Endgame with Gita Wirjawan - Theresia Gouw: Diverse Teams Make Better Decisions

Episode Date: January 12, 2022

Theresia Gouw, founder and partner at Acrew Capital and one of the most successful venture capitalists globally, talks about her Indonesian parents' sacrifices, the state of venture capitals, and how more diverse teams make slower but better decisions. Watch the video version of this show: endgame.id/theresiagouw

Don't be afraid to bet on yourself. You know yourself better than anything else. If you think about that bet sounds about invest in yourself, right? We talked about how you were worried that people are just investing in other things. Okay, well, that's great. What's the asset that you know better than any other asset class? You, your potential. So thinking about investing in yourself,

which is what I think of entrepreneurship as, should seem like the least scary asset that you would ever invest in. This is Endgame. Hello, teman, today we're coming Teresa Go,

a person Indonesia who's long as long as America and also and also and

is a founder of A Crew Capital. Hi, Teresa. How are you? I'm doing well. Thank you for having me. It's a real honor

to have you on our show. We've been a big follower of yours. You've gone through you know, so many successful stories. It comes with hard work. I want to touch on how you transitioned from Indonesia into the U.S. and your early struggles or journeys in making the necessary adjustment

and your scholastic experiences and how you got hooked up with consulting and the VC world for so many years. Please tell us. Tell us. Sure. Well, a lot of it, you know, I give all of the credit to my parents. So I emigrated to the U.S., so I was born in Jakarta, Indonesia. Very proud to be a daughter, if you will, of Indonesia. My parents came with me to the United States when I was a young child.

I was about three years old. Like many immigrants to the United States, we first lived with relatives. So we first lived with one of my mom's sisters and then with my mom's other sister. So first in Chicago, my mom's eldest sister, then my mom's middle sister in Detroit. And that was really where I spent my first couple of years in the States where I learned English from my two older cousins who were 12 months older and 36 months older than me. and also from American children's television like Sesame Street and the electric company. And my parents, my father was a dentist in Indonesia, both my mom and dad graduated from Trisaki University. And then so came to the U.S., my mom was a nurse, my dad was a dentist.

Their certifications were needed to be reaccredited in the U.S. So initially, my aunt and uncle, we lived with them above my uncle. Chinese restaurant and my mom and dad worked there. My dad was a dishwasher and my mom was the hostess along with my aunt and me and my cousin's state upstairs with my with my omenopo with my grandma and grandpa keeping an eye on the three little kids while all the parents worked. And so now looking back, I see the struggles and the major changes that my parents went through, not just in terms of, you know, cultural change, climate difference from Detroit, Michigan, if any of you've been there, quite cold.

Oh, yeah, I've been there. As compared to Jakarta. And then obviously, initially, education, you know, occupational changes while my mother and father sought to apply to various universities in the United States where they could get reacredited. But for me, at the time, being a little kid, it was just, you know, this excited. happy time, like suddenly being so, you know, still having the familiarity of my mom and dad, my grandma and grandpa, my mom's parents, my mom's Omanopa, but then also these new family, right, these cousins and aunts and uncles that I hadn't met before because they'd been living in the

States for a while. Anyway, so we lived there for a while. Eventually, dental school brought my dad to Buffalo, New York, even colder with more snow than Detroit. And after my dad graduated, from his recertification in the U.S. My dad had actually grown up in a very small town in Java called Cherbon. And so his aspiration. It's a pretty big town. Okay, well, it was small in his telling of it to me, right? I don't know what it was really like in the 40s and 50s when he was a young child.

But, well, at least relative to Jakarta, his view was it was a small town. So he wanted to be the small town, you know, dentist. He didn't want to join a big dental practice group. So we, after he graduated, he first started looking in what were suburbs, you know, not too far outside of the city of Buffalo and ended up meeting a real estate agent who lived in a very small town, which was about 35, 40 miles outside of Buffalo with a population of 2000 and he talked to my dad about this town and he said, hey, you know, he's like, our dentist is like 75 years old. He's looking to retire. Like, this could be a really

interesting opportunity for you. So we ended up moving to that small town. And my dad opened up the dental practice there and worked there until his retirement. And in, it's in the state of New York, but it's very rural. It's mostly a farming community. So in many ways, if you, as you'd mentioned, you're a fan of Westerns, but if you're a fan of things like Little House in the Prairie or other things, it's, though in the state of New York, it's like geographically much closer to Ohio and the farming communities in Ohio and Pennsylvania than Manhattan, you know, New York City. So it's more like that. It just happens to be in the state of New York. And so that was, that was where I grew up. It was, you know, it was the kind of place where

You know, the kids just, you know, small enough town. Everybody knew everybody. Even at a pretty young age, you're just like ride your bikes or walk around town everywhere. So that was the positive thing. You know, I didn't really, other than my immediate family or extended family, I lived in a community amongst all Caucasian Americans. So I didn't really know what it meant to be Indonesian or Chinese Indonesian. I didn't understand all of those subtleties other than the stories that my parents or my grandparents would tell me.

And then really, you know, I was fortunate. I did well when I say fortunate. It wasn't really a choice. I was, it was clear to me that my parents had made great sacrifices for me and my younger sister who was born in the States so that we could, you know, live, not their words, but I now know basically the American dream. So we should work hard, do well in school, great public education, like get into a good. good college and then get a sensible degree so that you could have a good living and, you know, eventually support yourself and as they did for their parents, if and when needed, help support your parents and your grandparents as well. So with that, I was fortunate and did do well

high school and was able to go to Brown University and get my degree in engineering, which was one of the acceptable degrees in my parents' eyes. Tell a story about your attempt to change your major to sociology. Yes, yes. And then you got a little comment from your father. Oh, yes, I did. So, you know, and I'll start with looking back now, 25 plus years. years later, I'm actually very grateful to my father for teaching me a lesson on perseverance

