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  • The Startup Battlefield: Lessons from History’s Greatest Military Leaders

    It is hard to find good analogies for running a startup that founders can learn from. Some of the typical comparisons — playing competitive sports & games, working on large projects, running large organizations — all fall short of capturing the feeling that the odds are stacked against you that founders have to grapple with.

    But the annals of military history offer a surprisingly good analogy to the startup grind. Consider the campaigns of some of history’s greatest military leaders — like Alexander the Great and Julius Caesar — who successfully waged offensive campaigns against numerically superior opponents in hostile territory. These campaigns have many of the same hallmarks as startups:

    1. Bad odds: Just as these commanders faced superior enemy forces in hostile territory, startups compete against incumbents with vastly more resources in markets that favor them.
    2. Undefined rules: Unlike games with clear rules and a limited set of moves, military commanders and startup operators have broad flexibility of action and must be prepared for all types of competitive responses.
    3. Great uncertainty: Not knowing how the enemy will act is very similar to not knowing how a market will respond to a new offering.

    As a casual military history enthusiast and a startup operator & investor, I’ve found striking parallels in how history’s most successful commanders overcame seemingly insurmountable odds with how the best startup founders operate, and think that’s more than a simple coincidence.

    In this post, I’ll explore the strategies and campaigns of 9 military commanders (see below) who won battle after battle against numerically superior opponents across a wide range of battlefields. By examining their approach to leadership and strategy, I found 5 valuable lessons that startup founders can hopefully apply to their own ventures.

    LeaderRepresentedNotable VictoriesLegacy
    Alexander the GreatMacedon
    (336-323 BCE)
    Tyre, Issus, Gaugamela, Persian Gate, HydapsesConquered the Persian Empire before the age of 32; spread Hellenistic culture across Eurasia and widely viewed in the West as antiquity’s greatest conqueror
    Hannibal BarcaCarthage
    (221-202 BCE)
    Ticinus, Trebia, Trasimene, CannaeBrought Rome the closest to its defeat until its fall in 5th century CE; he operated freely within Italy for over a decade
    Han Xin
    (韓信)
    Han Dynasty (漢朝) (206-202 BCE)Jingxing (井陘), Wei River (濰水), Anyi (安邑) Despite being a commoner, his victories led to the creation of the Han Dynasty (漢朝) and his being remembered as one of “the Three Heroes of the Han Dynasty” (漢初三傑)
    Gaius Julius CaesarRome
    (59-45 BCE)
    Alesia, PharsalusEstablished Rome’s dominance in Gaul (France); became undisputed leader of Rome, effectively ending the Roman Republic, and his name has since become synonymous with “emperor” in the West
    SubutaiMongol Empire
    (1211-1248)
    Khunan, Kalka River, Sanfengshan (
    三峰山), Mohi
    Despite being a commoner, became one of the most successful military commanders in the Mongol Empire. Successfully won battles in more theaters than any other commander (China, Central Asia, and Eastern Europe)
    TimurTimurid Empire
    (1370-1405)
    Kondurcha River, Terek River, Dehli, AnkaraCreated Central Asian empire with dominion over Turkey, Persia, Northern India, Eastern Europe, and Central Asia. His successors would eventually create the Mughal Empire in India which continued until the 1850s
    John Churchill, Duke of MarlboroughBritain
    (1670-1712)
    Blenheim, RamilliesConsidered one of the greatest British commanders in history; Paved the way for Britain to overtake France as the pre-eminent military and economic power in Europe
    Frederick the GreatPrussia
    (1740-1779)
    Hohenfriedberg, Rossbach, LeuthenEstablished Prussia as the pre-eminent Central European power after defeating nearly every major European power in battle; A cultural icon for the creation of Germany
    Napoleon BonaparteFrance
    (1785-1815)
    Rivoli, Tarvis, Ulm, Austerlitz, Jena-Auerstedt, Friedland, DresdenEstablished a French empire with dominion over most of continental Europe; the Napoleonic code now serves as basis for legal systems around the world and the word Napoleon synonymous with military genius and ambition

    Before I dive in, three important call-outs to remember:

    1. Running a startup is not actually warfare — there are limitations to this analogy. Startups are not (and should not be) life-or-death. Startup employees are not bound by military discipline (or the threat of imprisonment if they are derelict). The concept of battlefield deception, which is at the heart of many of the tactics of the greatest commanders, also doesn’t translate well. Treating your employees / co-founders as one would a soldier or condoning violent and overly aggressive tactics would be both an ethical failure and a misread of this analogy.
    2. Drawing lessons from these historical campaigns does not mean condoning the underlying sociopolitical causes of these conflicts, nor the terrible human and economic toll these battles led to. Frankly, many of these commanders were absolutist dictators with questionable motivations and sadistic streaks. This post’s focus is purely on getting applicable insights on strategy and leadership from leaders who were able to win despite difficult odds.
    3. This is not intended to be an exhaustive list of every great military commander in history. Rather, it represents the intersection of offensive military prowess and my familiarity with the historical context. Just because I did not mention a particular commander has no bearing on their actual greatness.

    With those in mind, let’s explore how the wisdom of historical military leaders can inform the modern startup journey. In the post, I’ll unpack five key principles (see below) drawn from the campaigns of history’s most successful military commanders, and show how they apply to the challenges ambitious founders face today.

    1. Get in the trenches with your team
    2. Achieve and maintain tactical superiority
    3. Move fast and stay on offense
    4. Unconventional teams win
    5. Pick bold, decisive battles

    Principle 1: Get in the trenches with your team

    One common thread unites the greatest military commanders: their willingness to share in the hardships of their soldiers. This exercise of leadership by example, of getting “in the trenches” with one’s team, is as crucial in the startup world as it was on historical battlefields.

    Every commander on our list was renowned for marching and fighting alongside their troops. This wasn’t mere pageantry; it was a fundamental aspect of their leadership style that yielded tangible benefits:

    1. Inspiration: Seeing their leader work shoulder-to-shoulder with them motivated soldiers to push beyond their regular limits.
    2. Trust: By sharing in their soldiers’ hardships, commanders demonstrated that they valued their troops and understood their needs.
    3. Insight: Direct involvement gave leaders firsthand knowledge of conditions on the ground, informing better strategic decisions.

    Perhaps no figure exemplified this better than Alexander the Great. Famous for being one of the first soldiers to jump into battle, Alexander was wounded seriously multiple times. This shared experience created a deep bond with his soldiers, culminating in his legendary speech at Opis where he was able to quell a mutiny of his soldiers, tired after years of campaigns, with a speech reminding them of their shared experiences:

    Alexander the Great from Alexandria, Egypt (3rd Century BCE); Image Credit: Wikimedia

    The wealth of the Lydians, the treasures of the Persians, and the riches of the Indians are yours; and so is the External Sea. You are viceroys, you are generals, you are captains. What then have I reserved to myself after all these labors, except this purple robe and this diadem? I have appropriated nothing myself, nor can any one point out my treasures, except these possessions of yours or the things which I am guarding on your behalf. Individually, however, I have no motive to guard them, since I feed on the same fare as you do, and I take only the same amount of sleep.

    Nay, I do not think that my fare is as good as that of those among you who live luxuriously; and I know that I often sit up at night to watch for you, that you may be able to sleep.

    But some one may say, that while you endured toil and fatigue, I have acquired these things as your leader without myself sharing the toil and fatigue. But who is there of you who knows that he has endured greater toil for me than I have for him? Come now, whoever of you has wounds, let him strip and show them, and I will show mine in turn; for there is no part of my body, in front at any rate, remaining free from wounds; nor is there any kind of weapon used either for close combat or for hurling at the enemy, the traces of which I do not bear on my person.

    For I have been wounded with the sword in close fight, I have been shot with arrows, and I have been struck with missiles projected from engines of war; and though oftentimes I have been hit with stones and bolts of wood for the sake of your lives, your glory, and your wealth, I am still leading you as conquerors over all the land and sea, all rivers, mountains, and plains. I have celebrated your weddings with my own, and the children of many of you will be akin to my children.

    Alexander the Great (as told by Arrian)

    This was not unique to Alexander. Julius Caesar famously slept in chariots and marched alongside his soldiers. Napoleon was called “le petit caporal” by his troops after he was found sighting the artillery himself, a task that put him within range of enemy fire and was usually delegated to junior officers.

    Frederick the Great also famously mingled with his soldiers while on tour, taking kindly to the nickname from his men, “Old Fritz”. Frederick understood the importance of this as he once wrote to his nephew:

    “You cannot, under any pretext whatever, dispense with your presence at the head of your troops, because two thirds of your soldiers could not be inspired by any other influence except your presence.”

    Frederick the Great
    “Old Fritz” after the Battle of Hochkirch
    Image credit: WikiMedia Commons

    For Startups

    For founders, the lesson is clear: show up when & where your team is and roll up your sleeves so they can see you work beside them. It’s not just that startups tend to need “all hands on deck”, but being in the trenches also provides “on the ground” context that is valuable and help create the morale needed to succeed.

    Elon Musk, for example, famously spent time on the Tesla factory floor — even sleeping on it — while the company worked through issues with its Model 3 production, noting in an interview:

    “I am personally on that line, in that machine, trying to solve problems personally where I can,” Musk said at the time. “We are working seven days a week to do it. And I have personally been here on zone 2 module line at 2:00 a.m. on a Sunday morning, helping diagnose robot calibration issues. So I’m doing everything I can.”

    Principle 2: Achieve and maintain tactical superiority

    To win battles against superior numbers requires a commander to have a strong tactical edge over their opponents. This can be in the form of a technological advantage (i.e. a weapons technology) or an organizational one (i.e. superior training or formations), but these successful commanders always made sure their soldiers could “punch above their weight”.

    Alexander the Great, for example, leveraged the Macedonian Phalanx, a modification of the “classical Greek phalanx” used by the Greek city states of the era, that his father Philip II helped create.

    Image Credit: RedTony via WikiMedia Commons

    The formation relied on “blocks” of heavy infantry equipped with six-meter (!!) long spears called sarissa which could rearrange themselves (to accommodate different formation widths and depths) and “pin” enemy formations down while the heavy cavalry would flank or exploit gaps in the enemy lines. This formation made Alexander’s army highly effective against every military force — Greeks, Persians, and Indians — it encountered.

    Macedonian Phalanx with sarissa; Image Credit: Wikimedia Commons

    A few centuries later, the brilliant Chinese commander Han Xin (韓信) leaned heavily on the value of military engineering. Han Xin (韓信)’s soldiers would rapidly repair & construct roads to facilitate his army’s movement or, at times, to deceive his enemies about which path he planned to take. His greatest military engineering accomplishment was at the Battle of Wei River (濰水) in 204 BCE. Han Xin (韓信) attacked the larger forces of the State of Qi (齊) and State of Chu (楚) and immediately retreated across the river, luring them to cross. What his rivals had not realized in their pursuit was that the water level of the Wei River was oddly low. Han Xin (韓信) had, prior to the attack, instructed his soldiers to construct a dam upstream to lower the water level. Once a sizable fraction of the enemy’s forces were mid-stream, Han Xin (韓信) ordered the dam released. The rush of water drowned a sizable portion of the enemy’s forces and divided the Chu (楚) / Qi (齊) forces letting Han Xin (韓信)’s smaller army defeat and scatter them.

    A century and a half later, Roman statesman and military commander Gaius Julius Caesar also famously advocated military engineering capability in his wars with the Germanic tribes in Gaul. He became the first Roman commander to cross the Rhine (twice!) by building bridges to make the point to the Germanic tribes that he could invade them whenever he wanted. At the Battle of Alesia in 52 BCE, after trading battles with the skilled Gallic commander Vercingetorix who had united the tribes in opposition to Rome, Caesar besieged Vercingetorix’s fortified settlement of Alesia while simultaneously holding off Gallic reinforcements. Caesar did this by building 25 miles of fortifications surrounding Alesia in a month, all while outnumbered and under constant harassment from both sides by the Gallic forces! Caesar’s success forced Vercingetorix to surrender, bringing an end to organized resistance to Roman rule in Gaul for centuries.

