Interview by Vivian Chung ’16. Published April 18, 2014
At Duke, I studied psychology (behavioral & cognitive) and philosophy (ethics). In addition, I had a deep focus with quite a few credits in English with Dr. Buford Jones, an incredible professor / person. I loved singing in the Chapel Choir for four years, and also a little bit with the Modern Black Mass Choir. My entrepreneurial activity at Duke was in the area of social impact. I became involved with the Golden Key International Honour Society, and helped build our chapter activity from a couple of us to 400 people in 18 months with 15 programs and a volunteer leadership team of 35 people. We focused on programs built around students’ core areas of personal passion (e.g. Volunteering at Butner Mental Hospital, the local children’s hospital, etc.). All of this work bundled together, led to the USA Today inviting me to be one of their top 20 students in the US (1993). This would not have been possible without Duke, and specifically my mentor Dean Caroline Lattimore. I would never have applied without her suggesting it and strong amount of emotional support. Dean Lattimore and Buford Jones changed my life, and I hope to find ways to pass their generosity along to others best I can. I cannot thank the both of them enough.
You recently founded Trusted Ventures. Tell us what types of things your current role entails. What are you responsible for?
Yes - I am the Founder / CEO of Trusted Ventures. This is the first time my personality is manifesting itself in work. Trusted Ventures’ thesis is to develop the Impact 500, targeting existing Fortune 500 cash flows, in areas like finance, healthcare and education, with a model where helping the community is how the company competes versus the traditional maximize shareholder profit model. To test this thesis, I joined the founding team of SoFi (Social Finance), targeting the $11 trillion dollar US Consumer Debt Market. The company has raised over $170 million dollars in equity since founding in 2011 and a majority came from my network by luck, along with half the board of directors (including my career mentor Mike Spence, Nobel Laurette in Economics). I started developing Trusted Ventures core thesis 4 years ago, then spent the past 3 years developing the SoFi proof point, and now am launching Marketplace Fund I - a $25 million dollar, thesis-based investment vehicle to further validate the Impact 500 thesis.
For those in the Duke Community interested in social impact and absolute yield / return, I am very interested in meeting / engaging with anyone with this double bottom line passion, if our work together can help others. I enjoy massive / global scale; yet with an approach that has interpersonal dynamos of an intimate small town. This mix is possible by leveraging social media in creative ways together, like we did with SoFi.
Golden Key seems like a great thing to have scaled at Duke. How did you get that idea? How has it impacted your life to be a part of it?
Golden Key was founded in Atlanta back in 1977. It is now up to over 400 colleges around the world. I have been very active since 1990 with the society. At Duke, we tried to help the community with service work. The society back then had about 1 million students, and they kindly elected me as their top student leader back in 1992. Later, I won a $10k scholarship to help pay for business school, and later spent 6 years as a Board of Director, including Finance Committee Chair, and one of three people on the Executive Committee. The board consisted of Vice Chancellors / Presidents of universities from around the world (South Africa, Australia, Canada, US, etc), and many other kind hearted people interested in social impact at a global scale. Golden Key has had a tremendous impact on my life. What is really cool - if someone has social entrepreneur instincts in college, GK provides a backbone to franchise your ideas globally if others in the society / chapters around the world like your ideas too.
After graduating, you worked at Battery Ventures for four years. Tell us about that experience.
When I was at Duke, my life goal was to be a second grade school teacher back in Chicago. My older brother is a teacher outside Detroit, and my family (including myself) has tremendous respect for teachers, given they are focusing their lives on helping others. That said, I was really surprised by the USA Today acknowledgement in the middle of my senior year. My uncle founded Battery Ventures, and I decided to join him in Boston in 1993, and he kindly taught me about the high technology industry from the perspective of the venture capitalist, market analyst (his partner Howard Anderson, whose son is a Duke alum too, invited me to the Yankee Group weekly meetings), entrepreneur, and limited partner lens. I moved to Silicon Valley in Q1 1995 with Bob and his partner Ken Lawler to help establish their West Coast office and have lived out her ever since then. Battery Ventures team and process are extremely disciplined and structured. They know how to make money as a venture capital firm, and I learned quite a bit from their team and system.
You went to Stanford for your MBA. Why an MBA for you at that time in your life?
