Understanding VC: Jeremy Au on Startup Fundraising, Must-Have Leadership Skills for a Founder and How to Deal with Startup Failures & Exits

· Founder,Start-up,Failure,Press,Blog

Understanding VC is a deep dive on how Venture Capitalists work. In this episode, Jeremy Au joins Rahul, the host, to discuss the 3 phases of fundraising, must have leadership skills for a startup founder, why building startups are really hard because of how humans learn and how startups are expected to grow. He also shares how founders can deal with failures, exits, and moving on to the next challenge. Jeremy also touched on how startups can use capital advantage as an economic moat and the number of ways he gives back to the startup community.


Key Takeaways

  • 3 phases of fundraising - how to prepare your startup for fundraising, organising your fundraising process, and growing your startup with the funds raised
  • Why the ability to learn quickly, making good decisions consistently, and emotional self regulation are the must have leadership skills for a startup founder
  • Why every founder must have the self awareness to grieve when they exit their startup before deciding on the next challenge
  • How you can deal with a startup failure and why it’s like losing a loved one
  • How startups can use capital advantage as an economic moat
  • How as human beings we learn linearly and startups are expected to grow exponentially, and why this makes building startups really hard
  • Ways Jeremy gives back to the startup community



Rahul Thayyalamkandy:

Welcome to Understanding VC. I'm your host Rahul. Understanding VC is a show where I talk to VCs to learn how they work. Today my guest is Jeremy Au. Jeremy is a VC at Monk’s Hill Ventures, a VC from investing in early stage tech companies, primarily series A in Southeast Asia. He also spearheads Monk’s Hill Ventures key initiatives from venture scouts to thought leadership. Prior to Monk’s Hill Ventures, Jeremy was an entrepreneur who has built multiple startups to including CozyKin, an early education marketplace and Conjunct Consulting, an impact consulting platform. He's also the host of the podcast, Brave where we interviews trailblazing founders, investors, and rising stars in Southeast Asia tech. Now let's talk to him. Hey, Jeremy. Thank you for being on my show, Understanding VC.

Jeremy Au:

Yeah. Awesome. I'm so excited to be in a show and share a little bit about my journey and experience. So thank you so much, Rahul.

Rahul Thayyalamkandy:

So let's start with your background, like your early experience, your college experience, or your experience serving the army.

Jeremy Au:

Yeah, happy to share. For myself, grew up in Singapore, classic national service story. I think what you're kind of referring to was I joined the military without really any idea of college or anything because I had done very poorly in junior college for my academics, and so I was kind of lost in the military. And so at some point I realized that I should probably go to the university. And so I ended up cutting out my SAT books and putting them in Ziploc bags and studying them while out in the jungle at night, studying them by torch light and stuff like that. So I could tell you, I did really well on the multiple choice questions component for SATs and I did very poorly for the essay section for the SATs, because you can practice multiple choice while you're in a truck somewhere, but it's pretty hard to do with that essay practice there because you never have 20 minutes to yourself.

Yeah, so the military was fun. I went off and managed to get an offer from UC Berkeley. Had a ton of fun there studying technology economics and business. My honors thesis was in how literacy rates affect the rate of technology adoption across the world from a statistical perspective. Awesome experience at UC Berkeley and obviously right there with Silicon Valley, so it was just seeing the emergence of Google and Facebook then. And then from there, I went off to work at Bain as a management consultant across Southeast Asia and China, and basically worked a lot on consumer retail, some tech. That was a great experience to do that and I went off to then leave that to bootstrap my first company, which was an impact consulting agency and platform that basically had over a hundred clients from Singapore Cancer Society to Boys' Town in Singapore.

And we bootstrapped that from zero to profitability and very much a Teach For America model in Singapore. And then it became very self-sustainable and I eventually handed off to my co-founder as well as the successor to do my Harvard MBA, where I had a blast. Very focused on entrepreneurship, venture capital kind of like the skating phase and problems associated with it and the success stories, but also the failures. And then went off to eventually build a second company that was VC backed, an early education marketplace and grew that out from zero to pre-seed, to seed, to series A, to sale, which was we grew that from Boston to New York. And we were acquired by a large global education chain. I led the expansion from the East Coast to the West Coast and Texas and a bunch of other states. So that was a interesting experience.

And then eventually I was poached by Monk’s Hill Ventures to join as a VC where I am enjoying and appreciating and learning a lot about the other side of the table, the venture capital side. So it's actually a quite interesting experience where Monk’s Hill Ventures, everybody is a former founder or high growth operator, which is like one of the prerequisites to join the team. It's been nice to hang out with other folks who are cut from the same cloth, but also interesting to be working from our perspective and from everybody's perspective in partnership with founders, but also acknowledging there are some substantial and significant differences from the point of view. So that's been an interesting learning journey for myself following and retracing the footsteps of Peng who you interviewed in an earlier podcast.

So shout out to that great episode, which is where you came on my radar and [inaudible 00:05:02] as well. So that's who I am. Hobbies, I also run a podcast called Brave South East Asia Tech where you will be a guest as well, so excited to spotlight you as well. But it's an absolute blast growing out that podcasts and profiling founders and VCs and rising stars and doing well on the charts in Southeast Asia. I'm a father of a daughter, as well as dealing with the joys of everything associated and the logistics around that, and then I also do improv hiking, science-fiction, and drinking tea. So that's who I am.

Rahul Thayyalamkandy:

Cool. Founders always have this great affinity towards other founders. No matter where they're from or whatever they're from, you always feel some sort of connection because of the shared experiences that you have. And so I just want to ask a question regarding fundraising. So what does fundraising look like from the time a term sheet is offered to you to closing the deal?

Jeremy Au:

Firstly, totally get it. It's kind of like how me having been in the military and the army, kind of really get it when someone talks about being in the military. There's this instant empathy. Sorry, there's a cat running around here. If you watched war movies with Brad Pitt and Rambo and that's the glossy exterior, but the actual interior of being in the military is just exhaustion, sleep, movement, stress, adrenaline. It has that instant moment of connection where someone talks about being in the military and you can actually really empathize with that at a deeper level versus reading or watching it, and I think that's very much similar for a founder to founder.

Rahul Thayyalamkandy:


Jeremy Au:

There's a huge aspect about... There's a lot of glossy entrepreneurial profiles about all the awesome stuff and truth is, the reality is very day-to-day mundane in terms of what needs to be done, but also very painful in terms of the resources versus output and very exhilarating in its own way where you get the small wins and big wins. I agree with you about the empathy piece. And I think fundraising is one of those things that it's really hard to believe and understand from an outside in, because like you open up the magazine and you're like, "Oh, this person raised $20 million." And that's really literally the headline and that's also probably the first paragraph and you're thinking to yourself like, "Wow, this person walked in and crushed it." Which, I'm not saying that there isn't a spectrum of easiness to hardness, obviously there is, but I think it's something that you just have experienced it to really feel for it.

Now, of course, I get to see both sides of it. I've been a founder effectively fundraising twice, and then now as a VC watching other people fundraise. That's at people level empathy and also interesting seeing things through the mirror here. So I think practically, I think about a fundraising process, I think about it as three major phases. I think the first major phase is, and I think this is the part that people just forget, is this building a great business. And the second one is actually the fundraising process, the one that we think about quite about.