    Vercingetorix Throws Down his Arms at the Feet of Julius Caesar by Lionel Royer; Image Credit: Wikimedia

    The Mongol commander Subutai similarly made great use of Mongol innovations to overcome defenders from across Eurasia. The lightweight Mongol composite bow gave Mongol horse archers a devastating combination of long range (supposedly 150-200 meters!) and speed (because they were light enough to be fired while on horseback). The Mongol horses themselves were another “biotechnological” advantage in that they required less water and food which let the Mongols wage longer campaigns without worrying about logistics.

    Mongol horse archers, Image credit: Wikimedia Commons

    In the 18th century, Frederick the Great transformed warfare on the European continent with a series of innovations. First, he drilled his soldiers stressing things like firing speed. It is said that lines of Prussian riflemen could fire over twice as fast as other European armies they faced, making them exceedingly lethal in combat.

    Frederick’s Leibgarde Batallion in action; Image credit: Military Heritage

    Frederick was also famous for a battle formation: the oblique order. Instead of attacking an opponent head on, the oblique order involves confronting the enemy line at an angle with soldiers massed towards one end of the formation. If one’s soldiers are well-trained and disciplined, then even with a smaller force in aggregate, the massed wing can overwhelm the opponent in one area and then flank or surround the rest. Frederick famously boasted that the oblique order could allow a skilled force to win over an opposing one three times its size.

    Finally, Frederick is credited with popularizing horse artillery, the use of horse-drawn light artillery guns, in European warfare. With horse artillery units, Frederick was able to increase the adaptability of his forces and their ability to break through even numerically superior massed infantry by concentrating artillery fire where it was needed.

    Horse-drawn artillery unit; Image credit: Wikimedia Commons

    A few decades later, Napoleon Bonaparte became the undisputed master of much of continental Europe by mastering army-level logistics and organization. While a brilliant tactician and artillery commander, what set Napoleon’s military apart was its embrace of the “corps system”, which subdivided his forces into smaller, self-contained corps that were capable of independent operations. This allowed Napoleon the ability to pursue grander goals, knowing that he could focus his attention on the most important fronts of battle, while the other corps could independently pin an enemy down or pursue a different objective in parallel.

    Napoleon triumphantly entering Berlin by Charles Meynier; Image Credit: Wikimedia Commons

    Additionally, Napoleon invested heavily in overhauling military logistics, using a combination of forward supply depots and teaching his forces to forage for food and supplies in enemy territory (and, just as importantly, how to estimate what foraging can do to help determine the necessary supplies to take). This investment led to the invention of modern canning technology, first used to support the marches of the French Grande Armée. The result was Napoleon could field larger armies over longer campaigns all while keeping his soldiers relatively well-fed.

    For Startups

    Founders need to make sure they have a strong tactical advantage that fits their market(s). As evidenced above, it does not need to be something as grand as an unassailable advantage, but it needs to be a reliable winner and something you continuously invest in if you plan on competing with well-resourced incumbents in challenging markets.

    The successful payments company Stripe started out by making sure they would always win on developer ease of use, even going so far as to charge more than their competition during their Beta to make sure that their developer customers were valuing them for their ease of use. Stripe’s advantage here, and continuous investment in maintaining that advantage, ultimately let it win any customer that needed a developer payment integration, even against massive financial institutions. This advantage laid the groundwork for Stripe’s meteoric growth and expansion into adjacent categories from its humble beginnings.

    Principle 3: Move fast and stay on offense

    In both military campaigns and startups, speed and a focus on offense plays an outsized role in victory, because the ability to move quickly creates opportunities and increases resiliency to mistakes.

    Few understood this principle as well as the Mongol commander Subutai who frequently took advantage of the greater speed and discipline of the Mongol cavalry to create opportunities to win.

    In the Battle of the Kalka River (1223), Subutai took what initially appeared to be a Mongol defeat — when the Kievan Rus and their Cuman allies successfully entrapped the Mongol forces in the area — and turned it into a victory. The Mongols began a 9 day feigned retreat (many historians believe this was a real retreat that Subutai turned into a feigned one once he realized the situation), constantly tempting the enemy by staying just out of reach into overextending themselves in pursuit.

    After 9 days, Subutai’s forces took advantage of their greater speed to lay a trap. Once the Mongols crossed the river they reformed their lines to lie in ambush. As soon as the Rus forces crossed the Kalka River, they found themselves surrounded and confronted with a cavalry charge they were completely unprepared for. After all, they had been pursuing what they thought was a fleeing enemy! Their backs against the river, the Rus forces (including several major princes) were annihilated.

    Battle of Kalka River; Image Credit: Wikimedia Commons

    Subutai took advantage of the Mongol speed advantage in a number of his campaigns, coordinating fast-moving Mongol divisions across multiple objectives. In its destruction of the Central Asian Khwarazmian empire, the Mongols, under the command of Subutai and Mongol ruler Genghis Khan, overwhelmed the defenders with coordinated maneuvers. While much of the Mongol forces attacked from the East, where the Khwarazmian forces massed, Subutai used the legendary Mongol speed to go around the Khwarazmian lines altogether, ending up at Bukhara, 100 miles to the West of the Khwarazmian defensive position! In a matter of months, the empire was destroyed and its rulers chased out, never to return.

    Map of the Mongol force movements in the Mongol invasion of Khwarazmian Empire; Image Credit: Paul K. Davis, Masters of the Battlefield

    A few hundred years later, the Englishman John Churchill, the Duke of Marlborough also proved the value of speed in 1704 when he boldly marched an army of 21,000 Dutch and English troops on a 250-mile march across Europe in just five weeks to place themselves between French and Bavarian forces and their target of Vienna. Had Vienna been attacked, it would have forced England’s ally the Holy Roman Empire out of the conflict, giving France the victory in the War of the Spanish Succession. This march was made all the more challenging as Marlborough had to find a way to feed and equip his army along this march without unnecessarily burdening the neutral and friendly territories they were marching through.

    Marlborough’s “march to the Danube”; Image Credit: Rebel Redcoat

    Marlborough’s maneuver threw the Bavarian and French forces off-balance. What originally was supposed to be an “easy” French victory culminated in a crushing defeat for the French at Blenheim which turned the momentum of the war. This victory solidified Marlborough’s reputation and even resulted in the British government agreeing to build a lavish palace (called Blenheim Palace in honor of the battle) as a reward to Marlborough.

    Marlborough proved the importance of speed again at the Battle of Oudenarde. In 1708, French forces captured Ghent and Bruges (in modern day Belgium), threatening the alliance’s ability to maintain contact with Britain. Recognizing this, Marlborough force-marched his army to the city of Oudenarde, marching 30 miles in about as many hours. The French, confident from their recent victories and suffering from an internal leadership squabble, misjudged the situation, allowing Marlborough’s forces to build five pontoon bridges to move his 80,000 soldiers across the nearby river.

    When the French commander received news that the allies were already at Oudenarde building bridges, he said, “If they are there, then the devil must have carried them. Such marching is impossible!

    Marlborough’s forces, not yet at full strength, engaged the French, buying sufficient time for his forces to cross and form up. Once in formation, they counterattacked and collapsed one wing of the French line, saving the Allied position in the Netherlands, and resulting in a bad defeat for French forces.

    The Battle of Oudenarde, showing the position of the bridges the Allied forces needed to cross to get into position; Image Credit: WikiMedia Commons

    For Startups

    The pivotal role speed played in achieving victory for Subutai and the Duke of Marlborough apply in the startup domain as well. The ability to make fast decisions, to quickly shift focus to rapidly adapt to a new market context creates opportunities that slower moving incumbents (and military commanders!) cannot seize. Speed also gifts resiliency against mistakes and weak positions, in much the same way that speed let the Mongols and the Anglo-Prussian-Dutch alliance overcome their initial missteps at Kalka River and Oudenarde. Founders would be wise to remember to embrace speed of action in all they do.

    Facebook and it’s (now in)famous “move fast, break things” motto is one classic example of how a company can internalize speed as a culture. It leveraged that to ship products and features which has kept it a leader in social and AI even in the face of constant competition and threats from well-funded companies like Google, Snapchat, and Bytedance.

    Principle 4: Unconventional teams win

    Another unifying hallmark of the great commanders is that they made unconventional choices with regards to their army composition. Relative to their peers, these commanders tended to build armies that were more diverse in class and nationality. While this required exceptional communication and inspiration skills, it gave the commanders significant advantages:

    1. Ability to recruit in challenging conditions: For many of the commanders, the unconventional team structure was a necessity to build up the forces they needed given logistical / resource constraints while operating in enemy territory.
    2. Operational flexibility from new tactics: Bringing on personnel from different backgrounds let commanders incorporate additional tactics and strategies, creating a more effective and flexible fighting force.

    The Carthaginian general Hannibal Barca for example famously fielded a multi-nationality army consisting of Carthaginians, Libyans, Iberians, Numidians, Balearic soldiers, Gauls, and Italians. This allowed Hannibal to raise an army in hostile territory — after all, waging war in the heart of Italy against Rome made it difficult to get reinforcements from Carthage.

    Illustration of troop types employed in the Second Punic War by Carthage/Hannibal Barca; Image Credit: Travis’s Ancient History

    But, it also gave Hannibal’s army flexibility in tactics. Balearic slingers provided superior long range attack to the best Roman-used bows of the time. Numidian light cavalry provided Hannibal with fast reconnaissance and a quick way to flank and outmaneuver Roman forces. Gallic and Iberian soldiers provided shock infantry and cavalry. Each of these groups of soldiers added their own distinctive capabilities to Hannibal’s armies and great victories over Rome.

    The Central Asian conqueror Timur similarly fielded a diverse army which included Mongols, Turks, Persians, Indians, Arabs, and others. This allowed Timur to field larger armies for his campaigns by recruiting from the countries he forced into submission. Like with Hannibal, it also gave Timur’s army access to a diverse set of tactics: war elephants (from India), infantry and siege technology from the Persians, gunpowder from the Ottomans, and more. This combination of operational flexibility and ability to field large armies let Timur build an empire which defeated every major power in Central Asia and the Middle East.

    The Defeat by Timur of the Sultan of Dehli (from the Imperial Library of Emperor Akbar);
    Image credit: Wikimedia

    It should not be a surprise that some of the great commanders were drawn towards assembling unconventional teams as several of them were ultimately “commoners”. Subutai (a son of a blacksmith who Genghis Khan took interest in), Timur (a common thief), and Han Xin (韓信, who famously had to beg for food in his childhood) all came from relatively humble origins. Napoleon, famous for declaring the military “la carrier est ouvérte aux talents” (“the career open to the talents”) and creating the first modern order of merit Légion d’honneur (open to all, regardless of social class), was similarly motivated by the difficulties he faced in securing promotion early in his career due to his not being from the French nobility.

    But, by embracing more of a meritocracy, Napoleon was ultimately able to field some of the largest European armies in existence as he waged war successfully against every other major European power (at once).

    First Légion d’Honneur Investiture by Jean-Baptiste Debret;
    Image Credit: Wikimedia

    For Startups

    Hiring is one of the key tasks for startup founders. While hiring the people that larger, better-resourced companies want to can be helpful for a startup, it’s important to always remember that transformative victories require unconventional approaches. Leaning on unconventional hires may help you get out of a salary bidding war with those deeper-pocketed competitors. Choosing unconventional hires may also add different skills and perspectives to the team.

    In pursuing this strategy, it’s also vital to excel at communication & organization as well as fostering a shared sense of purpose. All teams require strong leadership to be effective but this is especially true with an unconventional team composition facing uphill odds.

    The enterprise API company Zapier is one example of taking an unconventional approach to team construction by having been 100% remote from inception (pre-COVID even). This let the company assemble a team without being confined by location and eliminate the need to spend on unnecessary facilities. They’ve had to invest in norms around documentation and communication to make this work, and, while it’d be too far of a leap to argue all startups should go 100% remote, for Zapier’s market and team culture, it’s worked.

