Small software firm finds global success, hit by double-whammy: Page 2 of 2

Radica beginnings

Small software firm finds global success, hit by double-whammy: Page 2 of 2

Yip graduated from the French-Singapore Institute in 1990 with a diploma in electrical and electronics engineering. The institute was an engineering school that provided industry-oriented technical training, and was later merged into Nanyang Polytechnic to become part of its School of Engineering.
 
After graduation, he was invited to stay back in the Institute as a research assistant. He then worked at Seagate Technology for a year before returning to Malaysia where he and some friends started a business that performed automation systems integration.
 
“For 10 years, we designed electrical control systems for machines ranging from woodworking, waste disposal systems and automobile manufacturing, to rubber processing and more,” he says.
 
Then serendipity stepped in. “It was all an accident,” says Yip. “We were asked to send in a quotation for a rather large project amounting to over RM1 million.
 
“In electrical engineering, nothing can be done until the designer has come up with a circuit design, and we were very worried that we would be unable to create designs quickly enough to meet our customer’s expectation.
 
“Therefore, we set out to find tools that we could use to make our own circuit design faster and easier, but having tested all the solutions out there, we found that they were all very difficult to use … and very expensive too.
 
“So we decided to automate some tasks using Microsoft Visio, as it is very easy to use and familiar to everyone,” he says.
 
But to their dismay, Yip and his colleagues did not land that very large project. They did realise, however, that they had a pretty good tool on their hands.
 
“We decided to put it up on a website as we were pretty sure that electrical engineers all over the world could use a tool like this,” he says.
 
Small software firm finds global success, hit by double-whammy: Page 2 of 2Radica Software was formed. Yip (pic, right) had as cofounder his partner Woo Ah Kek (pic, left), a certified accountant and thus the chief financial officer at Radica Software.
 
The orders started rolling in, as did the challenges. Three weeks after putting Electra up on the website, two orders came in on the same day – one from Sharp in Mexico and the other from Pitney Bowes in the United States.
 
“At the time, it was customary to put software onto a CD and package with a box, together with a manual, to be shipped out to customers,” says Yip.
 
“We had already engaged designers to print our box and manual, but they kept getting delayed. We had to find a friend with a laser printer so that we could print two manuals and bind them to be shipped out to our customers.
 
“By the fifth day [after the orders had come in], understanding that customers would not want to wait that long for an online purchase, we decided to spend the night at the printing factory, waiting until 2am to get that freshly printed box so that we could send out the entire package the next morning.
 
“To our dismay, despite our proofreading, the boxes came out with spelling and grammatical mistakes,” he says, even sending DNA pictures of the boxes to illustrate his shame – and yeah, there were errors, but we have seen worse.
 
“We had to send our first two orders out, and they were the only orders throughout our entire history to have had spelling mistakes. We hold ourselves to high standards and simply cannot accept sending low-quality boxes with spelling mistakes to our customers.
 
“Not having the budget to reprint our boxes, we had to print stickers to cover up our spelling mistakes instead,” he recalls.
 
“Our guiding principle has remained the same since … no shoddy work, period. Everything that goes out of our doors must be of high quality, down to the last detail – especially when nobody is looking,” he adds.
 
Another guiding principle, although Yip does not describe it as such, would be for Radica Software to continue its focus on ECAD.
 
“We focus on electrical CAD mainly because we strongly believe we can be the world’s best in this area, ,” Yip declares. “We truly understand this area, and this is the area in which we have insights into what problems electrical engineers face.”
 
But how different is ECAD from general CAD software, such as Autodesk Inc’s AutoCAD, which electrical engineers can use as well? How does Radica Software differentiate Electra from the competition?
 
“The difference between our software and general CAD software is that Electra truly understands electrical, and can provide an engineer productivity gains of at least 300% to 500%,” claims Yip, adding that electrical circuits that would have taken seven days to draw can now be done in two days with his software.
 
Imagine the time and money saved, he adds.
 
It was enough that when Electra first came out, Control Design magazine columnist Jeremy Pollard gave it a thumbs-up, writing, “If you’re not an AutoCAD guru and/ or want to get control drawings and layouts done quickly and inexpensively, it might be worthwhile to check these guys out.”
 
Small software firm finds global success, hit by double-whammy: Page 2 of 2Radica Software earlier this week released the latest version of its software, Electra E7.
 
“In electrical engineering, wires are drawn in a certain way, and although you can do the same thing using conventional software, our software automates the entire process – making it far easier and faster for you to complete the diagram,” says Yip.
 
“In many cases, electrical engineers leave out critical information simply because these are too tedious to be done manually. Electra automates most of these tasks, allowing an engineer to concentrate on safety and great design … and therefore able to create documentation that is far more accurate and detailed.
 
“Creating electrical circuit designs are often difficult enough, but using the software should not be. We differentiate ourselves by creating software that is extremely easy to use, without the need for extensive training.
 
“Everything we do must be easy to use, backed by our superior customer service. We were one of the first in the world to allow an online trial download. We were one of the first to publish our prices openly on our website, and to allow customers to buy and download our software instantly,” he proudly declares.
 
Radica Software also prides itself on its customer service, saying that it always answers email support within 24 hours.
 
And despite the problems Radica Software is having with the business side of Visio, Yip swears by the tool, which as he mentions above, is easy to use and familiar to most Office users.
 
“For systems engineering, Visio is actually an excellent choice; it allows us to customise and do practically everything. Although we have considered other software, Visio offers unparalleled ease of use and compatibility, where you can import and export AutoCAD drawings,” he says.
 
CGP assistance
 
Radica Software’s challenges remain, but the company is now at least getting some expert advice and mentorship through the Coach and Grow Programme (CGP) initiated by Cradle Fund, an agency under the Ministry of Finance, and run by Proficeo Consultants.
 
“We felt we were a bit stagnant with our growth and wanted to learn how we could take Electra to the next level,” says Yip.
 
“CGP has helped us in three main areas:
 

Methodology
 
Although we have a sense of what we want to do, in CGP we learned about methodologies that answer business questions. For example, learning about the business model canvas allowed us to look at our business from a totally different angle.
 
All this while, we have been improving our product but we now realise that we also have to improve our business model, channels and delivery.
 
Networking
 
An entrepreneur's journey is a lonely one, but it does not have to be. By joining CGP, we were inspired by what our peers have been doing and continue to do.
 
We now have a support network with people of the same channel, where we can freely share our experiences and learn from each other. It is extremely inspiring to see other great work being done by Malaysians.
 

Mentoring
 
CGP mentors are helping us ask questions that we were too afraid to ask ourselves. For example, last month, I had the opportunity to talk to the managing director of Google Malaysia, Sajith Sivanandan, and he asked me how I would scale my business 10 times or 100 times.
 
While we are celebrating a 35% increase in sales this year, our mentors are asking if we can hit 300% or 400%. And Sajith is asking how we can hit 1,000% or more. This has opened our eyes to newfound possibilities.

“Through the CGP, we were fortunate enough to be evaluated under the Endeavor Malaysia programme helmed by Zaman Ahmad, and had the opportunity to meet T.S. Wong of MyEG.
 
“Simply meeting these people allowed us to see what Malaysians are capable of, and shed our feelings of insecurity so that we may dream big,” he adds.
 
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