Spencer Yang: Founder vs Operator Trade-offs, Angel Investing Frameworks and Cultivating Relationships - E120

· Singapore,Founder,Angel Investor,Web3,Podcast Episodes English

I got married to my wife in 2017, I think the both of us looked at our bank accounts and said “Whatever amount of money we have in whatever this is called is so little, how are we going to build a life together?” And I think that was one of the first things that made me go “Alright, we got to find a way out of this” I think whether it’s selling our startup, getting acquired, whether it’s going into the crypto industry, whether it’s making sound or stupid investments along the way, it’s our ways to try to be better. -Spencer Yang

Spencer Yang is a Senior Product Manager at Coinbase. He is an active angel investor with investments in various early-stage startups. He was the VP of Growth, Operations and Revenue at CoinMarketCap, the largest cryptocurrency information site. He led the business areas of spanning across data, content and revenue. He was part of the executive team and led the company through a successful acquisition by Binance. 

Jeremy Au: (00:29)

Hey Spencer, welcome to the show. 

Spencer Yang: (00:31)

Hey Jeremy, thanks for inviting me to the show.

Jeremy Au: (00:34)

Well, I’m really excited to have you because you’re a founder, you’ve been acquired, you’re working in crypto and blockchain, and also you’re a solid guy who’s really chill; I really enjoyed hanging out with you the first time we met. So, I’m really excited for people to learn your story as well. 

Spencer Yang: (00:48)

Yeah, it’s really good to be invited to the show, Jeremy. I think the first time we met was pretty random…through one of our mutual friends? I remember we had a really, really great conversation and have kept in touch ever since. 

Jeremy Au: (00:57)

Yeah, I think I was talking to Jeffrey and asking him whether I should join On-Deck and he was like “Oh, hey, after this brunch, you should meet Spencer, he’s also part of On-Deck” and I was like “okay, I’ll just say hi”, it was a random conversation. We ended up having a separate conversation after that which was a lot of fun, right before you headed back out. I’m glad we got to connect randomly, right? 

Spencer Yang: (01:17)

I know, right? I think those are the best kind of meetings when you don’t expect it and everything else is upside from that. 

Jeremy Au: (01:25)

Yeah. I like the phrase; everything is upside from there. Sounds like you hit the lottery, right?

Spencer Yang: (01:32)

Exactly, exactly.

Jeremy Au: (01:32)

Because everything is upside after there, right? 

Spencer Yang: (01:35)

Exactly, the lottery of meeting people, right? The lottery of meeting people. 

Jeremy Au: (01:39)

Serendipity…yeah. Well, for those who don’t know you yet the way I do, could you introduce yourself professionally? 

Spencer Yang: (01:45)

Hi, everyone, I am Spencer I’m a senior product manager at Coinbase. Prior to that, I was the head of business operations and growth at CoinMarketCap which is a coin currency information site and then I led the acquisition of the company with a Binance group…spent some time at a Binance group on a leadership team. Then I left in August last year and joined Coinbase in January this year where I focus a lot on trading products, basically anything that our retail customers could use, but are more advanced and we try to cater to their needs with our products

I spent the last four years in crypto and before that, I spent a lot of time in the AI space and I worked at Twitter as well out of college. So, that’s a bit about me.

Jeremy Au: (02:22)

Awesome. I got to ask, when did the entrepreneurial startup bug first bite you? 

Spencer Yang: (02:29)

I think it first bit me in 2010, actually,| when I was in the military. During that time, you’re not supposed to do anything outside of the military, so I guess some time after I started a business in the events management space. I helped a friend to start an education sort of company, it’s actually still around today. That’s how I first got started. Then when I was in college, I was looking at Tech Crunch for one of my classes called technology and world change and that really helped me to just absorb everything about tech and I decided “Alright, tech it is!” So, that was some time in 2014 

Jeremy Au: (03:01)

Yeah, I think it was around the same time as well I was reading a lot of Tech Crunch also I think Valleywag was around at that time and it was very fascinating to read about technology from this place called Silicon Valley.

Spencer Yang: (03:12)

Yeah, it’s like this magical place, right? 

Jeremy Au: (03:15)

Yeah, this magical wonderland. For me, I think I was lucky as I did my undergrad in UC Berkley so, Silicon Valley wasn’t that fantastical, it wasn’t too far away. But it was weird because the actual Silicon Valley is nothing like the dream Silicon Valley. 

Spencer Yang: (03:30)

It’s probably more like the parody, comedy show Silicon Valley. 

Jeremy Au: (03:35)

Yeah, exactly, exactly! ‘Cause Silicon Valley, when you first get to know as a kid, I don’t know what it was like for you, but for me it was this rarefied place where all the founders know each other, they’re all at cool parties and ideas effortlessly come into your brain. Oh, I remember the movie Social Network was exactly how I visualized all of Silicon Valley, right? How about you? What was your imagination of Silicon Valley back then, do you remember? 

Spencer Yang: (04:00)

Yeah, I think my imagination was probably some of the documentaries that I watched before like the movie Social Network, I think that was also our era, basically of how we got to know more about tech and it’s kind of interesting because I think before that show, the Social Network, there wasn’t any real Hollywood blockbusters or shows that depicted about what Silicon Valley was and I think that was one of the first shows that we really got to see how it’s, right? Like Sand Hill Road meetings, raising money from VC’s, all that kind of stuff. So, yeah, I think it’s pretty idealistic.

