Welcome to Howl Leaders Lead where every week you get to listen in while I interview some of the very best leaders in the world. I break down the key learning so that by the end of the episode, you'll have something simple you can apply as you develop into a better leader. That's what this podcast is all about. Today's guest is my friend Jeff Yang, the founding partner and managing director of Red Point Ventures. He's a legendary venture capitalist who's backed companies like Stripe, Netflix , Sonos, and DraftKings, just to name a few. I got to say, Jeff really knows how to spot what ideas are going to catch on. In this conversation, we go into detail about what he looks for in a new idea and the big trends he's excited about. But Jeff doesn't just assess the ideas. He assesses the people behind him. He has to decide whether an entrepreneur has what it takes to turn that idea into a thriving company. He's become an expert at knowing exactly what trades great entrepreneurs have. He's gotten really good at assessing whether or not someone has them. That's a skill that every leader needs. Let's face it, we all have the potential to make a poor decision when we choose a person or we choose a partner. The consequences of that can be pretty darn painful. But Jeff has proved positive that amazing things happen when we get it right. If you want to know how to assess people, then you'll love this conversation with my good friend and soon to be yours, Jeff Yang. Jeff, you and I recently played in a golf tournament and you were paired with NBA coach of the world champion Golden State Warriors, Steve Kerr. How about relationship come about? I'd like to say it was because of us, but like all great relationships, it was because of our wives. Our wives were best friends in college and they brought us together and we started hanging out and our families started hanging out and our kids grew up together and he's been a very close friend for a very long time. You know, it was a real thrill for me to see you two together because I love seeing my how leaders lead guests hang out and you were out there with them at a great course, having a heck of a time. And one of the things, Jeff, as you well know that Steve Kerr talks about is the importance of bringing joy to whatever you do. And Jeff, you're one of the happiest, most joyful guys I know and you love what you do. Was there a seminal moment when you knew that you wanted to become an investor and focus on identifying up and coming companies? You know, it's funny, the advice I always give to younger people who are just starting their careers is, you know, don't lock into early. And I tell them about this, you know, where they're trying to pick a major and I tell them about this when they're getting out of school and I say, you know, survey the landscape and get an opportunity to see what's out there, be well-rounded and don't necessarily focus on being a investor early on, you know, getting some good operating experiences key. So then I look at my own career and that's exactly what I didn't do. In high school, I wanted to be in the venture capital business. You know, I grew up in New Jersey and my parents were both, you know, engineers and my mom actually started a software company in the 60s and 70s and she had worked at IBM and I was always fascinated by technology. I was always fascinated by computing. And then a family friend had been in venture capital and I had no idea what that was and he brought me to work one day and I looked at all the really cool things that he was working on and all these new companies that were coming up and early on I fix ated on wow, that's really a fun thing to do. I love technology. I love how things work. I love the idea of invention and marrying that with kind of building businesses I thought would be, you know, really cool. So I got fixated on it early, not really thinking that I would end up doing it. And when I finished college, you know, I went to go work at IBM. My mom had worked there and they were kind of the leader in computing and I went and learned the computer business. You know, Jeff, you talk about learning on somebody else's nickel. Was that the IBM experience for you? Yeah, very much. At the time, you know, IBM was one of the most respected companies. And if you wanted to be in computing, IBM was really the top dog. And so I learned a lot about computing, but I also learned a lot about sales manship and leadership because at the time IBM was really, really a really cool company. I learned about how, you know, attitudes of, I think, winning companies, you know, I spent a little bit of time at Goldman Sachs and they had the same attitude. And I thought, God, it's really cool to be around companies that really believe that they should win. Jeff, you've had the opportunity to work with so many different leaders and entrepreneurs over the years and you've identified a number of key characteristics that you look for to help you determine who you're going to partner up with. And one of the things that you talk about is the importance of finding partners who see patterns where others see chaos, which is interesting turn of a phrase. Tell us the story of how you put this thinking into action or someone else. You've seen someone else do that. The best companies are usually born when industries are rapidly changing. When consumers change the way they do things or businesses change the way they operate. And most people sit there and they go, "Geez, I can't understand this. This is crazy. This is chaos." And other people kind of put all the different patterns together and weave them . And so my analogy of that is someone walks along and they see a foot and they come to us and they go, "This is the best foot I've ever seen." And someone else says, "This is a trunk. This is the best trunk I've ever seen." And someone else comes and goes, "Let's look at this ear. This is the best ear in our scene." And somebody actually goes, "Wow, they're all describing an elephant." And if they put all the pieces together, I can build an elephant. And the best entrepreneurs have a clear vision of what that pattern is. And they look around and it's obvious to them, but everybody else in the world is like, "I don't know where the world is going." And the great entrepreneurs go, "I can clearly see where