Entrepreneurs often spend years searching for the next big opportunity, but sometimes it is hiding in plain sight. For Wee Lee Hiong, founder of W Hydrocolloids, Inc., the breakthrough came not from a laboratory, a consultant, or a business plan, but from observing his own customers. By taking the time to understand how overseas buyers processed the seaweed he exported, he discovered an opportunity to move up the value chain—from supplying raw materials to manufacturing carrageenan, a shift that would redefine the future of his business.
“When we started the business in seaweed, I visited my buyers, sabi ko, ‘Anong ginagawa nyo sa seaweed?’ Nakita ko, aba, madali lang pala tangke-tangke lang and cooking lang eh. So when I went home, ginaya ko. Sabi ko pagawa mo kong tangke, but after that sabi ko, anong gagawin ko sa tangke?”
That visit changed how Wee viewed the industry. He had entered the business as a trader, but seeing the production process showed him where most of the value was being created. Instead of remaining a supplier of raw seaweed, he began thinking about becoming a manufacturer of carrageenan, a processed ingredient that could command much higher prices.
His response also reflected a practical form of entrepreneurial learning. He did not wait until he fully understood the technology before exploring the opportunity. He first identified the basic process, created the equipment he thought he needed, then looked for the expertise required to make the system work.
“Luckily, there was this retiree na engineer from a friend in Japan. So I asked him to come to Zamboanga to teach us how to cook the seaweed. In six months, we were able to make carrageenan na for pet food.”
The decision to bring in an experienced engineer was critical. Observation helped Wee identify the opportunity, but technical knowledge allowed him to turn it into a repeatable industrial process. This distinction matters because copying visible equipment is not the same as understanding formulation, temperature, timing, quality control, and consistency.
Within six months, the company had moved from exporting seaweed to producing carrageenan. That shift represented a major upgrade in the business model because processed products usually offer stronger margins, greater control, and more defensible customer relationships than raw commodities.
“And yung mga multinational naman were selling it for $12. My cost was only $2 at that time, so I looked for a market naman, and I was offering it at only $4. They were surprised—‘That’s impossible, Mr. Wee ah. You must be losing money?’ Sabi ko, but I’m already making 100 percent.”
The numbers revealed the strength of Wee’s cost advantage. He did not need to charge close to the multinational price to earn an attractive return. By selling at $4 against a market price of $12, he could offer customers a compelling reason to switch while still doubling his production cost.
This gave him more than a pricing advantage. It gave him strategic flexibility. A lower cost base allowed the business to enter markets aggressively, absorb competitive pressure, and expand without depending on premium pricing.
The story also shows why entrepreneurs benefit from understanding their customers’ operations, not merely their orders. By asking what buyers did with the seaweed after purchasing it, Wee discovered that the most profitable part of the value chain was happening beyond his own business.
His breakthrough was therefore not simply about copying a production process. It was about recognizing where value was created, acquiring the knowledge needed to reproduce it locally, and using a lower cost structure to compete against much larger companies.
By moving from seaweed trading into carrageenan manufacturing, Wee transformed the economics and long-term potential of the enterprise that would become W Hydrocolloids. His story demonstrates that one of the most powerful forms of innovation is not always inventing something new—it is recognizing where value is created and having the vision to move there first.
