Seed to Exit
Welcome to Seed to Exit, the ultimate podcast all about startups, scaling, and venture capital. Your host is Riece Keck: Startup veteran and recruitment entrepreneur.
Join us as we dive into the journeys of startup founders and venture capitalists who share their insights, successes, and lessons learned from seed stage to successful exit.
Each episode, we bring you candid conversations with startup founders, executives, and investors. Whether you're looking for inspiration, actionable advice, or a deeper understanding of the startup ecosystem, Seed to Exit offers invaluable knowledge and real-world experiences to help you on your entrepreneurial journey.
Tune in to Seed to Exit and get ready to be inspired, educated, and connected with the exciting and ever-changing world of startups and venture capital.
Seed to Exit
Eugene Zhang, Managing Director at TSVC | From Seed Investment to Tech Titans | Immigrant Entrepreneurship and Deep Tech Insights
Join us on Seed to Exit as we welcome Eugene Zhang, the Managing Director of TSVC, whose foresight has backed industry leaders like Zoom, Carta, Ginkgo Bioworks, and Iterable. Through Eugene’s incredible journey from China to Silicon Valley, he shares his keen strategies for identifying and nurturing emerging leaders in the tech space, with a particular focus on supporting immigrant founders.
From his early days at Sun Microsystems, Cisco, and Juniper Networks, to launching an EDA company and founding Tiga Angel Fund, Eugene provides an insider’s look at the evolution of tech investing. We discuss his hands-on approach to mentoring and his commitment to immigrant entrepreneurship, offering invaluable lessons for anyone navigating the startup ecosystem. Notably, Eugene reflects on his early, albeit contrarian, investment in Zoom back in 2011, underscoring the importance of believing in the right team and market potential despite initial skepticism.
In this episode, we also delve into the meticulous world of deep tech investing. Eugene shares his insights on evaluating startups, emphasizing the growing interest in hardware and deep tech innovations poised to transform the industry by 2030 and beyond. Learn about the pivotal role of understanding financials, the necessity of professionally-prepared documents, and cultural shifts in attitudes towards entrepreneurship among immigrant families. This episode is a treasure trove of wisdom for tech investors and aspiring entrepreneurs alike.
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Thanks for listening to Seed to Exit. As always, I'm your host, rhys Keck, and today I'm joined by Eugene Zhang. Now, eugene has made some absolutely legendary investments and was the first corporate investor at Zoom back in 2011. He's also made early investments in world-class tech companies like Carta, ginkgo Bioworks and Iterable. He's a managing director at TSVC, where he heads a team of investors, and today we're going to deep dive into a bunch of different topics over things like how he identifies early stage leaders, how he mentors early stage founders and what he thinks the next decade of tech investing is going to look like. So I'm excited for you all to listen. Let's get into it.
Speaker 2:You're listening to the Seed to Exit podcast with your host, rhys Keck. Here you'll learn from startup executives, founders, investors and industry experts. You'll learn from the best about building amazing products, scaling companies, raising capital, hiring the right people and more. Subscribe and listen in for new episodes and enjoy the show.
Speaker 1:All right, I'm joined today by Mr Eugene Zhang. Eugene, welcome to the show. Thank you for coming on.
Speaker 3:Thank you for the invitation. Glad to be here.
Speaker 1:Absolutely so. I'm really excited to talk with you. You've had an incredible investment record over the course of the last decade or so, one of them, of course, being your investment in Zoom, which we'll get into. I'm really excited to dive in and talk about some of the things that you're seeing in the market, some of the reasons and decisions that you've made in terms of backing immigrant founders, and where you think the future of the market in terms of technology is going to go in the next few years.
Speaker 3:Okay, you're okay, it's a loaded question so yeah A lot. Yes, know, okay, it's a loaded question. So yeah A lot.
Speaker 1:Yes, yeah, yeah yeah, okay, so let's start out with your background. So you were originally from China, you did your graduate degrees there and you moved here back in the early 90s, correct?
