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In the MHV Podcast, we speak with leading founders, VCs and operators on their journey in Southeast Asia. In this episode, Jeremy Au, MHV Head of Strategic Projects and host chats with our Co-Founder and Managing Partner, Kuo-Yi Lim.

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Prefer reading? Read the transcript below.

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Jeremy Au:

Hey Kuo Yi, great to have you on the MHV Podcast, so excited to have you. So many people look up to you across South East Asia as someone who is a great coach, a great investor and a great human. So, excited to have you share about yourself in the early days.

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Kuo-Yi Lim:

Thanks. Thanks for having me, I'm excited to be here.

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Jeremy Au:

So Kuo Yi, a lot of people have to ask, what were you like in the early days as a kid, as a child? Were you rebellious? Were you studious? Were you free and wild? What were you like?

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Kuo-Yi Lim:

Well, I know that's a long time ago obviously, given how old I am right now. When I was growing up in the '80s, just to put some vintage on me, those were non-internet days, before devices and all that. So, you could imagine a lot of the time outside of school was spent either with friends outdoors, playing games, playing soccer when I was younger. And obviously, during secondary school, it was more extracurricular activities outside of the classroom. So, a lot of time was spent playing sports, et cetera. So not atypical of a lot of Singaporean kids that were growing up in the '80s. So, not a lot of Game Boys, not a lot of computers back then, definitely no internet.

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Jeremy Au:

So what non-internet hobbies were you doing a lot of?

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Kuo-Yi Lim:

There was a lot of sports. Right? There was a lot of sports. I was playing a lot of just courtyard soccer, or football as we call it, with kids in my neighborhood when I was growing up. And in school, more organized sports. I was on the softball team, and so I did that quite a bit. I was also in the science club in school as well, so a bit of that too. And a bit of stamp collection, that was still a thing back then, right? So obviously, not a thing as much these days but who knows? Some of my collections could actually be worth something.

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Jeremy Au:

I got to ask, how did you get into stamp collection?

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Kuo-Yi Lim:

It was just friends doing it, and then you got pulled into it. So, it was just who you hang out with and that's one of the things that happened as well. My dad actually collected stamps, so he did a lot of that. So, part of that was really inheriting that hobby from him as well, in addition to having friends in the school who does the same thing, so.

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Jeremy Au:

Yeah. What other things did you inherit from your dad other than stamp collection?

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Kuo-Yi Lim:

Not for me to say, but I think that's probably one of the most biggest thing that I remember that he did and I did as well. So, reading I guess, a lot of-

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Jeremy Au:

Reading attribute, nice, yeah.

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Kuo-Yi Lim:

Yeah, definitely. My first language was Chinese, Mandarin, and there's a lot of that from my dad. So, a lot of the Chinese literature that I read was when I was much younger than when I was older.

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Jeremy Au:

Yeah. As you grew up, one of the interesting things was that you went on to not just do sports, not just do all the stamp collection, but also put all that together and you went to university. So, how did you use that to decide what you chose to study, which was much more on the scientific side and engineering side. How did you make that decision?

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Kuo-Yi Lim:

I've always studied science in Singapore. For those who are somewhat familiar with the Singapore education system, you got a channel to different focus areas in school. And so, I was part of the pre-med group, we studied the sciences, including biology. So in fact, most of my friends are doctors now, and some of the top medical professionals in Singapore. But no, I did not go on to medical school, and I went on to decide to take on engineering instead.

So, that was the natural next step, largely because I think I like the first principles of physics, the approach of first principles in physics. I was really off with biology, I failed my first exam just because I never realized I had to memorize things. I'm used to just knowing things in the first principles and deriving a lot of stuff from that. Biology was literally, you got to remember a lot of stuff, and reproduce a lot of stuff from memory, which I was awful at.

Although I did do pretty well eventually in biology to possibly make it to medical school, I realized that my bias is towards first principles-based type topics like physics, chemistry, et cetera. Hence engineering was the path that I took. Enough of that, so.

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Jeremy Au:

And one interesting thing is that you not only chose to start doing engineering, you made it seem like it was something you chose to do because you weren't good at medicine, but yet you chose to double down on it and master it, right? With advanced degrees in it. So why is it that you chose to double down on it over time?

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Kuo-Yi Lim:

It wasn't a plan. I think it wasn't something that I planned to... So to your point, I did my undergraduate in double E, in electrical engineering, primarily in semiconductors, et cetera. And I eventually, I did do a doctorate, a PhD as well in the same field, but truth be told, I think setting out when I was studying as a freshman in college, I wasn't planning on PhD, or a career in academia. It just happened. I would say that sheepishly, largely because the opportunity presented itself, it was a natural next milestone and achievement, I guess, to go for. And the opportunity was there. And to some extent I had the ambition and probably now a little bit of a misguided ambition that I could have done it quicker. Right? But all told, I spent eight years in college, which included the undergraduate and the graduate programs. But I thought could have been faster.