    Principle 5: Pick bold, decisive battles

    When in a challenging environment with limited resources, it’s important to prioritize decisive moves — actions which can result in a huge payoff — even if risky over safer, less impactful ones. This is as true for startups, which have limited runway and need to make a big splash in order to fundraise, as for military commanders who need more than just battlefield wins but strategic victories.

    Few understood this as well as the Carthaginian general Hannibal Barca who, in waging the Second Punic War against Rome, crossed the Alps from Spain with his army in 218 BCE (at the age of 29!). Memorialized in many works of art (see below for one by Francisco Goya), this was a dangerous move (one that resulted in the loss of many men and almost his entire troop of war elephants) and was widely considered to be impossible.

    The Victorious Hannibal Seeing Italy from the Alps for the First Time by Francisco Goya in Museo del Prado; Image Credit: Wikimedia

    While history (rightly) remembers Hannibal’s boldness, it’s important to remember that Hannibal’s move was highly calculated. He realized that the Gauls in Northern Italy, who had recently been subjugated by the Romans, were likely to welcome a Roman rival. Through his spies, he also knew that Rome was planning an invasion of Carthage in North Africa. He knew he had little chance to bypass the Roman navy or Roman defensive placements if he invaded in another way.

    And Hannibal’s bet paid off! Having caught the Romans entirely by surprise, they cancelled their planned invasion of Africa, and Hannibal lined up many Gallic allies to his cause. Within two years of his entry into Italy, Hannibal trounced the Roman armies sent to battle him at the River Ticinus, at the River Trebia, and at Lake Trasimene. Shocked by their losses, the Romans elected two consuls with the mandate to battle Hannibal and stop him once and for all.

    Knowing this, Hannibal seized a supply depot at the town of Cannae, presenting a tempting target to the Roman consuls to prove themselves. They (foolishly) took the bait. Despite fielding over 80,000 soldiers against Hannibal’s 50,000, Hannibal successfully executed a legendary double-envelopment maneuver (see below) and slaughtered almost the entire Roman force that met him in battle.

    Hannibal’s double envelopment of Roman forces at Cannae;
    Image Credit: Wikimedia

    To put this into perspective, in the 2 years after Hannibal crossed the Alps, Hannibal’s army killed 20% of all male Romans over the age of 17 (including at least 80 Roman Senators and one previous consul). Cannae is today considered one of the greatest examples of military tactical brilliance, and, as historian Will Durant wrote, “a supreme example of generalship, never bettered in history”.

    Cannae was a great example of Hannibal’s ability to pick a decisive battle with favorable odds. Hannibal knew that his only chance was to encourage the city-states of Italy to side with him. He knew the Romans had just elected consuls itching for a fight. He chose the field of battle by seizing a vital supply depot at Cannae. Considering the Carthaginians had started and pulled back from several skirmishes with the Romans in the days leading up to the battle, it’s clear Hannibal also chose when to fight, knowing full well the Romans outnumbered him. After Cannae, many Italian city-states and the kingdom of Macedon sided with Carthage. That Carthage ultimately lost the Second Punic War is a testament more to Rome’s indomitable spirit and the sheer odds Hannibal faced than any indication of Hannibal’s skills.

    In the Far East, about a decade later, the brilliant Chinese military commander Han Xin (韓信) was laying the groundwork for the creation of the Han Dynasty (漢朝) in a China-wide civil war known as the the Chu-Han contention between the State of Chu (楚) and the State of Han (漢) led by Liu Bang (劉邦, who would become the founding emperor Gaozu 高祖 of the Han Dynasty 漢朝).

    Under the leadership of Han Xin (韓信), the State of Han (漢) won many victories over their neighbors. Overconfident from those victories, his king Liu Bang (劉邦) led a Han (漢) coalition to a catastrophic defeat when he briefly captured but then lost the Chu (楚) capital of Pengcheng (彭城) in 205 BCE. Chu forces (楚) were even able to capture the king’s father and wife as hostages, and several Han (漢) coalition states switched their loyalty to the Chu (楚).

    Map of the 18 states that existed at the start of the Chu-Han Contention, the two sides being the Han (in light purple on the Southwest) and the Chu (in green on the East); Image Credit: Wikimedia

    To fix his king’s blunder, Han Xin (韓信) tasked the main Han (漢) army with setting up fortified positions in the Central Plain, drawing Chu (楚) forces there. Han Xin (韓信) would himself take a smaller force of less experienced soldiers to attack rival states in the North to rebuild the Han (漢) military position.

    After successfully subjugating the State of Wei (魏), Han Xin (韓信)’s forces moved to attack the State of Zhao (趙, also called Dai 代) through the Jingxing Pass (井陘關) in late 205 BCE. The Zhao (趙) forces, which outnumbered Han Xin (韓信)’s, encamped on the plain just outside the pass to meet them.

    Sensing an opportunity to deal a decisive blow to the overconfident Zhao (趙), Han Xin (韓信) ordered a cavalry unit to sneak into the mountains behind the Zhao (趙) camp and to remain hidden until battle started. He then ordered half of his remaining army to position themselves in full view of the Zhao (趙) forces with their backs to the Tao River (洮水), something Sun Tzu’s Art of War (孫子兵法) explicitly advises against (due to the inability to retreat). This “error” likely reinforced the Zhao (趙) commander’s overconfidence, as he made no move to pre-emptively flank or deny the Han (漢) forces their encampment.

    Han Xin (韓信) then deployed his full army which lured the Zhao (趙) forces out of their camp to counterattack. Because the Tao River (洮水) cut off all avenues of escape, the outnumbered Han (漢) forces had no choice but to dig in and fight for their lives, just barely holding the Zhao (趙) forces at bay. By luring the enemy out for what appeared to be “an easy victory”, Han Xin (韓信) created an opportunity for his hidden cavalry unit to capture the enemy Zhao (趙) camp, replacing their banners with those of the Han (漢). The Zhao (趙) army saw this when they regrouped, which resulted in widespread panic as the Zhao (趙) army concluded they must be surrounded by a superior force. The opposition’s morale in shambles, Han Xin (韓信) ordered a counter-attack and the Zhao (趙) army crumbled, resulting in the deaths of the Zhao (趙) commander and king!

    Han Xin (韓信) bet his entire outnumbered command on a deception tactic based on little more than an understanding of his army’s and the enemy’s psychology. He won a decisive victory which helped reverse the tide of the war. The State of Zhao (趙) fell, and the State of Jiujiang (九江) and the State of Yan (燕) switched allegiances to the Han (漢). This battle even inspired a Chinese expression “fighting a battle with one’s back facing a river” (背水一戰) to describe fighting for survival in a “last stand”.

    Caesar crosses the Rubicon by Bartolomeo Pinelli; Image Credit: Wikimedia

    Roughly a century later, on the other side of the world, the Roman statesman and military commander Julius Caesar made a career of turning bold, decisive bets into personal glory. After Caesar conquered Gaul, Caesar’s political rivals led by Gnaeus Pompeius Magnus (Pompey the Great), a famed military commander, demanded Caesar return to Rome and give up his command. Caesar refused and crossed the Rubicon, a river marking the boundary of Italy, in January 49 BCE starting a Roman Civil War and coining at least two famous expressions (including alea iacta est – “the die is cast”) for “the point of no return”.

    This bold move came as a complete shock to the Roman elite. Pompey and his supporters fled Rome. Taking advantage of this, Caesar captured Italy without much bloodshed. Caesar then pursued Pompey to Macedon, seeking a decisive land battle which Pompey, wisely, given his broad network of allies and command of the Roman navy, refused to give him. Instead, Caesar tried and failed to besiege Pompey at Dyrrhachium which forced him into retreat in Greece.

    Pompey’s supporters, however, lacked Pompey’s patience (and judgement). Overconfident from their naval strength, numerical advantage, and Caesar’s failure at Dyrrhachium, they pressured Pompey into a battle with Caesar who was elated at the opportunity. In the summer of 48 BCE, the two sides met at the Battle of Pharsalus.

    The initial battle formations at the Battle of Pharsalus; Image Credit: Wikimedia

    Always cautious, Pompey took up a position on a mountain and oriented his forces such that his larger cavalry wing would have ability to overpower Caesar’s cavalry and then flank Caesar’s forces while his numerically superior infantry would be arranged deeper to smash through or at least hold back Caesar’s lines.

    Caesar made a bold tactical choice when he saw Pompey’s formation. He thinned his (already outnumbered) lines to create a 4th reserve line of veterans which he positioned behind his cavalry at an angle (see battle formation above).

    Caesar initiated the battle and attacked with two of his infantry lines. As Caesar expected, Pompey ordered a cavalry charge which soon forced back Caesar’s outnumbered cavalry. But Pompey’s cavalry then encountered Caesar’s 4th reserve line which had been instructed to use their javelins to stab at the faces of Pompey’s cavalry like bayonets. Pompey’s cavalry, while larger in size, was made up of relatively inexperienced soldiers and the shock of the attack caused them to panic. This let Caesar’s cavalry regroup and, with the 4th reserve line, swung around Pompey’s army completing an expert flanking maneuver. Pompey’s army, now surrounded, collapsed once Caesar sent his final reserve line into battle.

    Caesar’s boldness and speed of action let him take advantage of a lapse in Pompey’s judgement. Seeing a rare opportunity to win a decisive battle, Caesar was even willing to risk a disadvantage in infantry, cavalry, and position (Pompey’s army had the high ground and had forced Caesar to march to him). But this strategic and tactical gamble (thinning his lines to counter Pompey’s cavalry charge) paid off as Pharsalus shattered the myth of Pompey’s inevitability. Afterwards, Pompey’s remaining allies fled or defected to Caesar, and Pompey himself fled to Egypt where he was assassinated (by a government wishing to win favor with Caesar). And, all of this — from Gaul to crossing the Rubicon to the Civil War — paved the way for Caesar to become the undisputed master of Rome.

    For Startups

    Founders need to take bold, oftentimes uncomfortable bets that have large payoffs. While a large company can take its time winning a war of attrition, startups need to score decisive wins quickly in order to attract talent, win deals, and shift markets towards them. Only taking the “safe and rational” path is a failure to recognize the opportunity cost when operating with limited resources.

    In other words, founders need to find their own Alps / Rubicons to cross.

    In the startup world, few moves are as bold (while also uncomfortable and risky) as big pivots. But, there are examples of incredible successes like Slack that were able to make this work. In Slack’s case, the game they originally developed ended up a flop, but CEO & founder Stewart Butterfield felt the messaging product they had built to support the game development had potential. Leaning on that insight, over the skepticism of much of his team and some high profile investors, Butterfield made a bet-the-company move similar to Han Xin (韓信) digging in with no retreat which created a seminal product in the enterprise software space.

    Summary

    I hope I’ve been able to show that history’s greatest military commanders can offer valuable lessons on leadership and strategy for startup founders.

    The five principles derived from studying some of the commanders’ campaigns – the importance of getting in the trenches, achieving tactical superiority, moving fast, building unconventional teams, and picking bold, decisive battles – played a key role in the commanders’ success and generalize well to startup execution.

    After all, what is a more successful founder than one who can recruit teams despite resource constraints (unconventional teams), inspire them (by getting in the trenches alongside them), and move with speed & urgency (move fast) to take a competitive edge (achieve tactical superiority) and apply it where there is the greatest chance of a huge impact on the market (pick bold, decisive battles).

  • The only 3 things a startup CEO needs to master

    So, you watched Silicon Valley and read some articles on Techcrunch and you envision yourself as a startup CEO 🤑. What does it take to succeed? Great engineering skills? Salesmanship? Financial acumen?

