Sonny Vu: Founding Misfit Wearables ($260M Fossil Acquisition), Vietnam American Roots and Navigating Tough Decisions - E362

· Founder,Vietnam,USA,Podcast Episodes

“I used to give this talk that was entitled ‘Nine Lessons Learned from Failure’ and the basic idea around that is failure's the best teacher. Success is a terrible teacher, and with each startup, not just my own, but other people's startups, there are two awesome things you get from it. One is you learn something, usually. And two is, you have awesome people that you run into, and if you're lucky enough, you get to take them with you. If you’re lucky enough, you treated them well enough, you get to take them with you along the way. They become your crew. So I feel like I have a small crew now that I'm very grateful for.” - Sonny V

“We never talked about heart rate. We never talked about data. We never talked about the megahertz and gigabits, and no technology, no fitness. We just had interesting people doing really interesting things and looking great doing it because that's what people wanted. And if we can encourage those people to work out or to change their mindset about health, then we win from a missional perspective. And we win from a business perspective as well. So that was what Misfit was about. It was going after that segment on the outer ring of customers.” - Sonny Vu

“After the recent operating positions, I feel like the 9 lessons I learned from failures are now 11, I haven't learned everything yet. Hopefully, you don't make the same mistakes, but you definitely make new ones all the time. Whether it was hiring, setting up the environment, commercial development, or go-to-market, there are a lot of things to learn in doing a startup. I've raised a lot of money, 22 venture rounds over 25 years, and I would say this: when people say you're a serial entrepreneur, I almost never really know what to say.Mark Zuckerberg is not a serial entrepreneur and he made it. I'm a serial entrepreneur because I haven't made it yet. I'm still trying to make it. There's one recurring theme that comes back time and again. What is the most important role? The role that I feel like I keep having to do whether I like it or not. It’s sales.” - Sonny Vu

In this episode, Sonny Vu, Founder of Alabaster and former founder of Misfit Wearables, and Jeremy Au discuss three main themes:

1. Vietnam & America Roots: Sonny talked about growing up in the Midwest as his older brother’s sidekick and a Vietnamese immigrant who spoke Vietnamese to his American friends. He decided to study Aerospace Engineering at the University of Illinois, but quickly realized his passion lay elsewhere - and shifted to eventually studying computational linguistics at MIT under Professor Noam Chomsky. He also shared why he felt Noam Chomsky was misunderstood by the broader public.

2. Founding Misfit Wearables ($260M acquisition by Fossil): Sonny’s entrepreneurial journey started when he participated in the MIT $50K Business Plan Competition with FireSpout, a startup focused on machine learning-assisted natural language processing (NLP). After selling his first startup, he co-founded other startups including AgaMatrix, an electrochemical biosensor for diabetes management, and Misfit Wearables, a wearable technology company that was eventually acquired by Fossil for $260 million. He discussed how he figured out product-market fit by reading 5,000 reviews of competitors’ wearables and emphasized the importance of timing and market needs. He also stressed the importance of assembling a crew that’s deeply committed to the mission beyond personal gain and celebrates the rare and precious servant leaders who prioritize the team and the mission over themselves.

3. Navigating Tough Decisions: Sonny shared a story of physical bravery while hiking in Turkey, as well as a critical business decision during his second company’s near bankruptcy, where ethical considerations led him to reject a term sheet that would have been detrimental to previous investors. He asserted that true bravery and courage emerge not from the absence of fear but from facing and navigating through it despite potential risks. The key is considering the long-term perspective of self-perception and integrity.

Jeremy and Sonny also talked about how the disciplines of art, math, and languages are a unified pursuit of beauty, the evolving nature of entrepreneurship, failure as a more potent teacher than success, the importance of sales in startups, and the value of continuous learning.

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(01:37) Jeremy Au:

Hey, Sonny, really excited to have you on the show. We had such a wonderful dinner conversation at the Hustle Fund Camp, I just thought that this would be an amazing journey to share. Sonny, could you share a little bit about yourself?

(01:47) Sonny Vu:

Yeah, that was a lot of fun in Bali and it seems like a world ago, but it's only been a few weeks. Gosh, time's flown by. Yeah, so, a quick background on myself, born in Vietnam, came to the United States as a young boy refugee, grew up in the Midwest, Oklahoma City, and went to University of Illinois and then MIT for university, grad school. The plan originally was to be a professor, to be in academics. And then one thing led to another and I ended up being in startups. And so I've been doing, I've just been swimming in startups for the last 25 years. Founded five of my own, ran a couple. Invested in a bunch of others and advised countless others. So I've just really enjoyed that world.

(02:23) Jeremy Au:

Amazing. Could you share a little bit about what you were like growing up as a kid?

