In this episode, we speak with Edith Yeung, who is a partner at the Silicone Valley based venture capital firm 500 Startups. Edith is a true Silicone Valley geek. She started off her career as a developer, and then she joined Dolphin Browser as the VP of Marketing. Dolphin Browser was a Sequoia-backed Android mobile browser, with over 150 million installs worldwide. Dolphin was sold to Chung Yo, the Nasdaq listed Chinese gaming company in 2014.

After that exit, Edith joined the 500 Startups family and she now oversees the funds investment in greater China. So for all you startup  founders out there looking to pitch Edith for funding for 500 Startups, she shares some of the great tips on how to get her attention in this episode. So let’s jump right in.

Jay: Edith, thank you so much for joining us on the Jay Kim Show. We are very happy to have you. For our listeners here, I know that you are from Hong Kong and you are very familiar with the region but for our listeners that are tuning in, case you please give us a little bit of background. Who is Edith Yeung and how do you make a living?

Edith: So first off, thanks for waking up so early to chat with me in San Francisco. Yeah, I was born and raised in Hong Kong, I actually went to school, high school, in [inaudible 00:02:17] public school. My parents are still there. I love Hong Kong and have the Hong Kong blood in me.

I moved to the U.S., a little bit the other way around, almost 23 years ago. I came here for actually high school, and then stayed for university and moved to the area, actually since ’98, in Silicone Valley for a long time. So my background is actually, I started as a developer, doing a lot of coding, working with a lot of enterprise companies. I spent six years with Siebel System, which is a CRM company, and did a lot of different orientation around the world for Siebel, and then Oracle bought Siebel. So I went to Oracle. After that, I just thought, “oh man, this is such a huge company.” I think at the time it was an 100,000 people company. And I thought it was too big and I left and went to Autodesk. Autodesk makes AutoCAD.

So anyways, I did ten years mostly in [inaudible 00:03:14] software, and I thought, enterprise is interesting, but it’s so boring. And I felt like it was time for me to move on and do something else. Then, completely by accident, because at the time I felt like I really needed a new set of friends, because all my friends were so happy working in enterprise, and I started this meetup group in San Francisco. Actually, that’s how I met Dave McClure and a lot of investors and entrepreneurs in Silicone Valley, because I started hosting my own meetup group, and sort of grew that from five people to ten, 30, 100, 300, 800, it turned into a conference business.

Jay: Wow.

Edith: It was by accident. And I did that for a couple of years, and I realized …

Jay: Which year was that, that you started this meetup?

Edith: That was eight years ago, a long time ago. This is before 500 Startups even existed.

Jay: Right, so it must have been 2008-ish?

Edith: Yes, 2008, 2009. I think I met Dave around the same time, because he was one of my speakers. That’s how I got to know him, and sort of kept in touch the whole time. So after I started that, I realized sort of my own thing, it was a great cash business, but it was the type of business where I realized by learning from all my speakers that this is not really a high growth startup, it’s a conference business. And it was very enterprise-y. After all, even though I wanted to get out of it, at the time I started to think about, maybe I should really learn more about consumer, which is something I never had done before. And one of my attendees from my conference, it’s called Biztech, is the founder of Dolphin browser. Dolphin browser is a mobile browser mostly on the Android. We scaled it from zero install to 150 million install worldwide.

Jay: Wow.

Edith: And I didn’t know anything about consumer at the time, and the founder showed me … his name is Yongzhi … very geeky, Microsoft engineers all [inaudible 00:05:32] from Microsoft, and he’s from mainland China, and there’s all these things I don’t know anything about, but he was really diligently wanting to learn about U.S. markets, and just kept coming back to the States. I met him every month, and finally after six months, he went to me and said, “you should really join my company.” And I asked him, “why would I care, because I have my own thing.” And he basically convinced me that he’s going to be the next Jerry Yang (of Yahoo), because they have the same last name. And actually, I also have the same last name.

So I figure, you know, this could be a really interesting ride, I will be able to learn something that I’ve never done before, and we were very lucky. So I joined and then a couple of months later we raised series A from Sequoia Matrix Partners and [inaudible 00:06:25]. And it was a great ride. So the whole time, the structure was a product and engineering team in mainland China, in Beijing and [inaudible 00:06:34], and I was running all the non-China business, with a particular focus on user growth and monetization.

And then we sold the company, two years ago now, to a Chinese gaming company called ChangYou for $179 million, and then I decided …

Jay: They just listed that company on the U.S. stock exchange.

Edith: Yeah, it’s [inaudible 00:06:56] listed, a couple billion market cap. They’re doing okay. So it was a great journey.

