Hans Tung: Finding opportunity in failure
28 Juli 2022
When it comes to VC and investing, Hans Tung is the man to watch. Hans is a Managing Partner at GGV Capital and has been featured on the Forbes Midas list for nine consecutive years. He is an early investor in multiple billion-dollar businesses including Airbnb, XiaoMi and, ByteDance.
Hans recently joined us on the Ridiculously Good podcast to share his experience and wealth of knowledge. Hans speaks on how founding a startup can be lonely, how successful companies rise from periods of uncertainty, and what makes a successful and inspirational VC pitch.
This episode is hosted by Nicole Astra.
Listen to more of the Ridiculously Good podcast here.
Read the full transcript of the episode below:
Nicole: Welcome to the Ridiculously Good Podcast. We talk to people who are ridiculously good at what they do, learn how they got there and uncover first-hand insights about their industry. I’m Nicole Astra. My guest today oversees DNI initiatives as a Managing Partner at GGV Capital.
And, as one of the top venture capital investors in the world, GGV Capital are early investors in Next Gen Foods and focus on early-stage investments across the global digital economy ecosystem. Hans Tung has been named in the Forbes Midas list for nine consecutive years. He has also been mentioned in the New York Times, CB Insights, Top 100 Venture Capitalists list four times and recognized among top 100 Asian Americans by Gold House. Born in Taiwan. Hans grew up in Los Angeles and attended Stanford University, graduating with a BS in Industrial Engineering.
In 2005, he was among the first Silicon Valley VCs to move to China full-time spending eight years investing in the world’s fastest changing tech landscape before returning to the States in 2013 to join GGV Capital. Hans, thank you for joining us. It’s an honor to learn from you today.
Hans: You’re very kind, Nicole. Thanks for having me on your amazing podcast as well.
Nicole: So first, let me ask, why do you prioritize stories? You host a podcast. You are man of limited extra time Hans, but yet, you have done interviews on a number of different outlets. You really do prioritize teaching other people. Why is that important to you?
Hans: I think I’ve been extremely fortunate of the places that I’ve been, the people I have worked with and some of the companies I’ve been able to fund and participate in their journey to achieve their mission in the vision of the founders.
So as a result, it feels like this is a great way to give back. It’s also a great way to share our knowledge, to help other people so they can be better founders or better VCs or, better operators. And learn from them as well. We learned so much more from the people we interview it’s been incredible.
And it felt like every podcast you’ve learned something new, and I have a chance to share, and gain something back as the result. It’s both giving back and also learning from the broader group and so it has been a very interesting and fun experience so far.
Nicole: Yeah that’s, that’s our goal here too. So, I’m not going to mince words with you, sir. You are a legend. Number three currently on the Midas list. Share with us your journey on how you got here. And more importantly, I want to know, is this where you pictured yourself growing up? Is this what you envisioned?
Hans: Great question. When I was younger, when I was in Taiwan, I was a student of history. So, I always imagined that one day I will end up doing something very interesting and make impact. Somehow since our lives on this, on this earth is limited. I figured I’d make some impact before I leave, will be something that that will be important to me. Growing up in LA, I became a fan of LA sports.
Whether it’s the Lakers, the Dodgers, the Rams and so forth. It’s, it becomes easy to imagine myself doing that in, in the context of being a, sports executive or coach of some kind. Then I got to Stanford and realized that I am nowhere near the athlete that other people are and started to develop a strong interest in Tech.
Being in Stanford really, really, really helps. And it was the rise of the semiconductor industry back then in the eighties and the rise of Japan in particular and their role in it. So, I become fascinated with studying how innovation centers rise and fall, and technology comes and gos. And that kind of helped me to, sort of map the foundation of what I ended up doing, which is, involving with Internet 1.0, 2.0. and now increasingly, 3.0, and just, it’s been a very interesting journey since because I ended up being the right place at the right time and seeing a lot of interesting things happening.
Nicole: We’re going to start with two questions. You probably get a lot of, what do you think is your greatest professional accomplishment thus far?