I think some time in 2011, I went to San Francisco for the first time and I stepped foot in the Facebook office and I saw Mark Zuckerberg through the glass, I’m not sure if that’s bulletproof or not, but anyway, he was in a meeting room and I was “Oh, shit!” Starstruck. For a moment.

Jeremy Au: (04:47)

What’s your first impression of Mark Zuckerberg, looking at him from a distance, through the glass? 

Spencer Yang: (04:52)

He, he seemed pretty intense as a person. He was deep in a conversation I think with one or two execs in a meeting. He seemed pretty personable, he looked and smiled a little bit at people as they walked past so, yeah, he seemed pretty nice, but intense, definitely. 

Jeremy Au: (05:09)

I have a similar feeling. I remember The Social Network was such an inspiration for me for a time. I’m almost embarrassed to say this but I actually I had a vision board around that time and I actually printed out the business card that Mark Zuckerberg had which was the I’m CEO and so on. So, I printed out this card, a small one, and stuck it to my vision board. 

Spencer Yang: (05:33)

I may have done the same thing…I would not admit it, but I might have done the same thing. 

Jeremy Au: (05:39)

So that means you and I are very similar then. Oh well, who knows we could have theoretically done the same thing, inspired by the same business card, from the same movie. Actually, now that I think about it, maybe every founder at that generation also did the same thing as well. 

Spencer Yang: (05:53)

Yeah, you don’t remember that many things from the movie, but that’s definitely one of the things that you’ll remember, right? Like that founder going against all odds kind of feeling, that feel, I think is what we’re really going for right? It’s not so much about the title, the business card, I think it’s more about what it symbolises and the cultural movement behind that. 

Jeremy Au: (6:08)

Yeah, you’re right, it’s not about the crudity or the vulgarity, it’s more about the underdog story which is like – “Hey, you don’t care about me, but I know who I am and here’s me just being super blunt about it and then take it or leave it” Kind of dynamic, right? And I think that’s the nice thing when you’re feeling like being the underdog especially when you’re being a founder in the early days.

So, you’re working on a bunch of different ventures and so on and so forth and then what’s interesting is that you start your, you know, your work at Singtel then you work at Twitter and then after that you actually found up your first company, right…called KeyReply and later on you became a founder again, but what was that like being your first founder story?

Spencer Yang: (06:49)

Ah, I think the first time I was a tech founder, specifically, was for the company called KeyReply. We started out as a company called Graph Paper, actually. My co-founder and the CTO, he won the Facebook Hackathon with a product that was basically like a collaborative canvas tool where you can put in web elements and so on and then, being first time founders, we were like “Alright, we have a cool product, let’s try to build a startup out of it, but yeah, I think we failed pretty miserably at product market fit; couldn’t get any sales, couldn’t get any customers. We launched after half a year or a year of toiling on the product. So that was that. At that time, we had a pivot of sorts, right? Basically a redirection change and we found that, at the time, there was a lot of interest in the enterprise space and companies for automated chat solutions and we started looking into that and that’s kinda how we built it into KeyReply where we focused on AI chatbots and service for enterprises and the company went on to, I guess, raise funding in the valley, we lived in San Francisco, in New York and Hawaii for a bit of time, and then we had customers like Zalora, Singlife, Ninjavan…basically a lot of customers out of Asia, including the government of Singapore’s Ministry of Communications. So the Facebook Messenger chatbot by GovSg was actually developed using our technology and then we ended up getting the company acquired then to new investors, so I left the company thereafter. So, that’s a bit about that story. 

Jeremy Au: (08:07)

Wow! Thanks for sharing about that company and, you know, how it went. This is something that happens for a lot of folks, right? They start up a product because of a hackathon so they’re like the judges made some good noises, so this is the best team out of 20 and then you’re like “Oh that totally means we have product market fit”, “It’s totally going to be a billion-dollar company” Right? Then you start building up this hackathon product or the equivalent of it, right? And it’s just not going anywhere, right? And one of the interesting parts that happens there then is that you start thinking to yourself – “Okay, do I keep going because the market is just too dumb? Or do we need to pivot, whatever that means, into something else that we don’t really know or should we dissolve as a team” Right? So, for you it sounds like you were able to do that pivot. So, tell us more about what advice or how would you think people should be thinking about it from finding product market fit and what to do about it if they’re struggling. 

Spencer Yang: (08:57)

There’s a saying by one of the YC founders, I forgot which one…it might be Paul Graham or Kevin Hale, whoever, basically the definition of a startup is – actually, you are in constant search of product market fit. So, the product market fit is almost like this elusive thing that people look for, I think. Even today, you know, having been in the startup industry for such a long time, I realise that product market fit is something that you know qualitatively and quantitatively when you have it. But how do you quantify it, right? I think qualitative is something that we all know and are aware that people love the product say for example sport cars or podcasting solutions or Mac Books, all these products people use and love; it’s very qualitative in a sense that “Oh, yeah, you know, I would love to use it” and so on. But what are some of the quantitative ways that you can see? I think maybe one is the traction in the number of users signing up over a period of time you may see some form of acceleration. I think that’s one way to think about it. Another one is maybe revenue, because paying customers is also a good signal of a product market fit, but these are all causation metrics. I think if I were to advise a founder early on what product market fit really means, it’s really that with a specific niche group of customers that you are looking to serve, they find that your product has given them basically a superpower or value, that is in my mind, what product market fit is for early startup founders.

