Conviction Beats Consensus: The Venture Mindset

Christian Soschner00:04:08

Yeah, that's really a great area for you generally to live. I mean, you are surrounded by the world's best VCs and entrepreneurs.

Alex Dang00:04:17

That's right. And I do think that I would definitely place entrepreneurs first because that's their talent, which is building the whole innovation culture. VCs are a critical element of this ecosystem because they find and fund. And nowadays, all these big VC-backed corporations, which once were funded by VCs, are now part of this ecosystem. We can mention similar names that we've just mentioned, like Nvidia, Microsoft, yeah, Amazon, Google, they're now part of this ecosystem.

Christian Soschner00:04:50

Yeah, that's good. We are still at the beginning of 2025, and it's the prediction time. And I'm curious to hear what's on top of your mind in this year.

Alex Dang00:05:03

Look, I think some topics will be very similar to your other guests, I would assume. I have an applied math and economics degree. I spent some time in computer vision as early as in 2003 and then was part of AWS AI team in 2018. So AI is certainly something that drew my attention very early on, and I felt that this will have an impact. Nowadays it's pretty much a common sense that AI will change the world. The question is how it will change the world, at what pace, which industries. I'm now very excited about what's happening with the ChatGPT and Gen AI, and I would call them entertainment applications, but at the same time, I think the most transformational impact will be happening in more traditional industries like agriculture, manufacturing energy. I think that's where the impact of AI and Gen AI will be transformational. So I'm constantly thinking of different use cases and what will be the impact that this new technology wave will bring with it. And I do think that's a wave. It's someone who is calling from Vienna. I think you're very familiar with Schumpeter's innovation waves, and that's definitely seems like a truly big innovation wave that will change the world. And the world is, I think, is a critical point. I also travel a lot. I've visited many countries in the past, thanks to the book as well as to my work. And I see that there is some expectation that it's not going to be just Silicon Valley. People do believe that Silicon Valley found some kind of a formula. And there is one but it feels like, and I think we will see more silicon valleys in the next, maybe not next year, but in the next decade and certainly in the next generation. So we will see, I'm pretty sure hubs in Berlin or Vienna, in Abu Dhabi or Dubai, in Riyadh or Beijing, actually, we'll really see that. It will just have more power and more impact, and therefore, we'll have to think about Silicon Valleys or hubs, innovation hubs in the world, with each hub potential representing a very specific area. It could be semiconductors in Taiwan. I've just talked to a very big RD and I do believe that Taiwan may become the semiconductor innovation hub. And many others. So it's another question to many leaders would be what their hub is going to be about. What is going to be the core focus? That's probably the second important topic. The third one is that I do feel that many former VC-backed companies will play a bigger role. They have so much, they have such an access to capital and they are profitable nowadays. And therefore, they have this capital to allocate and to dedicate to innovation. So, to some extent, the role of VC used to be to invest in emerging new ideas. I think that many corporations especially technology corporations, will play that role as well. So they will not compete, I would rather say they will complement VC investments. These are three big topics which are keeping me busy. AI what's going to be what's gonna be the next Silicon Valley and what's gonna be the role of corporations in the future.

Christian Soschner00:08:35

What's your guess? What will be the next Silicon Valley? I mean, the size of this Silicon Valley, what's what I think we'll have many.

Alex Dang00:08:41

I think we'll have many because nowadays the world is so complex and way more developed. Therefore you will see these spots of innovative ideas anywhere in the world. So as I'm visiting Middle East, every single visit inspires me because I can see so many new ideas from Kuwait and again, or from Dubai or from Riyadh. As these companies and startups are coming here to Silicon Valley to learn. They're coming back and now they're building their companies. The same thing happens with Europe. I think it's just more about what kind of a niche each of these players will play in. And these niches are numerous. Now we're all thinking about AI, but what about biotech and longevity? What could be more valuable than our health and lifespan? I think we will spend more time, effort, money on our health. And I spent some time as a co-founder, the CEO of a health tech company, Cancer Compass. And you could see the advancement in cancer treatment in the past 20, 30 years has been tremendous. And now I help another startup in Alzheimer's disease. I help a company in AI drug discovery. We will see a tremendous wave of new ideas. Hopefully, they some of them will be funded. And hopefully, and I'm kind of pretty sure that some of them will become very impactful startups and ideas.

Christian Soschner00:10:13

That's good to hear. The majority of my audience is from the biotech and pharma field. So they will love that you also have some startups in Silicon Valley and potentially they can approach you when they want to access the ecosystem and have now another person, another qualified person who can help them. Totally.

Alex Dang00:10:30

Healthcare is such a complex space that the we will see innovation waves across the board from healthcare and hospital networks to clinics to drug discovery to life sciences to how to make sure that we are healthy in terms of mental health. So there are so many aspects of health and longevity that there will be a lot to do. And look, I mean, we're all familiar that the US is to some extent is leading the way in terms of the spend on healthcare, but I'm not sure that many healthcare many executives here in the US would be proud of stating that because it's also an excessively expensive care and treatment. So it's gonna be, and it gives it huge potential to improve the efficiency of the system. So we will see a lot. That's what I'm sure about.

Christian Soschner00:11:23

That's true. The healthcare industry meets this week a little bit north from your place in San Francisco. It's the JP Morgan Health Innovation Week. Before we dive deeper into this conversation for the listeners, what are the three core messages that you would like to bring across in this episode?

Alex Dang00:11:44

Three core messages. So, first of all, Christian, thank you so much for even giving me a chance to share these messages with your audience. Look, I think there are three different audiences here. So, for startups, I would say if you pursue your idea and you need venture capital, try to understand how they think. That's of a critical importance to learn and know what is the mechanics behind the scenes, what is important, what is not. We've written our book The Venture Mindset. I'm not sure whether you had one. I have one right in front of me. I will show it to your audience, though. This is the US version. If someone speaks Mandarin, this is the Mandarin version that we now have. There are so many different versions in Korean. There will be one in Russian, there will be a hopefully one day one in German as well. So my piece of advice at least read the book, but ideally learn about the space so that you will learn how the decision is made because this will increase your chances to raise capital and be fit for the industry. For corporate leaders I would actually recommend follow VCs. My learning from my research and from talking, working with the VC industry is that they know they predict the trends. Many of their bets they take some time to materialize into big businesses, but they're so often are great pickers of big ideas. So if you want to know the future, probably look at where VCs invest their money now. 80-90% of these ideas will be a nonsense, they will disappear, they will never materialize into anything meaningful, but 10 to 20% will be these big transformational companies. So if you want to predict the future, I think that would be the best way to see the trend. For everyone else, like for general audience, for decision makers, I think the level of uncertainty today is so high that I would just recommend to at least blend in a different mindset and a different toolkit, in addition to what we call a traditional toolkit. So the traditional set of rules, how you plan, how you make decisions. Venture capitalists somehow, because that's what they do for the living, they live in this kind of an environment where risks are high and they had to come up with some set of rules. We outline these rules in the book. Hopefully, we'll be able to cover a few. But these this is a toolkit that you may just apply in your day-to-day decision making, especially when the risks are high, when you do not know what will happen in the future, when you do not know which technology will take place, when you do not know whether that would resonate with a user or not, especially in the healthcare industry, where you never know whether that clinical trial will be successful or not. And the biotech industry was built by VCs to some extent. Therefore, just borrow some rules from them, and that may help you make better decisions, not just in business, but in your everyday decision-making as well.

Christian Soschner00:15:02

And I can proudly say as an Austrian that Eugene Kleiner Perkins, they invested in Genentech, and Kleiner Perkins was founded by Eugene Kleiner, who has roots here in Vienna. So it's also a great place to be. Alex, thank you very much for writing this book. It's one of the best books on venture investing, and especially, I mean, your title The Venture Mindset is just genius. I wish I had this book in 2006 when I got in touch the first time with venture capital. It was with a Novartis spin-out led by Rodger Novak, who later founded CRISPR Therapeutics with Emmanuelle Charpentier. And I was responsible for finances. And the first time I looked at the balance sheet of the company, I was just blown away. I thought this company is just burning capital. Why do they invest in this company? Actually, we should rather think about declaring bankruptcy and shutting this company down instead of moving it forward. Back in 2006 there was no literature out on the market that was easy accessible here in Austria. And since then I use venture investing and venture capital quite broadly, also the term, but never thought about the definition. So, my first question to you is how do you define venture investing?

Alex Dang00:18:06

I think in a nutshell, it's providing early stage companies with their first or almost first capital, with an expectation that this high growth startup will succeed and become a multi-billion dollar corporation or a unicorn. Unicorns is defined as a company which with a private valuation of one billion and above. So that's in a nutshell what venture capital is about. It's primarily about startups, but more importantly, venture-backed companies which used to be venture-backed 20, 30 years ago, are now to some extent a foundation of the US economy. If you think about all of the top leading companies by valuation in the US, half of them are venture-backed or used to be venture-backed. Top seven, or I would say at least top seven, because more recently sometimes you can see nine out of ten companies are VC-backed companies. Apple, Google, Nvidia, Broadcom, Tesla, all of those would not be even possible without the VC industry. So venture capital is not just the provider of early stage capital, but to some extent they are the foundational element of the growth of the US economy and many other economies in the world as well. So that would be my definition of VC. But the book that we wrote and thank you again for mentioning it's actually a book not about VC, but not for VCs. We decided that, and we thought that would be valuable for every decision maker, not just to learn about the VC industry, but also to learn what are the tools, mechanisms, and rules they use to make decisions in such a complex space. How do they find and fund such innovative companies so early on, before many other larger investors, think of Fidelity and other big investors, or even corporations which were inside the industry, which were inside us, they still missed these technology companies, teams. But VC somehow did it well. How? This was the key question that we asked ourselves. We combined 20 years of research of Ilya Strebulaev, who's a professor at Stanford, who is an expert, world-known expert in VC industry. I'm a practitioner, so I used to be a product lead at Amazon, then AWS AI, and was a partner at EY as well as at McKinsey, serving clients in the technology space. So we decided to combine our effort together to write this book.

