Silicon Valley vs Hong Kong Startup Ecosystem with Edith Yeung of 500 Startups

Welcome to episode 131 – recording today’s intro in Prague – been in Europe a couple weeks now for Dynamite Circle conferences and its going great. There is all this news on UK exiting Europe – I’m just an innocent American living in Asia witnessing all this craziness.

A quick and fun announcement, we are going to be doing some “Cross border trips” from Hong Kong into Shenzhen for various themes – and our first one is Friday July 29th going to the Qian Hai Free Trade Zone in Shenzhen – a full day event leaving Admiralty at 8am and going to various government incubators and cross border e-commerce companies, training workshop and meals all included. If you’re interested to read about this event and more check out globalfromasia.com/crossbordertrips

Ok, now for today’s episode – we have a special guest, Edith Yeung, a venture partner at 500 startups. I was fortunate enough to catch up with her at the Rise Conference and she is kind enough to come on the podcast today and share about her perspective on the startup scene differences between Hong Kong and Silicon Valley. She is in HK a lot so maybe we can catch her more – let’s listen in!

√ 500.co
√ Riseconf.com
√ globalfromasia.com/crossbordertrips
√ Chinaimportal interview on my ecommere experience

Thank you Edith for coming on! I hope some startups and entrepreneurs got some great ideas on how to pitch a VC. Also it is so tricky to know when to raise money and when to build. Should always make progress and not wait for investment!

Also – if you want to read some of my own battles – I have a recent interview on Chinaimportal – Fredrik is a big supporter of this podcast and got me some exposure on their blog – I’ll link to it in the show notes!

That is all for this week – we have a lot of amazing interviews coming up over the summer months – from incorporation to various parts of Southeast Asia to manufacturing tips in China – we are all over Asia

And, if you want to meet up and do this fun cross border trip – let me know – check out globalfromasia.com/crossbordertrips and let’s make some moves!

Til next time, enjoy!

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Introduction: Welcome to the Global From Asia podcast where the daunting process of running an international business from Hong Kong is broken down into straight up actionable advice. And now your host, Michael Michelini.

Michael Michelini: Welcome to Global From Asia number 131. Recording today’s introduction in Prague. Yes, in Prague. I have been in Europe for a couple of weeks for the Dynamite Circle conferences and it’s going really amazing. There’s also this news just came up in the UK leaving Europe and I’m just some innocent bystander American from living in Asia just witnessing all these craziness and people talk about everywhere just kind of funny timing that I’m here and just a fun announcement, we are going to be doing some cross border trips, that’s what we’re calling it. So a lot of people from Hong Kong wanna go into Shenzhen for different themes and our first one is going to be on Friday July 29th and we’re going to the Qian Hai Free Trade Zone in Shenzhen. It’s going to be a full day event leaving Admiralty District of Hong Kong at 8am and going to different incubators and cross border e-commerce companies have a little bit of training workshop, roundtables and lunch and dinner is included. So, if you are interested and want to learn more check out globalfromasia.com/crossbordertrips, trips with an “s”. All right and now for today’s show we have a special guest with us, Edith Yeung, she is a venture partner at 500 Startups and I was fortunate enough to catch up with her at the RISE conference and she is kind enough to come on today on a podcast and share with us about her perspective on the Startup scene differences and similarities between Hong Kong and Silicon Valley. She goes to Hong Kong quite often lately and she’s definitely interested in helping out startups and entrepreneurs here so she shares a lot. And let’s listen in.

Michael Michelini: Okay! So, thank you everybody for tuning into another Global From Asia podcast. We have with us a special guest. She’s from, I was fortunate enough to meet her at the RISE conference. Edith is from 500 Startups, thank you for being here, Edith.

Edith Yeung: Hi! How are you? Thanks Michael. Nice!

Michael Michelini: Great!

Edith Yeung: Great meeting you at RISE, too.