But, of course, that definition changes over time when the company has some form of product market fit, you might want to then seek a product market fit in a new segment of customer base and so on. And I think that is really about how you scale, how you extend your product offerings and so on. I think that’s how I think about it today.

Jeremy Au: (10:28)

Yeah, I like what you said – qualitative and quantitative which is qualitative, you know it and quantitative is something you can measure. For me, I always talk about it as - can you potentially make enough money with the way that you’re growing, to pay yourself. If you can’t pay for yourself now, that’s okay, but if you don’t see that you can pay yourself in six months at a basic salary, then you may not yet have a product market fit because you’re hungry, you can’t make rent, you know, it’s probably a dark path that you’re going.

What was it like going through that process because at some point, you did almost four years with them, right? What was it like to say “Okay, I’m going to start looking for the exit path on this one” on this one versus keep going, you know, for Mark Zuckerberg, he stared the social network…sorry, was famous enough to get the movie The Social Network when we were in 2014/2015 and he’s still at Facebook right now, right? So, he’s done one company for a long time. So, for you, what was that like, decision making wise to keep going versus hand off?

Spencer Yang: (11:27)

Yeah, I think leading a startup where you kinda co-founded and you went through a lot of struggles and so on to make it happen, it’s definitely almost an emotional journey, I think for most founders…for myself at the time, I think, it was a fairly emotional journey where I was very, very uncertain after that of what to do. Personally, for me, I pack a lot of my identity with the startup and the startup is almost like who I am and I’m the startup and so on, right? And I think the first order of business was to try to detach that. When you decide to leave the startup, you, kind of, in a way, force yourself to detach from that identity. So, I think that is the first thing that is a challenge for sure. Then the second thing is finding new purpose, maybe it’s like filling the hole or whatever. It’s almost like a breakup of sorts, right? And you try to find that balance and find that new purpose and I think that, for me, I was pretty fortunate that one of the startups that was actually in the same accelerator I was in at Hawaii, the founder reached out to me and said “Hey, you know, I would love to work with you in the blockchain and crypto industry. We are doing this interesting project, would you like to be a part of it” And I think that’s kind of how I found my next item and at that time, I had a lot of friends around me who were very, very fascinated by blockchain and crypto and we just started talking and I started learning, absorbing, taking everything in, in this new industry and I think that the new opportunity as well, helped me a lot, in a way.

Jeremy Au: (12:42)

Yeah, so what was it like entering blockchain at that time because I remember reading about it all the way back in undergrad and I was just like “Oh, as an economist, this is not fiat currency”. I think for a long time, I was bear-ish on the store value and I always forget about the fundamental store values. If everybody believes the store value, it’s the store value so. So, that was kind of the coin dynamic that kind of blew my mind and then there was a big part of it which was everyone has been saying for a while it’s actually the blockchain actually that’s much more really thought for in terms of what it allows and what it enables, right? But it took a long time for me to even wrap my head around it and what was it like for you, wrapping your head around this is something that is a vertical that is something I want to put serious time, energy, career into. 

Spencer Yang: (13:33)

I think my first foray into Blockchain and Crypto actually was for a very functional need of mine, right? To share a very, very personal story as well - around the time when I exited my startup, I got married to my amazing wife and I guess that once you get married you feel a lot more responsible about your life and about your family about your purpose and work and so on. There was a functional need of mine to try to participate in an industry that is on the rise. I think it was in 2017 sometime around June or July. The initial coin offering wave was super popular. There were a lot of coins that were doing really, really well and I think there was a functional need of mine to try to, I guess, make more money. I guess greed is more the way to describe it, at the time. I think what then happened was when I started diving into the industry, I started understanding more about the functional purposes of, for example, cryptocurrencies, about blockchain technology, about the different ways that you can issue new mechanisms, fund-raise, and so on.

I think it’s very interesting and I started to develop more of an aspirational sort of interest in the industry. From the functional layer to the aspirational layer where I was like “Okay, what will it mean if we were to govern a company, not using the company act, but let’s say decentralized autonomous organization? What will it mean if, let’s say, we don’t go to Sand Hill Road and bang on the doors of VC’s and we have instead an initial coin offering mechanism; what will it mean if, for example, countries today don’t use their physical currencies, but instead started using digital currencies…what will that mean?” It became a lot more aspirational after, and I think that’s really what helped me stay in the industry through the bears and the bulls in this industry. 

Jeremy Au: (15:04)

Yeah, I think that’s a great way to describe it, the bears and the bulls because people are predicting the collapse of crypto for a long time and everyone’s been predicting the death sentence of crypto for a long time as well and what’s interesting is that you not only obviously joined your first blockchain company, but then you keep going. What was it that made you say I want to keep going after my first job in this blockchain space? 

