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Edith Yeung General Partner Race Capital She is author and creator of the China Internet Report, an annual report on China technology trends widely popular among investors and corporate executives and Silicon.news – weekly briefing on Silicon Valley funding, merger, and acquisition news. She has invested in over 50 startups including Lightyear/Stellar (valued $1.2B), Silk Labs (acquired by Apple), Chirp (acquired by Apple), Fleksy (acquired by Pinterest), Human (acquired by Mapbox), Solana, Oasis Labs, Nebulas, Hooked, DayDayCook, AISense, and many more. Prior to Race Capital, Edith was a partner at 500 Startups, the world’s most active early-stage fund and incubator invested in Twilio, Credit Karma, Grab, and 2000 more companies. Before 500, Edith was the general manager at Dolphin Browser, a Sequoia-backed mobile browser with over 150 million installs worldwide. Edith also worked with many Fortune 500 companies such as Siebel, AMS, AT&T Wireless and Autodesk.
Lovely to speak to you . I was wondering if you could tell me how things are going at your firm as regards this crisis?
Well I think that the Pemo, I don’t know how you feel about it. I, I really feel that I really feel that the world literally turn upside down in the last, in the last 90 days. I think, you know, if, yeah, I think like all the changes we have experienced is just a beginning. There’s going to be a whole lot more changes to the world, to the society, to the economy, to how we live. We work and go back to particular to our fun for raise capital. I think we like our focus is, is this right? I would be curious how other VCs that you talked to and how they would answer it differently.
But yeah, in terms of like our, our goals and thesis of focus of the funds is not going to change because there’s COVID, or there’s all these crisis going on that is not changing, but what, what is changing is the framework of how we work and how we sort of like structurally how like putting in a lot more, I would say practices on the day to day in terms of how we look at companies have changed. So just to start with, I just in terms of practice I normally will be seeing you at your event visits.
Like we did last time. We did last time and that, that, that is normal and that is how I been living. And for the longest time they’re going to events and meeting companies face to face have able to look at somebody in the eyes where do you feel the energy? And you don’t really have that. Like as much as I actually wrote article, it’s kind of funny, I’ll tell you all the funny thing that happened experience I had with zoom for the last three months, but it’s really just, it’s not the same. So I found that as an industry I think our investment just sort of like an internal deal by deal basis to on making decisions to invest is taking definitely a lot longer. Not, not because we, we look at the company differently, but it really takes more due diligence, a lot more specific questions, a lot more homework.
We do do that already, but now is everything is remote and not touchable literally. So, so in that sense, I feel like everything is taking longer from our side. And I’m sure like many of the founders CEO’s feeling more frustrated as well. And then, and then also like the way that we’d look at metrics. So the way that I look at B to B companies in terms of a churn sell cycle revenue, like conversion rate, those that doesn’t change a night, or if I will look at consumer, I don’t look at our consumer as much, but the same question, right? What’s your, if your mobile, what’s your install base Mau, auDA you turn all that. But I think that the key difference between, so the pre covert and now sort of still in it is a lot of the metrics. If you are in a specific category, let’s say you’re in gaming or online education or telemedicine, those numbers are skyrocketed, which is great, right?
Speaker 1 (03:54):
You’re really helping folks that needs it, like when they’re stuck at home or they’re not even getting an education or medical services, and now you can get it remotely. But what big question mark in my mind is would this phenomenon continue post covert? I really hope so. I think that is long overdue particular for things that are telecom education and telemedicine because the industry is so old school and this time for disruption, but at the same time, as, as an investor, we want to know that, okay, like the way it’s being instrumented, this great, amazing to see entrepreneurs and companies being so adaptable because your customer needs probably it’s not public have changed. Whereas since covert at the same time, I think if I have a choice to have this conversation with you face to face versus I’m staring at a screen, I think I prefer face to face.
