Brian Ma: Unicorn Founder to VC, Southeast Asia 10 Year Patterns & Letting Go of Ego - E231

· Podcast,Founder,Start-up,VC and Angels,Podcast Episodes English

“Building a company is an extremely lonely journey. You're rejected 99% of the time, and most of the feedback given to you is probably wrong. What people need isn't more people telling them what to do, but a very supportive ecosystem of other founders who have also failed, telling them what they did wrong, and how they would do it later on. That's the ecosystem we're trying to build.” - Brian Ma

Brian is a 3x founder turned investor now spending the majority of his time as General Partner of Iterative Capital. Brian was previously the founder and CEO of Divvy Homes ($2B valuation), Weave (YC S14, acquired), and Decide (Series C company, acquired by eBay). In non-existent spare time, Brian enjoys dog parks with his German Shepherd mix, rides on his motorcycle, and aping into interesting crypto projects.


Jeremy Au: (00:29)
Hey, Brian, really excited to have you at the show. You are building an incredible venture capital approach to Southeast Asia, and also a serial and successful founder. So really excited to hear your story. Could you share a little bit about yourself?
Brian Ma: (00:43)
Yeah. For sure. It's great to be here, by the way, and Happy New Year, Jeremy. For those that don't know me I'm a general partner at Iterative Capital. We're a seed-stage fund. So it's literally just fund we just happen to run an accelerator on the side. Every company that we invest in, they go through the program.
We help them for 14 weeks. At the end of 14 weeks, we'll run demo days. About 400 or so investors will meet them, and then the majority of them, I think 90% of companies will then subsequently raise a round afterward. So that's what we've been doing for two years. Prior to that, I founded three companies in the last 15 years. The first one was an e-commerce AI company, before AI was a thing, raised 16 million USD and worked on it for about five years. eBay bought the company, it ended up in the Bay Area where eBay started a second company. That one went through YC. Then my most recent company is a $2 billion PropTech company now. Recently, two years ago I transitioned from being CEO to being on the board. So only thing I know how to do is start companies and grow them.
Jeremy Au: (01:58)
So how did you first get into the addiction of building those companies?
Brian Ma: (02:04)
I think maybe at the very beginning it was, I just wanted to do something that had the impact, and impacted me, was kinda changing lives and I, for whatever reason, thought the only way you could do this was to build large businesses. I didn't think I would do this long term, but what ends up happening when you're a founder? You don’t know how to do anything else. So after you start your first company, my first company was great, but it wasn't a billion-dollar company, right? And so I was, oh, do I join another company? Do I do something else? And I tried interviewing for bigger company roles, but nobody wanted me, so I just end up not having a choice. So, that's why my second company, that's my third company, et cetera.
Jeremy Au: (02:12)
That's a common problem, right? And I think there are a lot of founders who can't go to the experience, right? They had a successful experience, they steered to some exit, they had an unsuccessful experience, and then there's a transition point about “Are you gonna do it again?”. Right? This is exactly what you're getting into this time around the first time you're a little bit shaky, but the second time, it gets going much clearer. So how did you, I think, approach that second and third time differently in front of where you first built your first company?