it's going." But it's not enough just to be able to see it, yet to be able to communicate it to others. You also say that entrepreneurs are not created. They're compelled. What do you mean by that? And can you give me a, for instance? The best entrepreneurs come with an idea and they go, "I have to do it because it's as clear as day. And if I don't do it, I don't know who's going to do it. And if someone else does it and it's not me, it's going to drive me crazy." Reed Hastings is a good example of Netflix. I mean, he started off with this vision of mail order delivery of DVDs. But when he saw where everything was going and he put all the patterns together about bandwidth available in people's homes and giving ultimate choice and being able to bring the world's content to everybody, I think he felt compelled to kind of change the vision of Netflix and move it to streaming. And he saw vision. He had the courage of his own convictions. He knew what was right. And I think he felt that if he didn't do it, somebody else was going to do it. And if someone else did it, he would drive him insane. That's interesting because in many respects, one of the things that I've seen working with a lot of entrepreneurs is that they happen to be paranoid. Yes. Okay. They can't stand the thought of somebody else doing something maybe before them or whatever. And usually paranoia is a negative trait, but I know you see it as a positive when it comes to running a business. Talk a little bit about that. I find that the best entrepreneurs and the converse is the worst entrepreneurs, the worst entrepreneurs have no respect for the competition. And they feel like I don't have to worry about it. And you want to have courage of your own convictions and you want to believe in what you're doing, but you have to have paranoid. Andy Grove had this great quote about only the paranoid survive, right? What you want is healthy paranoia. You want to respect the competition. You should never feel like the competition is stupid or they're lazy or they're just not going to do it. And I've seen great entrepreneurs get lapped because they just have no respect for the competition. And so it's that nice blend between worrying about what other people see and trying to understand what's in their head and having the paranoia that they may have a better idea. But as long as I stick to what I understand and you try to learn from your competition, and that's one of the biggest flaws in big companies. They're not paranoid enough. They dismiss the competition or they dismiss young upstarts. At the end of the day, that's what gets them in trouble. What about the optimist? Where does that play into your way of thinking? Every great entrepreneur is an optimist because everybody knows why things won 't work, but the optimist think about what is possible versus why things will fail. And my observation is that optimists change the world and pessimists criticize it. Now, I'm sure you'd agree. You can't get better as the leader without a plan to help you develop. It's why I send out a weekly leadership plan. This weekly plan gives you practical steps you can take to develop leadership skills that will help you grow. Each week focuses on a different leadership topic. It makes like culture, control, innovation, and handling conflict. Now, you might know a lot about these things, but how often are you taking time to actually get better at them? This free weekly leadership plan will help you do just that. It will improve your leadership skills and give you simple ways to navigate any leadership challenge you'll face. Sign up for the plan today at howleaderslead.com/plan. Jeff, you're one of the best people persons I've ever met in my life. So I know that people equations really important to you as well. How do you get to know the entrepreneurs that you invest in and what process do you go through to understand how they really think and operate? That's a really good question and I think for a lot of younger people who come in the business, they tend to underestimate the importance of really getting to know the person and what makes them tick. One of the things I always like to do is I hear the presentations and I hear the rationales and I meet the people. It's very important for me to see how the entrepreneur acts around the rest of his team. If they speak all the time and don't let their people get in a word, that tells you something. How the team interacts with each other. If I had my brothers, I would meet their kids and I'd go play some sport with them, whether it's basketball, tennis, golf or whatever. I just want to know how they act. I think if you meet their people's children, you get a pretty good idea of what their value system is, but that's usually not appropriate. I then very much like to go out to dinner with them. I try to let the entrepreneur control as much of it as I can. I see how they treat their waiters. I let them order the wine. As an example, if we're going out to dinner or having wine, I have been in these situations where entrepreneurs will pick the most expensive bottle on the list. Just because they're like, "Hey, the money guy is taking me out to dinner." That tells you something as well. He's not looking out for our collective interests, if you will. I then try to spend a bunch of time understanding how he or she grew up and what motivates them. I ask them, "Why is this important to you? What do you want out of your life?" If they come back and they say, "All they want is, they want to make a lot of money." My experience, money is not really a great motivator at the end of the day. Money is what comes with success. Success doesn't come with making a lot of money. Often people will make absolutely the wrong decisions if that's all they care about. I want people to care about the rest of their team. I want people to want to change the world. I want them to be driven on a mission. If they happen to be able to make a lot of money, that's great. That's not what in my experience drives the people that change the world. The last thing I try to understand is, are they driven by a desire to win or are they driven by real fear failure? I happen to personally believe that everybody likes to win, but the people who are the best and stay on top of the longest, the people can't stand the thought of