Christian Soschner00:20:59

You mentioned that this book is not only relevant for venture capitalists and the startup world, but for every single decision maker in every field. So it's basically industry leaders of small and medium-sized enterprises, politicians NGOs. Why do you think the venture mindset is relevant for everybody today?

Alex Dang00:21:24

Look, I think the majority, if you think about the management science, it was based on the foundation of and the belief that everything is to some extent predictable, that you have to plan ahead. The whole world, the whole, the whole idea of a strategic planning or financial planning that you've just discussed, Christian, is about making sure that you can plan ahead, five years ahead, ten years ahead, and then you analyze the market and you make a bet then you wait and just execute on the plan. It's this predictability was key. We just think that's in so many cases it's not relevant anymore. You have to apply a different built set of beliefs that the outcome is unpredictable, that when you launch a product, it's not just about the execution. You just you just can make a mistake, or that product or service may not resonate with the client. And you may have to close the idea and start investing in some other ideas. And that has to be the modus operandi of a new leader or a new kind of a decision maker. So I would not claim that we came up with a new management theory by no means, but we just think that there are a set of rules and techniques or mechanisms which may help decision makers to rethink how to think about innovation. I can give you a very specific example. What is important, what is more important, the size of a market and a detailed analysis of it, or a team for any VC, now we have a very clear answer. Ilya's team surveyed all VCs and asked them what was the most important factor in terms of the success for a startup. And he outlined a few options. We divided that into two big categories: jockey and the horse, where jockey represents the team, and horse represents product-market fit, total addressable market size, etc. Any VC would immediately respond that the team is the most important factor. Why? Because as you build the product, most likely the service or product will fail, and therefore you may want to have to pivot or change your business model and find a different way to solve the same problem. And that would be the process that they would follow. Therefore, the team's excellence or the team's effort will be the most important factor in terms of the success. Any traditional organization, and Christian, I'm pretty sure that you will agree with me, would spend way more time on analyzing Excel files and debating the assumptions. And then finally, after maybe three, six, nine months, the plan will be added or a business plan will be added to the annual review. And then after the annual review, it will be added to the next year budget. And then finally, new recs or roles will be opened to finally hire the leader of the team and the first employees of that new business. And this is exactly the opposite of what VCs would do. They would start with the team, not with the idea. It doesn't mean that they would ignore the total addressable market and other factors. The number one factor will be the jockey versus within the corporations, it will be the horse. So this is a very specific example where a traditional mindset may lead just to a wrong decision or a waste of time or and a waste of resources. This and there are many other examples. We actually outlined nine of them where traditional mindset which works perfectly well if you're building a McDonald's or a factory where you know the process so well, and where it just simply fails if you deal with anything innovation related, AI-related nowadays, but it used to be not AI but the internet, you name them all.

Christian Soschner00:25:24

Yeah, you mentioned I think one of the biggest misconceptions in venture investing that the technology and the market is not as important as the team. And interestingly, I work with biotech companies now since 2006, and the majority of early stage ideas that come out of academia prioritize the science and the technology. And I can imagine when the scientists speak with venture capitalists and the VCs look rather on the team structure than the technology, there is a lot of potential for misunderstandings and conflict. How do you see this intersection between startup founders scientists, and VCs?

Alex Dang00:26:08

Well, first of all, I have to make a comment then that Christian, it really depends on the industry. So for health tech and biotech the ratio is a bit different. Still, team is important, but as well as patent patents and IP and other factors, because it's way more science-based, and it's a lot about the small molecule or other or DNA sequencing, et cetera rather than just about the team. But the team still matters. Again, for the very simple reason that at early stage company or early stage corporate startup you will you do not you cannot predict what kind of challenges you will face. You will have to overcome them all. And no Excel would help you to do so. You will need a team to do that, and not just the founders, but the whole team has to be incentivized and motivated to overcome those. And therefore, the incentives which are backing these kinds of motivations, they have to be structured in a different way. You have to share the benefits of if the of the game of the potential win, which is again a bit different from the corporate environment where your fixed amount of salary will probably represent 80 to 90 percent of your compensation. And if you ask any startup founder here or any startup employee or engineer I would not say that will be almost the opposite, but to some extent, the expectation is that their fixed salary will represent no more than 10, 20 percent. The rest will be coming from stock investing and the success of the business.

Christian Soschner00:27:50

I agree to what you say that science, of course, matters. I was a little bit exaggerating. But I think, in my opinion, science, especially in deep tech fields, not only in biotech, but also in other deep tech areas, science is a given. I can't imagine any university, any academic institutions that brings out produces science that doesn't matter or is incomplete or is completely useless. I mean, they know how to do academia. But when you look at the team composure, most spin-outs that I have seen here in Europe, maybe it's different in the United States are more or less a bunch of scientists. And when I look at biotech again you have a lot of challenges to solve. I mean, manufacturing is one, scaling manufacturing up to commercial level is the next one clinical trials is the next one, financing, regulations, working with governments. There are so many challenges that scientists can't cover. So I would also say that even in biotech companies the team matters a lot.

Alex Dang00:28:51

That's right. That's right. And look, I mean, you've noted you've just mentioned a few not to be going too deep into healthcare, though your audience would appreciate that. That many corporations are now building an ecosystem to help such emerging and startup startups to survive but and to overcome these challenges. Because you've just mentioned regulatory barriers or legal challenges. And all of those, as a startup, you simply cannot afford to have all these experts in your team. And you may not have enough knowledge, expertise, or money to hire distinguished lawyers and legal advisors to help you and protect you. So, what many corporations, and one example is JLABS, what they do, they let startups be part of their accelerator program and have access to, you may call them buddies or supporters inside J&J to help them and to navigate them through the challenges of a pharma, big pharma world from, like you said, clinical trials and lab to legal things and challenges to distribution. Because a part of the game is to make sure that your drug is delivered to the patient or a caregiver or healthcare provider. All of that is an interesting combination of this ecosystem building, again, like I said in the very beginning, from the corporate end to the startup world. And that makes the Silicon Valley as an ecosystem. So ripe for startups to come and to join.

Christian Soschner00:30:32

I think you brought up the right term. I think venture capitalists are ecosystem builders at the end of the day. So when team matters, their job is to bring the right people together. Let's dive a little bit into the spirit of Silicon Valley. I'm born in Austria, and I was born in Austria in the 70s, 74, and grew up in the 80s, and was at university in the 90s, and this was in Europe the spirit of 1989, the Cold War was over, and everything was moving, integrating. The Eastern bloc didn't exist anymore, and there was a spirit of moving forward. Also, we had the internet it was basically an idea from CERN that put the World Wide Web into the public domain that enabled a lot of startup companies back then, like Amazon, the technology. And I had the feeling that Europe basically was commercially and economically even with the United States. And when we look at the GDP figures, it was pretty much the same level GDP per capita. And then the 2000s happened, 2008, a big crash, 2010 then happened, and Silicon Valley was just skyrocketing. You mentioned a lot of companies that were startups back in the 90s and 2000s, who are that are now basically building the entire 40% of the S&P 500 today. And my question to you is what happened in the last 30 years in Silicon Valley that they created such a difference to the rest of the world?

Alex Dang00:32:06

I think the title of the of our book is a good answer. It's a venture capital. So the whole development of the venture capital industry which brought with itself entrepreneurial spirit as well as risk-taking mindset, that was a big driver of the success. So the companies that you've just mentioned, they would not be even possible without venture capitalists who took the risk and made the bet. It's now kind of obvious that Amazon or Apple or Google were the right bets. But back then it was absolutely not clear. Similar to now, you may look at so many different investments from crypto to blockchain to AI to, and you may just, well, is it truly that important as a company? Will it really transform the world? So, very similar thoughts, I'm pretty sure, struck many minds back then. I would have to actually bring you back to one key principle of the book. We start our book with this principle. It's home runs matter, strikeouts do not which are derived from a very simple business model that VCs follow. If you think about a portfolio of a regular VC, you will they will make 20 bets. 20, they make 20 investments in startups. And 16 to 17 of those bets or investments will be written off. And so many people forget about that aspect of a venture capital business. They just write off all of these investments right away. And more importantly, if you compare that to the private equity industry or to your traditional investing, normally you can sell these assets for something in a VC business or startups, the outcome will be zero. You will write off because you cannot sell your laptop or a lease in a garage, which may not even exist. So what you will end up with is maybe three, four companies and three of these may generate two X return, four X return, which will be an amazing return for a traditional company, but not for VCs, just because that will not compensate for all the losses will not pay off for all the losses generated by 16, 17 other companies. And there will be one, it will be a single company that may generate 10x or 100x return. And this is the one that VCs will hunt for. They will be look and search for this outlier that will define or make it or break it in terms of the venture capital industry. So, this is what we refer to as a risk appetite model. When you may compare VCs and the US in the European economy, is this appetite to catch that outlier, and VCs were backing all of these potential and future outliers. So it means that, and you've mentioned Amazon, it means that for every Amazon, there were 19 losses, and we know actually many of them Webvan and many others, you name them all. I mean, internet bust in 2000 was for the reason so many companies disappeared. But back then Amazon survived, and now Amazon represents is that one trillion plus dollar corporation representing a backbone of shopping and e-commerce. So you have to remember about both parts of these stories. There were so many busts and losses and misses and failures, as well as the Amazons, Googles and Metas of the world. And VCs will think about the risk a bit differently. Regularly, you would refer to a risk as a risk of a loss. VCs would say that's you can if you invest in the wrong company, you will lose 1x. But if you miss Google, you may miss 10,000 X. That would be the mindset. So the risk for a VC industry is missing Google or missing Amazon or missing Apple. And therefore, they would rather make an investment not to miss, to catch that outlier, because that would define the success of a fund. That would define their success. And if you apply this mindset and multiply that across the economy, that might have, or probably is, the that creative force that changed the economy and gave it an additional boost and became this growth engine. Interestingly enough, if you think about it, that's a macro level. If you go to the micro level and look at, say, Amazon as an example, within Amazon operates like a VC to some extent. They launched many new businesses, and I'm glad that I was part of that. I had the luxury of seeing how the machine works inside. And many ideas were failures. We can talk more about that, but one idea became a tremendous success, AWS, Amazon Web Services. It didn't exist when Amazon was created, it was an internal startup to some extent, which now some may believe is the backbone and the source of profit for Amazon, which gave it a chance to grow beyond one trillion dollar valuation. So even at the micro level, the same sort of rules apply. It's you create these new growth engines by taking risks in a smart way. So, probably Europe if you mention Europe is not taking enough risks. There could be very many systemic reasons for that. And I would not just blame culture or economy or rules or regulation, it's a blend of things happening. I would also highlight that many European companies are exceptionally successful in or used to be successful in finding innovative ideas like Nestle and Nespresso. Could be just a simple example that we refer in the book to. Maybe we just need more of those in our AI era.