And the third thing actually that's really interesting is actually what happens after fundraising which is similar to phase one, but little bit different, especially for those people who are going through their first ever round of capital, either at the pre-seed or seed stage. And to some extent a series A. And hopefully by then if you've done those three rounds of funding, you're like a pro and you know what to expect, and you can disregard this advice. But I think the first part I always tell people is like, and this is a part that often isn't talked about in the magazines or anything is really about focusing on building a great company and what that means could be finding product market fit, interviewing customers, getting to know great partners, bringing on great employees. The truth is at the end of the day, even for those who are able to raise a ton of money on just a pitch deck of idea, the truth is a great pitch deck of idea probably implies that this person actually spent a lot of time thinking about problem, has a ton of domain expertise in the business as a very sound go-to market approach that the VC likes.

And so what I'm trying to say here is everybody you're walking in, it's not about having the best pitch deck to some extent, but the fact that you actually have something to match up to that deck, either because you have that domain [inaudible 00:09:42] personally, because you have a business that's starting to figure out what needs to be done, building out a business that actually works from getting from point A to point B, having to team. All those things just count for something. And the truth is if you build a terrible business, the truth is a great pitch deck can only get you so far to let people over it, and maybe there'll be some unsophisticated folks who are going to be less worried about it.

But the truth is if you build a great business and you have a weaker deck from their perspective, plenty of VCs are sophisticated enough to look past the deck and say is this a good business or not? And is there growth potential there or not? And so I think the crux of it is I always tell people the first step to be a great fundraiser is to be a great business operator and founder. And everyone's kind of like, "Yeah, it's pretty obvious when you say it out loud, but it's pretty non-obvious in terms of the energy or the amount of ink that's spilled on it."

Just like this person raised a 20 million series A because he's charming and he came from a great background and blah, blah, blah. And you're like, "Yeah, but if you look at it, he's been working at this company for four years already." So probably it's maybe more likely that he has a really solid business that he worked his ass off on. So I think that's the first part is building a great business to the best extent possible, which at time that you have. I think the second part about the fundraising process, and I think we think about it from go off the market and chat and blah, blah, blah, and negotiate and persuade, I think that's expected, but I think fundraising also includes the fundraising plan and approach, which is number one, like should I fund raise or not, should I use venture capital or should I bootstrap?

I have done both now. And the truth is different businesses have different approaches. Some business models and the way they build their mission [inaudible 00:11:37], that's going to do better with more traditional or conventional types of capital. The truth is I think there's a bunch of businesses that can either grow with either conventional capital or with venture capital. And at that stage, then the founder needs to make a decision about saying, "How do I want to grow this business? What is the best fit for me as a founder with the type of capital because the capital is associated with the type of investor board member, a stakeholder that you're going to be working with the moment you bring them on.

It is literally like you spend all this time agonizing about whether you're going to hire this intern or this junior employee, or even a senior VP to join this person and the truth is this person is going to be with you in the worst case scenario a couple months. And in the best case scenario, the talent is going to be there for a long time, but at least anybody can walk out from their relationship. But when you're choosing to bring on a venture capitalist or investor, this person is going to be on your cap table for the next ride or die whether you succeed or fail. And when you succeed, they're still talking to you every month, every week. And if you fail, then they have a very strong stake in what's going on and it can get very complicated, very emotional very fast. And so I think people kind of underweight that dynamic to be thinking, "Do I want to take venture capital? And if I'm looking for venture capital, what kind of venture capital am I looking for?"

And that level of self-awareness is tough to get without prior experience, but I think increasingly I think we see founders as they get more advice from previous generations of founders as they read online and do this the homework before hand. I think they spend more time on just preparation phase or the fundraising a bit more and a little bit much more intentional about the process. And of course, I think the next [inaudible 00:13:31] is the fundraising actual part of it. The second half of the second phase is the classic negotiation control terms, economic rights, trust building. And I guess we're going to talk a little bit more about that because I think-

Rahul Thayyalamkandy:

So what are the terms that founders should be aware of and what [inaudible 00:13:48].

Jeremy Au:

Sounds good. So let's dive into this and then eventually I'll talk about a touch phase, which is what happens after the fundraise. I think there are three buckets that are really important for this negotiation phase. This is assuming that you manage to get a term sheet even better, multiple time sheets. So you have that auction process going. I think there are three buckets of terms that we'd think about now. I think the first is really about economic. The second is really about control rights. And the third is really what I call the process of trust. I think the first of course, economic is the most obvious. So what's the valuation, what's the dilution/ownership that you're going to have, what is the employment, stock options before they're carving out. So these are economic terms that eventually basically say how much slice of the pie do I have in exchange or trading in a slice of it to get capital to grow the business and grow the pie.

So I think the economic terms is what we need to get fixated on because obviously, there's a natural dynamic where founders want more ownership preserved. Venture capitalists say, "We're taking on a large amount of risk. So we want to have a better stake in the business." So there's that natural, inevitable dynamic where it feels like it's going to get boiled down to a one goes higher, one goes down. But I think the other two aspects are a little bit under weighted in terms of process.

So the second one is, it becomes like control rights. So like board seats, what's on the list of reserved matters for the board? Is it veto, who's not? [inaudible 00:15:19] for the founders is it assigned to a person's name or is it assigned to the offices of the company? There's a whole bunch of control rights. There's a long list of them. And those are really important because what I think founders under appreciate is that these control rights actually stack up over time. Because once you give out that control right to an foreign investor, the next investors is going to take on those control rights and add additional control rights.

But of course, the other side of the table is not every founder is perfect. That's long story short. And so I think in the best case scenarios, you'll see VCs and founders who work well and the control rights help preserve that boundary and makes it clear who is in charge of what and helps create a process and understanding about the scope dynamics. And so that really helps a lot of it. And we also see a ton of really problematic lapses of fiduciary duty. We saw that from Therano, we saw that from WeWork. We saw that from Revolution Precrafted, Philippine's Unicon. And the awkward truth is, and we kind of know this is not every VC is a saint and not every founder is a saint.

Rahul Thayyalamkandy:

We have checks and balances for both parties.

Jeremy Au:

Exactly. So I think the control rights is [inaudible 00:16:38] what's a fair dynamic that makes sense for the long-term future of the company as a whole. And it is always a tricky one because it feels very much like it can get emotional very fast as a negotiation term, but I do think it tends to get a little bit underweight compared to the economic terms which are a little bit more obvious. And I think that, that thing of course is like what I call the process of trust. And what I mean by that is I think a lot of founders as they negotiate for the best economic control terms, I think they really look at it as... and it can feel very much like a zero sum game because it's tough. As a founder, you naturally want more economic and you want more control, and that's this underlying dynamic there.

And I think one thing that's under appreciated is how do you build up trust with the counterparty? Because again, if we were bringing on like a VP of sales, you would want the salary negotiations and every founder and CEO knows this. It's like you want a negotiation to be fair and you want it to be in a good spirit that helps build the relationship, because you know that if you're too hardball on the negotiation phase, you're going to lose the person. That's it, full stop. Or you keep the person, but the person enters in with a chip on your shoulder a little bit and say, "Hey, I got screwed." And that's a destructive way because you lose the upside of the value of this person. The person bails and then they have a bad review in the sense of the company for the rest of the time.

