3 Differentiators of Top Entrepreneurs
May 13, 2019
May 13, 2019
I had the pleasure of interviewing one of the most successful VC’s in the world, Jenny Lee, at Money20/20 Asia in Singapore. Jenny Lee is managing partner at GGV Capital which has had an uncanny ability to pick entrepreneurs and startups that have gone on to be industry leaders in relatively short periods of time, including Alibaba, Xiaomi, Grab, Didi Chuxing, and many others. Since 2011, Jenny has been recognized by the ForbesGlobal 100 VC Midas List of top venture capitalists, ranking as the #1 woman and #10 overall in 2015. In 2016, she was named to the Vanity Fair NewEstablishment list, Fast Company Most Creative People in Business list and was recognized by The New York Times and CB Insights among the top 100 venture capital investors worldwide, ranking #17 and one of the only two selected from Mainland China.
One purpose of this discussion was to get her thoughts about what is most important to be a successful entrepreneur. Another purpose of the discussion was to get her insights about what is on the horizon from a business and technology perspective and what types of things she might be interested in.
During the first part of the discussion, I provided Jenny a list of traits of a founder and asked her to select the most important. The list of choices is intentionally difficult to differentiate because in reality, VCs have to make hard decisions between several good options involving trade-offs. I designed the questions to help illuminate the thought processes of one of the top VCs in the world.
Mental Skills: Intelligence, Adaptability, Confidence
Jenny’s Choice: Adaptability
Founders are pushed and pulled inso many different directions, so being able to adapt to these changes is important. Over the long term as the company evolves from Seed stage to Series A and B, the requirements are different. In the short term, you wake up every morning and don’t know what major changes will happen that will impact the business. For example, if your cofounder decides to leave or your closest competitor gets a $200 million funding round, you will need to adapt to the new situation immediately. The founder needs to be able to size up the issue, immediately reflect on it, and come back with a plan to address the new reality.
Regarding the other choices, Jenny commented that they obviously like highly intelligent founders, but beyond IQ, she believed that EQ is more important. For the ‘confidence’ choice, Jenny commented that founders can build more confidence as the businesses progress. In fact having too much confidence at the onset can be a problem.
Personal Traits: Positivity, Energy, Resilience, Vision
Jenny’s Choice: Vision
As a founder, your vision, if it is correct, will be your guide for the next 3,5, 10, 100 years of driving the platform.Vision can’t simply be a theoretical ‘I want to change the world’ statement. The vision needs to be crystalized to be able to be dissected into concrete actions for senior and middle management as well as the people on the frontlines. That clarity of vision enables you to hire the right people and to execute appropriately. She cited how Alibaba’s vision of enabling small and medium businesses to do business globally has guided their strategy, the products they launch and how the grow.
Looking at the other traits, Jenny ranked resilience as being higher than the positivity and energy. If you do not have positivity and energy, you’re likely not a founder to begin with. But the ability to keep going when everything is against you, to wake up when the mountain is on top of you, but you’re able to dig yourself out, that is resilience. Successful companies are able to persevere and make it to the next milestone.
Interpersonal Traits: Leadership, Ethics, Communication
Jenny’s Choice: Leadership
As a founder, leadership is not about you doing everything. It’s about once you set the vision, can you bring others along on the journey? Can you delegate to the right people to create a coordinated response? As a second choice, Jenny selected Ethics as being important, especially in light of all of the new consumer facing changes that are happening. Regarding communication, Jenny felt that this was a skill that one needn’t be born with and could be learned, as well work with people that have this skill. What she felt was more important, rather than broad external communication, was the ability to communicate with your team in order for them to take the right actions.
After this initial discussion about founders and the traits of successful founders we proceeded to talk about the state of the industry.
The mobile wave is not over. In India’s 1.2billion population, there are 400 million just getting onto mobile, which is also their window onto the internet. In Latin America and Southeast Asia you’re also seeing something similar. She sees the mobile wave in two parts. The first part is the mobile wave that swept through the US and China with the new products, services and experiences that are now expanding to other geographies. The second part is the 5G wave coming to US and China. China in particular sees5G as being very important and strategic. She cited how we’ve been talking about IOT (Internet of Things) for 5 years, but now with 5G, these discussions will become reality and will also be drivers of discussion. Jenny cited connected cities and connected transportation as examples. With 5G, when data and networks are no longer a constraint, we’ll see more disruption. In tandem with the data will be AI and algorithms to help make sense of all of this data. She believes that the US and China will lead this trend and other markets, as they progress will join as well.
For the fintech part of the discussion, Jenny specifically zeroed in on Southeast Asia. Given the different types of currencies, regulatory regimes and diversity of cultures and companies that focus on the backend and develop enabling technologies rather than consumer-facing technologies, will have a leg up. As these economies mature and global leaders from other parts of the world seek to do business in Southeast Asia, backend providers with connections to large numbers of business will have a leg up. Jenny cited investments in companies in the region that use machine learning for payments and fraud detection as well as one that focuses on interconnection.
Jenny and GGV Capital have recently raised a large, $1.88 billion fund. Jenny said that as a VC, they are also running their own small business. They are also focused on who can disrupt them. In the current environment it is almost impossible to stay small, classical and nimble. In the past, working from a $20 million fund passing out $100k checks might have sufficed, but now funding and capital is a key competitive differentiator for startups. To keep pace and stay competitive with the funding market, they’ve structured their latest fund to be able to progress with the entrepreneur from seed and early stage, to growth stage and beyond. The test of a good VC is if they can find the underdog and help them become top dog. The new fund has been structured to enable GGV to stay close to the entrepreneur as they grow their business.