(02:26) Sonny Vu:

Oh boy when I was a little kid, I was always my brother's little sidekick. I have an older brother who's six years older than me. And so, I was just the little kid that would tag along a lot of the time. But honestly, I think I was pretty much clueless when I came to the US. One of the stories my friends used to, I'm still in touch with my friends from first grade. My friend John, he said, Sonny, you used to always get mad at us because you wouldn't understand why we didn't understand you. You get upset because you just speak to us in Vietnamese expecting us to understand and being upset that we didn't understand you.

And I'm like, okay, that sounds like me. I don't remember that, but that sounds like something I would probably do. But I had a great childhood growing up in the Midwest. And I've always loved to study. That was one of the things that I've always really enjoyed. And I don't know, maybe someday I'll come back to it.

(03:06) Jeremy Au:

Oh, have to ask, what would you study?

(03:08) Sonny Vu:

I'm actually, been working on preparing to do a PhD in math. So math is really my real passion in life. So whenever I have time, I kind of steal away with my books and problem sets and whatever. So, yeah, someday, but I don't know. Startups are all consuming right now.

(03:22) Jeremy Au:

Yeah. Growing up, you studied in university and so forth. And then you started going to more on the engineering side. Could you share a little bit more about how you chose this major?

(03:32) Sonny Vu:

Yeah. So I applied to University of Illinois, Aerospace Engineering. That's what I did. And then within the first day of orientation, they tell you, look to your left, your right. Only one of you will be left after, by the time you graduate. And I thought, oh man, those guys are gone. I'm totally, I'm going to stick with it. And of course, within two weeks I decide, wait, I don't think this is for me. I'm like, okay, I'm going to be designing, landing gear for the rest of my life. Forget it. I'm not doing that. And so, I go ahead and take my math and science stuff, and I decided, I really like art. So I actually transferred from the College of Engineering to the College of Fine Arts. I don't know if too many people have done that. And so I wanted to be a sculptor for a while.

(04:06) Jeremy Au:

Wow.

(04:06) Sonny Vu:

My roommate, who was very wise, because if he would have told me, you know, It's a useless degree, never gonna get a job. Of course, if he said that, he knew that I would ignore him. And so he was much smarter than that. He said, you know, real artists don't need degrees to do art. And I'm like, oh, that's a good point . And anyway, so I realized what I really enjoyed all along was math. So I became a math major and really did fall in love with that. That's what I did for a while and then yeah, school has always been a big part of life, end up studying abroad. And then while I was studying abroad, I learned about languages and linguistics and I ended up last minutes applying to both linguistics and math Ph.D.. programs, which basically means I didn't know what I was doing, because usually by the time you apply for a program like that serious, you should probably know which one to go after. And that also very characteristic of me. Last minute I kind of decided to do linguistics. So that's what I did. My Ph.D. was in linguistics at MIT.

(04:54) Sonny Vu:

And it was mainly because I had a chance to study with Noam Chomsky, who was kind of a hero. So. Yeah, so that was it.

(04:58) Jeremy Au:

Amazing. So I had to ask, I mean, a lot of people kind of say like, Oh, mathematics and linguistics is left brain, right brain, they're totally separate domains. For you, it felt very natural. Could you share about how the intersection worked for you?

(05:09) Sonny Vu:

Yeah you know, art, math, languages, I felt like it's all kind of one mishmash and it's just things that I like to do. I like images. I like pictures, I like numbers. I think most importantly I like beauty . I feel that in math, I get to peer into creation and see beauty in its most pure form. Things that I feel like I was if I'm able to prove them, they were true before I was alive and will be true long after I'm dead. So I think it's one of the coolest things that you could do.

(05:34) Jeremy Au:

You shared that Noam Chomsky was a role model and hero for you. Could you share more about how you got to know him and what he was like in person?

(05:41) Sonny Vu:

Yeah. Noam great. First of all, he was just an incredibly kind advisor, for someone that kind of well-known and had that kind of demand on his time, not just in linguistics, actually, mostly outside of linguistics, people were wanting his time, but he was too busy for the, for his students, so we always had a chance to, being able to meet with him was not very hard. I mean, we had to book ahead of time and stuff. But yeah, he just knew a lot. I mean, he would say pretty controversial things in every domain, in linguistics, philosophy, whatever. And you just think, oh my goodness, how are you going to defend that position?

And then he does it. He has knowledge, the references. So I always felt like I think twice, and debating with them was just brutal. I mean, I don't think I cried, but anyways, he's an incredible teacher and I think he's often misunderstood. He's very misunderstood, let me just say that, especially when he talks about AI, his positions about it and whatnot. I think he's, what he's, what, how he, I mean, his positions evolved over time, but yeah, I think he can be easily misunderstood.

(06:34) Jeremy Au:

I'm so curious because obviously you've worked with him, studied under him obviously you've seen him evolve over the years. How do you think that he's misunderstood?