Speaker 3:Actually 1990,. Exactly yeah, Beginning of 1990. 1990, exactly.
Speaker 1:Yeah, yeah yeah, what is it that drove you to America? Did you want to come to work in Silicon Valley, in tech specifically, or did you just sort of fall into it?
Speaker 3:Yeah, so that's quickly. You know. During those days, you know we went to the college, right? You know my class entry year was 1980. In right now in hindsight, that was a very special window in China, very, very open, very, very different from today. And then we had at that time on campus American teachers teaching our second language in native. We all loved that conversation and sometimes go out for lunch or something. So the American dream was kind of built pretty deep at that time. It's pretty deep and then a bigger trend for students to finish a degree and then go abroad or study in America. That was the number one dream and then, if the other country is the second or third, so I was one of those, um, you know, kind of, that's kind of the the background. Yeah, you know the how and you know the american dream was whatever the melting pot and all that message yeah, yeah, yeah.
Speaker 1:So you moved here in 1990 and I know you had one of the world. But then your second role was Microsystems, which at the time was already one of the leaders in technology doing a mixture of hardware software. But in addition to the larger corporate experience, you also joined a side project from I think it was a coworker you mentioned, right Right, Called Vera, which later got acquired. Am I getting that correctly?
Speaker 3:Yeah, yeah, that's totally true. So, yeah, you know, I, after graduation I was happy to landed at that time, you know, a lot of students, a lot of students from Taiwan, they just came, they just go to a Silicon Valley, you know. So I kind of lucky, found the first job and then at the Sun Microsystem actually it was my second job the first company, mdot, was not doing well, you know, with all that recession. So, yeah, sun was super, you know, during those days, sun Microsystem building the workstation was a rising star in silicon valley. Right at that time the ceo was scott mcneely and then, you know, was a super great um experience.
Speaker 3:And then I, lucky, working with a lot of smart people, wow, is a co-worker um, you know, from japan. And then, you know, we got a support at that time. I got a support from some ecosystem management and he has this idea and I, we team up, develop this tool on the side actually, and then, with the company's endorsement, and then we'll work with the outside company that they are responsible for selling various products in the e-semiconductor design automation space and we were responsible for writing the code, doing the moonlighting work, with all the endorsement from all parties, and that was kind of the background and then later on the company was acquired.
Speaker 1:Yeah, Got it. So that was sort of your first taste of the true Silicon Valley startup experience, right? How did that change the future of your career?
Speaker 3:Yeah, so that was really you are right on. So you know, you kind of you know we came to the US as this dream, right, so you know. Then you work on a real job and then you witness this outcome, you realize, and then you kind of see where you go for yourself in the future. Right, so clearly you could choose to be a technically climbed tech ladder, right. Another is be somehow related to entrepreneurship. So I clearly decide not to take on a technical ladder, right, and then just do what a possible. So that's really planted the seed. You know that's my interest, all that. So you know, later on you know, on investment and be a start, a company, again, all that stuff.
Speaker 3:So really, really, that was the, the kind of a real experience, um, to say, wow, this is, this could be true. Not earn a fixed salary. That was pretty huge compared with China during those days, china in the early 90s, very different from today, very good money in that context. But you have this kind of dream be entrepreneur, setting company, make a lot of money, what we call it. That was just like, wow, this is true, this is real. And why do I do everything else? I need to go that direction. That's kind of the fact, yeah yeah, that's amazing.
Speaker 1:I mean the, the, the idea that something can go from just an idea to a huge exit. It's, I mean, it's one of the most tantalizing things in business, in my opinion. So so you had the big exit now, obviously back in 2010. I think is when you founded uh tsbc, but there's a pretty good gap in in terms of years in between there. How did you get from that that exit to founding your first firm?
Speaker 3:yeah, yeah. So there's a long uh yeah, uh kind of this career of working with the company was extremely lucky, after Sun, you know. And then there's a concurrent to this company that I was sold, but I joined, all to do with my coworkers. They referred me. Then I went to Cisco. Obviously it's a better start, okay, a new start rising.
