wkyi-blog

[wkyi-blog]

5 Reasons Why LATAM Tech is Growing Now

Original article on Linkedin:

https://www.linkedin.com/pulse/5-reasons-why-vcs-investing-now-growth-latam-tech-wilson-kyi-%E6%9C%B1%E4%BC%9F%E4%BF%8A/

Hola a todos! Having worked in Mexico for the past year, visited Brazil, Peru, Chile, Argentina, and worked with Mexicans, Colombians, and Brazilians, I’ve witnessed the tech growth in LATAM. Between research and firsthand experience on the ground, I believe there are 5 key forces driving the recent growth and years to come.

Demographics are fundamental to its growth. There are currently 658M people in LATAM, of which 454M (69%) have access to the internet, which has grown 2411% from 2000 to 2019, adopting technology much faster than before (Internet World Stats). With access to internet, learning to code could be done more quickly and remotely, without formal changes to the education system. This story has been told before, but why now? 

1. Increase in demand for “daily upgrades” for growing middle class

As a proxy for standard of living, GDP for LATAM has been on a run for the past 70 years. While recently it had hit a speed bump in the past 5 years, IMF projects that there will be more than 2x the GDP growth. With a higher standard of living, middle class Latin Americans will be able to make “daily upgrades,” which is not necessarily massive purchases (house and car), but actually affordable, premium consumables that are either at the margin whether to purchase, better quality, or more convenient. Examples are being able to spend more on apparel, convenient transportation, or order food delivery. 

Since the middle class is making these “daily upgrades,” and the middle class itself is made of those who are able to earn income through traditional or technology jobs. Below we see that Mexico’s age group is pyramid, where the massive base of about 50% is from the age of 0-30, and in the next decade, children will enter the workforce, many of whom will earn enough to become part of the growing middle class. So if the working class is growing, then we have a compounding effect of these “daily upgrades.”

2. Increase in supply to meet demand enabled by technology platforms

In order to meet the increase in demand, technology platforms have capitalized on these opportunities by providing a scalable way to make e-commerce (Mercado Libre $27B), ridesharing (Uber $51B, DiDi), and food delivery (Rappi) more accessible every individual through their mobile app. In order to deliver their services, they’ve built the appropriate supply chains, logistics, and payment infrastructure to support the scale. Since fraud due to cash payment is a serious issue for LATAM, these platforms have not only made services more convenient, but also safer, thus educating and instilling confidence in consumers. Below is Rappi’s exponential growth in the past two years that reflects an increase in consumer demand and supply, driven by venture capital.

3. Increase in existing regional and global venture capital

 As many of the above tech companies have reached a level of maturity where their talent have left to start businesses that will continue to further build infrastructure or services on top of existing ones, these founders begin to seek out venture capital to build scalable companies. Hence, existing VC’s like Monashees (Brazil) and Kaszek (Argentina) have been able to double down, while outside VC’s like GGV Capital (in Yellow), General Atlantic (in Clip), Sequoia (in Rappi), and DST Global (in NuBank) have been proactively entering LATAM. Even global accelerator’s have accepted more Latin American founders than before. Y-Combinator accepted Grin (S18), while MassChallenge, Techstars, and Startupbootcamp also made LATAM investments. 

Despite its recent controversies, Softbank allocated $5B to invest in LATAM led by Marcelo Claure to focus on fintech, e-commerce, healthcare, and mobility. This is effectively an announcement to founders that they should pursue these massively impactful areas, and indirectly to early and growth stage funds around the world that there are massive investable opportunities. Softbank immediately poured $1B into Rappi to scale across LATAM, while growing their share and services in existing markets, hoping it will be a hybrid of Alibaba and Meituan of the region.

4. Chinese companies have expanded aggressively into LATAM

LATAM has similar demographics and tech adoption as Southeast Asia, where Chinese tech companies have already found success (Grab, Gojek, Tokopedia), and have identified LATAM as the current growth region. In late 2017, DiDi bought 99app for $1B the largest tech acquisition to establish its presence in Brazil, the largest LATAM market. In late 2018, Tencent further invested $180M in Nubank, valuing it at $4B. Now, as the largest messaging and payments network, Tencent is able to guide Nubank in giving access to many of the unbanked. Traditionally, Tencent makes small bets to partner and grow its network, and sometimes acquires. With $27B in cash, acquisition is certainly an option for its payment network at the right price. Also in late 2018, Tencent’s other half Ant Financial (Alipay) committed $100M to Brazil-based online payments platform StoneCo, and Mexico-based OpenPay to connect local merchants with the growing Chinese population that prefer to use Alipay. This year, Tik Tok (parent ByteDance $75B) and other similar apps have also made key hires and expanded into Brazil and Mexico.

5. Key countries Brazil, Mexico, Colombia, and Chile are leading the way

Though LATAM has a population of 658M, investors have prioritized the largest markets - Brazil (210M) and Mexico (130M), where 76% of LATAM venture capital have been invested. Large rounds have already been invested in Brazil in mobility logistics (iFood, Loggi, CargoX), fintech (Creditas, Nubank) and in Mexico in fintech (Clip, Konfio, Credijusto, Bitso). However, healthcare has been an under-invested opportunity area, where Softbank’s thesis has not been fulfilled. In the next 3-5 years, there will be more founders outside of Brazil and Mexico capitalizing on their large market, like Cornershop founded in Chile and expanded to Mexico. 

Strategically located between Brazil and Mexico with relatively smaller 50M population, Colombia has already made a name for itself with Rappi, and will continue to do so in the coming years due to the wave of founders post-Rappi and its demographics. Israel has been known to create global companies due to its restrictively small population 8.7M; though Colombia is much larger and dense enough to test consumer marketplaces, its market is still too small to create unicorns on its own, so it’s forced to think more broadly for LATAM, hence Rappi expanding to Brazil and Mexico. As early employees are leaving Rappi with their international expansion experience, they’ll be equipped with the vision and ability to build teams and raise capital. 

