Six years ago, Ant Financial was a small company spun off from Alibaba as Alipay. Today, this spinoff from an ecommerce platform is one of the largest financial institutions globally. Ant Financial’s current market capitalisation is $300 billion, making it more than 50% bigger than Goldman Sachs (with a market capitalisation of $130 billion).

This success story of non-fintech companies expanding into fintech services is not a one-off situation and companies are paying attention. Last year Grab announced the formation of Grab Financial Group to provide financial services to its users, while this year Douyin (chinese version of TikTok) acquired a payment license to form Douyin Pay.

I had the opportunity to speak to Jakub Zakrzewski, who was listed on Forbes 30 under 30 in 2018. He was an early employee of Lazada Singapore (acquired by Alibaba for US$1B). Starting from an ecommerce company, he made his way into the world of fintech as the APAC market launcher for Revolut, one of the largest fintech companies in Europe. Now he is the Managing Director of Kraken Digital Asset Exchange, the first cryptocurrency exchange to be approved for a SPDI charter, that makes it equivalent to a bank.

In this interview Jakub discusses trends he is excited about in the fintech space, particularly the fintech-ification of seemingly non-fintech industries. He also talks about the future of crypto and his perception on the digital assets industry entering the mainstream financial market.

Let’s start with your background and how you got interested in fintech, as well as the cryptocurrency space?

Looking at it retrospectively, it was all a chain of events building on top of each other. I was very lucky after business school to join Lazada which was an early stage ecommerce company, that got me into the venture building space. That was extremely exciting because I was building something meaningful surrounded by some of the smartest people, while being given pretty big responsibilities at a very young age. To me, that was much more fun than going the classic route of consulting, investment banking or working at a big corporation. After Lazada, I wanted to continue working on building companies and moved to Hong Kong to join my two friends from Lazada to build an ecommerce logistics company. I joined this company at a much earlier stage than Lazada so here I learnt how to build companies from almost scratch in terms of growth, operations and product.

When I was in Hong Kong, I first-hand experienced massive problems in financial services when I had trouble opening a bank account. The process took a long time and I was working long hours so I didn’t even have time to visit the bank branch too often. At the time, I had to use my Singapore card in Hong Kong. That was obviously a very expensive decision to make because I had to pay a lot of spreads on FX and a very high ATM fee. This led me to search for a better banking experience. Being in venture building and having graduated with a MSc in Finance, I thought it would be really cool to combine these two worlds. It was also then that a friend introduced me to Revolut and I thought it was a really great product. I reached out to the CEO on LinkedIn and six interviews later, I was on my way back to Europe to join Revolut in London.

And from Revolut, I got into the cryptocurrency space. Revolut launched crypto at the end of 2017 and I got to learn a little bit more about what digital assets are and the potential that the industry has. I wanted to understand the industry better and so when Kraken came as an opportunity, I thought it would be a great way to continue this learning curve that I had at Revolut.

This is a nice chain of events that looks very logical in hindsight but at the time each decision was really made to continue learning and to do things that are pretty nascent. That was very important to me because I believe that it is at a nascent stage where you can actually have a big impact.

So you started with a non fintech background but now you work in fintech. What is your perception of fintech-ification of industries that are seemingly non-fintech, with companies like Alibaba starting Alipay, Douyin getting a banking licence and Grab’s Grab Financial Group (GFG) raising a USD300M Series A round in the beginning of 2021?

I think this trend will definitely continue — in Asia with the companies you’ve mentioned but also in Europe. The reason for this is that these big companies already have a very big user base. Fintech is just a way to grab even more attention of the current user base to upsell them to products with higher margins, and services that being a fintech enables these companies to offer. Moreover with the transactional data, companies are able to actually tailor not only marketing efforts but also other product recommendations. So to me it seems like a very logical step, especially because the cost of customer acquisition is almost non-existent. And add to that — the operational efficiencies that can be achieved when you do things in-house versus versus outsourcing them, I think it’s fair to assume that all companies would want to increase their sources of monetization.

And what are some trends that you particularly are excited about in fintech?

So I would definitely say to your point, the embedded finance space will be getting much more attention. This means that there’ll be more big companies that are going to be including fintech or financial services as their business line. There will also be more fintech companies that are going to be providing B2B embedded finance services. This basically opens up a two way stream — the big incumbent offering the services and the B2B embedded fintech companies selling their solutions to larger corporations.

The second big trend I’m excited about is something that is present in Europe but is yet to be a massive success in Asia is open banking. This is something that is coming in Europe from the regulators (PSD2) and it will definitely change how personal finance works and how we’re thinking about financial services in general. It will be great to see how APAC will adopt open banking standards in the region, knowing that it’s much more scattered compared to Europe, which is more homogeneous.

The third trend is decentralised finance. In general, if you think about it from a perspective that by using just a protocol or an algorithm, you’re able to facilitate borrowing, lending or exchange of goods in a market that is decentralised without anyone being in the centre of it, that’s extremely powerful. And we’ll see many more use cases that are going to be coming up from this, which are going to be extremely disruptive in many areas of financial services.

Zooming into the cryptocurrency space, do you believe that in the future they would be an asset or also be used for commerce (as actual money)?

So I don’t have a 100% certain answer but I’m a very firm believer that digital assets in general are going to be solving many problems that we’re currently facing everywhere in financial services. Just a couple of examples — Bitcoin is solving the problem of storing of value because people in our generation view storing of value in a different paradigm, and would much rather invest in Bitcoin than say gold. Then there are cryptocurrencies solving the problem of money transfers by trying to make the process as efficient as sending a text message. A third example, as I previously mentioned is that of decentralised finance companies that are trying to facilitate the way the borrowing, lending and exchange of goods is happening without a third party.

What keeps me most excited about crypto or digital assets is that I don’t really look at it from a perspective of the price going up 10% one week or going down 20% the other week. I’m much more interested in what these projects are trying to solve in the world of traditional finance. Looking at it from this lens, I think it’s going to be a very exciting couple of years ahead of us.

I would say it’s fair to assume that that money will be on blockchain in the future whether it’s peer-to-peer like Bitcoin or it’s backed by central governments. This is yet to be unfolded but it’s a pretty safe bet to make that blockchain technology is here to stay when it comes to money. We are already seeing the boom with NFTs when it comes to technology solving the problem of digital ownership and there are plenty of other use cases I’m definitely very excited about.

Within this particular race, there are a couple of horses that I would put my bet on, all of them solving a particular problem within financial services. If we look at financial services in the 21st century, technology has made so much advancement in this field but when it comes to paying with cash, it’s exactly the same as it has been for many years. So it’s my own perception that a change in paying with cash is inevitable in that we’ll be using money that is on blockchain which is probably going to be a combination of decentralised money and a component of centralised money coming from central banks.

And I think this is going to be a trend similar to how companies are using fintech as a line of business to monetize their user base, crypto is a natural way for a lot of them to keep the users within their own ecosystem. I don’t see it very far away where for example we have coffee chains that are going to be having their own cryptocurrencies being used as loyalty points. So to me this world is so fascinating and a completely different way of thinking about money.

And do you see any difference in the digital asset industry between Asia and the West or that doesn’t really come into play because the nature of the industry is that it’s global from day one?

It is global from day one but a lot of the biggest players are US-based when it comes to digital assets so it feels like the whole industry is a little bit more mature over there. When I look at APAC, it is catching up very quickly so I wouldn’t be surprised if some of the biggest companies within the digital assets space come out of this region in the near future. I also think there’s a big need in the region. Drawing a parallel from ecommerce — we saw a lot of Southeast Asian countries leapfrogging ecommerce and going directly from retail to mobile commerce and then even to social commerce (inventing the different ways of buying and selling products). And we’re going to see something similar when it comes to fintech. A lot of people in this region are unbanked which may lead them to leapfrogging directly to digital wallets and using digital assets for payments. This would not be surprising to me and I’m sure that APAC is going to be one of the fastest growing regions for the industry.

Lastly, what is your perception on the digital assets industry entering the mainstream financial market as well as, the significance of Kraken and being the first SPDI?

So Kraken being the first SPDI is sending a pretty big and strong message that we are already seen as a part of an established industry because we want to play by the same rules that the banks are playing with in the US. This definitely had a big impact and it was a vote of confidence for the whole industry, not just for Kraken itself.

I think crypto is already mainstream — it feels like everyone has heard about it and everyone has an opinion about it. Many people actually own digital assets so it’s definitely different from what it was in 2014 or even 2017. And especially what is different is that we are seeing the more established financial institutions incorporating digital assets into their businesses. We are seeing big financial institutions, big banks and tech companies buying up Bitcoin. I think we are at an early phase of mass adoption, so right now is definitely great to be a part of it. With the vote of confidence from the more established companies, it further legitimises that this is the right space to be looking at and that this industry is actually the future. I’m definitely very fortunate to be at the centre of this industry, surrounded by people that live and breathe digital assets, for me to understand and learn more about how we’re thinking about the future of finance.

To get more information on the Asian Startup Ecosystem, get in touch via Twitter or LinkedIn!

The Fintech-ification of Non-Fintech Industries was originally published in The Asian Edge on Medium, where people are continuing the conversation by highlighting and responding to this story.

2020 was not only the year we were hit by a pandemic, but also the year of events around the Black Lives Matter movement, Bitcoin, climate change and GameStop. Although these might seem unrelated, there is a common theme amongst these of inefficiencies in the way the current system works and solutions driven by groups of people with collective beliefs.

While historically, there have been moments where groups of people banded together to challenge the system, it was the first time we saw them pervade one of the most powerful industries that has remained untouched — Finance. This has led to decentralised finance entering the mainstream financial market and I spoke to Tushar Aggarwal on his perception around it.

Tushar is currently the CEO of Persistence, a blockchain company he founded in 2019, that powers next-gen financial products. In two years, he has helped to scale the company to a current market capitalisation of US$900 million. Before founding his own company, he worked on the sell-side of finance as a consultant as well as on the buy-side as a venture capitalist. With this 360 degree view of the finance industry, this year he was listed on Forbes 30 Under 30 for Finance and Venture Capital, as a leader influencing how money flows in Asia’s economy.

While he is known for his work in the blockchain community, I happen to know him not only as that, but also as my friend, mentor and big brother. And suffice to say, growing up with him was a very interesting experience. He has always been a dreamer and as kids who grew up in a small town in India where conventionality is encouraged, I watched him challenge the norm at every step and chase after his dreams even when no one believed in him.

The year he graduated from high school was the year ‘The Social Network’ was released. The moment we finished watching the movie, as a 17-year old he told me that that was his dream. He wanted to build a unicorn from scratch. The day he graduated from university, he told me that it was his dream to be on Forbes 30 Under 30.

And I watched him go after these dreams relentlessly even when his path did not make sense to most people. When he was 25, I watched him quit his cushy six-figure job to move back in with my parents to start a podcast from their couch. When he was 26, I watched him borrow a sizeable amount of money from friends and family to put into cryptocurrencies, at a time when no one believed in the industry. And when he was 28, I watched him quit his coveted venture capital job to start a company in the middle of a pandemic.