Speaker 3:So I joined Cisco and then after two years, and then my former co-boss at Sun Microsystems, he became Juniper Nen, one of the three co-founders. We knew each other and then he came to knock on the door booking me, brainwashing me, right, because Cisco was doing super well, right At that time. It was the position to be the first trillion dollar company. It never happened. I stopped every split. One ship became two ships every six months. Ooh, it's crazy. But I got brainwwash to abandon the ship, join Juniper to claim to have the best software talent in the networking space and the best hardware people talent.
Speaker 3:So then I joined and then that company took about three years to went public. It was super, super fast, right. So by today's standards, three years, right, yeah, three years, incredible. Yeah, market capital was 70 billion. So then after that I worked there actually six years and then I kind of 2003 started another EDA company and then 2010 started. Then I started also concurrently doing angel investment. With some kind of little luck, also have quite a two company doing really well. And then 2010, I worked with the school alumni, decided to launch this angel fund called the Tiga Angel Fund 2020.
Speaker 1:And that was in 2010,. We were sort of on the tail end, still somewhat in the financial crisis. What was it like launching a fund in that environment?
Speaker 3:It's very different from the top-down approach. It's like, if you hindsight look at it, we were 100% bottom up. It's not like we have a pile of money and then find the best asset to invest. This is a typical allocator's mentality, right, there's nothing wrong with that. You have the money and see which asset you should deploy. We were totally different. We were just 100% because we had some success and at that time we had two in the community.
Speaker 3:It's all 100% empirical. So like WebEx was successful by the Chinese entrepreneur Wow, they were like a billion dollar kind of right. It's sold to Cisco. And then, more closely, another company called Nest Screen by three schoolmates we all know them right, and then they sold the company to actually Juniper for $4.3 billion.
Speaker 3:So this is like the yeah, that is the background that we say, hey, we, maybe if we are not a starting company, we need to help more people to start a company, because we know when we raise the money it was super, super difficult. So this kind of the background, it's definitely not do. Those empirical experience was enough kind of motivation, you know. We say, hey, can we repeat, but definitely not a farm. Like we have a dollar and then how to allocate it like a mentality, so that's the bottom-up uh approach and carry that you know kind of uh passion. And then until today and we're still in business, maybe we we had, I think we've developed a pretty solid return and then we are still in business. It's that's kind of the way to look at it. Yeah.
Speaker 1:That's all you can ask for. So have you continued that same bottom-up approach today, or are you now taking the more traditional approach of we're raising funds and then deploying that capital?
Speaker 3:Yeah. So we are still kind of 14 years in, we are still adding in the new element and then we would not kind of abandon the roots, right. So the entrepreneur first, kind of roots. We're coming into health. But we need to look at combine with the capital, because we do have from the different, from the early one, 100% our investors LPs were schoolmates, individual, successful entrepreneurs, right. But now we do have institutional investors. We have to take their thinking into the. But ultimately it's the performance and the fund return. So that's kind of that's important for everyone, right. So that's ultimately the measurement If you choose to do a, manage money from other people. So that's kind of the combination today.
Speaker 1:And so, speaking of fund returns, your biggest winner that you've had of all time came across your desk really only a year into starting the fund, which was Zoom back in 2011. Tell me a little bit more about that. How did that come across your desk? What was your thought process in terms of deciding whether or not to invest?
Speaker 3:Yeah. So today, of course we have like a tent and a unicorn a few in the public, but Zoom was by far still the greatest return compared with others. So at that time I think so yeah, I wrote an article about it and I ran into Eric we already knew each other, you know certain Chinese community social and I ran into him in Santa Clara so just to learn that he quit his job as a VP at Cisco. At that time. Webex was acquired a few maybe one year earlier, acquired by Cisco for $3.4 billion. Webex already was a public company and then he decided to do the next generation. The thought was to do a next generation kind of product targeting mobile, and he couldn't wait, waiting for getting the bonus or that. So I met him and then the two employee, number one and number two, in his office in Santa Clara at that time. So show the leadership and taking the team right and out super, super motivated. And then, of course, we need to look at another angle, which is the market.