(06:42) Sonny Vu:

Well, I'll just say one thing, when people ask, "what do you think about AI?" And I asked him that because I wanted to work on, you know, So I was doing my computational linguistic stuff on the side, almost secretly, because most of the work at MIT Linguistics was very theoretical in nature. And I really think the difference is that the generative linguistics enterprise, analytic philosophy, a lot of that stuff is after, is really trying to plumb the depths of the mind and trying to understand how our mind works, but what are the mental models that exist? That kind of thing.

Whereas AI, I think to many people, it's really just an engineering kind of challenge. I mean, they're philosophical questions, obviously, but I feel like people are trying to do different things. One's trying to understand the mind and the other is trying to build useful stuff. And those are just really different enterprises.

(07:24) Jeremy Au:

Yeah, really interesting. And like you said, was doing something on a site, which computational linguistics, and you went off to do that twice, right? Once that as a researcher at Microsoft, eventually as a CTO and founder of FireSpout, can you share about how that all came together?

(07:37) Sonny Vu:

Yeah, so I was pulled in as a subject matter expert or whatever for a business plan competition. So at MIT, there's a general encouragement to do that. At the time, there was a competition called the MIT 50K. And the idea is you went well, you didn't actually win 50k, it was more like 30k. And then there's 50k was the total amount of prizes. But anyways, that someone was doing in a natural language processing project and they wanted an expert. They thought somehow I was one, silly them. But I was like, sure I'll help out. And then, I watched how a business plan was formed and written and defended, how judges, the kind of questions that judges ask, what investors ask. I thought, wow, that was, that's fascinating. I'm like, wait a second, I can do that. So the next year I decided to give it a shot and wrote my own business plan. And I didn't end up winning, but we did get funded, so I guess that counts for something. And that was for FireSpout, machine Learning Assisted Natural Language Processing. And I'll have to say, this was back when NLP didn't really work that well. So, the demos were cool, but in terms of being able to make a really useful product, that was much more difficult.

(08:35) Jeremy Au:

 

And what's interesting is that actually, my second startup actually went through MIT 100K.

(08:41) Sonny Vu: Oh, right on.

(08:42) Jeremy Au:

We didn't win. Were one of the folks that still got supported by MIT. Uh, so it happened, like dozens of years after you went through the experience

(08:49) Sonny Vu:

Yeah, this was in the mid 90s, man. This was like '97, so it's a long time ago.

(08:53) Jeremy Au:

It's like inflation. So it's just double the prizee

(08:55) Sonny Vu:

I know. Yeah now there's like multiple 100ks.

(08:58) Jeremy Au:

Yeah, exactly. So what's there is that, you decided to become entrepreneurial. Was that something that you felt like was a no brainer? Was it something that you had to be much more intentional about?

(09:06) Sonny Vu:

I wish I could say I was intentional about it, and I wish I could say I was intentional during, at any point in life, but this is not true. I've just generally pursued things that I've enjoyed doing, and And that's what I did. I thought, wow, this sounds fun. It's a different part of the brain.

It's not just abstract thinking and theorizing, which is fun. I love doing that kind of stuff. Love learning languages, love doing math, love solving problems. But this was another kind of problem. Because there was a very, a deeply human dimension to this. And so, I did it just because it was, I found it where's the M and how does it work. So I look at that and I well, I said, I had this idea, I was like, oh I, I just learned So I looked at it and I was like, I knew it. So and then about later, I found it

(09:51) Jeremy Au:

Yeah. And what's interesting is that you went off after selling to an ask chiefs in 2001, you went out to become a founder again. Right. So

(09:59) Sonny Vu:

Yes, so I was, you know, I was trying to actually at that time I'd gone back to try to finish my PhD. You know, Asian mom always saying, Hey, when are you going to finish your degree? I'm getting to it, mom, I'm getting to it. And then shortly, after going back into my program ,my partner Sridhar pulls me out and said, Oh, no, you don't, we're going to do this again. Cause I had pulled him into doing my first startup and then. So we all right, fine. So we do our second startup, which is called AgaMatrix which was doing electrochemical biosensors and so just in general, I mean, there's a general theme of where I'm just a sucker for, I guess people call it deep tech these days, which is, Silicon Valley parlance for science based technology or some sort of technology based on some sort of breakthrough. So, Scientific Engineering Breakthrough. And so we did that was Agamatrix and just the two of us in our apartments built a blood glucose sensing company for the diabetes space. And Yeah that was a good run. We did that for about 10 years, built it from nothing to, I think at the peak, we had over 90 million in revenue. And then anyways, we eventually sold it did a deal with Apple and then Sanofi and whatnot and ended up selling the company. And then yeah, the rest is history. We've done a lot of, we've done a number of these things together now.