And so there's this dynamic where... Obviously, this is true, not just for founders who are negotiating, but also I think for a lot of VCs who are negotiating this dynamic as well. I think where the differential a little bit here is that for every pre-seed and seed founders, you can say founder for example, this is our first time raising pre-seed or seed or series A. And when you raise a series A, this may be a their third time raising capital in the best case scenario whereas for a VC, I think normally they've done it so many times now, because they're doing a deal every month, every two weeks, every week. And so for them, they tend to gravitate to a certain, where they on average, at least achieve a certain floor in terms of how they negotiate in terms of behavior and building trust because the VCs know that if we put in X million dollars, we're setting the stage for the next five to 10 years, because we already have a portfolio of 10 to 20 companies who have that relationship with us.

So I think what's interesting at this stage of course is as a result, the different dynamics right here. And you have founders who are first time founders have less experience fundraising. And so they tend to wait economic control, economics rights, their control rates, then the trust building process on average, adding more... But sure, our more experienced founders like myself and Chad is almost opposite way round, which is who do we trust and how do we build trust with them? And then that's focused on the control rights and also the economic terms with the knowledge that we can actually confidently grow the rest of the business.

And then I think there's a lot of founder emotional regulation and learning acceleration because yeah, the counterparty, the VC honestly has more experience negotiating fundraising, so it's not only intellectually painful because you have to scramble and find out the founders to ask questions and talk to a lawyer and [inaudible 00:20:10] and read, Brad Felts, Venture Deals book [inaudible 00:20:12], but also there's a huge amount of emotional self regulation, because it feels like you're getting screwed. It feels like you're incompetent. It feels like people are out to screw you. It feels like they're asking for unreasonable stuff. I've seen founders honestly lose funders because they weren't able to see that self-regulation because they felt the moment of that pressure, versus I think the stronger founders are very much almost like looking past the fundraise and saying like, "Okay, I want you to be on my board. I want you to be on my cap table. I want to build a great company together for the next five to 10 years."

More just at an who was on the bus rather than trying to figure out how are we going to get out with as much as possible if the thing fails because the truth is 90% of startups will fail, even higher actually in some markets. And so maximizing for the upside is really the crux of it and maximizing the possibility of that upside is really the crux of the negotiation phase rather than the slice of a pie if things go sideways and that's tough. That's super tough. I say this in the knowledge that I did not play by these rules or have this level of maturity and thought around the fundraising process when I first started going out to market and it's what I know now through painful experience.

Rahul Thayyalamkandy:

I don't think anybody has. I had no clue. All you read is TechCrunch articles and maybe you have your heroes in the form of Steve Jobs. It looks very different to what is the real reality.

Jeremy Au:

Yeah. And I think that's the crux of it because at the end of the day, if you have a 400 word article, there's no time to go deeper with these things, and so I think that's why the podcasts and long form profiles are already important and the peer coaching and getting help, asking questions. And that's why I always tell other founders when we hang out is like, "Hey, no stupid questions. Ask questions, that's the only way we can know and figure stuff out."

Rahul Thayyalamkandy:

So how important do you think leadership skills for founders are for the sense of a startup? And this is also similar to the fundraising thing. You don't have much of experience, you've not managed people probably or built a team.

Jeremy Au:

[inaudible 00:22:38] third phase that we talked about, which is now you've raised the money and sorts of what do you do with it? So let me just quickly cover that. The third phase of the fundraising process is really the moment you closed, signed the term sheet. There's a logistics. Actually, there's a tremendous amount of work that you need to do which is you need to prepare to scale the company to the next phase in terms of company maturity, obviously. In terms of chronology, in terms of you've sold to 100 customers now, how do you get to 1,000? But also in terms of the people and the growth expectations. So you're expecting the company to grow in hockey shaped fashion, because you decided earlier that you're going to take venture capital and you build a process of trust with a board member who is now on your board that you're going to do it this way or that way.

So I think that third phase is really important because the truth is whenever you raise capital, you're actually buying time. At level one, a lot of people are like, "Okay, obviously use money to buy talent, multi-level developers, blah, blah." But I say, "Yeah, but you buy talent to buy time. We're trying to accelerate some man hours to solve certain things, but why are you buying time? You're the time to run experiments. So you figured out that, for example, you figured out that mental health is an underserved category. Sure. But if you raise [inaudible 00:23:58] of money, you may not necessarily know that it's available thing to go after. You may not necessarily know what the right approach or solution is. And that's to say you do risk that in the pre-seed round or angel round, and now you go raise a seed round.

And you've now proven that people are willing to pay a set amount of money, you have a hundred customers. Now you're raising a seed, you raise a one or two million seed, and you're buying a couple of folks. You're buying about one to two years of runway in term of time, but there are going to be three, four, five, really key experiments that you need to experiment. And if they all succeed, you line up all five experiments work, and the first time go perfect. You're on your way to raise your series A right, because you can say I've learned all these specific things along the way, but the truth is life is more awkward than that, and [inaudible 00:24:48] experiments, but it is not so straightforward, and so the truth is you probably fail some experiments along the way, and then that's where you having bought two years of time, lets say you have some buffer hopefully to do those experiments and learn from them.

So that's the third phase of fundraising quickly again from building a great business to the fundraising strategy, preparation and negotiation and lastly the third part which is actually growing the company with the funds to experiment with the time and key points and milestones and throughout all three phases, I think that's where leadership is key because as a founder at the end of the day, especially at zero to one, it's just you and maybe another co-founder. And so there's a tough dynamic where you're managing not just what I just talked about, but process of doing those things, which you can tell is tough, especially because if you are a classic first time founder, or even a second time founder, if you're first I found out you've never done any of this process before, you've never built a business from scratch, maybe you were a consultant, maybe you were an employee, maybe you're in venture capital, but that's different from actually building a business.

And I think the second aspect of course is fundraising. I can tell you that all first time founders have never done it because it's not a daily activity. If you ask me, the second phase was like brushing your teeth. Then everybody has brushed their teeth before, but fundraising for venture capital is a new and novel activity for everybody. And of course, that thing is using this venture capital to scale again, it's also totally new and novel. So I think that's where the leadership needed to do those things, but also have the learning acceleration to be able to learn very quickly to do those three things is so difficult. And I think the third thing which I hinted at is actually the emotional self-regulation that's actually really difficult as well, because at one level you're like, "Okay, if I read this 20 books equivalent, and get this advice, I will be able to execute and do those things."

And then the learning acceleration piece is... And I had to figure out how to do that in a very efficient and fast way, 80/20 way that actually lets me learn how to do it and then be self aware about doing it. But the third thing is, and at the same part time, I had to feel okay, feeling and understanding that I have 20 books equivalent shot of being that person I saw on Fortune or Forbes which made it seem super simple.

Rahul Thayyalamkandy:

And also a lot of [inaudible 00:27:19].

