308: Benjamin Joffe (Ashley Talks ASH20)

308: Benjamin Joffe (Ashley Talks ASH20)


 

Podcast highlights:

  • [11:15] If you look around Asia, what is the most exciting market you see going forward? -- Just because of it's scale, China is the place. There is no comparison to what China is doing in terms of the amount of resources being poured into innovation in China now. India is starting to rise. Indonesia is massive; but it is lacking in some of the basic infrastructure that make technical systems thrive. It's a massive problem to figure out how to offer services in a market and ecosystem that is completely different.
  • [32:15] How do you choose the right companies to work with? -- In the end we don't know if we've chosen the right companies. Maybe there are some we've missed along the way. We tend to look for very classic things. Does the startup have the right team? Do they have the skills to build with? Are they coachable? What is their market potential? What is their technology potential? Then we look at their prototype. This tells us a lot about whether the team is capable.
  • [54:13] For people listening who might be going through their own dark hour of doubt, what advice can you offer them? -- Keep your eyes open. Try to stay engaged and apply yourself. Don't just get interested in something and not do anything. You don't know where things might lead you. Don't worry too much about your status and just keep pursuing your interests. Ask for advice and don't be afraid to reach out. Also, help others help you. It's really important for founders to be visible and to be recognized as experts in their field. So be part of the public conversation.

Podcast notes:

  • [00:05] Welcome Benjamin Joffe, General Partner at HAX, to Ashley Talks with host Ashley Galina Dudarenok.
  • [01:00] You've done so much in Asia, but you are not Asian yourself. Tell us your story. -- It all started in college with a minor in Japanese and strategy. Ended up doing some work in Tokyo and became interested in Korea and China so decided to stay around in the region. Liked each place during time spent there. In terms of places would want to visit again, of course Japan and Hong Kong, and yes there are lots of other places. What's interesting is that Hong Kong is not very startup friendly due to high costs and lack of talent right now.
  • [03:30] How did you end up going into business? Were you a businessman all the time? -- Don't come from a family of entrepreneurs. While in Japan, met many different entrepreneurs and became fascinated with them and their stories. Eventually decided to follow a similar path, and since 2003 haven't had to look for a job. Started doing consulting before being approached by the founder of HAX. Went to Shenzhen and was impressed by the startup environment there. In terms of hardware, Shenzhen is arguably the most amazing place in the world. What's really special there is not all the startups are Chinese companies, and at HAX we work to bring startups from around the world to Shenzhen.
  • [10:15] You say Shenzhen is just one of the places driving China forward. What are some of the other places? -- Of course there is Beijing, which is the center of telecoms and for internet. The money is there, the talent is there, and the power is there, which is really important in China as you know. Shanghai is good in marketing and online commerce.
  • [11:15] If you look around Asia, what is the most exciting market you see going forward? -- Just because of it's scale, China is the place. There is no comparison to what China is doing in terms of the amount of resources being poured into innovation in China now. India is starting to rise. Indonesia is massive; but it is lacking in some of the basic infrastructure that make technical systems thrive. It's a massive problem to figure out how to offer services in a market and ecosystem that is completely different.
  • [16:40] If you compare the Chinese and American tech ecosystems, what would you say? -- If you think about what is Silicon Valley, you realize it's the combination of having access to a large market, the combination of having infrastructure for payment, roads, logistics, internet, it's the combination of access to capital, it's the combination of talent and culture, and finally it's the fluidity in the job market. Can you get a job again if you fail? This is extremely important in containing risk and allowing people to put themselves out there.
  • [22:15] There's a lot of talk about China and the US being in a technology war. Who has the upper hand? -- To me this is not just limited to technology. Countries are engaged in economic battles all the time. Not worried about a technology war, but if you're interested in which country is doing better it matters again what you look at. The US is still ahead in terms of research universities, but in terms of commercialization of research, China is doing really well. They are also catching up on research. The momentum is on the side of China.
  • [24:46] You've been in business now for many years. What is your passion? -- Like to understand "edgy" things. At HAX we try to map the path from the lab to being a successful company. That's what I enjoy doing. The reason we only deal with hardware is because the founders recognized early on it was critical to have hardware if you ultimately want to influence the physical world. At HAX we help people build companies. We try to find the ideas that are "venture-backable." This means finding businesses that will be able to scale. We really have a comprehensive team to help founders with all aspects from manufacturing, marketing, branding, etc.
  • [32:15] How do you choose the right companies to work with? -- In the end we don't know if we've chosen the right companies. Maybe there are some we've missed along the way. We tend to look for very classic things. Does the startup have the right team? Do they have the skills to build with? Are they coachable? What is their market potential? What is their technology potential? Then we look at their prototype. This tells us a lot about whether the team is capable.
  • [34:35] In your estimation, is it easy to get startup funding now? -- The joke we have is you can find money if you're doing blockchain and can do an initial coin offering (ICO). Overall yes, there is a lot of money available; but it's not easy to get. The amount of money is not the problem, the problem is getting it in the first place. Certainly the expectations of VCs depend on which stage investor they are. Late-stage VCs might expect smaller returns on fewer investments, whereas early-stage investors might fund lots of things with the expectation only a few will show huge returns. If you want to be a good VC, you need to return 10% or ideally 20% per year over the life of your fund. In terms of the investments that fail, we just want to see people making the effort.
  • [44:55] Right now there is so much talk about gender equality in business and in tech. What do you think about women in tech and tech women in China? -- China is more egalitarian regarding gender. It is probably one of the side effects of communism. We've found women are generally more skilled at communication and organization; however, we've also seen extremely analytical and entrepreneurial women. Out of the 200 startups we've backed at HAX, 25% of them have female founders or co-founders. We try to invest in the best teams and it doesn't so much matter whether you're male or female.
  • [48:13] On your entrepreneurship journey, what have been some of your darkest hours? What have you learned from these periods? -- The most difficult times are when you start to lose interest in what you're doing and you're not quite sure what you want to do next. Rational decision-making might make you rich, but it can also make you happy. Emotional decision-making can make you happy, but it might not make you successful. The key is to find a balance.
  • [54:13] For people listening who might be going through their own dark hour of doubt, what advice can you offer them? -- Keep your eyes open. Try to stay engaged and apply yourself. Don't just get interested in something and not do anything. You don't know where things might lead you. Don't worry too much about your status and just keep pursuing your interests. Ask for advice and don't be afraid to reach out. Also, help others help you. It's really important for founders to be visible and to be recognized as experts in their field. So be part of the public conversation.