As his little sister, I was always blown away by the confidence he had in himself and admired him for it despite always thinking he was crazy. But as he himself has told me more times than I can count, you have one life so “Dream Crazy” (watch the video).

Let’s start with your story and how you got involved in the blockchain space.

I grew up in India and graduated from The Doon School in 2010. From there I went to Nanyang Technological University in Singapore for university, and did a Bachelors in Business with a focus in both Banking & Finance, and Marketing. After graduating in 2013, I worked at PwC for a couple of years and then worked for a boutique management consulting firm that focused on private banking and investment banking. During this time, I had also been actively investing in real estate with my parents, who have been investing in real estate in India since the 90s. In 2016, I had a liquidity event leading to some surplus capital that I was looking to invest in startups in Southeast Asia. At this point, I was trying to work actively with multiple startups, but instead came across a few people in Singapore who were working in the cryptocurrency ecosystem.

It was then that I met someone who was working in crypto and he told me that working in a traditional startup is like taking a staircase, whereas working in crypto was like getting on an escalator. So with a startup you grow incrementally, but with crypto you are climbing the staircase but the escalator is moving up very rapidly as well. When I look back, it was this very simple analogy that stuck with me and really changed my perspective on macro conditions, and how the tailwinds for crypto help you rise up exponentially faster. I was very intrigued by the industry and started putting in money as an investor. As I started investing, I wanted to get better access to founders and other relevant stakeholders in the industry including people running exchanges, market makers, people trading on the liquid side, regulators and compliance folks. So I quit my consulting job and started a podcast called Decrypt Asia at the beginning of 2018 to give me access to these people, which was my first professional entry into the industry.

And from there, how did Persistence come about?

My high-level thought process was inspired by a few people. I consider myself lucky to have grown in the age of social media and the internet where you have access to some of the biggest thought leaders and have access to how they think. A few of them have almost become like spiritual guides in life and business for me. One of them is Naval Ravikant, who is very popular now but I’ve been following him for about six years. He talks a lot about how media, capital and technology are the three pillars on which successful individuals and successful businesses are built. Most successful individuals and most successful businesses are heavily leveraged up on all three. That was sort of the guiding principle, which led me to Persistence.

To break it down further — the first step for me was betting on the industry. At the time, crypto was going through a hyper growth stage so I decided to bet on it. And then within crypto, I started building on the media piece of the three pillars. I started a podcast called Decrypt Asia, which further led to writing opportunities on Tech in Asia and YourStory. Through leveraging on the media aspect, I was able to position myself as somewhat of a thought leader and create a small personal brand in the industry. This led to an opportunity with the crypto arm of a traditional venture capital fund in Singapore called Golden Gate Ventures. Some folks within Golden Gate came across my podcast and I was hired as the first employee at the crypto arm. Working at a fund helped me to leverage on the capital aspect where instead of just investing the $100,000–200,000 of my own money, suddenly I was helping to manage external capital and investing millions of dollars of other people’s money into blockchain startups and digital assets. I kept running my podcast while I was working at the VC fund and so was leveraged on both media and capital.

Then came the technology piece. What the leverage of technology means is that, say you create Gmail as a product, you can then have a hundred thousand people using it or a million people using it or a billion people using it. The product essentially remains the same but it’s just about how much usage you can drive. By virtue of being an investor in tech, you are tangentially leveraged on technology but the best way to actually leverage up on tech is through building products, and that’s how Persistence came about for me. At Persistence, we are leveraged on technology through our products, leveraged on capital through our investors, and leveraged on media through our Telegram and Twitter audiences.

Based on your story, you quit your consulting job to start a podcast. You then invested money into crypto when the industry was at an extremely nascent stage and you quit your VC job to start a company in the middle of a pandemic. All these things require a lot of risk, and so what do you think differentiates your risk appetite and the career path you took as opposed to a more “traditional path?”

Just speaking in terms of risk, externally it may seem like I have a huge risk appetite but internally, I think it would be false of me to say that. I was never too academically inclined so I finished university fairly quickly. I was 20 years old when I graduated and put myself in the corporate world. Then I had a very, very conventional path of most people who graduate from college. I worked at PwC and Sia Partners for four and a half years before getting into crypto. During these four years, I was just a little bit prudent with my money. I always kept my expenses really low and didn’t let my lifestyle scale up even as I started making more money by 25–26. This helped me to save up to have a decent amount of capital to play around with.

So people say that founders take on excessive risk but I think founders are good risk mitigators or good risk managers. By the time I was 25, from a conventional perspective I had a decent six-figure job and was already “successful”. But when I looked at what the partners in my firm were doing, I realised that it wasn’t exciting and definitely not the life that I wanted to lead. I’ve always been a big believer in a 1x downside,100x upside kind of play. What this means to me is that you could lose everything you have and still be able to make it back really quickly, especially if you’re enterprising and hard working, but the upside is just insanely big.

So I think what happens especially if you’re in a job, you become used to getting that monthly paycheque. And as cliché as the saying goes, that monthly paycheque is one of the biggest drugs in the world. I was very influenced by Gary Vaynerchuk, who is a very successful businessman and creates a lot of content. Different people have different opinions about him because he’s a little bit loud and obnoxious sometimes. But he keeps driving this point that if you’re below 30, you’re still so young. I was stuck in this mindset where I thought I was 25 and I still hadn’t figured life out. But here was this extremely successful businessman who was saying that if you’re below 30 you’re super young. And you can essentially take all the risks and fail for five years and still be 30, which is really young. So I took his energy and his optimism, and drilled it into my head. Then at 25, I made the decision that for the next five years, I’m not going to focus on optimising for money. As long as I have enough money to live, I’m going to optimise for experiences and learning.

That allowed me to take that leap of faith and quit my six-figure job to do something that is deemed to be risky by most people. From the get-go, I invested a significant portion of my net worth into crypto and professionally bet my career on this industry succeeding as well. And these bets have now paid off but there were moments where I’ve been 40% down on my personal portfolio on money that I had borrowed from my parents. At that moment, it was sizeable capital, but because I had that fundamental belief in the industry and belief in my capabilities, I never felt that I was taking on too much risk. I especially believe that in today’s world the bigger risk is essentially not taking any risk.

Now going a little bit deeper into what you’re working on right now, Persistence facilitates the creation of next-gen financial products. So what exactly do next-gen financial products mean?

Let’s just take a simple example — if you have some money with you today, there are different things you would do with it. You would probably keep some in the bank to pay for your expenses. You would typically also want to lend some out to earn some fixed income. Right now interest rates are super low, so most people are opting out of that and investing in, say stocks. But the problem with that is that, a lot of people talk about investing in American tech stocks or in S&P 500. But what they forget is that there are big parts of the world, including China, India and Indonesia where there are capital controls. In these countries, it’s extremely tough to get access to global financial markets.

Essentially, what we are doing is expanding the scope of that and crypto in general with the ethos of facilitating financial markets or creating financial markets that do not have borders. So creation of borderless financial markets and creation of trustless financial markets where you don’t need to trust the counterparty that you’re dealing with. The protocol (or the platform) facilitates that trust algorithmically or through code, and that is what the next generation financial products look like. With the principles of instant, borderless, and trustless finance, we’re creating a suite of financial products focused on solving what we call real world problems as well as, crypto native problems.

On the real world side, we have two products. One is called Comdex, which is a commodity trading and trade financing platform that facilitates the trading of commodities like wheat, soybean, copper. The other is related to NFTs or non fungible tokens, that have suddenly become very popular. These are real world objects that are unique and can be tokenized such as — cars, houses, paintings or even Pokemons. So the second product is Asset Mantle, which is an NFT marketplace framework where multiple people can create their own marketplaces without having tech expertise.

And then we have a couple of products on the crypto native side. So these are for folks who already have crypto wallets, know how to manage public-private key pairs and essentially, can interact with web 3.0 applications or decentralised applications. So on that side, we have a product called Audit.one that runs mining infrastructure on proof-of-stake protocols. It is now the largest miner in Southeast Asia and South Asia, as far as proof-of-stake is concerned. And the other product is a little complex but when you’re mining, a lot of your assets get locked up and can’t be usable. So what we do is we use certain derivative products to unlock liquidity from those assets, which become unusable when you’re using them to mine cryptocurrencies. This is what the financial products suite looks like for Persistence.

Given your background in traditional finance on both the sell-side and the buy-side, as well as in Finance 3.0, why do you think it is only recently that a lot of people have gotten interested in investing, a space that was traditionally reserved for institutions?

I think there are a lot of factors but the two big ones are the recent hyper-financialization of the world and COVID-19. During the lockdown, a lot of people were just sitting at home, didn’t have too many social activities to do and had their expenses go down. At the same time, the Fed and different central banks around the world were printing a lot of cash. While financialization of the world was already a trend pre-COVID, it was further exacerbated during this time at a consumer level because there was a lot of liquidity in the market and the markets were doing well. As a result, more and more people were signing up on platforms like Robinhood in the US or Zerodha in India or multiple other platforms around the world.

With the increase in the number of consumers on these platforms, the companies have also been looking for ways to retain them. And the biggest way for them do it was through gamification and pushing the community aspect. While community-driven finance has existed in different forms in traditional finance such as communities around different credit card products, it is only very recently that we are seeing platforms gamify investing and create almost like their own social media around it. And because of this, there has almost been a democratisation around investing (from an access and education perspective) to the extent where even high school students or university students understand things like stocks and actually have their own portfolios.

At the same time, industries that don’t directly seem linked to finance are also being financialized. The biggest example of this is gaming, whether that’s through in-game purchases or games where you can trade your armours or costumes. So I really believe that this trend of financialization is something that we will see more and more of, and across industries. Obviously there’s a caveat if tomorrow there’s a huge recession and a huge bear market, a lot of this will change. People’s perception and risk appetite will change but we’ve been in a 12 year bull market where most investors have only seen markets go up and to the right. But I do think if the macro stays like this, then this trend is here to stay.

Speaking of community-driven investing, I wanted to get your thoughts on the recent episode with GameStop and how do you think it relates to the rise of decentralised finance?

Yeah so having spoken to a lot of private bankers, and people working in traditional finance, most people working on the institutional side feel like they have to play catch up with retail. A lot of retail investors are now doing research which is at par or even sometimes deeper than what some of the institutions do. Retail investors are well informed, and some of the influential ones have large social media following. If you look at StockTwits or Crypto Twitter, a lot of it has become community driven, where there is a sentiment of big financial institutions having had it too good for too long. The overall narrative, which what crypto encompasses as well, is giving the power back to the people or decentralisation. That’s the narrative that has become super strong, where individuals, sometimes even those using anonymous or pseudonymous accounts have gained enough influence where what large institutions were able to do in the past, individuals are now able to.

In GameStop’s case, the regulators stepped in but there was huge backlash from the community around the regulators stepping in and saving the big companies. But I’m a macro guy and I think from a macro trend perspective, once the virus has been planted you can’t unplant it and you cannot fight trends. Maybe in the beginning you can curb it, but when things are community driven especially at the level of pervasiveness that social media has, you cannot put an end to it.

As we’ve seen with some of the other hyper growth tech companies like Uber or Airbnb that have fundamentally changed how the world is, similarly we’re going to see these changes in the financial world as well.