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Jeremy Au:

Any fun stories about eight years in college? I mean most people have fun stories from four years of undergrad. Did you have some fun years?

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Kuo-Yi Lim:

It was good. It was good. I think it was also the time when... It was the early '90s, so, and I was on a financial aid package. So part of that was really finding work to pay for the tuition and everything. And one of the jobs that I took up, I think I took three jobs at any one time, stacking books in the library and stuff like data entry. But one of the most interesting thing and timely thing that I did was to work as a computing help desk consultant.

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Jeremy Au:

Interesting.

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Kuo-Yi Lim:

So folks who are online, trying to use the network computers, et cetera, with have any questions. We were helping them with the questions. And this is in the early '90s, so there was early stages of the internet, very early incarnations of network computers, networks, applications on top of that, anything from authentication to network directories and storage and file folders, to messaging and to emails and video sharing and et cetera.

So I was fortunate to be right at the forefront of that and to see things happen. And that's when I think I got my first exposure to what a network world might look like. That was the early days, early days. So because I had to make money to pay for stuff to be able to afford college, but it also set me up to learn about and be a part of the early internet, which is, I think, fortuitous and yeah, no complaints.

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Jeremy Au:

One interesting aspect is that it's an interesting inversion, right? Because I also used to be part of that computer help desk as well at a younger age, running around, setting up EV cables and help desk for the teachers and things like that. And at the time it almost felt like being a help desk was like the lagging, right? Or like you were supporting... I don't know.

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Kuo-Yi Lim:

Not really no, no.

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Jeremy Au:

Not at the time?

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Kuo-Yi Lim:

Yeah, no. In college the help desk guys are the ones that... And so just to be more specific as well, I went to MIT, so a lot of the early internet stuff was created at MIT. It was a network called Project Athena.

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Jeremy Au:

Got it.

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Kuo-Yi Lim:

So Athena Network. So a lot of the early stuff that you see right now, that's underneath the covers of the computers of the network protocols you're using, of Unix, Linux, et cetera, were coming through, some of the things that were invented and created through those projects.

So, no, it was a lot of experimentation. The Athena consultants, as we would call, were very much helping to solve for some of the early use cases. Some of the folks that we were working with within MIT included guys at SIPI don't ask me what it stands for now, something about a publishing board, which is a bunch of hackers. Right? That was really hacking stuff. And trying to extend and stretch, and make things do, make the network and computers do things that they were not meant to do. And so to be like, at least on the peripheral, observing that, yeah, no, by no means was it a set up the projector type of role. No. It was fun. It was good. I mean, to be paid for it, I can't complain.

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Jeremy Au:

Yeah. It's interesting that you put it that way, because I think for me, it was more like within the computer club, we felt totally fine. It was experimentation, but that part in time in a school of jocks and we were the nerds, it felt like the nerds were a little bit lower in the pecking order.

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Kuo-Yi Lim:

Right.

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Jeremy Au:

But I think it's true that MIT is a beautiful place where there's a lot of experimentation-

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Kuo-Yi Lim:

Yeah, yeah.

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Jeremy Au:

... and I don't think there's that sense of dynamic there. And I think that's a beautiful part of MIT that's really quite special as well, there's a huge culture of hacking, experimentation, all the pranks that are being done there as well. Any beautiful memories about MIT there, that you liked, that you feel special that you haven't gotten since, outside of campus?

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Kuo-Yi Lim:

I think if there's any one thing that I took away from MIT was just the fact that you're never really looking backwards at what has been done or accomplished. You're always looking at what's possible, what's next. And there's a very deep sense of that across MIT. As accomplishes, a lot of people and the majority of the people are at MIT, there was never really a sense of, "Hey, look at what I've done," right? The conversation is always about, "Hey, what's the next interesting thing to really look into." Right?

I had the privilege of working with a lot of very highly renowned scientists, engineers when I was doing my PhD. Some of these guys are Nobel Laureate type folks. And I like to joke that I used to piss in the toilet next to some of these famous people, and the conversations that you have with some of these folks outside the toilet is never really about admiring what they did before. It's always about, what's this new thing they were looking at? What are possible things that we should put in place to experiment, to probe, to explore, to uncover, to discover new, possible edges of what we know? Or, we knew back then?

And that was a fantastic feeling. And I think that culture of never really being restful on your laurels and just looking ahead, is something that I took away from. One of the famous anecdotes that people say about the MIT is doing commencement graduation, you see folks going out there, getting the diplomas, bowing and walking off the stage. The one parting terms that everybody hear from the provost who's there on stage is, "Keep moving." That one phrase that you hear as probably the last parting words from MIT before we graduate is, "Keep moving." Which is cool, which is cool. Although obviously he meant, "Just get off the stage," but at some level it does carry a lot of meaning, right?

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Jeremy Au:

Yeah. Yeah. Keep moving. That's a powerful phrase there. There you were, and you walked off the stage, right, with the words, "Keep moving," ringing in your ears, and you made a choice to enter the world. So tell us more about what your first job was outside the PhD and why you chose that.