    As someone who has been on both sides of the table (as a venture investor and on multiple startup executive leadership teams), there are three — and only three — things a startup CEO needs to master. In order of importance:

    1. Raise Money from Investors (now and in the future): The single most important job of a startup CEO is to secure funding from investors. Funding is the lifeblood of a company, and raising it is a job that only the CEO can drive. Not being great at it means slower growth / fewer resources, regardless of how brilliant you are, or how great your vision. Being good at raising money buys you a lot of buffer in every other area.
    2. Hire Amazing People into the Right Roles (and retain them!): No startup, no matter how brilliant the CEO, succeeds without a team. Thus, recruiting the right people into the right positions is the second most vital job of a CEO. Without the right people in place, your plans are not worth the paper on which they are written. Even if you have the right people, if they are not entrusted with the right responsibilities or they are unhappy, the wrong outcomes will occur. There is a reason that when CEOs meet to trade notes, they oftentimes trade recruiting tips.
    3. Inspire the Team During Tough Times: Every startup inevitably encounters stormy seas. It could be a recession causing a slowdown, a botched product launch, a failed partnership, or the departure of key employees. During these challenging times, the CEO’s job is to serve as chief motivator. Teams that can resiliently bounce back after crises can stand a better chance of surviving until things turn a corner.

    It’s a short list. And it doesn’t include:

    • deep technical expertise
    • an encyclopedic knowledge of your industry
    • financial / accounting skills
    • marketing wizardry
    • design talent
    • intellectual property / legal acumen

    It’s not that those skills aren’t important for building a successful company — they are. It’s not even that these skills aren’t helpful for a would-be startup CEO — these skills would be valuable for anyone working at a startup to have. For startup CEOs in particular, these skills can help sell investors as to why the CEO is the right one to invest in or convince talent to join or inspire the team that the strategy a CEO has chosen is the right one.

    But, the reality is that these skills can be hired into the company. They are not what separates great startup CEOs from the rest of the pack.

    What makes a startup CEO great is their ability to nail the jobs that cannot be delegated. And that boils down to fundraising, hiring and retaining the best, and lifting spirits when things are tough. And that is the job.

    After all, startup investors write checks because they believe in the vision and leadership of a CEO, not a lackey. And startup employees expect to work for a CEO with a vision, not just a mouthpiece.

    So, want to become a startup CEO? Work on:

    • Storytelling — Learn how to tell stories that compel listeners. This is vital for fundraising (convincing investors to take a chance on you because of your vision), but also for recruiting & retaining people as well as inspiring a team during difficult times.
    • Reading People — Learn how to accurately read people. You can’t hire a superstar employee with other options, retain an unhappy worker through tough times, or overcome an investor’s concerns unless you understand their position. This means being attentive to what they tell you directly (i.e., over email, text, phone / video call, or in person, etc.) as well as paying attention to what they don’t (i.e., body language, how they act, what topics they discussed vs. didn’t, etc.).
    • Prioritization — Many startup CEOs got to where they are because they were superstars at one or more of the “unnecessary to be a great startup CEO” skills. But, continuing to focus on that skill and ignoring the skills that a startup CEO needs to be stellar at confuses the path to the starting point with the path to the finish line. It is the CEO’s job to prioritize those tasks that they cannot delegate and to ruthlessly delegate everything else.
  • Advice VCs Want to Give but Rarely Do to Entrepreneurs Pitching Their Startups

    Source: Someecards

    I thought I’d re-post a response I wrote a while ago to a question on Quora as someone recently asked me the question: “What advice do you wish you could give but usually don’t to a startup pitching you?”

    • Person X on your team reflects poorly on your company — This is tough advice to give as its virtually impossible during the course of a pitch to build enough rapport and get a deep enough understanding of the inter-personal dynamics of the team to give that advice without it unnecessarily hurting feelings or sounding incredibly arrogant / meddlesome.
    • Your slides look awful — This is difficult to say in a pitch because it just sounds petty for an investor to complain about the packaging rather than the substance.
    • Be careful when using my portfolio companies as examples — While its good to build rapport / common ground with your VC audience, using their portfolio companies as examples has an unnecessarily high chance of backfiring. It is highly unlikely that you will know more than an inside investor who is attending board meetings and in direct contact with management, so any errors you make (i.e., assuming a company is doing well when it isn’t or assuming a company is doing poorly when it is doing well / is about to turn the corner) are readily caught and immediately make you seem foolish.
    • You should pitch someone who’s more passionate about what you’re doing — Because VCs have to risk their reputation within their firms / to the outside world for the deals they sign up to do, they have to be very selective about which companies they choose to get involved with. As a result, even if there’s nothing wrong with a business model / idea, some VCs will choose not to invest due simply to lack of passion. As the entrepreneur is probably deeply passionate about and personally invested in the market / problem, giving this advice can feel tantamount to insulting the entrepreneur’s child or spouse.

    Hopefully this gives some of the hard-working entrepreneurs out there some context on why a pitch didn’t go as well as they had hoped and maybe some pointers on who and how to approach an investor for their next pitch.

    Thought this was interesting? Check out some of my other pieces on how VC works / thinks

  • Helping Multi-Agent AI Experimentation

    Inspired by some work from a group at Stanford on building a lab from AI agents, I’ve been experimenting with multi-agent AI conversations and workflows. But, because the space (at least to me) has seemed more focused on building more capable agents rather than coordinating and working with more agents, the existing tools and libraries have been difficult to carry out experiments.

    To facilitate some of my own exploration work, I built what I’m calling a Multi-Agent ChatLab — a browser-based, completely portable setup to define multiple AI agents and facilitate conversations between them. This has made my experimentation work vastly simpler and I hope it can help someone else.

    And, to show off the tool, and for your amusement (and given my love of military history), here is a screengrab from the tool where I set up two AI Agents — one believing itself to be Napoleon Bonaparte and one believing itself to be the Duke of Wellington (the British commander who defeated Napoleon at Waterloo) — and had them describe (and compare!) the hallmarks of their military strategy.

  • Not your grandma’s geothermal energy

    The pursuit of carbon-free energy has largely leaned on intermittent sources of energy — like wind and solar; and sources that require a great deal of initial investment — like hydroelectric (which requires elevated bodies of water and dams) and nuclear (which require you to set up a reactor).

    The theoretical beauty of geothermal power is that, if you dig deep enough, virtually everywhere on planet earth is hot enough to melt rock (thanks to the nuclear reactions that heat up the inside of the earth). But, until recently, geothermal has been limited to regions of Earth where well-formed geologic formations can deliver predictable steam without excessive engineering.

    But, ironically, it is the fracking boom, which has helped the oil & gas industries get access to new sources of carbon-producing energy, which may help us tap geothermal power in more places. As fracking and oil & gas exploration has led to a revolution in our ability to precisely drill deep underground and push & pull fluids, it also presents the ability for us to tap more geothermal power than ever before. This has led to the rise of enhanced geothermal, the process by which we inject water deep underground to heat, and leverage the steam produced to generate electricity. Studies suggest the resource is particularly rich and accessible in the Southwest of the United States (see map below) and could be an extra tool in our portfolio to green energy consumption.

    (Source: Figure 5 from NREL study on enhanced geothermal from Jan 2023)

    While there is a great deal of uncertainty around how much this will cost and just what it will take (not to mention the seismic risks that have plagued some fracking efforts), the hunger for more data center capacity and the desire to power this with clean electricity has helped startups like Fervo Energy and Sage Geosystems fund projects to explore.


  • Geothermal data centers

    The data centers that power AI and cloud services are limited by 3 things:

    • the server hardware (oftentimes limited by access to advanced semiconductors)
    • available space (their footprint is massive which makes it hard to put them close to where people live)
    • availability of cheap & reliable (and, generally, clean) power

    If you, as a data center operator, can tap a new source of cheap & reliable power, you will go very far as you alleviate one of the main constraints on the ability to add to your footprint.

    It’s no small wonder, then, that Google is willing to explore partnerships with next-gen geothermal startups like Fervo in a meaningful long-term fashion.


  • Store all the things: clean electricity means thermal energy storage boom

    Thermal energy storage has been a difficult place for climatetech in years past. The low cost of fossil fuels (the source for vast majority of high temperature industrial heat to date) and the failure of large scale solar thermal power plants to compete with the rapidly scaling solar photovoltaic industry made thermal storage feel like, at best, a market reserved for niche applications with unique fossil fuel price dynamics. This is despite some incredibly cool (dad-joke intended 🔥🥵🤓) technological ingenuity in the space.

    But, in a classic case of how cheap universal inputs change market dynamics, the plummeting cost and soaring availability of renewable electricity and the growing desire for industrial companies to get “clean” sources of industrial heat has resulted in almost a renaissance for the space as this Canary Media article (with a very nice table of thermal energy startups) points out.

    With cheap renewables (especially if the price varies), companies can buy electricity at low (sometimes near-zero if in the middle of a sunny and windy day) prices, convert that to high-temperature heat with an electric furnace, and store it for use later.

    While the devil’s in the details, in particular the round trip energy efficiency (how much energy you can get out versus what you put in), the delivered heat temperature range and rate (how hot and how much power), and, of course, the cost of the system, technologies like this could represent a key technology to green sectors of the economy that would otherwise be extremely difficult to lower carbon output for.


  • InVision founder retro

    As reported in The Information a few days ago, former design tool giant InVision, once valued at $2 billion, is shutting down at the end of this year.

    While much of the commentary has been about Figma’s rapid rise and InVision’s inability to respond, I saw this post on Twitter/X from one of InVision’s founders Clark Valberg about what happened. The screenshotted message he left is well-worth a read. It is a great (if slightly self-serving / biased) retrospective.

    As someone who was a mere bystander during the events (as a newly minted Product Manager working with designers), it felt very true to the moment.

    I remember being blown away by how the entire product design community moved to Sketch (from largely Adobe-based solutions) and then, seemingly overnight, from Sketch to Figma.

    While it’s fair to criticize the leadership for not seeing web-based design as a place to invest, I think the piece just highlights how because it wasn’t a direct competitor to InDesign (but to Sketch & Adobe XD) and because the idea of web-based wasn’t on anyone’s radar at the time, it became a lethal blind spot for the company. It’s Tech Strategy 101 and perfectly highlights Andy Grove’s old saying: “(in technology,) only the paranoid survive”.


    Tweet from @ClarkValberg
    Clark Valberg | Twitter/X

  • The World Runs on Excel… and its Mistakes

    The 2022 CHIPS and Science Act earmarked hundreds of billions in subsidies and tax credits to bolster a U.S. domestic semiconductor (and especially semiconductor manufacturing) industry. If it works, it will dramatically reposition the U.S. in the global semiconductor value chain (especially relative to China).

    With such large amounts of taxpayer money practically “gifted” to large (already very profitable) corporations like Intel, the U.S. taxpayer can reasonably assume that these funds should be allocated carefully and thoughtfully and with processes in place to make sure every penny furthered the U.S.’s strategic goals.

    But, when the world’s financial decisions are powered by Excel spreadsheets, even the best laid plans can go awry.

    The team behind the startup Rowsie created a large language model (LLM)-powered tool which can understand Excel spreadsheets and answer questions posed to it. They downloaded a spreadsheet that the US government provided as an example of the information and calculations they want applicants fill out in order to qualify. They then applied their AI tool to the spreadsheet to understand it’s structure and formulas.

    Interestingly, Rowsie was able to find a single-cell spreadsheet error (see images below) which resulted in a $178 million understatement of interest payments!

    The Assumptions Processing tab in the Example Pre-App-Simple-Financial-Model spreadsheet from the CHIPS Act funding application website. Notice row 50. Despite the section being about Subordinated Debt (see Cell B50), they’re using cell C51 from the Control Panel tab (which points to the Senior Debt rate of 5%) rather than the correct cell of D51 (which points to the Subordinated Debt rate of 8%).

    To be clear, this is not a criticism of the spreadsheet’s architects. In this case, what seems to have happened, is that the spreadsheet creator copied an earlier row (row 40) and forgot to edit the formula to account for the fact that row 50 is about subordinated debt and row 40 is about senior debt. It’s a familiar story to anyone who’s ever been tasked with doing something complicated in Excel. Features like copy and paste and complex formulas are very powerful, but also make it very easy for a small mistake to cascade. It’s also remarkably hard to catch!