To get more information on the Asian Startup Ecosystem, get in touch via Twitter or LinkedIn!

The Hyper-Financialization of the World was originally published in The Asian Edge on Medium, where people are continuing the conversation by highlighting and responding to this story.

Entrepreneurship is not a skill, it’s a mindset and nobody defines this mindset better than Molly Bloom.

Molly started her career as an athlete. Despite suffering from a medical condition when she was 12 that did not allow her to ski anymore, she ended up being ranked #3 overall in North America and made it to the Olympic qualifiers. At the qualifiers, she injured herself and decided to retire from skiing. Wanting a break from the cold weather after retiring, she decided to move to Los Angeles for a year.

In Los Angeles, she worked many jobs including being a waitress, cocktail waitress and an executive assistant. While working as an executive assistant, her Manager put her in-charge of being a waitress at a weekly poker game he used to run. This poker game was frequented by some of the most powerful celebrities, athletes, Wall Street titans and CEOs in the world. Regulars of the game included people like Leonardo DiCaprio, Tobey Maguire, Ben Affleck and Matt Damon.

Apart from just money, she recognised the opportunity that being in that room gave her — enabling her to have access to a network with information and power. She used poker as her trojan horse into the highest levels of business and society. She learnt everything about the game and used her observation to create an experience that was unparalleled. Within 8 months, she went from being a waitress at that game to running the game. As a 22 year old, she went up against the Billionaire Boys Club and won by asking them to abandon her Manager’s game, and to play in hers instead.

After a few years of running the game, in 2008, at the peak of the Financial Crisis she lost the game to Tobey Maguire. Instead of giving up hope, she decided to go bigger. She treated the poker game as a startup, where she then scaled it up from an initial buy-in of $10,000 to $250,000, and pivoted by moving to the East Coast. By the time she was 26 — she was running the biggest, richest and most infamous underground poker game in the world. To ensure this time that she would not lose the game, she became the owner, operator as well as, the bank for the game extending credit to the players.

It was also during this time she ran into trouble. Without her knowing, some of the players in the game were actually members of the Russian mafia. She also started using substances to be able to keep up with her lifestyle. This resulted in her being arrested by the feds and them seizing all her assets (worth over $5 million). At that point, they offered her a deal. She had the option of getting all her money back and having no criminal record if she handed over the hard drives that had information of all the games. Despite the risk of losing all her money and her freedom, she did not give up the information because it would impact so many careers, families and children. Although her judge was merciful and she did not go to prison, she did lose all of her money.

At 35 she was broke and moved back in with her parents. At that point, she took a step back and viewed herself as a startup in need of a rebrand. She knew her story was the monetizable asset she had, and wrote a book so she could own the IP for it. She wanted it to be made into a movie and used a data-driven approach to reach out to writers. Most of all, she wanted Aaron Sorkin (writer of Moneyball, Social Network and The Trial of the Chicago 7) to write her story. After asking every lawyer and agent for an introduction to Aaron Sorkin, she was able to meet with him and pitch her story. He agreed to write the story and direct it. In 2017, the movie came out and in 2018 it got nominated for an Oscar.

Since then, Molly has been a very sought after speaker travelling the world and sharing her story. Going from an Olympic-class skier to the operator of the largest underground poker game to the subject of an Oscar-nominated movie — she has always gone all-in, in what she does and has lived a bigger life in every decade of her existence than most people ever live.

I had the opportunity of speaking to her and learning more about her thought process behind being able to execute at a level that is the best in the world regardless of what she takes up. In this interview, she also talks about the importance of mindfulness and tools she uses to control her mind. She also discusses what an entrepreneurial mindset means to her, growing her business during a recession and what she’s working on next.

So you went from being an Olympic-class skier to the operator of the largest underground poker game in the world. You then pitched your story to Aaron Sorkin, the best screenwriter in the world, and the movie ended up getting nominated for an Oscar. What do you think differentiates your vision and execution, where you’re able to really go from being a beginner to the best in the world at everything you pursue?

First and most foundational is this willingness to work on cultivating a mindset that’s really resilient, which allows you to shift out of less productive states. Because you cannot control for obstacles in the world — you can’t control whether you were born with money or connections, but what you can do is, you can start to have real power and agency over how you navigate through everything. In my opinion, this starts and ends with your mind.

That’s why I talk a lot about how important a meditation practice is to me, because it allows me to override states of fear, states of doubt, states of wanting to give up, burnout, and manually change the narrative internally. And we know that thoughts correspond to actions and so, working on your mind allows you to have this threshold for discomfort. This allows you to take the action over and over again, until you get to where you wanted to go. So 100% first and foremost, foundational for me is the mind and doing some sort of daily practice of mind training.

Another thing I’m a big believer in, which I realised when I got to some of those more prestigious worlds, is that it’s not always or even most often the most talented person that rises to the top — it’s the person that keeps showing up. So that means, you can start from wherever you are and get there if you’re just willing to keep pushing the envelope.

Another factor that I’m big on is vision and strategy. Visualisation is something that I learned in my sports background and I think it’s really useful. I don’t think it’s the only thing because manifesting without action never works. What I do is this sort of visualising where I think about where I’m gonna take this thing that i’m working on and honestly, sky’s the limit. I constantly think about how big it’s going to be and a lot of times when you spend so many hours building something or thinking about something and visualising, and then it happens, it’s kind of like déjà vu because you’ve seen it so many times in your mind. But, there’ve also been things that I couldn’t see in my mind necessarily, and was still able to bring to fruition. But it’s a great skill if you can use visualisation.

Then before I execute something, I do a lot of due diligence, I do a lot of inquiry and I do a lot of research. I also think about things from as many different micro-angles as I can with a particular focus on the psychology of human beings that are in that world. I try to understand as much as I can about what’s going on in their world and their mind, before creating a vision and a strategy. From there I take the mental dexterity, resistance and threshold for discomfort that I’ve developed and just really move into things, whether that’s building a business or anything else.

In terms of building a business, there were several points in your life when you viewed different things as startups — the games and then your life story. From your experience, what do you think really comprises an entrepreneurial mindset?

I think it comprises of a willingness to be in the dark in the beginning and have no idea where you’re going and still go. You have to be relaxed in that uncertainty and to just believe that with sustained effort, it’s gonna work out. It’s also liberating yourself from perfectionism, learning how to fail gracefully even if there’s no such a thing as back up and just kind of conditioning yourself to have tolerance for it. I also think being an entrepreneur is all about learning your universe and figuring out where you can be a bit disruptive, or where you can bring in something that hasn’t been done before, considering all the angles while also being able to take calculated risks.

Apart from that, again it’s a lot about developing a threshold for discomfort, and being able to overcome these uncomfortable states of mind to continue going. This was something I learnt from my dad, which he called constructive suffering, and it’s the only way to get anywhere. There are very few people that just put in very little effort and make their life work and so just getting to this place where you have a threshold for discomfort helps you to build an entrepreneurial mindset.

And lastly, it’s about dissecting things to their fine parts so that you can understand them, and then understand how you can be different or be able to create something valuable in a unique way. I’m not somebody who just has ideas in a vacuum, it’s always looking at what the contents of my universe look like, getting involved, showing up and then being like okay, I can kind of see this angle to do it differently or I think we’re underutilizing this strategy. So for me, it’s just kind of like being a yes person (being willing to say yes), having lots of adventures, having things not work out and not being on a linear path. It’s got to get your head messy.

So for me, it’s just kind of like being a yes person (being willing to say yes), having lots of adventures, having things not work out and not being on a linear path. It’s got to get your head messy.

Outside of the individual building the business, another thing that always plays a huge role is the macro environment. When you lost your game in LA, it was right in the middle of a recession but you still went ahead and actually went bigger. What was your thought process then?

I think that it’s easy to get overtaken by the tide of negativity when markets are down, when recessions are in place or when world pandemics are influx. I think it’s important to understand the world that you’re living in, but also to not let it limit you. It obviously depends on industries and there are times when you should scale back, but for me, I believed then that there were people in my industry that were still financially okay and wanted an escape from what was going on in the world. Through these games, I was able to create that experience for them. And truthfully, at the time I did not think of it like it’s a recession and I’m going to go bigger because of that — it’s just that I was desperate because I had lost the LA game. I was full of spitfire and wanted to prove that I wouldn’t go down like that. I just muscled through, which was a great lesson because if I would have listened to what was going on in the cautionary tale of the markets and the world of finance, I wouldn’t have even tried. But because I was just so determined to stage a comeback, I powered through and it taught me that we have to be really careful to not completely get absorbed in the doom and gloom of the turbulence of the world, and instead maintain our own steady path.

And what are you working on now?

I think gaming and social experiences are a very underutilised technology in changing human behaviour. And so I’m in the process of establishing the first asset that’s going to come out of a gaming studio, that basically attempts to use an in-app currency in a social form and gamification to help people change behaviour. This would help people engage in activities that result in them being happier and create a sense of well being. I know that with self-help people just continually fall short of the motivation and so my vision is to build products in the mental-health and self-help industry for adults, kids or people who are in a place of need.

I did a lot of internal suffering in my 20s and 30s. I was able to accomplish things and be ambitious, but internally I was not well and paid a big price for it. And then I did a deep dive investigation into neuroscience, neurophysiology, biology, psychology, Buddhism, meditation, the 12-step program, and all these different protocols which helped me to learn how to completely shift and rewire what was happening inside my brain. From there, not only was I happier and not suffering, but I was also able to move more seamlessly through business and become much more productive. And so I believe that it’s my calling and I want to share these things. I see what exists in the market right now in terms of the books and the courses but these are only working for some people. There’s still a big part of the population that it’s not working for and so I want to use my experience in storytelling and movies, media, gaming and finance to address that gap in the market.

What is the most important tool that you’ve found that helps in improving human behaviour?

Meditation is a huge quantifiable practice, and by quantifiable I mean there’s a ton of hard science to validate the benefits of meditation and what it can do for your brain. It is scientifically backed that meditation drastically helps to increase your ability to focus and your ability to overcome lower mind states that hamper productivity, or cause unhappiness and discontent.

I think it is really important for ambitious and successful people to pursue well being and emotional regulation as heartily as they pursue business. This is because the benefits are just so massive for not only enjoyment of life, but also for truly being able to embrace risk and uncertainty in a business sense. Many of the things that hold people back or that get people into trouble in business are these unresolved issues that I think we as human beings, if we are steadfast and we’re really committed to it, can resolve and give you a completely different experience.

Personally, I also have a very overactive mind and it was always very hard for me to sit still. I didn’t think I could meditate at all and I used to keep getting angry when I would read that meditation was the solution. What I did was that I started really small with 30 seconds on the first day and then built on that. So at least until my app comes out, I recommend the app Headspace for people who want to start a meditation practice.

And lastly — I’m always very interested to learn more about how entrepreneurs in the US view Asia. So what is your perception on Asia in terms of whether you see it as a market with opportunities at the moment?

I think Asia probably has the most compelling opportunities right now. If I was younger and not so tired 😝, I would be really excited to check out what’s happening in Asia. It’s not what I’ve been focused on right now but I know that there’s huge opportunities. If I were in finance at the moment, that’s where I’d be looking. Also as someone focusing on gaming, I definitely also see a lot of opportunity in the Asian market for gaming.