Brian Ma: (03:31)
What was interesting to me was every company that I started the culture, we codified it and it was slightly different. And so what I think ended up happening was the early 10 or 12 people ended up being the champions or the defining people for our culture. And so, that itself was very interesting. Maybe when we talk about scaling companies culture tends to be the one thing, that kinda ends up being very hard to change later on. And so I think as I was doing later, later-stage companies being very intentional about setting a culture from the early stages what's acceptable, what's not, how do you go about making decisions, et cetera, was just really important.
Jeremy Au: (04:26)
What's interesting is that you chose to take all those learnings about, building your first company, your second year, a third company, and then now you've made a decision to found something in the venture capital. Right, the fund approach. Which is the total opposite, right? I mean it's definitely auto agonal at least, is still in tech. And also you made a geography shift as well, right? From the US and Southeast Asia. So could you walk us through how that shift in thinking happened?
Brian Ma: (04:51)
Yep, yep. For sure. Maybe what's interesting for folks that haven't gone through the experience is when you, when you start a company and then when you exit, typically when you're, do I start another company or the thing that you're trying to shoot for is you're trying to shoot for a better company. And so the first company, we did fine. We raised 16 and made money for everyone. There's still room to build a bigger company. And so I did the second one. And then the same thing with a third one. I haven't built a billion-dollar company yet, so why stop? The interesting thing, having reached the, I don't know, magical, kinda unicorn status, is when you're making a decision about whether to build another company or not, you’re like how can I build a company that's bigger than a previous one?
So you're shooting for a 10-billion company or whatever. Most of the time people don't have, you accidentally build big companies, right? They'd all come up and you're, oh, that one's gonna be a 10,000,000,001. And so I just didn't have a good idea to go after for, for a much bigger company. And so really early on, I got back with Chen, who's my co-founder for my very first company. And I was, “Hey, I don't really know what to do with my life, blah, blah, blah.” And I think over sushi one day in San Francisco, I was, “Hey, have you thought about doing this accelerator thing?”
Why build one company? You could build hundreds. And so that snowballed. And then we got into this whole planning and strategizing about what that might look like. It just so happens that you can hire both from the region. So I was born in Hong Kong and go back all the time. Saw a family there. Chen is from Malaysia and is now living in Singapore. And so what was interesting is when we were trying to figure out what to do with the fund and we wanted to be different we looked at different geographies including Southeast Asia. So when we were doing early market research, Southeast Asia was just extremely interesting.
You're in a period now of the inflection point. I feel I'm now part of the region now. So our executives now have some money, right? They're angel investing. You're seeing it, people starting to help each other. You're seeing kinda nascent beginnings of what looks like a very robust founder ecosystem. I think what's interesting is the thing that's lacking still. There aren't a lot of experienced founders in the region who have the time to go help other founders do the same thing. And so when we saw that was lacking and we could provide that, that's when we knew that right now, it was the thing to do. We have a love for the region. And then there was quite a bit of opportunity to build an interesting new VC in the space.
Jeremy Au: (08:02)
Yeah, and it's been tremendous as seen, not just, I think the success in terms of growth as a fund in terms of SS under management, but also I think the quality of the founders and the positive word of mouth that I think people have shared about Iterative. In fact, I think it was interesting because I remember when we first started talking about this it was very much, I think positioning was trying to be, The Y Combinator of Southeast Asia, that initial accelerator. I feel the vision has also changed a little bit over time.
So could you share a little bit more about what the initial approach was and what you've learned a little bit more since launching it, building it, scaling it, and building up products on

top of it?
Brian Ma: (08:39)
Yeah, for sure. Maybe to start, start off I was part of YC 2014. PG was still there. It was maybe, I wanna say 60 companies or something. So it was still super, super small. And you would get a lot of time with all the different partners. YC, the YC experience to me was amazing, right? Because you all of a sudden have this cohort of founders that you can type on it. We made kinda very, very long-term friendships to this day. Now, 10 years later a bunch of our founder friends still get together every single year. You also get very, very hands-on support from Justin Kan, from Casser, who are now also kinda of, Gary, right, who are all long-term friends.
So, the early small YC experience was just, amazing. We wanted to replicate that here in Southeast Asia. And so a lot of what we have done has been inspired by the early YC experience. I think the thing that most people don't understand about YC is everyone who's helping you is a founder. They, everyone has built a company, and more importantly, everyone has failed at some kind of major part of building. What's very neat about it is you are all in this very close community of founders who are just sharing their learnings and how they approach certain decisions or questions, et cetera.
The reason why it's very hard to replicate YC is that it's very hard to replicate the ecosystem of just amazing entrepreneurs who go through the community. And so we're trying to do that here. Literally having this same quality of mentorship and community around the region. So I think that was what happened, in the beginning, hasn't changed too much, honestly, from what we've done in the beginning. I think the only thing that's really changed is we now have quite a bit more capital and so we're deploying to more companies. We're scaling, we now have visiting partners. We have a bunch of templates on how to do things. How do you do experimentation, how do you go about doing fundraising? So everything has gotten a little bit tighter and more replicable. And so we've scaled quite a bit. The experience itself, I think is still quite the same.
We spend a lot of time with every single company and I think that's the right thing to do. Maybe kinda one thing looking forward to. I think what's gonna end up happening is you're going to get people us who are specific experts, if you will in certain areas, right? Because in