Speaker 3:The market was a little bit controversial. You know a lot of discussion internally also, just like other typical investors, a lot of people decide not to do it with Skype, facetime. But one thing was the mobile window was not. You know, if you really look at a market analysis, the mobile window was not totally closed. You know the Skype was there but the product was not super easy to use by those standards. So yeah, so combined, you know, the team and the market, we had debate and then we, of course, we reached conviction and then the team experience, we believe they can build a very good product. So that's kind of the background. We were among the you know our other first round. We're all in use and we become the kind of little fund for the money into the fund. That's kind of the quicker back pound.
Speaker 1:Yeah, and so we'll get into your investment criteria a little bit more in a bit, but I know that spoiler alert. One of the biggest things that you look for is the team and the founders. What did you see in Eric that gave you the confidence to be that first check?
Speaker 3:Yeah, I think here's the thing. So we typically more other deals right At that time. We actually kicking the investment only January 11th, from the July of 2020, we were all doing community work, doing marketing, doing business plan, competition, that kind of work. So all the founders they are Tsinghua University, they are whatever the more elite university students, right. So usually that's a profile. They came here to study and then they go find a work.
Speaker 3:Eric was very different. Eric just directly, you know, hired from Webex, from China to come work here. So he raised rise from the ranks, from the kind of engineer all the way to that level. So that is very, very important in the real. Uh, you know webex, we, we, I happen to know the founders, you know. So, if you, you know it's a real, you have to earn it right, that position, definitely not by, uh, you you're granted or not, it's just that you earned super, super important for that earned that position, leadership position. So that's one. And then the way we talked to him, you know he at one point we, I met him first in the office with three people and was deeply impressed.
Speaker 3:I took my partner to the gym and then we had lunch and then Eric was like if I don't earn your 10X, I'm going to return your money. Return your money, all that stuff, super super driven all that stuff. So the passion, and then, of course, the earlier I mentioned he gave away the bonus. If I need to wait for three weeks to get a bonus, he doesn't care, so that's kind of also special. For that we feel this is a super, super driven entrepreneur.
Speaker 1:So there's the signals in terms of the progression through the ranks, and then also, on the personality side, the conviction and the passion and the determination. Yeah, yeah, yeah, totally.
Speaker 3:And then the personality side, the conviction and the passion and the determination, yeah, yeah, yeah, totally. And then of course the Cisco. I know I also know during the Juniper days they buy a lot of companies, acquisition so, and then the WebEx software, the product in this big Cisco plotlines. It's very tiny and then it's very understanding they don't get much resource and money share to build the next generation, all that stuff. So nobody really, maybe the influence are very limited. So even if you have a VP title I think. So it's kind of connects and then also know a lot of people leaving Cisco creating great companies. So from an external signal also kind of reinforce this kind of the signals 100%.
Speaker 1:So, obviously, zoom hasn't been your only one. You've had some really other great names. You've invested in Carta, you've invested in Iterable, you've invested in Ginkgo. But one of the underlying theses is for for your firm, is that you invest in immigrant founders. Um, obviously you're an immigrant yourself. Is that the reason for the passion and backing immigrant founders? Have you found that there's data that causes them to outperform? Just walk me through your your okay, yeah yeah.
Speaker 3:So we are also uh, yeah, you know, kind of all the analysis, all that it's all afterwards, but we were sure kind of just dealing with the, the ecosystem. So, um, you know the the really fortunate. You know, qinghua university was the kind of the very uh, you know, if you go back to china, look for the entrepreneur percentage of why Qingpa is probably still probably percentage-wise, maybe not the dollar amount, the number is pretty concentrated and maybe not number one. So lucky you have a lot of school mates. They are all technical background concentrated here in the Valley. Some people say it's $15,000 today or plenty, I don't really know the exact number. So we had this biggest, the top talent around us. So that's kind of get us the very good starting point. That is just kind of the starting from the ground up. That's kind of the. And of course I mentioned earlier WebEx, the family tree from WebEx and then Eskring. They all had a great success and then, and also, so we know someone will be successful and hit big right. So but we in today we look back.