To get more information on the Asian Startup Ecosystem, get in touch via Twitter or LinkedIn!

The High-Stakes of Going All-In was originally published in The Asian Edge on Medium, where people are continuing the conversation by highlighting and responding to this story.

In the last two decades, China saw unparalleled growth with every section of the society, including the lower income bracket, being able to reap the benefits. In 2000 — China’s middle class amounted to 3% of the total population, but by 2018 this number had climbed to 50% of the population. Both India and Southeast Asia are now following suit, making the three economies in Asia one of the fastest growing in the world.

William has been a first-hand witness of China’s growth story, and has been instrumental in shaping the tech landscape of the country. He is now using the lessons he has learnt from China to help entrepreneurs in India and Southeast Asia. William grew up in the US and started his career as an English editor at a local Taiwanese investment bank in 1996, editing local analyst reports. He also worked at Bear Stearns in New York as an Asia tech analyst during which the dot-com bubble popped. He then moved to Hong Kong to work with Deutsche Bank, where he worked on international IPOs of Chinese companies including Alibaba’s. It was also during this time he was ranked as #3 stock picker in China and Hong Kong across all sectors, and the #1 in tech.

After working as an equity analyst at different investment banks for 11 years, he moved to venture capital working at Singtel Innov8 Ventures and Softbank China & India Holdings. He is currently a General Partner at SOSV and Managing Director of Chinaccelerator and MOX. SOSV is the #1 most active venture capital investor in the world, managing over $740m in assets under management. Through Chinacceletor, SOSV helps entrepreneurs from around the world enter into the China market while, MOX helps entrepreneurs in India and Southeast Asia.

I had the opportunity to speak to William on how he’s seen the Asia tech landscape develop in the last 25 years. In this interview, he discusses why he focuses on helping companies expand to Asia, opportunities that exist for companies coming from the US into China, before talking about sectors he is excited about investing in India.

What was your motivation to focus on helping startups with cross-border expansion into the Asian market?

The way I see it is that all VCs should act like startups. All VCs have money, otherwise you’re not a VC, but what you really want to do is focus on helping startups with problems. And so for us, the problem that we are uniquely positioned to solve based on my experience of 25 years in the market, is helping companies go cross-border. In the past when Google came to China, they did not get shut down by the government but instead were not able to crack the Chinese market and left themselves. They went from 60%+ market share to 11% and got hacked, before they decided to leave. Similarly, Facebook was not able to come in and Amazon tried to come in but also was not able to survive in this market. These major big tech players have come over and not done particularly well in this part of the world. We helped some other companies come in (not through our accelerator) such as LinkedIn, Airbnb and Evernote that actually did fairly well in this market.

One of the biggest challenges for companies around the world is how do you make a play in the world’s number two economy? So it helps to have a guide in the region and because we are global, we’re uniquely positioned to help companies go cross border. I invest in companies from all over the world but the service that we provide is helping them expand to Asia, generally, the big markets in Asia — China, India and Southeast Asia. So the reason why we’re doing cross border is because it’s a big problem that needs to be solved and we’re pretty uniquely positioned to solve it.

In the 25 years that you’ve spent in the region, how have you seen the tech landscape evolve?

To focus on a particular part of that, there’s not just one internet anymore — there is a China internet bubble, an India internet bubble and a European internet bubble (because of GDPR). It is very difficult to pierce through these bubbles and our role at SOSV is to help allow free traffic in and out of these bubbles. We’ve always helped foreign companies enter China and helped Chinese companies go global. Now there’s even more barriers to entry in different geographies so the need for MOX and Chinaccelerator is even greater than in the past, especially for smaller companies. In China historically, the companies have always stayed inside the bubble but now we are seeing them venture out mostly through investments. Both Alibaba and Tencent invest a lot globally, with Alibaba even acquiring companies outside. But the big change is ByteDance. It’s the first time where a company from inside the bubble became popular outside the bubble.

The problem with these bubbles is that everybody in China thinks that everybody else around the world is like Chinese people, just like everybody in the US thinks that everybody in China acts like them. That’s just not true. Companies need to figure out how to communicate, sell and engage people from other countries and the way you do that is by putting your product out, getting data and making iterations based on that data. Traditionally, when Chinese companies have gone outside the bubble and tried to market to the US or Europe, they were not data driven and were treating the people outside of China like Chinese consumers which didn’t really work.

Tencent spent $120,000 a day on advertising, got big stars as influencers and gave away free food coupons. They ran a promotion in the US where anybody who downloaded WeChat and got four other friends to do it got a $25 free food coupon. So everybody got the $25 gift voucher, and then uninstalled the app. That’s what you would do in China but it did not work in the US. The same thing happened to a lot of American companies when they came into China. The big thing that TikTok did differently is that they actually localised. They took their product for China, and then they had curation teams. The product itself is quite similar across markets, but the content in it and the growth hacking is very data-driven. So what you see if you’re in Spain is very different from what you see in the US. They have different personas and it’s automatically personalised based on what people want to see. That’s why it’s taken off because it is localised to each country and with a bit of tech over time, actually localised personally.

TikTok is now a successful model for other Chinese companies to follow but these Chinese companies might not enter the US because of the political climate. The same way we helped LinkedIn and Airbnb with when they came into China, we’re going to help Chinese companies as they go out. The only difference would probably be that these companies would prefer expanding to South America, Southeast Asia, South Asia, Africa or Eastern Europe, instead of the US or Western Europe.

Despite this political climate and macro economic challenges, do you still see opportunities for companies from the US to enter the China market?

I think because of the macro economic challenges, it’s more important to be in China than ever because China is the only growth market in the world — the rest of the world is shrinking. You can’t ignore the number two economy in the world and now, because of COVID-19, it is really the only market where you’re actually seeing economic growth this year.

Given how strong the local players are in the Chinese market and their natural advantages, what are some challenges that companies who want to expand here from the US should keep in mind?

The biggest challenge for US startups coming to China is that the US market itself is large. So for many US startups it is important to understand and think deeply about the reason why entering China is so compelling when they already have a very large home market. Historically, you’ve always seen 5–6 companies coming out here every year but they are usually pure internet models. The exception was Uber, which is an online-offline model, and they actually did quite well. They’re probably one of the most successful large US internet companies to come into China who ended up fighting the local competitor to a draw.

The second thing to keep in mind is that most US software companies are set up to solve the problems of US consumers or enterprises, which have different challenges than Chinese consumers. Many Chinese consumers are used to systems that are far more advanced than the US consumers are used to. For example — in the US, people have been very slow to move to e-wallets because of credit cards but when you get a digital e-wallet solution that results in less waiting in line, you get much faster adoption of this new technology in China than you would in the US. So as a US startup here you need to focus on certain areas where you can actually solve a problem that somebody over here has, which could be deep tech or hard tech. There’s a lot of money and support here so if you have technology that makes sense, China is a good market to roll it out in. The best way to do it is to bring on a local partner or a JV partner on-board that runs it, raises money for it and launches it, and sometimes we’ve seen the China JV actually becoming bigger than the original US parent company, so there’s an opportunity there.

The third thing is that usually people in the US think that they can take what was built in the US and apply it to the rest of the world, and they’re right for most of the world except China. If you look at LinkedIn, they have the same platform all over the world except in China. In China, the entire code base built for LinkedIn is built for the China market from scratch — much leaner, more tighter, and optimized for the China internet. There’s a Harvard Business School case study on the LinkedIn approach to China. It’s not wholly owned by LinkedIn and they haven’t hit the ball out of the park, but they’ve done reasonably well all things considered. And one of the reasons why they didn’t fail, like the other 6–7 other LinkedIns before them in China, is that they were locally managed. They made sure they dumped all the code base and took the assets that LinkedIn could provide, which is a global network of users, corporate partnerships and content. And then they built the China versus separate China version, bringing the best of global LinkedIn, and dumping the worst.

The final thing to keep in mind is that startups can’t run their China business from the US. Google tried to basically remote control Google China from the US and it did not turn out very well. People in China move very quickly — companies and competitors are super fast. There is a strong working culture of 996 (9am to 9pm, 6 days a week) or 007 (24 hours, 7 days a week). But if a startup has expats that take off a few weeks every year, and the company is also trying to help people in the US understand what’s happening in China, it’s dead before it even starts. So on-the-ground command and control is important, with people who have experience with the market. Startups should take a page out of Uber’s book, as opposed to following the many companies that failed here like Google or Amazon.

Zooming out of the US and focusing on India — people always compare China and India. From a tech perspective, do you see any parallels between the two countries?

The challenges that people in China have had over the last decade are very similar to the challenges that people in India have now. I’m the #5 most active VC in India and have been investing since 2005. I did my first investment with SOSV five years ago but in the past three years, I have really doubled down on India. This is because of three reasons: (i) the internet basically became free, similar to China; (ii) smartphones became cheap and more widespread across India; and (iii) digital payments became a lot easier after demonetization cutting down a lot of the drag due to cash. I’ve done 40 investments in the last two years around consumer internet, which is not a popular thing to invest in India. Everybody in India is always investing in software to sell to the US, but we’re investing in India for India. We want to help these Indian entrepreneurs, with lessons from China as an American VC to let them compete against Facebook, Google and Amazon in their country. We call this cross border innovation arbitrage.

We want to help these Indian entrepreneurs, with lessons from China as an American VC to let them compete against Facebook, Google and Amazon in their country. We call this cross border innovation arbitrage.

And what are the biggest opportunities that you’re seeing in India at the moment?

So I went from doing one investment a year in India to doing fifteen a year and I don’t think that’s going to slow down. COVID-19 has accelerated the adoption of technology in india. Everybody’s locked up at home, nobody wants to touch paper money and people can’t go to stores making everything delivery-based. It’s changed the world over but it’s had an experimental acceleration in India. So, you’re seeing mass adoption for ecommerce and e-wallet. Because of that, the opportunity in consumer internet for India is not serving just the rich people in the top metros, but in providing services to people who’ve never had them before. We don’t pay attention to Apple at all, we’re all Android or Jio.

There are different sectors that we are looking at right now. We’re very heavy investors, and one of the most active investors in edtech, outside of China. We’ve also been investing in digital media for India and for Bharat. We have been supporting the growth of local vernacular content enabling people in India to make content and actually make a living out of it. YouTube doesn’t share revenue so in India people end up watching Bollywood or American media, but local people creating local content for locals, province by province, city by city, is a huge opportunity.

Another area we are looking at is mobile games because nobody has cracked the code on mobile games. China is the #1 revenue generator for mobile games globally and mobile games are huge everywhere in the world, except for India. This is because people in India haven’t understood how to deliver and monetize mobile games. So we are bringing a different mobile game model that is not ad supported, but basically a pay by time. So it’s all-you-can-play games with no ads for a certain amount of money per day or per month. And then if you want to compete for money for games of skill against other people, and an esports type leaderboard for ranking on the leaderboards, you can do that too. So we launched that recently in India, and it’s starting to slowly take off.