Jeremy Au:

Exactly. That's tougher. I think a lot of founders are very focused on level one which is like, did I make the right decision or not? But just because you made the right decision now, doesn't mean that you'll make the right decision in six months time when the company grows into a new scale that you haven't been at before. And of course, you're tackling the problem and approach which is totally new. It's never been done before. If you're doing a startup, the truth is it's never been done before. Maybe it's been done maybe once or twice in different geographies, if you're trying to localize a concept, but the truth is if you ask me, "Jeremy, if I want to tie my tie..." I'll be like, "Oh yeah, I'm trying to tie and practicing now."

The learning acceleration is very simple because I can go to Google and there's literally a million pages on how to tie my tie, YouTube and all the different pedagogies. YouTube, podcasts, infographic, texts, heck, my dad, my friends in person. So the learning celebration is solved. And then emotional self-regulation is very simple because you're like, "Yeah, if I don't how to tie a tie, I don't feel terrible. I feel like I just got to learn it. It's low stakes." Versus when you're a founder and you're like, "Okay, I got to make this decision on what to do because a customer support issue has come up and the customer's frustrated. I need to make a decision now and I need to carve out enough time because we expect to target a series A in six months time to go out to the market, and I have no idea how to do it. I need to figure out now how to learn, how to get ready for that process."

And in order for me to learn that, I need to say to myself, a couple of things, which is one, "I don't know how to do something. Two, it's the most high stakes things I've ever had to learn, because if I don't with series A, this company is going to go sideways. Three, all my employees are counting on me to get this capital and they feel very confident that I can do it because I raised a pre-seed and seed before, and I don't know how to do it. I'm scared. I'm anxious, I'm nervous because it's the future and it's not been done yet."

And so I think there's that iceberg component where everyone's trying to make the best decisions now versus how do I accelerate my learning to be able to continue making the best decisions in six months time or one year's time. And then lastly is that deep chunk called the emotional self-regulation which is how do I come across as a leader, as a CEO, as a teammate, as a human being to my co-founder, to the VC, to my employees, to my customers, to my family? And all those things are pretty difficult to handle. And I think that's where leadership really kicks in at all those three planes of the existence of a founder.

Rahul Thayyalamkandy:

So you've sold to two startups. One was bootstrap, one was grown with VC funding, so what was it like doing both?

Jeremy Au:

I think the best part about being a founder is that sense of purpose, that sense of community because you build that as a team, that sense of dynamic nature, like you know what's going to happen in the next one, two or three years which is I'm going to grow the company this way. B, I'm going to go raise an [inaudible 00:30:36] capital. C, I'm going to... There's almost a very clear sense of progression and standard pathing the moment you're with a company.

That's honestly pretty different the moment you're outside a company because you're effectively unemployed. Of course, there's a transition path where you have been acquired and part of a larger company, obviously feeling time in between. But at some level, you're unemployed from the role of being a founder. You know what I mean? So you're still employed in a role of being a general manager, you're still employed in a role of going to Harvard Business School in a sense, but you lost that role of being a founder and then to some extent, obviously if you're the CEO, the role of being a CEO, the role of CTO, all those status and identity.

I think there's two aspects of it. One is the loss feeling of it like now that you lost it, how do you process that loss and you can use the word grief and absolution. But also I think there's a second dynamic which is what's the next thing? Or like what actually is the next thing that I want to do, that I needed to? And so those are the two emotions that are really like yin and yang of leaving a company and starting something new. And it's tough.

It's tough to close that chapter on one side. And at the same point of time, double down on the search for something new and... I was hanging out with a whole bunch of other founders who had left their companies over the past one year. One in SF, one in Taiwan, and we all found each other through our online networks. It was just kind of chit chatting and part of it is just like... My advice for a lot of founders is those are two different processes. They should be done in parallel to some extent, but there are two distinct processes. And what I mean by that is the grieving part and letting go part, that's writing thank you notes, that's going for a long walk. That's taking that vacation you've always wanted to do. For one of them, I basically went to a Vipassana retreat with my co-founder Jia Chuan. Shout out to him. He is also one of my podcast guests, but we were in the army together.

We were good friends together. And then we became best friends from building our Conjunct Consulting together. And so we went to Vipassana retreat and we did 10 days of silent meditation. So we couldn't talk to each other. We would hang out with each other, but we couldn't talk to each other which was crazy because we had talked to each other all the time. The joke was we talked to each other more than we talked to our partners, romantic partners, which was in terms of texts, in terms of like WhatsApp and everything. In terms of phone calls and meetings. And so we did that conscious uncoupling through that 10 day silent meditation retreat, but we just meditated and didn't talk to each other, no devices. We did that in Chiba, Japan, beautiful place. Learned how to meditate there, but also had time to unwind and process and be present and feel my body and feel my gravity and the sense of who I was as a person and stuff like, and feeling the moments of time rather than thinking about my next meeting, my next conversation, my next two deal wherever it was.

And I remember doing that silent meditation, I remember I was watching a butterfly and a grass field and I was paying attention for like, I don't know, it must've been like... I don't know. I didn't have a watch, but I don't know, like 20, 30 minutes. And I was just paying attention. I was like, "Whoa, I've never paid attention and whoa, actually the butterfly actually has a pattern to how they go to the flowers." And you're like, "Whoa, I've never watched anything for 20 minutes and just focused on that thing." Because most people are hanging out with the dog and playing on their phone and listening to our podcasts. You're not paying attention to the dog. Your hand is with the dog, but not your mind, not your focus. It was crazy. I remember I would while meditating continuously feel a phone going off and vibrating in my pocket. I had no phone in my pocket, so I was just flat hallucinating a phone vibrating. Anyway, so it was a great experience.

And out of the 10 days, we had an awesome time just chit chatting and hanging out and talking together. And after that, I went off to do a hike, the Pacific Crest Trail with my then girlfriend and now wife, Candace. And we hiked to from Los Angeles to Yosemite for one month. One month we were on a trail. It was on my bucket list for a long time. I read this book called Strayed... Sorry, Wild by Cheryl Strayed. She also wrote this great advice called Dear Sugar. It sounds like you know what it is. I was inspired by that. So it was always on my bucket list to do, and I never had time to do, to hike. I hiked for a month in California and it was amazing.

I was just enjoying nature, and obviously it was pretty tough because you spend 10 days of sitting down and meditating and suddenly you go to trail and the truth is you've probably spent a couple of years being a lazy startup founder who is always working and not really spending that much time on the trail anyway, but it was this amazing view, amazing timing. I got space and also the best part was there was no devices again.

Sometimes you go to the top of a mountain or something or region to get some little reception just to download your emails and make sure you follow up. But it was just amazing, effectively two months where I got time to peace out. It really helped me solve the distancing component of grieving and reflecting on the fact that yeah, I had left something that I had founded and birthed. And I think that was actually very separate from my second part of the journey when I was at Harvard Business School and I started searching for something else, what the next thing was and I was open to joining a company. I ended up founding something, but it was just a discovery of saying like, "Hey, I had done A, B and C. I like B, I don't like A. C I'm pretty weak at, I want to get stronger at." So there's a very much more intentional search process to improve on it.