Michael Michelini: Yeah, yeah. I’ve heard about you alot and I always, I always think of you as a Dolphin Browser and now you’re a partner at 500 Startups in Silicon Valley. So it’s, it’s really great to have you here. So do you mind introducing yourself to our listeners?

Edith Yeung: Yes. So I am a partner at 500 Startups and 500 Startups is an early stage seed fund and we run out of master writers but, I particularly focus on non-curators or early stage seed investments. So, and we went on 50k up to up to 200k, and lately you know in addition to mobile startups. I’ve also been looking at a lot on VR-AR IOCs startups. So, definitely very exciting space to be, tons of things to learn.

Michael Michelini: Awesome, awesome! So you’re originally from Hong Kong but most most of your time is in the U.S., right?

Edith Yeung: Yeah. So I’m born and raised in Hong Kong. I love Hong Kong. It’s like my family is still in Hong Kong, but I’ve been in the U.S. now for over 20 years now. I came here for school and just been here ever since. Pretty much most of my my career has been in Silicon Valley for the last 15 years.

Michael Michelini: Great! So, yeah. I mean I think there’s definitely a lot of people in Hong Kong that are in Silicon Valley now, and what do you, what do you think of that trend? You know there are some I think a lot has maybe in Hong Kong and other parts of Asia they’re trying to bring back people like overseas people that have studied over abroad or worked abroad. Is that something you think is going to happen more, or are people going to continue to go to U.S. and stay there?

Edith Yeung: You know in in the sort of their main enshrined Chinese way of calling it will be like sea turtle.

Michael Michelini: Yeah! Heigway, yeah.

Edith Yeung: Heigway and I mean obviously there are. I think it really depends on what you do and what you end up, what industry you want to focus on. I, I think you know Hong Kong and China is such an exciting and vibrant high growth market. And I think, you know, if I would start my career over again probably I would have come back to China and Hong Kong and you know it’s just being such a high growth environment. Don’t get me wrong, I love Silicon Valley. I think there’s so much like technology and innovations and are now advancement that we’ve seen even in the the last 10 years, but it’s just the sheer growth of China market is astonishing. It’s astonishing. I think there will be more and more Chinese who graduate from U.S who want to go back to Asia to, to develop.

Michael Michelini: I got it. And, yeah something about growth. I mean the RISE conference is only the second one, and I mean it was, it’s got a little bit of back up from the Web Summit team but it’s, it was a pretty amazing conference for the ecosystem and in Hong Kong and Asia. There are people from all over the world, too but, it’s really different in a sense. I’ve been in Hong Kong in China for about 10 years now and it’s definitely a lot. Finally it seems like there is more attention being paid maybe in the startup ecosystem and in Hong Kong and, or how are you on?

Edith Yeung: Yes, it’s great. I think you know for a long time, Hong Kong obviously been such a big, you know, finance hub, but technology has never been sort of the focus and now in the last couple of years says I, I can also feel like the energy is so much more people not only local but around the world coming to Hong Kong and start businesses and I love Hong Kong obviously. I was born there but also Hong Kong is very I think easy compared to mainland China for people who are non-Asian to get started because it’s so convenient and most of the folks they can speak pretty good English so, much more easier to get by compared to other other countries in Asia.

Michael Michelini: True, true. So, yeah in Hong Kong specifically, I mean I think I’ve heard Dave talk about this. Dave McClure your partner at 500 and I think there’s a few different sectors in Hong Kong specifically that you guys think are good opportunities. I think it was like fintech and cross border, e-commerce and things like that, or what are you, what are you or maybe that has changed since that was a couple of years ago I heard him talk about that but you know what do you see in opportunities in Hong Kong?

Edith Yeung: Yeah, I think that for me because I focus more on IOT. I actually think that you know, Hong Kong being so close to Shenzhen honestly just even like some of the IOT or hardware related work we have done in the U.S. most of them and I have to go to China because of manufacturing exemption and I think that Hong Kong, and by the way, you know DGI which is one of the largest strong company in the world actually comes from originally the Hong Kong University of Science and Technology, Hong Kong UST.