losing. They're driven all the time because they're at the top and they've got to find a way to stay at the top because they can't stand the thought of losing. It's really important to me to go and understand who I'm getting involved with and why they're doing what they're doing. I also want to, at this point in my life particularly, I want to work with somebody who wants to have partners and who will listen. It'll be a really fun journey with a great person. That makes so much sense. I know you strongly believe that you should never compromise in people and running a business. Where did you develop this deep down conviction? Well, it's because I've gotten bitten a few times. I remember doing reference checks one time on an entrepreneur in a company that we ended up investing and I called everybody on their reference list. All the references came back really strong. I didn't go out to dinner with this person. I didn't go off the reference list. All the things that I do now. What ended up happening was the person was really shallow. It looked really good on paper. When it came to what was the values of this person that I want to be in a battlefield with this person, the answer was no. It ended up being a complete disaster. The other example I gave you about, I gave the entrepreneur the wine list. There was a company that we invested in on a closing dinner. I had him order the wine. He ordered the most expensive bottle of wine. He got blind drunk. I'm like, "This is really just not appropriate behavior." He ended up embezzling from the company. He didn't really embezzle, but he falsified the financial records with the CFO. Closest. Yeah. A lot of the advice I have is born from bad experiences in that regard. I think about these types of teams a little bit like you're going into a marriage. I always say this to the entrepreneur. "Hey, listen, we're going to be involved hopefully for five, 10 longer years together. You should do your due diligence like I'm doing the due diligence and you should go off my reference list and find other people that you know that might know me because I'm doing that for you. Don't get upset when someone calls you and says, "Hey, Jeff Yang's calling and just wanted to let you know because I'm trying to get the whole picture about you." That's the way you should feel about it too. I feel the same way about how we started Redpoint. We wanted a culture which was we win as a team and we're better together. Like I always said, a recon team. We're outwardly really aggressive and inwardly really supportive. I wanted to build a culture where I got your back, you've got my back and let's go and win together as a team. You know, Jeff, you've got a great philosophy and it's called the ABC philosophy for people. When I learned about this while I was doing my homework, I love it. You've got to share this with everybody. It's very rare that people hire up. People hire the same or hire down, right? The reason I really want A's in every position. That's the first part of ABC. That's the first part of ABC. When you're getting started, I always say, "Listen, don't just get someone that fills the job because you need someone to fill a job. Just make sure the person's an A. It doesn't matter where in the company, but make sure that the person's an A because if you get a group of A's together, other A's will want to come because A's hire A's, B's hire B's and C's and once you get C's in a company, they're like cockroaches. You can't get them out. When you get a reputation of being C's, you can't hire A's like B's can't hire A's, C's for sure can't hire A's. I always say in the beginning, you're setting the culture and you're setting the philosophy and you're also setting the threshold. It's a little bit like building a club. If you're going to build a club, you want to start with absolutely the bell cows that everybody wants to follow. Then once you do that, then all of a sudden, the best people will want to come in. If you start with B's and C's, you'll never be able to level up and the C's really are like cockroaches and destroy a company. I want to give you a potential funding scenario where you got to make an investment. I want to know who you'd pick to go with and invest in and why. You got person A is young but is super talented. They just don't have a lot of experience. Then you've got person B who's a veteran with a solid track record. Who do you typically go with and why? I almost always go for raw talent. I would much rather get someone who's younger, less experienced, who's maybe doing it for the first time, but is really driven and has all the skills and will listen and wants to learn. I would much rather invest in someone with a ton of upside that's not proven than investing in a proven B. The B, that's where they're going to top out. It's not like a B's suddenly going to turn into an A. A young A, that's a huge headroom, a solid B will always be a B. Every time I've got myself in trouble, it's thinking that this person's a B. Maybe all of a sudden, we put this person in a situation and it'll do work like an A. B's tend to think like B's and that's the best they're going to be. A's will always be, "Why can't I do better? Why can't we be better?" Those are also the type of people you love to work with, the people who are always pushing the thresholds of how good they can be. The B's, anybody who's satisfied with mediocrity is never going to achieve great things. One of your other learnings that I've heard you talk about is Staedtling Fat Kills. What drives this thinking? Where have you seen Fat Kill? Tell us a story about that. I'd say that generally, companies and younger companies do much better operating really lean because it forces hard decisions. It forces hard decisions about, "Do I have to hire someone? Do I really need to bring this person on or which direction should we go in?" It's really hard because when the money's in front of you, companies tend to raise it. I always discourage companies from raising too much money and they always say, "Well, we'll protect it. We'll protect it and we won't spend recklessly." I say that's not possible because it's not human nature. We talk about putting a ring fence around the cash like it's your prize pig, but people can't do it because once you have a lot of money in the bank account, people