(11:04) Jeremy Au:

Yeah. Amazing. And after that, you went off to build a Misfit earables right? After. So back to back.

(11:10) Sonny Vu:

Yeah. So I, at that time we had a CEO in place for AgaMatrix and I've been there 10 years. I was like, okay, ready to go. And so I left and started and actually I left because I was on a vacation at the time. I was with my wife in Israel to actually, she was there to teach. And so, I accompanied her and I was just going to take time off, but then one thing led to another. A series of weird coincidences and providential events that basically led me to start Misfit. And yeah, so I pulled in Sridhar, and then at the time I had become friends with John Sculley, the former CEO of Apple. Kind of a weird friendship, but the three of us banded together and started Misfit. So, I mean, they were non-operating founders, they were on the board so I was the sole operating founder for the business, but it was, why I thought that was I don't know, for me, a historic time. It was actually, we founded the company on October 5th, which was the day that Steve Jobs died and we kind of named the company Misfit kind of as a tribute to him, one of the great misfits of all time, right? And, what a cool name for a company that was about fitness technology and about wearable stuff that should fit. Right? So we had a good time just getting started. But boy, I didn't know what we were getting ourselves into because when we started, there were 20 companies that were competitors. And by the time we got our first product out to market, there were 72 competitors. Oh, my goodness. I'm like, wow, such, I don't know if that was it, but the funny thing is though, is in retrospect, it was actually amazing timing because it was during a hype cycle honestly, we just had to be better than the other folks because everyone was interested in a wearable technology of some sort.

(12:37) Jeremy Au:

Yeah. I remember actually looking at this fit uh, and that bind a jawbone up 24, turned out to be a little simpler from my perspective, but it turned out to be not so reliable, unfortunately. Definitely uh, broke down.

(12:49) Sonny Vu:

Yeah, you know, there were, we had several pretty tough competitors out there, Fitbit, Jawbone at the time. Fuel band, Nike Fuel Band, if you remember them. And uh, why things. So four really tough competitors and dozens of copycats. And then we were kinda like the fifth, somewhat original I would say. And so we quickly became third or fourth in the market in a short period of time, and it was primarily because I think we were, we just found a really awesome market for it. I mean the product was not necessarily, wasn't like this amazing product. In some levels it was actually a very basic product. But there was a market that wanted a basic product so that's what we went after.

(13:24) Jeremy Au:

Yeah. I thought it was a very interesting time. I remember going to the Quantified Self, meetups and everybody be comparing their various devices.

(13:31) Sonny Vu:

That's right. Well, that's funny, because, and I talk to the Quantified Self folks, you know, and I'll tell you this, Jeremy, you know, we cheated. You know what we did? Was, I went to amazon. com and read the reviews for Jawbone, Fitbit, Y Things, all of those guys, right? I remember Fitbit, it was like 169 pages. I still remember, you know how you click through the bottom, like 1, 2, 3, dot, dot, dot, and it goes up to 168, 169. I read every single review for them. Jawbone had like 53 or something pages. I think in total we read about 5,000 reviews. It was a heck of a lot of reviews. But I read it and I, I kind of learned what people loved and hated, and I still remember it was like, you know, it had to be comfortable, they hated charging, they hated products because it didn't look good they couldn't make sense of the data and just reliability, and so I said, okay, if we can nail two out of those five, three out of those five, then I think we're good. And in fact, however many we nail, let's just focus on one of the five that we, where we nail and then we go to town.

So this is what did cause the basic question that we asked ourselves was why is it that people, why do people buy wearables? And you ask people, they say, well, and the vast majority said, Oh, because I want to live longer, live a healthier life which didn't make sense to me as an answer, to be honest. Like, I just didn't believe them. Because I said, if you were really serious about getting healthier, you would just eat less. You know? Like, why do you need to spend $100 to tell you for a product that you might not use to tell you that you're not moving enough? You already know that. So I thought, there must be another reason. And then as I just thought about it more, talked to more people my hypothesis was, I think there's like three kind of concentric rings of types of people who are buying these things. You've got people, marathon runners, active, regular working out people, and then there's the elite athletes, regular working out people. But one ring out would be people who want to work out and want to be active. Okay? But I thought there's got to be something else missing here. So I thought, wait a second. As I talked to more people, I realized there's a third ring, which is people who want to look like they are healthy, but don't really want to work out. Because I don't think anyone really wants to just work out. If you had your way, and you could get the benefits of working out without actually working out, I think the vast majority of people would prefer to not just, to just not work out. And so I'm like, okay, let's go after that group because that is probably the largest group out there.

