Manufacture the Reference Customer

Buying the first proof point

A two-sided marketplace with no supply cannot attract demand, and no marquee brand will supply an empty marketplace first. Danny Yeung arrived in Hong Kong in 2010 with no e-commerce background, a handful of staff, and a Groupon-style voucher site called uBuyiBuy. Every major brand he approached said no, Starbucks included, and without recognizable names on the site nobody would buy from it. His response was to stop asking and start buying: if Starbucks would not work with him, he would buy Starbucks vouchers at full retail price and resell them at half off as a customer acquisition tool, eating the spread on purpose.¹

What the loss actually purchased

The spread bought two different things, and the second is the one that mattered more. The obvious purchase was customers: a straightforward loss leader that subsidizes the first transaction and wins on lifetime value. The less obvious purchase was the appearance of a relationship. To a shopper browsing the site, a discounted Starbucks voucher looked indistinguishable from an actual Starbucks partnership, and Yeung was explicit that the point was to create brand value while the company was too small to earn it any other way. The real return, though, came from spending that borrowed credibility on the sales floor rather than from the vouchers themselves. Once Yeung could say he had worked with Starbucks, he could walk into Peet's Coffee with that fact alone and close a genuine, negotiated deal with a real competitor, a deal that did not depend on any further subsidy.¹

A tactic with a known expiration date

Reselling vouchers violated Starbucks's terms, and Yeung knew a cease-and-desist letter was coming before it arrived.¹ His calculus was that a company his size could absorb the letter when it came, and by the time it did, the borrowed credibility had already been converted into real, independently negotiated supply. It was a knowingly time-limited maneuver rather than a durable strategy, and it depended entirely on being too small and too fast for the counterparty to stop in time.

The companion moves: manufactured habit and unreasonable persistence

Alongside the manufactured supply, Yeung manufactured a demand-side habit, launching a new deal at midnight every single day regardless of local advice that nobody would visit a shopping site at that hour, and regardless of whether the previous night's deal had sold. The point was not that night's revenue, it was training a behavior into existence before it was real. The same persistence shows up in how he won his next major supply source. A cold call to the restaurant group Dining Concepts got him sworn at and hung up on by a marketing director, so he searched for the company owner directly and called headquarters again. The owner heard him out and handed over twenty restaurants, while telling Yeung plainly that he did not believe the concept would work in Hong Kong at all, and explaining that the willingness to keep calling after being hung up on was itself what earned the deal.¹