inside the company will always say, "Well, why do we have to fire that person or why can't we do both directions? Why do we have to work that hard? Isn't that what the money's for? And in fact, what you really want is you want lean hard decisions so that success is the only option. I've seen it a lot and pretty much every company, when companies raise a ton of capital, they lose that lean hunger and they stop making hard decisions and you don't get rid of the non-performers and every company has non-performance. It's just the nature of companies. When you get non-performers, it kind of demotivates the performers and it creates a lot more fat, a lot more process versus kind of lean effective decision making. So it happens pretty much in every company, but unfortunately I have this discussion every time. It's one of these learnings where I say, "This is what's going to end up happening." People say, "It won't happen here," and it ends up happening. In downturns, people have never cut enough. Everyone always says, "Well, I've cut all the fat. If I go any more, I cut muscle and I go, "Trust me, you're not even close to muscle." Then what happens is they cut later and they go, "Wow, you're right, we're better." It's just part of life, I guess. Yeah, it's what, that Harry Chapin song in life is just a circle that goes around and around. It sounds like a dark matter. We'll be back with the rest of my conversation with Jeff Yang in just a moment. But listen, you don't have to be an entrepreneur to love talking about new ideas. In fact, every leader needs to embrace the power of innovation, both at a high level and in their day-to-day work as a team. That's why I love talking to Evan Spiegel, the CEO of Snap and the guy who built SnapChat. In our episode of Howl Leaders Lead, he shared how we can all create a culture where big ideas develop and thrive. Kindness is so important for us because in our view, that's what helps people feel comfortable being creative. So unless you have a really supportive atmosphere, it can be hard to take risks . It can be hard to throw out a crazy idea. So what we really want to do is have a culture where people feel comfortable being themselves because that's what drives that innovation and creativity. If you want to learn the secrets of fostering innovation, then you want to listen to the whole conversation with Evan. Episode 3 here on Howl Leaders Lead. You've invested in a lot of startups, but you're actually an entrepreneur yourself now and you've founded two companies that I think are really cool. Tell us first about Rock the Bells where you teamed up with LL Cool J. Part of what I wanted to do is I had an urge to get involved really early on starting a company that I would be the founder of versus just advising founders. And so I was introduced to LL Cool J and he was talking about how hip-hop was more dominant theme in popular culture and that the origins of classic hip-hop were really not appreciated and not brought together in a single place. He said, "Imagine if you're able to do this in rock and roll and you create the global platform for rock and roll, imagine what that would be worth. Well, hip-hop is a much bigger theme, manifests itself not only in music, but film and television and books and fashion and art. And imagine if we could do that for all of hip-hop and we start with classic, it's a great thing to do with this company. This would be a huge company. And I walked away from the breakfast with him. I really didn't want to like it because you have a lot of meeting with talent and they don't really understand what it takes to build a great company. But I walked away going, "God, this guy has a really strong vision." And in many respects, he's like the perfect guy to do this. And so I went and called one of you and my mutual friends, Chris O'Donnell, who was LL Cool J's acting partner, I said, "Hey, COD, tell me about LL Cool J." And this guy works his butt off and he's all about hip-hop. It's kind of who he is. And so we spent a bunch of time together and I tried to see if he was really serious about it and I put all these gates up and all these meetings and whiteboarding. And then I asked him to write checks with me to kind of get the company started . He was there every step of the way and we've been having a great time and we're trying to build a global platform for hip-hop and its culture. And we have a live events business and we have a media business, including rock and bells radio and channel 43 on SiriusXM. We have a lines of clothing, both high-end collectibles as well as more volume basics that we distribute through a lot of retail partners and we're having a great time. Now Jeff, the other company I know you've founded is Performance Health Sciences, which has a real noble cost. Tell us about it. I got involved with the USG team in 2002 and then I got involved with the USOC about seven years ago and I was always impressed by how much human performance science and sports science would be impacting our athletes. And I really love the approach of unifying training, nutrition, sleep and recovery and all the parts of science to make the athletes perform better. But I thought, you know, I'm not an Olympian going for a gold medal or an NBA player going for a world championship. But I thought, God, why can't I use that approach to improve my life and the lives of my friends and the lives of my family to perform best as an individual and as a human being, not necessarily on the field of play, but just in life. And so what we did was, you know, I looked everywhere for it and I couldn't find it, finally, I decided to build it. My goal is to hire the best performance team in the world, a combination of human performance scientists, stocks, nutritionists, trainers, sleep experts, physical therapists and put them all together and manage the lives of people like you and me who just want to perform better and create a healthy and a long health span as opposed to lifespan. You know, lifespan is the number of years you're alive, health spans, number of years you're healthy and alive. And all of us want to be healthy, vibrant into the later parts of our life. And I firmly believe that if I don't die of stroke, heart disease, cancer, my odds are living until my mid to late 90s are really high. And I want the quality of my