Lastly, though Chile is only 18M population, it’s GDP per capita is 2.5x Colombia’s, meaning consumer products can be charged higher. Walking around Santiago feels like I’m back in Los Angeles with well-paved streets, highways, and office buildings. Also, there is the “Groupon mafia,” after Groupon acquired a bunch of copycats including Chile-based ClanDescuento, whose founders started Cornershop. Also, Chile is proud of its accelerator Start-Up Chile, who’s supported by Groupon’s Founder Andrew Mason. Finally, its government has given out high incentives for startups as much as $40k equity-free seed capital, 1 year visa, and other extra benefits to make it easier to do business. With these resources and talent, Chile has the potential to produce a few more Cornershop’s. 

Final thoughts

Many have said LATAM is a “hot market,” displaying many of the characteristics of Southeast Asia 2-3 years ago, and China 4-5 years ago, where super apps, payments, and logistics are already built at scale. The key challenge will be for entrepreneurs to create not only single country companies, but at least LATAM scale, and maybe even global scale. LATAM scale will always have localizing challenges of language between Brazil and Spanish-speaking countries and organizational leadership. But I’m optimistic, because at the end of the day, LATAM countries have more similarities than differences when it comes to lifestyle, family, music, and consumer spending. However, those similarities also include challenges like logistics infrastructure, cash payments, and corruption that are true opportunities but also speed bumps that can slow down the growth. With that said, LATAM tech will further establish itself on the map, as there will be more regional unicorns built in the next 5-7 years, attracting both global talent and capital.

Since my experience and especially language in LATAM has its limits, please let me know if you have any ideas or thoughts from inside or outside of LATAM. 

Gracias y Saludos,

Wilson

P.S. India tech is often an overlooked region for its growth in the next few years, while Africa tech is not too far off in the distance. 

[wkyi-blog]

Why I joined 滴滴 DiDi

Happy Holidays,节日快乐, Felices Fiestas! During the holidays, I’ve been asked why I joined 滴滴 DiDi with projects across China and Latin America. So in the spirit of reflection, here are some of my thoughts and hopefully it’ll inspire others who are interested in similar paths in 2019.

When I graduated from HBS, I had been incredibly lucky enough to have traveled to 36 countries. With every new country I visited, I felt like I inherited a piece of the culture. Though I’m proud to be a U.S. citizen, I actually felt more comfortable with the idea of being a global citizen. Because the U.S. has such great opportunities, my next job would naturally default in the States, and I didn’t think I was being intentional enough about location. So I tried a mental exercise of lifting the constraint of geography and asked myself a simple question:

“If I could work anywhere in the world, what would I do?” which broke down to three questions:

Where in the world has the fastest growth?

Where could I see myself, not just living, but learning the most from this ecosystem?

Where can I make the most complementary impact?

Where in the world has the fastest growth?

In the past decade, it was clear that technology was democratizing economic growth globally. Developing countries were growing at an accelerated pace with many unicorns being born in regions that had large populations, rising middle class, and sources of tech talent. Below were my top three regions.

China has the largest population with 1.4B people and Mandarin as a requirement to do business, which makes it challenging for anyone who isn’t native speaker. It is an undeniable juggernaut with Alibaba and Tencent preceding and often funding the next wave of unicorns - Toutiao ($75B acquired Musical.ly $1B), DiDi ($56B), Meituan Dianping (pre-IPO $30B), Pinduoduo (pre-IPO $15B).

Southeast Asia has 656M people across 11 countries. Unlike China, it has many languages with no single dominant language, so in many ways English would be manageable especially in Singapore as the hub. Currently, there are ridesharing rivals Grab ($11B) and Go-jek ($10B), and Tokopedia ($7B), Traveloka ($4B), many of which are funded by Chinese tech Alibaba and Tencent.

Latin America has 652M people but with a whole different level of energy filled with music, laughter, and lots of dancing, with Spanish being a dominant language across the region, with the exception of Portuguese in Brazil. U.S. companies like Amazon and Uber has made their foray into Mexico, but for the first time, Chinese-born tech like DiDi (acquired 99 in Brazil for $1B) has been expanding into Latin America due to its similarities in its growth in consumer tech, especially in mobility.

Personally, I’ve been fascinated by tech companies with both online and offline components that transform and improve lives across regions. Mobility, and specifically DiDi, was ideal, because it’s a unique time on earth where we’re combining the best of both eastern and western culture for a common cause of improving how people and things move.

Where could I see myself, not just living, but learning the most from the ecosystem?

DiDi has roots in China and a global attitude and mission with operations or investments in Latin America, Australia, Japan, Southeast Asia, India, EMEA, U.S., and others.

Language is not just a form of communication, but also an exchange that deepens relationships and experiences. As ethnically Chinese, being able to speak Mandarin and Cantonese is not just helpful in business but also personally rewarding with family. As an American, being able to communicate to some extent in Spanish is also incredibly helpful with many Spanish-speakers in the U.S. and Mexico as a neighbor.

Global collaboration and empathy are two skills that I believe will be more important in increasingly mobile and diverse companies. Every culture has its own reason for being successful or unique, and those from different backgrounds have to be patient enough to fully understand the subtleties, while giving the benefit of the doubt when things feel seemingly offensive. Though different cultures may seem different or even odd at first, being open-minded and empathetic is something I’m working on and aspiring to be.

Where can I make the most complementary impact?

Similar to most relationships, finding a role is a two-way street, in which both parties have to be able to show value. And the best ones, whether between founders or partners, tend to be complementary. Since I’ve mainly worked in the U.S. (born in LA, consulting in NY, tech in SF), my hope is to bring some of the best practices I’ve learned in Silicon Valley along with my relevant international network from HBS. My experience is arguably more incrementally impactful to a developing region with relatively less tech talent than in Silicon Valley, where the person sitting to me in an Uber has the same background but wearing a different hoodie. Also, in the U.S. I took the ability to speak English for granted, while outside of the U.S. between people with different languages, English often serves as the common language. So, being able to communicate and bridge cultures with English with a level of empathy can go a long way for international companies.