I was hanging out with another founder and he was a CEO and founder and I was helping him through the first phase, and then eventually we transitioned to a second phase and part of the gift of the first phase of grieving and self-awareness separation was he realized that he didn't want to be CEO anymore. He'd enjoyed being a founder. The CEO part sucked. The fundraising part sucked. He enjoyed the product and engineering side of it, but he was already on that journey for years and years and years. And so when he went on that search process, he was very much more like explicitly saying like, "I'm a founder. Yes, I was CEO, but I would rather be the CTO." This is one dimension of it, and obviously he was also like, "I was part of this industry and I like these parts of the industry, but I don't want to do this industry."

And I think a lot of the problems with all our founders is they can't separate from this phase is they're trying to mix up some of those two processes. So the first part of the process, they're trying to get self awareness and they keep thinking to themselves like, "Oh, I shouldn't be relaxing. I shouldn't be on holiday. I shouldn't be taking a break. I shouldn't be meditating because I should be doing the next thing. I should be doing the next thing now. I've always been doing the next thing. I've always been managing folks. I've always been making decisions and where is it? And I don't have it." So there's that loss of version, right? So I lost something. But you're not getting separation and awareness. So there's that aspect of it. But there's also founders who are doing the other side of it. They're so busy chasing the leave or the part or the exit. Exit is a bit easier, because if you exit, you're still locked up to the company for the next one year like me. So you're still part of the business.

But I think for a lot of founders, obviously in any scenario, they start chasing the next [inaudible 00:38:30] away and it's because the intellectual part of the brain is guiding them and saying, "Okay, I'm going to subconsciously look for something." But then they feel sad about the past thing. They spend a lot of time not too... They're chasing something and they're trying to do a lot of work, but it's not much direction. They feel like that boiling the ocean a little bit in their search and it's because they didn't really take the opportunity to take time and separate and take the learnings from the first phase. And I think that's something that I've realized... I'm sharing this advice because that's what I realized, the big difference between the first time I left a startup and the second time that I left a startup effectively was I think the first time I was very lucky, I was able to carve that out implicitly because I had decided to leave and hand off the startup and to do my Harvard MBA.

It was interesting because I actually deferred my start date of Harvard MBA by one year, because I needed to get the company to really become very profitable, to find a successor to take over my role as the CEO while letting my co-founder continue to be the chairman of the board. And so I already had that preparation time for departure, and then when I was able to leave and let go, I was able to carve out that. I already carved out that time because it was planned, a plan process. And now I was doing my Harvard MBA and Harvard MBA is a great place to search for the next thing. So I was very lucky at that time. And then I think the second time around, I did a bit more intentional about structuring that process for myself.

Rahul Thayyalamkandy:

I have a question. So you've been fortunate enough to have a good exit. It's been not a complete failure. So what happens when a business just fails? How do you think founders can go? I had a dramatic experience many years back, but yeah, then you pick up after a while, but what do you think founders can do to move on?

Jeremy Au:

It's tough. At the end of the day I think there's grief. And there's awkward, terrible reality is it sucks. It really sucks. It's [inaudible 00:40:33] sucks. There's no getting around it. Your mouth's going to be like, "It's not that bad." [inaudible 00:40:47] it's not that bad, blah, blah, but it sucks. It sucks. You poured in time, that's the minimum, energy, reputation, spirit. You did it all. And it sucks. It just sucks to feel like it's gone. It's evaporated [inaudible 00:41:13]. And then there's also responsibility. I think there's a very true reality.

My friends always say like, "Like it or not, start-ups when there's departure in whatever form or fashion, feels like the loss of a loved one." It's different like loss of a friend, loss of a mother, a loss of a parent, loss of a sibling, loss of grandparents. Obviously, there's a spectrum of grief because there are people who are closer to us and there are people who are far away from us. But the color is there. The similar waves of emotion is there. When my friend says that sibling has died, I feel that grief through the system even though I'm not that person. And so when you see a founder grieve over the startup, I think you really feel that as well.

And really adding the advice for every founders is just accept, feel that it sucks. It's okay. It's okay to be sad. It's okay to grieve. It's okay to take time out. It's okay to go for long walks, cry. It's okay to be sad about it. It's okay to be sensitive to it. Yeah, it sucks. And I think this is also my advice also to a lot of people who are adjacent to the founders. You're a founder and your friend's startup has failed, et cetera, or you're wondering to yourself, or you're an operator or whatever it is, if someone's mother has died, you don't go up the person and you say, "Oh, it's not that bad. You'll get another one soon." You would never do that. You know what I mean?

Or you're not going or you'll be like, "You know what? It's good that your mother passed away because you're getting stronger from it." Like what? You would never do that in a personal loss situation and I think there's awkward reality for someone who is putting a business, the feeling is there. There's grief. And so I think it's more about the lessons that we take from supporting someone that we know intuitively as human beings and as friends and as colleagues, we're just being present for the person, helping out, being present in a moment is really silent remembrance in that sense is really the key for grief or loss of a loved one, and in this case, grief over the loss of a company.

And I think that's something that it's really just under appreciated, I think. And I think of course, this is a time eventually we start to zoom out and we can start to understand that it's not that uncommon. Over 90% of startups fail to [inaudible 00:43:59] outcomes, just like how the truth is 100% of humans to date have died. You know? Great, great grandparents has died. My great grandparent has died. My grandparent has died. My parents are aware that my grandparents had died. Death is this norm. Literally 99.9% of the human race has died so far. It's just like the 0.1% that's alive and I think we're aware of it, but also terrified about death. I think one thing I shared earlier was I did poorly in junior college and that was because at that time, my girlfriend passed away in junior college. And to me, it was the worst thing that ever happened to me ever, because she was someone I loved and I never saw death so close, in front of me. And obviously, I had to go through that set of feelings and there was nothing compared to of course the feelings of her parents and her siblings as well. So we were all grieving together and that's really a big dynamic about what's it like to lose someone.

And in retrospect, obviously I had the benefit of a school counselor and she was great. She was just present, she was there. She did not ask many questions, she just checked in. And now that I'm older, I think to myself like, "Oh my gosh, she saw this all the time." The truth is some student in the junior college loses a parent or a sibling or a close one every year, it happens all the time at a school. If you have a couple of thousand students, you have to counsel lots of people. And so death is happening all the time [inaudible 00:45:33] scale. But not only for her, she's probably lost her own grandparents, people that she's loved and [inaudible 00:45:39].

Anyway, so I think the interesting connection I have here with no failure, which is... But it's really about the grief for the founder. And I think a lot of us we're trying to [inaudible 00:45:51] the intellectual side and it was like, "Failure is good. Failure is awesome. If you're learning blah, blah, blah." Let's all be humans. And yes, there will come a time when the failure is something that is in the past. Death and grief is in the past and then we take that and that makes us more appreciative of living of life of a great team, of a great company, of a new startup. I think those are the things that we will come to understand. It's just that we don't need to make it so... I don't know, hustle upon, like big bull caps. It's small caps living.

Rahul Thayyalamkandy:

I can relate to a lot of what you said. I think the best thing that somebody has told me... My mom passed away a few years back and then one of my friends said that everybody has to deal with their parents dying in their lifespan, most probably. And you just think of it that this happened sooner to you. I thought that was a very smart thing to say. And another thing with the whole connection with grief and startup failing, so last time a startup of mine failed honestly like at the same time my father passed away, so it was like a double blow.