Christian Soschner00:38:24

Yeah, it's interesting. Can we stay a bit with Amazon and the 90s? When I look at Europe in the 90s Europe basically was leading the mobile industry and the automotive industry. A lot of innovation came out of Europe. And then the internet happened, and with the internet, Amazon. And sorry to say so, but back in the 90s, I don't think Amazon was particularly special compared to other companies. In Europe, immediately copycats or companies popped up at the same time doing pretty much the same thing as Jeff Bezos did with Amazon, selling books online. And in Europe, people were joking around. So, I mean, why should I go online, buy a book when I can go to the bookstore around the corner and can just pick it up anytime I want it? There is no reason. In Austria, we had Lion.cc, pretty much the same concept like Amazon. Now, 20 to 30 years later, Amazon is a trillion dollar company. Lion.cc doesn't exist anymore, it was rebranded to Thalia and they still do the same thing selling books, but not anywhere near to a trillion dollar company. My question to you is how does venture capital or this venture mindset make such a difference? What's the what's the recipe of this mindset in the case of Amazon? How do you how would you define it?

Alex Dang00:39:54

Oh I think the whole book is written just about that. So not by not to retell the book, and I think there are a set of principles and mindset. And my only belief is that I will just quote Jeff Bezos here, that good intentions never work, but mechanisms do. So it's all about the set of mechanisms. And if you think about the outcome, it's a set of decisions, right and wrong decisions, but it's a set of decisions made on the way in terms of how you scale, what you scale what you focus on. You've just mentioned if we just take books and say with the topic of books which I had a chance to spend some time on, building a new innovative program within Amazon, a subscription program. But if you think the goal and the pain point of a user is still the same. I want to get a book whether it's a venture mindset book or any kind of book, but say, let's take this example. This one is written in Mandarin and it's now available on Amazon. You can actually buy it on Amazon US. You may have to wait for a bit longer to get one, but you still can. So it's all about the selection. So it's how can I receive a book that I want to read out of millions of books available in the world and receive it as fast as possible? So one of the solutions would be to locate these books very close to you. Either it could be a bookstore or a warehouse of Amazon, but it's extremely expensive. If you think about the number of books that you may want to make available to readers for bestsellers like the Venture Mindset, it's relatively easy, but for less popular books, but still, if Christian wants to read about Ludwig von Mises' history or something of that kind, it's hard. So, what could be a solution is to locate it closer, or and then Amazon came up with a new, very creative idea: to print books on demand. So they have a facility, and when you, Christian, place an order for a book, then the book could be printed right then and be shipped to you. So you don't need to store all the books in the world anymore. You actually can print the book whenever there is a need for one. Isn't that a creative solution? It is, it's an innovative solution for the old problem. Again, the same pain point. Or think of Kindle. That's exactly the same solution for the same problem. That's the new solution for exactly the same problem. How would I get the book? I would just get instantly. You place an order, you receive it on your Kindle device. Okay, well, maybe you would still prefer, like I prefer, a physical book. Can't you combine it? And Amazon did that. If you place an order for a physical book today, and if you own a Kindle device, Amazon will give you a chance to read the first chapter on your Kindle for free. Because you can start reading now, and by the time when you end reading chapter one, the physical book would arrive. Or a subscription program. I've just mentioned that we launched a program for kids and teens. I have a two-year-old. He already starts to kind of enjoy books. And parents just simply do not know which books to buy and when to buy them, and Amazon helped them with that. They created a program for kids and teens for parents to subscribe to the service. I'm giving this very detailed example to demonstrate that it's not just about the let's bring books online. It's a constant creation of new ideas, it's a constant experimentation with new business models so that one day one idea would resonate more, and that will stick and will stay there. And with these kinds of myriads of different improvements and different new ideas and businesses, that's how Amazon is being built. Not just Amazon. Think about Google or Apple or Netflix. Netflix moved from just a DVD company to a streaming company, then to media company to some extent, because they now create their own content. It's a constant innovation. I think that's the part of a DNA. If I had to point to one single factor, this is the factor.

Christian Soschner00:44:12

Was this always there in the economy? This spirit of constant innovation.

Alex Dang00:44:18

Was it always part of the spirit of the economy? I don't think so. I think it's again a combination of financial incentives because VC industry in a particular moment in time in the US was stimulated by regulatory environments so that pension funds and retirement funds and other funds could invest more capital into a VC or riskier investments. It's also the level of regulatory barriers. So can you actually incentive make people earn a lot as sort of founders? Is it easy to structure the compensation incentives for the founding team? All of that starts. So to build the ecosystem, it takes many different steps. And for each case, it will be a different discussion. But again, I'm a big true believer that I have seen too many entrepreneurs from all over the globe coming for now, many of them are coming to Silicon Valley to get their funding. But I'm 100% sure that many of them either they're coming back, say from Middle East, and many of them come back. And if they have access to the same level of access to VC and funding, they would stay in their regions to build their phenomenal ideas and startups. And we'll see more of that kind of actions and activities.

Christian Soschner00:45:42

Yeah, access, I completely I completely agree. Access to capital is very often the limiting factor, and there seems to be more capital available in the United States. But when I think back to the 90s still to stay a little bit in this in this era the model I learned in school and university, business school and university, was that every company has a life cycle, a lifetime. So the start, the mature, they end. And all these companies that you mentioned Apple, Amazon, Tesla, they seem to be evergreens. So when one of their products mature and seems to be going out of business, they come up with a new idea. And come up with a new idea. And how do you create such a system in a company of this constant innovation? How do you create the spirit and how can you systematically keep the spirit in a big organization alive? This is something that I really can't find out.

Alex Dang00:46:42

I think, Christian, that is a trillion-dollar question. Let's try to answer one. But first of all, let's first start with some facts. We looked at with Ilya, we looked at the Fortune 500 companies and the list which was created, I think, 40 or 50 years ago, the very first one, and only 15%, one five, 15% of those companies still exist. They either were acquired or just go went bankrupt. So Fortune 500 in the US is not that much of a difference. If you compare that to other regions, to some extent, I actually may not be surprised if we look at the similar list in Japan that we will see more stability there. So, to some extent what you described as a life cycle of a company still exists. I actually would make even a comment that I think we may see more deaths of companies soon because of AI, because some business models will just simply be destroyed or be non-existent in the financial sector, in the healthcare sector, and so many different sectors. So that's the fact number one. So I do think that companies do die and that they may actually disappear more regularly than before. At the same time we used to call that a day one and day two mentality at Amazon. Where if you continue to innovate and you think as a day one, as a kind of a startup which I think is a very tough problem to solve because as a company with 1.5 million employees, you cannot call yourself a small startup anymore. You have to act a bit differently. But it's kind of an interesting mindset that you if you keep and preserve the day one mentality then you have a chance to survive and you have a few more years to generate value for your users. If you switch to your day two mentality you will become bureaucratic, you will become slow, you will become more worried about the next quarter results rather than about your strategic positioning. You forget about your users, you start to focus more on your shareholders' profit and management and politics. All of that starts to accumulate. And actually, if you do not proactively do anything about that will happen. So preventing this day two mentality from emerging within your corporation, I think it's a critical philosophical point that kept all of these companies reinvent themselves. And I think that's the word that I would use and repeat reinventing. Amazon which we got to know in the 90s, is different from 2000s and completely different from today's company. It's Amazon today is about cloud computing, AI telecommunications, satellites potentially healthcare. So it's it experimented a lot. The same for Meta. Meta is now well known not just for their social media, but for their Llama Gen AI models and LLM models. Or take a Google. Google is now known for so many bets across driverless cars, as well as advertising. And I think they're also thinking of how to reinvent themselves. That's their challenge because they're so dependent on their core business being advertising that they're now seriously worried about whether they be able to stay, still be the leader in search, in especially with all the AI innovation and potential competitors from OpenAI or Perplexity, a startup that didn't even exist a few years ago. So I think that's a constant battle of your day one mentality and day two mentality. And thanks to leadership of Amazon, Apple, and others, they managed to keep that day one mentality alive. Many companies did not. So they would they either disappear or lose a battle to these new giants.

Christian Soschner00:50:49

Yeah, that's true. That's true. The day one and day two mentality. That's probably a good point the best point to solve this problem. Alex, what inspired you to move from McKinsey and Amazon to becoming an author, a writer?

