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All this streamlining, though, has an inevitable downside. M17 has been known for its “hire fast, fire faster” culture, according to industry insiders and former employees. “They’re ruthless. Even if you’ve been there a long time, working your ass off, if they want to fire you they will fire you,” said the ex-employee.

Nevertheless, the management team seems to have faced the ugly part of the job head on.

Survival mode till the finish line

Survival mode till the finish line

As part of M17’s “corporatisation”, budgets are reviewed two quarters ahead of time and each member of the team has to deliver on KPIs, said Phua. “You can’t hide if you’re not doing well.”

“I’ve been very focused on the data, there’s nothing more than that,” he said. “The team has instituted a very strong overview, every single line item of expense is reviewed.”

Even if Covid has brought more live streaming opportunities, it’s uncertain how sustainable the growth is, with a global recession underway. M17 would rather stay on the conservative side, and this approach often means cuts. This includes doing away with offices this productive work-from-home season. “We gave up half of our office in Japan, so we save on rent,” CFO Koo said.

“People are still spending money, perhaps their savings. But in six months or so, they might not have savings anymore. So we’re definitely keeping a cautious approach overall,” he explained.

M17 is trimming down costs wherever possible. The company has also scaled back on user acquisition spend in new markets like the US and Middle East, Koo pointed out.

M17 has good reason to be cautious, though. Live streaming is a competitive space today.

“From what we’ve seen at least in China, it’s become extremely competitive so you have creators who are underperforming in terms of results. There’s just so many people posting content,” UPLAB’s Bern explained.

To that end, the biggest challenge for players is retention. Bern said platforms must keep their content interesting. They also need to think about new features within streams that will make users stay. “In the past months, a lot of platforms have been experimenting with things like group live streams, allowing users to challenge each other in acquiring virtual gifts or letting them play games together.”

Australian property market

M17 has just boosted its warchest in preparation for the downturn. Its latest round remains open, according to Phua, and an M17 investor hinted about talks for a new investment, likely from a prominent Chinese investor. The potential deal will supposedly be large enough to “redeem” M17 from 2018’s IPO fiasco.

Live-streaming is well established in China, but political and cultural reasons have made it hard for Chinese companies to enter Taiwan—a disputed territory for Beijing—and Japan, which has a tense relationship with China. That makes the revitalised M17 business an attractive asset.

In the long-term, an IPO is probably on the cards for the company; and if finances continue their uptrend, any future attempt to go public should go down easier, said company investors.