Jeremy Au:

I'm so sorry to hear that, about your loss obviously. I think I just want to say the truth is it's happened and I'm sorry that you went through that and I've had similar experiences too in terms of professional failure, in terms of personal loss. So I empathize with you and the truth is we wouldn't be able to have this conversation right now if that experience didn't happen, but no way would I have traveled back in a time machine back then and say, "Hey, you're going to use this in a conversation in a podcast interview in X number of years." By the way, loss is good. Failure is good. Anyway, that's the humor and the dark humor of it. All of us try to stay alive.

Rahul Thayyalamkandy:

Yeah, I would like to move on from this and then probably talk something like you've written about capitalism advantage as economic mode in Southeast Asia tech, so what are some of the markets where you think this would work? And let's say, should you as a founder use this as a strategy and also when you have a competitor who's using this strategy, how can you then play along?

Jeremy Au:

[inaudible 00:48:14]. I wrote a recent piece on capital advantage and the long story short was like, can we use capital's economic mode, so go to www.jeremyau.com and search for the article economic mode. It's a popular one. And the crux of it was [inaudible 00:48:30] basically saying can we use capital as an economic mode? Right. We dominate on economic modes as [inaudible 00:48:36] lock in on a supply, lock in of the customers [inaudible 00:48:41]. But I think the question was how much of an economic advantage is having and raising a ton of capital very quickly to snowball and out-compete your competitors? And I shared in the article why it works, how it works and how to think about it. I don't want to get too much deep into it, but hopefully that gives a bit of a high level summary.

And one aspect that we talked about was whether you should do it right. So the crux of it is just going to be does this approach and does this industry have [inaudible 00:49:13] to support it? Because the truth is economic capital is getting increasingly available over time, and I think if you have it, use it and use it well. But I think it's best deployed in places where there are strong [inaudible 00:49:28] effects where if you have that large economies of scale, you actually become much stronger as a result. And so I think that's where I like, for example, two-sided marketplaces, for example, tend to respond well historically having their capital advantage, because the truth is you have the largest number of suppliers on one side [inaudible 00:49:44] the largest number of consumers on the other side in terms of availability, in terms of diversity of SKUs for example, or services.

So there's some natural intrinsic network effects, because there's a flywheel that happens very quickly. The corollary of that is that when you do receive the capital needed to do that capital snowball advantage is that you should be using that capital in a way to accelerate the network effects because that increases the ROI of it versus in using that capital to invest in [inaudible 00:50:14] does not necessarily increase the network effects and the lock-in effects to help preserve that capital advantage. So that's the high level piece of it on the professional side. And I think this is a bit more obvious from a VC perspective because we're evaluating so many startups and you're like, "Okay, this company can really take in a lot of capital."

And when we put in a ton of capital, it's still going to be awesome to create a leadership position, which everybody can deal with. If you raise 10X more capital than everybody else, you will always have a leadership position to everybody else. But the question is, would you get 10X or a 100X more returns by having 10X more capital? And that's not something that may necessarily be true for every company, or it may be true for the vertical, but a company's approach or the founder's way of deploying the capital may eventually cause it to not have an [inaudible 00:50:59] level of return. And as a result, I think where that boils down for the founder personally, in terms of decision-making is at two levels is one, do I understand the business or how do I understand the business better in a way to deploy this capital in that network effects dynamic to preserve that thing. Because if you take on a ton of capital, sure you get high valuations. But the truth is, there's a cost to it, which is the dilution.

So you can get that pride and prestige of having a higher valuation, large capital raise, which is awesome. It feels amazing when you raise money and you raise a lot of money, it feels awesome. Everybody's giving you a bunch of congratulations and you feel better about it because it feels like it's giving you more time because you raised a large capital raise. It feels like gives you more options, but a tricky part and I think that's a part where every experience founder knows is that actually, if you raise 10X more capital than someone else, you probably got diluted 10X more than that the other founder. And the only way to make up for it is to in many ways get 10X growth compared to the other person.

And that's tricky because lots of companies can grow well at 50% growth a year. Lots of companies can grow well maybe 100% a year. Some companies can grow about 200% a year and a few companies grow at 300%. And that's a function of sometimes the company, the way it's built the structured, but also is a function of the founder's ability to grow and scale. And I think there's a tricky part is like every time you take venture capital, you already are agreeing to do a hockey stick of growth. That's what you're trying to unlock, a hockey stick of growth. And that's already tough, because most humans grow linearly in S-curves. So if you look at how someone learns music or chess or any kind of skill, we actually learn in linear S-curves.

So in the macro, we were flat and then we want to learn something, maybe even to unlearn something, maybe even dip a little bit, and then we start learning again and then after that, we plateau because we learned that one thing that helps us get better. And then we set up realized that, "Okay, we're doing it this way, but now I have to do it in a different way." So you got to unlearn something, so your performance dips a little bit, and then you start rising again to unlock that new thing. And then we zoom out, actually humans kind of grow pretty linearly. No one shows a hockey shape curve in Learning piano. No one is like, "Let me learn the one," and then you're kind of terrible. And then you suddenly go like you learn level two in six months now, then level three you learn in three months, level four, you learn in one and a half months, level five, you learn in three weeks.

And then the next level is one week. And the last level, you learn at one day. Nobody learns the piano that way. That's impossible. Flat out impossible. We know that's impossible to learn in a hockey shape way. It is opposite, right. It's like actually you need a bunch of pass codes. At the startup level one, you're terrible. You have to unlearn some stuff. And then you start getting better at some point to get the level one and then you plateau, right?

Rahul Thayyalamkandy:


Jeremy Au:

That's why most learning in the world today is done as 101, 201, 301, level one, grade two, grade three, grade four is because we as humans [inaudible 00:54:18] education S curves inherent to it and we structure it linearly like that to create those curves and give people space to learn and to unlearn stuff and have a pause. So anyway, that's how most humans learn, especially the founders and CEO. And then, their companies also go hockey shape, and then your learning is linear. And so at the start of every startup, I always tell people like most people when they found a startup, it feels very easy. And I tell you, "Yeah, of course it's easy because you're learning to build a company from scratch and you're probably building it in a domain you already know."

Like you're doing something in, I'm just saying... You sold SaaS companies, you've done B2B, and then now you're building a first product. Obviously, you have so much learning over the past 20 years of your life, 30 years, 40 years, if all this learning and growing this linear phase, and this company is only using up to a few years of experience. Doesn't make sense? And then probably once you start taking venture capital, et cetera, it starts catching on pretty quick, because you're still learning linearly when you zoom out, but then this company is growing a hockey shape and at some point, every founder and CEO's beginning to say, "Oh no, I don't know how to fundraise. I never hired an engineer before and now I need to hire an engineer. Oh, I need to know DevOps. What is DevOps? Oh, no, one of our [inaudible 00:55:46] providers has a data breach and now I have to inform my customers how that someone else and not me had a data breach. So how do I do that?