Alex Dang00:51:06

Look all my work was always focused on finding new growth engines for my clients or building these new growth engines at Amazon internally and finding these new businesses and launching them with my teams. And one day I met with Ilya, and I realized that there are so many commonalities in between how VCs make decisions and how these successful technology companies make decisions. And when we started to exchange our notes, we realized that, well, we want to share that with more companies and more clients. So we started to work together. We are running workshops and educational sessions and strategic offsites. But then we quickly realized that if we want to truly deliver the impact, we will simply not have enough time in our lives to do so. So the best way to spread the word would be probably to write a book. And that's when we decide that it will not be an academic book, it will not be a textbook, it will be a book, very practical, easy to read easy to implement with anecdotes and examples, but data backed. So it will not be just a set of anecdotes or beliefs or rumors. Ilya has a 20 years of research, which became a foundation for this book. So that would refer to the data, then illustrate it with a few examples that hopefully people would remember, and then give very practical set of suggestions or pieces of advice, what you can change or do differently to apply the venture mindset when we compare that to a traditional mindset. So that was our journey to become book authors that I personally did not expect. I had a wish that one day I would write a book, but certainly I could not predict that I would just become a full-time book author one day.

Christian Soschner00:53:00

It's one of the best books that I've ever read. And I love the way you and Ilya tell stories in the book, which are data-backed. I have read it no, I think for the first time. And the interesting thing, what I really like with your social media profile, yours and Ilya's, is that it's a companion to the book. So you present a lot of data and information on your social profiles that make better sense for someone, I think, my opinion, that has read the book. So it's really good to get the book, to read it, and then also to connect with you and Ilya on LinkedIn. My question, my next question to you is about the writing process. I mean, I have now the book in hand, and while you were speaking, I picked it up. And it's it's a great book, but how do you approach such a project? And how much time does it take to deliver a book like this to a reader like me?

Alex Dang00:54:01

Well, we could record another podcast for future book writers because it's a it's emotional, very cool topic to discuss. I doubt that it will attract that many attendees and attention as venture capital and startups. But I think it's a very interesting and fulfilling process at the same time to see now with to see the book being recognized as a bestseller, as a Financial Times book of the month. To hit Wall Street Journal. Now we have different international editions. The one published in UK and in Europe Chinese version, Taiwanese is coming as well Kazakh version, Russian version Korean version. So these are this is the an accomplishment, and certainly it took us a while to get there. And the most, I think the most important thing if you will want to become a book writer is to keep the reader in mind. That's where you start. Who's gonna be your reader? What do you want to share with that reader? For us, it was the word impact that made it clear to us. We wanted to make sure that this book will end in hands of decision makers, but it will also be part of the CEO's agenda so that they may that might inspire them to make some changes and to do things a bit differently. We want to keep it very practical so that we would not just refer to philosophical concepts, but to specific things that they can change tomorrow, how they conduct the meetings, when they speak up as leaders, first or last. Would they ask experts, first or last? What about junior employees? All of these very specific, nitty-gritty details that we'll learn from VCs in our interviews and surveys we outlined in the book. But certainly writing a book is hard, especially if you if two people were writing the book. And I'm so glad that we were so open to criticizing each other with Ilya as well as to finally relying on data over other opinions to make a final call. Because you may imagine that we had so many debates throughout the book with our editors as well as among each other.

Christian Soschner00:56:30

And what was the most challenging part in the writing process?

Alex Dang00:56:34

I think to dedicate time to writing, because you always can find a reason not to write the book. There is always another request. I'm still a senior advisor at McKinsey meaning that I receive on a regular basis requests from clients or from teams to discuss AI or digital transformation or operating models. The same goes for Ilya, but at on steroids. So it's being always busy and always find a reason not to write the book. Because interestingly enough, writing a book and putting complex ideas into simple words, into simple sentences is very challenging because you want to go into specifics and details and discuss some terms, and then the book becomes less and less approachable. Or you have to cut your sentences short just to make sure that it's easy to read. So all of these will pick the best anecdote that you could find, even though you have maybe five, ten examples to discuss. So finding these analogies, anecdotes that was probably the hardest part, is just to find time to do the work, to write the book. And I have to admit and probably Christian, this will be the first time announced on your in this interview. Some part of that book was written in Vienna where I found an escape, when I found an escape from a busy Silicon Valley life. And then I just could respond to people who were sending me emails, you know what, I'm not in the country, I cannot accept your phone call, and literally spent some time writing a book. That was helpful. So to some extent, Vienna definitely inspired me to write a few chapters and sections of the book.

Christian Soschner00:58:21

That's good to know. Why Vienna?

Alex Dang00:58:23

I love Vienna. Actually Vienna and Austrian economists as well as Austrian concepts are mentioned in the book. Say the game theory is mentioned in the book. You definitely know von Neumann and for the game theory. And I'm a big fan. When I was still at my college times, I was a big fan of Ludwig von Mises. And his very thick book, which my professors back then could not understand why I would spend that much of attention to that book. Though I started with Hayek but then I realized that Hayek was a kind of a was a continuation of Mises' philosophy of human action. And again, that just highlights the importance of human in this process, the team, the jockey. These are the people who are actually building things. But von Neumann is definitely someone who created the whole gave us a nice analogy of a poker to some extent. If you think about poker von Neumann believed that would be the best analogy of life modeling. Why? Because if you think about a chess, this is a very predictable game. It's a very well-planned game. And that's why when you hear the things about strategy, you would normally put a chessboard as a picture, as an illustration of that. If you think about VCs, many people many think would think that they're gamblers. But this gambling is different because that's where you rely purely on a chance. Purely you go to a casino and just hope that you will win something. So it's kind of a two opposite parts. Very predictable nature of things, it's chess, that's kind of a game, and very unpredictable, pure luck gambling. Poker is somewhere in between because you collect information, more cards are open to you, more you can predict what's going to be the future, and that should impact your behavior. And von Neumann liked that specific analogy of poker in game theory, and we like it as well, because actually VCs act in a very similar fashion. And we recommend even corporate leaders and decision makers think in the same way. You double down or quit. So you collect information and you double down if you like what you see and you quit if you think that the signal is wrong. That's what poker players do. We don't recommend to bluff. We recommend to that's not the analogy that I wanted to make, but the double down or quit is the one that I think and we think is a critical component of the venture mindset.

Christian Soschner01:01:09

Yeah, this is a fun joke. Don't bluff. I can imagine that some people say, Okay Alex brought this example of poker, so we need to bluff more in business and just acting.

Alex Dang01:01:21

I can see I can see that working well on social media. Hopefully, you will not do that.

Christian Soschner01:01:25

It would lead to the next Theranos then, but probably. When we stay a little bit with the Austrian school did you understand you right that the Austrian school of economics had an influence on the on the venture mindset?

Alex Dang01:01:39

I would say it had an influence on me personally, just because that's kind of a foundational philosophy that I think Austrian economists to some extent found the way to describe the world. The way that I think is one of the best ways to give you a framework, how to think about things, how to explain things happening in the world, in the economy in general. Because Austrian economists they're not giving you very specific pieces of advice. They're not telling you that the interest rate has to go up or down. They are giving you a framework they're outlining the foundation. So, to some extent, that's definitely the foundation that helped me to understand the economics and the macroeconomics better. Even though the I think Austrian, many Austrian economists would immediately say there is no such a thing as macroeconomics, it's a combination of microeconomic economic decisions which human beings will humans will make, and I would agree with that.

Christian Soschner01:02:41

Yes I read this book recently from it's by Richard Cockett, Vienna. And it's basically a run through of the time of 1880 to 1945, and the Austrian economists had to flee Europe. And some of them I think went to the east coast and the other parts to the west coast and influenced a little bit the spirit of California and also the east coast around Boston, Massachusetts, New York, a little bit, I would say. And then Silicon Valley perfected their whole process and moved forward with venture capital. When we go back to your analogy of poker why do you think is poker the mindset of a poker player relevant in business?

Alex Dang01:03:39

Yeah Christian, I would use this as an analogy again to some extent. Because what poker tells you is that you should not make a decision right away. If you just always say yes and never quit, then that's a path to disaster. You have to fold. And poker folding means that you exit the game. You lose whatever you invested already, but you exit the game because you feel that the chances to succeed are lower or lower than you expected, or than you should expect. So, poker game in a nutshell is when you have a few cards available to you, but then you open more and more cards on the table, and then you make a call. And then you either stay in the game or you double down, you even increase the bet, or you exit the game. And if you think about that stage model, that's the one that we liked to explore more with Ilya because this is the one that VCs would follow. They would do this, their investment in series. They would start with the seed stage, then series A, then series B, series C. So for your audience, it means that the first check that will be written to a startup founder will not be in tens and hundreds of millions of dollars. It could be just a few hundreds of thousands to test the idea, to build a prototype, to get the first market feedback. And then if the market feedback is positive, then you go to the series A and you can raise more capital from the same VCs or new VCs. Maybe new VCs would join. And definitely when you reach Series C, Series D, you may need more cash and more capital to say scale the business across the world, to bring Airbnb or Uber to other countries, to give you a specific example. So VCs would do this in a step-by-step process, learning on the way. And I would say that successful corporations should do exactly the same way. When we launched Prime Now, which is the one hour to two hour delivery at Amazon, we start with a very small-sized experiment at in a single zip code in New York City. So that's where Prime Now was first launched to collect information to learn more about the user feedback. And only after the first feedback was positive, then it started to scale to other cities and then to other countries. If you think about any bet of a technology corporation, that would be a typical process. You start small and then you scale fast as you learn on the way. But I don't want to miss one critical point that in case the feedback is not positive, then you should close the business, then you should cut your losses. You cannot just simply keep all of them, all of your ideas alive in the lab. Unfortunately, with Ilya and as a consultant, I had a chance to see so many labs and incubators where you can come and see so many ideas all prosper that senior leadership simply forget about their existence. And all of these zombies are still there. You have to cut your losses in order to keep the capital and your resources and your effort and your attention focused on the ones which are potentially unicorns or big ideas, which will become these 10x, 100x bets in your portfolio. That's why we use the analogy of a double down or quit which is a combination of doubling down on winners and quitting or killing your darlings, even though it's one of the hardest jobs to do so.

Christian Soschner01:07:29

This means, I mean, there are two questions that I have to you what this means for the founders. I mean, there's always in this in founder ecosystems, there's always this notion of you don't quit, you need to push through adversity and you never quit. You just work harder, and one day you will succeed. This is not the venture mindset then at the end of the day. So relentless.