when things are hard. And obviously now that I'm a venture capitalist and I work in technology, I feel really benefits me to have that engineering undergraduate degree is sort of my foundation, even though I clearly don't write code or anything anymore, but it helps me in speaking with and learning, speaking with my entrepreneurs and learning about new technologies. But like, like, maybe many students, it was quite a culture shock going from a town of 2,000 people, most of whom don't leave that town for multiple generations, going to an Ivy League institution and being thrown in freshman engineering with other students who were clearly better prepared than I was. I mean, I went to a high school that didn't even have advanced placement physics or calculus,

right? And so I struggled. I got what in the United States they call Asian F, which was I got a B, freshmen, but I also got a C. So I got one A, one B and one C. And if B is Asian F, I, there's, you know, C is like the grade that shall not be spoken. So with that in mind, I then, you know, but I had taken in this second semester, I took the sociology class, and I got an A-plus in that class and was asked by the professor to be an undergraduate teaching assistant, right? And so this was sophomore year, but before it was in the fall, so before the spring semester when you have to declare your major. So I remember going home for Thanksgiving in November of my sophomore year and excitedly telling my dad, dad, you know, first of all, I'm doing much better in my grades this year than I did freshman year.

And I think I'm going to change to sociology as my major because I'm doing great in that class. In fact, the professor has asked me as an undergraduate to be a teaching assistant and a research assistant. That's a really big deal. And my dad,

I now know from knowing many of his friends from his college, his university days in Indonesia. He is a pretty soft-spoken person in general. When I was younger, I thought it was because he, which he still is, that he's a little bit shy about his English because of his accent. So he didn't say anything. He just looked at me and he said, well, so T, Yanti, because that's my middle name. That's what he called me. He's like,

so Yanty's like, I'm sure that they teach sociology at the local community college. And I looked at my dad and I kind of let out a nervous laugh. I said, well, I'm sure they do, dad. I don't understand what you mean by that. He was like, well, he's like, if you are changing to sociology, then I assume that you'll need to move home and switch to community college because you'll have to find a way to pay for it. You know, I didn't take out a mortgage on our house so that you could go to an Ivy lead school and study something that I don't understand what it is and I don't know how you'll get a job and how you'll ever, you know, not necessarily repay me, but repay your student loans. So I looked at him. I thought about it. I said, well, in that case, Dad, I guess I'll, I'll,

I'll stick with engineering and maybe I'll just do a minor or a double major in sociology. He looked at me, he nodded and he said, that sounds like a good idea. That was the end of the conversation. conversation. You did okay. You did okay. It did okay. And, you know, it turned out to be, like I said, it didn't feel like it at the time, but it was an important lesson in like, you know, not giving up on things just because they're hard, right? And I was fortunate. I turned my grades around. I went from being the Asian F and C students to being a straight A student after that, just, you know, realizing that sometimes things that are hard are very much worth it. Fantastic.

And then you went on to Stanford. I did. I did. So I worked two summer internships in engineering, one at a General Motors Automotive Facility, not too far from home, and another at British Petroleum. I was a material science engineering major. And while I enjoyed those experiences working in real life as an engineer, what actually was more interesting to me was the people who were doing product engineering and product management. And because those were larger, more traditional companies, you know, all of those people had engineering degrees, but they also had MBAs, masters in business. because that was how you moved from just

engineering into engineering management and when you actually got to have input on the design of the overall car not just like the CAD drawings for one very specific piece of it. So I didn't know anything about business, my whole family. They're all doctors, dentists, they're all in the medical fields, which was not an interest to me for a variety of reasons. But anyway, so I was like, okay, great. Well, if that's what I want to do with my engineering,

I want to move into this management, product management, engineering management kind of role, I guess I have to get this MBA thing. So I went back to Brown and I took my entrance exam for business school. And then I looked up like, okay, the people who go to business school, like, what jobs do they have before they go to business school? And at that time, in the 80s, early 90s, it was all, they all worked at investment banks for management consulting first. I didn't honestly didn't even know the difference between what they were, but I was like, okay, well, there's a bunch of these that are coming to campus and interviewing for jobs. So I'm just going to sign up for every banking and consulting interview for a job that I can get. And so that was how I ended up in management consulting at Bain in Boston after graduation. And I enjoyed it. And because of my interview, I got to work on some of the, I thought, some of the more interesting. more technical projects. So we worked with one of the clients at the time.

This was early days of cellular technology, helping them do an analysis on which type, they were moving from analog to digital and which type of digital technology infrastructure should they move to. The time division multiplexing, which was going to increase capacity by 3x per spectrum, or the more modular code division multiplexing,

which would create a 6x increase. And it was kind of fun because the analysis was like, well, we can't think of things that people will do on their cellular phones that will actually require you to get to 6X unless they start doing video conferencing on their mobile phones, which I just laughed because, like, obviously, even before, even before, the pandemic, we were all doing. But, but, you know, the analysis was like, but obviously,

you should always just expand the capacity to as much as you can because you can't, you can't make more spectrum. So let's use, let's let's do the most advanced technology possible, even though we can't imagine that people will actually do video conferencing on their mobile phones, which we are obviously doing now, literally halfway around the world. So that was fun. and then I applied as I hope, which was my plan, to get an MBA. And I was able to get into Stanford because of my interest in technology, although I didn't know about startups, I was like, okay, well, the big tech companies like Hewlett-Backard, they're out here.

So this is where I want to go to get my MBA. And really going to Stanford was what opened my eyes to like, okay, there's big giant Fortune 500 technology companies, but there are tons of startups. And I didn't even know what venture capital was, and some of them are backed by venture capital. And that was really what kind of opened my eyes to the opportunities to being in tech, not but also to being a founder and being in the entrepreneurial community as part of technology. So that was amazing in so many ways to me. and after graduation, I did go back to Bain for a couple of years in the San Francisco office

so that they would pay for my business school and I wouldn't have hundreds of thousands of dollars of more loans on top of my undergraduate loans. But then a couple of Stanford classmates had a startup that was doing digital rights management, so encryption and payments and downloads for software in the late 90s. and they'd just raised a million dollar seed round, which back then was a pretty big seed round, not so much anymore. And I was like, this is great.

