Tim has been selected to Forbes Magazine's prestigious Midas List three times. THREE. But even better than being a well-respected investor, he gives off the best vibes...
The first time I met Tim at the Next Play Capital Tech & Venture Summit, he talked about how much he loves Burning Man. All I could think was "Yes. He's definitely going to get me!" His energy is so calming and genuine that I suspect its something his portfolio companies really connect to. I sat down with Tim to hear more of his story and see what he was willing to share with this Black Girl in Venture. But before we get into it, of course I want to share my key learnings!
Key Learnings from Tim Chang:
1. Be authentic! Faking who you are to fit in is draining and doesn't benefit anyone. Entrepreneurs can see through it and then, well, you just look silly.
2. There is no perfect background for VC. Of course, certain skills are helpful from time in investment banking or consulting, but don't be discouraged because there are other skills, talents and values that you bring! What is your secret sauce?
3. If you believe in a company, you may have to put in extra work on your own. Commit to them. Get them ready to pitch. You'll get a ton of satisfaction from working on something you're passionate about.
Now, enough of my thoughts! Let's hear from Tim. And of course, this interview and been trimmed in certain areas for the sake of length and your eyesight!
Megan: I want to ask about you as a person, and I want to ask about you as an investor. I remember hearing you say you went to Burning Man and you really liked the whole vibe there, so I'd love to hear like, where are you from, what you're interested in, how do you describe yourself as a person, and then how does that translate into how you invest?
Tim: Right. You know, it's interesting, the older I get the more I realize the two are intertwined. Investing ultimately ends up becoming an extension of your persona and your values and what your personal interests are. I used to, when I first got into the venture world, try to separate the two. I would think of like, well, there's my personal interests, and then there's what I'm supposed to do for work.
I remember thinking “I need to be really serious and buttoned-down and polished when it comes to work” and then my fun side activities and interest in music, or theater, or Burning Man, or whatever else, those are unrelated and the more I think about those or talk about those at work, the less seriously I'll be taken. I think I've found through my journey the opposite is actually true. The more authentic, integrated and dare I say vulnerable you are, the more engaging and the more that you will resonate with people. Maybe not everybody, but if you believe in the notion of like attracts like, you'll be drawn to entrepreneurs and companies and people that share your similar energy or bandwidth.
I think my interests were kind of scattered growing up. Everything from comic books and video games to math and science and computer programming and arts as well. Growing up, I remember kind of being steered towards engineering, but all my interest and my time and attention was on performing arts and poetry and music and theater and stuff like that.
I guess today we'd call that, oh, you're a polymath, you like lots of things, but back then I think it was kind of hard because people would rather slot you in one bucket and you just looked really distracted or unfocused if you didn't.
Megan: Because it's easier for them that way. To absorb you.
Tim: Yeah, yeah. That's right. You know, back then I felt like, well, it's not authentic if I don't do these things I like, I enjoy all of them. But it was kind of harder to square even with myself. It's like, am I not being focused? Because truth is, sometimes you get really good and you can go really deep when you focus on something, but innovation and non-intuitive insights are drawn when you connect worlds that don't naturally live together. Even at GSB (code name from Stanford Graduate School of Business), I remember learning there was sort of this theory of network value which is directly related to the heterogeneity of the network, meaning, if you have lots of connections in very disparate worlds, the synergies that are created are probably more likely than if you just know all the same people in the same field.
Megan: Absolutely. We learn it in our social networking class but also have a really interesting opportunity to put it to work at the GSB.
Tim: Having network homogeneity won't work because you'll know all the same stuff. Even for me personally, when I first entered venture coming out of the GSB, it was hard because the typical backgrounds were folks who were either from banking, or they might have come from startups or other places before. I had been working in Japan before that so I had no network in the valley. All I knew was that you know, Japan had a lot of advanced technology back then. I saw the rise in mobile phones before they hit the US and so my first investment thesis was, well, mobile phones gotta come here someday, and so that's kind of what I built it on.
It was tricky for me because I felt like an outsider even in the venture world. I was a fresh out of MBA associate, working alongside a lot of other associates who were former McKinsey consultants or bankers or whatnot. I didn't have their network, I didn't necessarily have the same lingo, and again-
Megan: Sounds like we're in the same bucket.
Tim: Yeah. Always that feeling of being an outsider.
I tried really hard to kind of fit in and speak the lingo and all that and I remember, when I first got in the business I thought, I've got to fit in and be like others, and so I'd chase the shiny sectors like security or semiconductors or whatnot. Then what I kind of noticed was like, I don't like these other people. I'm not like them, I don't want to hang out with them, but I tried really hard to be like them. Then as I talked to entrepreneurs I remember thinking that they want to see that I speak the lingo and I have to impress them and so when we have lunch meetings or whatever I should talk about industry stats and investment thesis and market trends. While that was okay, over time I learned that what they really want to talk about was like, you know, why they were frustrated with their job, or their personal interests, or why they were trying to think of leaving their company and start something else, or whatever it was. Right? It was more the authentic things they wanted to talk about, and then business stuff was just one subset of that. Or be able to talk about Burning Man, because chances are they might be curious too, right?