Jay: That’s amazing.

Edith: So Jay, when you and I met, I guess a few years ago, I was still working on Dolphin.

Jay: Yup.

Edith: It was a big learning curve for me, but I’m so glad I did, because I sure didn’t know anything about raising money, dealing with VCs, and it’s really through all the Dolphin experience. And during Dolphin years, and one of the reasons I think why I started to get involved early on with some of the 500 Startups activities, was I really wanted to learn [inaudible 00:07:38]. And my expertise at the time … I realized, okay, I really understand mobile user growth, I wanted to really invest in things that I understand. So that was sort of the beginning of it.

Jay: Right.

Edith: So during my Dolphin years I did a handful of angel investments and thought, wow, this is so fun, because I can put my brain in a different place, but I can still apply things that I know and I value. And so two years ago, after the acquisition, I basically went to my CEO and said, you know, it’s time for me … and let’s pool our resources together. So the Dolphin founder was my first LP for the mobile fund.

Jay: Ah, excellent.

Edith: And we do a lot of deals and look at a lot of companies together, and still continue to do so. Yeah, so it’s been great fun, and now what I do for a living is I invest, and for the last two years being part of 500 Startups now, I’ve done 35 investments so far. And I would say still a majority of them are in the U.S., in Silicone Valley. Lately, I have to say my biggest epiphany, as I mentioned earlier when I first started … first off, no investor will admit that they don’t add value.

Jay: Right.

Edith: Right? And everybody wants to add value, and everybody wants to invest in things that you understand. But I have to say, my biggest epiphany after 35 deals is if there are certain companies or industries I know too well, it’s probably too late for me to invest.

Jay: Ah. Interesting. That’s an interesting metric. Yeah, that’s one of those things that every investor’s like, oh, well, I could do more than just give you my money, I like to give you my resources or add value, right. That’s just the line that people say. That’s an interesting metric that you use.

Edith: Yeah, and I think for me, because I do early stage, I should make sure that I’m always on the cutting edge of technology, especially being in the Valley. I’m just so constantly fascinated by things that … it amazes me. Lately I’ve been spending a lot of time learning … again, it’s all buzz words, right … so Dave likes to make fun of me sometimes, chasing after all these buzz word investments. We can argue about that all day long, but it’s definitely fascinating, looking at the growth of … Last year, the buzz word was definitely all about the RAR. And I think this year, the investment dollar will go down from [inaudible 00:10:22] For sure.

Jay: Right.

Edith: And I think another buzz word lately is all about AI related things, machine learning … but to me, I’m also very pragmatic about all this, which is if you have no data, there’s no AI, and it’s just the name of the game. And I focus a lot more, like vertical focus business [inaudible 00:10:39], rather than generic AI. And I was talking to somebody this morning about edge computing, you’ll once in a while get into conversations about general [inaudible 00:10:49] which I’m really not qualified to invest, but it’s just fascinating.

Jay: Yeah, there’s a guy that I interviewed on this podcast, from Hong Kong actually, Danny Yeung, who …

Edith: Oh yeah, great company.

Jay: Yeah.

Edith: It’s a 500 company, actually.

Jay: I want to take a step back before we get carried away, because I think your background is fascinating. I want to ask you a couple of questions about it. So first of all, I like the fact that you used to be a geek, and I say this as a pure compliment, you actually have a very technical background, so I think that’s refreshing because I feel like there’s a rising number of non-technical founders that we see these days, and I think it’s getting easier to get around that, but the fact that you came up from that sort of developer background is cool.

Second of all, I want to take a step back and talk about when you got into this whole game of being a developer, and one of the things we talk about is family support, you know, Asian parents, doing something that’s a little bit more entrepreneurial is a difficult and challenging conversation to have, usually, with one’s parents. Was it a conversation that you ever had to have with them, or were they happy, were they supportive of your career decision?

Edith: I love that you asked that, because after I quit Autodesk, before doing investment, when I started that meetup [inaudible 00:12:16] conference business, my mom had no idea. My parents had no idea that I even quit my corporate job.

Jay: Right.

Edith: They didn’t know. And it was getting to a point where I’d actually done pretty well, and I think one time I got invited to speak at something at Cyberport, and I did some media interview, and it was about to go on a newspaper. And I had to tell my mother that I actually had quit two years ago.

Jay: Right.

Edith: Because if I just quit, as you know, with Asian parents, they’d be like, “are you crazy?” And I didn’t want to go through that. I sort of felt like I needed to show some results before I even had to deal with all that, and I didn’t go back to Hong Kong for like, two straight years, because I was working on figuring things out.

Jay: Right.