Speaker 3:Actually, the company we back about 45 to 50 percent company has Chinese founders. Less percentage has the less, but much lower percentage is the CEO, so sometimes, sometimes they are just a technical role. For example, example, another caller, zoom Z-U-M right, so it's a she and she actually from India. I think her brother also was the co-founder and then we in fact, today it's quite a sizable and successful, raising a lot of money company. But when we invested was really very, very early on. So we remember Insanitell and then we also, influenced by his current profession, all that sometimes influenced us to write a check. So you know, we kind of try to stay blind in terms of who we can have chemistry, you know, being in Silicon Valley, yeah, right, so that's kind of typical. We have co-workers from everywhere, so we're all used to, but just by, maybe, maybe a fish affiliation association, the chinese entrepreneur, continue to be a quite a big chunk of the, the company's way back okay, that's interesting and fun.
Speaker 1:I hadn't mentioned this to you, but I actually know andrew over at uh cilentio. I saw you had that that exit recently, so congratulations. We uh, we actually did some work with them a couple years ago oh, okay, okay, okay I see, it's a small world, yeah yeah, okay, okay, okay, yeah I see, yeah, I'm curious.
Speaker 1:Are there challenges? Obviously, being a founder is an incredibly hard job, regardless of your background, whether you're privileged, whether you're not, whether you're an immigrant, whether you're not, whether you're an immigrant, whether you're domestically born. Are there challenges that immigrant founders tend to commonly run into, that founders that were born in the United States might not?
Speaker 3:Yeah, totally. Yes, some are more obvious for the Chinese first-generation founders. So that's kind of we hope to play a role, but that's a play a role but it doesn't mean we have the total solution. So, yeah, you know there's I can name a few typical right First generation for us.
Speaker 3:We, you know the new generation gets better, but fundamentally still have, you know, we were not trained to in school, especially engineering school, to articulate things. Well, communication right, public speaking, this kind of skill usually are lacking in this engineering school. Today is much better, but our day so that's a typical pattern. So the articulate vision or that stuff, that's, that's that's kind of one of the could be easily kind of a weakness. And then another thing is depend on person right.
Speaker 3:So they, you know you need to adapt. You need to adapt to the. If you, your business is here, you need to adapt. If your business is here, you need to adapt to the American culture. Sometimes, if you don't click, it's very hard for you to maybe recruiting or say, a partner and all that. So actually quite some challenges. And then typically, you know, typically Chinese entrepreneurs, they do well in those human touch, less human touch business. Like you know your benchmark, your benchmark and your product works. Other people you do better than other product and that product speak for itself. But today it's rare and rare, right, you have to communicate. Yeah, so so that's a china entrepreneur definitely has some additional uh difficulties.
Speaker 1:Yeah, then then the yeah people look and and how do you suggest that they overcome those challenges? Is it just a matter of practice or is there? Are there resources that you typically recommend?
Speaker 3:okay. So very good question. I think, uh, um, think a lot, a lot of. I think there are professionals help you to. You know kind of on the leadership training, you know marketing, even help you pitch how to do better pitch, all that stuff. That's kind of certain professionals. They can come in, come in do this. I think that it's more important is for today. I think it's about entrepreneur how quickly, um, you know kind of how quickly they can, they can learn.
Speaker 3:We encourage it, yeah, um, but sometimes you know the to be a CEO. So, if you know, we usually ask do you want to be, continue to be the CEO, or you kind of hire a CEO or whatever? Right, If you want to be that CEO, say that's nothing wrong with that, but you have to take out all the burden, you have to learn, you have to, you know, be the person. You know the buck stops at the yield, nobody else. You take out all that load and then so, yeah, so we kind of mentally prepare for them. You know kind of, you know, since we've seen more than them typically and then we just point out and hopefully they pick it up and echo and then they need they are the ones taking actions to how to address their kind of certain weaknesses. Um, yeah, um.