life to be really high. In the interim, I want to perform at my best. I want to be cognitively strong. I want to be physically strong and active. I want to be metabolically high energy. I want to be emotionally happy. And I want all four of those aspects of health to be strong right now. So I perform my best as well as in the future when, you know, I'm aging and I'm enjoying life. I don't want to just be alive. I don't want to be that person where you come to my memorial service and go, wow, 80 great years, the last five were tough. It's probably a good thing he's gone. I want you to come to my memorial service 105 and go, what a tragedy you got hit by a bus because he was just living life. It was full. So that's what we're trying to do. We're trying to do it as a right now as a high-end concierge service, but we're also trying to take all the learnings and put it into software so that we can begin to automate it so that bigger tech companies with consumer brands can deliver the service through software and through technology and that our goal in that aspect is to power those recommendations. So in many respects, you're almost going to become the Walmart health industry because, you know, Sam Waltons says, I'm going to make, you know, everyday Americans give them the opportunity to have everyday value and what they buy. And you're going to do that in health service. That's outstanding. You'll scale it. Well, I'm trying. You know, the observation and especially coming out of COVID is that everybody 's kind of all of a sudden realizing how important their health is. And health and wellness is a major theme kind of going on out in the world. And you can see it everywhere from, you know, wearables to, you know, different supplements to people kind of trying to eat healthier in a lot of the big cities all the way to even in alcohol beverages, they're marketing as low calorie, low ABV, you know, feel better about yourself and all that kind of stuff. And I think this is right in that trend. And interestingly, the science hasn't really been applied to the general population as much as it should be. There's a lot of innovation of science and marrying kind of technology and wear ables as well as kind of human physiology. You know, you've had so many successful investments and I'd like to get into your head on the process that you go into when you make an investment just by a couple of quick examples, cliff note examples. Tell us why you got behind my space. I got behind my space because I was really intrigued by the idea that people were kind of creating their own content in these profiles and they were communicating with each other and they're creating this community. And the thing was virally growing, well, you know, like crazy. And I looked at every other content company out there where professionals were creating content, you have to spend money to create content that other people would look at. Well, in my space, your whole community was creating content and they were engaging with each other and the engagements and the content was being created by the network . I thought it was an incredible business model. It was one of these things which would grow like a virus. You know, the virality of the social networks was just extraordinary. And when we invested in it, they came to us and they said, we want to be the MTV of the Internet. And I showed it to somebody at MTV, you know, a good friend of mine who was in charge of our product at MTV. And he came back and he said, man, I looked at it. It looks dirty. It's grungy. It looks like someone did it out of their garage and I thought he was going to hate it and he goes, it's perfect. This is exactly what people will want. And they had this thing where there was a guy named Tom Anderson, who was your first friend on MySpace. And it looked like it was Tom Anderson's thing that he just did in his garage when, in fact, there were, you know, a bunch of engineers and stuff around it. And I loved it. So generally, you know, you asked, what do I look at in an investment? There's the age-old question, which is more important, people or markets. And I would say half the people would probably say markets, half the people would probably say people. But it turns out they're kind of the same because my logic has always been if you have great people and allows you market, it doesn't really matter how well you execute. It's not going to be successful. It's like throwing a great party, not inviting anybody. But if you have a huge market, great people will find their way to the huge market. And so I tend to be more of a markets person. If something can be a really big market, it tends to be what I'm really interested in. But you need a few A's to kind of go after it. And an interesting story was, you know, we invested in MySpace and one of my partners that got been introduced to Facebook. And they said, hey, we should really talk to Facebook because this young guy, Mark Zuckerberg, who started this thing, Facebook, and I'm like, I don't even know if one's going to succeed. And I'm like, I'm not too right. You know, it turns out it turns out that probably would have been a good decision. Yeah. You know, Jeff, you've had so many successes, but I'm curious, what would be your darkest day in business and how'd you come back from it? Boy, I've had a lot of dark days, but I would say it was a period of time with the Internet bubble burst. That was a really, really hard time. And unfortunately, you could kind of see it coming. And I remember the first thing we started doing when valuations are really over -inflating in the 2000 period was we started pulling away from pure Internet models because evaluations were so high and it just felt like it wasn't sustainable. And we kind of retrenched into Internet infrastructure. And my logic was always, hey, if we're in the infrastructure, we'll be safe. And I remember having lunch with a mutual friend of ours, Dave Dorman, and he was running BT concert at the time and he was talking about building out the fourth backbone network. And he said, I'm not really sure why the world needs a fourth backbone network, but you know what? The public markets are giving me the capital to do it. I should build out the network, but I think there's a lot of extra capacity that's going to be out there. And I remember