And then the last sector is financial services. The Indian financial service market is extremely fragmented and the user experience of the products is 5–7 years behind China, even from startups. So we’re trying to help parachute-in the learning and understanding from China, the most competitive market in the world in this area, and give local Indian entrepreneurs the tools to help them be super competitive in India. So those are the things that we are excited about in India.

To get more information on the Asian Startup Ecosystem, get in touch via Twitter or LinkedIn!

Demystifying Asia for the Global Market was originally published in The Asian Edge on Medium, where people are continuing the conversation by highlighting and responding to this story.

The last decade saw the Chinese economy overtake that of the US to become the largest in terms of purchasing power parity, for the first time (2014). Since then, it has also been the main source of global economic growth. This prosperity has fueled a consumer movement in China, which along with the allure of the large population size has led to prominent western brands expanding to this part of the world.

I had the opportunity to speak to Jen Loong who has been at the centre of this consumer movement since the beginning of this decade, acting as a bridge between the East and the West with a focus on creating an impact. Jen started her career with Groupon in 2011 and scaled the Hong Kong office from a team of 20 to 110+. She then led the launch of Lululemon and TOMS in China, and the launch of Alipay in the US. She also founded her own startup before joining HYPE Asia as a Managing Director for the Greater China region, where she led the cross-border expansion of startups like Carousell, StartupCare and GOAT. She is currently the Head of Portfolio Management at C Ventures.

Given Jen’s vast experience and curiosity with cross-border expansion she is also a travel enthusiast, having travelled to 50+ countries. One of those countries includes North Korea where she participated in the first Pyongyang International Marathon. In this interview she discusses the key factors that companies should consider while entering China as well as, trends she’s bullish on in the coming years, before sharing her experience in North Korea and its correlation with her journey in the venture capital/venture builder space.

So let’s start with the story behind your career trajectory and what your thought process was behind selecting the brands that you worked with?

I grew up into a lens that bridged the East and the West. Growing up between Hong Kong, Shanghai and Canada, much of my learning education and understanding was always trying to bridge both the Asian lens and the Western lens. And so in my career, it became a very natural progression to go for opportunities where that East meets West lens was relevant, leading me to build out certain companies in Asia for Western brands. The impact aspect became ever more important as a value purely out of the idea that if we spent more time working than spending it with our family or on ourselves, why wouldn’t we try to at least create some sort of positive impact for society. Borrowing ideas from Ikigai, the Japanese way of life- do what you love, do what the world needs, and do what you’re good at. And the “do what the world needs” very much fits into this piece about impact.

In terms of my thought process behind selecting brands to work with, I can unpack that to the first layer at the beginning of my career, where the most important metric was just ability to learn in an environment where I was pulled up by certain mentors and coaches. And in that, I would go after different opportunities based on what I think I needed to learn and where my gaps were. Coming out of college, I went into Groupon purely because I felt like my degree did not teach me as much as I need on what it means to sell, and to do business development. And from that lens, I thought of opportunities where I could learn door to door sales from. From there I thought of my gaps with the mindset that I’m weak in China operations so I sought out opportunities in order to work on that gap. Thereafter, it was thinking about filling in my gaps on building a brand and creating a new consumer movement in social impact. And so I always look out for what’s next, not purely by the role or the company, but more inwardly by identifying my gaps and trying to fill those in.

And what did China look like back then, compared to what it looks like now?

Recently, there are Facebook groups that have popped up for people who have since long left Beijing and Shanghai, started by folks who used to be very active in those communities. And it’s just such a wonderful way to walk down memory lane. When you’re in the experience year to year, you lose track of just how different things can be but with these groups popping up, the changes both visually and anecdotally seem like night and day.

If I were to capture a few- the first would be around freedom of mobility to the extent that even as a foreigner, there were a lot of different pockets of societies you could create communities in. These could include a bar street, an entertainment area or a small business. There were just so many opportunities because of China being such a big market and the market craving for a lot of these Western innovations that made it a really exciting time for anyone who was entrepreneurial, regardless of whether they were in tech or not.

Secondly - because of that environment, it attracted the kind of alpha type who would want to go there even if they may not speak the language or may not know anyone. They would land into that area with an entrepreneurial spirit to make something happen. Those kind of people make for very fast friends, and great partners to start initiatives with. It adds a lot of colour to what day to day life looks like living up there.

Thirdly - more trivially when we were building Lululemon I remember, it was strange to wear spandex and run along the streets of Shanghai on a jog, while carrying an expensive phone that connects to your music. Those were all things that would catch eyeballs, people would take pictures of or were just purely unsafe. And so to think of now, the movements that have since come forth with personal fitness being such a big industry and seeing thousand person Zumba or Yoga events, it’s incredible to think that all that happened in less than a decade.

What are some important factors for companies to keep in mind when launching a consumer brand in China?

There’s quite a few that I’ll reflect on based on the macroeconomic climate now. The foremost top layer is tied to the political factors that are relevant in that industry or that country of origin. Regulations are fast changing around what are the prerequisites for let’s say a beauty brand entering into China or there are other factors like certain economic zones that benefit ecommerce brands if their operations or manufacturing are based overseas. So first and foremost, I cannot underpin the importance of political factors as part of that go-to-market consideration.

One layer underneath that would be if the overall environment is positive to your company or solution coming to the market, then what’s the ultimate goal to establish in China. Is it one of wanting to serve a bigger population size or is it purely a commercial reasoning with GMV sold and number of dollars contracts signed. Getting clarity on what that goal is, just helps to align internally why China is a priority or is not a priority, and that internal alignment is not always necessarily fully executed before diving into such a heavy resource initiative.

And the third layer underneath that is having a realistic assessment of the resources required to achieve those goals. China is a pay-to-play market for the most part. If you’re a traditional DTC brand looking to set up into China, even before you sell the first unit of goods and make that first unit of GMV, you’re probably looking at pretty substantial licencing fees, setting up your IP address, and setting up your accounts on Tmall, JD.com and WeChat, all of which have an overhead fixed cost. Then even with those costs built-in, you’re looking at 30–50% of sales as your marketing budget just to get traffic by awareness in these heavily trafficked channels.

One layer below that is around team building. There’s so many stories on how difficult it is to find local talent whom you can trust and who speak to your cultural values. But more than that, I think it’s how you find that talent and hire that talent based on local jurisdictions and expectations, retain them in a very competitive job market, and incentivize them in a way to become your long term partner on the ground. You have other options if employees is not the way to go such as- franchising, licencing or finding a JV partner. And in Western markets there may be less variety but that shouldn’t be an excuse for not exploring that variety and going to China.

And the last layer is not to assume that your offering is that unique in China. Chances are if you’re very successful overseas, there may or may not be local versions or alternatives to what you’re doing in the local market that has significant local traction. So it is important to align if your offering needs to be in the market or how it needs to change to come into the market more compellingly. There were periods of time in recent history where being a Western brand meant certain positive values such as innovations, pricing, quality or experiences that local brands could not deliver. But I don’t think that correlation is as strong now or it’s just more scrutinised with Chinese consumers becoming more diligent to really understand what kind of brand you are and what kind of team you are to bring your product to China.

Those are the five steps that I typically would like the teams or the companies to really have an honest dialogue around before expanding into China.

How do you view China’s growth in the next few years and what are some trends you’re bullish on in the region?

Selecting a few, the first one around industry specifically is the diversification of solutions and public-private partnerships in the healthcare space with the backdrop of COVID-19 accelerating it. These partnerships range from tracking to equipment distribution, information distribution, testing, processing patients into clinics, private clinics, public clinics, with the whole funnel being an array of opportunities and a celebrated innovation. Currently there are also groups who are solving for building academies to train more doctors outside of the traditional schooling system. And so being able to examine that entire value chain in healthcare, that can be done in a public private partnership way is a really unique enterprise opportunity in China in this generation that is much needed.

The second observation might be more around, given recent changes to the US-China relationship, an influx of Chinese nationals who were overseas coming home due to visa changes. These people bring with them their network, their wealth of resources and their experiences from places like New York and Silicon Valley. And I think this will help to upgrade professional operations and really start to benefit Chinese organisations, as well as the companies that these people may start when they come home. So what that means when you have this quality pool of talent flooding back into the market is the overall upgrade of skills, product offering and innovation.

Thirdly, given geopolitical changes, I think you’d see more Chinese companies looking to expand their offering not so much to the US, but to the Middle East, Africa and Southeast Asia. And so for folks who speak languages that can broker both sides of those borders, it will be an increasingly desired asset and talent.

Lastly, zooming out of China, what was your experience in North Korea like and what are some lessons that you took from your time there?

So this was about five years ago and I must caveat that any sharing in this capacity is not by any means representative of the real experience on the ground. I went into the country with a high degree of curiosity as one of the first group of Pyongyang International Marathon runners, without knowing what to expect. Before starting our race in the stadium, you could hear the chants and thumping of the ground because there were thousands and thousands of citizens sitting inside of the stadium clapping, and you’re standing outside of the stadium thinking I’m about to do a lot of walkthrough of a stadium that I know nothing about. And there was some confusion around whether or not we were allowed audio players for music and confusion around if the audio players could be phones because they didn’t consider that phones then could already play music. And then they didn’t allow phones on the tracks because they didn’t want you to take pictures along the way. So there were just so many of these kinds of grey uncertainties, but we rolled with the punches.

What I would say is if I landed into North Korea uncertain, I left with even more uncertainty. And when you realise the vastness of how much you don’t know, it’s actually a bit scary. So I left not really sure what I saw was intended or serendipitous. I left not really sure what was true or wasn’t. I left being confused by the rhetoric that was shared inside but understanding also, that if I’ve probably never heard anything else I would also be brainwashed by the rhetoric. And I think I could compare all that I saw, to what I imagined Beijing may have been at one point in time. It was just a surreal visual and intellectual experience.

Five years later, I can’t say that I sought out a lot of the answers to my questions. But what I would say is, it’s just one of those places that does injustice for you to make a comment or make a judgement without having gone in. And it’s tiny moments like, at one point, I was running through an underpass tunnel and it was just me on the street and there was one North Korean boy not too far in front of me, and I could see him by his jersey and he was running in the tunnel as well. It was just him and I and you could tell he ran with the purpose, while I was probably more leisurely jogging. And out of nowhere, through this tunnel a motorbike came behind us and on this motorbike was his mom, or who I might gather to be this boy’s mom and she was yelling at him (I’m guessing) something along the lines of run faster. And to see how similar the parenting experience might be in a lot of Asian households like mine, and him and I, in that moment in time didn’t have too much of a difference. We were both coming from similar family dynamics and structure but the only difference in experience is our passport and our place of birth.

And so being able to have those kind of just moments of humanity, people may not walk away with very deep lessons and resolutions of what we can do, but not passing judgement or comments of what this place is/isn’t until you’ve experienced is probably a recommended way to experience a place whether that’s North Korea or anywhere else. It humbles you to learn the vastness of what you don’t know and when you realise that, it pushes you to wanna learn more, find out more and speak to more people. And that pure curiosity may be the driving force behind wanting to work in the VC space or the venture building space because at the end of the day we’re just curious people who want to figure things out.

To get more information on the Asian Startup Ecosystem, get in touch via Twitter or LinkedIn!