Spencer Yang: (15:24)

I think for me what really kept me going aside from the aspirational ethos that I’ve developed was the people that I met in the industry. So I was really, really fortunate to be able to meet the early founders in this space like the founder of CoinMarketCap, the founder of CoinHako, the founder of EtherScan, CoinGecko, and so on…the list goes on. After interacting with a lot of these founders and team members, maybe it’s part of social proof, so maybe it’s just part of interest in the industry. It became more entrenched in me that this is the industry that I want to contribute in and develop solutions. What I’ve also noticed, having worked at so many different very retail focused places, in this industry, we have a burden as practitioners in the industry to protect the user and to help the user with the best kind of tools and information possible. I think in an industry where we do not have direct government or regulations of sorts, we really need to self-regulate and essentially have practitioners in the industry that have the right ideas and ideals for the users and I think that maybe that’s one of my core missions right now to try to focus on that as any other external factors influence me.

Jeremy Au: (16:28)

Yeah, I think that’s really important. And there you are getting Hashtag Capital which was acquired by Crypto Audiences and CoinMarketcap and after that, you joined Coinbase. So, there’s a lot of interesting dynamics where you kinda go into that sequence of joining different crypto companies in different roles, right? So, what was that like? This is where it’s interesting because you’ve done, obviously, the founder role and then now you’re closer to doing what I call executive and product roles…so, what’s the difference between founder vs operator? 

Spencer Yang: (17:05)

The main difference between the founder hat that I used to wear and the more management hat that I wore again at CoinMarketCap and the product hat that I wear at Coinbase today, it’s quite nuanced. So, the founder hat at Hashtag Capital and Crypto Audiences is more of where as a regular startup, try to find product market fit for your company for different industries. For example, Hashtag Capital was a quantitative trading fund, our product market fit was whether we could make more BTC using BTC from our trading strategies. That was the product market fit of that. For Crypto Audiences, it was that advertising network, so, how do you provide value for customers and so on. So, finding product market fit in those roles was really important and then once you’ve found that, I call it the value hypothesis, right? The value to customers. Then you have to solve the growth hypothesis which is – how do you scale? Can you scale to a certain AUM for example, for a fund; can you scale to a certain number of customers, for example for Crypto Audiences. And then the third one is monetization, I mean, somewhere along the way you also have to figure out how to make money. For a fund, it’s more straightforward, for advertising, it’s more straightforward, but maybe for some consumer related apps, for example, it’s less straightforward.

I think at CoinMarketCap, I was then able to put on more of a management hat you know where it’s also about building a team, right? So, I was directly managing about twenty people…basically about half the company. And I think a lot of my time was actually spent more on making sure that everyone is productive, everyone is, motivated, and everyone is on the ball. I think with the acquisition there is also that challenge of how do you integrate both teams together and how do we make sure that both parties feel great about the process, especially, for example, being the acquired company, how do we make sure that now that we are acquired into a bigger company, everyone still has their own place; they still have their sense of belonging to their previous teams and their previous roles, but at the same time, now they have a larger opportunity in a larger organization to grow and excel in. So, in that, it is very important to manage and I think that’s a ‘management’ part that I really enjoy as well.

I think now at Coinbase, it’s a bit different, I can put aside some of the stress of product market fit, the stress of management and just focus on how do I deliver the best products for our retail customers. I think that’s very, very different in a way, but obviously, very different challenges as well where we have a lot of internal alignment given that Coinbase, today, is a public company with over 2000 employees, there’s a lot of internal alignment that we need to do. That’s a lot of cross collaboration, there’s a lot of considerations for every single product we do. So, I think it becomes a very different challenge, it becomes more functional which is a skill that I’m beginning to enjoy honing. 

Jeremy Au: (19:32)

Do you miss being a founder? 

Spencer Yang: (19:33)

Oh, terribly…terribly so. Yeah, I terribly miss being a founder; like yourself, I’m sure. Being a founder means that you have a chip on your shoulder, right? That you have a point to prove…and I always have a point to prove. So, I look forward to going back to being a founder at some point. I won’t say when, but yeah.

Jeremy Au: (19:52)

Yeah, I totally get it. But, it’s funny, right? Because from what you just described, these are all the factual stuff where it’s better to be executive than a founder, right? Because you can say “Now I get to focus on management, I get to focus on productivity, and I don’t have to worry about some other things”.

Then slowly you go “Now I’m doing products, I get to focus on technical and the best product, I don’t need to worry about product market fit, management…” So, there’s all this logical stuff about saying you’re getting more and more specialised and then finally, the emotional part is like “Oh, actually, I want to be a founder”.

Spencer Yang: (20:24)

No, I honestly think that being a founder is kind of an emotional process and I think you might be aware as well, Jeremy, I think I do still retain a part of that by trying to invest in early stage founders. So, my wife and I, we do a bit of mutual investments on the weekends. I guess a part of our responsibility and role help us to always be in touch with early stage founders; their struggles, their success and so on and I think that’s what I try to do these days until I become a founder again.

Jeremy Au: (20:50)

So, what’s it like to angel invest? That’s a very common journey, right? Like you and I were both startup founders, we exited, now we’re a bit chilled and then we start angel investing. So, could you tell us more about what it’s like for you to get around to making your first angel investment because I think a lot of people who are looking for angel investments, first time founders, are often curious about what makes a founder later on in their life want to start angel investing. 