So, so yeah. But more importantly, I think last thing I wanted to address also, regardless, all these for what’s been happening for the last week particular with all the protests. I think like my biggest thing, which as a fun particular for raise capital, we have looked very deeply into ourselves is like, is there anything we need to change? And I think what sometimes I feel like it’s great to, there is we need to voice and sometimes protests to basically there’s a lot of quality in this enough society at the same time. I think we, as an investor, we should be even more conscious in investing. We’re not just mechanically investing in robots or companies, robots, it’s not robot is actually a real human are our founders and CEO have that value system that we believe in like the, are they going to serve? Is it purely just for making money or do they have their own moral and or belief that, that we, we need to like be even more, more due diligence to find out about the person that’s really important? Isn’t it? Yup. Yup. So there’s definitely a lot of changes, but it’s not no pun intended. We can touch it. We don’t want to touch it, but it’s very like more fundamental about how we operate.
Yeah. Okay. That’s really nice perspective because it’s totally true. Definitely has changed everything. And just while we’re on that subject, could you have you had any personal insights during this time? I see it as an enforced retreat, but I’m a Tibetan Buddhist, so it’s sort of like, Oh, it’s in enforced retreat while I’m still working. But I wonder what sort of insights personally you’ve had out of this
But personally not necessarily related to work and then I’ll share with you some funny things. So so I’m born and raised in Hong Kong and actually a big portion of my time, especially the last few years is really looking at, you know deals in Asia and really kind of a particular helping, also a lot of portfolio portfolio companies to go to market in Asia particularly greater China. And I think more personal is it, you know, in March I was really thinking hard that, okay, maybe I should leave like fly back to Hong Kong because there was one weekend they’re gonna shut down if I don’t go, Oh, by the way, I’m so in San Francisco this summer, and I decide not to go have a lot to do with other than the plane is actually the most dangerous place in terms of cash. Otherwise I’m sure you, you originally from Australia right originally? Yes.
Oh, my grownup kids were asking are you going to come back, come back home. I’m not getting on a plane
Getting on a plane. I think. And then a few things I absolutely learned. One is we’re playing is one thing, but I will get to see my family in particular, my parents, but the back of her mind, if I catch something like we are healthy people probably won’t may not the chance of even getting really sick may not be that high, but more importantly is we could be carrying the virus without knowing it and still impact somebody else. Yeah. I think that sense of realizing that it’s not just about us or individual is about the grip, like the community, the collective, the collective, and that is something that I think we need to think hard about. And then second is, you know what, like if I don’t enjoy my own company who want to hang out with me anyway, so living with yourself and really enjoying and finding that in a piece almost so that’s more personal.
But I have to say, I think from a mental sort of stimulation, Oh my God. Like basically zoom or in this case we’re using San Castro is assimilating and yeah. So the funny thing I want to share, which leads into the article I wrote about how do you actually conduct all these meetings and present on zoom, right? Cause yeah, I would say 90, 90% of my time on zoom is actually like talking to company, founder, CEO, and watching them pitch. And you cannot imagine like there are, there are founders, like we’ll zoom and drive like, Oh my God, goodness. It’s like, MultiTech stress. I’m not joking. I was fearful. Like I was scared for his I’m. Like I said, it’s okay not to talk now. And he’s like, don’t worry about it.
And then it’s so funny. Like just a little thing cracks me up. I, I, my, to my, yeah, my partner is there particularly Chris and Alfred. They’re crazy about lighting and they are all expert photographers. So they using amazing DSLR camera for their zoom calls, which is cool. But a lot of the founders, like they will little things like there were sit bright behind it really bright windows. So it looks like they’re a dog Vader. Like I just can’t see their face is hilarious. And then I think more than ever, the good and bad is, is less, much less and less small talk. I feel like if you’re pitching on zoom, you really need to like, and I am trying to do the same thing for myself too, with any other meetings is you basically replaced a face to face, right? With different medium.
You need to treat that as just like you’re doing face to face, set an agenda respectful of people’s time. And sometimes you will be funny. Like they think they, they didn’t mute yourself, but they could be doing a lot of funky thing in the bathroom, other places, you know, like, okay, I talked to Ann Winblad from this just before you, and she was saying, it’s amazing to see the inside of so many people’s living rooms and your reality. Could you tell me what you guys are or what you like to focus on and as far as your investments go? Yeah. So we in, in raise capital in terms of industry, we’ve been really focused on enterprise infrastructure, anything related to data, AI FinTech infrastructure. We’re really big on that. We, we have a very, we’re really excited actually this whole work from home phenomenon, because I think that it really and power, a lot of this doesn’t matter.