Bridging the World’s Largest Economies was originally published in The Asian Edge on Medium, where people are continuing the conversation by highlighting and responding to this story.

Southeast Asia’s internet economy hit $100 billion in 2019, more than tripling in size since 2015. This unprecedented growth has put the region on the tech innovation map in the last few years. Most recently Facebook and PayPal invested in the regional ride hailing giant Gojek, only solidifying Southeast Asia’s position as a tech hub, and further driving interest from investors in the US towards the region.

But one of the leading global funds that was looking at this region even before the Gojek deal is Point72 Ventures. Point72 Ventures is the dedicated early stage venture capital arm of Point72 Asset Management run by Steve Cohen. The fund entered the region last year with an investment in Sprout (HR tech startup) and most recently invested in TONIK (digital banking startup), both in the Philippines.

I had the opportunity to speak to Ishan Sinha who leads the Ex-US investments at Point72 Ventures. Ishan joined the fund when the team consisted of three people and has scaled it to thirty people now. He has invested in 20+ companies across the US, South America, Middle East and Southeast Asia.

So what’s been your path to Point72 Ventures?

My dad is a serial entrepreneur, so I was born into a family that always leaned towards taking risks. We moved around a lot because of my dad’s work, and I spent my early years between Japan, Germany, the Philippines and Vietnam before moving to the US. I went to Yale and worked at Goldman Sachs right after in a group that focused on derivatives structuring. After Goldman, I was working at Point72 as an equity analyst when Steve had the idea to set up a venture fund. Coming from an entrepreneurial family, I was immediately drawn to the opportunity, so I raised my hand when they were looking to set up the initial venture team.

In many ways, I kind of stumbled into this role without really knowing what I was getting myself into. Coming from the public markets, where decisions are based on crunching numbers, I had to learn the qualitative things that are very important in this world — such as truly understanding the pros and cons of a startup’s founding team.

What is Point72 Ventures’ core focus?

Stage-wise, we focus on companies between Seed and Series B. We look at a few different sectors as a team, though my particular focus is financial services.

And how did you first start looking at Southeast Asia?

In the last couple of years I’ve spent most of my time in Latin America, where we have portfolio companies across Mexico, Argentina and Brazil. I got to know that particular ecosystem really well. About a year ago, I started to think about the next frontier that I wanted to explore. I saw some interesting dynamics play out in Southeast Asia that were similar to what I’d seen in my initial research in Latin America when I first started looking at it. Southeast Asia has increasing mobile penetration and a very engaged base of young people that are spending a lot of time with technology. Specifically in financial services, you’re seeing similar bank penetration rates and a similar stagnant culture within the incumbent banking system.

Culturally there are certainly some differences, but there are a lot of parallels as well. Latin America has one really massive country, which is Brazil. Southeast Asia also has one really massive country, Indonesia. These two big countries are culturally very distinct from the other countries in their respective regions. While Brazil is Portuguese-speaking, Indonesia is largely Muslim making the two countries (and their ecosystems) different from the countries surrounding them. Over the course of a couple of trips to Southeast Asia, I immersed myself in the ecosystem and was very inspired by what I learned. This interest ultimately led to our two investments in the region.

What was it about your first investment in the region (Sprout) that made it such an exciting opportunity for you?

We’re very thematic in our approach to investing. When we were initially designing the fund at its inception, the approach we decided to take was to do a lot of research and think very critically about the world as well as, the themes that we see emerging globally. There are obviously varying demographics, regulations, and cultures in the different ecosystems but in general you start to see similarities when you look close enough. One of the themes that we became excited about was low-touch, low-tech HR.

If you think about SMEs anywhere in the world, they have to manage processes like time-in, time-out, employee attendance, vacation time, and payroll. For many SMEs, all of this is managed on pen and paper or via Excel. In all honesty, this was something that we heard was a huge pain point as we talked to small business owners in every geography that we travelled to, not just in Southeast Asia.

There’s a second layer to this thesis that was particularly interesting to us as fintech investors. With HR tech you have access to people’s payroll and if you know how much someone earns as well as the schedule of when they need cash, there is an opportunity to build a lending product off the back of that data. Similarly, when you begin employment at a company you typically sign up for some kind of benefits or retirement account, which creates another opportunity for financial services to be built or sold. There are many more examples I could think of on why HR is an incredible inroad into financial services distribution. And so, upon doing all this thematic research, we sought the best HR tech companies that we could find in different geographies. Over the years, we’ve invested in companies in Australia and the UAE that reflect this thesis. Through this thematic work, we heard about a company in the Philippines that fit what we were looking for — we got the intro to Sprout, and the rest is history.

What are some important value-adds that Point72 Ventures brings to its international portfolio companies, compared to what regional investors bring?

What we bring is a very global lens. For one, we see companies across the world pursuing solutions to similar problems (like the SME HR theme I described earlier). We also have the benefit of being in the US, which in most cases is a little ahead in terms of business model innovation relative to countries in, say, Latin America or Southeast Asia. We’ve studied companies that have succeeded — and failed — and can pass on those learnings to our international portfolio companies.

For example, we were a seed investor in a company called Ualá, which is the largest digital bank in Spanish-speaking Latin America. Ualá started in Argentina and scaled across Colombia and Mexico, and just announced a large financing round led by SoftBank and Tencent. We saw them scale incredibly successfully and learned lessons around customer growth and product/market fit that we can apply to TONIK, a digital bank based in the Philippines whose round we just co-led with Sequoia. That’s the unique perspective that only a truly global investor can bring in.

The other big value-add that we bring to our portfolio are our team’s operating partners. They have different experiences throughout their careers that we think could be particularly additive to our companies in areas like business development, sales, go-to market strategy and tech product. For example, we recently hired Dave Matter who was the Chief Product Officer at Marqeta, a large payments infrastructure company here in the U.S. and one of the examples of a truly successful B2B fintech business. Dave scaled their architecture and helped build out the product and technology teams. He brings a very unique lens on how to really scale an organization’s technology roadmap. That’s an asset that any CTO would be excited to have advising them.

Currently, how much of your focus is on Southeast Asia in proportion to other geographies and what are some trends that you’re excited about or companies you’re looking at in the region?

I balance my time between all the geographies I mentioned, but a pretty significant amount of my time is spent on Asia nowadays. I’m meeting a lot of companies there and getting to know the local investor ecosystem. And even though our first two investments in the region have been in the Philippines, that was not necessarily by design. I spent some years of my life in the Philippines so I have an emotional connection to the country but I am very closely monitoring India and other Southeast Asian countries like Singapore, Indonesia, Vietnam.

There are a number of trends generally across emerging markets that you’re seeing — in particular, I’m excited about the accelerated digital transformation of financial services. Across the board, every fintech investor could see the writing on the wall that the physical branch-focused business model that banks had was going to die at some point. We thought the move to digital banking would take years but with COVID-19, it’s been accelerated to months. It’s a unique crisis where even the common person understands what’s going on and understands the danger of using cash. Even in heavily cash-dependent economies, this has caused a rapid shift to cashless transactions.

What I’m really interested in is different ways to play that shift. And so, a digital bank like TONIK is one way. But there are other ways, too! For example, one could look for infrastructure-level solutions that allow non-financial companies to quickly integrate into the financial services ecosystem. It’s deeply complex because these technologies have a lot of moving parts with a customer base that’s beholden to a complicated legacy value chain. It’s a lot to learn but I’m excited to be a part of this digital revolution and back founders looking to solve these problems.

To get more information on the Asian Startup Ecosystem, get in touch via Twitter or LinkedIn!

Southeast Asia through a Global Lens was originally published in The Asian Edge on Medium, where people are continuing the conversation by highlighting and responding to this story.

Southeast Asia’s digital potential was at a time Asia’s best kept secret, with China and India stealing the spotlight in this part of the world. This is not surprising considering in the beginning of the last decade, people in the region were just beginning to use Facebook. And now in a 180 degree turn of events, this region is actually seeing a surge in the number of unicorns being born.

Jon Russell moved to Thailand in 2008 and began covering the tech space just when this region began its journey of digitalisation. I had the opportunity to chat with him on his journey since and what his take is on the ecosystem moving forward.

So let’s start with how Southeast Asia looked when you started out and how has it evolved since then?

So when I came to Southeast Asia, there were a few startups and at the time I didn’t really even know the distinction between a company and a startup. There were some companies that had been around and one of them was sold to McAfee in the late 2000s. I came from the UK in 2008 and at the time Facebook was huge in the UK but nobody used it in Thailand. The year I moved here everyone began to sign up and you would see a million people signing up on average every week. At the time, I was a freelance writer so I started writing about how many people joined Facebook in Thailand, Indonesia and the Philippines each week.

Now, social media sites like Facebook are very widespread in this region. But even now, in terms of a country like Thailand, startups still haven’t really broken through. There’s lots of big corporations that own most of the business here, and they tend to attract the talent. The Philippines has a similar story but if you look at Indonesia, it has its own startup culture. The biggest driver of that is the government which is helping them to grow that extra step from a decent sized startup to a billion-dollar company. So government involvement is quite important and I think Singapore is doing this quite well also.

Overall, Indonesia has emerged as the big player where you’ve got companies like Gojek and Tokopedia that are worth billions of dollars with 6–10 others that are upcoming. The interesting thing now is, do they expand regionally or do they just stay in Indonesia? it’s still early but what Gojek has done right is that they stuck to Indonesia first, whereas Grab went after eight countries from the get-go. Grab’s position is much stronger in the region but in Indonesia they’re clearly not the number one player so the key question is what is the best way to take on the region. That’s a question that I never even thought about in 2008. In 2008 to see the position that we have today, with six to eight billion-dollar companies in SEA wasn’t thinkable to me. Everything changes over a 12 year period in any country but in Southeast Asia, the speed of change has been unprecedented.

And if you’re looking at it from the venture capital side — some of the VC firms that I talked to for the first time when I was starting out as a reporter in 2012 were raising a $5 million angel fund but now the same funds are raising $200 million funds and a growth fund on the side. That is the best kind of lens to see the changes in the region through, because funding is what is driving the ecosystem on. If you look at Jungle Ventures, they had a $5 million fund in 2012–13 and now they have a $120 million fund, which is a huge jump. That just shows the kind of the kind of growth that we’re talking about.

The growth that Jon talks about has also attracted players from more mature markets in terms of startup ecosystems. China’s tech majors like Alibaba, Tencent, and JD.com have been investing heavily in the region, since Alibaba’s landmark acquisition of Lazada in 2016 and Tencent’s investment into Shopee in 2017. Now US tech giants have also started making strides in the region, with Facebook and PayPal claiming their stake in Gojek’s recent US$1.2 billion funding round.

With billion-dollar companies emerging from within the region and capital pouring in from abroad, the question of the potential of Southeast Asia players and industries/sectors to dominate Asia vis-à-vis China and US counterparts is interesting to understand.

In the future, do you think dominant players like Grab and Gojek would expand across Asia as you mentioned or do you think it would be players from China or the US that dominate this market?