Spencer Yang: (21:17)

I think, angel investments, for me, I knew the basics of it because being a founder, you have to raise money. You raise money for your startup, so you have to essentially, understand how it works. So, angel investments, I think, to be honest just means you’re on the other side of the table where now you are the person who’s actually evaluating the startup, the team, and so on and then giving them cash in exchange of equity.

That itself was easy for me to understand as in the process of what angel investments mean, what founders like, what founders don’t like, I definitely appreciate that a lot being a founder myself. I think the second part is more of the team selection and deal selection, how do you filter opportunities and so on. I think that’s a little bit difficult. The good thing is that crypto as an industry, packs a lot of angel investment opportunities. That was kind of how I first got started, by angel investing in some of the crypto networks, protocols, and so on…that was very helpful. But, of course, then if we look at other industries, moving from crypto to non-crypto industries. The dynamics change, the terms are different and may be slightly better, actually; evaluations are slightly better off, and so on.

So, there are things that you have to adjust accordingly, but it’s definitely a learning process still for me. I do, very candidly think that, angel investments is one of the most expensive hobbies that you can do in life; it’s definitely more expensive than buying a Lamborghini or whatever…if you do enough of it. 

Jeremy Au: (22:30)

I also say it’s one of the potentially worst returns kind of hobby you can do as well.

Spencer Yang: (22:34)

Of course, of course. Just invest in the S&P 500. This is not financial advice, but I think that’s probably better 

Jeremy Au: (22:40)

Yeah, exactly, because you get something and you can cash out anytime. The Lamborghini, of course, you lose a lot of value off the top, but a little smarter there, so you buy used, right? Still, you can drive it everyday, right? Versus, one thing I noticed about angel investments is that you’re basically giving them money so that you can coach them.

Spencer Yang: (22:59)

I know, right. It’s weird, it’s really weird. Yeah, it’s basically a way to work for someone, by paying them money for it. That’s pretty much what angel investment is. 

Jeremy Au: (23:08)

Yeah, that's interesting, right? Because we talk about the financial side – if you lose money, basically, even in the best case scenario, maybe it’s 10% of your portfolio 20% is going to make it and even then, a subset of that would be the ones who actually make a return. And then you have this situation where you’re helping 80 – 90% of your startups go through some form of pain, right? So, it’s a difficult process and, of course, the capital is locked up for so many years as well. So, it’s really tough. 

Another thing I always encounter is that all of us founders know that there’s a 60 – 80% chance of failure at the seed round, the angel round, because a lot of them just don’t find product market fit and just fail….and the angels only get 20% discount on their investments.

So, you’ve got a 60 - 80% chance of failure from point 1 to point B and you’ve only got a 20% discount on…well, it used to be…now, I think it’s closer to…I’ve seen a lot of 10% and 0% these days as well. So, you’re not getting much out of the marginal risk that you’re taking on versus actual risk.

Spencer Yang: (24:14)

The risk premium, right?

Jeremy Au: (24:15)

Yeah, the risk premium. You get a 20%...well, you used to get a 20% risk premium for 80% of the risk. 

Now, obviously, you’ve been both sides of the table and you are angel investing. How do you feel when another founder is pitching you? There’s always those few hats, right? The founder hat and the angel investor hat. So, how do you think through that process?

Spencer Yang: (24:38)

I think, for me, the mental model I like to use is – I will try to help the founder to not say the things that I already know as a founder. For example, if the founder is trying to tell me five-year projections of their business, I’m just like “Let’s not talk about that.” Because I know that that’s just something that you don’t know for sure. Any founder who has some form of projections there is just going to be taking numbers out of thin air. So, I don’t really care about any of those and I think that has helped me a lot when communicating and talking to founders about their business. I try to focus on the tough things, for example, one of the recent calls that I had with a potential opportunity, I asked the founder who was trying to pitch for investments – “When you have two co-founders, when it really comes down to it, who is going to make the decision? Who is the real decision maker over here?” I think some of these tough questions are important because we’ve gone through these situations, disagreements and difficulties, I think it’s really helpful and I use some of these ways to filter out good opportunities from bad opportunities 

Jeremy Au: (25:36)

Yeah, I think it’s interesting because you’re talking about helping people go through all these dynamics, advice, and jumping straight to the point. Is it weird sometimes? Because, for me, as a founder, you always hung out with founders who you thought were pretty good…but now, they’re pitching to you and you start to see this bell curve of teams. Like you said there are teams where they haven’t figured out who is in charge, they would probably be on the weaker side of the spectrum just because it’s such a fundamental question whereas a high functioning team will probably be on the stronger side of the bell curve. So, how do you feel about the bell curve? Was it interesting to see; how do you feel about it? 

Spencer Yang: (26:15)

Yeah, I don’t kid myself. I’d like to think that, for me if you look at the bell curve, I don’t think I’m above average on the bell curve. Maybe people like Mark Zuckerberg or even yourself are much higher on the other side of the bell curve than myself. But it really doesn’t matter in the long run, I think. What happens is that I feel you might be on the middle of the bell curve in enterprise SAAS, but within that vertical, you might have this really, really small…tiny niche which is possibly cyber-security, blockchain enterprise SAAS that you might be the leader in. So, I think what matters more is that within the startups’ core focus, is that one of the best teams who will win in their space…and maybe even geography as well; whether it is in the Vietnam market, China market, Silicon Valley or Singapore, these are all interesting things to think about. 