Edith: And I swear to God, my mom either thought I was pregnant or was on drugs.

Jay: Yeah.

Edith: Otherwise, why wouldn’t she want to come home? Now she’s very supportive, but my parents still don’t quite understand what I do on a daily basis. In her mind, particularly my mom’s side … I keep saying my mom because it’s you know, like the tiger mom.

Jay: Yup, yup.

Edith: And I still think that she doesn’t think I have a stable job, and in the back of her mind it’s like, “you should go back to your publicly listed enterprise company”, you know.

Jay: Yeah, that’s right. “Why leave such a good job”, you know.

Edith: And I’m like, no, you need to take control of your own life and where you want to go.

Jay: No, I think that’s awesome. The recurring theme of my previous guests is that regardless of how conservative or how tiger-ish your parents might be, if you prove yourself, in one way or another, if you show them that look, I’m capable of succeeding in something entrepreneurial and here are my results, then there’s not really much that they can say, you know. And I think that if you have an honest conversation with them, then they will respect you for that.

Edith: Yeah.

Jay: So that’s cool for people listening here in Hong Kong, Edith is a pioneer and you can follow in her footsteps and you can do something entrepreneurial and be successful, and you can have that conversation with your parents.

I want to talk quickly, before we move on, about Dolphin. So when I met you, I think it was 2010, you were fully, deep-involved with Dolphin Browser. And I remember it being sort of, back then, the only browser on Android that you could view flash with.

Edith: That’s right.

Jay: Okay. So that was sort of the claim to fame of Dolphin. How did you guys … you scaled it, the growth was explosive on users of Dolphin. You said what, 150 million by the end when you exited? How did you guys achieve that?

Edith: I think it was a mix of luck and being early, and also, we did a lot of really … well, it was creative in my sense, it’s very common now in terms of pre-loading and partnership with different OEMs [inaudible 00:15:35] operator. But to start, when we first launched, I would say we had many different phases, but it’s a similar mentality, I think, for all the B2C mobile apps these days. So step number one is always, you started with nothing. So in our case, we were very lucky because we started early in Android, and in our category, the big guys in town, still, is Chrome and Firefox, they didn’t want to focus on Android. And we were definitely very early. There were only 3,000 apps at the time on Android, on Google Play. It’s not even called Google Play, it’s called something else, I don’t even remember. And now there’s almost 2 million. So you can imagine, just in terms of discovery, we were able to get to about five or six million, all those purely just because of product.

And then I would say early on, before you get to ten million [inaudible 00:16:31], PR definitely helps. Every time we have a good quality product review from CNET, Android Police … again, I keep saying Android, because Android and IOS are very different sort of authority type coverage … so PR definitely helps. You can sort of, if your B2C has decent double digit millions, these days it’s the least expectation, you want to go big or go home.

Jay: Right.

Edith: And your investors are usually okay with you not making money, as long as you continue to grow minimum, like 30-40% a month [inaudible 00:17:16] and once we get past the ten million mark, then it’s a completely different ballgame in terms of user growth. We started to spend money on mobile app networks, we spent a lot of time learning about app store SEO, ASO, we doubled down on some content marketing, and we started to scale up a big BD team to basically work with all the operators, in particular with Android because most of the Smartphone manufacturers are actually in China. So we definitely have an edge there, because we have a good number of folks in China, we’re able to cut a lot of deals. Especially, I have a lot of appreciation for our investors, because they’re really well-networked, and introduce us to a lot of these key … and when we raise … literally, like we have a pipeline across three, four years of 100 million total across a few years, in terms of their commitment to [inaudible 00:18:21] as a default browser on these phones.

Jay: That’s awesome.

Edith: It’s a lot of work, and I don’t think we can repeat this again, because now …

Jay: Yeah, it’s a function of the timing. At the time, because, like you said, Firefox and Chrome were highly geared towards IOS, right, so …

Edith: Yeah.

Jay: Actually, here’s a good question for you, Edith, since you have a background and you’re an expert in this. So when I first met you, I think I was going around these startup conferences, probably late 2009, 2010, early those days … you know, I was like, the only guy in the room, other than you, probably, because I think you had both. But I was like, the only Android user, you know, I was walking around, I had my Samsung Galaxy and everyone was on iPhone, obviously, right?

Edith: Right.

Jay: So now we’ve seen the climate change a bit, there’s a shift. How do you see it playing out? You know, Android versus Apple? Globally, obviously, since you have a connection with Asia, you know China’s huge with Android, but how do you see the split developing in the say, next five to ten years?