Hans: Professional accomplishment. I’ll probably say helping to scale, playing a role in scaling, GGV is probably my greatest accomplishment. I joined GGV in 2013 and the AUM back then was a bit over a billion. And as part of the team that worked hard to stretch ourselves to both go early in, become more sector focused in investing, in multiple geographies, and sharing data points and knowledge and insights with founders, within the same sector, across different parts of the globe.
And now today, we’re a bit over nine billion in AUM in just eight years. It has been incredibly fun to work with my partners, such as Jenny Lee, Jixun Foo, Jeff Richards, Glenn Solomon, Eric Xu. And our, we build up a platform team led by Jen Holmstrom in the US and Lily in China.
And we have an amazing IR team and our colleagues on it. Building up the data team, seeing Raymond taking charge and helping us make better decisions every quarter. It just there’s so many things have happened in the last eight years. And so many people have joined, and help it build this to where it is today.
And with much more exciting things to come over the next eight years. I know I’ve, I’ve been involved with over 20 unicorns, but scaling GGV to the size and building a strong team and culture has been an amazing experience so far.
Nicole: Yeah, it’s gotta be really rewarding. So how about the other end of the spectrum? Can you think of an opportunity that you did not jump on and you regretted?
Hans: I was a Founder twice and, even though I did that twice, back in the late 90’s and early 2000’s, I think I always feel bad about the two startups I was involved with. That we didn’t end up being the bigger outcome that I thought we could.
And the lessons I learned in terms of trying to scale those two businesses, I think have really helped me to help GGV to grow and also be of some value and service to the founders that we work with. Doing a startup as can be a very lonely job. If you’re the Founder or the CEO, you have made a lot of tough decisions and not, not, not many people you can consult with.
So, I was in that kind of position. As one of the executives of these two startups. So, I understand and appreciate how hard that is. Even though those two startups did not make it, it helped shape me into the VC I am today and also gave me much more of a Founder mentality in terms of building up GGV.
Nicole: Yeah, our failures can often be really great lessons. And we’re going to touch on that in a little bit. Walk me through a GGV investment. This is not just handing over capital. You guys are true collaborators. What does that look like?
Hans: Two stories come in to mind. One is, I became an investor in a firm, and it was back in 2017, 2018.
Obviously, the company has come, gone on to come public and has done well, from our point of entry. I think there’s a lot more room and growth ahead for them as a publicly traded company. But I first met Max back in 2009, 2010 when he was the founder of Slide and he was doing web games for Facebook back then, and this is Mex Levchin co-founder of PayPal.
And obviously, well, how well PayPal has done since, and to see him go from building web games for Facebook was interesting. I, I brought a portfolio from Asia whose founders in the same business really want to meet Max, and he was able to get a meeting with Max. And inside of the meeting, I couldn’t help but see that this, this man can do so much more.
And he is going to go back to do FinTech at some point, because he’s just so smart and thoughtful. He doesn’t say a lot. But everything he says is direct and to the point, you can just tell he has a very strategic mind. So, I remember leaving a meeting, he says, you know “I don’t know how long I’ll be doing this, but I hope one day to be, to work with you when you decide to go back to FinTech.”
And then, good friend of mine from Founders Fund, Brian Sugarman, mentioned to me that a firm may be raising money and fast forward. That’s already, you know, 10 years, hence, in 2018-2017. I ended up reconnecting with Max, via Brian, and it was just so interesting to see that he’s finally at his element and doing the things that he loved.
And even though the business seemed undifferentiated at a time versus other, a company trying to go into buy now pay later. And we had some negative references, the future of that bit of his business. But we ended up investing in Max anyway, after doing a lot of due diligence and interviews, and feeling that they have something that’s going to be able to grow with online e-commerce merchants. And the fact that in a partnering with Shopify, and partnering with Amazon and, partnering with American Airlines and other big big, big companies.