Speaker 3:So another example I could, you know, I mentioned you know the articulate, articulation and story telling usually are not super strong. Another thing for a technical founder could be they want to build a product getting, uh, you know, customer, customer success, but they sometimes overlook the importance of putting a professional financial together. They think it's not a kind of important. But actually I told them this is the, it's the opposite, right? So you need there's no such a thing as you have how many customers you acquire become the perfect point, then you can raise money. It's a process. If you are not ready, if you cannot present professionally down financials, people just write you off and a lot of entrepreneurs they are losing a lot of you know not pay attention to this. So those are the things we yeah, we try to, you know, kind of, you know, yeah, put our tips in front of our founders.
Speaker 1:Right, because you have to. I mean, at the pre-seed stage, seed stage, everybody knows that those financials are not going to be the end. All be all right.
Speaker 3:But you have to have something just to show that, okay, this is how our users translate to revenue and our costs and so forth. Yeah, yeah, definitely today. So for a forecast, but that's a way for communicating with the investors and then your board or whatever that you do for yourself to see how later on you execute, how to benchmark. Otherwise, yeah, and then even for a certain company, I saw right, so they already have some tractions a year or two, but they are too busy to put together a professional done, kind of a, for that's very rare. For other type of entrepreneur, we see, but for Chinese entrepreneur it still happens. It's kind of a yeah, thing that we see, but of all, if it's Chinese entrepreneur, we still, it still happens. It's a kind of a yeah, you know, thing that we see.
Speaker 1:Another, another question I had on challenges that, uh, that immigrant founders might run into. And I I actually come from I know I don't look at, but from a family of immigrants myself. On my, my mother's side, her, uh, her mother moved from Peru back in the seventies and a lot of times in immigrants there's, you know, there's very much that hard work knows to the grindstone mentality, but there oftentimes is also a little bit of a bias towards, you know, higher paid kind of status level positions. You know your doctor, your lawyer, that type of thing Do you tend to see founders running into doubt or lack of support from their families who may want them to go into a more stable, uh, you know, steady, career?
Speaker 3:with the time, things change quite, uh, quite a quite a bit, yeah, yeah, so, um, so, entrepreneur, because the you know a lot of successful entrepreneur become kind of celebrity kind of, so it's more receptive traditionally. Yeah, I agree, you do a startup. It's like it's not that you cannot find a good job. That's why you do this kind of you. You don't know what you are doing. This is, you know, you know kind of no insurance, you know. You know, you know you're're not dependable, right, it's job.
Speaker 3:But the thing I really, especially a new immigrant, I think it really changed a lot. You know the early stage. That's why the feel for early startup is getting more capital where you're actually coming, I feel coming already a lot, maybe too many, but we're still coming in. If you, I chatted with a lot, maybe too many, but we still were coming in.
Speaker 3:If you, I chatted with a lot of people running, um, manage bigger money or their, their personal life or their, their children or their. They are many of them got into, uh, you know entrepreneurship. So we end up with talking about that part, not the the bigger fun, the remaining, you know you endowment that kind of a thing, but the more entrepreneurs. So that's definitely getting more mindshare. That's true for the immigrant environment and then, especially in Silicon Valley, we see the momentum quite high but at the same time still a lot of, of course, a lot of parents say, hey, if you want to have a small startup, say you join a startup or with a big company. You know, I recently still have friends say, hey, highly encourage kids. You know, get a multiple offer, go to a big company like a Meta or that stuff.
Speaker 1:So yeah, yeah, well, it's good to hear the times are changing a bit. Yeah, I mentioned briefly earlier your investment criteria and what you focus on, so I want to come back to that a little bit. When you're at the seed level. I know we mentioned briefly the financials but, like we said, those are both just sort of best guesses. They're not going to be anywhere near as reliable as they would be in a Series C, series D, et cetera company. So what you're really betting more at the C level is your product, what sort of market you have and the founder, and I know that you mentioned in a previous interview. If you say you have five investment criteria and it's because you count the team three times, right, what brought you to that decision?