Alex Dang01:07:55

So, first of all, I think that yeah. It's the pain point is the same, the way that you solve this pain point might be different. So one click checkout system at Amazon which we're all very much familiar with, which once was a patented solution, by the way, not anymore, but that was a revolutionary idea. But is it the best way to place an order nowadays? No, because then Amazon created this dash button. You can click the dash button and place an order instantly without even opening your laptop. The pain problem, the pain point is the same, the solution is different. Or when this then started to not be working very well, then Alexa device came up to the reality. And then now you can, with a voice add something to your cart and place an order. So I'm saying that you have to be, like you said, pushing hard, you have to be resilient, have to be certainly focused on solving the problem. But if something doesn't work, you have to be flexible in terms of how you solve this problem. What would be another experiment that you can run? Actually, I would recommend if I have a chance to talk to any founders, that you have to maximize your chances of success by running as many experiments as possible. So you're given money to run a few experiments, and if one of them would be successful, awesome. Then you can double down and then you can ask for more money, but you will have some data to prove that you're on the right track. So maximize the pace of your experiments by applying both agile principles as well as being flexible in terms of what kind of experiments you run.

Christian Soschner01:09:44

And this means: stay sharp on the mission and the vision of the company, but be flexible with the solution. If something doesn't work, totally just quit it totally, abandon it and try the next thing. And if that doesn't work, try the next thing. But don't get stuck with or fall in love with one solution.

Alex Dang01:10:00

Correct. And that's to some extent, that's the leader's job to some extent stop such efforts and refocus the company on new experiments and new things to test. That's part of a job. I mean, it's really hard, especially if you are the leader of a particular initiative. It's hard to stop such things just because you own it and you get you always can find the reason that, oh well, if you just slightly improve here and there, maybe it will be a successful one. Unfortunately, more often than not, that's not the case.

Christian Soschner01:10:38

Yeah, there is hope and shame. There are emotions at work. I can imagine when I think back to my time at big corporations, when a project or an initiative was, let's call it the baby of the CEO, it was really hard to criticize that and say, okay, it doesn't lead anywhere. And what advice do you give corporate leaders? I mean, isn't there a risk that just because it's their project, that it just the employees keep it alive and don't shut it down and sugarcoat the data a little bit and say, okay, it's doing well, but in reality it is not. How can a big corporation handle emotions in that game?

Alex Dang01:11:22

It's a very hard question to and especially it's hard to address in the corporate environment. But you're absolutely right. It's all about, to some extent, the word failure. If the attitude within a corporation to failure is very negative, then you may never solve this problem. Because people are driven by incentives, and incentives drive behavior. Their decisions will be driven by incentives. And if you may lose your job or will not be promoted just because of a failure of your project, then well, it's really hard to expect that no sugarcoating would be happening because people would be, and your leaders will be doing everything in the world to keep the project look alive, even though you'd rather close it. So to some extent, companies which manage to solve that problem by letting people fail and still keeping their jobs as well as to continue to experiment more with other ideas, that's a critical point. Of course, you have to define similar to VCs. There is a founder problem and there is a business idea problem. There are so many different risks. So, in some cases, if you're just a wasteful leader or made too many wrong decisions on the way because you ignored customer need, well, such a leader has to be fired by no means. And such a founder should not be funded. But in general the culture which will stimulate your failures in order to hunt for that outlier, in order to find one, I think that's the culture that you may want to enforce in order to get the success. And again, I can refer to companies which we already mentioned too many times on this in this interview Amazon, Apple, Google, all of them made many bets. And some of them are so proud of these bets that they even created a graveyard or of ideas that we invested in, similar to think of Google, similar to Bessemer Venture Partners, which created the anti-portfolio page on their website. What does that mean? It means that you can find companies that they had a chance to invest in, but never invested in. That's a very tough one to have a look at, but that's part of the journey. They appreciate so similar to me, when I was at Amazon, I had in my office press releases of successful projects as well as failures. And some of these failures, I would not name them all, just you will see why, because some of them were sponsored by senior executives as well as the CEO. So, meaning that it was fine to fail, even if it is inspired and sponsored by the CEO of the company.

Christian Soschner01:14:11

Many companies I got to know here in Europe failure is the end of the career. So if someone fails with a project, the way forward is really difficult and really hard. I like the book analogy that you brought. I mean, I was just I combine it with chess. There is I think it was wasn't it David Sacks and Peter Thiel. I think Peter Thiel is a very good chess player. And at PayPal, I think I read it in the book about the PayPal founders. David Sacks won one day a game against Peter Thiel in a simultaneous tournament where Peter Thiel was playing basically against more players. And when I think about poker and say, okay, let's not think about one poker game where a player gets one hand but gets simultaneously 100 hands and has a budget to allocate. So if I interpret your book and what you said they would not bet all the money on one hand and say, okay, this looks good, and you think this wins. They would spread out the money on hundred decks, on hundred hands, a little bit on each one, and then get the next card. And then they see, okay, where are the odds better, and double down on that hand, but fold all the others.

Alex Dang01:15:29

You're absolutely right. You may think of this as a traditional portfolio approach. Similar to any portfolio management, VCs will make many bets. And most of these bets will be bold, meaning that they should have a chance to become these 10x, 100x companies. They will make them small, so they will not make, they will not bet the farm. So they will never invest the whole fund in one company. They will spread it across multiple bets, numerous bets, and then they will carefully track if a particular bet is not that successful, they will just quit. But for the ones which are successful, they will double down. So this is exactly what you just described. It's like playing with 10, 20, or 100 hands. More importantly, if you think about a corporation, that's a huge difference with a startup. A startup to some extent is a single bet thing. They have a particular idea, they have a particular goal in mind, and they try to solve this problem. And that's a single bet game to some extent. I mean, they can still run many experiments, but to some extent that's a single bet approach. While VCs will have a portfolio of such bets, and corporations may actually create a very similar set of bets, and they may even spread their bets across the spectrum from low-risk bets to high-risk bets. And when I refer to low risk, it's about the core business. So when Amazon runs today an A-B test on its website, it's a pretty low risk. When New York Times, which will experiment with headlines and or eBay, they will just continue to experiment with something which will be part of their core. Or let us speed up the delivery. What if we switch from two-day delivery to one day, from one day to the same day? Would it increase the conversion? Will it be better for customers? That's exactly the same business model sets, exactly the same set of rules. So it's a low-risk bet to some extent. That's the core business bet. There will be some adjacent businesses. Think of a subscription business or sampling business or other things that would complement the current core company. And then there will be wild, disruptive kind of bets, things outside of their core business. Think of AWS or Alexa at Amazon. And the level of this, you can think of this as a pyramid. Actually, many corporations should still continue to invest in this core element, the majority of their funds and efforts and management skills and resources. But some of that has to go to this, in our belief, has to go to the high-risk bets. So you have this portfolio. And I think it's kind of wild that many corporations just do not do that. So they should, because that's the way for them to leverage their expertise, their access to distribution network, and to many other things that small startups simply do not have. Small startups do not have a second chance, while corporations do.

Christian Soschner01:18:42

Let's stay a bit with the corporations. I think back to my time in corporations, and the selection process was pretty straightforward in most companies. When someone had an idea, they put together a deck, a pitch, basically PowerPoint back then, 20 years ago, and presented it to some sort of committee or supervisory board or board of directors, and then the board of directors made a wise decision and put some budget on the winner, which very often what I experienced was one winner and the rest were not mentioned anymore. When I apply what you wrote in your book, the venture mindset, it would mean not to step as a decision maker in the role of making the final decision early, but rather spread the budget across more teams and just let them play.

Alex Dang01:19:34

And I mean, especially if you have two way two-way decision-making process, meaning that it's not a one-way. You can split all the decisions into one-way, two-way doors, meaning that if it's a reversible decision, so if you can launch something and then pull it off then you definitely have to do so. I actually seen so many times with my clients when they debate and discuss assumptions and spend months of doing so, versus rethinking the model to launch a very small-scale experiment and just simply launch it and test it and see the outcome. And if it works, awesome. Then you can double down. If it doesn't, then stop. So, to some extent, the magic and the wisdom of a leader could be how you can convert this big bold idea into a small experiment. How would you challenge the team to launch it fast and at small scale to test the idea and then give them a very limited amount of money? Actually, act as a VC, which will make a seed stage investment rather than commit a series D amount of tens and tens of millions of dollars. You can discuss tens and tens of millions of dollars as a long-term plan early on, but you have to start with a seed stage investment.

Christian Soschner01:20:58

And come back with the data. I mean, this leads me to the next question. Decision making. Very I mean, it's about managing risks at the end of the day. And very often when you look at decision making, people try to manage risk in their decision making by trying to come to a 100% consensus in the team and say only if everybody agrees it makes sense, and we limit the risk because everybody agrees. What's your take on this kind of decision making?