Southeast Asia, for example, you run into very different challenges than you would in the Bay Area. Two very quick, kinda examples here are with very little money raised, your team becomes extremely big. And so all of a sudden you have culture issues, management issues, leadership issues, et cetera, and so you have to deal with those much earlier on. Very similarly, if you're starting a company in the Southeast Asia market, expansion becomes kinda one of the things that you're doing within a series, right? So you're in Singapore, it's too small, you're going to Indonesia, or you're in Vietnam and you have to go figure out, do I do something in the Philippines?
And so those are things you just don't run into when you're building a US company. And so having folks around the table and in the community who have solved the challenges specific to your region is incredibly important. Those are the types of things that we try to build. Make sure we're giving founders the best experience in the community.
Jeremy Au: (12:40)
Love that. And I think chronology, right? And showing how your thinking has involved and approaches changed. I think what's definitely true is that Y Combinator company has built something special. In the US I think they're trying to replicate it for the world. And here you are actually building this for Southeast Asia, right? And so I think it's interesting because I remember obviously, as someone who's in venture capital and a former founder looking at the startups and I think Y Combinator company and Iterative are picking very differently.
I just felt the overlap in the type of founders and the startups is actually quite significantly different. So perhaps the end game in terms of approaching the community has some similar dynamic, but the selection does seem to be different. So what do you think about that process from your perspective?
Brian Ma: (13:26)
Yeah, great question. I honestly think it's not that different. The reason why I think it seems that way is that there are just a lot of startups in the region and a lot of them are amazing, great founders, great hustlers, executors, et cetera. And so it's funny cause I don't think we've competed on any deal. This tells me that we're seeing generally the same things and then picking most of the good ones together. So I, until I feel we're directly competing with YC on deals what that's telling me is just there's a lot of great founders out there in Southeast Asia and so plenty of capital to be raised and deployed into the region.
Jeremy Au: (14:17)
I mean, I think to push that further, I would probably say that Iterative picks a little bit in a more local way, I think. I feel YC does seem to pick on very US-centric credentials. Universities. Like, work experiences, right? Even referral networks.
Brian Ma: (14:38)
That's a great observation, Jeremy. Cause I think that we, spend a lot of time with founders, for those that don't know, YC is a 10-minute interview, right? So you go in and it makes sense cause they are on a massive scale. They don't have that much time to do diligence. And so a lot of times you're looking at the application, you're looking at a couple of questions, how people answer. It's great that the partners that are able to pick quality companies from just so little time spent the reverses. We spend a lot of time with founders and typically what happens is we wanna make sure that we're fairly aligned with the founder on what they're going to do within a three-month period to make sure that one, it will be trajectory-changing, and two, that we know how we're gonna be helpful. And so what that tends to do is that tends to give you a really good insight into how a founder executes. So we will just give a concrete example, sometimes we'll go to a founder and be, Hey, I don't know if I agree with you on here's what you think you, you think you should go in direction A, we think you should go into direction B. Could you try this? We'd literally tell them, could you try talking to a dozen users and asking this specific question, et cetera, et cetera. And then people will come back to us and be, Hey, we did this. Here are the results here. This is what we think about it. And we'll do a couple of iterations of these.
What tends to happen is we're able to pick out founders who just execute well and think very strategically because we get multiple views into a company. Whereas YC, again, just because of the scale, only gets the 10-minute, snapshot of a company. And so it allows us to see, I think, a little bit more perspectives which give local founders, founders whose English isn't very good, founders who I don't know, don't know how to pitch well, et cetera, just kinda more of a chance. So maybe that's a little bit of what you're seeing.
Jeremy Au: (16:43)
I think what's interesting is that there's also an interesting dynamic of what you mentioned a little bit earlier around the maturity of the ecosystem, right? So I think in terms of founders, in terms of the different unique challenges, what would you say that, over the past two years, as you worked with so many founders across so many different geographies, what would you believe are some myths or misconceptions that people have? Southeast Asia tech or startups or founders?
Brian Ma: (17:09)
Yeah, maybe the one that comes to mind is everything's a copycat and you definitely see a lot of copycats, but I think when you're in the region you'll find that a lot of founders have very deep insight into cultural differences or maybe even religious differences or how things behave, things are different. One good example here is everyone in Asia uses WhatsApp and nobody in the US really knows what WhatsApp is. So all of a sudden economies develop very differently, right? In the US everything's dominated by Amazon. In Asia, everything's fragmented. No one goes to websites. Everyone's using their mobile phones to buy stuff, including the retailers themselves. Most of the time logistics is extremely fragmented. And so the types of businesses just looked very different. And so if you're a Western investor or even a Chinese investor kinda coming in and trying to copy and paste what you did in your existing region, it just doesn't work. And so I think that's the one thing that I think we've been. Most intentional about is, what are the types of things that look different here?
Maybe another big thing is Singapore in particular, which I think is quite strong in just kinda very deep tech startups. A lot of people think that doesn't work as well or their tech isn't as good, et cetera. Some really innovative stuff is happening in the region. I think what I'm trying to say is you're going to find very big businesses being built in Southeast Asia that nobody even predicted were going to be able to be built here. And so I think it's just a very exciting region to play in as of easy.
Jeremy Au: (19:20)
I think this goes into the perceptions, right? When you're an insider or outsider looking at a region and I think there's obviously a lot of concern. Because they're saying Southeast Asia, is it too fragmented? Is it never really gonna be able to build unicorns? Because the last batch of unicorns unfortunately have struggled over the past few years as they hit the reality of multimarket, maybe fragmentation, different approaches. So how do you feel about that?
Brian Ma: (19:46)
Yeah, I think the biggest, the most concise answer is it's changing, right? If you, every single year, the average GDP has increased, I think two x more than every other region. Your middle-income layer is almost doubling in each region. And so it might take seven, eight years, to build a really big company. What people don't really understand, it's very hard to think about is you should be looking 7, 8, or 9 years out rather than, “can you build a company today?”
It's, “can you build a company in seven years that's going to be not a billion, but 10 billion”. And I think if you look at the stats, and I have to convince myself of this, I think when I first started the fund, cause I had to convince other people a bit too. The answer is quite obviously yes. Maybe other folks haven't looked at this because you're not a VC, but if you look at Silicon Valley, maybe 20 years ago, the stats looked very much the same, right? People were asking if could you build a billion-dollar company in certain regions that look very small. And when you fast forward 20 years, the answer is just so obviously, yes. So the same types of things are now kinda happening in the region. And so obviously I'm very biased cause we're doing a VC here, but I think in every single region you're gonna find, not one, but maybe dozens of billion dollars, not in every region. Maybe at three or four of the top regions. Within the next 10 years, you'll see dozens of billion-dollar companies built just for that one region alone.