And so we that's what we did. So we went after folks who so we never talked about, you know, heart rate. We never talked about data, we never talked about the megahertz and gigabits, and don't, no technology, no fitness. Okay, we never talked about any of that. We just had interesting people doing really interesting things and looking great doing it because that's, I think, what people wanted. And so we said, okay let's go for that. And if we can actually encourage those people to actually work out or to change their mindset about health, then we win from a missional perspective. And I think we win from a business perspective as well. So that was what Misfit was about, was going after that segment that actually just that, that outer ring of customers.

(16:22) Jeremy Au:

Yeah, I definitely agree that, uh, Misfit had the style points for sure.

(16:26) Sonny Vu:

That was the focus. You know, Jumbo had, there was beautiful and a bold design. I have to give them that, but we had one test, which was cool. So I would pull out our product first to people and say, would you wear this? And they, and often people say, well, what is it? I'm like, it's just the thing, this little silver disc. Yeah, I'd wear it, I'd wear it. Okay. Then I pull out the Jumbo up and I'd say, would you wear this? And they say, well, what is that? And I'm like, nothing. It's just a thing. They're like, no, why would I wear that? And then I pull up the. You know, the other competitors and they and I said, would you wear this and they're like, well, why, what is it? I'm like, it's nothing. It's just, you know, no meaning. So I was basically asking, would you wear any of these as jewelry?

And for us, most, like a lot of times the answer was also no, but it was like 30 percent of the time people say, yeah, I'd wear it. And then they say, well, what does it do? I was like, it doesn't do anything. And then I was like, okay, I think we're on to something here, cause it did actually do something, though we did find out later that a fair number of people probably, I don't know, we estimated eight, nine, 10 percent based on usage patterns and sales data that around eight, nine, around eight to 10 percent never used the battery on the product.

(17:29) Jeremy Au:

What? Is this always?

(17:31) Sonny Vu:

They just wore it. They just wore it. Yeah. Yeah. It's like, I mean, it shocked me that any number above zero, right? You'd think it would be zero. It wasn't. It was like eight or nine. I mean, it wasn't like a huge number, but it was like ten-ish

percent.

(17:43) Jeremy Au:

That's a huge customer persona right there. Yeah.

(17:46) Sonny Vu:

Yeah. Yeah. So that, that's who we went after.

(17:48) Jeremy Au:

And I remember reading news back then, right? That it was acquired by Fossil for $260 million. That was a huge exit. I think were like, wow, like, you know, huge dynamic there. And then you worked at Fossil for a couple of years after that. and grew the business to over $300 million know, annually for Fossil Group. share a little bit more about that whole experience?

(18:07) Sonny Vu:

Oh my goodness. I would just say, in summary, it was more providence than being good. Okay, I think a lot of people talk about how, you know, Oh, we did all this stuff, and then it just happened. You know, translation now is awesome, right? Let's be very clear. There was no awesomeness involved. It was pure providence. It was just given to us. And you look back, the timing was impeccable. It was really good timing. I think we did serve a market need. That's one. And we found really a perfect partner. know, Our acquirer was someone who cared about that segment, who had always been in the fashion industry, and was a world leader in fashion wearables. And so, fashion watches, and wanted to have a presence, a larger presence in the wearable space. So we were incredibly fortunate to have them just to be matched with them. So we're just so grateful for that opportunity. It was a fabulous exit. It was, you know, from when we, first funding was in April 2012, Founders Fund backed us, and they just, they're the best, man. We love those guys. And Cosla, the two of them co led our Series A. And then, to the time we sold, it was, I think like 42 months or something like that, which is insane for a hardware company. But I think it's a testament to the timing of the market.

(19:08) Jeremy Au:

Yeah, I think it was great timing because like the competitors that you you mentioned, jam went one way, Fitbit has gone public, but you know, I think he's gotten own set of issues that they have there.

(19:18) Sonny Vu:

Yeah, well, fitbit, I mean, after Fitbit, we were the second largest wearables exit in history, so I think that's the case. Maybe that's not the case anymore. I mean, gosh, that was a long time ago. That was in 2015. But it was yeah, we had a different story. You know, one was about fitness and technology. Ours was about fitness and design and fashion. Uh, and that's what we, that's what we leaned into. But yeah, it was a great time. Two years at at Fossil. And I didn't know what they needed a CTO there for. But, you know, I was happy to. Do whatever it was to support their mission. So it was a good learning experience for me. I've never, honestly, I never really had a job. I mean, that was, I kind of worked at Microsoft, but yeah, I don't know if those were internships and kind of short stints, you know? And so this is my first, like, real job. It was great showing up to work and having a boss and stuff.

(20:01) Jeremy Au:

And then you went on to keep going. Right? so you worked at Impact Biosystems and other startups along the way.

