Edith Yeung: Partner, 500 Startups (Founder World 2015)


KORY JEFFREY:
Welcome, everybody. We are on site at Founder
World in San Francisco. Joining me in the
studio right now is Edith Yeung
from 500 Startups. Edith, thank you for joining us. EDITH YEUNG: Thanks. Nice to meet you, Kory. KORY JEFFREY: So tell us a
little bit about 500 Startups. EDITH YEUNG: So 500 Startups
is a early stage C accelerator and also VC firm. 500 Startups is actually
no longer 500 startups. We actually have invested
in 1,200 startups now. Our staff is actually almost
90 people now and almost 20 investment professionals. And so half of our investment
is done through accelerator. What that means is
every three or four months we have
about 700 startups will apply to get
into accelerator. And we usually take
about 30 companies. And once you get accepted,
right now we actually are investing $125,000
for 5% of the company. Once you get
accepted, you actually spend four months
with us on-site, either in Mountain View office
or San Francisco office. And we will bombard
you night and day with a lot of mentorship,
a lot of classes, but with a very strong
focus on growth. We have about, right now, about
15 [INAUDIBLE] in residence. So all these guys will
basically spend a lot of time with our companies to help
them to figure out the funnel, really think through like what’s
the right strategy in terms of marketing user acquisition. KORY JEFFREY: Very cool. So if a lot of the
focus is on growth, does that mean most of
the people, the startups that you take in, have
a product already? EDITH YEUNG: Yeah. So we don’t really
invest in idea. And actually many
of the companies that get accepted as
accelerators, let’s say if you’re mobile
apps, I would minimum look for at least five digit or
above in terms of install base. If it’s just a few hundred,
it’s very tough for us to see if this is
actually a good– at least like a product that is
valid for a particular market. KORY JEFFREY: Right. So 500 Startups
has famously said that we are going to go
around the world and invest. You’re probably one of the
first accelerators, anyways, to do that. EDITH YEUNG: Yes. KORY JEFFREY: Can
you talk a little bit about your guys’
international strategy? EDITH YEUNG: Yeah, so we– very,
very early on when Dave first started, Dave and
Christine first started the firm, pretty much
a year in, I say like Paul, your friend, we hired people. Folks now has people in India
Malaysia, Thailand, Singapore, Vietnam, Japan, Korea,
Brazil, Russia and Israel. We have partners in all
these different places around the world. So our who strategy is that we
believe in emerging markets. We know that US is
great, and all of us have a lot of awesome
developers that we found here. But still I think
in terms of growth, it’s definitely international. So we want to invest
very, very early in some of the best people in
all these different countries. Of course, Canada
is awesome, too. We need to spend
more time in Canada, and Waterloo particularly. But really, we want to
be the first one that invests in some
of the best people in that particular country. And we believe that if we
don’t have people there, we don’t understand the market. I want to say right now
about 20% of our investments are international,
like non-US founders. KORY JEFFREY: Awesome. Wow. And so you said that about
half of your investing is through the
accelerator, so that’s where companies from around
the world will come to you. EDITH YEUNG: Yeah. KORY JEFFREY: And
then is the other half done by these people in
market, in the regions around the world? EDITH YEUNG: Yeah, so I actually
happen to focus on mobile. So I have a mobile
collective fund, focus on early stage
mobile around the world. So I’ve done about 20
investments so far. And about four of
them are non-US. KORY JEFFREY: OK. EDITH YEUNG: And
we will do more. So in that case, not all of
them will come to accelerator, because our accelerator’s
actually very, very US focused. KORY JEFFREY: Right. EDITH YEUNG: Or I
guess, let’s say if you’re from China,
if your goal is actually to grow in the US, I think
that an accelerator will help you a lot. KORY JEFFREY: Right. EDITH YEUNG: But we
