Entrepreneur Spotlight: Before Founding Futu, CEO Li Was a Trading Junkie

Now, Mr. Li heads an online brokerage unicorn, a "one-stop shop" for traders in China and beyond.

Belinda Zhou
    Jan 12, 2020 5:00 AM  PT
Entrepreneur Spotlight: Before Founding Futu, CEO Li Was a Trading Junkie
author: Belinda Zhou   

While China often makes headlines in U.S. media these days, the inner workings of its up-and-coming companies and the innovators behind them are mostly unknown to the West. In this interview series, CapitalWatch lifts the curtain on the Chinese entrepreneurs on track to make a global impact.

Today, we shine the spotlight on Leaf Hua Li, the founder, chairman and chief executive officer of Futu Holdings Ltd. (Nasdaq: FUTU).

Over the past year, the online brokerage platform, with headquarters in Shenzhen and Hong Kong, made significant strides growing its business. It not only became publicly traded in New York but also witnessed significant user growth, launched an online wealth management service and kicked off its operations in the United States. Now, U.S. traders can use its mobile app, moomoo, to trade stocks and see real-time market data.

Eventually, the moomoo app will have all the functions of its Hong Kong counterpart, Futu's slick high-tech app NiuNiu, which allows customers to trade stocks across mainland China, Hong Kong and New York. NiuNiu features financial analysis, latest company news, public feeds and even courses in investing.

This "one-stop-shop" for trading was Li's vision from the beginning. 

Li was the 18th founding employee of Tencent Holdings Ltd. (HKEX: 0700), where he participated in the R&D of Tencent QQ and created Tencent Video. During his career with Tencent, he invented 23 international and domestic patents. He then attracted the Chinese tech giant as an investor and partner in his own venture.

This year, Li is revamping Futu's mission, which now states: "The investor is not alone." In an interview with CapitalWatch, the innovator shared his background, entrepreneurial path and leadership strategies for the first time.

CapitalWatch: Tell us about your early years. What was it like growing up?

Leaf Hua Li:  I was born in Loudi City, Hunan Province.

My parents worked earnestly. For example, when they cleaned, they would pay attention to every detail of the home, even to some negligible places like door frames and corners.

CW: What guided your interest in computer science and technology?

Li: My dad was interested in machinery like radio and other electronics. I saw him buy electronics components and go for TV repairs. As I mentioned, I lived in a small city. Until I saw a multimedia computer with a CD-ROM drive for the first time, I did not know they were meant for more than just typing.

So, I subscribed to magazines about coding, like Computer Fan and China Computerworld. Eventually, my interest in the field intensified.

CW: What was one valuable experience you took away from your studies that impacted your future business strategy?

Li: In addition to gaining the basic credits at college, I would also apply the knowledge. Many things in the textbook can only let you understand the disciplines and cannot sharpen skills.

What's learned from books is superficial for computers. We also need applications. I did some hands-on projects at school, like the student cafeteria cards, management software and front-end applications for postgraduate qualifications and student status. I also built a campus network.

CW: Who was your idol when you were growing up?

Li: Lei Jun, the Chinese billionaire entrepreneur who co-founded Xiaomi Inc., and Qiu Bojun, the founder of office software WPS.

Before Microsoft came to China, WPS Office, an office suite developed by China-based software developer Kingsoft, changed the way the Chinese worked. I met Lei Jun during the B round of financing for Futu, and I'm excited that he encouraged us and recognized our efforts.

CW: What inspires you today?

Li: My inspiration comes from my work experience at Tencent and the influence of its founders, Huateng Ma and Zhidong Zhang.

During my years with Tencent, I learned how they think and how they make decisions. Futu has not yet achieved the level at which I left Tencent, and we continue to learn from that past experience.

CW: What led you to establish Futu?

Li: In 2007, I was a trading junkie of Hong Kong stocks when my personal transaction value reached HK$4 billion. However, the trading software provided by the Hong Kong securities firm at that time was inconvenient to use. The interface was rough and the system often crashed. A little carelessness could easily lead to capital loss.

When I reported those problems, the firm was also careless with feedback. I thought – if I don't do it, no one would. These pain points resonated with my product development work experience at Tencent, so we started to develop our own trading systems and set up an internet brokerage company.

CW: How did the founding team of Futu form?

Li: I started with several of my colleagues from Tencent. Robin Li Xu, our vice president in charge of products, marketing and growth, joined our team in August 2013. He was planning to open a trading account and became drawn to my idea of developing an online brokerage platform.

The co-founder of Tencent, Zhidong Zhang, also helped a lot. He walked me through the security risks at Futu and also introduced Ppchen Weihua Chen to our team in 2015, who was in charge of the security, maintenance and big data areas of Tencent's WeChat. He is now Futu's chief technology officer.

CW: What is most important in a startup: the team, the product, or the market?

Li: The team is the most important and requires relative stability, especially in the early stages. Futu is lucky, as our market has not changed and the product has not changed, despite some early errors.

CW: Looking back at the first years of Futu, what would you do differently now, if anything?

Li: No major changes, but there were some optimization issues that, once fixed, could have save us some time. For example, the corporate structure and the design of the product. 

CW: How did you come up with the new mission of Futu?

Li: In 2012, we wanted to disrupt the industry and set on a mission to "let finance no longer be inaccessible and available to everyone." The old slogan no longer sounds clear.

Futu announced its new mission is to "make investment easy and show the investor he is not alone" to kick off 2020. This highlights that Futu is more than just a tool for trading. It also provides clear and relevant market data, social collaboration and best-in-class trade execution.

CW: What are Futu's biggest challenges going forward?

Li: The challenge comes from internal management. The headcount at the company has reached more than 900 employees. For such a scale, keeping internal management efficient requires a lot of work.

CW: What are you most proud of, looking back at your years of leading Futu?

Li: Cross-border success.

At first, people did not believe that we can make it, and we succeeded in cross-border application of internet and finance. For many colleagues in the internet industry, we set a good example.

CW: In an interview with CapitalWatch in July 2019, you said that you would like to be most recognized by your work at Futu rather than at Tencent. Do people still inquire more about your Tencent experience than your current position?

Li: My experiences at Tencent and Futu are difficult to separate.

For a long time, people wondered why I left Tencent at its peak of growth. Now that Futu has made it, the weight of importance has changed.

CW: Where do you see yourself and the company in 2020?

Li: In 2020, some U.S.-listed Chinese stocks want to follow in the footsteps of Alibaba to become dually listed in the Stock Exchange of Hong Kong. That's a great opportunity for us as our platform is fully-licensed to conduct securities brokerage business in Hong Kong. 

CW: What are your hobbies? What do you do in your free time?

Li: I like sports-oriented activities like mountain climbing, cycling. I also enjoy photography.

CW: Who supports you the most in your work?

Li: My family, especially my wife. When I failed to raise funds, my wife agreed to invest tens of millions of dollars from her personal account. It would be difficult to make it without my wife's support.

She also gives me a lot of advice on products and operations, utilizing her expertise in investment as a professional in venture capital institutions.

(Co-authored by Belinda Zhou and Anna Vodopyanova)