Like, I'm going to quit my consulting job and I'm going to come join you. And that was really my firsthand experience at sort of, you know, being an entrepreneur, raising venture capital. And then ultimately, as the entrepreneurs say, after having raised several rounds of venture capital, that was then when I made the switch to the dark side. and became an investor. That was in 1994, right?

1999. No, so my startup was in the, my startup was in 96 through 1999. And then in 99, I joined Excel partners as an associate and eventually became a partner, a general partner and a managing partner. I was there for 15 years before becoming an entrepreneur once again and starting my own venture firm, which is now called a crew capital. Tell us, I mean, you know, you've been associated with so many great companies, one of which is Excel, right? And you would have met firsthand with some of the greatest techpreneurs in the world, right?

And how would you differentiate, you know, what you saw in the late 90s, early 2000s, vis-à-vis what you're seeing right now? what we're seeing right now, generally speaking, is that there's just so much money flying around, right? Too much liquidity or so much liquidity. It's kind of like what we saw in the late 90s and early 2000s, but I'm sure you have seen some fundamental differences, right? Talk about that. So yes, a lot has changed. When I'm with my partners at Acre, I'm now like the old person in the I guess you would say I would be the gray hair. I know, you've been talking about the multi-generational, you know, team, right? X, Y, and Z.

Exactly. So I'm one of the Gen Xers. So first I'll start with the interesting positives, right? So you're right. In terms of when I entered the venture business in 99, which is like 99 to 2000, right, classic, like, tale of two cities in terms of like what the investing environment was like in that first 12, 14 months. in my venture career. The positives are, and Indonesia plays a part of this, right? Is today, consumer-facing internet companies are global, like, from the start.

This is going to sound sort of quaint or antiquated, but literally in like 99 and 2000, and even into the early, we used to have conversations at board meetings with our tech startups about like, okay, when is the time to go, you know, outside of the U.S. and begin expansion to Europe or Asia. And now it's like, you don't have that conversation because by design, like once you put something out there, it's global by nature. And for example, so that's a difference between Web 1-0 versus, I would say that change, you know, started with Web 2.0, which would call sort of like social media and so forth, the rise of like. Facebook, once they opened up outside of U.S. colleges, became global.

And as people are quite aware, the growth for many, many years has been much more in global places, I believe still, from a daily active usage and penetrate. Like Indonesia is actually one of the strongest markets from that perspective in terms of engagement. Anyway, so that's one thing. the scale of the number of internet connected devices. So I always find this interesting. So when Netscape, the first browser went public in 96,

there were the number of browser-capable devices, even including dial-up, which a lot of it was dial-up, was measured in the hundreds of thousands, right? And now we're talking about between five and ten, 10 billion. So the scale is, you know, multiple, you know, two orders of magnitude more than before. And so those are the exciting things, right? Like information, like the products, the technology products that the startups are creating are global and literally reach a truly mass market, if it's a great product, or could reach a mass market from the get-go. The things that have changed,

you talked about some of them, the number, the amount of venture capital dollars investing in startups also has changed by a couple of orders of magnitude. And that is both for the venture capital, the traditional venture capital firms themselves, like the X-Sells and Sequoias of the world, right? Their funds have gotten much larger than they were in the late 90s, early 2000s. And also, you know, the movement from very well written about and documented public hedge funds into, you know, they've, back then and I net, they would cross over a bit with their 20% what they call side pocket allocations. But now they've created multi-billion dollar dedicated venture capital funds like the tigers and the co-toos of the world. So there's, that's the change in terms of the macro situation. So it is as competitive as ever to find and win great tech startup entrepreneurs into taking your capital.

But I think that the need for VCs like myself and others to actually have clarity on where do we have a differentiated value proposition for an entrepreneur. there's some positives that come from that, right? We at A crew have spent quite a bit of time learning from our other startups with our startup, which is, we need to have a mission. We need to have a value statement about like, what makes us different from all the other? There's money everywhere.

What are we doing that's different? And we know that like any other product that you create doesn't appeal to everybody. But if it appeals to your, in tech company startup, because I was just reading a board deck before I got on the Zoom with you, like ideal customer profile. Like know who that is.

Who's our ideal founder profile, roughly speaking? And let's make sure that we have a value proposition, a mission, a set of values that speaks to that. We know we're not going to win every deal. That's very unrealistic, even at a big firm when I was at a big firm. And so I think that that's been positive. I think that there has been, so one of the positives of the, as we used to call it, the nuclear winter post internet 1.0 or the dot-com bubble was that by and large, most entrepreneurs

who are doing it now are building companies because they're really excited about what they're doing and they think that it's going to have a meaningful impact. They're not doing it because they did some market analysis and they think this is, you know, this is where the opportunity is. Like they have true passion for what they're building, which I think you need to have knowing that vast majority of startup don't work out. Don't become public companies.

Don't get acquired for successful outcomes. So that's been a, you know, it was sort of like there was the wave and it went down. And now I think that's the result. of like people are doing it because once again, which was certainly true back in the 80s, 90s, is because it was unglamorous. I worry a little bit about the fact that, you know, entrepreneurship and being a founder has become sort of like

the thing that the cool kids want to do. Because it's, it didn't used to be cool. And maybe it's good that it's cool. know, sometimes, some days I wonder. But it's really hard. So you have to be in it for the right reasons. You've, you've been talking a lot about the role of women, right, and diversity. You've been an advocate for diversity being correlated with even higher ROEs within companies. and this is supposedly universal, not just in the U.S., right? Talk about that.

And I know you've been very passionate about this, and I think it's going to resonate a lot with, you know, people who care about diversity in Southeast Asia and who care about the role of women in entrepreneurship, which we're not seeing much off yet, right? Please. You bet. And I think I will point out that it's interesting because, you know, I'm sitting here in the United States, which is one of the few democracies not to have a female leader, head of state, which Indonesia has had.