Jeremy Au: (21:29)
Within the next 10 years. This is a good prediction, right? If you say, oh, there's gonna be unicorns, lots of them, and then you just don't put a timeframe that's next 10 years. You heard it here first. Well, I think that's a good conversation in right next 10 years, right? Because I was talking to another VC, tier one and the investor was saying that perhaps investors are overweight too much in the next 10 years, but probably a bit too underweight over the next 20, or 30 years.
Right. So, what the vessel was saying was those macro trends are really good, but it would take 10, 20, 30 years to play out. But perhaps there's too much hype for a startup to be able to become a unicorn within the next 10 years. Because it takes time for the economy to share, et cetera. So what's your reaction to that?
Brian Ma: (22:24)
I mean, the differential, I think of the time horizon from your perspective. Yeah, I'm a new BBC, right? And so I'm mostly a founder. If a founder hasn't built, in my eyes, if a founder hasn't built a billion-dollar company in eight years or something, what are you doing? And so 10 years is about the timeframe I think about. I haven't had the luxury of being an experience VC enough to think 20 years or 30 years in 20 years or 30 years. Maybe I'll back up a little bit. Look at most of the companies that we're funding, they're mostly software, right?
They're mostly FinTech marketplaces, SaaS, et cetera, et cetera. You can easily build massive companies in 10 years for those types of companies in 20 or 30-year timeframes, what ends up happening is you have these technology shifts, right? So you have breakthroughs in power or breakthroughs in maybe, AI breakthroughs in, I don't know, a bunch of different things.
And so a whole entire category of companies gets unlocked. And so maybe my answer to this is when you're looking at 10-year timeframes, certain types of companies will come out. When you're looking at 20-year, and 30-year timeframes, then another set of companies comes out. What's interesting to me, we don't have to get into this topic, is most VC funds are structured as 10-year vehicles, right?