Speaker 1 (13:02):
You are a tech company or not of small businesses, be able to tap into the whole world in terms of talent. And because of that I call it enterprise, but really is also for smaller businesses too. But now you should be even more aware about like at home employee security at home sort of data privacy a lot of the infrastructure you don’t necessarily have to worry about when you’re at the office, because your it department pretty much take care of it. We still do, but now is sort of even more important, like, so I think more and more these sort of self service and the prize infrastructure sort of support this whole phenomenon. We do really well. We excited about that. And then in terms of stage we so focused on early to age our early check could be anywhere from, you know, a quarter of a million up to 2 million.
Speaker 1 (14:02):
We, we are mindful of that. And then I would say in terms of geography, seriously, postcode pre covert, I would say, Hey, yeah, majority of our investment will continue to be in Silicon Valley and now I’m thinking about it. Well, what difference does it make that you use sit in Palo Alto versus you could be, I don’t know, sitting in, I dunno, like Arizona is the same to me cause I don’t see you anyway. So, so in some sense, I think what’s going on is Broughton like the geography reach for, for us to like in terms type of companies where yeah. Maybe we need to loosen up a little, a little, like in terms of where these companies are. Yeah. And how, how did you manage your portfolio when the crisis hit? And, and how are you managing them as you go along now?
Yeah, I, I think the good thing is, you know, our fund like really is so really young. So, so a lot of our existing portfolio company, we did a few things. One is immediately the first week. I’m happy to send you to we sent out a, almost say like a checklist in terms of, for all operations or area of operation. It’s not just, it’s not only about cutting costs, but obviously if you think about it, right, we, it doesn’t matter. I’m talking to somebody who, who built a McDonald’s versus building a SAS company, all of them need to think about their own products or product and engineering. So in that side of things, okay, do do is that certain product feature you may need to adjust change, or maybe either even accelerate because of, of the special times do you, probably many of them need to adjust their sales, target and revenue goal just because you’re, their customer is taking longer to make a decision and some of them are delaying pain is happening.
And because of that, you see marketing, all right. Like if you, should you actually expand marketing or reduced it, this is not necessarily all about retract. It’s not about like reduce is it could be bullish on certain area too. So this is not just a, like a one way a formula of really depends on the vertical you focus on. So actually, which we talk about many things in type of operation for our existing portfolio company. But I think our key thing we wanted to emphasize to our company is that we don’t only wanted to invest in survivor. We want to invest in winners. So what are you doing now? Temporary is important, but even more importantly is how are you able to really like five, 10 years from now, how are you changing the way we work? We live, we operate and how your company going there.
Take part of that. That’s actually really about mindset and taking care of their own people, I think is actually really unfortunate and sad to see that in Q1 there is over there. There’s a thing called I think the CEO that the tracking of like I have to look it up that literally statistic about over 200 corporate America CEO quit in Q1 year. Wow. And it’s so annoying in terms of how many captain literally abandoned the ship in the world in history. And I feel like it depends on what industry, I think some of our, our CEO they’re young, they never experienced any hardship whatsoever before, not like this. So I feel like sometimes I almost become like a psychotherapist dangerous territory. I know I am still not qualified. I’m doing it, but it’s about like, making sure that you are like hanging in there mentally. And, and, and if you are a captain of a ship, you are the one that needs to be still be there for all the employee, your teammates. Right. Yeah. And it’s just insane, like to see how many CEO jumps ship and how many in mature practice of layoff that’s been happening in our industry. So a lot of our, our, our beginning of it is really making sure our portfolio companies are okay.
Yeah. Yeah. So we’d love to get that link to your article and the checklist. We can add it to the post podcast, Edith look thank you so much for your time today and also for all this information it’s been really incredible. And I really wish you and Chris and your partner the best with the fund.
Yeah. Thank you so much for having me and healthy back when the new normal is much more clear. I can’t wait. Thanks so much. Bye.