I do recognize that the fact I’m able to even consider lifting the geographic constraint is a luxury and of personal circumstance, while each person has their own priorities and obligations. For those who are interested in a similar path or even one that may feels untraditional, just know that the process of making this decision did take months and may be met with friction from close family and friends not with the intention to stop you, but because they care and they want you to make sure you’re making an informed decision. Counterintuitively, if you have developed conviction, you also have a responsibility to educate them, because friction is usually driven by lack of understanding.

But at the end of day, I’m not getting any younger and my risk appetite is probably at its highest. Whether it’s for short or long term, when I looked at the decision through Jeff Bezos’s regret-minimization lens, it felt right.

Warmest wishes to you and your family,

Wilson

Sunrise in Mexico City

DiDi Mooncakes during Mid-autumn festival

桔子 (Oranger), our mascot in Beijing HQ

[wkyi-blog]

3 Reasons Why I’m Long LA Tech ☀️

Goodbye summer, and hello still sunny weather! After graduating from HBS this past May, I decided to spend this summer being a tourist in my hometown and reconnecting with friends, places, and experiences in LA. I ended up learning about their passions, their industries, and their thoughts on the LAtest trends. I especially enjoyed wandering around their chill-tech office, which revealed a lot about their culture. After learning from 20 of the fastest growing tech companies across major industries, I’m long on LA tech because of the following key reasons:

Recent home run exits and influx of institutional and industry-specific capital to seed and grow the next tech generation

Uniquely diverse industries going through a creative renaissance (creative capital of the world as Mayor Garcetti officially established)

Universities producing large tech talent pools while favorable climate attracting and retaining talent

1. Recent home run exits and influx of institutional and industry-specific capital to seed and grow the next tech generation

If SF Bay Area is in its mid 50’s like a seasoned CEO, then LA is in its early energetic 30’s as a newly minted Director. SF Bay Area has seen massive exits, dating back to the 1960s when Intel was founded, 1970s for Apple and Oracle, then 1990’s for eBay, Yahoo, PayPal, and Google, then followed by the 2000’s Facebook, Twitter, Uber, and Tesla. On the other hand, LA has recently seen a few home runs from Snap, Dollar Shave Club, Beats by Dre, and Oculus VR. After employees vest at Snap and Google Venice, they’ll spin off to either found startups or become angel investors for other founders looking to build. This won’t happen overnight, but it is inevitable as families establish roots in the community.

There has been an influx of institutional capital from long-time VC’s and new industry-specific VC’s. Upfront Venture and Greycroft continue to raise massive $400M and $250M funds respectively, while newer funds like Fifth Wall Ventures (real estate tech), Bonfire Ventures (SoCal B2B), Embark Ventures (deep tech), and CAA Ventures (entertainment) provide more industry expertise. As both tech talent continues to increase and venture capital continues to follow in lockstep, there will be healthy incubation and support for startups in the growth stage in the coming decade.

2. LA is uniquely diverse in its industries going through an innovation renaissance

Some of the major industries in LA are media, entertainment, transportation and logistics, aerospace, e-commerce, real estate, and health & wellness.

As the original entertainment capital of the world, LA is the home of major offices of Disney, Netflix, and Creative Artist Agency (CAA). Media has no boundaries when it comes to expanding to other countries. With the massive population in China, there are a lot of opportunities to create content in LA and then scale internationally. And the reverse is true, as Chinese media giant ByteDance ($75B) and Spotify have just opened offices in West Hollywood and downtown LA, as they look to connecting with content creators and hiring talented engineers and business development teams. Also, Intel recently built a 10K square feet dome studio for volumetric VR/AR video productions, taking advantage of the creative content, talent, and real estate in LA.

Gaming is well positioned in LA, as top gaming developers Blizzard Activision and Riot Games (League of Legends, Tencent acquisition) are born and raised here. Gaming is growing massively and globally because of its scalable and democratic nature, in which anyone in the world can play or create new games with just an internet connection. With the rise of eSports, LA leads much of the innovation as the top developers have already experimented the past few years. They have taken a page out of NFL and NBA sports leagues to create their own like Overwatch League and building physical stadiums for live events drawing in 11M viewers. As a result, they are creating new job opportunities and pulling in talent from traditional sports leagues to enhance their business development.

Transportation gets a bad rap in LA, but that just shouts opportunity especially in such a large metro area with the second largest population in the U.S. Recently, Santa Monica approved some of the biggest players: Bird is based out of Venice Beach, and LimeBike is aggressively putting its stake in the ground, while Uber (via Jump) and Lyft are inevitably establishing themselves. Driving has been the main mode of transportation for most people, except in West LA most recently. After living in Venice Beach for a summer, I noticed the medium distance last mile could easily be solved with ridesharing, and the short distance last mile can be solved by scooters. Cars are not going away anytime soon, but we do see a major platform shift into multi-modal transportation that can involve public transportation, ride sharing, scooters, and then our feet. (Perhaps they’ll be running shoe-sharing on the streets...). The new modes of transport will lead to more frequent social interactions; this density will lead to more and faster information sharing, which is often cited as an interactive ecosystem for creativity and innovation.

Frontier mobility tech has quite literally launched few moonshot ideas in LA. During World War II and the advent of Cold War, LA became the nation’s hub for weapons research and aerospace, and it has had a residual effect on today’s massive bets in mobility. Now, it is the home of SpaceX, Richard Branson’s Hyperloop, and a fellow USC Trojan’s startup Relativity Space, building and launching 3D printed rockets in days. Also, Uber Elevate is partnering with NASA to launch their first pilot city in LA, because its highways can greatly benefit from air taxis. Every year, LA experiences forest fires, so drone startups like DroneBase and AirMap have been hatched out of necessity, capturing data from hundreds of feet above ground while optimizing for safety and cost. Many of these decades-long infrastructure bets require industry-specific talent and a vast amount of land to test products, both of which are ideal in LA.