There's all this stuff, all kind of [inaudible 00:55:57] real quick. Of course hopefully, the solution is that the venture capital that's been provided to you, a strong venture capital board member was able to support you and be the coach in some ways. You're having to engage a coach of your own. You having brought on great talent who are further along in that journey and are [inaudible 00:56:18] with the capital that we talked about, those things allow your company to learn just as fast, hopefully faster than the rate of growth. And I think that's really something that is under appreciated by myself when I was a first time founder.

Rahul Thayyalamkandy:

I think I have one last question. So I read your first blog post. I think it was back in 2016 or something about two missions and one fish. By the way, it talked about how you intend to give back, pay it forward kind of thing. So what are some other ways that you give back to the startup community?

Jeremy Au:

Yeah, two missions and one fish was interesting and again go to jeremyau.com to read it for yourself. This one is the shortest read out of everything. It's like what? Two or three minute read. But I think it was at a time my secondary school best friend and I, we had a big disagreement because [inaudible 00:57:19]. For him, he was very much like, "I want to make my family and the people around me... Those are people I want to make the biggest difference in their lives." And I was like, "Whoa, that's so small. I want to impact the greatest number of people, the greatest [inaudible 00:57:37] possible." It was a way to some extent utilitarian approach of it, it was a maximum of good and I think that piece was sharing about that time when we had that feeling, but also us reconnecting years on the road and talking about it and... I think the mutual recognition, I think that for him, he felt like I had achieved quite a bit more than he did because of the approach of what I was trying to do.

But also I think to me actually recognizing that there was actually a deeper truth to what he did, which is that the truth is I'm not going to save the world. The amount of impact I'm going to do in the grand scheme of things is time limited. I'm going to be around for the next, hopefully 50 years of my life, but in a grand cosmos of time of hopefully the human race, it's a spec. The biggest magnitude I could do is still going to be a spec across that timescale. [inaudible 00:58:31] you spend time with folks. So I think for me, I think it was just mutual recognition on my side as just like, "Hey, I think his approach is way better for a living and way more realistic."

The awkward dynamic that we had was this was we both laughed about it and we both acknowledged that it's somewhere in between. I got to do both, at one level of course, try to help as many people as you can, but [inaudible 00:58:56] just be in touch with yourself and just help the people who you can and that you are responsible for your interactions with. And I think the way I think about it obviously is how that translates to me personally. And of course, he asked me in the context of startup [inaudible 00:59:12]. So let's put it aside to my obligations and my desire to be a great dad to my infant, six month old daughter, my obligation and my desire to be a good husband to my wife and as a son, as a citizen, as a friend, but it will zoom me into the startup side. I think what is the crux for me about a startup is I love working and helping other founders is that fundamentally it's about creating the future.

I think every founder, every VC, every employee of a startup, every stakeholder in the technical system is fundamentally creating the future, investing in the future and saying, "We want to make something different and new." Even if it fails, the success is in the learning and the skills. It's creating the future for people and I think the future is how things get better. I think objectively speaking, I think my personal conviction and thesis is that we, as a society is better off than where we were 1,000 years ago in terms of violence, in terms of crime, in terms of lifespan, in terms of basic needs. And that's because 1,000 years ago, some people are like, "Let's invent stuff. Let's build stuff. Let's have scientific progress of course, in terms of telescopes and navigation and compasses and shipping, but also there's that whole spread of people who were building businesses in shipping and building businesses in astronomy, building businesses around telescopes, and building businesses around all these things.

They were helping create the future in their own way. And I think that's what the crux of today's world is. I think we recognize that joy of the invention of technology, but also the scaling and the building out of the team and organizations that cascade that technology to create the future. Obviously, it goes without saying that things need to be done to make sure that there's less inequality about technology, that there's less pain and suffering for the people who are left behind in terms of the transformation, and obviously the distribution is unequal across the world. It's just that in the net things, so I think scale and the zoom out, I think we're still helping people at a macro scale for things to get better. And I think that inherent optimism of adding the technology of all this makes me love and have that mission of being in this field.

It used to be the same excitement as I did while I was explicitly building my first company which was much more consulting for the social sector and creating change and a future within the social sector to my second company investing in the future of education for our kids. And so I think the way I tried to exemplify that personally is I think about it in terms of three levels. And I call it inside out. Inside, the most core of it is who am I on a one-to-one basis? When I do the Zoom calls with you, I'm a professional. Now in this context, in this phase, I'm a VC, founder, or sometimes as an angel investor or a founder. And most of the time it's a founder hanging out of another founder. Those are the context I am in one-to-one. And obviously, at one level, it's really about what I call doing no harm. That's what I tell people like, "Just make sure you're doing no harm."

And it's way better and most people try to be positive, try to be constructive, try to give feedback in a way that is a critique of the business of the approach and feedback for the future because people deserve your frank opinion, whether you're right or wrong which people... But at the same point of time, doing it in a way that articulates that number one, I may be wrong. And two, since we are both tackling a problem that has never been solved before in this vision or dynamic approach, we're just using it as a way to move the conversation faster, and thirdly do in a way without destroying the spirit of the other person, because I have been on the receiving side of that.

I've got advice or I'll tried to get advice from VCs, whatever, and I'm just like, people have just been like flat out assholes who don't even give you the time of day, which is not that bad actually, because if they don't give you the time of the day, at least you're like, "Oh, that guy is too busy and quite clearly on his phone and doing something else." But it's even worse when they do pay attention and then they say stuff in a way they're like, "I'm not trying to be negative here, but bam, bam, bam, bam." Actually it's not bad preamble to say actually, but it's more like if you make it personal versus being about the business, it's totally night and day difference which is I disagree with the font choice here because [inaudible 01:03:58] because you're trying to go for a consumer friendly approach and you're using this very tech forward font face. That's the feedback you want and I benefit from that feedback versus the equivalent of it is you don't sound that committed or blah, blah, blah.

And I'm like, "What? Why are you telling this to me and that's so untrue." Anyway, so I had that feeling and I try my best to not do those things. And I'm not trying to say that I'm perfect. I'm not trying to say that I get it right all the time. But then this is how I think about it for one-to-one is doing no harm. And I think the second thing that I think about is when I have that professional interaction, how do I be real and be helpful?

And so what I mean by that is talk about it is giving feedback. A lot of people ask me for feedback and I frankly just try to be as direct and honest as possible while trying to be warm. Sometimes if I can be who I am, which is I try to be... I like to be funny and I try to be like... There's always a shred of humor in trying to create the future. It's this hilarious that we want to make things better. It's like, "All these idealists like myself running around trying to change the world, make the world a better place." There's something hilarious about it. And so there's always this absurdity, I think, that happens all the time. And I think if we can look at a light side of things, it helps.

So I just tried my best to be helpful in my own way. Looking at light side of staff, when people... Like someone was asking me for some feedback on... A founder who I angel invested in was asking me for some feedback on her marketing team and her leadership, and I was just joking and said, "Hey," without getting into who or why, but I was like, "Would you as a customer want to be sold by this person? If the answer is..." And this case, the answer was not really, then you're kind of like, "So why are you hiring this person to sell to your customer?" You know the customer because you were the customer and you have been a customer. And that feedback can come across as very negative, obviously, because they'd be like, "Oh, you're a terrible leader. Or you chose the wrong person, blah, blah, blah." And I was like, "Hey." There's something funny about it in a deep way.