You can just tell that Max is going to build something that can make the current world better. And so, it’s a long-winded answer to say that sometimes we don’t end up partnering with a founder the first time we meet them. But over a period of time, you focus on the right trends and looking at the right founders, who has the right founder-product fit, or the right founder-market fit. And you end up in business with them later.
And it’s, it’s fun to watch them grow, expand, and go on to become much bigger company over time.
Nicole: What does that first pitch look like, Hans, if someone is lucky enough to get in front of you? What does a typical pitch look like, how does that play out?
Hans: Well, one of the best pitch we heard was from Brian at Airbnb, just him coming in, not just talking about Airbnb as a travel company, but as an experience company of the things that they want to do in both leisure and business and over time, change the way consumers behave and consume and experience.
He was extremely inspirational. I’ve been to so many YC Demo Days in seeing the founders get better and better at pitching and articulating their vision, their mission and their thoughts. Those are some of the best reasons for us to be in VC. So, meeting a founder who has a clear idea of what she or he would like to do, and the changes that he or she would like to make, and the imprint they want to make on the world.
It’s very similar to the kind of things that I want to do when I was a child to make an impact. And so, I can relate to what they’re trying to do and the more thoughtful they are, the faster they learn, the more they’re open to new ideas. And you use that to make better decisions, what to do and what not to do, make those trade-off decisions.
Resource is always limited. Money is always limited. Peoples always have limited time. So how do you make the right, these trade off decisions, and think very critically about that. Those are the moments that make my job so much fun.
Nicole: Yeah. You know not only are VC hopefuls tuning in, but founders, startups are, are tuning in.
So, in case they missed it, that is something that will make them ridiculously good. It is really understanding who they are and clearly communicating that when they, when they have the chance to pitch.
How do early investors make their money? You’re talking to someone who is not in this world at all. So, break it all the way down for us.
Truly like let’s use TikTok, for example, big name.
Hans: Sure. We’re investing in the Musical.ly. I remembered the valuation was about a hundred million dollars and two years later when it got sold, ByteDance was about each one was around 800, 900 million. And we had a half our stock, have our value in Musical.ly which was acquired by ByteDance for cash. And the other half came in the form of ByteDance stock. So now, instead of just a holder of Musical.ly stock, we now have ByteDance stock plus cash. So, the portion of our shares that were sold to ByteDance for, for cash. Now, that’s how we made money.
And as we hold on to the ByteDance stock, the ByteDance stock will continue to appreciate because then Musical.ly got merged with TikTok, became much a bigger outcome than people thought. There are people constantly asking me to sell out ByteDance shares to them. So, if I sell that’s how I make profits on the, on the shares I sell, that eventually ByteDance will hopefully go on IPO one day. Once it becomes a publicly traded company, we can sell our stock in ByteDance in the public market, wherever we may be. And that’s how we make additional money as well. So, one of the hardest things is actually not investing, but figuring out how to exit, when to exit. And when you bring cash back to your LPs, who invested in you, ultimately, they’re looking for a cash in, cash out kind of return.
And for most funds, if you can do a 3x, 4x return and consistently, people will be happy to give you more money to manage. And so, a lot of people think that VC’s just want high returns. High returns are always welcome, but what they are looking for is consistency in showing cash back to the LP.
Every year at the same time, we still have a chance for higher, multiples over time, but consistency is what they’re looking for.
Nicole: So I think we’ve got a pretty good handle on who you are as a professional. But I haven’t heard much about who you are as a man. Do you have a family, sir?
Hans: Yes, I do. A wife and two kids and very fortunate to have them in my life.
Nicole: Tell me how your two kids would describe you, Hans.
Hans: I think they both would say Dad is very big. I’m six foot four. So, you don’t see a lot of people, my, my race at this height. So, I definitely stand out. And both of them, I think got to know me more during Covid, before, pre-Covid, I used to travel a lot.
So, my kids would say sometimes when they wake up in the morning, Daddy’s not around anymore. And during Covid, Just be able to see them every day and taking them to school and picking them up from school at times, taking them to different practices whether it’s rowing or, or swimming. It has, it has been a lot easier for them to see me.