Fashion, e-commerce, and CPG companies are able to competitively differentiate in LA thanks Hollywood and media. Some of the biggest consumer brands are right in LA, because fashion and beauty is a big part of its culture. For example, Jessica Alba founded The Honest Company and Gwyneth Paltrow founded Goop, both CPG companies have capitalized on their founder’s star power. From the investor side, Ashton Kutcher and Kobe Bryant both have their VC’s investing in consumer startups like Bird and BodyArmor (Gatorade competitor), respectively.

Health & Wellness has always been a big part LA culture due to the entertainment sector and “sun’s out guns out” weather. In fitness, SoulCycle, Rumble Boxing, and CorePower yoga studios have opened up locations from West Hollywood to downtown LA. In meditation, Headspace has been growing rapidly driven by a trend towards mindfulness. From a tech perspective, my section mate from HBS Amira is founding Struct Club, a technology platform for fitness instructors, transforming the way they design and teach classes because of the health and fitness industry and culture in LA.

Real estate is multi-faceted in LA ranging from beach-side resorts in Malibu to Beverly Hills and to large suburban inland neighborhoods. In fact, one of the largest real estate brokerage companies CBRE $16B along with others is headquartered in downtown LA. This sounds like a traditional industry and not tech-enabled, because it really hasn’t experienced much innovation until recently. For example, storage is a very antiquated industry dominated by Public Storage ($37B) but starting to be disrupted by LA-based Clutter, an on-demand storage startup capitalizing on the underutilized storage spaces due to LA sprawling nature. Though it will not change overnight due to the inertia of the industry, it has already started to shift and will accelerate when incumbents play catch-up.

3. Universities producing large tech talent pools while favorable climate attracting and retaining talent

LA Metro has 10M people making it the second largest city in the U.S., but it hasn’t really claimed itself as the second hottest tech scene. Sure, it has Silicon Beach, but I personally cringe when I try to boast about it. Part of the reason for lagging is timing. As we segment the total population we find that LA has great technical universities such as USC, UCLA, CalTech, UC Irvine, and Harvey Mudd producing almost 10% of the nation’s engineering graduates. But many of them end up being brain drained to SF and NY. My friends and I are prime examples of this. Lastly, we find that professional training is critical in producing experienced talent. Think of this as the Google, Facebook, Amazon, tech powerhouses that produce talent that learn from the best and end up leaving and starting their own companies. Now, LA has Snap, Google, and other tech-enabled industries training next generation of entrepreneurs not only in the internet space.

Weather is not just small talk when people talk about LA. There is a good reason why people live here. Spoiler alert - it’s because there are beaches, it’s always sunny, and the sun usually makes people happier. New York, Chicago, Boston can be freezing, while San Francisco frequently fools you because it looks sunny until the fog rolls over. Good weather matters.

There are LA specific challenges, but I remain optimistic

However, the future will be a bumpy ride up, because there is a reason for how long it’s taken for LA to establish itself as a contender for the tech throne. LA is notorious for its traffic, and I’ve personally experienced 3 hour round trip drives from east to west LA visiting companies. There are metros being built and mobility startups, but it’ll take years or decades to truly solve the commute problem. Homelessness continues to be a major issue with almost 60K homeless, only second to NYC, as I’ve witnessed many tents set up near tech companies in Venice Beach and downtown LA. This may continue to happen if affordable housing doesn’t meet demand while many homeless from colder states are moving to LA for a better weather. The city has been experimenting with creative ideas like subsidizing homeowners to build backhouses to provide more supply and lower cost of living. Whether this will solve the problem is less important in the short term, while LA’s private and public sector’s innovative attitude is more promising in the long term.

Despite all the challenges, as an LA native, I remain optimistic about what the future of LA tech community looks like. Having lived in NY, SF, Boston, I’ve noticed there are similar energy and innovation that have allowed tech to thrive in those areas, while differentiating LA with its massively diverse industries and, of course, its unparalleled weather.

What city are you long or short tech? Feel free to share your thoughts and if you’re working on an interesting startup let me know if I can help! kyimail@gmail.com, LinkedIn, FB Messenger, Instagram.

Wilson

P.S. Many thanks to all the old and new friends for indulging me and my musings at their workplace!

[wkyi-blog]

Top 3 Questions Answered about My Harvard MBA Experience

Disclaimer: This article reflects my views and does not represent those of HBS. Original post here.

It’s been almost three years since I applied to business schools, and I still painfully remember how much time and planning it took to gather GMAT/GRE, recommendations, essays just to have a shot at getting in. Believe me, I truly empathize what you are going through. The stars aligned for me and I’m grateful for my experience, and I’d like to pay it forward by providing some insights on intangible data that’s usually sanitized on most schools’ website. Though I haven’t looked up when first round deadlines are this year, I already know they're coming because I've received messages from friends applying this year, and here are answers to some of the most common questions I've been asked.

1. Why did you apply to business school and what did you get out of it?

When I graduated college, I thought about getting an MBA because it seemed like  the ideal next step towards furthering my business career, but I couldn’t explain in detail why. Before school, I met some of the greatest managers at Square who have shaped my career path. They were Harvard and Wharton MBA grads, and I noticed there was an aura about their leadership in how they treated people, solved problems with humble conviction, and had access to an influential network. It’s impossible to say that their MBA programs directly taught them those skills, but I was curious enough to start the application.

There are three clear values that I got out of business school. The first was gaining experience in venture capital. I came from the operating side, which meant building teams and products, but I always wondered what it meant to work on the “other side of the table” as an investor. Though that’s not impossible to do without an MBA, HBS did open up conversations to almost any firm I was interested in. However, sealing the deal was a different story, because VC’s are notorious for their slow but thoughtful hiring process. After many conversations, I was able to land my internship through one of the email newsletters from the venture capital club. Oftentimes, the biggest value from joining clubs was just getting access to an email of opportunities.