(20:06) Sonny Vu:

Yeah. So that's right. So after, yeah, so after uh, the Fossil thing we started Alabaster, which is our family office, invested in a bunch of companies, and then, during that time, also helped Sridhar start you know, founded our fourth company together, which was Elemental Machines, which does IOT for basically automating, helping to automate science and doing so initially the positioning was that we would be doing lab ops analytics and monitoring for lab operations and the vision has grown substantially from that since and the company's doing great. I mean, I was a non operating founder there just as Sridhar was a non operating founder for me at Misfit. And he's just done an amazing job growing a business that is now, I think it's profitable, it's Series B funded, and honestly I had very little to do with their success. I was just a n early helper.

Yeah, so after that, I don't, yeah, never really stopped doing startups, and yeah, that's right, we did Impact Biosystems, which is a muscle sensing technology that's been acquired as well. Technology out of MIT out of Ian Hunter's lab. That was a lot of fun. And then I tracked my hand at operating a couple of companies. So, it was an early involvement at Harrison that AI, which is a medical AI company that analyzes medical images, chest x rays, CT scans, that kind of thing. And then Ariba, which does 3D printing of carbon fiber. So, yeah, founder, investor, operator, and I think my natural kind of place in life is probably to be a founder. That or in academics. We'll find out.

(21:29) Jeremy Au:

And over this grand arc of multiple, entrepreneurship, both success and failure. What have been some lessons that you've had over time? Perhaps, for example, the CEO has been good at, especially since you've done that role quite a bit.

(21:41) Sonny Vu:

Yeah, absolutely. You know, I used to give this talk that was entitled Nine Lessons Learned from Failure and the theme around that, the basic idea is that I think one, failure's the best teacher, success, a terrible teacher, right? And with each startup, and with each not just my own, but other people's startups, I feel like I've learned. There's like two awesome things you get from it. One is you learn something, usually. And two is you have awesome people that you run into that you, if you're lucky enough you get to take them with you. If you were lucky enough, you treated them well enough, and you get to take them with you along the way. They become your crew. So I feel like I have a small crew now, that I'm very grateful for. After the recent couple of operating positions, I feel like my nine lessons learned from failures now like more like 11 lessons from failure, and I feel like you just think like, wow, have I learned everything? And absolutely not. I mean, hopefully you don't make the same mistakes, but you definitely make new ones all the time. But I want to say that yeah, whether it was hiring, setting up the environment, commercial development go to market. There's just a lot of things to learn in doing a startup, how to pitch, how to raise money. I've raised a lot of money. 22 venture rounds when I think about it over the 25 years, see like a bunch of seed, series a series B, a bunch of series C rounds. And I would just say this, when people say you're a serial entrepreneur, I almost never really know what to say about that because Mark Zuckerberg is not a serial entrepreneur, right? Like he made it. I'm a serial entrepreneur because I haven't made it yet. It was still making it. And I would just say that if there was one recurring theme that comes back time and again, what is the most important role? What is the role that I feel like I keep having to do time and time again, whether I like it or not, what is the role that my founder friends find themselves having to do time and time again?

I'd say it's sales. Sales is it, man. It's not just sell me this pencil, that's a very kind of a vulgar oversimplification of a very a noble role, a noble task. And that task involves convincing people to come work with you when they really shouldn't because you're going to pay them maybe half, give them no job security. And that's it. You gotta convince, yeah, you gotta convince the media to write about you when there's like nothing to write about because all you have are ideas and vaporware, or getting partners to work with you, , big companies to give you money or do something with you when honestly they probably shouldn't take the risk of doing that because you might not be around for another six months. In six months time, you're trying to get investors and invest in you when it's exceptionally risky.

No matter how much, you know, reality distortion or song and dance you put on, it's freaking risky. You know what you're doing? There's commercial risk. There's timing risk. There's engineering risk. Who knows, and then, there's the risk of and then, you know, you're trying to convince obviously customers to buy your product if you have one, or even buy your product when you don't have one. So this job of having to convince people to do stuff. It kind of in all with rational thought, they probably should not, this is something you have to do time and time again. And it's not just the role of a founder. It could be whether you're a manager at an organization or a team leader and in an MBA program, you're constantly trying to get people to do something that they might not normally do. And hopefully it is something that's actually good for them, because if it is good for them, it turns out to be great for them, then you get your crew, you know.

(24:39) Jeremy Au:

Amazing. Talk about what the crew is like.

(24:41) Sonny Vu:

Oh, goodness, you know, like over the time, I'll just tell you some of my favorite crew people. Okay, I won't mention names because it'll embarrass them. But, I'll just say the recurring themes for an awesome crew person. Okay I was gonna say crewmen, but there's also, there are women as well in my life journey. Obviously awesome skills is really important. They got to be good at something, okay? whether it's engineering, design, or something. But generally they're good at something, okay? They have some sort of superpower. And often times in almost every single one of these crew people that I can think of. I'm thinking of right now, they have some sort of weakness, that's for sure. But it's an overcomable weakness. So, some sort of superpower, an overcomable weakness. That's on the skills, like, stuff you can do side. But I would say the one definitely strong recurring theme is selflessness. Like they are the most awesome people because they're the people I love working with because they just, it's never, once they're kind of on board with something, and by the way, the crew isn't automatic.