leaving that lunch going, oh my God, we've been talking ourselves into the fact that Internet infrastructure is a safe place to be. And it really isn't. We're about to get hit. And so what we did was we went and encouraged all of our companies to raise a lot of money because valuation is still really high and just started preparing for this winter that was coming. And when the bubble burst, it burst in a very big way and there was a buyer's strike for over two years. And unfortunately, companies just can't survive little to no revenue for over two years. And that was a really hard time because we had to do a lot of layoffs and company shutdowns. And I remember having the discussion about we should cut once, cut deep and consider the cash and making it come out the other end and companies just couldn't do it . They just weren't built for that way. So that period was really hard. How'd you come back from that, Jeff? I remember in the Q4 of '03, I was on the board of, I think, Ask Geeves at the time and I was involved with a bunch of other Internet companies. And I could kind of see the market turning. It was remarkable. It kind of felt like things were really starting to pick up. And we had been in a buyer's strike since 2001. And I remember saying at a partners meeting, like, I really think the markets coming back, we should lean in rather than look for reasons not to do things, let's look for reasons to do things. And the interesting thing was it was really hard to get people to change their behavior, right? Because you get into this culture of every time you stuck your head out the window, you know, in the prior couple of years, the window would slam on your neck and it'd be really painful. And then all of a sudden it got to a point where everybody started culturally, the norm was all the things that could go wrong. And I remember saying, okay, let's all lean in and start being positive on things. And it was almost impossible to get the culture to change, right? And so one of my learnings out of that was when things are riding high, it's really hard to get people to stop riding checks. And when things are really at their deepest, darkest times, when things are really starting to look up, it's really hard to get people to lean forward and ride checks. And so I look at kind of where we are right now and it sure feels like the world is changing. And I think for a lot of firms, it's going to be really hard to develop a culture of people because they've brought in these young people who all they do is source and ride checks and they've built the muscle of how to ride checks. And right now the thing to do is not to ride checks and to kind of rationalize your portfolio. And I think it's going to be a difficult time for a lot of firms. You know, John Weinberg used to be on our board and he says, trees don't grow to the sky. And right now we're seeing all these tech stocks and growth companies that are really having very challenging time raising capital. When do you see us coming out of this period, Jeff? Well, you know, I think the good news, David, is that the fundamentals are still really great. You know, when I look at kind of the fundamentals of how the world is changing through the use of technology, both consumer and enterprise, I still think it's one of the greatest growth sectors for at least another decade, right? And so I think we're still in the early innings of it. You know, I think we're getting evaluation reset, for example, enterprise SaaS companies being valued at 100 times, you know, forward revenue. That was great, but that really isn't sustainable a little long term. But I do think it's reasonable if you look back on historical valuations being valued at one times your growth rate, you know, from a PE standpoint, so a peg ratio PE to growth of one, I think it is still really possible. And that would cause evaluation reset, which are still really attractive and still highly valued and still we're going to build great companies. But I think people need to reset what success is from a valuation standpoint. But that should be okay. I think the companies will be fine. There have been too many companies that have been started and will have a we eding out period. I think it's not going to be anything near like the internet bubble where the vast majority of companies went out of business and a few came out of it really strong. I think, you know, it wouldn't be unusual if half the companies that were started would go out of business, but that's still a much higher percentage than we did coming out of the internet bubble and it's probably healthy over the long term. It's like a forest fire, but I love where our industry, the tailwinds that the industry has for the next decade and I'm still very positive about it. You know, Jeff, you spend a lot of time in China. What's your observation on what it takes to lead in China versus the U.S.? When I first started working on investments in China, I will say that culturally, I think the Chinese are some of the best entrepreneurs. I think it's in their blood. You know, commerce and competition, it's just incredible. A Chinese entrepreneurial team will outwork pretty much any other team in the world. I mean, you've got Chinese entrepreneurial teams, Israeli entrepreneurial teams and then we've lost a little bit of that in Silicon Valley, but you know, I would put those three cultures as people who are really clever, determined and very capable with a lot of skills. And so, you know, originally when I went over there, it was a lot of state- owned enterprises going private and then all of a sudden the young entrepreneurs kind of started showing up and then we had version two and version three, almost in one generation, three generations of entrepreneurs in China. It was a little bit easier because they had a big partner in the government, right? And the government had very clear strategic 10-year goals about what the strategic technologies are and they still put that out there and they support the hell out of the companies that are in that space. So the entrepreneurs there work really hard, they're very capital efficient and they're extremely driven. And it's hard to think that over the long term, a lot of those companies won't be, you know, the US is toughest competitors. You know, Jeff, this has been a great time