One thing that my daughter told me the other day that that warmed my heart was at, you know, in, for her, for her class. Her teacher was asking everyone to write an essay on a leader they know or respect and my daughter ended up writing about me. So that, that was very touching for me. But I still would love to spend more time with them.
Nicole: And I’m a mom too. So, you know, hearing that just warms your heart, that’s all, that’s all you want from your kids. Right. So, I can only imagine the emotional cycles being in investing that, that stress really people’s lives and livelihood in your hand. How do you keep your own mental health where it should be?
Hans: Yeah. Two things. One, I like to swim whenever I can, I try to swim recreationally just for half an hour, 45 minutes, and try to cover about, you know, a 1000 to 1500 meters. Swimming kind of just relaxes me and it helped me to wind down, but at the same time just the energy in a blood circulation is just incredible. After I’m done, I feel like I can do anything, lift anything.
The second thing I do is I love getting up early in the morning, and just thinking about things. I sometimes go to bed thinking about certain topics or certain issues. And then by the time I wake up early in the morning, there’s no distraction. Things become a lot clearer. And it’s easier for me to try to take a complex problem and develop into parts and then try to force myself to figure out what is the tradeoff decision I need to make.
So as a result, I try to weed out all the noises. To zoom in on, you know, this is what I need to believe for that to work. And that’s what I believe, fought for this to work. So where should I allocate resource and time, what will give you a better return? And so, trying to always know, that there’s always limitations and you can never make a perfect decision.
It helps me to get into immediately into this phase of making the right trade off decision. And that’s what I zoom in and focus on. So, I don’t waste a lot of time thinking about what it could be or what is an ideal situation because that’s not realistic. And so having that tendency to be able to make this as quickly is both good and bad, but for the most part helps me to be more productive over time.
Nicole: You know, I was going to ask if one of your expertise or superhuman moments is problem solving. I’ve read that you are really driven by shifts and changes in industries because you like to solve problems. So maybe not necessarily making the deal but finding that solved. Is that something that drives you?
Hans: Definitely cause when, when things are in motion, when there’s chaos, there’s opportunity and everybody is, being put out of their comfort zone and as a result, I always tell my colleagues, you know, don’t, don’t worry or even my founders.
Your competitor will make mistakes. It’s human. They will. And your job is not to worry about it. What you do is be ready to take advantage of when other people do show mistakes or things that for you to, to make a difference in. Not get too worried on other things that you can’t control but focus on waiting for the next turn is extremely important.
So, you have a longer-term way of thinking and you’re strategic. You can always figure out ways to get back into the game and then excel. So, this way you don’t get too down on yourself when things aren’t going well, you also don’t get too high because you know that you gotta be, you know, watchful for the next wave, the next shift, next change.
And that makes life much more interesting. And if you enjoy the process, you would like the result.
Nicole: You listed a lot of people at GGV who are on your team. When you consider that circle around you and their strengths, do they differ greatly from yours?
Hans: I tend to want to hire people who are better than me and who can complement me and do things I cannot do.
And so besides the sort of leadership team that I just mentioned, we are out, we also have a sector teams. So, people on my Consumer Internet team sector, we do a lot of investments together in US and Latin America, India, whether it’s Robin or Marcelo or Huey, Jo, I mean, it’s fun working with them.
And we have our weekly calls every Tuesday morning Pacific time. And you have people from all over the world. Whether it’s San Francisco, New York, Bogota, Singapore. And it, it’s just fun to be able to bring different perspective. And so, investing can be a lonely job too, because you kind of make decisions and deals. And you work with a founder, but it can also be a team game. And as a team game, your chance of success is now much higher, and we help each other to make better decisions and focus all our resources on affecting better outcomes. So, I like the team approach that we have, we have built up for this.