We've had a female precedent. Yeah. Exactly. So I'm just saying, interesting. So I definitely don't want to come off as like preachy. And we certainly don't have all the answers here. And actually, interestingly, disappointingly to me, and this part of why I took up the mantle is, you know, tech companies, which on the one hand, you know, are literally pushing the bleeding edge in terms of introducing new, you know, whether it's cloud computing, you know, blockchain or back in the day, you know, mobile web browsers, like the first set of technologies, right? but they actually lag even relative to the United States Fortune 500 companies in terms of the diversity,

whether that's gender or ethnic or other diversity on their boards. It's pretty sad to see. It's great that they're now reporting. It used to not necessarily be reported. But as you were saying, so look, I think there are study after study both in the U.S. and globally in the U.S. from groups like McKinsey and Company would show that, you know, gender diverse boards and management teams, you know, outperform on a return on equity and on ROE basis in sort of the mid-20-ish percent improvement. And then if you have both gender and

ethnic diversity, it increases that to like 35 percent ROE outperformance relative to peers. So, you know, you don't have to have the same personal passion that you and I do. If you're a person who looks at numbers, that's pretty compelling. That's a statistically significant improvement. And then there's also studies from Google. There are studies out of HBS that study sort of Western Europe. There have been many studies, all of which show the same directionality. That teams, the Google study specifically was high performing engineering teams, which I thought was interesting because it's kind of like breaking it down to like what's ought to be the most. most coveted fashion of, you know, in tech world anyway, like the engineering team is sort of like this.

And they found that, you know, homogenous teams made faster decisions, but tended to make less good decisions because everyone was more likely to agree very quickly on the same thing because everyone was coming to the table with a similar, like, worldview and lived experience. And because fundamentally what tech startups do is new, there's not, I mean, there are things that we can learn from like prior generations of technology, prior businesses, but the specific problem that you're trying to solve or the specific problem you're trying to solve when you're an engineering team at Google, for example, is like you're building something new. You're not necessarily trying to make something better, faster, cheaper. If that's the part, then probably there's benefit to more homogeneity, right,

because you can get to the decisions faster. But when you're trying to build something that's never been built before, like, you need to think about things in fresh perspectives because there is no clear answer. So what you really want to do is you want to try to try multiple things, you know, have different points of view, and maybe you'll try anyway. So hopefully I've convinced to the audience that this is not just a Teresa Agita crusade. This is like it's grounded in, you know, academic and business research that proves out the benefits to companies

to having diversity of perspective and more diverse individuals on the board and in leadership teams. You know, I feel very fortunate that this has now become pretty well accepted in American business and in American, tech startups. And part of that is this new generation, the millennials and the Gen Zs, like they kind of grew up with this as like,

it's a given, right? Like when I grew up, it was like, if you were a feminist or you were a diversity advocate, you kind of, you knew who your people were and you would have these conversations, but you didn't really speak about it in public in corporate circles.

Got it. Lest you be seen as radical in some way. And it's amazing to see how much it's changed. And so therefore, you know, I have been a long time advocate for this. I'm part of the founding membership team of a group called Allrays, which is a group of women VCs who are dedicated. When we started a few years ago, three quarters of all venture capital firms, so three out of four venture capital firms had no women investors. it's now down to two-thirds,

so down to 66 to two-thirds. We're making progress, and I don't want to make progress. It's on a percentage basis, that's a pretty large percentage, but it just gives you a sense for how far we have to go. And then, you know,

unfortunately on the female founder side, it's even more dramatic, right? Like, on the one hand, the positives are the percentage of founding teams that receive venture capital that have a female founder or co-founder in my 20-plus years in venture has more than doubled. It's gone from around 9 to 10% to 20%. So that's good.

Still a long way to go. But the dollars are not equal. I know. Like 1 or 2% right? Exactly. Still around 2% of the dollars. And what's maybe not as well known is similarly on the venture side, on the venture private act on the private fund side, $73 trillion of private assets under management

in the U.S. 1.2 to 1.5 percent, depending on which study, whether it's Ford Foundation or Knight Foundation, but around little, just a tiny bit over 1 percent, is managed by funds that have a woman or person of color. Right. of any sort as in leadership positions. And the math isn't 100% of that needs to be a woman or person. You only need to have 25%. So if you have four partners,

you just need one of the four partners to qualify that 1.5. The remainder in the U.S. is managed by white male fund managers. So it's Justice Stark on that side of it. Wow, that's the U.S., right? It's a little bit more dramatic in this part of the world. It's even worse outside of the U.S. With the exception, I think Europe is a tiny bit, I only know, European Venture is a tiny bit better than the U.S.,

but what I know, and there aren't as many funds in other geographies, but yes, you're exactly right. It's a problem that, or, well, I say it's a problem, I should say, the disparity is probably more stark in many other geographies outside the U.S. I just happen to know the U.S. stats. Yeah. What would it take for you to get excited about participating in the Southeast Asian narrative of investing? Yeah.

Well, we have recently made an investment in an Indonesian-based tech startup. And the thing that would be that that gave us the confidence to that. Female founder? No, not. To Indonesian male founders. But the management team, I think just I'm going through the management team slide in my brain, probably 25 to 30 percent female. which is by U.S. standards, good.

I can't speak to Indonesia standard. It's very good. Okay. The biggest thing is, you know, we know what we, we know what we know and we know what we don't know, which is we understand things about whether it's cybersecurity, fintech, or in this case, digital health, where we have some of those investments here in the U.S.

And to the extent that we can be helpful to share, you know, lessons learned, but what we need is we need a partner, and in this case, in Tudor Ventures, who is in market in Indonesia, knows the local market understands to help with everything from recruiting and helping the company grow their management team and their team on the ground in, Indonesia, as well as better understands everything from the regulatory to the consumer

tastes, if it's a consumer-facing application, which this one is in HoloDoc. And so finding that partnership of trusted people like Eddie and Patrick, whom I've known for quite a few years now, they obviously know about my Indonesian heritage, and finding finding people who really understand the company and the market and can help on the ground, like literally on the ground with helping grow the company, where then what we can be helpful is at the right time when the company's interested in learning about, well, what are analogies or lessons learned from Silicon Valley-based companies that we could take as part of our growth journey, right?