Michael Michelini: Wow!

Edith Yeung: Yes, and most of us don’t know about that. And, I think that there is gonna be just being so close to China, Hong Kong can play a really, really important role in IOT and also in the last few months I have some go to conversation with the Hong Kong government and now Nick Yeung is the new secretary of innovation and technology to have a strong emphasis on smart cities and wanted to rebuild part of Hong Kong as the place where service from the ground up. I think that’s also very interesting seeing them so motivated. I have a little bit different. I mean, I totally agree with Dave and not, not agree on the other hand. I think cross border commerce is something that we’ve been actively investing in for sure. When he said what they meant is – you know we have invest, invested in a lot of marketplaces. We let it to fashion, make-up or luxury goods and we own them some of the U.S. are sort of that we have invested in and now looking at China as a potential market. So, I think if I would start up would like to play a role there. Be able to sort a bridge the two world. But, part of me on Syntec even though there’s so many investment banks and bank general happening in Hong Kong I think Hong Kong in terms of banking and structures costs more to the U.S. I actually not to a little bit bearish on that because I think when there is fintech of finance in general is not just about innovation, it’s about policy and infrastructure. I mean U.S you don’t see anything like oddly pay or wechat payment. We’re really taking off as much as what we see in China have everything we do it, you know government and infrastructure banking been around for so long and most of the U.S. bank or Hong Kong bank is pretty much on mainframes so to disrupt that, actually it will take them much longer because you have to deal with governments and policies so, I don’t know why I want to see more, but even most of the U.S., U.S. innovation that we’ve seen just takes a long time so, I personally would like to push for seeing more IOT and commerce startup in Hong Kong and support that and make that happen.

Michael Michelini: Awesome! Great, great advice. Yes, it’s true. I mean there’s, there’s this space would becoming a huge metropolis like Hong Kong, Shenzhen you know even goes into like Dongguan, Gongju like it’s and each one of those is like huge, huge populations and they’re trying gonna like, it seems like the trend is trying to even merge or make it easier to go between all these places between all, you know with new infrastructure being built in and it’s, it’s almost scary how big it’s gonna be I think if you just add all those populations together it’s like I guess around 15 million each one maybe, or so. Probably like it’s just insane how, how big this area is going to get. So, you kind of mentioned a little bit the challenges, but I mean I think I can think of some challenges for the Hong Kong community that maybe we could try to work on or improve. What are your thoughts?

Edith Yeung: So, I hate multiple things, you know, to be able to build up an ecosystem takes a lot. It’s not purely just for the entrepreneur. So, I have to sight in just the challenges and suggestions that I have for Hong Kong community. Start with the founders, I think, you know, Hong Kong founders – I mean I am from Hong Kong, I’m very supportive to talk to all of you at the same time. I think what I’ve seen is most of the farmers I’ve met in Hong Kong really, really focus on talking about when they pitched their companies about features or what they do. And, you know most of the things I’ve seen has been done like in the U.S. so, I think finding that analogy and say, “Hey, we’re better”. It doesn’t even you say with an every need of U.S. or for Asian market that to me is already like a really fast shortcut because it will show that you understand the world of your industry, that you not actually focus on a feature or two because most investors are greedy, right? They’re not interested in just you as an engineer can build a product, they want to know that you can do a business and what I found a lot of times what I’m looking for is if you really have a product you already launched, the first thing I would love to see is the demo of the product. Number one, if you have traction you’ll relaunch – talk about those numbers. Those are the two things usually I find it very difficult to get that from a Hong Kong founder. They always like to talk about what they do rather than these are my traction and this is showing off your product and showing off the teeth. I think a lot of Hong Kong founders are really humble. Don’t be humble, if you are building a business, you’re selling – you should be a walking billboard of your business at all times. So, these, these are a few things I’ve found and challenges that I see when Hong Kong founder pushing their business. And, on a different note on the flip side I think a lot of Hong Kong angel investor also need to think about not, I mean obviously we, as investors are always looking for return but investing is a sort of compared to you investing in real estate is really, really different. I think you, you’ll gonna take a lot of risks but at the same time I think the help that they need to start up me from you is sometimes it’s more than your money so, getting the investor to getting used to the start up environment to really learn how to actually works which helps start up that is the result and that is also another challenge that I really want to see more and more Hong Kong startup investors and serious A, serious B type investor be build up in Hong Kong as well.