Edith: First off, Jay, I think that if you come back to visit us, a majority of the investors in the Valley use IOS. And I continue to use both, and use a lot more so my Galaxy S7 Edge, that’s not going to blow up, and Android’s more the geeky side of me. But I have to say in Asia, particularly China, southeast Asia, Android is definitely a majority of the market share, even though the majority of the developers … this is sort of the epiphany … usually start with IOS. For good reason. Because the majority of the revenue still comes from IOS.

Jay: That’s right.

Edith: Particularly IOS gaming. But the irony is that now gaming’s number one country is actually China, not the U.S., for 2016 in terms of mother revenue. So there’s a lot of going back and forth in terms of what to focus on. So here’s my two cents: depends. Everything depends on what category of B2C apps you would like to work on. And also of course, your cultural background. If I’m talking to game developers, they hesitate and don’t necessarily want to think about Asia a few years ago, because [inaudible 00:20:59] is so high in the U.S., you can definitely get away with it, like without thinking about it, and still make amazing revenue. But I have to say recently, a lot of game developers, they may not care. Before they started to think about it, and they may not know, but they still would find a publisher in mainland, and sort of work with them and [inaudible 00:21:22] with them and at least have somebody to take care of that market on their behalf.

Jay: Right.

Edith: And so that’s one area. If you’re talking about music, worldwide, I just don’t believe in anybody. Because there’s already dominant players in both worlds, and you really need to know how to operate. Actually, in both gaming and music, a majority of the B2C content-related categories are all about operation. It’s not just about building the app.

Jay: Right.

Edith: I think a lot of developers sort of miss that, it’s not about … technology is quite proven already, so I don’t believe that just another cool feature is going to make it. It’s all about operating.

And then I would say, I have a handful of friends, some quite active and doing utility, sort of productivities … again, those are very, very hard making money.

Jay: Yeah.

Edith: And a similar category like social communication. Having said that, I still have more friends [inaudible 00:22:33] another messaging app … which, I don’t know, I’m very jaded in that sense. But it’s all about thinking through frequency of use, and your ability of operating various different apps, and think about how you’ll be able to, within twelve months, be able to claim at least your number one category in certain regions.

Jay: Right.

Edith: I think without that, it’s very hard to say … You don’t want to be the number five of anything, right?

Jay: Yeah, that’s right.

Edith: You want to be top two. And yeah, it’s just tough.

Jay: So it’s a crowded space, such stiff competition right now, and particularly in the app mobile space, so you’re right, you have to just go for the top if you’re going to survive.

Thank you for that Edith. So let’s fast-forward now. You mentioned after Dolphin, you started the mobile collective at 500, but now you have kind of taken over the … is it the Asia regional investing portfolio?

Edith: Yeah, so recently our good friends Ray and Don and [inaudible 00:24:09] something new on her end, which I’m very excited for her. So yeah, I am overseeing China, Hong Kong and Taiwan for 500 Startups, and we have about 35 investments so far in this region, and definitely want to do more, and also have done quite a handful of really good investments so far. And you mentioned Denny Yeung, and he’s one of our portfolio, he’s awesome, does some very groundbreaking stuff, I’m very excited about that. And then recently some of my own investments, [inaudible 00:24:44] Cook …

Jay: Norma, she’s very well known here in Hong Kong City.

Edith: Yeah, so Norma is great, I met her a couple years ago. Definitely a go-getter.

Jay: They’re doing incredible. She’s a true entrepreneur. She’s really, really good.

Edith: And both of these guys, as I mentioned, Danny and Norma, are the ones that when you talk to them, you see that they will do so much better than even … so much better than me. And you know they will go somewhere really, really far, and you want to be supportive of them.

Jay: Yeah.

Edith: So far, at least in Hong Kong, I feel like we’ve done pretty well, so, go Hong Kong, as somebody from Hong Kong.

Jay: Yeah, absolutely.

Edith: I think we need to do a lot more in China, and we want to do more in Taiwan. At the same time, I think in at least the next 12-24 months, we definitely will step up in terms of the cross-border theme. We talked about it quite a lot in the last few years, but we have more and more, more or less because our own portfolio in the U.S. now has more awareness of this region as a very high potential, high revenue region. Very likely, we’ll have portfolio companies that we already invested in in the U.S. want to come to China. And we want to step it up and be more proactive, 500, to bring them and double down on some of our winners. That is some of the strategy that I’m working on. So there’s no particular companies per se, but we’re definitely doing a lot of work in the background.