And so finding that ideal marriage, and we hope that this is the first of many more opportunities, but it starts with finding a partner. And this was true. I do a lot of cybersecurity investing. I know you've had some guests from Israel, which is obviously there are quite a few cybersecurity companies there. And when I made my first and still to the state, when I make investments that have an Israeli connection, I always make sure that I have another venture capitalist, another investor or an angel. investor who is living, working in Israel to help with that part of it. And I know what I can help with is as they build out their U.S. and Silicon Valley operations, right?

So it's a good partnership from that perspective. You mentioned the regulators. You know, there's this observation about the gap between the exponentiality of progress within the private sector vis-a-vis the linearity of progress within the regulatory framework. What can you do or what can we do to help with respect to, you know, providing the necessary advocacy as to narrow that gap going forward? It just seems a lot more relevant in developing economies, right? Because the gap is just far greater, presumably. Well, I'll start, but I'll actually turn that back to you.

As you have much more experience, having worked in that side of the world, as well as in the for-profit business side of the world, as an investor, what I can say is that I've seen two things that I think have had tremendous impact, specifically on venture capital and technology innovation, in regions around the globe. One, as you talked about, which I will turn to you, is like, I do think transparency and consistency of understanding what the regulatory rules are

without, you know, and transparency is pretty self-evident. Not all governments are. open to the transparency part. But the second part about the consistency, which is going to sound strange, right? Because we're in the business of backing technology innovation, which is always about change. But we need to understand what we're operating in.

That shouldn't be changing, right? So, like, having clarity and not having changes from year to year or leadership team to leadership team, government leadership team, that's what's necessary because otherwise, the tech startups are like building these businesses to the ones that are good citizens trying to fit within the current regulatory frameworks. But if those are changing all the time,

it becomes a moving target for them. The second one is, and I'd be interested in your thoughts on this because of your experience, I have seen that when governments put some of their investment dollars into, not necessarily directly into companies, but into managers who are specifically focused on backing technology innovation, that that has led, hopefully to

good returns if you pick the right managers, but more so access, early access to seeing what the emerging technologies are, because that's right. the managers your backing are investing in. So I don't know if that's something that that resonates with you, but I've actually, I've been venture long enough that like initially we were skeptical of like these governmental entity and they've been great partners. And I think most of them would say those who actually invested in spending the time

to get to know the companies and the managers, they feel that it has paid dividends for them in terms of early access to seeing technology trends in companies? I think one of the more structural issues anywhere, not just with this part of the world, is the lack of open-mindedness, right, within the public enterprise. And that makes it difficult for them to better understand what's happening in a private enterprise or in the private space. And to the extent that there is open-mindedness, then there is an ability, if not willingness, to exchange ideas. And the exchange could go to the extent of what we might be seeing in Singapore, where they actually second on government employees in a private space for one, two, three years. And that, I think, is a powerful way to democratize ideas, right?

And then once the ideas get democratized, they get fused. And it just creates a much more synergistic, you know, way of, I don't know, doing things better, faster, richer. And this sort of like touches upon the topic of education. I know you've been very passionate about education. You've been involved in a number of schools, you know, on the boards of brands. and Council of Stanford and other schools and stuff like that. Talk about education. I'm, you know, I've been advocating a lot about, you know,

focusing more on good quality teachers as opposed to just the curricula, as opposed to just the quality of the students. And unfortunately, in many developing countries, you know, the quality of teachers is not just, you know, at par with what we might be seeing in, you know, places like where you're staying, is that a concern for you as an investor who might be investing in a place where perhaps the quality of teaching is not being addressed the way it should be? That's a really good point.

So to be honest with you, my knowledge, of educational systems outside the United States is pretty limited. I can tell you, but it resonates with me that the quality of teaching is important because I've seen that in the United States, particularly in the kindergarten through 12th grade, elementary and high school education. And part of my work on a nonprofit called DonorsChoose.org here in the U.S. is 100% it's very teacher focused, right? The teachers put projects up and they are funded either by citizen philanthropists, as we call them,

or by corporations who want to sponsor all of the teacher projects in their area, maybe around their headquarters or wherever they may have significant locations. And it's very clear in, again, in those. cases, which it resonates and makes sense to me. I know you're very involved with. I'd love to hear what you've been seeing, and you've been a very passionate advocate in Indonesia for education. In the U.S., it is very much around teachers, and the impact that teachers can have on students, to your point about regardless of curriculum, right, because in public schools in the United States, there's very, you know, by district, it's, you know, every teacher is required.

to teach the same materials, roughly speaking. So it's all, the differences in outcomes are all around who the teacher is and how they're able to connect with and impact their students. So I've been very much, I'm very much a supporter of that. I think in, in many, in many countries outside the United States, particularly when it comes to tech innovation, right? sort of, and this is sort of like U.S.'s loss is fill in the blank, Indonesia, China, India's gain. A lot of those entrepreneurs have been, I guess the word might be repats, right?

So they were expats. They either went to university or graduate school or worked in the United States. And then went back to their home countries and started companies very successful. in many, many cases, right? So that is something that, thanks to the U.S. immigration policy, seems to be an open door for other countries. But your point about, you know, to really get to scale, right, is like the educational systems in country need to, in some cases already are, and in other cases maybe

need to improve in order to make that more available. on a more mass scale because only so many students from say Indonesia are going to come to the United States for university or for graduate school in any given year for a lot of reasons. You know, there's there's about 8,500 Indonesians in the U.S. Compared to what, four or five hundred thousand Chinese in the U.S. Probably 150 to 200,000 Indians in the U.S. And I'm just using U.S. the U.S. as an example here. It's not the most important example, but you know, I think Indonesians need to focus a lot more on STEM.