But also there's something true and I tried to be helpful in that context. I try to look at it more from a light-hearted way. Recently I had to do a classic founder pitching so far and without naming names and I very quickly realized that effectively, even past the pitch and everything, the company was failing. [inaudible 01:06:36] and effectively two months of obligation, so I was effectively bankrupt and very few investors are going to catch a falling knife and put money into this kind of dynamic, so the odds were poor. And so I had to switch from the conversation where I felt like I had to make a decision between will I just wrap up the call and to say, "Thank you very much," and then send a rejection email.

And honestly, I think that would've been a more efficient way to do it. For some reason, I'm not sure why I was like... I had to think to myself and eventually do very quickly was like, "Hey, how do I switch from you trying to pitch to me as a VC to a founder, if that power distance and hierarchy in a sense, and how do I reset the conversation and say like founder the founder this is going to be pretty tough. What I'm trying to say is this and this. And actually we know the company doesn't cash. Have you heard from other investors that they're not going to fund this company because of the way it's structured." And there's a bunch of other issues, cap table and all these other issues that made it highly problematic. And the founder very much had that dynamic with me where she basically said, and she opened up and I think kudos to her for opening up as well, because this is also a tough conversation to make.

And then we had a conversation founder to founder which is we went through the PNL together, we went through the plan. We went through and said, "If we go down this path, this is how we need to restructure the company at a high level within this timeframe versus if we need to shut down this company, this is what we need to think about from a process perspective." And then more importantly, I think, taking a step back and giving her assurance kind of like what we did just now and talk about earlier about the failure piece by saying like, "Hey, the high probability of failure for this company is not guaranteed yet because there's still time to maneuver, but you can only maneuver if you are aware of that high probability of failure at one level." But the other level [inaudible 01:08:28] separating the company failure in the essence and saying it's different from personal failure. And the biggest advice I spoke as a founder to founder was like just because the company is a failure or me potentially fail, doesn't mean that you're not thinking about how to fail gracefully.

How do you guide this and land this plane in a way that respects customers, suppliers, your employees, your investors, because, you want to walk out this process proud that you did your best, and that you did the work. And that's actually a very tough conversation to have in any scenario, but I think that's something that I chose to do because I think that a compensation I would have appreciated if I was a founder in those same shoes. And again, I [inaudible 01:09:12] props to her for being mature and dynamic enough to switch the conversation, to open up and... Because the truth is when I made the offer to talk about it founder the founder instead of investor to a founder, sure, it's not everybody would have reacted well, because if you're very much like, "Are you trying to say that I'm failing? Are you trying to say that I can't pull this out?"

And I'm like, "No, that's all I'm trying to say. I'm just saying there's this very troubling dynamics that we need to figure out." Anyway, so I think that's the second level is like first, do no harm and the second cause is being helpful and thoughtful as another founder to founder. And I think that the third thing of course is that obviously I'm very happy about the podcasts, Brave on Southeast Asia tech. I used to do a lot of improv in Boston and New York as a hobby, and then when pandemic hit, I transitioned hobbies. At the time it was podcasting and it just at the start just a whole bunch of conversations with my other founder friends. My first episode was with my co-founder Kwok Jia Chuan and reminiscing about our old times, but also what we've learned over the years.

And since then, we've had this incredible growth because I think personally I learned over time what it means to be a better podcast host over time, but also what to think about when having a conversation, but also I think tailoring the topics to what questions the audience really wants to know in a sense. And I think that personal growth was there. And obviously, I think the early [inaudible 01:10:44] by guests to join the thing and now we're totally oversubscribed. Now, we have over 60 guests all lined up and booked. And we went out from once a week to twice a week show with a ton of people. We were number two in Singapore for careers on podcasts. It's nice to see that trajectory because just a year of work has gotten us from point A to point B and I have that conviction that I know that if I keep going the way that it's going, it's going to go from point B to C to D. It will only get larger and larger over time.

So that's all the logistical and I think the numerical... I'll say the quantitative side of the podcast in terms of the nuts and bolts of building it and the crux of why I do it and why I look at it as part of my impact is because what I realized and the reason why I transition was because I couldn't scale anymore personally, as a coach. When I transitioned and the reason why I wanted to move from improv to do to this was because I was already getting one request a week from people asking me for help with how to found a business, how much money to save to prep for founding, how to raise a seed round, how to raise a series A, what do I think about this investor? What do I think about this employee? How do I solve this issue? My friend says that you are a great person and a great founder, can I just talk to you? Can we do a coffee chat? What was it like at Harvard? What was it like at UC Berkeley? What did you learn from each place? What's it like to be a Bain consultant? What's the toughest part about being a founder?

So I just realized that I was getting swamped and the truth was, I just flat out was unable to answer and so I'd just tell them I'm [inaudible 01:12:28], I kind of don't have time, but the truth is I had some time and I had maybe an hour a week at a time, two hours a week maybe, but there's a choice that you have to make between just restoring yourself and also investing in the business or whatever venture that you're building. And so I think for me, beyond one-on-one doing no harm, and on a professional sense, being helpful and being empathetic and having empathy as a founder, I think that is really scaling those conversations that I used to have one-to-one, and scaling to one to many.

So recently someone reached out to me and asked me for help about whether to go to On Deck as accelerate. And I flat out told her, I said, "Hey, you're a cousin of someone who was a good friend of mine from Harvard Business School, so I'm going to take this call. It's just I would really appreciate you if you could record this conversation with me, I'm happy to make you anonymous. But [inaudible 01:13:27] able to prepare the questions I'll have a longer period of time. And because so many other people are asking the same question." And she was like, "Oh, I'm happy." [Katty 01:13:35] was like, "Hey, I'm happy to do so. I'm happy to have my name. It'll help other folks. And happy to take that thing."

We ended up recording for an hour and a half, and we got to go deep. We got to go into not just On Deck as an accelerator, but also how it compares to Entrepreneur First and Antler and other incubator programs. We got to go about how to prepare for the program. We got to talk about how to maximize the value from such a program. We got to talk about how to look for a co-founder and what the prep in that process. And it was just an absolute blast. And I could invest in that one and a half hours, and obviously she got value from that because instead of half an hour, or instead of getting rejected by me, she got an hour and a half, but I also was happy to give her that hour and a half because I knew that this episode would be relevant for so many other folks. And that's how I thought about it.

Rahul Thayyalamkandy:

Yeah. This has been a really wonderful conversation. Thank you so much for being on my show.

Jeremy Au:

Awesome. Thank you so much, Rahul.

Rahul Thayyalamkandy:

Hey everyone, hope you enjoyed my chat with Jeremy. Key highlight for me from this chat is the fact that your startup is expected to grow exponentially, especially when it's VC funded, but as humans, you can only grow linearly and this limitation makes building startups really, really hard. Jeremy explains how you're going to work on this when he talks about the leadership skills required for a startup founder. I totally agree with him when he said that emotional self regulation, ability to learn quickly and make good decisions are key to succeed as a startup founder. If you like this podcast, please do subscribe at understandingvc.com and leave us a review.