Speaker 3:Yeah, yeah, that's a very, very, super great question. So you know, the first is the team and founder. We need to reach some kind of a personally everybody, reach some kind of conviction, right, of course. What does it mean? Okay, so of course we look at some signal we can collect. You know you can put the list right. You know, okay, 100%, of course. You know full time, right, I mean easy, easy checklist and then why you want to start it, what's the background you know, and then can you convince others to join you or all that stuff. So so that is kind of very, very, also important, right. And then of course, you have the good professional training. If you wanna do AI or something, you have a good technical background to support it. So if you are doing hardcore tech, then you need to have some papers for us to digest. Okay, so, on the team. But sometime recently we invested in a few deals practices.
Speaker 3:We collect two data points. It's because it's a company. Earlier, when we talk to them, they maybe just formed the company and they want to figure out. So we collect two data points. Of course we don't have the luxury collecting, you know, too many data points over too long period, but sometime over a period of, you know, one month or two or sometimes three, we collect two data points. That becomes very, also important. We see you said that you're going to do this and after the second data point, how much you have done.
Speaker 3:Because we first believe the founder they can do this, but then if we have a little bit of signal that tells us you can execute, it is super, super important to validate, because of course it's a validation process. But if you get a two data point, that's also if there's it's possible, it's feasible then we collect two data points. Right, you know so. But yeah, but overall, on the on the team, you know, you know we kind of relate to our experience and then we really sometimes it's really hard to do it remotely and we more right now, before we write a check, we have a, you know, in-person, I'd say, right, the engagement, a long engagement, a few hours sometimes, and they really get a sense. You know how they think about this and all that. So we reach that feeling. If we don't have revenue to pack it up, then we do more work here on the team side and then we have three pillars, two other pillars. We have to at least have some supporting angle for other elements.
Speaker 1:I have to make a little bit of a joke that the first investor in Zoom says you need the impersonal element. But yes, I totally get it. So then typically, how long is that conversation? If you're looking for those two data points and some execution, how long typically is it from say that first conversation or that first pitch to writing a check?
Speaker 3:Yeah, it kind of varies. If they already have some traction, then we let them to speak right. So, whatever the user or get some early paid customer, we do analysis. If there's some cohort, if they have numbers, so typical time could be very quick, like one, two, three weeks, or sometimes it's a little longer. If you do a kind of deep tech hardware company, then experience, you know, it's become very, very, very, super, super important. But you have done this and then with business experience, so because we cover quite a big area, a broad area, so we use adapt different companies, um, tweak it for different uh, so a different uh angle, uh, yeah, that's kind of what we do, yeah that makes sense and and you mentioned deep tech and in fact on your linkedin I think you know you have the deep tech decade yeah uh.
Speaker 1:What does that mean for you? What is that? What do you think the rest of the decade looks like in terms of technology? What do you think the 2030s look?
Speaker 3:like okay, okay, great, let me take a step at it. Um, so, the, the, yeah, so one context is the. You know we have the software either word for successfully pretty uh, you know, right, so a lot of, uh, wealth created. You know a successful company created because the you know right, the sass some software, right, the software software kind of, that's kind of creating a lot of. You know it's a high margin business. You know, like good growth, very, very good business model, right, you know so, people love it. And then the peak was 2021, right, everybody wanted to invest in SaaS company. Hey, give me a SaaS company, I want to invest it was a wild time.
Speaker 1:Yeah, yeah.
Speaker 3:Multiple, become 10, 20, 30, sometimes go to 40. It's crazy. So that's kind of the backdrop. And then we so it's a middle. Deep tech is more a long-term way. So the hardware has to catch up. It's already today right. We say you know the NVIDIA commanded the software margin and all that's exceptional. But really, really, you know, for a good 10 years, you know, nobody touched semiconductor, right, and all that Now in the last three years maybe also. So how do we come back Eventually? It's an opportunity, kind of go.