Megan: Yeah. I'm a Coachella girl myself.
Tim: Yeah, there you go, right? Those actually are sometimes more authentic ways to find something to resonate with entrepreneurs than just reciting market stats or something like that, right?
Megan: Yes. I would agree.
Tim: I think ultimately money is just a symbol of affinity or trust or connection that you're on the same wavelength, that you kind of have trust with each other. A lot of trust is built on more intangible things, like, do you like the same restaurants? Do you hang out in the same way with the same people? Right? I think that's the thing I learned most. I thought I got into venture capital because I was going to do deep analyses on business plans and like, sensitivity analysis, spreadsheet models on market sizes or whatever, but really ultimately it was just like, do you like the people? Do you get along, do you trust each other?
Do you resonate with them? That's kind of how I've evolved in investor now, while I have my investment themes and theses and focus ideas and those sorts of things, a lot of it boils down to you know, what's the energy of the people that you tend to be drawn to?
It's really simplistic but, well, 79% of startups not going to work, but do we get along so well we're going to have a great time trying to build this thing and even if things blow up, would I even consider turning around and writing him another check for their next thing? Right? It's really become more people-based, I think more so than market sizings or deep tech analysis and that kind of thing.
Megan: That is a perfect way to think about it. I'd completely agree. As I was doing research online preparing for this interview, I really related to a lot of the things that Mayfield was saying that they believed in. Two of those things, the first one is that they embrace or you all embrace unconventional, unusual, and different, and that great people evolve and not everyone comes in with all the skills and experience they need to get to where they're going. Of course, I personally connected with those two so I wanted to ask you, why did you choose Mayfield and what was it about this firm that really you connected with?
Tim: You know, back to relationships and trust, I actually had pre-existing relationships with a lot of the partners here. I performed in a band with Raj Kapoor for several years. Then Navin and I actually were partners at a very small emerging fund called Gabriel Venture Partners back in the day, too, so we cut our teeth together in the industry, learned how to hustle because Gabriel didn't have the strong, well known tier 1 name, so we had to figure out how to get the attention of entrepreneurs through hustle, through good people skills, through market know-how, that kind of thing. We had a lot of trust and respect for each other even from back then.
Megan: Got it. Got it. Actually that's a really great segue into my next question about diversity. Since it is so relationship based, a lot of people tend to hire, invest in, fund things that they're familiar with that look similar to what they already know. Could you tell me why you think that there may be so little diversity in venture capital and private equity? I read somewhere that less than 1% of VCs are black, and I would imagine that even smaller percent are black women. Why do you think this problem persists in the Valley and also, for the black people that I have been able to find in VC, they tend not to be on the investing teams. Do you have any thoughts on that or why you think that problem continues?
Tim: Yes. I think it's pretty systemic. It's all the way going even down to the graduate pool as well as the pipeline. I'd like to say we try really hard actually to aim for diversity. We're one of the funds that had a senior female partner for many years in Janice Roberts, and we are actually all, I don't know if we count as minorities anymore, Indians and Asians we're like the majority now in many ways. But it's interesting, we actually don't have a Caucasian partner. Sometimes people say like, Mayfield's all Indians and it's funny because we actually are all Indians and me.
We actually even reached out and said, we want a woman partner, specifically on the consumer side because we want to do more commerce investing and our thought is, we've got a blind side here, we need the female perspective. Then thank goodness our head of marketing sits in department meetings because she will chime in with some real zingers that we just hadn't thought about on commerce or other consumer deals will come in, which really highlights why we need more diversity of that perspective.
We have several partners here who are on the boards of diversity nonprofits and whatnot, so we're trying to play some small role in that but it's even down to maybe just, how do we recruit more minorities and women into engineering and business programs too, even at the Stanfords of the world. We need more folks who are inspired by you as a role model for that.
Megan: Well thank you. That's certainly the goal. What do you think, and this may be reaching a bit, what do you think it's going to take for more women, more minorities, to want to go into this field? What do you think is the barrier?
Tim: I'm not sure. There are probably multiple things, but I could say one, role models, like yourself and others. You're going to need mentors and role models that actively are helping others, encouraging them, kind of even showing them the path to like, hey, this is possible and here's the road to get there. Right?
You know, it's interesting, I helped to co-found an Asian American professional group and we even have that issue in the Asian American community. There's a lot of Asians in tech, but very few Asian founders and leaders. I'll give you one example, this stems all the way to the way we were raised. At least my generation. We often were raised under very conservative Asian tiger parents, so we're really good at following marching orders of others but we don't break rules well. To be a founder or to be a creator of something you have to be really comfortable with being a maverick and being a pioneer, right?