Michael Michelini: Yes, that’s great advice. I think, I think I’ve said that to and if others but I think there’s this lack of experience right with you know like investors I think want to invest and startup want to startup but I think I’ve seen a lot of times maybe they’ll get investment or have money but they don’t have the mentorship. I think that’s what’s really missing is the mentorship and the help you know in the community which is getting better for sure. But, I think that’s something that leads me to Silicon Valley which honestly, I don’t have too much experience with but I’ve been there a few times and it’s, it’s obviously the heart of the global ecosystem for startups and I think it’s a hard or it could be a long answer but, what’s the magic you see in Silicon Valley. My guess is just the community, right? For all these decades that’s been built up.

Edith Yeung: Yeah, I actually have a summary for that. I think we are magically high in any ecosystem. As I mentioned earlier there’s a sort of founders, there’s investors which I think being in Silicon Valley is really fortunate. Most of the angel investors are usually also come from the tech community. We have a lot of Google, Facebook, Apple folks that are you know make a lot of money because of IPO’s and they are willing to put their money and reinvest back to back to the ecosystem. So most of them understand some of the metrics and they understand that most of this stuff probably won’t be money for the first couple of years but they are quite comfortable with that. And couple other thing which is important one there’s also talent in Silicon Valley you have Stanford and Berkeley just around the corner. You can find a lot of great talent that could potentially join your startup. And then last but not the least, you also see a lot of the big sort of giant internet giant experts in Silicon Valley namely the Google, Facebook, Twitter, Square, Yelp, Salesforce you name it and they’re all here. It’s like I live in San Francisco, Twitter, Uber, Airbnb, Pinterest are all walking distance from my house and this is really, really close by being able to so close to these industry leaders so you know where tech is going. I think you know got to Hong Kong. I think Hong Kong has a great education. We find great engineers from the university graduate but have a lot to do with the culture I guess you know my parents live in Hong Kong. I think there are so many have a lot of expectation for a new graduate. They want to have a good job to make that money, working as start up they don’t make good money so, so with that that’s really what makes it, makes it different in terms of certain knowledge.

Michael Michelini: Okay. Great, great! So, what would be a good next step for Hong Kong maybe we’ve touched that a little bit. I think it would be maybe educating the I guess both sides of you know the investor and the founder, or which one do you think would be, or what do you think is a good next step to get to the next level or closer?

Edith Yeung: Yeah, I mean other than you know get everybody to come to visit in Silicon Valley, that’s one way to do it.

Michael Michelini: Oh, okay.

Edith Yeung: But, I think in all seriousness me, personally I should have been coming back to Hong Kong quite often pretty much every three or four months. I actually been on a pooling day that all my Fiver colleagues and in fact they’re not only in Silicon Valley but also we have a lot of colleagues in greater Asia, in Southeast Asia, Japan, Korea. I’m trying to get as many people to come to Hong Kong and sort of connect and have more conversation with the locals. I think we don’t know what you don’t know, if you don’t know like this ecosystem in other places is happening in a certain way I think the locals will know how to build it the right way. So, personally I like to do more sort of bridge the gap.

Michael Michelini: Great! Yep, thank you for that, that’s courageous. So, maybe we’ve talked about maybe Hong Kong startups are not talking numbers and metrics and KPIs and having a demo in it and showing their team. Is that normally what happens in Silicon Valley, or maybe we can kind give what should be the picture like they’re working on a demo maybe working on our MVP part time, building their team. Meanwhile, still maybe they’re still in corporate, or should they go, you know try to get to the accelerator I guess first maybe build up, build some product get some, get some traction and then, maybe look for certain programs like 500 or maybe what will be a normal track or a good track to follow?