Nicole: So at Next Gen Foods, we really try to build a culture where we celebrate failures. And so, at their Town Hall meetings, everybody is of course reporting on the successes and the milestones, but they’re also revisiting when things crashed and burned or when they felt very overwhelmed. And like you said before, we can really learn from those moments.
So how does your team approach failure?
Hans: I think we, we, we definitely talk about it- and try to be intellectually honest cause it’s easy to It’s easy to. In hindsight, try to explain things away, but deep down inside, you know, what was the tradeoff decision you made and why you made it?
The more people can remember from that and helps to make better trade off decisions later. Venture is a tough job. It’s just like doing the startups is a tough job. 98% of the startups don’t make it as a venture investor. If you’re right, 25-30% of the time, you are already quite amazing. So, knowing that failure is, is everywhere and is part of the job is something that you learn to adjust and cherish that things work well. And at the same time, you can be too fazed by things that don’t go your way. In, in watching Next Gen grow, I mean, I, I first met Timo back in 2017-2018 in Hong Kong during a RISE Conference. We, I, I ended up not investing then, so I’m very thankful that my colleague Dimi and Jenny Lee ends up spending time on it, making that investment.
And then when they brought up the opportunity, I’m like, this makes perfect sense and Timo now has hired an amazing team to work with him. It’s just not one-man show anymore. And so, it’s, it’s amazing to see TiNDLE grow and then helping them expand into the US. And so just watching the founders mature grow and learn how to build up a team and culture around them to take advantage of the opportunities and not worry too much about the, the misses or the mistakes.
Again, it’s why we’re in this business.
Nicole: So what made Next Gen Foods a safe bet. Can you remember?
Hans: With Next Gen, starting to make chicken work and out of Singapore to do it. It is not an easy thing, but from the first time I met Timo, to when Jenny and Dimi made that investment, the progress that the Timo has made and the team have made are amazing.
And so, a lot of times it’s not a snapshot of how the company’s doing, but the delta, the speed of change that really gravitates and captures our attention. One of the things that’s hard to do is see how the team learn and adjust. When you have multiple data points, through different points of time and see how the team learned.
That’s actually the best predictor of success.
Nicole: Okay, let’s stick with this for a second. Are there some universal principles to successful startups and founders?
Hans: Usually the team that learns very quickly and efficiently and can adjust and be more right than wrong when they make their adjustments. And, and know how to build the team and rally people around a common cause or mission to make it work.
Those are the teams have a higher chance of success, whether the management style is more open or dictorial or close, or whether they have longer work hours, shorter worker hours it matters less. It, it is just the ability to learn and adjust and be able to form a cohesive team.
Those are the things that over time, when I look at my, the unicorns I’m in to have done best, it is, it is all about that. Sometimes a company can begin in a bigger market or faster market, but if they don’t know how to learn and adjust and have a team that’s cohesive, they still won’t be able to win, even if they are in the best market in the world.
Nicole: Yeah. Great advice, particularly from your perspective. So conventional wisdom may say stick with what you know, but you guys have made some really bold moves. You’ve moved into competitive landscapes with established players, hardware. Now, food tech, how do you apply that investment lens to such drastically different sectors?
Hans: A good thing is we don’t have one person doing all sectors. We have sector teams. So, I spent most of my time on consumer internet. And the reason food tech was interesting to me was because food tech was becoming more mainstream and was impacting more consumers than ever. So that’s where it becomes interesting for me to spend time on it.
I picked up smart hardware because a smart hardware is getting more popular and more mainstream. So having made an investment in Xiaomi in Asia taught me a lot of what, what, what can a smart hardware work and how to build a brand through social networking. And then those lessons stick with me when I make an investment in Musical.ly or in Airbnb or in Stock X or Peloton or later.
Figuring out what are the lessons that you can learn from different sectors or different areas and apply that to adjacent places or even something completely different is taking those right lessons makes a huge difference. I mentioned about how a team. Can be cohesive and learn and adjust quickly and make the right trade off decisions.