Alex Dang01:21:28

Thank you, Christian, for this question. Because I think it's a critical element of the venture mindset. VCs would believe that conviction is way more important than consensus. More importantly, if you look at the research, then VCs make the make decisions differently in different VC firms. Some of them still prefer consensus, especially for smaller VC firms. For some of them give a full right to a single partner to make a call, they discuss debate, and then a single partner is enough to make a decision. And then Ilya's team compared the results of these firms and the ones which would prefer full consensus underperform versus the ones which would prefer lack of a consensus to some extent. So, what's happening here? What's going on? Because what's the root cause of such an outcome? The root cause is the following. If you're hunting for an outlier or a company that would perform way better than the other, a startup that will transform the world to some extent, these companies, and at the same time, you do not want to make a bet on the company, on the idea that will be a common sense, that will be everyone will bet on, because then typically the valuation will be too high or it will be just a symbol of a hype. So you're looking for kind of a very strange type of a company. It's an outlier which is not yet recognized as a future winner by the other. So if you think about that, this is the ideal company that the VC would invest in. So, therefore, if you just simply apply these set of conditions and expect that every VC partner in the room would accept this and would agree with you, that's ridiculous. It's almost impossible. So, actually, it's the opposite is true then. If everyone in the room agrees that this is the company to make a bet on, then something might be wrong with the company. Maybe that's not bold enough, maybe that's not risky enough, maybe this is not the company. So, to some extent, consensus would be a good symbol of that of a misfunctioning or not functioning, not decision making that is not functioning well enough. So it's easier said than done. I mean, it's easier said that consensus is not that important, conviction is more important. You have to start with a few sets of rules in the corporate settings that so that you can implement that principle in your daily life. Say the boss should be the last to speak up. Why? Because people are very smart, they will look at the boss and they will look at the leader and they will trust the leader for a good reason, by the way. And if they will hear that, oh, that's a great idea, they will all start to be in line to agree with that opinion. If you just change the order, then the outcome might be different. We actually observe that with Ilya ourselves in our workshops. Or so you have to actually make juniors speak first or experts speak last because they will give an opinion that may impact everyone else's opinion, or keep it unanimous. And that's actually applied not just to investment practices. This could be applied for recruiting practices, for promotion benefits for HR, finance, any kind of decision making. If you want to make sure that the team would make the right decision or a better decision, then you may want to change the rules or the mechanisms and how the meeting is conducted.

Christian Soschner01:25:05

We are talking, I mean, I think for it for the listeners, we are talking about a very specific case decision making in uncertainty where this venture mindset applies. We're not talking about changing the six sigma approach of optimizing the cash cow to make it more profitable. We are talking about a situation where you don't know the outcome and you have no idea of what the future looks like, but you need to make a decision.

Alex Dang01:25:30

I'm so glad that you mentioned that, Christian. That's exactly the case. So we have to clearly separate when to apply your traditional set of rules and processes and mechanisms where process is way more important than other elements, where process is more important than people to some extent. Again, I would just refer to hamburger production at a fast food restaurant. I think you need a process there. You actually want to make sure that people are to some extent replaceable. I would be very careful of stating that because it's any business is now people focused. And the impression and your attitude to a fast food chain will still depend on your interaction with the person. But to some extent, you do not expect that when you place an order for an Uber or go to fast food, you just expect the result in the most efficient way, but that's not the case in innovative processes, just do not mix these two completely two different things. And we use an example of 3M in our book, which is still believed and was definitely one of the most innovative companies in the world. And more importantly, that's actually a very old company. That's a great example of that Fortune 500 company that which survived through the different waves of creative destruction and lots of waves of Schumpeterian innovation which happened to the world. It started as a mining and manufacturing company from Minnesota, hence the name, but 3M. But now we know 3M as a manufacturer and creator of sticky notes and many other inventive ideas which are now part of our daily life. They actually once introduced Six Sigma and quality controls into the system, which were brought by senior leaders from GE, which was a leader at the time, for a good reason. And you could imagine that costs were cut and that the efficiency of the machine started to be way higher. But it also, if you apply very simple similar principles to your creative destruction process or creative processes like innovation, then you may end up, unfortunately, with a lower level of creativity less innovative ideas, less products that will become your growth engines and pillars of a future profitability. So to some extent, you have to be very careful in when to pick which tool.

Christian Soschner01:28:05

Yeah, Jack Welch was extremely famous in the 90s for a Six Sigma approach at GE, and then came Apple, and then came Amazon, and came Tesla, and they have a different approach like you described in your book. There is one component I would like to dive deeper with you. It's groupthink or crowd mentality, which is I think a human thing. How does it play out in venture investing?

Alex Dang01:28:34

Look, I think it's exactly the same problem that we've just discussed. That if you're hunting for an outlier, then you should be very careful in terms of how you structure your decision-making process, and that crowd mentality will be your enemy to some extent. The same matrix which we described is if you in the book we outline that as a if you want to catch a true outlier, you should not be with the crowd. And at the same time, you have to be right. So both factors, and that's actually applied across the boards. That's not just for VCs, that's applied to PE environment or any investment. So, in order to truly generate an exceptional return, you have to be right, but at the same time, you do not have to be right with the other. Well, you have to be right when the other are wrong to some extent or and underappreciate that specific bet. So that's the challenge. So following the crowd could be a negative it will have it will impact you negatively. In terms of your returns. They have to be striking a very tough balance how to pick the bet which will be underappreciated to some extent by the other.

Christian Soschner01:29:53

We have spoken with many VCs during right I mean during your career and writing the book and worked at Amazon. When you think about investing on public markets following the crowd in euphoria, all newspapers, the entire internet is full with good news. And it's so difficult to then say, okay, that's a sell, because everybody's talking about the company, it's positive news. The emotion on the internet is entirely positive, and it's a real tremendous pull effect. On the other hand, when a sector of the industry or the entire economy, like we experienced in 2020, collapses, there is depression, negativity. People talk very badly about companies and absolutely talk it down, and every company seems to be close to bankruptcy whenever you open a newspaper. What's the recipe in the venture world to work against this human notion to just go with the crowd and it feels feel comfortable and to work against this human nature? How do they do that?

Alex Dang01:31:06

I would say that many VCs and actually anyone anywhere in the world will face the same kind of challenge because that's a human nature, like you just said. I would just say that the word patience would be probably the one that you would not expect to hear when VC is discussed, VC industry, venture capital industry discussed, but that's actually a critical part of their success. We even named the chapter that good things take time and we refer to the patience of venture investors. If you think about venture capitalists, they make a very early bet on a small company, and then they often have to wait for six, eight, ten years until the time when they can actually exit the deal, when the company becomes either public, i.e. IPO or they would be acquired by a bigger player. And if you think about that investment, it's so it has all the negative aspects of a bad investment in terms of it's illiquid. You never know what's the actual price or the value of that investment until the very end. You can still be in series B, C, D, and yet do not know whether that would be a successful one or not, whether there will be an exit or not. Some investors in SpaceX, they're still waiting for the company to become public. So you have to be a different kind of an investor, and you have to play long in terms of your trends. And that's where they would refer to a very simple principle that there is typically a very short-term hype. So people would expect more from a technology to happen short term, but they underappreciate the impact of a technology midterm. So, short-term, we think that everything will be changed in the world, and that's kind of a hype mentality. But at the same time, midterm, we may miss some big industrial shifts, or that the whole sector could be transformed by the newly introduced technology like AI, like internet, like mobile, like semiconductor industry, like automation, robots, you name it all. I can give you one example. Kiva robots which are they look like Roomba and they move shelves across warehouses. Now Kiva robots represent about 750,000 robots are in Amazon's warehouse versus 1.5 million employees. So it's kind of for a single robot per two employees, and that's just about Kiva. Kiva was once acquired by Amazon, it's today's 2025. The company was founded, if I remember correctly, 2003. The first prototype was built in 2004, the first commercial deployment was in 2005. So if you think about the pace, it takes a while for a technology to truly propagate. Today's world is a bit different. If you think about ChatGPT, it reached 1 million users in I think five days. So it's one of the fastest technologies in the world to be spread across the users. But actually, if you take iPhone or Instagram, they will match to some extent. Their scale, the scale and speed and pace will be also measured in days and weeks. So today's world is a bit different from the time when horse was replaced by a car or electricity became part of everyday life, but still thinking these long-term that's a critical component of a VC mindset. So for a corporation which is making a bet today, if you your leadership expects to generate the first revenue or even profit next quarter, most likely this you either will be disappointed or it is not innovative enough. It doesn't mean that you should not do that, it's just not that kind of an innovation that would generate you 10x, 100x return internally. If you expect, if you want to build internal unicorns and invest in corporate innovation, extend your timeline to five to seven years. That would be a more realistic timeline for the for the business to become truly big. And if you look back at Amazon's example, AWS was a non-existent business, then many years down the road, that became the growth engine. The same would apply to Amazon advertising business. Again, didn't exist, became a big one. Or marketplace. Initially, it represented one, two percent of the total business. Now marketplace items, i.e., items which are not owned by Amazon itself, but owned by different sellers and merchants on the platform. That's now 50, 60, 70 percent of the business. And the curve took a while to get to that level. So patience. I think that would be the most important word to remind yourself. It doesn't mean that you have to be patient with bad results. Like I said, you may have to quit some businesses on the way. You have so many proxies and metrics and other mechanisms to apply. But longer term, that's the metric that you have to keep an eye on. Long-term impact in the time frame of five to seven years.

Christian Soschner01:36:26

Emotional resilience at the end of the day that matters, I think, also when we see business. What was what was the ratio at Amazon of failure and success? You mentioned that especially in venture-minded, let's call it, venture-minded organizations like Amazon, you place or the leaders place a lot of bets on many projects. I can imagine that not every project succeeds. What is the failure-to-success rate someone should expect when they think about it?

Alex Dang01:36:56

It would vary. So I don't have any data set to refer to. I would just keep in mind that at least half of them would fail. But that failure would happen in different stages. So some of the ideas will not just work at the A-B test, or the first feedback from the user will not be that positive. Some failures will happen down the road after the product is launched and scaled, and then you still do not see the track record. And I'm not referring just to Amazon's example, you could see so many other examples. A big investment, which is rumored to be made by Apple in cars, was then closed, or Meta's effort in the metaverse is I would not say downsized, but they're not discussed that anymore because all the effort is now shifting to AI. So there's so many examples of failures at different stages. The tough thing about failures is that they will not be known. Many of those will be hidden behind the scenes. And that's why I'm mentioning that many of those, I many of these ideas will be closed very early on. So the ratio could be actually even higher than 50% if you think about that. But you would you should expect a very similar ratio of VC, if I had a one in mind, that 50 to 75 percent of the ideas that you invest in will most likely fail. And that's totally fine, especially if you take the this risk approach. Like I said or like Jeff Bezos said, that the scale of your mistakes should scale in line with your business size. And there is some very important essence in this statement that if your mistakes are not scaling, if the size of a pain to some extent is not scaling, then probably your organization is slightly moving towards the day two mentality that we already discussed.