Edith Yeung: Yeah! So, most of the startup that I have personally invested in again, it depends on what you’re working on. So, let’s start with, let’s say mobile startup if you more B2C like consumer focus, you’re building a mobile app. Honestly, it’s not that difficult to launch a mobile app anymore. I mean there’s over 1.5 million apps in iOS and Android on both of these platforms. So, you’re not doing anything that is so in the oval and new, and if you are engineers and you know what are you’re doing which I, most of the time I just assume that you know how to build a good product, right? If you are having trouble even doing that, it’s very difficult for us to invest. So, my suggestion usually if you’re B2C that’s a mobile, launch it first, learn as much as possible and think about not just building your product itself, but also do research and honestly, just searching on the app store you can already figure out there’s all these other startup already working on what you’re doing. So, so it is not that difficult to figure out. So, I think the key is just first get some early numbers, understand the unit of economics from install to a monthly active, daily active to be able to eloquently talk about these numbers. So, they gave me the feeling that you are not only an engineer, you are a founder means that you know how to build this business versus if you’re working on a B2B more end selling to end the price the bar is a little bit different. We don’t expect you to necessarily make money, but if you are first starting B2B is all about selling. I used to work for Siebel and Oracle and when Siebel and Oracle first started there are no product but because the founders are such a good sales person literally they they sold like vapor wear, I still were able to get it as a customer.

Edith Yeung: So, enterprise is very different. So, usually what I look forward will be two or three private customers that you are able to convince, business is actually middle even when you get paid is okay but willing to spend time with you and put resources and do pilot with you. So, that’s what we’ll be, what we’re looking for. So, talk about these customers early on we’ll be able to show that, oh you know you’re on the right track. So, that would be something that I look for.

Michael Michelini: Great! Now, thank you for this. And, so I think if you have a couple of 500 investments like shop line is a pretty good success story in Hong Kong and outside of 500 investments I know Appiani started in Beijing and I remember I was on a meet up in Beijing and they said that they kind of recommended go to Silicon Valley regularly like every few months have one of your founders like CouchSurfing you know, and spending time there. So, is that still something, I think that still require re-think, or what time should somebody start kinda networking in the Valley. It seems like that’s what people in Asia are always talking about this. It’s kinda like starting to meet investors and spending time there.

Edith Yeung: Yeah. I think that you know by the way coming to look around not just Silicon Valley in fact for me I’ve been doing the other way around ’cause I spend most of my time in the Valley. I actually try to come back to Hong Kong actually particularly more in mainland China because every time I go I learn much about the local markets some of the innovations. If you really want to build a world class startup or a company going overseas in Silicon Valley and other market you’ll always gonna learn something because the key is it doesn’t matter if you’re starting Hong Kong or not. Every single vertical or business you decide to build somebody else is doing it, somewhere around the world that’s why it is not going overseas you will learn so much about your industry in place, in certain practice or strategy that you may never fall off. So, yeah I highly recommend you know, Hong Kong founders to come and visit Silicon Valley often. I, maybe I should like write down, I’ll share it with you, Michael.

Michael Michelini: Sure.

Edith Yeung: A list of all the major events that’s happening in Silicon Valley. Because usually right now as we speak this week we are doing, Apple is doing WWDC, the development conference.

Michael Michelini: Yup,yeah.

Edith Yeung: So tons of people are in town. Usually May is Google IO, September is Sacorage Disrupt. There’s always something going on that if everyone good excuse to come, come to the Valley not just for Hong Kong founders, people worldwide come here get together to learn about the latest technologies. There’s a whole list of major events that I highly encourage all of Hong Kong founders to come and visit us.