The second was having a sandbox to test out entrepreneurial activities. My co-founder Elton and I launched our podcast Fish Sauce at the end of my first semester of HBS, and some of the first people who “liked” our Facebook page were from my section. I challenged them if Fish Sauce hits 100 Likes by end of week, I’d take them out to Korean BBQ. Many of them also attended our launch party to support the mission. Also, the network gave us access to interview top founders and investors who were alumni. Essentially, having an environment of supportive and well-connected people accelerated our idea on both the supply (guest speakers) and demand (listeners) side.

The third and arguably the most incremental one is having a couch to crash in every major market, including places I was interested in working internationally. HBS did all the hard work in pulling my sectionmates from almost 40 countries from around the world from Poland, Japan, Brazil, to Nigeria. My section mates would plan “treks” to their home, where we can experience business, culture, and their lifestyle through their local lens. From a career perspective, it opened the possibility to work internationally by getting introductions to Chinese tech companies through China club WeChat groups that would otherwise be unknown to me.

2. What were your top learnings?

“In everyone's mind, there is a ‘Movie of Their Life’ playing. In this movie, every single person is playing the leading role. If you think they are envisioning themselves as your supporting cast, you are wrong.” – Toby Johnson

My first learning is captured by this quote. Initially I thought MBA’s were “cold,” but my experience proved quite opposite. My environment was warm and welcoming. In fact, our LEAD class focused a lot on the “soft stuff” and how to treat employees well, because at the end of the day we are all just human beings.

The second learning is always asking “what’s your edge?” particularly emphasized in my finance and public markets classes. I’m not here to debate whether markets are efficient, but I’d like to generalize that great opportunities will be quickly snatched up since most information is available to the public. And opportunities are probably too good to be true, unless you know something that others don’t know, in which case we call information asymmetry. Examples could be that you are a topic expert, you out-researched everyone else, or you have access to someone that others don’t. Though more of a financial term, I’ve come to apply this framework to many parts of my professional and personal life, because it teaches me to always wear a skeptical lens to avoid falling into opportunity traps. And when I’m able to fully communicate the “edge,” it makes sense to bet big and have outsized outcomes.

My third learning is that I now discount fancy titles and put a premium on odd paths. I used to put CEO’s of Fortune 500 and well-known investors on a pedestal, but that’s partly because I’ve romanticized certain qualities that may not be true, while not having insight into their flaws and personal life. By studying their actions with a critical eye, I try to avoid falling into the halo effect they tend to have. Also, frequently meeting star names like Bill Ackman, Marissa Mayer, and Steve Schwarzman has allowed me to desensitize the starstruck, while focusing on fundamentals of the human. On the other hand, I’ve learned to reward resumes without big brands but with a twist to them. Though some people didn’t go to top schools or jobs, they may have taken other paths based on circumstances, risk profile, or just contrarian thinking, and the “why?” may be the “edge” that differentiates the team and company from the competition.

3. What are your most memorable moments?

The first thought that comes to my mind is the “Flag Hanging Ceremony,” in which each section mate can share with the section why a country flag matters to them, and we hang each flag one by one until the classroom is decorated with the colors of the world. Like most students’ evenings, I was double booked that evening, and I almost missed what I consider one of the hallmark experiences at HBS. It’s challenging to get to know each of the 94 section mate’s first few decades of experiences, but this evening allowed us to peer into how one section mate’s Colombian father influenced her to be outdoorsy through beautiful hikes, while her Japanese mother showed her the wonderful foods like sushi and ramen.

My other first thought was when my mom and brother visited my operations class. Spoiler alert: we have section norms such as applauding after guest intros and when the student of the guest makes a comment. Also, it was my mom’s birthday, and my section gave them a roaring warm welcome by singing Happy Birthday followed by a section wave. And even when I made a very mediocre comment, my section including the professor knew exactly what to do next by clapping as if I was Baker Scholar (top 5%), though we all knew I clearly wasn’t. I will never forget this moment of proudness paired with confusion of my mom and brother.

The third memory is really a few memories blurred together, where many of my close friends celebrated birthdays, job offers, and breakups through Korean BBQ. You probably have guessed that I like the cuisine, but more than the food I love the environment, because you forget about time, while eating, sharing stories, and playing games. (Fun fact: Korean BBQ came up in my HBS interview when asked about favorite community building activities) Even with all the international travel we’ve had, some of the best memories were with good friends in a very typical setting in Boston. If you ask me where I’d like to have a reunion, you could probably guess it’d be right here.

3 Quick Application Tips

In case you’re looking for more tactical tips and less of my KBBQ stories, here are some quick tips. Since the application process is holistic, each tip  alone may not affect the outcome, but it is definitely worth considering:

Know your voice and value in the classroom - So much of the case study method relies upon industry insights provided by your section mates to allow for rich discussions. As much as you want to learn from your section mates from tech, finance, CPG, Oil & Gas, public sector, health services, etc., they want to learn from you. When you’re called on, know why 90 other students will listen attentively to you. Once that’s clearly communicated in the application, the school can understand how to best build section or cohort experience.

Show vulnerability, but not helplessness in the essay - A myth I initially held was that only flawless leaders are admitted, but no one is perfect, and schools don’t expect you to be either. It’s self-awareness of weaknesses and response to challenges that define one’s character. So, it’s okay to show vulnerability and even uncertainty, as long as it comes off reflective, thoughtful, and high potential.

Craft your story by the parts - Each part of the application from essays to recommendation letters should add up to the summary you’re conveying, so be intentional. For example, the scores can indicate quant skills, essay can evoke creativity, and recommendation letters can convey community building. Finally, take a step back to see if the values sound consistent through the application and most importantly it reflects you.

Strategy while balancing authenticity is not the just the name of this game, but also future business ones. In a way, this process helps test and hone the ability to reflect and sell yourself in the business world.