Christian Soschner01:38:52

So this means when the company scales, the number of mistakes should increase, and also the size of the mistake should I would say the size.

Alex Dang01:39:02

The number of the mistakes, I think, will maybe even remain the same if you continue to experiment more. But the scale and size of these mistakes, of course will go up again because some of these bets will go to the if you apply the venture mindset series C, series B, series E size of a mistake.

Christian Soschner01:39:19

And then it needs in leadership, a bit of a zen mindset to just let go, just let the failures go and don't overanalyze failures.

Alex Dang01:39:31

That's right. I actually have to be a very clear and open Christian that I think it's not just about the failures, it's more often than not about the number of ideas which corporations are dealing with. So if you think about the venture capital funnel, they start with many ideas that they have look at or had a chance to analyze, and then they drill down to the idea that they finally made an investment on. And this ratio is about 100 to one. So they look at 100 ideas to end up with the single that they make an investment on. There is a nice chart in our book which will illustrate that funnel by stage. So, more often than not, it's less about the failures, it's just about the upper part of the funnel for corporate leaders. More often than not, they deal with lack of ideas to invest in than with how we analyze and whether we have an appetite for the risk. So often my goal, and when we talk to leaders of organizations with Ilya, we build a heat map of where VCs currently invest in their sectors or in adjacent sectors. Here are the ideas that may kill your business one day. Can you come up with a few ideas which may we call it post-mortem analysis? Which idea could have killed you? And then we ask a very simple question: could you build it yourself? Why wouldn't you invest in such a startup? Why wouldn't you build a similar service that may kill you? So, and creating this list is a part of the exercise. And when you have many of those, many ideas, then you start filtering it out. And it's way healthier when you have a competition among ideas, then you have two ideas to fund and you have plenty of budget to invest. That's kind of an opposite situation. You'd rather have more ideas to fund and a robust process to end up with a few being funded.

Christian Soschner01:41:35

There's an interesting part in your book when I came across that you wrote that VCs look statistically on average at hundred deals to invest in one. So it's 100 companies that they research and then invest in one company. This means from the founder side, then that the founders get a lot of no's at the end of the day. That's right.

Alex Dang01:42:03

That's actually also it means that you have to train yourself as a VC or as an innovator to say no. And I will be very careful of the word research here because the word research implies that you spend days and weeks researching a specific company. That's not the case. They actually VCs are pretty good and say no pretty quickly. They apply so-called fast track mindsets so that they would just use their pattern recognition model to instantly identify flaws or red flags in the company. So they would be looking for things that they do not like in the company first, so that they can filter out about 90% of the companies that comes which come their way. For the rest, for the remaining, they will spend way more time to go deeper into nuts and bolts of a company. They will typically give reference calls to their customers, they will understand the addressable market, but that will happen after they will filter on the majority of the bets. So if you start applying the same kind of the mindset in the corporate setting or in your personal setting, that's could be the answer why they're so successful and why you may not be that successful. Maybe you have to stop looking at the idea and stop applying all your rigorous due diligence process across all of the ideas but instantly refuse a few and focus on the ones which are more promising based on your gut-feel expertise and actually train prepared mind. We even use that such a term from Louis Pasteur and from it's not our term, but preparing your mind or training your neural network your decision-making neural network is a part of the process and a critical part of it.

Christian Soschner01:43:50

So chance matters after all, and pattern recognition too.

Alex Dang01:43:55

Just to quote Pasteur: chance favors the prepared mind. So in this particular case the prepared ones. You need to train your mind. And actually, VCs demonstrate that so well. We one example is say Dropbox investment. Dropbox now is well-known storage shared storage solution. And when Sameer Gandhi from Sequoia back then, he looked at the company, he instantly recognized the potential of a company, even though it was just two founders who were sitting in front of him with some prototypes and ideas, because he met with many other startups in that space before in that field, and he could recognize what matters. So that no is not just coming from instant no to some founders, it's not coming from nowhere, from air. It's actually coming from the experience of meeting other startups or meeting with other industry sector leaders and representatives who are insiders. As at least this is applied to smart VCs the ones who are demonstrating systemic performance.

Christian Soschner01:45:12

Last week I had Marie Schroeder on my podcast. She is responsible for early stage investing at Novo Holdings, the company that owns Novo Nordisk. And she brought up an interesting concept. We also discussed about saying no and shutting down an idea and not investing in that. But then she said, no is not final. She brought the example of one company where she said we looked at the company for three years. Initially we said no, but then the team developed very well. They checked all the boxes they hired new people, they met the milestones, and after three years, they said, Okay, now is the right time, and we want to go in. I'm interested to learn from you what does your data say? What did you find out about venture investing in regard to recovering a no? Is that common? Is that usual in the venture world that they come back to an asset, or is it more on the other side that it's final?

Alex Dang01:46:12

So I think Christian, here it's I would just go back. Just yesterday we talked to some entrepreneurs at a big AI event with Ilya. And one piece of advice from us to entrepreneurs, and we actually took part in their pitch competition, and they were pitching to investors as well, is you have to do the due diligence of the investor that you reach out to, because funds are different. And some VCs they would prefer early stage funding, some VCs would focus on late stage funding. And the reason for that, because if they apply the same 20 bets model that we just described the size of this bet would matter. If your fund is a size of 10 million or 100 million or 1 billion, that would clearly define set of rules and the size of an investment that this fund will make. Will also depend at what stage the VC fund is. Have they just started deploying their capital, or are they at the end of the cycle, or maybe they have already deployed all their capital and you have to then wait for the second fund to be raised, a third, a fourth, etc. So we have to truly understand more about the VC that you're reaching out to. Like anywhere in the world no one is made the same. So in this case, you may, as an entrepreneur, return or come back to the VC if that VC was just not the right fit at the stage when you first reached out to them. So that's totally fine. In some cases, you may hear from a VC or get a message like, please come back later when you have a robust product, etc. And in some cases, I have to admit that's just a very nice no. We're not interested. But while VCs are opportunistic to some extent because there is a very nice experiment that Ilya's team ran about cold emails. And if you ask VC whether they would open a cold email and would that they would they ever invest in such a company, the response would be unanimous no. However, the actual experiment that Ilya's team ran demonstrated no, that's not the case. They would not just open, they would even respond and ask for a meeting at a non-trivial percentage rate. So it means that they are opportunistic, they do believe in these, I would not call them miracles, but in these chances. So that's why please continue to reach out to VCs. That's not the best way, or it should not be the only way for you to get in touch with the VCs. But certainly this is one of the ways that you should explore.

Christian Soschner01:48:49

Yeah, you need to play the game at the end of the day. I found this finding particularly interesting about cold emails. I learned in the last 10 years there is a whole market around warm introductions, and it seems to be this mythical thing where everybody believes when I get a warm introduction, I get the investment. Can you dive a little bit deeper in this story about cold emailing? Why does cold emailing matter in the VC world?

Alex Dang01:49:15

So I would start with the bigger message that there is no single silver bullet for a startup entrepreneur to raise funding and to get in touch with investors. Investors source from so many different sources, they rely on the network of other investors. They rely on the referrals from portfolio companies. And of course, that would be probably a very good signal if a portfolio company that they would invested in would recommend another startup. Serial entrepreneurs may have higher chances of being recognized by VCs for obvious reasons because they already demonstrated a track record. However, like you said, even cold emails or direct outreach may still work. And Ilya's team ran an experiment with sending fake emails. You can find even an article just about that experiment. Fake emails were sent to thousands of VCs with some LinkedIn profiles as well as with some stories of these entrepreneurs. They introduced themselves. The experiment was more about the gender and race and origin, etc. So it was also testing other things, but as a side effect of this experiment was that the open rate and the response rate was pretty high from 8 to 15 percent, which anyone who dealt with a cold calling would say, wow, that's an extremely exceptionally high number. So that's why that's just demonstrated that VCs do believe in these kind of miracles, which may just hit their mailbox, because they still their main fear is not about losing money, because if you lose money, you just lose one X. If you lose Google, you lose 10,000 X. So they are their fear is to lose that potential Google, which might have hit their mailbox one day, and then they would just say, Well, I had a chance to invest, but I missed it.

Christian Soschner01:51:13

I mean, i mean, it must be because if the intention is not only to make some money, which is fine for some investors, if the intention is to make 10 to 100x for the LPs, their investors in the fund, they need to look at places where nobody else looks. When they just rely on warm introductions on their network, on their founders, they probably get everything that's already warmed up other people are invested. It and the potential of creating a 10 to 100 X is a little bit smaller. And it might make a difference.

Alex Dang01:51:47

You're absolutely right. I would even elevate the discussion to our everyday decision making. If you are making in your everyday decisions only safe bets, then you may want to dial up the risk level a bit. Just because you may want to dedicate some amount of time on decisions and bets, which are riskier in its nature, which is some kind of wild bet. You don't have to dedicate all your life or all your career to such bets, but why not to pursue some side gig? Why not to respond to that crazy LinkedIn invitation that you've just received from someone that you do not know? Why not to accept that coffee chat with someone who wanted to get to know you? Or why not to proactively reach out to professors that you worked with or talked to 10, 20, 30 years ago? So all of these small things or small bets may could be and should be, I think, included into your portfolio and may actually have a significant payoff as a result of that. Not just monetary payoff that I'm referring to, just any kind of pay-off in terms of accomplishment or just make your life richer in terms of your experience. But this is the way that not just VCs should think. I think every one of us could leverage some tools and use some tools from that toolkit.

Christian Soschner01:53:07

Yeah, that's right. That's right. Go to the conference that you always wanted to attend it, but never did. And you might find some new ideas, some new people.