for me. I want to have some more fun with a lightning round of questions. Now, are you ready for this? Okay. Okay, here we go. Three words others would use to describe you. I hope they say curious. I hope they say empathetic and I'm pretty sure they'd say grateful. If you could be one person for a day beside yourself, who would it be and why? Boy, it'd be really fun to be Steph Curry. I've never seen anybody with that much talent, with that much confidence and that much humility all wrapped in one. It's an amazing thing to see. What's your biggest pet peeve? People who are unreliable. How'd you come up with the phrase, no one wants to catch a falling knife? I must have heard it from somebody, but it usually relates to the fact that the people who go out at the earliest phases of a downturn end up getting their nose punched. And you can wait till it's marked in terms. What's your lowest round of golf and where? I think I had a 73 at a golf course that I don't even remember the name of it. It was so easy. It doesn't matter. How many holes and ones and which is the one you're most proud of? I'm assuming you had more than one. I've had seven. Seven? Yes. I'm very lucky. My first was in Japan and it was a pretty short hole and I could see it go in. In Japan, many of the caddies are women and they don't speak English and my c addy was jumping up a down screaming, "Hold on one! Hold on one! Hold on one!" I thought that was great. That's great. And Jeff, this isn't a lightning round question, but I understand your picture. Well, I remember it was mistakenly shown on national TV as being Andrew Yang, presidential candidate in 2020. Tell us about it and how you handle it. Well, I was in a partners meeting and all of a sudden my phone started vibr ating and just going crazy and people were reacting to the fact that CNBC and putting up the latest fundraising for Democratic presidential candidates had my picture under Andrew Yang's name. And Twitter started going crazy and I remember in the meeting, I was just joking around and I took the picture and I put it up and I said, "This is Jeff Yang and I am not running for president." And all of a sudden, the next thing you know, the thing starts going viral and in the next couple hours there were like 60,000 or 100,000 reposts and then I'd start getting emails and calls from reporters wanting me to comment. And I'm like, "There's no comment." I mean, if an intern made a mistake on the picture, it's no big deal. It was kind of a joke. And I'm not trying to make any political statement by saying I'm not running for president because I'm not running for president. Anyway. And I thought it died down and then Stephen Colbert had Andrew Yang on his show and he put my picture up and they started talking about me. And I'm on the West Coast and it's a Monday night and all of a sudden my phone starts going crazy again from people on the East Coast saying, "You're on Colbert." And I'm like, "What is going on?" That is funny. Quickly, a couple more questions here. Give us three to four quick bits of advice you'd give aspiring entrepreneurs. Okay, the first is nobody needs to start a company. A lot of people right now feel like, "Oh, I've got to start my company," or they think it's really cool to start a company. The best entrepreneurs have an idea and they're compelled to start it because they're like, "If I don't do it, nobody else will." So the first is get an idea that you're really compelled to do it. If you really are compelled to do it, just go do it. The second is find some really, really smart people to partner with because they'll make you better. A lot of people focus on, "Well, I don't want to split the pie with whatever." That's absolutely the wrong way to think about it. You get the best people and you do it together. And the third is do all your homework, but the end of the day believe in yourself. What that means is before you actually take the dive to start the company and raise the money and ask people to leave their jobs, do all the homework you can do to believe whether or not you should do it, and then go do it. There's that period of time where you have to will the company into existence because until you do, everyone tells you it won't work. And then once it becomes obvious, everybody turns to and goes, "I knew it. I knew this was a great idea." And the fact is, if you knew it was a great idea, then why didn't you do it? And you've got to just will it into existence. And you keep telling the story and over and over again. I can't tell you how many times I told the story about performance health sciences or rock the bells. I mean, thousands of times. But I tell the story and I exude my passion. People come join. And then all of a sudden the thing starts breathing and it develops a life of its own and gets some momentum. And now people go, "Wow, yeah, that's pretty obvious." I'm like, "Well, it wasn't obvious until it got willed." And so this willing into existence, you've got to be prepared to do it because if you have any doubt at the end of the day, once you start it, you can't quit midway. You can't quit while the airplane is running down the runway trying to get lift off. Jeff, I know that it's not all about work for you. And we actually met on a golf course and you were on the USGA board and you served as a rules official. What was the most challenging or famous ruling that you ever had to make? When you're a rules official, you don't want to have any rulings of note. You want to basically disappear into the abyss. But I remember one time I was at Augusta and Justin Rose was in the final group on Friday and he was right up there on the leaderboard and he wants a very simple ruling on taking relief from a sprinkle head. And his cat, he waved me over and I can see the cameras and I'm like, "I don't want to come." And he's like, "You got to jump." So I go out and he describes what he's trying to do and why he's worried about the sprinkle head and I'm thinking this guy's not going to break his wrist while I'm there and I'm going to end up on Sports Center being the guy who broke his wrist and he takes a drop and his consequence will drop and he hits it tight and makes the putt and I think he's in the final group on Sunday. And all my friends are saying, "Oh my God, you gave him the relief that he's going to