There are some companies that are expanding through this region like Shopback, that just raised money recently. They are already pretty big outside of Southeast Asia in Australia and Korea and are looking at other markets too. Carousel is another good example. But it depends on the business- for Grab and Gojek, it would be pretty tough because they’d be going into markets where they have zero branding and it’d be costly to compete with the local players. They might go into tier two and tier three countries in Southeast Asia but at this point, it’s going to cost them a lot more than they’re going to get back, especially during COVID-19. But there’s definitely SaaS companies in Southeast Asia that have been pretty successful in growing outside of the region. There’s lots of talent here so for the right business, it’s possible even though we haven’t seen it on a large scale yet. This is particularly true with SaaS and online selling businesses over more operational heavy businesses.

For Chinese companies, it used to just be the larger Chinese companies like Tencent, Alibaba and JD.com that came into this region. Now that’s evolving, especially looking at the Facebook and PayPal deal with Gojek. I didn’t see that one coming because US companies mostly perceived Southeast Asia as a place where they could make money through Facebook, Google, YouTube ads. But what has happened is that they’ve focused on India for the last two or three years and are now shifting towards Southeast Asia. Google has programmes that it runs in countries called NBU (Next Billion Users). They first focused on India but are now also looking at Southeast Asia. They’re beginning to realise that there’s a huge market here even though it’s a very tough place where every country has common features, but it’s not the same and it takes a different kind of approach to crack that country.

The Chinese companies, on the other hand, seem like they’ve already gone to the next level. Ant Financial has invested in almost every country in Southeast Asia. In terms of Fin-Tech, they found a FinTech business, put capital into it to buy up a decent stake and send over engineers to help them with tech. It’s still early days, but that could be quite a huge deal. So you can definitely see compared to five years ago, when any kind of investment deal from outside of the region was seen as being huge but now they’re happening on a very regular basis. And everyone’s got a different kind of approach. The US companies had been sleeping on Southeast Asia but it looks like after the Facebook deal, that’s not gonna be the case anymore.

What are some sectors that you’re most bullish on at the moment in Southeast Asia?

I think it’s the same across most of the world at the moment because people are locked down so I’d say entertainment, games and education. None of these actually come from this region, especially because YouTube is such a huge focus for entertainment. There’s also very few games from the region, although Sea’s Garena does have a pretty big one- Free Fire.

Edtech is definitely interesting because, in Thailand, I don’t really know any edtech companies. There are some but they focus on tutoring because trying to disrupt schools was tough pre-pandemic whereas, parents often pay for tutors. Edtech is something that I’m quite curious about, because I haven’t seen it outside of Indonesia and Vietnam.

But in terms of being bullish, one of the positive things about this region being so young is that as a startup, most investors are pretty invested in companies. Most businesses that have raised venture capital and that are on the way to doing something notable have been able to raise capital again. Because of that, you haven’t heard as many startups going bankrupt in Southeast Asia as you might have thought during this time. My hunch is that investors are making sure that the companies that they’ve already backed are in the right position to get through this period to the other side.

And are there any particular sectors that you’re bearish on in this region?

Ride hailing is obviously one that is a work in progress because the big gameplay that they have, hasn’t come to fruition yet. It’s a long-term plan- it’s fintech, it’s banking, it’s payments and so there’s obviously a massive question mark over whether that can be done. So I’m not particularly bearish, but I’m definitely aware.

As a reporter, you go through cycles where you don’t take things at face value. So you don’t always realise what’s gonna happen to these companies that are making grand and bold predictions that might not work. WeWork is a good example. If people just started following companies for the first time and read about WeWork’s plan on paper, it might sound interesting but in reality, there’s so many other factors. Southeast Asia hasn’t yet had that process where big companies that have made outrageous bets, haven’t pulled them off yet.

But if you’re looking to see what the sort of WeWork test could be [in Southeast Asia] — it would be Grab and Gojek, particularly Grab because they’ve raised so much more capital and because their business is much more stretched across the region. On the other hand, Gojek as a single market player, you can imagine that some of this stuff could actually work right. So I wouldn’t ever say that I’m bearish but I’d say that I am aware.

There’s been some good examples like when Lazada was bought by Alibaba, people considered it as such a validation for Southeast Asia. But actually, the reality was that it was not a great exit for investors because they were expecting to build the Amazon of Southeast Asia. They were looking at a $50–60 billion exit instead of a $1 billion dollar exit. Having said that, we haven’t really had a colossal failure yet in Southeast Asia and I wouldn’t really wish for that either.

One of the challenges with Southeast Asia is that it’s operationally very difficult. Even Amazon, which is the king of execution, hasn’t really achieved much in the region. They’re still only in Singapore, with no investment deals and no expansions. If Amazon is not able to nail it quickly in Southeast Asia, that just shows how hard it is. There’s a lot of factors you wouldn’t think about if you’re running a business across multiple countries and with different conditions and varied culture, so you could be bearish on any startup in Southeast Asia.

The resilience of Southeast Asia startups is truly noteworthy. Even though one could be “bearish on any startup in Southeast Asia” given the colossal obstacles to growth in the region, the ecosystem is still maturing and there’s a lot of room for discovery and new business models to emerge.

Despite the growth, this region has not been immune to the impact of COVID-19 creating a massive challenge for startups here. Although it is difficult to still see how the pandemic will shape the future of the ecosystem, there are some emerging trends that are interesting to learn about.

The last question that I have is, how do you think COVID-19 will impact the future of the startup ecosystem in this region?

It’s going to depend from country to country because just based on Thailand where I know a lot of people who unfortunately have been let go by their company or their small business, it’s hard for them to be bullish. A lot of startups also have had to downsize and had to pivot but it’s an evolving situation and it’s hard to tell right now. People are definitely more careful about how they spend and a lot of the pivots that companies have tried are still early days.

People say that a crisis presents an opportunity and maybe there are some companies that will pivot to a business model that makes more sense to them in the future that they wouldn’t have gotten to if it hadn’t been for COVID. But unfortunately, the immediate reality is that people have lost out on income so the futures are uncertain.

I also think the real worry is economic impact. Travel and hospitality is such an important threat across the entire region because it’s a decent chunk of GDP in a lot of countries. That obviously has an effect on other businesses too. I looked at some GDP predictions, and Thailand is one that’s gonna get hit the hardest in the region, which is kind of ironic, because Thailand didn’t suffer COVID as badly as others which just shows how everything is interconnected. It will definitely vary country to country. Thailand, for example, will probably open up some travel between countries, so it’s gonna start to come back but the chances of it returning to where it was pre-COVID according to people in the industry is 18–24 months.

The current companies that you see, there might be some kind of change in the hierarchy and how they rank. For example, Traveloka is one of the unicorns but there’s no way they can continue to be in that position during COVID.

So I’m still optimistic for startups, because I think that at this point, they have become a thing in sight in Southeast Asia. There’s also lots of governments that are supporting them and corporations that are realising that they either need to have a fund/startup thinking inside their company. So I think that that mark has been achieved, but just means that the current field is not gonna might not look the same in like two or three years time when hopefully all of this passes.

To get more information on the Asian Startup Ecosystem, get in touch via Twitter or LinkedIn!

Southeast Asia’s Decade of Digitalisation was originally published in The Asian Edge on Medium, where people are continuing the conversation by highlighting and responding to this story.

So let’s start with your story, what’s been your path to GGV Capital?

I grew up in India in a village 80 kilometres from Vijaywada. I went to IIT Kharagpur for university. I was actually the first in my family to go to high school and college, but privileged enough because Andhra is a developing state which allowed my generation to go to college. In Kharagpur, I was actively involved with entrepreneurship and led the entrepreneurship student body along with BlackBuck’s Chanakya Hridaya. After graduating, I worked at a consulting firm across India, Africa and Mongolia and then moved to Ethiopia to work in the Prime Minister’s Office.

After that, I moved back to India to open the India office for an incubator/accelerator in partnership with the Eric Schmidt Family Foundation and UC Berkeley’s Berkeley Lab. The goal was to create a Google X for social impact because social impact tech is sometimes not venture backable, but has the potential to create impact at scale. So the idea was to take the technology on paper, build products, pilot them in India, and transfer them to a big entity like TATA Group who can then scale it up. I spent a year on the ground travelling to villages and building products like low cost refrigerators and solar mini grids.

After that, I wanted to move to a global stage and decided to go to Stanford for Business School. I was passionate about working at a global stage and found meaning in connecting dots, connecting people, connecting geographies and pushing the frontiers. So I started looking for roles that would lead me to do that and reached out to senior people such as Hans Tung by going down the Forbes Midas List and the Forbes Billionaire List. I got the opportunity to work with Hans as an intern and we ended up doing some investments in India. Now India has become a core focus for the firm. After the end of my internship, I had the opportunity to join GGV Capital full time and I also started focusing more on LATAM. At the same time, I also started building my thesis on- Future of Work, Future of Food and Supply Chains, B2B Ecommerce and Ed-Tech. I have had the fortune of working with Hans in leading deals in India like- Vedantu, Rupeek, Udaan and Khatabook.

Your story is so inspiring! It’s amazing that you’ve had such a global experience while at the same time created so much impact. So with this cross-border mindset, what differences do you see in the way startups are reacting to COVID-19 between India and the US?

I see both commonalities and differences. The commonality that I’m seeing is that the difference between good founders and great founders is showing up. When COVID-19 hit, senior VCs advised founders to make cuts right away if they felt that their business would be impacted and actually advised founders to make the cuts deeper than necessary. They also advised them to communicate to their teams that they would not be making any more cuts after the initial ones. From a psychology perspective- the best determinant of team performance is psychological safety and therefore, founders who did that were able to eliminate uncertainty in the workplace.

The second trait that I saw was that great founders responded to COVID-19 immediately. They were also always hungry to learn and more importantly willing to learn from other people’s mistakes. One of our portfolio companies’ called Frubana in Latin America saw its GMV fall during this time, as did other companies’ globally with a similar model. The team reached out to us when COVID-19 had not even hit Latin America. They already started working with us to understand how much of their GMV will take a hit. They then planned for it, stocked up on all the essentials and got their supply chains ready to predict for different COVID situations. Before COVID, the company used to only serve restaurants, but during the crisis they launched a B2C arm, a Kirana store approach and a reseller model in almost no time. Now the model is back to Pre-COVID levels while the lockdown is still in place. The level of nuance and hunger with which the team planned for the situation was clear to me.

Now looking at the differences- the US is a technology based country so the impact isn’t as much. E-commerce companies were immediately able to switch gears and they ended up seeing a lot of pump up in their traffic. In India, which is a more operationally intensive country, there was a digital demand but the ability to fulfil that demand took a big hit. Another difference is fundraising between the two markets. The US has a larger bench of global investors who were able to provide funding immediately. In India, the late-stage investment pool isn’t as big. There are firms like ours who entered recently and are investing and looking at deals even now. But at the moment, platforms that operate across public and private investments are seeing more investments in the public market. This has resulted in even some category leaders in India finding it difficult to get a level of interest and appetite from investors to close the bridge round.

And what are the trends that you are seeing in both the US and India?

The obvious one is Ed-tech. In ed-tech traditionally there’s two sigma learning outcome differences with personalised online education- personalised education versus the general classroom education. The problem had always been that people had only experienced in-person classes. Now they’ve had experience with online education and they actually like it to the extent that they are willing to adopt it after COVID. We invested in Vedantu because we believe that parents may see schools as a must-go when the world opens up but tuitions are optional. Hence, there is an opportunity for online tuitions and supplemental learning to become big.