Also, there are also other principles that are at work. If you are building a product, an app that’s delight. Customers, you don’t have to make everybody happy, but if you can make a smaller group of customers that really love you become, become your fans and advocate for you that is much more important to gain more traction and have more people become part of your network to help you to expand.
And whenever you can get that right product market fit to have turning your customer into fans for you. That’s when you know that you have a very good chance of succeeding
Nicole: And they can do some of that work for you, right? Yeah.
Hans: And we’ve seen that already signals of that with TiNDLE. So that’s why we’re bullish on what TiNDLE’s working on.
Nicole: And really you know, promoting kind of a lifestyle and you know, around their product, but more than the product itself. That’s one of the first things I noticed about TiNDLE. So, we’re recovering still from pandemic. Are you seeing any new trends emerge?
Hans: Speaking of lifestyle, I mean, people have definitely changed your lifestyle during, during Covid. People have moved from big cities and people are working remotely. People want to be able to have staycations. They want to have more flexibility. They want to be able to take care of their children. And be able to balance out with work. A lot of people end up working for longer hours because they had ended up having more flexibility during the day.
So, we definitely see a big lifestyle change over the last two years. And that the companies that know how to take advantage of that and figure out how to continue to delight and satisfy the customer needs. And sometimes even delivering something that they weren’t expecting, but it was what they want when they, when they see and experience that those are the companies end up taking advantage of the trends over the last two years.
So again, for every no risk or every unfortunate thing that happened in the world there’s an opportunity for the right founders, right team to take advantage, to make impact and people care about values more than ever. ESG has become such a huge thing at DEI diversity, same thing.
And so, the companies that embody those kinds of values are definitely going to Excel and do better over the next five to 10 years as well.
Nicole: And let’s talk about uncertainty right now, just in the landscape of the world. And certainly, investing is long-term. But we are going through a big phase of uncertainty.
So when we look at this through the lens of what’s going on in Ukraine and oil prices, stock market correction, you have weathered economic cycles in your career before any wisdom that you can share with our listeners?
Hans: I mean, what was the world has seen over the last several months is, is it’s scary and it’s unfortunate.
And it changed the lives of many, many, many people. And before that, obviously there was, Covid and that has had huge impact worldwide as well. I lived through 1997/98 Asian financial crises from 2000 with the first internet bubble and then 2008 with the housing financial induced, the financial crisis here in, in, in the US and then the last two and a half years.
It is just amazing to see some of the best companies that come out of each of these cycles and do extremely well. And these days you see a lot more crypto and the web three companies than ever. You see a lot more ESG companies than ever. You still want more enterprise solution from infrastructure deepen the tech stack to API driven kind of startups.
You see, growth of companies are just expanding and growing and hiring employees on a daily basis. And so, there’s just a wide spectrum of possibilities. And again, the founders that are focused on a mission that makes sense that’s riding the right trend and wave and have a mission that people care about both their consumers, as well as employees and dub excelling and do better over a period of time.
Nicole: Do you think that this may depend on the sector, but do you think it is a time to sit back and wait, or do you think it is a time to double down on.
Hans: From an investment standpoint we, we have, we have try to maintain a constant, a constant pace as much as possible. We may have bigger AUM within every two years when we’d raised a larger fund, but our deployment of of capital and number of deals when we’re in have stayed relatively the same.
We have more money when the be more portfolio companies. And so. Great companies are billed at any point in time, but especially during moments of crisis or uncertainty better companies get built. You see coming second, Amazon emerging out of the 2000 correction become the trillion dollar more company that it is today.
You see in 2008 companies like Airbnb and Uber get built. And then over the last few years you started seeing companies like Zoom that really prospered and become a household name. So every time there’s crisis, there’s a period of uncertainty.
You see great names end up emerging and become lasting and become making impact. That was not anticipated earlier. I still remember early on, in spring 2020, I was invited onto another panel and to talk about Airbnb, you know, three-hour panelists were quite negative on it. And we just saw that with people being cooped up for two months now they need a place to go and they may not go to Paris or London or big cities around the world anymore, but they will, do staycation.