And so most VCs are very biased toward getting LP-type good returns in a 10-year timeframe. I have a lot of respect for people who can make these 20, 30-year bets. I'm not good enough quite yet to do that.
Jeremy Au: (24:06)
Well, I think, there's always the metric question for everybody. And I think what, how people compensate for that is that they have a portfolio, say, 15, 20 startups. And I think obviously you have quite a large, cohort of startups of multiple countries, multiple stages, multiple verticals. So what have you seen, I think in your pattern, what patterns do you see in your own decision-making or in the startups, startups that actually are doing better? How has that reflected in your own changes?
Brian Ma: (24:42)
Yeah, maybe to give people context, the reason why this happens in the very early stages is Iterative, and I think most early-stage VCs, right? When you're looking at a company that has barely launched, there's not much stuff to go on. So what you're really going on for good reason is the founder really good? And we have a particular, for us, we have a particular way to look at it, do they understand what the world looks like? Maybe. 10 years out if they're super successful and do they understand the steps to get there strategically? What do they work on first? What do they work on next, et cetera, and why? See Chen says this all the time, which in startups, ordering matters a lot. And so again, being able to be strategic in how you're going to get to a tenure. So you have to look at founders, which is why it's very hard to be, this sector is really good, or this region is really good, et cetera, et cetera.
So the one commonality you'll see with us picking founders is, or hopefully, you'll see, every single one of them is stellar in how they think about the future and how they specifically execute it. Which milestones, and what types of steps? What's funny is that's something, I don't know, maybe call it 65% of the equation. There are tons and tons of great founders out there who just are amazing, but are just executing the wrong thing. And a lot of times you don't know and I don't know, right? Nobody knows. And so when the market hits and things are not great, being able to pull through, you'll hear all the good stories, but, honestly, it's 50-50 chance, right?
So there are tons of great founders out there who fail not because they are bad, but just because the market was just not there. Maybe going back to your question about what have we noticed across the regions? The commonality is everyone, I think, executes really well. The other thing that we typically look for is that they have some unique understanding of their region that is extremely unique that doesn't play anywhere else.
So it could be something, I don't know like we funded Z Care. They're an Indonesian, EMR, they're quite the hustlers. What was interesting about them is they understood their customer really well, which is this hospital that uses Excel to do everything. And in particular, they understood how to sell and onboard them. They didn't sell to higher-level, hospitals that have lots of money. And so we're looking for insights specific to a country or a strategy or a type of operation for almost every single company that we're looking at. We almost, I don't know if this is, I don't know what other VCs do but we almost tend to not like companies that are like “Hey, we’re gonna do great here in Singapore”.
We're gonna expand in say, Indonesia, and this is gonna be a global company. And you all of a sudden leaped from this country, the global, without really understanding all the steps in between. And there's a million of them. For good or bad I think we are particularly biased towards local founders who have a very, very deep understanding of specific countries and specific operations in the country.
Jeremy Au: (28:34)
That's a fair point. Which is that I think there's a big conversation about the only way to expand is by doing multiple geographies, going from country A to country B, country C. So when you say, and you are almost inverting it, which is saying, just focusing on one customer, one geography wasn't it an argument that a single country isn't big enough, to handle all of it? Or are you saying this is the right order, how is that playing out from your perspective?
Brian Ma: (28:59)
Yeah, I think from a VC's perspective, maybe the answer's baby, right? Maybe a single or I don't know. Today it's probably right, who knows, five or six years out. But as a founder, you shouldn't care, right? You could probably build at least a 10 million business or maybe 50 million business, maybe even a hundred million business in a single country alone, no problem. And so I feel it's almost a disservice for, I feel bad poking at VCs. It's almost a disservice, honestly, to VCs in the region to be, what is your country's expansion strategy when a founder is at zero revenue, pre-product market fit knowing that they can very well. I mean, there are a thousand reasons why they'll die before they get to even a 10 million revenue run rate. And so it just doesn't matter that much in the earlier stages.
Jeremy Au: (29:54)