The second one is B2B businesses. For example- my dad in my village used to always go to the bank but after COVID, he’s keen to use cheque books more often, and has even installed the SBI app on his phone. Additionally, before COVID he would use Whatsapp for calls or to message vendors but now he is also thinking about how he can make sales or send invoices through the app. Therefore, this pull towards digitization has already started.

The trick for companies is product innovation during this time. However, the challenge that they’ll face is a small drought in terms of fundraising. In my opinion, the best way to do product innovation is to observe the customers. Looking at our portfolio company Khatabook, they observed what happens at a shop by looking very deeply at the problems their customers face. They saw that every day, after eight o’clock or nine o’clock kirana stores shut their shutters to do the tally. A pain point for the customers is that while they are doing the tally, their whole family is waiting for them to finish before starting dinner. That extra hour that the shopkeepers got to spend with their families because of Khatabook actually drove the biggest adoption.

For these founders in India, do you think COVID-19 would lead to a change in terms of the number of people who want to become entrepreneurs. Do you think people would be more risk averse or do you think because of people losing employment, there would be a shift towards entrepreneurship?

Human ingenuity and entrepreneurship is always going to be there. I think people will always gravitate towards entrepreneurship, because they’re passionate about something. Human fulfilment in Maslow’s Hierarchy of Needs, always comes at the frontier of pushing boundaries. Everyone in their lives wants to push something and push the frontier. And if you look at my path, I’ve been privileged enough to live in a village,in a small town, in a district headquarters and in a big city. When I look back I see that everyone wants to push their boundaries. For a person in a village, it’s the yield from their crops while for another person, it’s a motorcycle. Everyone wants to push their own sphere of influence. So I believe that entrepreneurship is always going to be there.

However, sometimes necessity is the mother of invention. If we look at Snapdeal’s founders, Kunal and Rohit- their H-1B visa got revoked in 2011 so they came from the US. At the time, they thought that India’s entrepreneurship landscape was in a very exciting space and ended up creating Snapdeal. It is similar for China and I even see it with other Indian immigrants. I run a community for Indian immigrants here with roughly 90 people who are fast growing leaders in tech companies. A lot of them want to start their own businesses but they can’t because of visas. Now, if they are unable to stay in the US, the Indian ecosystem will mirror the Chinese entrepreneurship ecosystem and when that happens, the level of potential of startups in India is going to be immense. This will especially happen because of their cross-border specialty. These people have a good network here in the US and when you pair that with an Indian remote workforce, it’s going to unleash a lot of technologies, companies and business models.

Absolutely! And looking at how Jio has been raising money even during the pandemic, what is the sentiment of people and investors in the US? Is India becoming increasingly on their radar?

Investing is different, public sentiment is different and ideas are different. In the entrepreneurial circles, globalism is always looked up to. If you look more specifically there are adaptations in business models in different parts of the world. An example is E-commerce- in the US, B2C e-commerce makes sense because logistics are efficient and the per capita incomes are higher. So even if you take a small cut, the unit economics still work. In India, the disposable income is not that high and B2C e-commerce companies are limited by the market because even the cream layer of India is sub-50 million people. This is why in India the game has been about B2B2C e-commerce. So going back to your question, as a founder you learn from other founders about different concepts and models that work in a particular region. As a result of this, founders in the US are always looking for people with diverse experiences, backgrounds and thoughts. It is similar at an investor level- we always want to partner with other funds. We regularly share knowledge with people in the ecosystem through calls or slack channels. So at a founder and investor level, multiculturalism is always valued but at a public level, there is more nationalism in the country right now. And as for us as investors investing in India, I am very bullish on the opportunities here.

And my last question is what does a post-COVID world look like in your opinion?

Some of the things that I see from a macro point of view is that the US will recover sooner. This is because the health infrastructure is better and the stimulus is better targeted. What that means is that the ability to get desired outcomes through the stimulus is higher in the US. On the other hand, India might take longer because we’re still offline and our health infrastructure is still not there. As for effective targeting of stimulus, we need to attack from multiple standpoints- we need to get the corporates, MSMEs, rural areas and the consumption engine back. This is going to take some time. Having said that, from a consumer standpoint I am cautiously optimistic but extremely hopeful in the Indian jugaad and Indian spirit to get back up.

There will also be a change in how work is done. I would say remote work is going to be the big trend in both countries but it’s going to be a mixed phasing out. For knowledge workers that require a lot of collaboration, there will still be in office meetings. For other remote teams, there will be challenges because in-person conversations create a level of comfort and safety that us as primal humans need. So there are going to be efforts in terms of building culture and feedback mechanisms virtually. A lot of the ecosystem surrounding remote work is going to get bigger which will lead to unbundling of video calls. Companies are increasingly going to start looking at things like how do you recreate coffee or how do you recreate water-cooler conversations?

Another change will be supply chains in the US. There are already laws in motion and whispers that a percentage of manufacturing will be mandatory to be done in the US. So if that happens, automation is going to be key. And because US corporations will want to keep it light, the ecosystem is going to unleash a lot of small businesses or manufacturers and partners. When a situation occurs where you have a lot of partners, then SaaS models come up to ensure they all work well together. Indian companies with B2B models have done that exceptionally well so I’m hopeful that they can implement similar models in the US.

And lastly, I think Indo-US partnerships are going to be seen a lot more. Indian immigrant founders starting companies from India serving the US market will get big. Additionally, Indian talent is going to start getting a lot more global opportunities. The reason for this is because US companies couldn’t hire this talent earlier due to visas and the hesitation with remote work. However, with remote work becoming increasingly normal, so will the shift towards hiring talent from here.

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De-CO(VI)D-ing the Indian Startup Ecosystem During and Post the Pandemic was originally published in The Asian Edge on Medium, where people are continuing the conversation by highlighting and responding to this story.

What is the Rent-to-Own model?

Most people either rent homes or own them. But access to homes should not be a black and white concept. The rent-to-own model is a step in between renting and owning a home. This model gives you access to any home you want today, without any mortgage while getting the upside of owning a property. To buy a home and get a mortgage you should have at least 10% of the purchase price as down payment. However, after the financial crisis getting a mortgage has become very difficult. The banks have increased their FICO score requirements from 690 to 740, cutting out 20% of US consumers. At the same time 48% millennials have student loans greater than 20K. With such a high debt to income ratio, this makes them more financially complex, resulting in not qualifying for mortgage. Divvy Homes aims to help you increase your FICO score and become eligible for mortgages while simultaneously having access to the homes. All you have to do is pick a home and put in as little as 2% of the purchase price as down payment.

What is Divvy Homes?

Divvy Homes is a company that bridges the path to ownership. The company works with renters who want to become homeowners by buying the home they want and renting it back to them for 3 years. These renters are typically people who do not qualify for traditional mortgages. Divvy screens them on the basis of its own algorithms that predict if the user will be able to pay them back in 3 years, that is significantly less harsh than the mortgage screening process by banks. How it works is, you can select any home they want. Divvy buys it on your behalf while you put 2% at closing as down payment. Divvy then opens a synthetic equity account where you own 2% of the home and Divvy owns 98%. Every month you make market rate monthly payments that are split into rent (profit for Divvy) and equity (increase your ownership of the house). After 3 years, you would own 10% of the house that would make you eligible to apply for a mortgage. Then you have the option to either buy-back the house from Divvy or walk away and let Divvy buy your 10% stake in the house.

What the company does well?

What Divvy Homes does well is have a business model that focuses on ownership of homes. Apart from simply providing homes, the company believes in a complete path to ownership and offers integration of services like cable, internet, home security, landscaping, renters insurance, tech services and even covers maintenance costs like a regular landlord. This aggregation of services helps it to make the experience seamless particularly for millennials who are averse to hassles. Many people argue that the trend of millennials wanting to own large dollar fixed asset investments like cars and houses is dying. Looking at the success stories of Airbnb and Uber, it may make sense. But if you scratch beneath the surface and look at actual data, there have been studies that show that 89% of millennials want to own a home. The reason that Airbnb and Uber type companies became so big is because of the need. The same study also showed that only 40% of the millennials believed that their financial situation would allow them to buy a home in the near future. So in my opinion, the biggest benefit of Divvy Homes is its focus on bridging the path to ownership for people who could typically not afford to buy a home. This has further benefited the company. Based on the information revealed by the company, it’s been found that because the customers treat these homes like their actual homes instead of rented properties, they treat them better leading to lower turnover and significantly lower maintenance costs. Moreover, the company also generates more rent per homeowner than any other REIT, which is historically one of the best asset class performers.

Another aspect of the company that is interesting to point out is how it de-risks itself. Because Divvy outright buys the homes, it is able to hedge its risks to a significant extent from macro factors like pandemics and economic downturns. The company has raised $100M+ in debt financing to purchase the homes. This increased leverage allows them to own a cash generating asset whose value appreciates in the long term. On the other hand if it had adopted the model of taking long-term leases and giving out short-term leases to its tenants like other similar companies, it would have gotten into trouble during these times.

What is the opportunity in Asia?

Singapore and Hong Kong are countries with the fourth and second most expensive real estate globally, respectively. Both countries also have large amounts of upfront costs for buying homes and make it difficult for first-time home-owners to get mortgages. At the same time, in Hong Kong the median property prices were 20.9 times the median household income in 2018. While the millenials in this country want to own homes as it is considered a prerequisite to getting married and starting a family, they believe that they would have to work for 25 years before they could afford a home. In 2019 due to political unrest Carrie Lam did relax mortgage regulations for first-time home buyers. Despite that according to Bloomberg Intelligence, the new regulations did not benefit too many home buyers. In both these countries, Divvy would have the opportunity to tap into the millennial market. While for most millennials the sentiment in these countries remains that they will have to rent a home for life, if given a choice they would choose to own a home. Additionally, the usual stability of income and jobs in these countries (disregarding political unrest in Hong Kong) makes these countries relatively risk-free for Divvy.

In emerging economies like India, 49% of millennials aspire to be home buyers. However, the guidelines set by the Reserve Bank of India make it difficult. It requires them to put 20% of purchase value as down payment, maintain a good credit history and not take risks with their investments for a period of 3 years before purchasing the house. Apart from the cost aspect another reason for millennials not being able to buy homes is due to the complexity of the home buying procedures. The lack of digital infrastructure for purchasing houses as well as the paperwork and hassle involved in aggregating other amenities makes it a complex task for them to purchase a house. Divvy would be a perfect fit for a market like India where it could help millennials and first time home-owners establish credibility to get a mortgage as well as make amenities more accessible and easy to use.

Overall, a company like Divvy Homes would be able to generate a huge impact in Asia particularly for millennials and first-time home owners. Regardless of whether these countries are developing or developed, the system has made it incredibly difficult for this segment of people to own homes. Through the rent-to-own model, Divvy would make this bridge to home ownership an achievable goal.

Why Buyers are using the Rent-to-Own model for Purchasing Homes? was originally published in The Asian Edge on Medium, where people are continuing the conversation by highlighting and responding to this story.