I guess, to your point about the bell curves when it comes to teams, I do think there is a bit of that, but at the same time, I do encourage teams who think that they may not be as special in their own perspectives to focus on certain niches that they can be better off in, that might actually help. 

Jeremy Au: (27:24)

Yeah, that’s a really great piece of advice. Like you said, if you zoomed out to the max, the bell curve exists, but if your team is able to focus based on geography, based on niche, based on the vertical, and based on their approach, I think they can become the category leader in that dimension and you break the bell curve. That is amazing advice and I have to remember that for a lot of different folks. Yeah, it doesn’t matter if you are not as good as Mark Zuckerberg, and please, I don’t think I’m anywhere close as well, but I think if you’re a team in Indonesia and you’re tackling something in the education tech space and divide that further, you’re doing something between for high school students, then it’s very niche, there’s no one competing there…or, at least, there’s only one or two teams and you just have to be thoughtful about how to build it in a thoughtful way to get to the next milestone.

So, I think a lot of people obviously think to themselves – “How do I get an angel investment.” What do you think about that? What advice would you give to someone before they pitch to you or me? 

Spencer Yang: (28:31)

That’s a very, very interesting question. Just a bit of a caveat to this…advice…or whatever you want to call it. I really think I’m one of the worst when it comes to fund-raising whether it’s for a startup, whether it’s for a fund, I’m generally pretty bad at it. So, because of that, I think I’ve maybe one feedback for founders. Think of it as a system. If you’re not that good like me, build a system that works for you. That system could have a 3-step process. 

One, intros. Intros are really important. Always try to be introduced, if you can. Whether it be Silicon Valley VC’s, Singapore VC’s, everybody likes to know somebody they trust has introduced a person or opportunity to them.

The second thing, I guess is look for investors who have some kind of interest in what you do maybe look through their networks or their postings, or maybe their portfolio investments and just have a chat. Maybe start with a chat and as you exchange notes on who you are as equal persons in a room, then maybe you’ll both develop an interest in working together. Kinda like how you’re finding a new colleague or partner or a VC, it’s the same thing. Just try to find common interest and alignment

I guess the third thing is to try to focus on where you are unique. I think this brings us back to the bell curve as well. There’s so many opportunities for investors to evaluate, how do you stand out? Maybe try finding more unique things about yourself or your team. For example, maybe you have a really novel solution that no one else has thought of before, highlight that. Highlight things that are unique about you. I think these are all things that are 3 general advice that I have for people.

Jeremy Au: (30:04)

Yeah, I really appreciate and agree with you about the system part as well because fundraising is a very abnormal activity for everybody, right? Everybody has hired people, everybody has tried to figure out products, but it’s very hard, nobody has learnt how to do fundraising. It’s not a course that they teach anywhere.

As you think about the other end of it, what advice would you give to other angel investors who are thinking about going to the market? Me and my angel friends’ first advice is “Don’t do it.” Because of the financial returns we just talked about, but what advice would you give angel investors who are thinking about entering the market? 

Spencer Yang: (30:40)

Try to develop a system, I think, would be the most prudent approach. What I mean by develop a system is a few things. First of all, try to set aside a budget like when you purchase an expensive Lamborghini or when you talk about investment strategies. Try to set aside a certain percentage of your portfolio or a certain x-dollar amount that you would like to disburse into startups over a period of time and set a goal for that as well.

Maybe the second thing is to pick sectors, or industries, or areas it’s more interesting for you. For me, for example, I try to focus on the greater China, US, and Asia markets…and broader Asia markets. I do occasionally look at European opportunities, but those are really rare and far between because of the lack of exposure and awareness to those markets. So, try to develop a market or a geography, or industry focus that works for you.

I guess the third thing is just really to think of it as a partnership and finding people that you like, and try to do angel investments if you want and really enjoy talking to founders on a regular basis. If you don’t enjoy that then try not to do that because it’s going to be taking away so much energy, if you are just there for financial returns and so on.

These are the three things that I would generally advise you add into your framework, but you can develop other frameworks or other systems

Jeremy Au: (31:57)

Yeah, that’s so true. I think the part where you said you have to like them on some level is actually a big thing because I’ve seen a lot of people angel invest and made their decisions where they thing this is a great idea, etc, etc, but it turned really passive because they don’t really want to hang out and it doesn’t work because the founder wants more from the angel investor and the whole relationship isn’t awesome which is a drain, and like you said, it’s a very expensive hobby.

I guess a lot of angels when they come in, they struggle with three things, right? One is finding deal flow, then the second one is picking amongst the deal flow, and the third is actually getting in…or not getting kicked out. I’m sure you’ve gone through the same experiences, I’ve gone through it a few times as well. So, I think you’ve talked a lot about picking already, but let’s talk about the first part which is how do you find deal flow and a little later on we’ll talk about how to stay in.

So, talk about how to find deal flow. 

Spencer Yang: (32:58)

I guess part of finding deal flow is extending through your network of friends and partners and colleagues and so on and just trying to help. One thing people will usually do is that they will leave companies to take a break. Usually at that time you should reach out, because they are very, very likely to start a company.

So maybe one immediate thing to do is when your friend leaves a company to do something, reach out and ask “What are you thinking about next”?