    Hopefully the Department of Commerce catches on and fixes this little clerical mishap, and that applicants are submitting good spreadsheets, free of errors. But, this case underscores how (1) so many of the world’s financial and policy decisions rest on Excel spreadsheets and you just have to hope 🤞🏻 no large mistakes were made, and (2) the potential for tools like Rowsie to be tireless proofreaders and assistants who can help us avoid mistakes and understand those critical spreadsheets quickly.

    If you’re interested in checking out Rowsie, check it out at https://www.rowsie.ai/!

    DISCLAIMER: I happen to be friends with the founders of Rowsie which is how I found out about this

  • Consulting / Advisory

    Hi! My name is Benjamin Tseng. My clients work with me because of my deep experience in:

    • Startup Advisory — I’ve spent 15+ years investing with two cross-border VC firms (DCM and 1955 Capital) in deeptech companies and in leadership / advisory roles at several VC-backed startups
    • Product Management — I’ve taken on product leadership roles at several VC-backed startups including Yik Yak (consumer social), Maximus (telemedicine), Clint Health (health IT), and Stir (creator economy/fintech)
    • Market Analysis / Investment Due Diligence — I started my career at Bain doing strategic analysis for Fortune 500 semiconductor and eCommerce clients. I subsequently drove investment due diligence processes at two VC firms where I specialized in deeptech and healthcare opportunities.
    • AI / ML work — I am a published researcher who’s applied AI/ML methods to electronic medical record data and have also built products powered by NLP and LLMs.

    For more about my background, take a look at my CV. For examples of projects I’ve done in the past and am open to taking on, see Types of Client Work below.

    If you’re interested in working with me in any of these capacities, please direct inquiries to [mail-at-<thisdomainname.com>].

    Types of Client Work

    • Early Stage Product Management & Strategy
      • Build actionable product plans that account for operational & regulatory complexity (e.g. integration with customer support/ops; integrations with 3rd parties like Stripe or Plaid or an EMR; handling KYC/AML; addressing HIPAA; complying with US telemedicine regulations; etc), unit economics / market analysis, and market research
      • Collaborate with engineers, designers, and other stakeholders on
        • Rapid prototyping for product discovery
        • 0-to-1 new product development and lightweight process creation
        • Product improvement pushes to address architecture/strategy issues and expand product reach
    • Expert Technology / Market Analysis
      • Conduct market analysis and unit economics assessment as part of a strategic planning or investment due diligence process
      • Objectively assess novel technologies and translate findings into business insights
    • Startup Advisory & Strategic Planning
      • Work with management to build actionable strategic plans that account for current and expected business activities, future financing needs, likely execution risks, and the need for stakeholder support
      • Assist management teams with fundraising strategy from deck creation to cap table & financial modeling to syndicate formation and negotiation
    • Analytics and Metrics
      • Create or overhaul an existing metrics plan to help companies understand their product/business and devise better strategy
      • Collaborate with stakeholders to select analytics stacks and implement dashboards to realize a metrics plan
      • Execute on bespoke analyses (retention, lifetime value, segmentation, clustering, sentiment analysis, etc.) to answer key strategic and operational questions 
    • Data Science / Machine Learning / Artificial Intelligence
      • Leverage ML and deep learning/AI methods to tackle classification and prediction problems
      • Build LLM-powered applications leveraging both publicly available LLMs (i.e. from OpenAI, Claude, and Google Gemini) and open source LLMs run on controlled infrastructure (i.e. Llama 3)
      • Scrape publicly available datasets / web pages for information to power data products or AI/ML models
  • Psychedelics in the Clinic

    When I first heard about the use of psychedelics (like ketamine and psilocybin) for treatment of mental illness, I was skeptical. It just seemed too ripe for abuse.

    But, there is a growing body of credible academic work suggesting that psychedelics when dosed properly and used in conjunction with therapy / other drugs can be a gamechanger — especially for treatment-resistant depression and suicidality — and that is incredibly exciting.

    At the same time, as a former telemedicine startup operator, this makes me more alarmed by the numerous companies working to commercialize these. In the bid for venture-style growth, it’s all too easy to lose track of the “when dosed properly and used in conjunction with therapy / other drugs” part.

    In any event, this article from Medicine at Michigan is a good overview of the recent research highlights in the field and why so many clinicians and scientists are excited.


    Serious about psychedelics
    Katie Whitney | Medicine at Michigan

  • Finance

    Analysis

    Advice from a VC

  • It’s not just the GOP who misunderstands Section 230

    Source: NPR

    Section 230 of the Communications Decency Act has been rightfully called “the twenty-six words that created the Internet.” It is a valuable legal shield which allows internet hosts and platforms the ability to distribute user-generated content and practice moderation without unreasonable fear of being sued, something which forms the basis of all social media, user review, and user forum, and internet hosting services.

    In recent months, as big tech companies have drawn greater scrutiny for the role they play in shaping our discussions, Section 230 has become a scapegoat for many of the ills of technology. Until 2021, much of that criticism has come from the Republican Party who argue incorrectly that it promotes bias on platforms with President Trump even vetoing unrelated defense legislation because it did not repeal Section 230.

    So, it’s refreshing (and distressing) to see the Democrats now take their turn in misunderstanding what Section 230 does for the internet. This critique is based mainly on Senator Mark Warner’s proposed changes to Section 230 and the FAQ his office posted about the SAFE TECH act he (alongside Senators Hirono and Klobuchar) is proposing but apply to many commentators from the Democratic Party and the press which seems to have misunderstood the practical implications and have received this positively.

    While I think it’s reasonable to modify Section 230 to obligate platforms to help victims of clearly heinous acts like cyberstalking, swatting, violent threats, and human rights violations, what the Democratic Senators are proposing goes far beyond that in several dangerous ways.

    First, Warner and his colleagues have proposed carving out from Section 230 all content which accompanies payment (see below). While I sympathize with what I believe was the intention (to put a different bar on advertisements), this is remarkably short-sighted, because Section 230 applies to far more than companies with ad / content moderation policies Democrats dislike such as Facebook, Google, and Twitter.

    Source: Mark Warner’s “redlines” of Section 230; highlighting is mine

    It also encompasses email providers, web hosts, user generated review sites, and more. Any service that currently receives payment (for example: a paid blog hosting service, any eCommerce vendor who lets users post reviews, a premium forum, etc) could be made liable for any user posted content. This would make it legally and financially untenable to host any potentially controversial content.

    Secondly, these rules will disproportionately impact smaller companies and startups. This is because these smaller companies lack the resources that larger companies have to deal with the new legal burdens and moderation challenges that such a change to Section 230 would call for. It’s hard to know if Senator Warner’s glip answer in his FAQ that people don’t litigate small companies (see below) is ignorance or a willful desire to mislead, but ask tech startups how they feel about patent trolls and whether or not being small protects them from frivolous lawsuits

    Source: Mark Warner’s FAQ on SAFE TECH Act; highlighting mine

    Third, the use of the language “affirmative defense” and “injunctive relief” may have far-reaching consequences that go beyond minor changes in legalese (see below). By reducing Section 230 from an immunity to an affirmative defense, it means that companies hosting content will cease to be able to dismiss cases that clearly fall within Section 230 because they now have a “burden of [proof] by a preponderance of the evidence.”

    Source: Mark Warner’s “redlines” of Section 230; highlighting is mine

    Similarly, carving out “injunctive relief” from Section 230 protections (see below) means that Section 230 doesn’t apply if the party suing is only interested in taking something down (but not financial damages)

    Source: Mark Warner’s “redlines” of Section 230

    I suspect the intention of these clauses is to make it harder for large tech companies to dodge legitimate concerns, but what this practically means is that anyone who has the money to pursue legal action can simply tie up any internet company or platform hosting content that they don’t like.

    That may seem like hyperbole, but this is what happened in the UK until 2014 where libel / slander laws making it easy for wealthy individuals and corporations to sue anyone for negative press due to weak protections. Imagine Jeffrey Epstein being able to sue any platform for carrying posts or links to stories about his actions or any individual for forwarding an unflattering email about him.

    There is no doubt that we need new tools and incentives (both positive and negative) to tamp down on online harms like cyberbullying and cyberstalking, and that we need to come up with new and fair standards for dealing with “fake news”. But, it is distressing that elected officials will react by proposing far-reaching changes that show a lack of thoughtfulness as it pertains to how the internet works and the positives of existing rules and regulations.

    It is my hope that this was only an early draft that will go through many rounds of revisions with people with real technology policy and technology industry expertise.

  • CV

    Professional Experience

    Consulting (2023 – Present; remote): Product / Strategy / AI work

    • Assembled storyline, data room, and consolidated financials to support fundraising process for VC-backed company with complex government contracting and long-lead-time sourcing and production planning
    • Led product management, software architecture, and execution for creator agency building internal tooling for metrics/reporting, top-of-funnel growth initiatives, an internal linkinbio tool, Chrome extension-based operational tooling, and AI-powered fan engagement
    • Wrote whitepaper about the application of reinforcement learning to the Pacific theater for VC-backed defensetech company for consumption within the Federal government
    • Developed new commercial positioning and more-customer-centric webpage for VC-backed AI-powered Intelligent Document Processing startup
    • Identified non-defense markets and rough sizing for VC-backed defensetech startup seeking revenue diversification and means to scale up production faster (as proof point for government sales discussions)
    • Evaluated healthcare market opportunities for VC-backed AI SaaS startup and identified segments to prioritize given opportunity size and firm’s capabilities
    • Devised new compensation scheme for an operations-heavy creator agency based on a quantitative performance review and in-depth assessment of job functions
    • Building business case, plan, and strategy for an “AI for government” initiative by a leading policy institute
    • Developing AI/ML based tools for clean cement company to reduce labor-intensive manual tasks and model material attributes
    • Building content (software and video) to power growth strategy for an “AI for spreadsheets” company

    Stir (2021 – 2023; San Francisco): Product & Data Science/AI Lead

    Stir was a venture-backed company focused on building technology to enable creatives to better collaborate which raised $20M from top Silicon Valley VCs such as Homebrew and a16z

    • Guided roadmap and implementation of product functionality (including key features such as Manager Access, mobile web, Invoices, international payments, early monetization, etc.) which helped grow transaction volume from <$2M/yr run rate to >$200M/yr at its peak
    • Strong experience working with Plaid and Stripe APIs to deliver customized financial service offerings
    • Built metrics and reporting infrastructure from the ground-up with a mix of SQL and business intelligence tooling for internal purposes and to support reporting needs of multiple enterprise customers
    • Served as data science/AI lead, building Playwright & BeautifulSoup-based scrapers, a prototype prompt engineering tool for image generation, serverless vector-based image search functionality, and a prototype chained LLM metasearch application

    Maximus (2020 – 2021; remote): VP Product and Strategy

    Maximus is a consumer health company that provides men with content, community, and clinical support to optimize them in mind and body. Maximus raised $15M from top Silicon Valley VCs such as Founders Fund and 8VC as well as leading angel investors/operators

    • Provided product and operational leadership culminating in release of MVP version of company’s first subscription product offering in Q2 2021
    • Oversaw team of engineers & designers supporting all software product and internal systems development within company
    • Developed user-friendly patient experience and compliant legal & software infrastructure needed for multi-state telemedicince operations in coordination with regulatory, finance, pharmacy partners, clinical labs partners, electronic medical record, clinicians, and other third parties
    • Built “operator manual” for launch operations that can be handed over to non-technical staff
    • Guided roadmap for further state and product launches, user experience enhancements, and infrastructure / operational improvements
    • Team member #1 with oversight over company’s fundraising close, as well as set up of initial legal, finance, and HR systems
    • Continuing to serve as an advisor

    1955 Capital (2016 – ; Bay Area): Venture Partner

    1955 Capital is a U.S.-based venture capital firm that invests in technologies from the developed world that can help solve the developing world’s greatest challenges in areas like energy, the environment, food safety, health, education, and manufacturing. 