I would imagine maybe some of that dynamic exists for other minorities as well. If you grew up without role models than you might assume it's not possible or sometimes you're even explicitly told, nope, that's not for you. We need to get rid of that, and that starts with role models and mentoring. I kind of view it as one of my responsibilities is to help mentor and kind of share my story with others in the hopes that it will show them, hey, this is possible.
Megan: That's extremely important.
Tim: I ain't that special. If I can do it, you can do it too. That kind of thing.
Megan: It's so funny that you mention that, that somebody will flat-out tell you no, this isn't for you. Somebody actually, in the Stanford admissions office, probably the year before I applied I went for a visit and I sat down with somebody in admissions and after speaking for a while they were like, you know, you may really want to think about applying to other schools. You're just not typically what we look for. Because I went to a historically black college, and they are, they said that if we look for students from a historically black college it's normally Spelman or Morehouse or Howard, right, really elite ones. He was like, so, I really want to encourage you to look at other places because it's a 5% acceptance rate. Tiny. I was defeated and I wasn't going to do it and my boss at the time was like, Megan, you've got what it takes. Do it. Do it, do it. At the last second I decided, I'm just going to do it.
Tim: Yeah. Thank goodness you did.
Megan: Thank goodness I did, right? My last two questions. The first one is, walk me through one of your favorite deals.
Tim: I have one that I'm really proud of. It wasn't the biggest outcome in the world but I'm proud of the journey. It's a company called Basis, which was one of the very first wearable companies.
They were probably the world's first consumer device that was a continuous 24/7 heart rate monitor on your wrist. This was way back before wearables was even a word. People used to ask me, "Who's going to wear something on their wrist to track their signals?" I met the founder, a young 20-something hustler named Nadeem Kassam, at Summit Series, the conference. He had this amazing vision and I remember just resonating with that vision, it was like, I really want this product to exist in the world, but it was so nontraditional. He didn't have a tech background, didn't have operating experience in this world. Didn't even have a network in this area, wasn't from Silicon Valley. Didn't meet any of the checkbox metrics that we'd normally see. I was at Norwest at the time and I remember just thinking, this is going to be a really uphill battle and what I ended up doing was working on it like a labor of love. We basically treated it like a moonlighting project, so I'd meet with Nadeem regularly and we would basically go out and virtually incubate it. Go out to friends and networks and convince them, hey, let's join this team.
It was almost like incubating or building this company person by person and step by step. Even before funding it. Because what I was trying to do was get it into a shape that it was fundable.
Megan: Prepared for funding.
Tim: Yeah, like it met the bar to be venture back-able. It took almost two years, but we got it there and it was really nice because that was one of the only times that I've got to legitimately be kind of a co-founder of something even before there was a dollar into it because I was investing my time and my network and my energy.
Megan: The very last thing. Again, I don't have the most VC-type background and so one of the things I'm trying to do over these two years is really learn and get myself to a place where, by the time I graduate, it may be a career option for me. As an MBA with a nontraditional background, what would you expect me to not know? You would say, oh, she doesn't have this background, she's not going to know how to do this. I'm taking those answers from people and I'm committed to learning those things.
Tim: Got it. The world is a little bit different today than when I was a Stanford MBA. Back then there was this very specific path of like, okay, you probably have operating experience at big companies, small company, you probably have a masters in Engineering and you have an MBA. You probably helped, you know, at an early stage of some startup or something as well as a big company like an AOL or whatever back then. There was kind of this template for what you'd look like, you had a specific job. You'd be a post-MBA associate entry level doing support work, right. These days there's so many funds that there's many different roads now. You could be a blogger, you could be a journalist, you could be a PhD researcher with an expertise in an area. You could be a management consultant, a banker.
I mean, the traditional go-to would be like, oh, have you done a startup before? Have you worked at a name brand company? Have you been already an angel investing your own money? Do you know how this game works? That kind of stuff, right? But I don't think those barriers necessarily hold up anymore.
Rather, if you inverse the question and say, actually what unique perspective or what special sauce do I bring to the table that others don't have or hasn't been seen before? It could be a perspective from a diversity viewpoint, it could be a skill set from an unrelated field that totally applies. You might come from the military or you might come from the NFL, or whatever it is, but there'll be a perspective, some know-how, some best practices or wisdoms that you can give to founders, or maybe connections or network that typical valley people haven't had before.
Any of those could be special sauce, unique things that you'd bring to the table as an investor. What's beautiful about this venture world, or the world of investing, anybody can be a good investor. There's no right way to do it.
Megan: I'm learning that. Yeah.
Tim: All that matters is just have your own particular unique playbook, and it could be anything. It could be that you've got a great network in Korea. It could be that you have a lot of connections with Hollywood and with influencers that entrepreneurs want and need to have on their side. It could be that you're really good at product design. It could be any number of things.