And if there is some period of uncertainty, just offer some help. Just really try to help because everyone goes through that. Usually, I start that conversation by saying congratulations on leaving your job, now tell me what you’re thinking about next. If they have another job offer lined up, then I’ll be thinking “Aw, that sucks”, but if they are thinking of a new startup opportunity, then alright let’s talk about it. Just be helpful. That’s just the general tip of finding new deals.

The second one was probably be reaching out to what I would call hyper connectors. People like Jeremy, for example, who knows a lot of people and who’s really helpful to everyone and anyone in your network who is a hyper-connector type, these people are the people you really want to work with to find deal flows together.

The third one is if you really have no friends and no hyper-connector friends then there are platforms that you can use to start, maybe on Angel List where you can join some syndicates and invest in some syndicates and so on to tag along. Those are all possible ways to get started. 

Jeremy Au: (34:21)

Yeah, I think it’s really about the network like you said…and reaching out is a good tip as well. Now that I think about it, one of my investments was because of that. We were hanging out as two founders who were chilling after our last company. It turned out that after a while he went off to start a startup and I was one of the first few people to have a chat with him, and it was a no-brainer. Now that I think about it, I still haven’t seen his deck.

He’s such a good founder and we talk about our problems, so I know what the product is, I’ve just never seen the deck which is kind of embarrassing, but you just make the investment based on the founder, right?

Hopefully this continues to be a cool story in seven years.

Jeremy Au: (35:06)

Let’s talk about staying in. That’s a problem for a lot of angels, they put their cheque in, they build up the deal flow, they see something that’s interesting and then I think I saw one guy got shut out because he took a few days to make a decision by then the round closed. You know, personally, I had my allocation shrunk by a factor of ten. So, what do you think about how angels should stay in? 

Spencer Yang: (35:30)

I think staying in is one of the most difficult things, especially in hotly contested deals. To be honest, staying in, in deals that don’t close are really easy because you just want more. Not being able to stay in, is actually a good problem to have for angels. So, if you are constantly in the situation of not staying in, please do reach out to me and we can have a chat. It means that you have really good deal flow, right? 

But on a more serious note about staying in, I think, number one, I think it’s okay to not stay in and get the full allocation. For example, there was a startup that I mentored in 2018, they pivoted and created a new company in 2019, they raised a really good seed round and I was only able to get a really, really small allocation, maybe around 10% of what I asked for. It was not a matter to me because I wanted to be in instead of having a very big amount in that startup. I think along the way I was able to add value to the startup over time and when they wanted to raise a bridge round before their A round, they gave half their allocation over to myself. A way to think about it as well is that I viewed that as a long-term partnership…your first cheque in the startup is not going to be your last cheque, it could be just the first of many. I think that’s a mentality that I have developed as well over time.

Jeremy Au: (36:43)

I think that’s a nice way saying it. I think the crux of it is being helpful, right? And being aggressively helpful. At the end of the day, the founder is the one who makes the decision on the allocation and I think the more helpful you are proactively…in general, the founders you picked are like the win-win and future oriented then they’re more likely to help you preserve the allocation or at least some of the allocation; and I like what you said that it’s a good problem to have, right? Because it’s feeding into the earlier two parts of it.

Spencer Yang: (37:09)


Jeremy Au: (37:11)

What’s also an interesting about you as well is that you’ve had that span of geographies. Grew up in Singapore, you’ve been in the States, you’ve been in China, and obviously, you’ve had the opportunity to be part of different work cultures as well. I see that you have a nice map of Singapore in the background which is nice because oftentimes when I do podcasts or video calls with other people they would often have a map with the same style, but of New York City in the background…but nobody’s done anything with Silicon Valley or SF…it’s all New York City. You’ve obviously had experience of countries like the whole South East Asia, Indonesia, Vietnam as well. Tell us more about that geographic dimension that you have as a wanderer. 

Spencer Yang: (37:55)

Sure. I think the first thing is that, before covid, and even post-covid, assuming that we have herd immunity against covid, I think travel is something that is so easy…I caveat it by saying that the last two years have been kind of weird, but travelling is so easy. You can literally hop on a plane and go anywhere. I think what’s stopping people from settling in a certain location and building a company is that lack of certainty or that lack of confidence or…a lot of other factors like finances or maybe family and so on.

I think, for me, I was pretty fortunate where I’ve a really supportive family and that was the first thing was really good family support to be able to go places and build companies where I felt it was meaningful to partake in. For example, Silicon Valley, my girlfriend who’s now my wife is really supportive and we travelled to Silicon Valley to build our company KeyReply and when I got back to Singapore in 2016, I was able to go on a trip to China with one of Jeremy’s co-founders and that actually exposed me to the China market and I was like “Alright, I’m going to spend some time here”.

Shortly after, I think within six months, I joined Cobo Wallet to start a team based in Beijing and uprooted my life and moved to Beijing. So, I think you take some risks with geography, and it’s very, very interesting and I think as Singaporeans, we tend to not do that a lot. Even though we travel. Singaporeans are one of the people in the world who travel because of how small our country is, we go to Japan, Korea, whatever for holidays and stuff, but I definitely do not see enough cases of Singaporeans starting companies in different countries just because maybe a lack of certainty in those areas. So, I definitely encourage more people to do the same, whether it’s China, whether it’s Silicon Valley; pick big markets where you can start to learn, and struggle, of course, and hopefully, learn something about the markets. 