Let me know if any of this helped or have other questions you’d like me to write about. Though I’m currently in the middle of transitions, I will try my best to carve out some time, because it really does take a whole village to do this. Mine was more like a city of generous volunteers for whom I’m still and will be forever grateful.

Feel free to share your thoughts with me. wkyi@mba2018.hbs.edu, Linkedin, FB Messenger, Instagram.

Good luck and at the very least I hope you learned something about yourself and your village throughout the process!

Wilson Kyi

Section Room 007 decorated with all our flags from almost 40 countries after Flag Hanging Ceremony

[wkyi-blog]

My Leadership Principles

Leadership Principles (from my first semester of HBS cases)

Leadership success is defined by performance results, org structure/operations, and culture.

Be authentic and empathize, because when done correctly, trust is built, and the team will give each other the benefit of the doubt.

Focus on the team’s happiness, and it will take care of 80% of the challenges. The key to a happy team is to empower them to own something they’re proud of. (millennials)

Work and personal life separation is nearly impossible with the most demanding/people oriented roles, and it should be embraced and welcomed to cross sides

Bold stroke, long march is necessary, during turnaround or urgent situations, there needs to be a big change to signal, then a consistent follow-through implementation

Leadership is tested in places where it’s least expected, such as making ethical decisions in gray areas in accounting, finance, and operations; these are a test of character and values

Let me know if you agree or disagree, or have any others you’d add!

[wkyi-blog]

Reflections from my first month at HBS

I’m taking a break from reading cases to write about a few thoughts in my first month. I can’t help but to imagine that I’m in Baker Library, sitting on the same leather chair on which Jamie Dimon or Sheryl Sandberg may have sat when they were cramming cases. In the world of instant media of FB, IG, and SC, I’m hoping this slower form gives a more balanced view of what I’m actually thinking.

As I take my first step onto campus, I’m staring at tall grand rustic buildings etched with names that are probably world leaders such as Bloomberg and Spangler. Words that come to mind are power, leadership, politics, money, and global. First day I walk into my section classroom, I already see my namecard “Wilson Kyi” in font size 50 bold. Looking across the theater-like room, I see namecards I could barely pronounce such as “Gregorio Colaci” and “Maciej Stański.” It’s diverse in every sense; in addition to banking, consulting, private equity, CPG, my section mates worked in public sector, marines, healthcare from England, Poland, Brazil, Mexico, Japan, Korea, Vietnam, Nigeria, and the list goes on. It feels like a UN meeting, and every detail from class schedule to the section-mates is precisely planned.

As much as I’m in awe of the environment, part of me was concerned if I wasn’t able to feel comfortable living here and spending so much time with the people I just met. But within a few minutes chatting with a few section mates in passing, I knew that most of us were feeling the same shown through our excitement and eagerness. In fact, within the first few days I had more messenger apps than I’ve ever had in my life e.g. FB Messenger, Whatsapp, Wechat, Slack, and Groupme. Business school kids are the most social animals. Just in our first week, we went out 6 nights starting from our apartments/dorms to local bars in Harvard Square, and finally Kong, the end-up Chinese restaurant for the Scorpion Bowl. We were years out of undergrad, some ran regional departments at Coke or made decisions at the World Bank, but it felt like we didn’t age one bit (except for the next morning). Despite everyone’s diverse background, everyone seemed to enjoy the same things.. music, dancing, and late night grub. Suddenly, it felt more like home. My belief is that HBS is recreating genuine experiences, the same kind we had when we’re in high school. It’s the kind that takes time, interactions, and usually vulnerability to build these type of relationships.

Leadership. This is a topic we often talk about, but it’s a topic we always think about. It’s quite surprising, even odd, that it appears even in operations or accounting class. It’s subtle, and it takes the form of ethics or doing the right thing based on one’s moral compass. It’s learning how to value a new business model at Netflix or empowering the cleaning staff at the Japan Railway. And most of the time it’s just listening attentively before speaking even when you have a burning thought (especially in a 94-person classroom). We talk about our “feelings” more often than I previously thought great leaders would. Perhaps in our world today, understanding empathy and compassion is our generation's form of communication. As someone who’s fairly logical and data-driven, I find myself grappling with this idea, afraid of being too “soft,” or maybe it’s called authenticity. It’s a new feeling, and I’m still learning how to embrace it.

It seems as though I’ve received a shiny badge wearing our swag, but I’m actually the same person I was a month ago, and I haven’t done much besides excessively spending (or investing.. we rather call it). Said in another way, I’m standing on the shoulders of giants. As much I may complain about the busy schedule or lack of sleep, I’m excited to take the next step to learn more about myself and how I can contribute.

Here’s a question for you from our first field course that I’m still toying with. Though I may not have a crisp answer by the end of the two years, I hope to find what matters to me, while being an authentic person throughout this journey.

“Tell me, what is it you plan to do with your one wild and precious life?” - Mary Oliver’s poem, The Summer Day

My wonderful neighbors have been and will be putting up with me for all of first year.

Week schedule

Our section retreat at the home of Civil Rights leaders MLK, Malcolm X, and President Obama when they stayed at Martha’s Vineyard. #sectionE #classE

[wkyi-blog]

5 Learnings from The Twenty Minute VC - Semil Shah Interview

After mentioning my interest in starting a podcast and VC, my college classmate highly recommended The Twenty Minute VC. I was delighted to see today’s guest speaker is Semil Shah, who has been helping out with StrictlyVC as it’s original author has been out. So, I immediately turned it on as I cleaned my room.

This interview is short and sweet, and I’d recommend for those who are learning the basics of VC, as it outlines starting a fund, investing in early seed, and who’s who in the industry. What stuck out to me most was that even someone like Semil, who has worked closely with top VC’s, still faced challenges joining one. Perhaps it has to do with joining at a senior role. 

Do you have any unique ideas for building trust when breaking into VC?

1. The best way to prove to other VC’s that you know how to invest early stage startups is to invest in early stage startups

Semil has been a consultant for Sand Hill Road (think KPCB, DFJ, etc.) for a while, before he started his fund. He thought he could “easily” join a fund, but even for someone so seasoned, he realized people didn’t trust him until he actually did it.

