. People are our assets, and we must have a great culture at work,” Yip explained.
After ten years of unexciting growth, in 2015, Yip had the opportunity to go to the Silicon Valley on MaGIC’s eStanford program. This was the first of three trips taken either by Yip or his team, where he likes to say, they got schooled in the concept of "humble audacity”and to dare to think big. His big idea was to adopt the subscription model for Electra and move to the cloud.
“I wanted to create a cloud based software for electrical engineering. I knew it was very challenging, technically and we did not know how to do it, how long it was going to take, or even if anyone would buy from us. Most people called us crazy, but we felt we had to be audacious, and if we do not do it now, it will never happen. I would strongly recommend that all entrepreneurs be humbly audacious,” advised Yip.
It took them five years to build their cloud based service, bootstrapped with no external funding. “You cannot simply port your codes and make it work for the cloud, as Electra was not designed for all the collaboration and sharing that happens when you move something to the cloud,” he explains, adding, “we designed the software from the ground up to solve these problems.”
Three key takeaways in the Thomas Yip journey
The timing couldn’t have been sweeter. Electra Cloud was launched in January 2020. Two months before Wuhan, and three months before the pandemic hit the world.
The first few months were scary though.
“In April 2020, sales went down 50%. Although we were frugal and had a long runway, but I was extremely worried, especially for my staff,” admits Yip, who quickly put a stop to online advertising.
It didn’t take long however for sales to bounce back. In the second half of 2020, Radica Software came back strong and achieved a record year. With the company now owned by Siemens, Yip declined to share more about its performance for 2021 or this year, though clearly the performance was good enough for Siemens to swoop in.
“Good times are easy, but it is the bad times that define a person. I am happy that as a team, Radica persisted through the bad times,” said Yip.
He summarises the key take-aways for those who wish to walk in his footsteps into three words: Audacity, Culture, and Persistence.
He recommends young entrepreneurs to be bold in taking that first step and the steps thereafter; that they should build their company around trust and integrity; and to never give up when faced with tough times and uncertainty.
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