Jeremy Au: (39:45)

One interesting thing is that networks are tough because you can move geography easily and you set up the business, but one thing I’ve noticed having ping-ponged between Singapore, New York, Boston, and the Bay Area is that the network does not transport the same way. Especially when you’re being a founder again, your network is not just a place to hang out or eat Singaporean food with, but it’s also a place where you can really get a lot of deep connections, help, and even get deals done. So, the density or the tightness of that network is also quite key. How do you think about that network, because you and I have stayed friendly using WhatsApp, etc, but I’m kinda curious as to what you think about that network piece? 

Spencer Yang: (40:28)

Networks for me, personally, I do appreciate the job of maintaining networks, to be honest. Some of my friends say I’m really good at it, but I think for me I always see people who are better than me at maintaining networks across various geographies and various communities. I think one thing that I’ve learnt is that you tend to build and spend more time with people naturally where you are located in. For example when I’m located in Las Vegas or for work at CoinBase, I definitely spend a lot of time virtually online with my colleagues and that’s part of the network, and the second part of the network is where you’re located. So, I spend a lot of time, for example, with people I know like maybe my past startups, travels, or maybe current hobbies, people who are living in Las Vegas and slowly build up the network over time with people with common interest and so on.

But I think one thing that a lot of people also forget to note is keeping up and maintaining networks with people who you have spent time with before in different locations like maybe Singapore, China, and so on, and I try to do that especially on the weekends like this I will always try to jump on a call with a friend or a former colleague or a partner from a different location just because I want to be connected and maintain that connection. I think that’s something that we can all do, almost like a weekly goal of sorts to have at least one or two calls with people that’s not based in the same location as you, that’s always helpful.

Jeremy Au: (41:54)

Amazing. Could you share with us a time where you had to be brave to overcome adversity or challenges?

Spencer Yang: (41:59)

To be honest, there’s so many, many times. Especially when you’re doing a startup. I think one time that was the most memorable to me and I wear it almost like a chip on my shoulder, and I kinda mentioned it earlier, is that when I got married to my wife in 2017, I think the both of us looked at our bank accounts and said “Shit, whatever amount of money we have in whatever this is called is so little, how are we going to build a life together?” And I think that was one of the first things that made me go “Alright, we got to find a way out of this”

I think whether it’s selling our startup, getting acquired, whether it’s going into the crypto industry, whether it’s making sound or stupid investments along the way, it’s our ways to try to be better. A part of that is being on that path and one of the biggest checkpoints in my life was that 2017 time when we got married. The last four years have been, I think, a constant journey of overcoming adversity in a way whether it’s new challenges, new opportunities, new geographies, new growth and so on. So, I think I’m very, very thankful in a way, both my wife and I are very thankful for what the last four years have been because of that.

Jeremy Au:

Wow! Thanks for that and totally resonate with that. Getting married and now accidentally having a kid as well made me much more thoughtful about financials and everything. Unfortunately, you can’t eat stock options so….

Spencer Yang: (43:15)

You might be able to tokenise that on a blockchain or something right? But let’s save that for another day.

Jeremy Au: (43:18)

That’s why us angels get all these secondary sales because of all these founders who need to eat and buy another bedroom for the house or something like that, right?

Spencer Yang: (43:29)


Jeremy Au: (43:30)

Thank you so much, I would like to summarise the top three themes that you've shared. The first, of course, thank you so much for walking us through your professional journey of being a founder being executive being a product leader and I think sharing a lot of that dynamics between not only what was it like to be progressing between point A to point B and why you decided to be a founder, what it was like to be acquired but also I think I really enjoy your thoughtfulness about the tradeoffs associated with it, some of the benefits of becoming an operator, but also the emotional reality of still wanting to be a founder, which was still hilarious, and I think any founder who’s become acquired still has that fundamental dynamic. I think the second, of course, was thank you so much for obviously the deep advice on the angel investing side because I think it was really good advice on both sides of the table, right? So, I think, obviously for people who looked and want angel investments, it’s nice to hear the mentality and thought process of someone who is on the other side of the table, which is honestly just for you and me who are former founders. It’s been plus ten years? So, it’s not too different and then conversely, I think it’s great advice for angel investors as well as well to be thoughtful about how they source deals as well as big deals as well as you know, keep the allocation. And lastly, I think I thank you so much. I think actually for this and it’s a bit more invisible, but I think the thread about how to be thoughtful about your personal life, geography, the various tradeoffs, trotted type process. Because I always remember my mentor always saying that startups and life is a marathon and I think I really like what you said about the thoughtfulness about being mindful of what your partner is thinking versus the bear counts versus the industry changes; it’s not easy to make those changes along the way and I really enjoyed that theme of being thoughtful and deliberate and intentional on the tradeoffs as much as you can even though it’s a very scary period time for everybody. Thank you so much, Spencer, for sharing and dropping your knowledge on us.

Spencer Yang: (45:29)

I appreciate the questions Jeremy and this podcast as well, and I think you just gave a really good summary of the conversation that we had.

Jeremy Au: (45:35)

Thank you, Spencer.