 2. LP’s (Limited Partners) can come from anywhere and they want to know others also have skin in the game

Some of Semil’s LP’s are on Sandhill, and they were were in a “pay-it-forward” attitude to get him started, while others are his close family and friends, (some just Facebook friends). LP’s didn’t want to be more than 10% of the fund, as they want to see others’ skin in the game. 

3. In seed stage, it’s important to have a large network, while not being afraid to share deals with the network

Semil keeps in touch with 80 seeds investors, angels, larger VC, and executives in companies. If there’s room for seed investments, he intros to them, because it’s not a zero sum game like Series A, where firms can’t afford to miss deals due to more limited deals. 

4. Branding is critical, especially to the right people. It should be the result of actions, instead of being the action itself.

Semil’s blog and writing is a “appetizer” of who he is. Though he believes branding is important (shortcut for the brain), he didn’t start with branding; it was a result of his thoughts and substance over the years. And it’s more important that people in the VC world know about your substance vs. the broad population.

5. Most “founder friendly” VC’s are afraid to be too direct, as it risks losing deals.

Though Semil has a good intentions, he’s always going to be honest and direct, and sometimes the tough conversations are not a representation of how he feels about the team, but more so of what his experience indicates. Even at the risk of losing deals, it’s more important to deliver tough love over time.

[wkyi-blog]

Cracking Machine Learning for Non-Technical Humans

Disclaimer: I’m no expert in Machine Learning, but I’ve probably learned barely enough to share some findings after reaching into the black box. I’ve borrowed learnings from the famous Andrew Ng’s Coursera Stanford CS 229 course. Hopefully, since I can empathize with you, this post can provide a valuable, human angle.

Ever wondered what Machine Learning (ML) really is? Or even how Facebook suggests fairly accurate photo tags? My friends, co-workers, and I have, so I decided to take the above course to quickly understand the basics, so now I can explain to those who are just as ignorant as I was, able to only visualize a robot vacuuming your room (though not too far off..)

What is Machine Learning?

In the world of data science, ML is at the intersection between someone who codes and applies statistics; it’s a discipline that uses large data sets to help computers learn how to predict and make decisions without being explicitly programmed. The general process is:

Get a training set of data (> 10k) to choose the right model (making sense of the data by fitting a line) and features (weighted characteristics that drive an outcome)

Validate and further tweak the model, by using more data

Test it with a set of data to see how it actually performs

Quick examples

In the most layman example I could think of… If you (“the machine”) want to figure out how to live a long life vs. a short life, and by looking at thousands of real life examples, you learned (“model”) that in order to live a long life you have to be healthy, which entails eating vegetables and working out (“features”). So, by knowing whether you have those healthy habits, you can know with a level of certainty if you will live a short or long life.

Other actual applications include self-driving cars (Google / Uber), spam detection (GMail), facial recognition (Facebook), payment fraud detection (Square), and everything else around you that you may not notice

ML is categorized into two major categories:

Supervised = the data set is pre-labeled, meaning the “right answer” is provided as input, in the “training set.” In the case of cancer detection, you already have history of 10k patients who you already know whether they have cancer or not with certainty. The possible outcomes (malignant or benign) are already known.

Features = size, length, and location of tumor

Other example applications = email is spam or not, payment is a fraud or not, animal is cat or dog

Example Models = Linear Regression, Logistics regression, Decision Tree Analysis

Not Supervised = the data set is unlabeled, meaning “no answer” is provided as input in the “training set.” In a world where we haven’t figured out how many sizes of t-shirts (S, M, L) to create, unsupervised learning can figure out whether to have 3 or 20 sizes based on the clustering of the population’s physiological data

Features = width, height, thickness of body

Other Examples Applications = identifying market segments, observed earthquake epicenters

Example Models = Clustering, K-means

This is the most technical part of the post, and I hope I don’t lose you here... When finding the right model to apply to the data, you may use linear regression by minimizing the cost function J (below), which is the average of sum of squared errors. You don’t need to understand the formulae, but just know that the goal is find a line that best fits the data by minimizing how “off” it is from the data points. So, when you have a future problem with some X, you can accurately predict Y.

The takeaway for the below diagram is to understand that with a certain data set and purpose, certain methods are more effective (classification, regression, clustering, and dimensionality reduction).

Error Analysis

Lastly, error analysis will help you further tweak your model for your purpose. The below is a doctor’s challenge to optimize on precision or recall of accurately identifying a malignant cancer

Precision: What portion of classifications did we get right? E.g. of all patients where we predicted malignant, what fraction actually has cancer?

Precision = (true positives) / (true positives + false positives)

Recall: What portion of the “rare” cases where malignant did we catch? Catching too many is always better than too few. E.g. of all patients that actually has cancer, what fraction did we correctly predict as having cancer?

Recall = (true positives) / (true positives + false negatives)

Figuring out what you need to be right most of the time while sacrificing accuracy on a less important area, one can further tweak the ML model to match the real life challenge.

Below chart will help understand the Precision and Recall formulae mentioned above.

And the moment, you’ve been waiting for… how does Facebook suggest photo tags?

At a basic level, ML can identify text in a photo by going through every pixel with a scale frame and using the right model to categorize the frames, and similarly, it can identify faces or objects such as fruits or cars. Once it identifies the faces depending on the features, such as eyes, nose, mouth, etc. with different weights, it is able to make suggestions based on a training set (previously tagged photos). The below is a diagram of the process.

There’s no way to truly teach ML in 1,000 words, but the purpose is to reveal what it is, identify a few real life applications, and potentially pique your interest to learn more. So, now you kind of know ML. Since ML is so involved in our day to day tech lives, what other real life applications can you think of that Machine Learning is involved in or could be involved in?

Bloopers

If ML identified these beautiful faces...