When I was 8 back in Chicago, Silicon Valley felt to me like the Paris of the 1890s, where innovators and creative people aggregated, so at a very young age I knew I wanted to live there. My chance arrived in 1995, when opening up Battery Ventures’ west coast office. I attended Stanford’s Graduate School of Business to deepen my understanding of finance, economics and accounting. Given my interest in Silicon Valley, I wanted a very deep root in the community here, and felt very lucky for the chance to engage. The dean at the time was Mike Spence, someone I found incredibly humble, kind, and really smart. He was a Rhodes Scholar, previously was a dean at Harvard, and in 2001 became a Nobel Laurette in Economics. He kindly joined the SoFi Board of Directors years later. When I learned about Stanford, Mike felt strongly that the Public Management Program (PMP) and Global Management Program (GMP) were both strategic for the community. I felt so harmonized with his view that I eagerly joined once given the chance.
Softbank was a really neat experience. My career is a story of working with people I love and respect. Heidi Roizen was working at Softbank and I went there to get the chance to learn from Heidi, and help her anyway I could. We had billions of dollars under management, and a global platform investing in Internet companies. Masa Son in Japan had an amazing, long-term, global vision, and had invested in Yahoo!, eTrade and many other companies. We built out an incubator, worked with large channel partners like IBM, and viewed the overall portfolio in a strategic manner, like a Holding Company. The time at Softbank with Heidi and our broader team set many seeds for my work today with Trusted Ventures.
Xperius was my first startup to launch. I was a co-founder, and ultimately CFO, for Richard Earnest, CEO. Richard had founded six companies, and was the first one to believe in me as a senior executive. He is a Vietnam veteran, who flew over 300 missions, and was COO for VM Software, an IPO company in the mid 1980s. At that time, Richard served on the board of RSA Security (until bought by EMC). I learned a ton from Richard. We sold that HR software / SaaS company and made money for investors, a nice outcome, and my first taste of being an entrepreneur and having the chance to add material value as an operator, thanks to Richard.
After Xperius, you joined Diamondhead Ventures. Tell us about that experience. How is it being an experienced venture guy at a young age?
One of the partners at Softbank (Scott Russell) joined Diamondhead. Scott used to be a CIO at major banks, and he and I worked closely at Softbank building out the Hotbank Incubator. I loved the idea of working with Scott again, and I utilized the time together to think about which market to go and be a founder / operator again. At Diamondhead, I met Raman Khanna, one of the firm’s co-founders. Raman used to be the CIO / CTO of Stanford University, and had worked there starting 1984. We become dear family friends. His wife Indu basically named my son (since my wife loved the name Indu picked) - Rohan.
After working at three venture firms, I have seen about 10,000 companies, 500 more seriously (in our portfolios), and about 20 very seriously. Various pattern recognitions form, and a bell curve has developed for me over the past 20 years, focusing on four areas: (1) CEO; (2) Market; (3) Product; and (4) Business Model. At Battery, I learned about systems (wireless, hardware), embedded software, and enterprise software, primarily in the US and Israel. At Softbank, I learned about Internet / Web services and software on a global level. At Diamondhead, I learned about fundamental technology, in particular security and runtime software, with work with University process and their IP spin out process.
You started dotFX in 2007. Tell us how you decided to focus on that and what that experience was like.
The dotFX experience was interesting. It was a company targeting solving the security problem in software itself - a problem many think is not solvable. My original CEO on that project was Dr. Taher Elgamal. Taher is currently CTO, Security at Salesforce.com. Previously, he was Chief Scientist at Netscape and was the key executive for the SSL standard. Previously, he was on the board of RSA Security and served as its first VP Engineering. Working with world-class security experts, cryptographers, and Java experts was a very unique experience, which altered my lens on how things really work in the world.
What does it mean to you to be honored as a lifetime member of Golden Key?
Every member who joins Golden Key becomes a lifetime member. This global community means quite a bit to me, and I hope I am able to help the community as much as it has helped me.
Talk about Trusted Ventures and then SoFi. How did you decide to do Trusted and how did that lead to SoFi?