    • Team member #1 with far-ranging responsibilities including sourcing, due diligence, fundraising, deal execution, team construction, and process creation
    • Generalist within the firm with emphasis across deep technologies (cleantech, semiconductors, hardware, and healthcare)
    • Worked directly with portfolio company management teams including Gridtential, Nature’s Fynd, Ampaire, Craif, and Vital Bio, and other still-unannounced investments in aviation, energy, diagnostics, and advanced materials
    • Created firm’s first special purpose vehicles for investments leveraging alternative capital formation as strategy

    Clint Health (2020; Bay Area): Product Consultant

    Clint, the clinical intelligence platform, automates the identification of a patient’s true clinical state by analyzing all medical data the same way a physician does. Clint understands what conditions a patient has, why they have it, how well they have been treated, and how they should be treated. Armed with these clinical grade insights, clinicians and researchers are able to identify and treat guideline directed care gaps, identify patients eligible for clinical trials and unite clinical care with clinical research.

    • Provided product management, design & engineering leadership, and strategic guidance for several of company’s product efforts
    • Overhauled prior dashboard product to improve usability and support insight needs for commercial / medical affairs customers within life sciences organizations
    • Developed care gap closure use case for payer / value-based provider customers and built framework for opportunity sizing to facilitate pitches
    • Built initial concept prototypes on clinical trial optimization / external control arm product

    Yik Yak (2014 – 2015; Atlanta): VP, Product & Business Development

    Yik Yak was a venture-backed startup building hyperlocal communities for mobile devices which has raised over $70M in venture funding since its inception.

    • Drove Series B fundraising process leading to a $60M+ financing
    • Built and managed team of 6 PMs, designers, and UX researchers supporting all product and systems development within company
    • Guided roadmap and implementation of over 1 year of releases (including key functionality like phone number verification, reply icons, notification center, My Herd, sharing, web)
    • Handled all preliminary partnership conversations and executed on partnerships with University of Florida, MTV, Comedy Central, and Bleacher Report

    DCM (2010 – 2014;  Bay Area): VP, Investments

    DCM is a leading early stage venture capital fund based in the Silicon Valley, Beijing, and Tokyo, managing over $3B in assets.

    • Generalist within firm with emphasis on opportunities in deep technologies (cleantech, semiconductors), connected platforms (MVNO, smart TV, OTT streaming), and new models for healthcare
    • Drove due diligence processes on and worked directly with management at portfolio companies on product strategy, fundraising, financial planning, business development and hiring including SoFi, Whistle, 1Mainstream, Analogix, Matterport, PlayStudios, Cognitive Networks, and Enovix
    • Built software tool to programmatically parse data from AppAnnie (mobile app store rankings data vendor)

    Bain & Company (2007 – 2010;  Bay Area): Senior Associate Consultant

    Bain & Company is a leading management consulting firm.

    • Performed competitive benchmarking to compare a client’s manufacturing operations with industry best-in-class
    • Analyzed technology industry profitability to identify attractive growth vectors for large tech client and highlight key differences between profit/power concentration in different verticals
    • Conducted financial and strategic diligence on wide range of potential acquisition targets (ranging in value from ~$100M to over $50B) to map out strategic acquisition options and gameboarding scenarios for a Fortune 500 technology client
    • Facilitated concept development and pilot phase of client initiative to provide operational support services for supply chain
    • Provided strategic and financial analysis to aid multiple clients in determining appropriate response to potentially disruptive trends; topics covered include cloud computing, mobile commerce, next-generation semiconductor manufacturing, cross-border eCommerce, social networking, etc.
    • Devised presentation for CEO-level conversation on a process to pro-actively acquire/partner with assets which can aid client in dealing with disruptive innovations
    • Overhauled Bain toolkit for codification in book by Bain partners Mark Gottfredson and Steve Schaubert, The Breakthrough Imperative

    Roche Pharmaceuticals (2005; Palo Alto, CA): Research Intern, Drug Metabolism & Pharmacokinetics

    Roche Pharmaceuticals is a leading pharmaceutical company

    • Validated use of Isothermal Titration Calorimeter in enzyme kinetics studies
    • Assessed factors limiting application of approach to study of Cytochrome P450 enzyme system
    • Presented findings at department seminar

    Abgenix Corporation (2003; Fremont, CA): Intern, Process Sciences

    Abgenix was a biotechnology company focused on humanized antibody therapeutics which was acquired by Amgen in 2006

    • Performed optimization studies for ELISA protocols used by Abgenix’s Process Sciences division
    • Presented findings at department seminar

    Academic Research

    Stanford Ophthalmic Informatics and Artificial Intelligence Group (2019 – ; Stanford, CA): Stanford University Byers Eye Institute

    Work with Professor Sophia Ying Wang applying AI/NLP methods to understanding and making predictions based on electronic medical record data. Example work includes:

    Maniatis Group (2004 – 2007; Cambridge, MA): Harvard University Department of Molecular and Cellular Biology

    Completed senior thesis “Transcriptional Regulation of Members of the Tripartite Motif Family” (linkreport PDF) in lab of Professor Tom Maniatis.

    Brenner Group (2006 – 2007; Cambridge, MA): Harvard University Division of Engineering and Applied Sciences

    Worked with Professor Michael P. Brenner on applying separation of timescales and dominant balances towards simplifying complex biological math models, specifically with regards to what sets the Ran gradient in nuclear transport (linkreport PDF).

    Brown Group (Summer 2004; Stanford, CA): Stanford Medical School Center for Clinical Science Research

    Worked in the lab of Professor Janice (Wes) M. Y. Brown researching stem cell reconstitution of murine immune systems in conjunction with antifungal agents and combinations of lymphoid and myeloid progenitor cells. Research summarized in: Arber C, et al. Journal of Infectious Diseases [2005]

    Education

    Harvard University (2003 – 2007; Cambridge, MA): A. B. Magna Cum Laude with Highest Honors in Biochemical Sciences, Secondary Field in Mathematical Sciences

    • Honors: Phi Beta Kappa, Dean’s Research Award (2006), Harvard College Research Program Award (2006), Harvard College Scholar (2005-2006), Tylenol Scholar (2005-2006)
    • Thesis: Transcriptional Regulation of Members of the Tripartite Motif Family in Response to Viral Infection (link)
    • Selected Activities
      • Harvard College Asian Business Forum: Operations Director (2005-2006)
      • Next Generation MD: Associate Editor (2005-2007), writer
      • Harvard International Review: Media Department Head (2004-2005), Visuals Editor(2003-2004)

    Skills/Other

  • About

    Benjamin Tseng is a Product Leader & AI technologist with over 8 years of experience as a deeptech/cross-border VC.

    Some of my past writing:

    About Me:

    Benjamin Tseng is a versatile executive with experience in product management and strategy; as a researcher applying deep learning methods to healthcare; and as a venture investor with focus on cleantech, semiconductors, hardware, and healthcare.

    Ben has significant experience working with startups in both operating and advisory capacities. His prior roles include product and operational leadership roles at Yik Yak (location-based social media, raised over $70M in VC), Clint Health (health IT), Maximus (consumer telemedicine, raised $20M in VC) and Stir (financial services for creators, raised $20M in VC). He has also served as an advisor to companies like Whistle (pet-tech, acquired by Mars), Dextro (computer vision, acquired by Axon), Companion Labs (computer vision applied to pet-tech, raised $14M in VC), 310.ai (generative AI for biological design), and Rosie.ai (AI assistance for spreadsheets).

    He is a published researcher collaborating with Stanford’s OPTIMA group in developing AI/NLP-based methods to understanding electronic medical records. He was also an Associate Fellow with the Tony Blair Institute for Global Change where he contributed to their work in Technology and Public Policy.

    Ben spent nearly a decade in venture capital at 1955 Capital and DCM, two cross-border venture capital firms, where he had a special focus on deeptech (e.g., cleantech, semiconductors, hardware, and healthcare) and worked actively with the two firms’ portfolio companies on fundraising and strategy.

    Ben started his career at Bain & Company in the Bay Area after graduating Phi Beta Kappa with Highest Honors in Biochemical Sciences and a minor in Mathematical Sciences from Harvard University. He is an avid scifi & comic book fan, an amateur programmer, occasional blogger, and an unabashed knowledge junkie

    He can be reached at [mail-at-<thisdomainname.com>]. He can also be reached @BenjaminTseng on X & @benjamintseng.com on BlueSky

    (Photo credit: River Suh)

  • What I’ve Changed My Mind on Over the 2010s

    I’ve been reading a lot of year-end/decade-end reflections (as one does this time of year) — and while a part of me wanted to #humblebrag about how I got a 🏠/💍/👶🏻 this decade 😇 — I thought it would be more interesting & profound to instead call out 10 worldviews & beliefs I had going into the 2010s that I no longer hold.