Like I feel like with the crew, I have to convince them like, by the way, I'm doing this now. Here's why it's awesome. And there are times when they're like, that doesn't sound awesome, man. I'll help you, but it's not awesome. I'm like, okay, maybe I should work on it, and so one is I do have to convince them, but once they're in, they're really in, and they're about the thing, the mission, not about themselves. I'll give you one example. There's this one guy, I won't mention his name. People who know me will know who I'm talking about. He was the head of, he was employee number one at Misfit, and our engineering head, became our CTO type person there, and I couldn't for the longest time give him a raise. He was making, I'll say it. He was making 80k a year, which is like nothing in Silicon Valley for a head of engineering CTO. He was an employee. Number one. And he didn't even have that much stock, you know? And so for a year, for three years, I could not give him a raise because every time I did, he would just say, Oh, give it to my team members.

I couldn't give him a bonus. I couldn't even give him stock every time I offered him stock. He's like, I don't need stock, man. I live simply and I love what I'm doing. Just give it to my team members. They're the ones who need it. And I mean, who, who does that? You know? Truly selfless, for the mission. Not just the mission, but just for others. Man, that is so rare and so precious to have. And I don't know. Servant leader, man, those are the best. Servant leader who are really competent, if you have a handful of those people, I think you can do anything.

(26:47) Jeremy Au:

Amazing. and what's interesting in terms of Southern leadership is, you grew up in Vietnam, you moved to the US. You're speaking Vietnamese to your classmates, and now you're back based in Vietnam as well. And I understand that you've been. Helping out with the, you know, math Olympia team.

(27:01) Sonny Vu:

All right. Yeah.

(27:03) Jeremy Au:

So I was just kind of curious, how did you get about starting to do so? What you've learned along the way?

(27:08) Sonny Vu:

Yeah, look, we've been here in Vietnam for the last eight years. I'll be here one more year, moving back to the United States. New England, New Hampshire, 30 minutes north of Boston in August, 2024. So I'm looking forward to that, but we're going to make an awesome last push here this last year in Vietnam, and Vietnam has been, it's been a great time here. We've learned a lot, and one of those things, one of the rare treats, oh my goodness, because I love math, love people who do math, right? People who do math can do no wrong with me is we have an awesome IMO team. So the International Math Olympiad IMO is ASTEP is really one of the most difficult exams in the world, most difficult competition, mental competitions in the world, at least in terms of an academic subject.

I suppose the chess championships are probably really difficult as well. But math competitions, and Vietnam is just really good at it. Every year. I think something like almost 200 companies, a lot of countries participate, but each country says that they're the top six to go. And Vietnam has just traditionally done really well. And so we've been, we're big fans. We're big supporters of the IMO team. We hold a reception for them and I'm just yeah, I'm kind of a groupie, to be honest, like these kids. You know, 16, 17, 18 year old kids are solving some incredibly difficult problems and making the country proud. For a country whose GDP per capita is, I think it's like an eighth of Switzerland, it outperforms nearly every country in the world, except for last year, I think we were seventh year before that we were fourth in the world, crazy behind, you know, China, United States and Korea, number four.

Unbelievable for a country with a very slow GDP per capita. And so, always been very proud of the team, the coaches who are involved, the math institute who's helped hosting that. They've done just an amazing, the Ministry of Education, they've just done an amazing job for the resources that they have. So yeah, we're big fans. Yeah, I mean, honestly, I'm kind of a a fanboy because I never had really a chance to do that myself, I always wish I did.

(28:53) Jeremy Au:

It's so wholesome. I'm just kind of curious that from a personal perspective, have there been any times that you've personally been brave?

(28:59) Sonny Vu:

Been brave, oh yeah. Well I'll tell you two quick stories. There was a time when I was physically brave. A friend, a group of friends and I were hiking in Turkey. You know, you study abroad in Israel, thing you do is you go to Greece and Turkey. So that's what we did during the high holidays. So we went to Turkey, and my friend saw a cliff and thought it would be, we're in the middle of nowhere, Pergamum, like, the Ephesus area. He decides to climb it, and of course he gets stuck, and then it's a seriously scary cliff that he's trying to climb up without ropes or equipment. He's thought it'd be interesting to climb. Yeah, bad idea. Anyway, but there's another road you can go up, and the short story is that there was a moment where I had to decide, am I going to risk my life to try to save my friend or not? And in that moment, I actually decided, you know what, I may just die doing this, but I'm just going to do it. And just as I decided to do that and started moving towards, taking steps to fish him out with the strap on my bag, there was this Turkish guy, came bouncing down and pulled him up. So I didn't actually have to rescue him, but that was pretty scary. And, I'm no hero, let's be very clear. But boy, that was a moment of intense fear I have to say.