And you get a lot of STEM knowledge in places like Europe, the U.S., China, Japan, and Australia. So, you know, we got to take the long view, right, if we want to do well technologically. And that's something to consider. And I've been, you know, pounding the table on this. you know, over here. And I do believe education is an important part of the thesis for anybody, including those in the investing world. I want to switch topic a little bit to blockchain. I know, you know, a crew focuses on cybersecurity infrastructure, fintech, and data and all those cool things. But blockchain has been on your mind for quite a while, right?

And it's just an amazing phenomenon, right? It's been growing at more than 100% per year, well over how internet was growing, you know, at about 50, 60% per year. What's your view on, you know, there's a lot of people in Indonesia who don't understand what blockchain is, including me, by the way. And I understand a little bit. But I reckon there's a lot of people out here who just think of it as a black box and they think it's It's it's not only a mystery, but it's it's got negative connotation and and I've been trying to basically tell people that you know, I think there is a philosophical

angle to this And and I think there's going to be good things happening with respect to blockchain and and I'm gonna touch upon the potential not so good things with respect to blockchain and that relates to energy, right? But please do share your views about blockchain. Yeah, sure. So, and I'm glad that you called it blockchain as opposed to cryptocurrencies. I know. That's an application layer of something which is fundamentally, I think of it as a transport layer.

So, so, so I and at A-Crew, we actually started looking at, So we're very thematic in our investment themes. We at least twice a year do deep dives on things that we think are interesting. We actually do, you know, we don't do white papers, but we do presentations to our partners about here are the areas that we think are interesting for investment. And back in 2017, we had a point of view. We did a deep dive on blockchain, and we were very specific to call it blockchain and not cryptocurrencies. And at that point, our thesis was, this is a really interesting new, think of it like a transport layer in terms of information sharing capability, you know. And we don't necessarily know which chain is going to be the one that's going to be used for which application.

We definitely don't know which applications. But like Internet 1.0 with the emergency TCPIP, we know that there's going to be needs in our parlance for picks and shovels. Right. So we're not going to bet at that point in time on like, what are the things that are working at the application layer? But we know people are going to do things. And that happened to fit nicely with, you know, some of our cybersecurity and infrastructure viewpoint. It led to an early investment in a company called Cypher Trace, which has since been acquired by MasterCard. And that's important because now you can see how it's mainstream when a company like MasterCard, which does monitoring for a dozen different cryptocurrency transactions. So security and monitoring. They're security guys who melded with some blockchain guys and created this company Cypher Trace,

and now it's caught the attention of traditional financial services players because there's enough volume going on. You talked about some of the growth trends. I thought this was an interesting trend that one of my partners highlighted. It took credit cards approximately 40 years to get to $4 trillion in transaction value, and it took blockchains about four years to get to that level. So order of magnitude faster. So we think it's still early days.

Here's how we think about it. We do quite a few investments in this area. We do them sort of within our themes. Because we think about it as, in fact, we call it Web 3.0, right? So if Web 1.0 was like circa in the late 90s with the emergence of first web browsers, and TCPIP protocols. And then Web 2.0 is really sort of mobile web and social media web. This Web 3.0 is blockchain and full cloud embrace.

And because what the blockchains are, whether that's Bitcoin or Ether, which are the two most well, what it is is it's a way, and this is your point about energy consumption. It is a way that there is no centralized authority to look at the ledger, if you will. Think of it like in old school analogy terms, the database, right? The rows and columns, right? Each different unit is validated by a third party. And it's almost impossible to know who that is. So the benefits are it's highly distributed.

There's no centralized anything. And because the protocol layer, the transport layer, is essentially open and people know what it is, anyone can collaborate on this in theory, right, if you've got the right programming skills and capability. And when I say anyone, that's across borders, cross geographies, across organizations, there's no central organization that's controlling, unlike a database, controlling, like, who can read and write to that. that highly needed sort of validation and proof of work for every transaction, that's what's causing the energy, right? So hopefully that all makes some sense. But our view is, so there are a few things already today. So we do quite a few fintech investments.

You know, we were early investors and things like Chime and Divi Pay and we're now investors in Plaid and Marquetto and dessert. So we have quite a few FinTech investments. Our view is that blockchain as it is like the next wave of fintech companies are all essentially what are called decentralized finance companies, which are blockchain companies, right? So companies that are doing things that are known and needed in the traditional world like payments or like insurance, but instead of being built in a traditional form with a traditional company that controls all of that infrastructure, they're being built on top mostly of Ethereum,

which is the, there are a bunch of reasons why that's the one that's been the early adopted one in fintech. So we think that that's an interesting opportunity. There's been a lot of talk about NFTs, non-fundable tokens, and the impact that that's going to have on consumer internet companies. And I think that, you know, at the simplest level, you know, it's taking whether it's art or trading cards and making it digital. but the other thing, it's not just that it's digital. It's authenticated, right? So it can be authenticated. And also for the artist who creates it, it can be tracked and you can embed the rules

with your artwork so that instead of just getting paid the first time the art gets sold and then the trader or collector who resells it for two or three times what they paid, they don't necessarily in the physical art world, that all accrues to the trader. But in this case, you can write in the rules in order to, you know, guarantee the provenance and the authenticity of this artwork that, no, 10% goes back to the artist as well on an ongoing basis in perpetuity or for X number of years or Y number of years. So I don't know. Sorry, that was a lot. But we think that this is really interesting, fundamental, and it's not about betting on which cryptocurrency. And in the same way, we're not, we're not traders, right? So I don't

don't have a Forex trader who's figuring out how the dollar is going to move against the rupee or anything like that. That's not what we do. And that's at the currency level, right? There's some excellent firms who do that very well. It's a very different mentality. We're fundamental investors, right? In technology. And we believe that the technology of blockchain as an important piece of infrastructure into certain types of financial transactions, consumer transactions is real. And our first set of investments were mostly at the at the enablement level, right? So tooling, security, like, and then it's only more recently that we've made some investments