They will drive somewhere a hundred, 200 miles away from home and want something different. And Airbnb is going to be a better person than any other hotel to get manage that whether they can do it or not, it’s up to them, but the opportunity is definitely there. And you see Airbnb prosper thereafter even then went through some tough times, but they handle it well and help all the displaced employees to find new jobs and so forth. So, and to come out of a pandemic stronger than ever. So it is very heartwarming to see that things happen and see Brian being guided by his values, make the right decisions that rally, his team to be even better and produce better impact than ever.
So it, again, this is why we’re in the business we’re in.
Nicole: So your portfolio, I had 18, but you’re saying now over 20 unicorns. Okay. So, you know, many of them invested at early stage now valued at over 1 billion public portfolios, including we’ve mentioned them a lot, but Airbnb, Coinbase, Poshmark, Slack, many, many, many more also Private, Beta Dance, Function of Beauty, Stock X, Fortune Media reported 193 unicorns in 2016 compared to 925 December, 2021.
What do you attribute that rapid growth to?
Hans: A lot of businesses, global is actually global expansion and the rise of global mobile market before the unicorns tend to cluster around US and China, and over the last five years, you see a lot more happening in different parts of Europe Latin America, Southeast Asia and India.
And even Africa, I mean, the rise of mobile internet made it possible, build companies everywhere to Israel, for example, and a lot of people would pay attention to Israel on and off over the last two decades. But over last, last five years the number of security startups, enterprise startups from Israel expanding the U S and rest of world is unprecedented.
So, seeing technology become much more global than consumers and enterprises become more global than ever helps to fuel provide a foundation in the market potential for more unicorns to be born.
Nicole: And I’m not sure that I’m going to phrase this the right way. I hope you can track with me, but particularly with tech, you know, where the internet is going, do we have enough usership to keep up? You know, the technology I feel like by the time a startup is scaling technology is already zoomed right on past him. So, you know, of course we’re on our phones constantly, but do we have the usership to keep up with this incredible growth?
Hans: We have 7 billion people around the world. The number is going to be 10 billion by 2050.
More people mean actually more problems to solve. And what are they talking about knowing about food tech, ag tech, prop tech, fin tech, enterprise tech, they are a lot of problems out there that need to be solved. And having these technical solutions enable you to have a platform that can scale to be able to solve more problems across these different sectors.
When we see penetration rate of e-commerce as a person who retail, which is roughly about high teens in, in the US. And when you see, you know, an, a penetration of say online media to offline media, which is closer to 40. 45% in the U S that’s just the tip of iceberg.
There’s going to be more sectors that don’t see more online penetration than ever from a single digit to maybe as much as, you know, 50% over time. And so still many, many sectors out there have internet penetration rate of less than 15%. So, the room for growth across different sectors on a global. We’re still, probably in the second or third inning.
Nicole: Yeah. You know, in fact, you’re kind of answering a question that I had a little bit farther down the list here of just things that 3.0 is bringing to us decentralized ecosystems and the, you know, the ever-changing internet. So, when you were at Stanford, you know, you’ve been said kind of as a cost of 2.0, maybe, but 1.0. Is this at all the collective minds that were there at the time? Is this at all what they thought was coming?
Hans: Well, I was fortunate to be on campus. It was between 89, 93. And I think you know, a lot of PayPal co-founders were on campus at that time. You know, if you ask Mark and Jason or any of the PayPal co-founders, they feel that the stuff that they were dreaming of back in the nineties finally ended up being true.
I’m not as smart as them, so everything that I have seen in the last two decades is far beyond what I expected. But that’s the thing. You don’t need to be a prophet to do well. It’s just believing that the world would get further and people will be able to learn more from each other and look for these trends and shifts that’s happening. And taking a bunch of that as they’re happening and not trying to be too conservative and trying to lock into our own way of doing things.
Always be willing to evolve. And that gives you a much better chance to adapt and roll with what’s happening on the field. And so, if you have an open mindset, and have a growth mindset, I think you don’t need to be a prophet and still do very well.