Trusted Ventures took me a year to develop the thesis of the Impact 500. I see things in 3 Eras:
(1) Era 1 - most of time - the purpose of business was to help the community, not maximize shareholder profit. Especially, in areas like finance, education and healthcare services. For 250,000 years, people lived in small towns where travel costs where high so there was repeated game behavior that lead to an explicit social contact where social opportunity / cost was more valuable than profit.
(2) Era 2 - with the advent of the Industry Revolution, transportation / mobility costs lowered. Once everyone knows everyone else can move at low cost, system level trust breaks down. One output of that underpinning change is the purpose of business shifted to “maximizing shareholder value.” The current Fortune 500 is optimized around this teleological philosophy.
The great thing about Era 1 - business were focused on helping the community, unfortunately however, they were poor at scale. In Era 2 (present time) - business are great at scale, unfortunately are often agnostic in regards to helping the community at the core of its business model.
(3) Era 3 - Trusted Ventures is focused on develop an Era 3 in business where helping the community is how a company competes for competitive Fortune 500 cash flows.
SoFi is the first showcase. It is a community-based finance business targeting the $11 trillion dollar US Consumer Debt Market. SoFi has grown to over $500 million of student loans and has zero default. It has raised over $170 million dollars in equity, and in the most recent round Peter Theil invested.
As you reflect back on the years since you've started, what are some of the things you've learned that you wished you'd known when you were starting out?
Aileen Lee from Cowboy Ventures (formerly KPCB) wrote a blog called the Unicorn Club. She looked at all the startups in the US since 2003, and found (roughly) out of 50,000 companies, 50 will be worth $1 billion dollars of value or more. That is one ten of one percent (0.1%), i.e. the business equivalent of 145 IQ on the normal bell curve. In the past 20 years, I have spent quite a bit of time to understand the characteristics of that 0.1%. For those interested in massive scale, I recommend getting onto one of these rocket ship companies, network & learn.
Thinking back to when you were a student, were there things you wished you'd done differently to prepare for being an entrepreneur? And what did you do as a student that you are glad you did?
I took school very seriously at Duke and Stanford. At Duke, my lens viewed school as a 7 day / week endeavor with 16 hour days minimum. I went really deep in certain areas, like psychology, philosophy, English, and service work. Then, in business school, I focused on meeting everyone in the class, along with work. Honestly, I think every person is different. I would recommend honing in on your area of passion. I think of that as your nuclear level of passion, from which can spout your element of genius. I see time as most people’s bottleneck, however, once you isolate your area of passion, and communicate with others in their areas, magic can happen … quickly.
I strongly recommend Adam Grant’s “Give and Take” book. He is a Wharton professor who writes about reciprocity. Why are the best and worst people in business those who are “givers”, and what is the difference between the two. Fascinating book for those who are natural givers trying to help others by nature.
For students that are thinking of starting a company, but thinking about getting work experience first, how would you help them analyze that decision?
First - where do you want to live?
Second - what industries do you enjoy?
Third - are you extroverted or introverted?
Fourth - get a role where you add material value (sales or product development as two examples)
Fifth - if scale is of interest, join a “Unicorn”, one of the 0.1% - they are “very” different
Sixth - network with those in your vector of interest. View every meeting as the start to a 40-year relationship
Seventh - help others authentically as much as possible. Find out what “they” are interested in & add value.
There are many paths to actualizing your talents at work. These seven steps are the first ones that come to mind.
I view work like dating. For those who are goal oriented the purpose of dating is to find your spouse and build out your family culture. At work, find your CEO and culture match. Take it a seriously as you would in building out your family. Date, talk to your friends, etc. - until you find a CEO who understands you, respects you, helps you actualize your talents and pays you to value. Find your culture match in parallel. When both of those items are optimize in work and family, and you are in the physical location you enjoy, then the conditions for actualizing your inherent talents should be in a pretty solid petri dish.
Tell us what it’s like to live in the Bay Area / Silicon Valley. What’s the vibe like out there for young alum?
If you are serious about your career, there is a lot of opportunity. Focus, find your “work spouse / CEO” and culture match, and find your “Unicorn” business model / company, and you may be working very hard, yet it can be with passion since you are on the path to be actualized. If you are less intense about work, it seems a lot of people have fun with outdoor activities and things like Burning Man. Just depends on who you are and what you enjoy.