When Google Hangouts was able to not only identify where my friends faces were, it placed these horrific props on it. And I was able to quickly trick it, by showing a photo of my NY roommates’ faces to confuse it… you should try!

[wkyi-blog]

Top 5 Tech Trends in 2015!

VC Funding was hot in 2014, and it’ll likely continue in 2015! Though the total # of financings fell 16% in 2014, total $ increased $20 billion to $59 billion. This was likely driven by:

Fewer seed / angel funding, so fewer # of deals

Larger of VC-backed companies waiting longer to go public than they have in the past, so the total $ of the deals continues to grow. (e.g. Uber raising $2.4 billion).

1. Enterprise Mobile Apps

Though naturally slower to be fully be adopted, enterprise mobile apps will see an increased focus from both startups and established tech companies. According to Emergence Capital’s Kevin Spain, 80% of the global “out in the field” workforce in industries including construction and healthcare is underserved by tech. Check out the corporate messaging app Slack and its crazy growth. As a result, the Apple + IBM partnership is capitalizing on the vast market opportunity, applying Apple’s mobile software innovation to IBM Global Business Services long existing relationships with Fortune 500 companies. For example, in Travel and Transportation, flight attendants can gather real-time delay data and quickly email a new boarding pass from an iPad for VIP passengers.

2. Mobile Payments - NFC and EMV

As expected, Apple Pay’s launch was big but it’s progress has been and will be a slow ramp up this year before it gains enough critical mass from both buyers and sellers, in which case NFC behavior and adoption will quickly spike. And POS solutions, such as Square understand the importance of accepting Apple Pay. Another trend, the U.S. is finally switching to the more secure chip cards (U.S. makes only 24% of credit card sales, but responsible for 50% of fraud globally). Square, PayPal, and others are quickly offering EMV solutions to ensure their sellers aren’t left behind. Lastly, for P2P payments, check out SnapCash!

3. Internet of Things 2.0

We all know about Salesforce CEO Marc Benioff’s obsession of his Philips Sonicare toothbrush’s sensor that transmits data to this dentist to measure and provide recommendations. And we also know that Google’s $3.2 billion acquisition of Nest is also betting on making everyday things like your home “digitally smart.” And if the same Nest customers don’t already own a Tesla, they’re probably interested in transforming their car with Zubie to collect vehicle diagnostics and driving insights. Can we make our fridge measure how healthy our food is by the smell, age, and color? Or our vacuum or our trash cans informing us about the bacteria and probability of getting sick?

4. Cyber Attacks and Security

According to Akamai Technologies, hacker attacks have jumped 75%, while hackers in China responsible for almost half. Target, Feedly, Evernote, and Sony represent only a small share of cyber attacks. With all the cyber attacks happening in real-time and everyone’s information more public, the hope is that there will be a sharper rise companies more focused on security and privacy.

  5. Uber for Everything (especially Food Delivery)

Our on-demand generation has already shifted our behavior, and now tech is catching up to fulfill every part of our needy lives, started with transportation (Uber, Lyft), and ramping up with food delivery. Since the POS is moving to the buyer side, apps like Grubhub Seamless, Caviar (Square), Munchery, Instacart, and others are racing to be the “Uber” of their vertical. Who would have thought a simple food delivery service would be disrupting a sticky, predictable routine worth $574 billion globally?

Lastly, for entrepreneurs who are looking for funding, the below graph provides a general sense of where VC capital may be trending. VCs may be looking for quicker returns, as they look into Software at the expense of longer terms investments such as healthcare and biotech. In any case, if you and the world feels so passionate about a problem, and you’re determined to find a solution, these trends are just another data point. 

What other game-changing trends do you see in 2015?

[wkyi-blog]

Hooked

5/5 - Creating addicting products via "Hooked" model. Answers to ... why is Facebook or "Breaking Bad" so addicting?

                                  1. Trigger: How does the loop initiate? 

External triggers -"Growth Hacking" (email, inApp notification, dashboard, icon badge). These triggers are created and coded to grab your attention.

Internal triggers - pain or emotion that sends users back to your product. (e.g. people who feel lonely or bored may check Facebook). These are user's intrinsic want and need to go back for more. The most addictive habits are powered by these motivations.

2. Action: what it the simplest action users can perform to get some kind of reward. (e.g. Facebook "Like")

B = M + A + T

Behavior = Motivation + Action + Trigger 

Behavior can only happen when there is sufficient motivation, ability to execute an action, and an internal or external trigger to initiate it. That's why the upper right corner will become a habit with this formula. 

3. Variable reward: How can variable reward bring back users? Rewards should never be predictable, encouraging users to repeat the cycle.

Tribe - We all try to fit in and seem normal. This could be social validation, perhaps drinking to fit in or coding because it seems cool. 

Hunt - We have a purpose or mission to get something done. Checking text messages every 30 sec. to see if she responded.  

Self - We seek personal gratification and some things make us feel accomplished, such as inbox zero, leveling up in game

4. Investment: user needs to invest a part of self to repeat loop.

Content - creating your personal collection of books  (books in your Kindle)

User-generated Data - inputting your profile information (LinkedIn accounts)

Followers - Building an audience who will give you attention (Facebook, Twitter)

Reputation - Creating an image you are proud of or strive to be (Quora, this post)

Learned Skill - Progressing and getting better at something cool (rock-climbing, coding, cooking, singing, dancing ... now you know what I like)

Next Steps:

Knowing how to gamify products, we can easily create good or evil addictions. The best products are "Facilitators" who materially improves the user's lives and also uses the product.

Take Facebook Eradicator - I use the product and I know it's decreased 80% of my time / web session; it is intended to positively save time for users. If I created this product, the matrix above will categorize me as a "Facilitator" because it materially improves people's lives by saving them 7-14 hours / wk, and I also use it, enabling me to empathize with the user experience. (Btw, you should definitely download it if you haven't already). 

So, what kind of product will you create?

​REFERENCE: Pinterest does it well for their "consumers" and "curators"