at the application level because those things have emerged to such a state like our investment in Coinbase, right? Which is like it very clearly in the U.S. is one of the largest wallets and one of the largest exchanges. And so, okay, we'll make a later stage bet on that. in the early days we wouldn't have known which one of the exchanges which one of the wallets was going to go to primacy but by the time we invested in coinbase um that was clear so that that those are those are our views we think that you know we i think in terms of analogies when it's helpful

and i think that's the opportunity here right and think about what are the things that are going to be most likely to be impacted or disrupted by this new enabling technology which is highly distributed. And I'll turn it back to you because you are far more knowledgeable than I am about ESG and energy and government. Like what's going to happen, you know, with this, the fact that like, I don't think you can put the genie back in the bottle. People are using, you know, at scale, whether it's ETH or Bitcoin and possibly some

others as they emerge, right? It is a huge energy consumer. what, you know, there are governments who have tried to clamp down on this. They'll just go elsewhere. So what's going to happen with that tension? You know, by way of what I'm reading, Ether seems to be on its way of finding this solution for energy efficiency. I'm not sure about Bitcoin, right? And that's problematic, right?

If you take a look at the energy usage for Bitcoin in the last, what, year or two, it's equivalent to what, 130, 140 terra, what? Which is a lot. I mean, that's equivalent to the energy usage of an Argentina, right? And put that in the context of the developing world where energy generation capabilities don't add up, you know, as quickly as much as perhaps a China or the United States or Western European countries it's problematic because it's it's gaining a lot of popularity in the developing world call it Southeast

Asia right a lot of the Gen Z members are gravitating to this right they like this and and I think it's on the basis that you know they kind of prefer a much more decentralized type of model as opposed to a centralistic. Which leads to the second question that I wanted to ask you, philosophically, you know, do you see these two different models, one centralistic and the other decentralistic, being able to coexist, you know, in the future?

I think in many cases they will coexist. I think they will find the businesses and the models that fit that, you know, there are certain things that makes that benefit from being decentralized, but not everything. So take, for example, the other extreme, you know, the physical manufacturing of, items needs a

centrally coordinated organization and system. But things which are truly 100% virtual or

digital can be can benefit from a more decent so that's my simplistic way

of thinking about like okay those are pretty obvious there are a bunch of things which maybe are more

in the middle and we'll see what happens with that, right? Like in terms of like, what about, um, state, what about, so the payments piece of commerce is already being decentralized and can be, um, which I think gives you some insight into like at least why I think people like the, the master cards and visas of the world are interested in companies that are doing. Inevitably. Right. Yeah.

But the action, but then there's the. If the commerce is a physical item, there still needs to be some centralization of like, who's going to figure out how to ship it or how to get it, you know, how to how to warehouse it and then ship it to me or to, like, so some of those things don't make sense to be completely decentralized. And then I'm not smart enough to figure out what's going to happen with things that are somewhere in the middle, right? So I think the things that are somewhere in the middle will be broken down into components and things which can be decentralized will be and the things that can again back to my web one oh web two or web three o analogy right like in web one oh everything was

just like we'll just make a website and then put a dot com after her name and our stock price will go up right and it turns out that for some things it makes sense to do it digitally some things don't make sense. And so while the world and the businesses sort that out, there will be a lot of confusion. But eventually, it will sort itself out and things will coexist in both the decentralized and the centralized way, just as things continue to exist, you know, online and virtual only as well as physically. So in the days, you know, in the olden days pre-internet 1.0, right? It shook itself out. Look, I want to just check with you.

This is sort of like the argument that's been used to support Bitcoin or crypto, right? I mean, it's an uncorrelated asset class, right, which is why it's popular amongst money managers. And at the rate that there is about $100 trillion worth of liquidity flying around, floating around, and developed economies. It's inevitably the thing to hold on to. You can't just hold on to stocks and bonds and properties. It's a new asset class, right? I want to check with you on the line of thinking that I've been sharing with people. Is it possible that we're likely to see a correction with crypto?

At a time, we see some of the following observations. Number one, when the world is no longer worried about inflation. Number two, we know for sure that quantitative easing is going to stop. Right. And number three, the re-standardization of gold as to support money supply. Just intuitively, if some of those, if not all those, were to occur, that's got to create a stoppage, right, to this madness with respect to coins or cryptos. Is that the right line of thinking?

No, I mean, I think, so look, you're far more knowledgeable about macroeconomics than I am. You're being too humble. No, no, I'm not being false and modest. It's true. All of those things make sense to me. I think there will be corrections, just as frankly, for other macroeconomic reasons, there was a massive correction in 2017, 2018, in Bitcoin specifically, but in cryptocurrencies more generally. And then even more recently, one thing you didn't talk about is when countries who can make policy decrees,

as China has done recently, to make certain things not allowed anymore, and others, may do it for for energy consumption reasons, right? Like there will be macro shocks to the system which will cause the last 12 months

of these, you know, it's definitely true. Not everything's going to always go up into the right. So I absolutely agree. Like any other asset class, right, to use your parlads,

which is I think spot on. It's an asset class. There will be corrections and they will come in and out of phase and it will be sometimes that it is based on macroeconomic policy decisions. Sometimes it's based on fundamentals of what's going on.

And what I would say, I go back to the fundamentals, though, of like some, and we've seen it already, some chains will be more impacted than others, and the ones that will ultimately continue to have value, as I hope other assets that inherently have, is are they actually being used for real transactions in some scale, right? Because macroeconomic shocks will change the relative value of that asset, but the intrinsic value of the asset is based upon the work, in this case, that the currency, that the chain is doing, the amount of real work that's so. So do I think, do I think Ethereum is going to go away?

Do I think Bitcoin, even with the energy consumption challenges that you rightly brought up, is it going to go away? I don't think it's going to go away. Might the price correct significantly because of either self-inflicted or macroeconomic policy reasons? Yes, the price, the relative value could go up and down, but there are some intrinsic value there. some of these more speculative points, right, which have projects that have soared, frankly, more than these two main ones that we're just talking about. If they're not actually being used for significant amount of transactions or work, shall we say,

on that chain, then those things could go to essentially zero, right? Because then they go down to the intrinsic value, not the speculative value, which I think a lot of this traded up on speculative value, right? So what's the, it's, in that sense, I feel like it's like looking at stocks, like other, what's the intrinsic value of the company? Like, we can think the company is a good company, but we can think that the stock price is currently overvalued or undervalued based on a whole bunch of other factors, including, by the way, this is the biggest one, which you didn't talk about, is like currently public sentiment.