The service to other VCs. I wanna keep going on this. Obviously, startups are going on to meet lots of other VCs, right? Because they had to raise the capital total amount that they gotta go for. There are the follow-ons. They gotta grow. So what do you think, Asia VCs need to step up their game on and improve.
Brian Ma: (30:15)
Okay. You're gonna have me poke holes at VCs in Southeast Asia. Okay, first off, let me say I love all the VCs in Southeast Asia. They're super supportive. They're great people. All of them come to demo days. I think it's, it, I think it's quite a good ecosystem. There are bad players out there who have kinda bad term sheets and all that stuff, but as a whole, I think the ecosystem has been quite fortunate with the kinda funds that have today. That said obviously I've spent the past decade in the US dealing with US VCs, raising from them. Almost all of them are friends. The best way to articulate it for me is in Silicon Valley, most people are extremely independent thinkers.
Meaning if somebody says something, they're even more biased to be, I don't agree, here's why. And they will take massive leaps of logic and conviction. And most of the time when someone does a deal in the US, 10 other VCs who are very well respected, are like “Why did you do this?.” That's the culture of Silicon Valley in Southeast Asia. It feels the reverse, right? Most VCs, again, are really smart, but they need three or four other really smart folks to be, do we all agree that this is a good company and then someone kinda comes in and then takes the first check in it. So that's my biggest gripe right now with Silicon Valley, or sorry, with the region, or sorry, with Southeast Asia VCs is there's a little bit more follow the herd rather than, why is this company, in particular, going to be extremely good. So, ugh, Jeremy, great job getting that one out of me.
Jeremy Au: (31:45)
I totally get it. I also resonated with that as well. I think the number of WhatsApp messages I get is, Hey, are you looking at this deal? What do you think about it? Well, normally you wouldn't tell me that you're looking at this deal one, because it's a competitive positioning, but two, also, why are you asking me? So I definitely agree with you. What's the word? I think nobody wants to be the first dancer on a dance floor and get the dance going. But it does feel problematic, I think it makes sense from a capital deployment perspective, which is you wanna go in, everybody goes in. I think that makes sense. But from an underlying atomic habit of making a decision, it's not so, productive, I would say.
Brian Ma: (32:11)
Yeah. Yeah. And I think, I think it'll change too. And it's nothing it's not the people, right? The people and the partners are great. I really think what it is is Southeast Asia again, just hasn't seen this influx of founders that have turned into operating strong, successful founders that have turned into VCs. And so your evaluation matrix or criteria for a company is still very financial and maybe metrics are driven where for early stage venture type startups, it has to be strategically driven, what is the thinking? What are the steps? What is the strategy? How are we executing?
What types of things will we see if it doesn't go our way, and how will we react to it? Those types of things are much harder to evaluate but allow you to be an independent VC, I don't know, an investor in the region.
Jeremy Au: (34:15)
I think that’s spot on, right? I think there is an influx of Southeast Asian founders who are slowly becoming VCs. I think people who have built in the US and returning to Southeast Asia and also I think an influx of US capital, the Chinese capital, and the Indian capital, are all exploring the space. So definitely becoming more competitive. How do you think that will play out from your perspective?
Brian Ma: (34:37)
I think it's great, right? When it's more competitive or the way I think about it anything that's good for the founder is good for the region. And so as more people come in with more capital, with more perspectives, with more diversity in thinking, I think it's just great cause you're gonna get better companies funded and they'll get more help from everyone. I hope more people raise money and deploy capital in the region.

Jeremy Au: (34:03)
As you think through all of this one of the interesting dynamics is you're making a set of choices around time, geography, and attention, what do you think the region really needs over the next 10 years? What do you think, needs to be built for founders?
Brian Ma: (34:35)
Yeah. So, I mean, again, we're very biased and so take our answer with a pinch of salt. The entire thesis of Iterative is what the region needs. It isn't capital or isn't smart folks who want to go out and do companies. We have plenty of that. It literally is this founder ecosystem, super supportive founder ecosystem that allows founders to thrive and I think a lot of people who haven't been founders before, have not really experienced this, which is when you're a founder, CEO building a company, it is an extremely lonely journey. You're rejected 99% of the time. Most of the feedback that you're given probably is wrong. And the only thing that really matters is how much you believe, right? And what you're doing and how well you're executing, et cetera. And so what people need isn't more people telling them what to do. It's a very supportive ecosystem of other founders who have also failed. Telling them what they did wrong, and how they would do it again later on. And that's the ecosystem we're trying to build with the people we're funding.
Jeremy Au: (34:44)
I totally resonate with that as a pharma founder. And I think what's interesting. I've had to do that massive shift from the founder perspective to the VC perspective. I remember, I was looking at a bunch of terms, right? And, obviously, we're discussing parameters. And then I was, I totally understood all these terms, and then what I realized was that in the discussion, I was always leaning on a more founder-friendly version of these terms, right? Maybe versus what is the VC-friendly approach and then there's something in the middle. That's fair. So I think that was an interesting dynamic where I had to be, okay, they're good fair founders and are bad fair founders. Right. And so we need to be aware of this whole bell curve and so we've gotta figure out what a fair stance is.
But, that's one shift ahead, right? From a founder to VC. So I'm curious, obviously, you're super clear about what founders need and what the ecosystem is. I'm just curious about how that perspective has changed when you shifted from being a founder to being on the fund site.
Brian Ma: (35.39)
Yeah. I mean, the short answer is it hasn't. So, we still try very hard to be extremely founder friendly, right? We don't take board seats. I don't care. I just care about that. Hear me out. I don't care if you agree with me. So, if you decide to sell your company or if you decide to grow much slower, then I think you should, it's your decision. And that's how we treat every other founder in our portfolio. Our terms are super straightforward. Most of the time when I look at other people's terms, and term sheets, they're ready afterward. What the hell happened here? And so I think, yeah. For us, I think we, keep to what would we want as founders just for us as a VC firm. I'm quite strongly opinionated about this just because it's what I would've wanted when I grew my company and so, yeah, those are the types of things we try very hard to keep as part of our cultural values.