Speaker 3:The other day I just chatted with the legendary telecom investor entrepreneur Wu Fuqian. Wu Fuqian was in the 90s and early 2000s. He had so many hits as an entrepreneur and later on he turned into an investor. So yeah, we had a good chat. But he said the speed today is 5 to 10x the internet in the 90s speed. That's his view. So things are changing very fast. That's a side note. Yeah, but the hardware opportunity, software run for a while and then the hardware opportunity will emerge. Today in optics it's back right, optical computing, all that been.
Speaker 3:I was at the juniper at a certain point. Like you build the highway and then the, you know not many cars on it why you want to keep building the highway right. It seems like it doesn't make sense and then later on you catch. So right now we are in a wave of hardware, have a lot of opportunities coming again. Of course, the nature of these deep tech company it's more capital intensive typically than the software company, but once you have the critical return it will attract more investors, for example.
Speaker 3:One example I want to mention is one of the portfolio called eBots. They do the smartphone assembly. So what's the value? Smartphone assembly? Because today you are typically the three-shift young Asian woman working on three shifts on the bench to do with wiring and connection, know, kind of connection, all that stuff that is yet to be uh kind of replaced by automation. So you know, um, so that we believe strongly that this vision and the role of getting there is quite a, quite a you know, longer than typical software. But yeah, eventually we believe it will pay off. Of course, everything today all have this AI engine in the back. It just sometimes pure software sometimes show up in the more hardware kind of form.
Speaker 1:When you mentioned Nvidia as well, and they've obviously been the winners of the semiconductor race in the last few years with the GPUs, and everything is essentially running off of NVIDIA, and so is the thought then that, of course, other competitors will see this and say, ok, well, we need to get into the GPU business, but given that NVIDIA has a few years of head start, we'll probably be a few more years before we have any meaningful competitors on that side.
Speaker 3:Yeah, that's a great way. So everybody is asking that question because they took such a large share of the market and then definitely for a while people say it's easily three years lead, especially the CUDA. It's such a lock on the customer all that. But clearly all other companies, including one company we invested in called D-Matrix they do influence chips. When you train a model you want to run fast, maybe you want to have the cheap chips than the immediate right. So there are quite a few companies in that space also. So it's just a ton of company. That's good about the market economy. So you have attracted so many competition coming in. Everybody wants a piece and then you further, of course, you need to also look at energy, energy consumption. That's one of the drivers for optical computing. You know, kind of coming in to help reduce the power consumption so that trip don't, you know, get overheat or that. So so clearly, yeah, the competition also. Just today nobody's come close to Amoeba.
Speaker 1:So, so, invest for the next three years. Maybe I'll exit in three, four years. That's what you're saying. Yeah, um, yeah, cool. Well, final question for you. Obviously you have a wealth of advice for founders at the early stage, whether they're immigrants, whether they're domestically born. What would you say is some of the best advice you could give someone who maybe they're just starting and they just incorporated, or maybe they've gotten a little bit of traction? What would that be?
Speaker 3:Yeah, of course there are many things I could mention, but still I want to go to the roots, which is still I encourage to kind of yeah, the advice is you have to mentally ready to do 1% better than others and then keep at it.
Speaker 3:Consistency and effort right 1% better than others and then keep it at it. Consistency and effort, right, yeah, yeah. So it's no easy way to you know, we look, I kind of also talked to quite a few successful entrepreneurs, so this is just definitely no easy way. Sometimes, you know, I have this also interview series, but not a serious one, but serious one. But on surface very successful, super smooth, but when you get into it the company almost die to price or that. So it's yeah, you keep at it on top of it, yeah, and then you, yeah we luck will come.
Speaker 1:And then you break through right yeah, and then you, yeah, luck will come. And then you break through right, yeah. Well, I love the no sugarcoating approach and the honesty. Eugene, it's been a pleasure. Thank you so much for coming on the show.
Speaker 3:Okay, thank you, rhys, great talking to you.
Speaker 2:Thanks for listening to See to Exit. If you enjoyed the episode, don't forget to subscribe and we'll see you next time.