So the second story that might be more relevant to the audience here is for my second company, we're doing that blood glucose sensing company and we're almost out of money. And we finally get a term sheet, just wow, we finally get a term sheet. This was in 2002. And boy, we were like, Oh yes, finally, we're going to have money. These investors, I mean, well intentioned, honestly, they're just doing their jobs, but they basically were trying to get us to screw our previous investors and kind of deal that where we would actually end up with a lower valuation, but with top ups and what not, we were actually have more ownership in the company, and they would have as well, but the previous investors would have substantially less and now of course the existing investors could have just like not signed off on it but they knew we were running out of cash so they had to sign off on it and the new investors knew that and in that moment I think Sri and I looked at each other and said are we gonna really do this or not?

We thought, no I don't think we're going to be able to sleep with ourselves if we did this. So we decided no. And even if the existing investor said, you can go ahead and do it. It's fine. we know what's going on. Enjoy the equity, and just keep the company alive. And we said, no, we're not going to do this. So we declined it. And then we almost run out of cash because we end up using our credit cards, personal credit cards to pay payroll for actually two months. And then we finally got a replacement term sheet that didn't have those conditions. And finally get the company funded. Boy, that was a close one. But that was definitely one of those hard decisions, because it's kind of morally grave but it also was a matter of conscience and trying to live beyond reproach. And, I don't know, it was hard. We're in our 20s, we didn't know anything, we're just kids. But I think we knew what was right and what was wrong.

(31:23) Jeremy Au:

You know, for both stories, I think you mentioned some element of fear and confusion. How did you go about, I mean, obviously there were different types as well, right? One's more physical and one's more, and from a considered a startup perspective. But I'm just kind of curious, how did you go about thinking or feeling, navigating through these issues?

(31:41) Sonny Vu:

I think at the end of the day it was about I mean when it's in the moment you are acting instinctively. I mean certainly by that cliff I was on my own. And me and God, right? In the moment of startup financing it was me and Sridhar. And then us discussing what, how are we going to? We're young, if this startup fails, there'll be other things to do. How's life gonna be if we knew we did something that we were not proud of? And so, in the end, it didn't really affect the final outcome all that much, but having the longer perspective of just thinking, how will we be in the future? How will we think of ourselves in the future? I That helped kind of guide us to the decisions that we eventually made.

(32:15) Jeremy Au:

Any reflections on what bravery means or how to go about it?

(32:20) Sonny Vu:

Well, you know, you can't really be brave or courageous unless you're afraid. So, I think the first step is if you're not afraid, then, I don't know, maybe if you're not afraid, then you're brave. But I think have courage, you really have to be afraid of something. Because otherwise, that's just carelessness, or just not thinking about stuff.

(32:36) Jeremy Au:

Yeah. On that note, thank you so much for sharing. I'd love to summarize the three big, takeaways I got from this. First of all, thank you so much for sharing about what you were like growing up as a Vietnamese newcomer, speaking Vietnamese to your American classmates. But also talking about life being a sidekick, and also what you've learned along the way, in terms of how you chose your major, how you decided to do both mathematics and linguistics, and what was it like to learn from Noam chomsky Chomsky and and decide about different aspects and how to some extent that came together as computational linguistics, which kicked off your first job at Microsoft. So really interesting, early exploration of who you are as person.

Secondly, thank you so much for sharing about your entrepreneurship journey, especially with a big chunk, obviously around the wearables, but also the other companies you build along the way and what you learned along the way, in terms of how to navigate financing top decisions that you had to make along the way. And also, I think that dive into wearables about how you went to over 5, 000 reviews across multiple competitors, to understand what they were. And I really thought it was fascinating to hear about how you went about to benchmark them, but also to think through. Like you said, those concentric circles, of why people would wear a wearable. I thought that was a very fascinating, study of not only product market fit, but also, I mean, the iteration and learning process.

Lastly, thank you so much for sharing about your own personal story of courage. obviously you shared about the experience about helping your friend during a tough time and that decision that you had to make. even though you didn't have to follow through the action, but you made an intentional choice. Secondly, of course, talking about how you think through fundraising and accept decisions. Now, of course, not just that, but I think you showed multiple times along the way of bravery, in terms of like choosing to build a startup, the first time around, choosing to build it again so Sonny, thank you so much for sharing your journey.

(34:12) Sonny Vu:

It was an honor to be here. Thanks for having me, Jeremy.