Jeremy Au: (35:46)

Makes sense, right? I think in a long term, I think building for the best founders and having them as the customer, makes sense in the long term because they're building a great company, right? And I think everybody gets to be a co-owner over that timeframe. I was interested because I was reading this article and he said that funds need to be more customer friendly, and the customers are LPs, right? And startups are a product. And so, yeah, I mean, I laugh a little bit and I'll say, well, what do you think about that?
Brian Ma: (36:08)
Yeah, yeah. I mean, obviously, for us it's the reverse, right? So founders are clearly the customers, and then LPs. Honestly, LPs just benefit from a founder's hard work and sweat and tears. And so when everything works well, then it's great. So that's how we think about the fund. I love my LPs by the way, but founders are the customers.
Jeremy Au: (36:40)
I mean, theoretically, I think it all lines up right in the. 10, 20, and 30-year timeframe. Right. Where strong founders, strong companies, strong VC performance, and strong LP returns. But I think everything else in between is crazy. I mean, I think, I said, looking at terms that are super straightforward versus what the hell happened here. Definitely seen somewhere is just, wait, you destroyed any chance for a follow on funding? Yeah. With these tubs.
Brian Ma: (37:06)
Totally. Totally. Right. People, what are you doing? Exactly. I, I don't know for your, for your viewers, right? The things that just surprise me are how many times a VC will come in and, then tranch their investment. if you hit this milestone, right, here's something that happens. If you hit this milestone, something else happens. And on the surface, it's, okay, it makes sense. Why don't you just believe in the founder from the very first place, and so, put all your money in right there? Other weird things I mean people have seen weird liquidation, and pre-preferences. Other weird, weird things around options or warrants or there's some, I don't know. Safe notes that have interest rates attached to them that serve, debt notes rather than equity or you're getting the benefit of both debt and equity. So yeah, just lots of strange things that I've never seen before happening in Southeast Asia.
Jeremy Au: (38:08)
Yeah. And, on a debt note, I'm curious about whether could you share with us a time when you personally have been brave.
Brian Ma: (38:20)
Probably the hardest time in my life was giving up my company. So I mean, obviously I haven't given up still on the board, all that stuff, but It was a really tough decision, right, to go from kinda day-to-day operator growing a company that was quite successful to being very hands-off and then starting something else. And so that took a lot of courage and I think the reason why I took a lot of courage, I took, I, I had the CEO coach, extremely expensive helped me grow a lot highly recommended to everybody who's a CEO. Was, it required a lot of introspection and letting go of your ego, right? Because a lot of times what happens is you kinda birthed a company. It's kinda your baby and your entire identity is attached to it. You've grown the team, and you've led the mission. You think about 24/7 all your blood, sweat, and tears have gone into this, you've sacrificed o much for it. Relationships, time, all that stuff. And you get to a point where you're, am I the best person to make this company public or am I the best person to, I don't do X, Y, and Z cause the company might need something else going forward. And so working through that with my coach and then answering all the questions of whether should I lead this company to the future or not was really tough. Obviously, you guys know what happened. I took a step back and started Iterative, et cetera. But that to me personally was one of the hardest moves I had to make and the hardest decisions I had to make as a CEO of a company.
Jeremy Au: (39:06)
Why is letting go of ego so hard? for example, when I left Bain as a management consultant, I was like, Okay, bye. But from your perspective, why do you think letting go of ego is difficult, particularly for founders?
Brian Ma: (39:21)
That's a great question. I think a lot of it is because you had to do the reverse when you, from the very beginning. Right? Everyone's faking it until you make it, you're artificially inflating your confidence just to let VCs know that you can do it when clearly you can't. No founder I know from the very beginning is, oh, I can clearly do this. They just tell you that. You've had this persona or thing that you've kinda built for yourself to defend you against the rest of the world to be, I can actually do this. And all of a sudden you have to be, Hey, no, I can't. Or, I'm not the best person to kinda, move this company forward and you have to grapple with that. And so for years and years or maybe even decades, you were one person, and then all of a sudden you have to let go and be someone else and kinda move forward.
So that's that kinda psychologically is really tough and this is really random, but we had a six-month kinda transition plan that was very, very well structured and detailed, et cetera, et cetera. People are like, oh, that's tough. It's, not tough at all. It's the emotional impact. And psychological, I don't know, whatever it is, making that decision was difficult for me.
Jeremy Au: (39:52)
There’s a lot of truth to that, right? Which is, there's an emotional layer to it. And I think, personally when I was looking for a successor, I had the same dynamic that executive coach, and I think he, he said something that locked me was, you're not looking for someone to replace you. You're looking for someone who's. Better for this next stage of the company. And I think that was very soothing, right? Cause it didn't feel like it impacted my ego. I was, I was good for this initial stage, but, someone can be better for the next stage. I think finding that next person is really hard, right? For so many founders. So how did you go about it? Is it grooming talent or finding someone to take over and find that person better for the next stage of the company?