win the tournament over." And I'm like, "No, I didn't. I gave him four inches of relief so I wouldn't break his wrist." But luckily I've had no rulings of consequence and I want to keep it that way. Jeff, you're a master at identifying patterns and trends. How do you go about it and what do you think will emerge in the next five years ? I mean, that's what we all want to know now. I mean, we're going to get behind your idea in a hurry. I really obviously believe in this health and wellness and I believe that technology has a real role in health and medicine, not only with records, not only with delivery of medical, but also kind of preventative stuff for general health and wellness and all the wearables that not only monitor your progress, monitor things that kind of are going wrong. I think we'll have blood monitors in the next few years that will be able to tell you ahead of time before you get in a problem, not just after you have a problem, that type of thing. I really believe in the finance industry and personal finance and industrial finance is going to undergo a complete revolution. And that's a combination of kind of using technology as well as blockchain that will disintermediate and make businesses more efficient and make information more secure and make transactions kind of easier to do. Obviously, everything on the enterprise of what's happening with cloud computing, the use of data and data analytics and artificial intelligence is going to really change consumer experiences as well as business efficiency. I'm not worried that it's going to put a lot of people out of business because I think people are really clever and there's a lot of ingenuity out there and people are going to be able to use it as a tool to make life better for others. So I think there's a lot of potential out there. Good stuff. And I'm going to wrap this up in a totally different direction here. Tell us about your family and this holiday card you write. It's amazing. I mean, a lot of people write holiday cards, but I have to tell you yours is the best I've ever read. What goes into this? How do you do this? You're very kind. I started writing our holiday letter because I did it for me and I did it really as a record of kind of what's happened in the prior year. And I try to make it kind of humorous, but everything in there is completely accurate. And I know it's accurate when I show it to my kids and I don't let my kids edit it, but I've always said, if you want to write a rebuttal, you can write a rebuttal . And I actually just sit down in one sitting, I just write the whole thing and I try to summarize the year and I make notes throughout the year of kind of funny things that have happened. And I know it's on the mark when one kid says, that's so unfair. And the other two kids go, are you kidding? You do that all the time, right? I do a lot of taking a logical thing and taking it to the extreme. I remember when my youngest son was first born, he was a really big kid. And I took his first 28 days of life. And what I did is I straight line extrapolated how big he would be and how much he would weigh when he was 13. And I came to the conclusion that he would be as tall as the Empire State Building and have the weight of 13 Nimitz class characters. So that's my goal. My goal is to have a lot of fun with it, but more than anything, it's my goal is kind of chronicle our family's life in the past year. And at some point, I'm going to put them all together and put them up on a board, kind of a 30 or 40 year history of our family. Well, I look forward to getting to that you have a wonderful family for sure. Thank you. Thank you so much for taking the time to be with me today. I really appreciate it. It's been fun catching up with you. Thanks, David. You're the best. Well, let me tell you something. Jeff isn't just your ordinary leader. He just gave us a cheat sheet for a successful business from the idea to the team to the kind of leader who can pull it all together. And it all starts with getting the right people on board. Great people don't just contribute great ideas and do great work. They also hire more great people. It's funny how that happens. So it's pretty clear to see if you want to be a great leader, you've got to get really good at assessing how good people really are. But too many leaders don't give that process the time or attention it really deserves. Let's make sure that you're not one of them. This week, ask yourself, does your current hiring and interview process allow you to assess all the key qualities you really need from hiring your team members? Do you really get to know who you're hiring? Do you really dig deep into how they think and what makes them tick? Brainstorm a few ways you can get a fuller sense of how your candidates respond outside of the traditional job interview situation. For Jeff, a simple meal together showed him a whole new dimension of someone's personality and behavior. And it was the deciding factor in whether he ultimately made the decision to invest in that person's company. It's so, so important to get your hiring right. Take time this week to improve your process. And I know that you'll get more and more A-level talent knocking on your door. So do you want to know how leaders lead? How we learn today is the great leaders know how to assess people. Coming up next on how leaders lead is get this legendary Hall of Fame quarterback and now incredible businessman Peyton Manning. I couldn't out throw anybody. I certainly couldn't outrun anybody. If you ever watched me play, I had a coach tell me once that I couldn't run out of sight in a week. That was a nice thing to say. But I thought I could at least out prepare them and I've tried to kind of take that same approach, you know, in this second chapter, working, trying to learn, trying to ask questions, but trying to also have an identity and figure out what my role rose. So be sure to come back again next week to hear our entire conversation. Thanks again for tuning in to another episode of Hall of Leaders Lead where every Thursday you get to listen in while I interview some of the very best leaders in the world. I may get a point to give you something simple on each episode that you can apply to your business so that you will become the best leader you can be. [BLANK_AUDIO] [ Silence ]