But as you know, with our conversation, my strong suit and a lot of my network has been in Silicone Valley, so I’m not too worried about getting the best deal here. And now we want to go help them in China, and I told some of my guys, my CEOs, I said, “look, I can speak Chinese with some of our LP support when we get to potential distribution and potential partners and monetization partners, but without these guys and us figuring out what would be a clear roadmap, I don’t want you to spend time either.” It’s all about being completely open and bringing these super-valued strategic partners. That’s the key thing. I feel like a lot of the U.S. companies that go to China just want to go without understanding the landscape.

Jay: Oh, yeah. Still, even now. When I came here ten years ago, everyone was like “oh, I just want to get into China, it’s easy, right?” And still, ten years later, people are making the same mistakes, having the same struggles that they had, because they just don’t understand it, right?

Edith: Yeah, exactly. So anyways, I think we definitely would do a lot more, and TBD. A lot of things coming soon.

Jay: Yeah. That’s awesome. So that leads us into the very next question which is, if I am an aspiring startup founder and I am working hard, I’m trying to get my growth to being number one or two in whichever company that I’m building, how do I get on your radar? What types of companies would flash up at Edith and say, oh, okay, this is interesting, this is an investible company. How do I make sure that I position myself, as a startup, to get under the radar of 500 Startups?

Edith: Jay, it’s great that you mentioned the word … the key word is positioning. And sometimes I feel like most of the founders that I meet … let’s say, start with Hong Kong … are in love with what they’re working on, and usually start to pitch with the product. And that’s the last thing I want to know, if you don’t know how to position yourself in the world that you work on.

Jay: Right.

Edith: Usually my advice is … and I have certainly actually taken [inaudible 00:28:59] off of a cold email as well, because the email was written so well. And some of the key points are, if you already launch and you have some traction, always start with numbers. Let’s say, I come from mobile, so I’m always going to ask you, what’s your install base? What’s your monthly active? What’s your daily active? What’s your potential [inaudible 00:29:19] pool? It’s okay if you don’t start making money but still, what could be it, like what would be the range? Because there’s many others that have already started monetizing. These are some of the high level numbers, if you have already launched.

If you’re B2B, start with some pilot customers, name drop a little bit, like two or three of these big names who are willing to pilot and test. Even if they don’t pay, it’s okay, because it will show your ability of business development and your access to promote your concept. If neither of these have happened yet, then I would think about, can you brag about your team? Maybe your team is all ex-Google or all Facebook, or some really relevant accomplishments that are related to what you’re working on now. Which leads you to, so let’s say you have two years of research and [inaudible 00:30:17], I don’t know, like something, right, to uniquely qualify you. Why you?

So I think these two or three things will make you different to start, because I’m very number-driven, and I want to know that you’re sure, and keeping track, as a CEO particularly. And sometimes if the email is written in a way that, you know, “I haven’t started yet, I just wanted to chit chat,” the likelihood is that I’ll say “please just start it first.” Because it’s not that expensive to launch and proof out certain things. If you take at least six months and you’re just stoking the conversation, I will probably advise you not to start a company.

Jay: Right.

Edith: So, that will be key. At least, I can contest that I’m very responsive on email, but if you take a few more emails to just ask, or if you send me a plain “let’s give her a call and talk about things,” very likely no one will reply, because you just need to be upfront, right. You don’t need to be shy that you are raising money. That’s another Asian thing.

Jay: Yeah, sure.

Edith: Me too, I’m Asian after all. I overthink a lot of things, and want to build better relationships before my ask, but this is quite an active … and everybody knows that you need to raise money. And that’s when I think the more clear you are about your ask, your goal and your timeline and your numbers, the faster response you will get from the investors.

Jay: Man. Yeah. That’s awesome. That’s such great advice Edith, thank you so much for giving that. You know, just to recap, so if you are a startup founder out there, numbers don’t lie, Edith’s a geek, she knows her numbers, so you can’t get around that. Have some numbers to back up your data, have some talking points, have some sort of social proof, have a really good team, something to catch her attention.

And so Edith, thanks so much for your time, I really appreciate it, and I think the audience out here is going to really enjoy our chat today. And speaking of where to contact you and email and pitch you, what’s the best place to find you, follow you?

Edith: Email is very straightforward, it’s just edith@500.co. And I’m also very active on Twitter, it’s basically my full name, Edith Yeung. And then last but not least, a really quick plug, I do have a weekly email, you can sign up on my site, edith.co, on Silicone Valley funding and animate trends, every week. It’s [inaudible 00:33:04] all news.

Jay: Excellent.

Edith: So that’s that.

Jay: Very helpful. Yeah, great, fantastic. Thanks so much again, Edith, for your time, and we look forward to seeing you when you come to town.

Edith: Yeah, for sure. Thanks Jay.

Jay: All right, take care.

Edith: Take care, bye.