Nicole: Yeah. So sum up everything we’ve talked about here today, tell me in your own words, what makes a ridiculously good VC?
Hans: Ability to make the right decisions at the right time. So, when there are changes happening, whether it’s caused by a pandemic or expansion of mobile internet market from that sector to other markets. When you can see some of the early signals of things changing, you must be willing to take a chance, have a growth mindset and make the right bets, even though you’re not sure if they will pan out. But you could do it consistently over a period of time, with a large enough sample size, and you’re bound to do well as a VC.
Nicole: I have a couple of kind of consumer driven questions for you too. We can’t waste our time with you! What do we make of, I guess, give me a brief education on crypto exchange funds. Help us out!
Hans: For GGV we’re trying to open an account ourselves and the process is long, and you see some of, our portfolio, like Stock X, Issue NFT, and if he’s trading at higher prices than the underlying shoes that it could convert into, then yeah, short-term, there’ll be a lot of noise.
You just don’t know. We were a small investor in Coinbase at a billion-dollar valuation, and we had no idea that it would become as big as it is now. But it is just interesting how, what we’re seeing reminds us a lot of Internet 1.0 and to some extent, Internet 2.0 as well. So, I encourage everyone to buy a Bitcoin and buy Ethereum and try to open an account, try to trade, just have some exposure to it and learn from learning by doing and it’s, it’s mind boggling to see that for Gen Alpha 70, 80, 90% of their personal net worth is tied in crypto. This is hardly matching someone who’s a Gen X and Gen Y. So, a lot of things are just happening and happening at rapid rate.
Again, having a growth mindset and being able to try certain things. It can go a long way. At the end of the day, though, whether you are a VC or a founder we’re in the people business. So, figuring out ways to share stories, share lessons, share experiences, to find common ground and be able to grow as a team is actually the most important predictor of success.
Nicole: 5G. Is it doing what everybody thought it would do?
Hans: I think we’re still very early in the 5G processing in the US in many parts of our own country. Probably seeing 4.5G run on 5G. So, we haven’t seen what you were to get at all.
Nicole: What about the future excites you?
Hans: It’s both the unknown and the fact that some of the uh, you know, Hollywood was actually an amazing predictor of what will happen in the future.
So, watch as many movies that make you happy and excite you. And one of them ends up being the visual of the world.
Nicole: Maybe true autonomy is coming. So, we are going to wrap up our time here, but I like to button down our conversation with the same few questions, but you get to choose.
Would you like to take the easy road or the hard road out of here today?
Hans: Yeah, I I’m always willing to take the easy road whenever I can.
Nicole: I love it. Okay. First question. What’s something you will never do again.
Hans: I’m afraid of heights. So, whenever I go hiking with my wife, she knows that. So, we try not to go to places that’s too high or too steep. But then, whenever we get close, that tension is what makes me feel alive as well.
Nicole: Oh, yeah. See, it’s always that balance of, you know, terrifying and, you know, pleasurable. It’s always that balance that really excites us.
What is one food you refuse to live without?
Hans: It’s hard for me to live without red meat. I love eating steaks. So, I know I shouldn’t do that. I try to eat a lot more, a lot healthier, a lot more salads, but whenever I see a good steak, it’s hard for me to pass.
Nicole: Hey, we like honesty. What is a talent that you have wished for?
Hans: I wish I had more technical skills. Whenever I see my partner Jenny, she’s amazing, both an artist and an engineer. When, when I see people who are extremely thoughtful and technical and understand the architecture in a deepest way, it always impresses me and amazes me and humbles me.
Nicole: What is something the world needs more of?
Hans: More hope and more dreamers.
Nicole: I can get on board with that Hans. Thank you so much for telling your story. If our listeners want more from Hans, tune into the “Evolving For The Next Billion Podcast” where Hans hosts brilliant entrepreneurial minds. Thank you for listening. I’m Nicole Astra, take care.
Hans: Thank you for having me, Nicole.