also invest in companies where a particular–
a Chinese developer focused on China also. KORY JEFFREY: Yep. EDITH YEUNG: So, in
that case, our help is a little bit different then. And coming to accelerator
could help with concept. But to go to market would
be very, very different. KORY JEFFREY: Yeah,
growth-hacking in the US versus growth-hacking in China would
be two very different things. EDITH YEUNG: Yes, that’s right. KORY JEFFREY: Interesting. So you were on stage
earlier today You were talking in a
panel, I believe, right? What was kind of the
key messaging that was getting across in that panel? EDITH YEUNG: So in that panel,
it was all about investing and sort of focus
on think through, at least sharing with
the audience, OK, what do some of these
investors look like. I think the big thing
for me to take away, I was actually quite
surprised most of the audience didn’t know some of the basic
about this sort of fundraising. KORY JEFFREY: Right. EDITH YEUNG: And I think there’s
a really good book by Brad Feld. Shoot, I forgot the name. What is it called again? KORY JEFFREY: I know exactly
what you’re talking about, but I forget. EDITH YEUNG: Yeah, that book. Everybody should
read Brad Feld’s book to just learn some of the
basics in terms of fundraising. KORY JEFFREY: Sure. EDITH YEUNG: But for
us, for fundraising, we invest in any– for
the first check, anywhere from 50k up to 200k,
that I actually have done. I think the big thing
is that early on when we evaluate a
particular startup, it’s all about the founder
being very thoughtful about some of the early metrics
that they should look at. Because we understand
that early on you don’t have money to do
a lot of paid marketing. But still, I think, put 100
bucks or a few hundred bucks, buy Facebook or
Twitter advertising. Particular focus on consumer,
if you focus on that, is not hard, right? KORY JEFFREY: Right. EDITH YEUNG: And I
think everybody always love to pitch us on, oh,
with like no marketing. I’m like, OK, sure. KORY JEFFREY: Not
necessarily a good thing. EDITH YEUNG: But I think
early on for founders, it’s only usually a
couple people, right? And you have to do everything. And when we talk to
the founders all about like thinking through,
oh, is this person being really thoughtful of why
they built certain features? Why did they measure
that versus– like later on, about monetization, we
know that you don’t make money. But it’s OK. So, it’s thinking through,
like, why this person? Because it’s so much
about the founders. KORY JEFFREY: So as you
walk around here today, you’ll see there’s
all sorts of booths, so there’s all sorts of
different technologies. EDITH YEUNG: Yep. KORY JEFFREY: Is there anything
in particular that excites you? EDITH YEUNG: Yes, VR. EDITH YEUNG: VR? EDITH YEUNG: I’m very bullish
on the virtual reality. I believe that VR,
especially for next year, there’s a lot of
all the big players. Even for you guys,
you had the cardboard. KORY JEFFREY: Yep. EDITH YEUNG: And I have
a couple of that at home. I’m always testing
all kind of VR app. I think VR, the platform itself,
will be the next Android. KORY JEFFREY: That’s very cool. Do you have a favorite
Google technology? EDITH YEUNG: I have
to say Android, because before joining
500, I worked on a Android browser called Dolphin. KORY JEFFREY: OK. EDITH YEUNG: And 90% of our
user base are on Android. And I think that
other than the barrier or maybe– I guess
we are all Android users, which is awesome. Most other developers–
you guys hear that I usually start with iOS. But they have no idea the
rest of the world, 80, 90% of the world
population use Android. KORY JEFFREY: That’s right. So building for that sort
of next billion users is– EDITH YEUNG: That’s right. KORY JEFFREY: –typically
an Android focused thing. EDITH YEUNG: Definitely. Totally bullish. KORY JEFFREY: Awesome. EDITH YEUNG: Big Android fan. KORY JEFFREY: Big Android. Well, Edith, thank you
very much for joining me. EDITH YEUNG: Yep. KORY JEFFREY: And thank
you guys for joining. We are on site at Founder
World in San Francisco. [MUSIC PLAYING]

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