Michael Michelini: Great! That would be if I can link it, if there’s a blogger or website I can link it or we could add it to the show notes. So, getting towards the end here, thank you again for your time, I know you’re so so busy. So, I’m sure there’s listeners and entrepreneurs like hoping to get on your radar. You mentioned some tips already with metrics and having a demo or a product and some some traction, and you’re also coming to Hong Kong often so, maybe there’s a Hong Kong based or Asia based startup they should try to catch you in Hong Kong, or what’s a good way to get your attention?

Edith Yeung: Yes. I, I do come back to Hong Kong often but I think the best way to get in touch with me and by the way, there’s an art to pitch email as well. I think in the pitch email just talking is not enough for me. I’m always looking for tractions. So, but feel free to email me love to learn more. And, particularly if you’re working on. I don’t see BR, AR, AI type of companies. I’m more than happy to learn normal for sure and I’m very easy to find so, basically edith@500.co . Feel free to email me, I’m happy to chat and looking forward to learning more.

Michael Michelini: Great, great! And, I think I want to, you know, sometimes people the 500 program the brand is so-so big but I think sometimes people think of it as they don’t realize there’s different there’s a fund as well as there is the program.

Edith Yeung: That’s right.

Michael Michelini: So, so you said at the beginning you’re – you’re on the seed fund which is like 50 to 200k normally investments and then would that be happening, or should somebody try to go to the program first, or try to get a seed fund private program first, I mean depending on what stage you’re on or what, or you’re more like looking people for the fund side?

Edith Yeung: Yeah, good question. I think you know I obviously the program for founder startup have really strong emphasis on marketing and growth and I, I think for us if you are thinking about wanting to expand in the U.S. particularly we have hired for our program almost 20 now, full time girl hacker that worked with you literally on a daily basis over the three months does unusually for so the first time and second time entrepreneurs that need help with marketing, I think you know accelerator program is great for that. Usually about a thousand company apply, we would take anywhere from 30 to 50 companies that are competitive.

Michael Michelini: Wow!

Edith Yeung: I think, you know, for the direct investment, I will say usually I like to
invest in founders have previous exit or and if, and or if you are industry veterans. So, let’s say you’re working, we’ll go back to been separate if you spend spent many years in a mess in banking and you’re going after the, you know, I was just talking to a world management startup earlier today and they’re really, really experience so, we are open to invest our operating act if you have a very unfair advantage where you don’t necessarily need a program to help you. So, again it really depends on what you’re working on and what stage and also the founder background that is how we decide. It is something that we would encourage the family to join a program versus you know we do the right investment.

Michael Michelini: Okay. That’s very clear. Okay. Thank you again for your time and we’ll, we’ll, I’m sure many entrepreneurs and others listening will benefit from this greatly so, thanks for coming on.

Edith Yeung: Yeah! It’s totally great. Thank you, Michael. Great chatting with you.

Michael Michelini: Okay. Awesome, Edith! Thank you so much for sharing and I even learned a few things I’m sure other startups and entrepreneurs are listening will learn a lot, too about pitching a VC and when the right time to get money and when the right time to just put your head down get some down and done and get some tractions and get some product. I totally know how difficult it is I know people always want money first and they wanna always be trying to you know, make some fun nothing but I think that’s the hard part of an entrepreneur and we suck it up and get it done. Also, I have a recent interview on chinaimports.com. Frederick is a big listener, supporter of this podcast and he got me some exposure on their blog. I talk about some of my e-commerce and sourcing experiences and get some tips for you. If you both are interested so check that out, I’ll link it on on the show notes for you to read. That’s it for this week. We have a lot of amazing interviews coming up over the several months during the summer time. We have incorporations and different parts of the Southeast Asia, manufacturing tips in China – we are all around Asia so, if you do want to meet up in person and do some fun cross-border trips let me know. Check out globalfromasia.com/cross-bordertrips and let’s make some moves together. All right. And that’s all for this week and see you next time. Enjoy!

To get more info about running an international business via Hong Kong please visit our website at www.globalfromasia.com. That’s www.globalfromasia.com. Also, be sure to subscribe to our iTunes feed. Thanks for tuning in.