    1. Sales is an unimportant skill relative to hard work / being smart
      As a stereotypical “good Asian kid” 🤓, I was taught to focus on nailing the task. I still think that focus is important early in one’s life & career, but this decade has made me realize that everyone, whether they know it or not, has to sell — you sell to employers to hire you, academics/nonprofits sell to attract donors and grant funding, even institutional investors have to sell to their investors/limited partners. Its a skill at least as important (if not more so).
    2. Marriage is about finding your soul-mate and living happily ever after
      Having been married for slightly over half the decade, I’ve now come to believe that marriage is less about finding the perfect soul-mate (the “Hollywood version”) as it is about finding a life partner who you can actively choose to celebrate (despite and including their flaws, mistakes, and baggage). Its not that passionate love is unimportant, but its hard to rely on that alone to make a lifelong partnership work. I now believe that really boring-sounding things like how you make #adulting decisions and compatibility of communication style matter a lot more than things usually celebrated in fiction like the wedding planning, first dates, how nice your vacations together are, whether you can finish each other’s sentences, etc.
    3. Industrial policy doesn’t work
      I tend to be a big skeptic of big government policy — both because of unintended consequences and the risks of politicians picking winners. But, a decade of studying (and working with companies who operate in) East Asian economies and watching how subsidies and economies of scale have made Asia the heart of much of advanced manufacturing have forced me to reconsider. Its not that the negatives don’t happen (there are many examples of China screwing things up with heavy-handed policy) but its hard to seriously think about how the world works without recognizing the role that industrial policy played. For more on how land management and industrial policies impacted economic development in different Asian countries, check out Joe Studwell’s book How Asia Works
    4. Obesity & weight loss are simple — its just calories in & calories out
      From a pure physics perspective, weight gain is a “simple” thermodynamic equation of “calories in minus calories out”. But in working with companies focused on dealing with prediabetes/obesity, I’ve come to appreciate that this “logic” not only ignores the economic and social factors that make obesity a public health problem, it also overlooks that different kinds of foods drive different physiological responses. As an example that just begins to scratch the surface, one very well-controlled study (sadly, a rarity in the field) published in July showed that, even after controlling for exercise and calories, carbs, fat, fiber, and other nutrients present in a meal, diets consisting of processed foods resulted in greater weight-gain than a diet consisting of unprocessed foods
    5. Revering luminaries & leaders is a good thing
      Its very natural to be so compelled by an idea / movement that you find yourself idolizing the people spearheading it. The media feeds into this with popular memoirs & biographies and numerous articles about how you can think/be/act more like [Steve Jobs/Jeff Bezos/Warren Buffett/Barack Obama/etc]. But, over the past decade, I’ve come to feel that this sort of reverence leads to a pernicious laziness of thought. I can admire Steve Jobs for his brilliance in product design but do I want to copy his approach to management or his use of alternative medicine to treat his cancer or condoning how he treated his illegitimate daughter. I think its far better to appreciate an idea and the work of the key people behind it than to equate the piece of work with the person and get sucked in to that cult of personality.
    6. Startups are great place for everyone
      Call it being sucked into the Silicon valley ethos but for a long time I believed that startups were a great place for everyone to build a career: high speed path to learning & responsibility, ability to network with other folks, favorable venture funding, one of the only paths to getting stock in rapidly growing companies, low job seeking risk (since there’s an expectation that startups often fail or pivot). Several years spent working in VC and startups later, and, while I still agree with my list above, I’ve come to believe that startups are really not a great place for most people. The risk-reward is generally not great for all but the earliest of employees and the most successful of companies, and the “startups are great for learning” Kool-aid is oftentimes used to justify poor management and work practices. I still think its a great place for some (i.e. people who can tolerate more risk [b/c of personal wealth or a spouse with a stable high-paying job], who are knowingly optimizing for learning & responsibility, or who are true believers in a startup’s mission), but I frankly think most people don’t fit the bill.
    7. Microaggressions are just people being overly sensitive
      I’ve been blessed at having only rarely faced overt racism (telling me to go back to China 🙄 / or that I don’t belong in this country). It’s a product of both where I’ve spent most of my life (in urban areas on the coasts) and my career/socioeconomic status (it’s not great to be overtly racist to a VC you’re trying to raise money from). But, having spent some dedicated time outside of those coastal areas this past decade and speaking with minorities who’ve lived there, I’ve become exposed to and more aware of “microaggressions”, forms of non-overt prejudice that are generally perpetrated without ill intent: questions like ‘so where are you really from?’ or comments like ‘you speak English really well!’. I once believed people complaining about these were simply being overly sensitive, but I’ve since become an active convert to the idea that, while these are certainly nowhere near as awful as overt hate crimes / racism, they are their own form of systematic prejudice which can, over time, grate and eat away at your sense of self-worth.
    8. The Western model (liberal democracy, free markets, global institutions) will reign unchallenged as a model for prosperity
      I once believed that the Western model of (relatively) liberal democracy, (relatively) free markets, and US/Europe-led global institutions was the only model of prosperity that would reign falling the collapse of the Soviet Union. While I probably wouldn’t have gone as far as Fukuyama did in proclaiming “the end of history”, I believed that the world was going to see authoritarian regimes increasingly globalize and embrace Western institutions. What I did not expect was the simultaneous rise of different models of success by countries like China and Saudi Arabia (who, frighteningly, now serve as models for still other countries to embrace), as well as a lasting backlash within the Western countries themselves (i.e. the rise of Trump, Brexit, “anti-globalism”, etc). This has fractured traditional political divides (hence the soul-searching that both major parties are undergoing in the US and the UK) and the election of illiberal populists in places like Mexico, Brazil, and Europe.
    9. Strategy trumps execution
      As a cerebral guy who spent the first years of his career in the last part of the 2000s as a strategy consultant, it shouldn’t be a surprise that much of my focus was on formulating smart business strategy. But having spent much of this decade focused on startups as well as having seen large companies like Apple, Amazon, and Netflix brilliantly out-execute companies with better ‘strategic positioning’ (Nokia, Blackberry, Walmart, big media), I’ve come around to a different understanding of how the two balance each other.
    10. We need to invent radically new solutions to solve the climate crisis
      Its going to be hard to do this one justice in this limited space — especially since I net out here very differently from Bill Gates — but going into this decade, I never would have expected that the cost of new solar or wind energy facilities could be cheaper than the cost of operating an existing coal plant. I never thought that lithium batteries or LEDs would get as cheap or as good as they are today (with signs that this progress will continue) or that the hottest IPO of the year would be an alternative food technology company (Beyond Meat) which will play a key role in helping us mitigate food/animal-related emissions. Despite the challenges of being a cleantech investor for much of the decade, its been a surprising bright spot to see how much pure smart capital and market forces have pushed many of the technologies we need. I still think we will need new policies and a huge amount of political willpower — I’d also like to see more progress made on long-duration energy storage, carbon capture, and industrial — but whereas I once believed that we’d need radically new energy technologies to thwart the worst of climate change, I am now much more of an optimist here than I was when the decade started.

    Here’s to more worldview shifts in the coming decade!

  • How to Regulate Big Tech

    There’s been a fair amount of talk lately about proactively regulating — and maybe even breaking up — the “Big Tech” companies.

    Full disclosure: this post discusses regulating large tech companies. I own shares in several of these both directly (in the case of Facebook and Microsoft) and indirectly (through ETFs that own stakes in large companies)

    Source: MIT Sloan

    Like many, I have become increasingly uneasy over the fact that a small handful of companies, with few credible competitors, have amassed so much power over our personal data and what information we see. As a startup investor and former product executive at a social media startup, I can especially sympathize with concerns that these large tech companies have created an unfair playing field for smaller companies.

    At the same time, though, I’m mindful of all the benefits that the tech industry — including the “tech giants” — have brought: amazing products and services, broader and cheaper access to markets and information, and a tremendous wave of job and wealth creation vital to may local economies. For that reason, despite my concerns of “big tech”‘s growing power, I am wary of reaching for “quick fixes” that might change that.

    As a result, I’ve been disappointed that much of the discussion has centered on knee-jerk proposals like imposing blanket stringent privacy regulations and forcefully breaking up large tech companies. These are policies which I fear are not only self-defeating but will potentially put into jeopardy the benefits of having a flourishing tech industry.

    The Challenges with Regulating Tech

    Technology is hard to regulate. The ability of software developers to collaborate and build on each other’s innovations means the tech industry moves far faster than standard regulatory / legislative cycles. As a result, many of the key laws on the books today that apply to tech date back decades — before Facebook or the iPhone even existed, making it important to remember that even well-intentioned laws and regulations governing tech can cement in place rules which don’t keep up when the companies and the social & technological forces involved change.

    Another factor which complicates tech policy is that the traditional “big is bad” mentality ignores the benefits to having large platforms. While Amazon’s growth has hurt many brick & mortar retailers and eCommerce competitors, its extensive reach and infrastructure enabled businesses like Anker and Instant Pot to get to market in a way which would’ve been virtually impossible before. While the dominance of Google’s Android platform in smartphones raised concerns from European regulators, its hard to argue that the companies which built millions of mobile apps and tens of thousands of different types of devices running on Android would have found it much more difficult to build their businesses without such a unified software platform. Policy aimed at “Big Tech” should be wary of dismantling the platforms that so many current and future businesses rely on.

    Its also important to remember that poorly crafted regulation in tech can be self-defeating. The most effective way to deal with the excesses of “Big Tech”, historically, has been creating opportunities for new market entrants. After all, many tech companies previously thought to be dominant (like Nokia, IBM, and Microsoft) lost their positions, not because of regulation or antitrust, but because new technology paradigms (i.e. smartphones, cloud), business models (i.e. subscription software, ad-sponsored), and market entrants (i.e. Google, Amazon) had the opportunity to flourish. Because rules (i.e. Article 13/GDPR) aimed at big tech companies generally fall hardest on small companies (who are least able to afford the infrastructure / people to manage it), its important to keep in mind how solutions for “Big Tech” problems affect smaller companies and new concepts as well.

    Framework for Regulating “Big Tech”

    If only it were so easy… Source: XKCD

    To be 100% clear, I’m not saying that the tech industry and big platforms should be given a pass on rules and regulation. If anything, I believe that laws and regulation play a vital role in creating flourishing markets.

    But, instead of treating “Big Tech” as just a problem to kill, I think we’d be better served by laws / regulations that recognize the limits of regulation on tech and, instead, focus on making sure emerging companies / technologies can compete with the tech giants on a level playing field. To that end, I hope to see more ideas that embrace the following four pillars:

    I. Tiering regulation based on size of the company

    Regulations on tech companies should be tiered based on size with the most stringent rules falling on the largest companies. Size should include traditional metrics like revenue but also, in this age of marketplace platforms and freemium/ad-sponsored business models, account for the number of users (i.e. Monthly Active Users) and third party partners.

    In this way, the companies with the greatest potential for harm and the greatest ability to bear the costs face the brunt of regulation, leaving smaller companies & startups with greater flexibility to innovate and iterate.

    II. Championing data portability

    One of the reasons it’s so difficult for competitors to challenge the tech giants is the user lock-in that comes from their massive data advantage. After all, how does a rival social network compete when a user’s photos and contacts are locked away inside Facebook?

    While Facebook (and, to their credit, some of the other tech giants) does offer ways to export user data and to delete user data from their systems, these tend to be unwieldy, manual processes that make it difficult for a user to bring their data to a competing service. Requiring the largest tech platforms to make this functionality easier to use (i.e., letting others import your contact list and photos with the ease in which you can login to many apps today using Facebook) would give users the ability to hold tech companies accountable for bad behavior or not innovating (by being able to walk away) and fosters competition by letting new companies compete not on data lock-in but on features and business model.

    III. Preventing platforms from playing unfairly

    3rd party platform participants (i.e., websites listed on Google, Android/iOS apps like Spotify, sellers on Amazon) are understandably nervous when the platform owners compete with their own offerings (i.e., Google Places, Apple Music, Amazon first party sales)As a result, some have even called for banning platform owners from offering their own products and services.

    I believe that is an overreaction. Platform owners offering attractive products and services (i.e., Google offering turn-by-turn navigation on Android phones) can be a great thing for users (after all, most prominent platforms started by providing compelling first-party offerings) and for 3rd party participants if these offerings improve the attractiveness of the platform overall.

    What is hard to justify is when platform owners stack the deck in their favor using anti-competitive moves such as banning or reducing the visibility of competitors, crippling third party offeringsmaking excessive demands on 3rd parties, etc. Its these sorts of actions by the largest tech platforms that pose a risk to consumer choice and competition and should face regulatory scrutiny. Not just the fact that a large platform exists or that the platform owner chooses to participate in it.

    IV. Modernizing how anti-trust thinks about defensive acquisitions

    The rise of the tech giants has led to many calls to unwind some of the pivotal mergers and acquisitions in the space. As much as I believe that anti-trust regulators made the wrong calls on some of these transactions, I am not convinced, beyond just wanting to punish “Big Tech” for being big, that the Pandora’s Box of legal and financial issues (for the participants, employees, users, and for the tech industry more broadly) that would be opened would be worthwhile relative to pursuing other paths to regulate bad behavior directly.

    That being said, its become clear that anti-trust needs to move beyond narrow revenue share and pricing-based definitions of anti-competitiveness (which do not always apply to freemium/ad-sponsored business models). Anti-trust prosecutors and regulators need to become much more thoughtful and assertive around how some acquisitions are done simply to avoid competition (i.e., Google’s acquisition of Waze and Facebook’s acquisition of WhatsApp are two examples of landmark acquisitions which probably should have been evaluated more closely).

    Wrap-Up

    Source: OECD Forum Network

    This is hardly a complete set of rules and policies needed to approach growing concerns about “Big Tech”. Even within this framework, there are many details (i.e., who the specific regulators are, what specific auditing powers they have, the details of their mandate, the specific thresholds and number of tiers to be set, whether pre-installing an app counts as unfair, etc.) that need to be defined which could make or break the effort. But, I believe this is a good set of principles that balances both the need to foster a tech industry that will continue to grow and drive innovation as well as the need to respond to growing concerns about “Big Tech”.

    Special thanks to Derek Yang and Anthony Phan for reading earlier versions and giving me helpful feedback!

  • Why Tech Success Doesn’t Translate to Deeptech

    Source: Eric Hamilton

    Having been lucky enough to invest in both tech (cloud, mobile, software) and “deeptech” (materials, cleantech, energy, life science) startups (and having also ran product at a mobile app startup), it has been striking to see how fundamentally different the paradigms that drive success in each are.