Brian Ma: (40:28)
I mean, I was lucky cause it was my co-founder. She's amazing. And she's particularly good. One of the interesting things about our company is we have to raise a ton of money cause we're buying property. And so what ended up happening was I raised all of the equity. She raised all of the debt. As the company grew, the debt honestly is more important. We've now raised over a billion dollars of lots and lots of debt facilities to go buy real estate. And so I was lucky it was my co-founder.
Jeremy Au: (41:05)
I think wrapping things up here if you could go back in time, 10 years, right? It is a little time machine that went back in time and met yourself for coffee. What advice would you give to yourself? Right. As the other person would be a founder and you are, I guess a founder, 10 VC. So I guess what advice would you tell yourself that would be particularly personal to yourself?
Brian Ma: (41:29)
I don't know if it would be advice, but I think I would tell it's gonna be okay. It might take 10 years or 15 years or 20 years, but it's gonna be okay. A lot of founders are probably going through this, right, which is, as a founder, you just never know. One of the things that I think I've noticed now looking back and looking at all my friends, et cetera, most successes come from a 10-year-plus journey of just failing over and over and over and again and you don't know if your next move, you're just gonna continue to fail. And so it's really difficult but what you see with most successful founders is it took 10 years of feeling shit and failing before something hit because you've gained all the experience, knowledge, frameworks, et cetera, to execute well. So yeah, I think I'd go back and be, it's gonna be okay.

Jeremy Au: (41:42)
I need that as a t-shirt or a hat. There we go. So I'd love to wrap things up by paraphrasing, I think the three big themes that got from this conversation. So from my notes, I think the first of all was thank you so much for sharing. I think your personal journey from founder to Unicorn, founder to now VC. And I think you were particularly good I think at sharing, I think those micro-moments where you made those decisions. And I think the uncertainty that really happened at each stage, but also how you approach the process to, I think, process that and learn and change your mind and all these various dynamics.
The second is, thank you so much for actually a surprising, debate, I think on Southeast Asia's 10-year outlook patterns, and trends, I parts about it. For example about, what great founders look like in the region versus how, for example, Y Combinator. Tell me, look at it and how you look at, founders that have that understanding of Indonesia or Vietnam or Singapore, or whichever country they're part of. And I actually also liked, I think your call to action for how, VCs in the region could really step up, right? Ranging from, thinking about, independent versus contrarian versus, more independent thinkers as well as being helpful and, being more thoughtful about your startup terms and term sheets. So lots of different tidbits I would say about, I think what Southeast Asia is gonna do. And I think a great articulation of why Iterative is different and crushing it I would say in the velocity over the past two years.
Lastly, I really appreciate it. I think there's this underlying team of what you said about letting go of ego, right? I think I think that's shown through in terms. Obviously your own personal journey about what you meant to hand over the company, to your co-founder and let it take the wing. But also I think, I think it showed up in what you're looking for actually in your founders, right? Founders who are, willing to learn, willing to change their mind, willing to experiment with the suggestions that you give them. And I think it's a really great theme. And if I had to add a bonus one, it would be, It'll be okay.
Brian Ma: (42:03)
That's a soothing one. We'll make, we'll make that t-shirt. We'll make it happen. It'll be okay.
Jeremy Au: (42:13)
Awesome. Thank you so much, Brian, for coming to the show.

Brian Ma: (42:20)
Yeah, awesome. Thanks for having me. It was my pleasure.