Alex Dang01:53:17

And at the conference, don't be afraid of reaching out to people and talking to people not from your industry, not from your sector. Because you may know everyone within your company, but your new ideas or some interesting stuff that you may see and face may be coming from the industry outside of your core interest. Maybe you should, as a healthcare professional, go to AI conference to learn more about AI drug discovery, and that may hit some ideas home. And maybe you would be invited as a co-founder based on your healthcare or your clinical expertise. So many magical things may happen. Actually, they are happening right now because if you think about where the innovation is happening, it's not happening in a single sector, it's happening across multiple sectors. And that's why Nvidia's talk or GenAI talk at the conference that you've already mentioned, JP Morgan Healthcare Conference will be is the one on high demand because something new happening specifically in that area, in the intersection of technology and healthcare.

Christian Soschner01:54:26

Yeah, I believe that innovation happens at the intersection of industries and bringing people together from different industries unleashes a lot of potential. When you think back at biotech 20 years ago, VCs here in Europe mostly invested in drug development, in biotech, in pure biotech. And it was around 2013, 2014 when this digital health topic came up, and it was not really AI yet, but a little bit towards machine learning, some apps, and the VCs on the digital side said we never want to invest in biotech. So anything that combines biotech with the digital world is out of our scope. And the biotech investors said the same. And now, 10 to 20 years later, we have companies like Insilico Medicine that actually combines artificial intelligence with drug development and does so successfully. My question to you is where do you see the future of innovation in the next 10 years?

Alex Dang01:55:30

It's a hard question just because there are so many things and trends happening nowadays. I do believe that AI trend, which is which has emerged and it's already happening, it's not just a dream, it's already happening here. And it's been here for quite a while. Actually, the first computer vision algorithms were deployed again, almost 20 years ago, and that was part of that effort back then. I think AI will be one of them, and we'll see more robots, like physical robots as well as automation at what we do every day. We'll see lots of things happening, like we discussed in longevity and in health tech and digital health space. We will have to bring more data and data-driven approach to prolonging our life and to making our lives healthier. And like we said before and discussed already there is nothing more valuable than our health and yeah trying to prolong our lifespan and healthy lifespan. So we'll see a lot of things in this space, but we will see a few things that we cannot even expect now. So that's why my bet and my suggestion is to that's why I carefully review where VCs are investing their capital today. And I could be a bit more skeptical about some of that, say crypto or blockchain technologies, but I could be easily wrong. Actually, I'm already wrong by being skeptical 10, 20 years ago. So I do accept that kind of a feel for sure. So things that will happen in the next 10 to 20 years will surprise all of us. And there will still be some events on the way like COVID or other crises, which will stimulate some of the technologies like digital health. And we will see more of those in the future. So hopefully we'll see a few more spikes like that, but without a negative impact of a COVID or other big shocks to the economy or to our health. Anyways, I'm a big optimist. I think every single time when I visit entrepreneurs and I see a room of hundreds and thousands of people, I realize that there will be a unicorn founder sitting right there. He or she just needs some support, not just from VCs with their capital, but also to explain the rules of the game and to explain to prevent them from making unnecessary mistakes. As well as when I meet with the corporate leaders, I think that they have so much assets and so many ways to experiment. And they have teams, they have expertise, they have customers, they have a supply chain in place. They just have to start running experiments and learn from VCs where to make bets. And for them, these bets are not that expensive. So I'm very optimistic on that front as well. So you can call me kind of a venture or Silicon Valley optimist, but I think the most transformation technology that we will discuss 10, 20 years down the road with you, Christian, will be not the one that we could name today.

Christian Soschner01:58:40

Yeah, I totally agree with that. I remember, I think, didn't you write a comment on the one of my posts that you are a huge crypto enthusiast? I'm just me. Yeah.

Alex Dang01:58:51

No, I'm not I'm not definitely not a crypto, I'm not definitely just joking. I'm definitely not a crypto enthusiast. For good or for bad reasons.

Christian Soschner01:59:01

So that's where I could definitely blame myself for I was just joking, I brought an example of social media, and I think you commented that crypto is not so much your thing. But you mentioned the crisis and the future and being optimistic. When you think when you look back in the last 20 years, the biggest crisis always brought forth the best companies. So when I look at our Zoom call, for example, right now, thinking back to Zoom and the technology in 2019, I don't think that our conversation would have been possible back then with the technology. The pandemic accelerated the development in the background. Now we have Teams, Zoom improved their offering. Also, when I think about biotech, what the pharma industry has done during the pandemic to produce billions of doses of vaccines, we can argue whether it's necessary or not, but the potential of the industry, the demonstration of the potential of the industry when everybody's collaborating and working together towards a goal was extremely optimistic. And I hope that we keep this optimism in the future. What's your assessment?

Alex Dang02:00:09

I would agree, Christian. I would just make my minor comment that Zoom as a company got is now well known after a pandemic, but it was actually founded in 2011. So I think I still want to applaud to the geniuses and to some extent, bold approach of VCs who invested back then when Zoom was clearly not the only company in teleconferencing space. Skype was already there. Google still had their own solution, WebEx was present. So it's interesting to see that venture capitalists, and what actually is intriguing is that they managed the specific venture capitalists that we tell a story about on the very first pages of our book, from Qualcomm Ventures. These people managed to somehow see the potential of a company back then when it was still a tiny company with a different name, by the way, no clients whatsoever, and just a dream of a founder with some technology and the belief that technology will win against the other. So that's this is exactly the reason why I think following VCs and learning where smart VCs make their bets. That's critical for everyone, not just for corporate leaders, but also for us as professionals for job seekers, for people who are willing to be engaged in the economy in the next 5, 10, 20 years and find a better, more interesting job. Pay more attention to where VCs invest their money in. OpenAI was not founded one or two years ago. It was founded back in remember 2014 or 16. I may want to, I probably made a mistake right now, but anyways, it was made many years ago. So pay attention to where VCs invest today. That may help you to be more strategic and where you place your bets.

Christian Soschner02:02:10

Yeah, I totally agree. The Zoom example is very fast, it's extremely fascinating. As you said, that the market was already taken, it was full back then when Zoom started. And now in 2020 everybody only was talking about Zoom and the other companies. Is Skype even there today?

Alex Dang02:02:29

It is. I mean I think you may still use Skype. I'm not a big Skype user anymore, but I still use it from time to time because some people still prefer to use Skype. I also some clients insist on using WebEx. So I'm happy to be as flexible as possible, but my preference would be always with Zoom. And look, I mean, Zoom will survive for as many days or as many years as they will continue to be day one, they will continue to have day one mentality. So they will have to continue to innovate to become still relevant for users.

Christian Soschner02:03:02

Alex, fascinating conversation. I just checked the clock. We are already two hours in the conversation. It's 8 p.m. Here, and I don't want to hold you up. I think you have probably other meetings after this one. My two final questions very quickly. How can people reach out to you? What's the best way?

Alex Dang02:03:21

LinkedIn. So I would prefer LinkedIn messages. I do check them from time to time and I post regularly. So hopefully that will also let us stay connected because what I do, I share some thoughts, ideas, insights, or just experiments which I'm running in AI space with some of my colleagues and friends. So LinkedIn would be the best way. I also would highly recommend to follow Ilya's LinkedIn, where he posts regularly about unicorns as well as both his conferences and his most recent research. So would highly recommend to follow Ilya Strebulaev as well.

Christian Soschner02:03:58

And final shout out, you and Ilya will be in Vienna in April at a conference. Can you tell me 30 seconds when and where the conference is?

Alex Dang02:04:08

So I believe it's gonna be end of April. The conference name is Alpha Omega Foundation. It's gonna be the conference not just centered around two of us. It's gonna be a conference about innovation and corporate innovation as well. So I would highly recommend you guys to anyone who's interested to join it. You can check online Alpha Omega end of April. I do believe that you are coming to such conferences, at least that's my learning and my experience. You're coming to such conferences, not just to learn more best practices or learn more about specific case studies. You are coming there to get to know like-minded people. And that network effect would play the most important role. So if you come to the conference, just try to get to know as many people as possible. And because you guys are going to be all like-minded, meaning entrepreneurial or venture-minded, hopefully, after our talk that's gonna be that's gonna play the most important role. And some of these meetings, I met Ilya more than 10 years ago as a professor. I could never imagine that we would write a book together. I met many of my mentors and future partners in a very similar way. And it took years to materialize into something meaningful and impactful. So please treat this event as a networking event to get to know people and please join. I think some information is already available online and you can buy tickets to the event. It's going to be sponsored or co-sponsored by Verbund pretty big corporation from Austria. So welcome and hopefully to see you guys in person in Vienna.

Christian Soschner02:05:54

Alex, thank you very much for the conversation and thank you very much for writing this book. In my opinion, one of the most important business books in this decade and probably also in the next and the coming decades, worth reading for everybody who's interested in venture investing and the startup world.

Alex Dang02:06:12

Thank you, Christian. Appreciate that. Thank you for your time and thank you, the audience, for their patience. It's been probably the longest interview that I have personally experienced. Appreciate that. And thank you, Christian. By the way, I have to admit that Christian is an exceptional interviewer because he prepared the framework and the he read the book multiple times. So it's been a pleasure to answer your question, Christian. I appreciate that. Thank you.

Christian Soschner02:06:38

Thank you very much, Alex. I wish you a great day in sunny California.

Alex Dang02:06:44

Thank you. Thank you, Christian.

Christian Soschner02:06:45

Bye-bye. Bye-bye. What separates the best investors, founders, and leaders from the rest? It's not luck, it's not even intelligence, it's the ability to spot outliers before anyone else and to bet on them with conviction. Today Alex shared the mindset that built Amazon, the venture capital secrets behind billion-dollar companies, and why consensus can be the enemy of innovation. We learned that conviction beats consensus. If everyone agrees the idea isn't bold enough. They fear more missing the next quarter. If your leadership expects profits next quarter, you are probably thinking too small. The biggest risk isn't failing it's playing too small. Every breakthrough every unicorn, every industry-defining company started as a crazy bet. So here's the question: what are you willing to bet on? Thank you for being here. Thank you for learning with us. And remember the future belongs to those who think like investors. See you in the next episode.