    Whether knowingly or not, most successful tech startups over the last decade have followed a basic playbook:

    1. Take advantage of rising smartphone penetration and improvements in cloud technology to build digital products that solve challenges in big markets pertaining to access (e.g., to suppliers, to customers, to friends, to content, to information, etc.)
    2. Build a solid team of engineers, designers, growth, sales, marketing, and product people to execute on lean software development and growth methodologies
    3. Hire the right executives to carry out the right mix of tried-and-true as well as “out of the box” channel and business development strategies to scale bigger and faster

    This playbook appears deceptively simple but is very difficult to execute well. It works because for markets where “software is eating the world”:

    Source: Techcrunch
    • There is relatively little technology risk: With the exception of some of the most challenging AI, infrastructure, and security challenges, most tech startups are primarily dealing with engineering and product execution challenges — what is the right thing to build and how do I build it on time, under budget? — rather than fundamental technology discovery and feasibility challenges
    • Skills & knowledge are broadly transferable: Modern software development and growth methodologies work across a wide range of tech products and markets. This means that effective engineers, salespeople, marketers, product people, designers, etc. at one company will generally be effective at another. As a result, its a lot easier for investors/executives to both gauge the caliber of a team (by looking at their experience) and augment a team when problems arise (by recruiting the right people with the right backgrounds).
    • Distribution is cheap and fast: Cloud/mobile technology means that a new product/update is a server upgrade/browser refresh/app store download away. This has three important effects:
    1. The first is that startups can launch with incomplete or buggy solutions because they can readily provide hotfixes and upgrades.
    2. The second is that startups can quickly release new product features and designs to respond to new information and changing market conditions.
    3. The third is that adoption is relatively straightforward. While there may be some integration and qualification challenges, in general, the product is accessible via a quick download/browser refresh, and the core challenge is in getting enough people to use a product in the right way.

    In contrast, if you look at deeptech companies, a very different set of rules apply:

    Source: XKCD
    • Technology risk/uncertainty is inherent: One of the defining hallmarks of a deeptech company is dealing with uncertainty from constraints imposed by reality (i.e. the laws of physics, the underlying biology, the limits of current technology, etc.). As a result, deeptech startups regularly face feasibility challenges — what is even possible to build? — and uncertainty around the R&D cycles to get to a good outcome — how long will it take / how much will it cost to figure this all out?
    • Skills & knowledge are not easily transferable: Because the technical and business talent needed in deeptech is usually specific to the field, talent and skills are not necessarily transferable from sector to sector or even company to company. The result is that it is much harder for investors/executives to evaluate team caliber (whether on technical merits or judging past experience) or to simply put the right people into place if there are problems that come up.
    • Product iteration is slow and costly: The tech startup ethos of “move fast and break things” is just harder to do with deeptech.
    1. At the most basic level, it just costs a lot more and takes a lot more time to iterate on a physical product than a software one. It’s not just that physical products require physical materials and processing, but the availability of low cost technology platforms like Amazon Web Services and open source software dramatically lower the amount of time / cash needed to make something testable in tech than in deeptech.
    2. Furthermore, because deeptech innovations tend to have real-world physical impacts (to health, to safety, to a supply chain/manufacturing line, etc.), deeptech companies generally face far more regulatory and commercial scrutiny. These groups are generally less forgiving of incomplete/buggy offerings and their assessments can lengthen development cycles. Deeptech companies generally can’t take the “ask for forgiveness later” approaches that some tech companies (i.e. Uber and AirBnb) have been able to get away with (exhibit 1: Theranos).

    As a result, while there is no single playbook that works across all deeptech categories, the most successful deeptech startups tend to embody a few basic principles:

    1. Go after markets where there is a very clear, unmet need: The best deeptech entrepreneurs tend to take very few chances with market risk and only pursue challenges where a very well-defined unmet need (i.e., there are no treatments for Alzheimer’s, this industry needs a battery that can last at least 1000 cycles, etc) blocks a significant market opportunity. This reduces the risk that a (likely long and costly) development effort achieves technical/scientific success without also achieving business success. This is in contrast with tech where creating or iterating on poorly defined markets (i.e., Uber and Airbnb) is oftentimes at the heart of what makes a company successful.
    2. Focus on “one miracle” problems: Its tempting to fantasize about what could happen if you could completely re-write every aspect of an industry or problem but the best deeptech startups focus on innovating where they won’t need the rest of the world to change dramatically in order to have an impact (e.g., compatible with existing channels, business models, standard interfaces, manufacturing equipment, etc). Its challenging enough to advance the state of the art of technology — why make it even harder?
    3. Pursue technologies that can significantly over-deliver on what the market needs: Because of the risks involved with developing advanced technologies, the best deeptech entrepreneurs work in technologies where even a partial success can clear the bar for what is needed to go to market. At the minimum, this reduces the risk of failure. But, hopefully, it gives the company the chance to fundamentally transform the market it plays in by being 10x better than the alternatives. This is in contrast to many tech markets where market success often comes less from technical performance and more from identifying the right growth channels and product features to serve market needs (i.e., Facebook, Twitter, and Snapchat vs. MySpace, Orkut, and Friendster; Amazon vs. brick & mortar bookstores and electronics stores)

    All of this isn’t to say that there aren’t similarities between successful startups in both categories — strong vision, thoughtful leadership, and success-oriented cultures are just some examples of common traits in both. Nor is it to denigrate one versus the other. But, practically speaking, investing or operating successfully in both requires very different guiding principles and speaks to the heart of why its relatively rare to see individuals and organizations who can cross over to do both.

    Special thanks to Sophia Wang, Ryan Gilliam, and Kevin Lin Lee for reading an earlier draft and making this better!

    Thought this was interesting? Check out some of my other pieces on Tech industry

  • The Four Types of M&A

    I’m oftentimes asked what determines the prices that companies get bought for: after all, why does one app company get bought for $19 billion and a similar app get bought at a discount to the amount of investor capital that was raised?

    While specific transaction values depend a lot on the specific acquirer (i.e. how much cash on hand they have, how big they are, etc.), I’m going to share a framework that has been very helpful to me in thinking about acquisition valuations and how startups can position themselves to get more attractive offers. The key is understanding that, all things being equal, why you’re being acquired determines the buyer’s willingness to pay. These motivations fall on a spectrum dividing acquisitions into four types:

    • Talent Acquisitions: These are commonly referred to in the tech press as “acquihires”. In these acquisitions, the buyer has determined that it makes more sense to buy a team than to spend the money, time, and effort needed to recruit a comparable one. In these acquisitions, the size and caliber of the team determine the purchase price.
    • Asset / Capability Acquisitions: In these acquisitions, the buyer is in need of a particular asset or capability of the target: it could be a portfolio of patents, a particular customer relationship, a particular facility, or even a particular product or technology that helps complete the buyer’s product portfolio. In these acquisitions, the uniqueness and potential business value of the assets determine the purchase price.
    • Business Acquisitions: These are acquisitions where the buyer values the target for the success of its business and for the possible synergies that could come about from merging the two. In these acquisitions, the financials of the target (revenues, profitability, growth rate) as well as the benefits that the investment bankers and buyer’s corporate development teams estimate from combining the two businesses (cost savings, ability to easily cross-sell, new business won because of a more complete offering, etc) determine the purchase price.
    • Strategic Gamechangers: These are acquisitions where the buyer believes the target gives them an ability to transform their business and is also a critical threat if acquired by a competitor. These tend to be acquisitions which are priced by the buyer’s full ability to pay as they represent bets on a future.

    What’s useful about this framework is that it gives guidance to companies who are contemplating acquisitions as exit opportunities:

    • If your company is being considered for a talent acquisition, then it is your job to convince the acquirer that you have built assets and capabilities above and beyond what your team alone is worth. Emphasize patents, communities, developer ecosystems, corporate relationships, how your product fills a distinct gap in their product portfolio, a sexy domain name, anything that might be valuable beyond just the team that has attracted their interest.
    • If a company is being considered for an asset / capability acquisition, then the key is to emphasize the potential financial trajectory of the business and the synergies that can be realized after a merger. Emphasize how current revenues and contracts will grow and develop, how a combined sales and marketing effort will be more effective than the sum of the parts, and how the current businesses are complementary in a real way that impacts the bottom line, and not just as an interesting “thing” to buy.
    • If a company is being evaluated as a business acquisition, then the key is to emphasize how pivotal a role it can play in defining the future of the acquirer in a way that goes beyond just what the numbers say about the business. This is what drives valuations like GM’s acquisition of Cruise (which was a leader in driverless vehicle technology) for up to $1B, or Facebook’s acquisition of WhatsApp (messenger app with over 600 million users when it was acquired, many in strategic regions for Facebook) for $19B, or Walmart’s acquisition of Jet.com (an innovator in eCommerce that Walmart needs to help in its war for retail marketshare with Amazon.com).

    The framework works for two reasons: (1) companies are bought, not sold, and the price is usually determined by the party that is most willing to walk away from a deal (that’s usually the buyer) and (2) it generally reflects how most startups tend to create value over time: they start by hiring a great team, who proceed to build compelling capabilities / assets, which materialize as interesting businesses, which can represent the future direction of an industry.

    Hopefully, this framework helps any tech industry onlooker wondering why acquisition valuations end up at a certain level or any startup evaluating how best to court an acquisition offer.

    Thought this was interesting? Check out some of my other pieces on how VC works / thinks

  • Dr. Machine Learning

    How to realize the promise of applying machine learning to healthcare

    Not going to happen anytime soon, sadly: the Doctor from Star Trek: Voyager; Source: TrekCore

    Despite the hype, it’ll likely be quite some time before human physicians will be replaced with machines (sorry, Star Trek: Voyager fans).

    While “smart” technology like IBM’s Watson and Alphabet’s AlphaGo can solve incredibly complex problems, they are probably not quite ready to handle the messiness of qualitative unstructured information from patients and caretakers (“it kind of hurts sometimes”) that sometimes lie (“I swear I’m still a virgin!”) or withhold information (“what does me smoking pot have to do with this?”) or have their own agendas and concerns (“I just need some painkillers and this will all go away”).

    Instead, machine learning startups and entrepreneurs interested in medicine should focus on areas where they can augment the efforts of physicians rather than replace them.

    One great example of this is in diagnostic interpretation. Today, doctors manually process countless X-rays, pathology slides, drug adherence records, and other feeds of data (EKGs, blood chemistries, etc) to find clues as to what ails their patients. What gets me excited is that these tasks are exactly the type of well-defined “pattern recognition” problems that are tractable for an AI / machine learning approach.

    If done right, software can not only handle basic diagnostic tasks, but to dramatically improve accuracy and speed. This would let healthcare systems see more patients, make more money, improve the quality of care, and let medical professionals focus on managing other messier data and on treating patients.

    As an investor, I’m very excited about the new businesses that can be built here and put together the following “wish list” of what companies setting out to apply machine learning to healthcare should strive for:

    • Excellent training data and data pipeline: Having access to large, well-annotated datasets today and the infrastructure and processes in place to build and annotate larger datasets tomorrow is probably the main defining . While its tempting for startups to cut corners here, that would be short-sighted as the long-term success of any machine learning company ultimately depends on this being a core competency.
    • Low (ideally zero) clinical tradeoffs: Medical professionals tend to be very skeptical of new technologies. While its possible to have great product-market fit with a technology being much better on just one dimension, in practice, to get over the innate skepticism of the field, the best companies will be able to show great data that makes few clinical compromises (if any). For a diagnostic company, that means having better sensitivty and selectivity at the same stage in disease progression (ideally prospectively and not just retrospectively).
    • Not a pure black box: AI-based approaches too often work like a black box: you have no idea why it gave a certain answer. While this is perfectly acceptable when it comes to recommending a book to buy or a video to watch, it is less so in medicine where expensive, potentially life-altering decisions are being made. The best companies will figure out how to make aspects of their algorithms more transparent to practitioners, calling out, for example, the critical features or data points that led the algorithm to make its call. This will let physicians build confidence in their ability to weigh the algorithm against other messier factors and diagnostic explanations.
    • Solve a burning need for the market as it is today: Companies don’t earn the right to change or disrupt anything until they’ve established a foothold into an existing market. This can be extremely frustrating, especially in medicine given how conservative the field is and the drive in many entrepreneurs to shake up a healthcare system that has many flaws. But, the practical reality is that all the participants in the system (payers, physicians, administrators, etc) are too busy with their own issues (i.e. patient care, finding a way to get everything paid for) to just embrace a new technology, no matter how awesome it is. To succeed, machine diagnostic technologies should start, not by upending everything with a radical solution, but by solving a clear pain point (that hopefully has a lot of big dollar signs attached to it!) for a clear customer in mind.

    Its reasons like this that I eagerly follow the development of companies with initiatives in applying machine learning to healthcare like Google’s DeepMind, Zebra Medical, and many more.