Sure. And your point about the Gen Zs in Southeast Asia, I see as well here in the US, it's interesting to me at this debate with some of my Gen Z and interesting my millennial partners. I think many of the Gen Z years would agree with this. It's interesting to, again, not statistically significant in any kind of social science kind of a way,

but just it's interesting to me that many 20-somethings and teenagers prefer to invest in, to buy assets that are cryptocurrencies than to buy stocks. I don't know whether that's transitory or permanent. If it's permanent, then it's pretty interesting and speaks to what the ultimate scale of this will be. Right. Scary.

Interesting and scary. You know, I just don't want the kids and grandkids to get lazy. You know, at the rate, I see so many people around me making so much money investing in Bitcoin or ether. They just sit around. Who's going to make the clothes? Who's going to make the shoes? Who's going to make the whatever, right? Somebody's got to make and produce. That's the message that I convey to to Gen Z, at least. Some millennials do. They're getting addicted to, you know, just sitting. investing but somebody's got to be making some things so I want to ask you about Tesla I get asked a lot here if if if you take a look at the value of Tesla on a per car produced basis right it it's probably at around two million dollars per car

produced and Tesla sells for what 40 to 120,000 dollars right if you take a look at Volkswagen Toyota they trade at about about $20,000 to $30,000 on a per car produced basis. Company value divided by the cars produced. It's a crazy gap, right? And I tell people that it's simply an amalgamation of AI, robotics, and autonomy, right? For Tesla. The other guys just don't do that as well as a Tesla.

Is that a reasonable explanation? Or is that an outrageous explanation? No, I think it's a reasonable explanation for sure. I'd add one more thing in terms of the technology that they have, which is the battery storage is highly valuable, even above and a part, like, as we think about renewables more broadly, and I know that they bought Solar City, so they have some solar, but like thinking about the value of that asset, which is incredible. incredibly challenging to develop. So I think all of those things are what I think investors are just valuing it differently, right? Does that sustain the two million? I don't know, right?

But I would argue that they're just using a very different set of metrics to value the company than the way that they value a Volkswagen, a traditional automotive company. Is it right or wrong? Is it overvalued or not? That's beyond my pay grade. But I agree with you. Those factors that you brought out, which is autonomy, AI, ML, computer vision. I would throw in the battery storage capability for renewables.

Those are all incredibly valuable. What is that if you then try to translate it to a per car basis? Is that the right or the wrong value? I don't know. But I think that they're just valuing. on those dimensions, not on raw production. Wow. Hey, we've spent a lot of time, Theresa.

I'm going to ask the last question in Bahasa. Okay, speak slowly, please. There's a person what acha for women in Asia-Tengara or Indonesia who want to be entrepreneur. Okay. I think I call part of it, but you're going to... What's your message for...

Oh, that's what that's what I thought. The females in Southeast Asia want to be entrepreneurial like you. I wanted to make sure I got it right. So what I would say is I think that there is so much opportunity. You know, Indonesia has the population and growth characteristics and youth characteristics that make it incredibly exciting and dynamic market. And I think as an entrepreneur, as a female, right? One of my, I'm going to share this, one of the first female CEOs that I worked with,

share this with me. I know for a lot of people, it feels like daunting to maybe start something as opposed to going to a more traditional career or job. She shared with me, and I found this to be true, it's actually quite the opposite, because when you are starting the company and you are running the company, you actually get to set the tone for what the culture is going to be.

And if you choose that the culture, again, this is a choice for everybody, not putting other people's, But for me, I think doing good work, having great returns, all of that is really, really important. But at the end of the day, we are also all parts of relationships, families. It only works if the whole person is allowed to make choices about when and where and how. and this is going to sound very cliche now that we're in a virtual time. But trust me, five years ago, this was not so much.

It's like you trust people to do the work. And it actually gives like, so I have found that I have so much more capacity to do work. I've been as productive, more productive than ever. If you look at, you know, investments and returns since founding and becoming a founder, which definitely sounded scary to my mom and dad. They were still worried for a long time. when I told him I was leaving a big venture capital firm. And yet at the same time,

I've actually been able to be much more present at the time when my children were young for my children. Because I get to choose, like, I'm not, there are not like processes, company-wide meat, like things that I have to be a part of, unless it's like,

okay, I've decided that these are important. Everyone needs to be part of this. And the other things, not so much. And I give everyone on our crew the same sort of flexibility. No questions asked. You need to be gone from whatever.

2 o'clock in the afternoon until 5 o'clock in the afternoon because your kid has a game or a recital or you have a dentist, a doctor's, whatever. No questions asked. You know what I find sneakily is like that person then is probably on their email and their slack for not just the two, but like probably three hours later that night. Probably more productive than the other guys. Yeah. Exactly. You give people the trust. Sorry, that's a long answer. The short answer is you should absolutely do. If you if you have the desire, if there's something that you're excited to start,

don't be afraid to do it. Take. Don't be afraid to bet on yourself. You know yourself better than anything else. If you think about, bet sounds about invest in yourself, right? We talked about how you were worried that people are just investing in other things. Okay, well, that's great. What's the asset that you know better than any other asset class? You, your potential. So thinking about investing in yourself, which is what I think of entrepreneurship as, should seem like the least scary asset that you would ever invest in.

You couldn't know it better than any. I mean, even if you're an expert at Ethereum, I don't think you're going to know it better than you know yourself. Wow. Great. Thank you so much, Teresa. Thank you. For your time. It's been fascinating.

Teman, teman, that's Teresa Go, founder of a crew, Cabron. Thank you. This is Endgame.