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Kuo-Yi Lim:

Yeah. One of the other things apart from computer, my PhD was in photonics, so semiconductor lasers, et cetera. But the other branch of my interest is really in economics. So I actually spent a lot of time when I was doing my doctorate at the management school taking classes in economics with some of the top professors in the world, top management science professors, finance professors, et cetera. So that was maybe my third branch that I was really interested in. Business economics and how that applied in the real world.

So coming out of the doctorate, that was in the late '90s, I was offered a position at a management consulting firm called the Boston Consulting Group. And so BCG in short. And so to work with the high tech team in the Boston office. So that was my first job. Although I do like to think that my first paid job was again, still back to being a help desk consultant, and I was paid to do research. I was paid to do research for my PhD. But my true first, I guess, full-time career outside of the academia was as a consultant at BCG.

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Jeremy Au:

And one interesting thing is that you also chose to join BCG and you also chose not to become a professor. Right? Which is a common path after doing a PhD. Yeah. So why not continue the academic route at that point in time?

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Kuo-Yi Lim:

The academia was never really my objective for doing that PhD.

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Jeremy Au:

Interesting.

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Kuo-Yi Lim:

I did my Master's... In fact, I did three thesis with the same professor. My undergraduate, Bachelor's thesis, my Master's thesis and my doctorate thesis with the same professor. So it was really a continuation of the research that I began when I was a sophomore. So that goes back to your earlier point about, it was opportunistic at some level, although it should have been more planned.

So I think the lesson here for folks is, things are never that linear. And I think you should allow for some non-linearity in your career planning, and everything's not lockstep, right? You graduate, and then go to Harvard, Kinsey, no. At some level what's in front of you, what gets you excited, it's important as well. So that's what I did. So the academia was never really my plan. But getting into business, economics and how that applies to the real world was something that was compelling to me. And the BCG opportunity, I think, presented that.

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Jeremy Au:

Yeah. What was that like? So there you are, you've had this wonderful experience with the engineering academia dynamic. And being that, like you said, keep moving, talking about what's in forward, and then obviously BCG. I've also been a management consultant and it's also a little bit different, right?

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Kuo-Yi Lim:

Yeah.

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Jeremy Au:

I don't think it's... There's a lot of best practices. There's a lot of comparison. It's a little different, I think, in terms of how they orient the dynamic. So how did you feel about your time, what you learned from that experience in terms of compare and contrast to that of MIT?

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Kuo-Yi Lim:

I think MIT and engineering and all that stuff was very precise. It did teach me to be clear in terms of what the conviction is around a theory, a thesis. Again, it seemed very much first principles-driven in how we think about the work. That remains to be the case in BCG. Right? There's a lot of first principles thinking, but at the same time, there was a need to be comfortable with a lack of precision. A lot of work are deductive. A lot of work are thesis, hypothesis-driven. We have no clear answer necessarily, but just different options.

So I think that was the hardest, steepest part of the learning curve for me, where things are so imprecise. My first case team consisted of three people, me, a PhD, we have another person who is more like a computer science graduate, but he have done some work in Oracle. And then we have a lawyer who is leading the case team. Three completely different training, different personalities and different view of how the world looks like. And so that was very interesting. Lawyers would think about all the options through A, B, C, and D and think about that. As an engineer, I look for any one option that works and then the rest, I couldn't care less. Looking for that, bootstrapping for the answer and then trying to iterate from there.

Whereas, the lawyer would think about all the possible scenarios, make sure everything is covered. And then the Oracle management guy is obviously more comprehensive, I guess. "How do I get this to the point where it's polished?" But it was a great experience. It was a great experience, I think, to be able to be in a board room With some of the top management, senior executive C-suite in the world. And we're talking about some of the pinnacles of some of the industries in the US, obviously in the world possibly as well, was amazing. In the dynamics, the way we would think about things, talk about things, the language of business. I think that was one of the key takeaway for me.

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Jeremy Au:

From there, from BCG, that's where you slowly left and eventually made your way into technology in different forms and fashion, right? Where you combine both of them in a much more synthesized way. So could you share about how that journey happened?

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Kuo-Yi Lim:

There's always this linkage back to the internet, the network, the computer and everything. And remember this was the late '90s, the first dot-com wave. There was a lot of energy around using the internet for interesting stuff. So I was connected with a MIT PhD computer science, whose focus was in machine learning and artificial intelligence. And my office mate at BCG, who is a Harvard MBA, also knows him. And so the three of us decided to start a business called Reputation Systems. We do have a couple of really topnotch engineers at MIT as well. One of them is Roger Dingledine, which I actually remember, he's the founder of the Tor network. T-O-R. If you ever go look it up, you find out who he is.

And also we have some really topnotch computer scientists on the team. The idea was to build a system to predict reputation and behaviors of players on marketplaces. So think of B2B marketplaces, think suppliers, thousands and thousands of them that you have not transacted with before, but may have some history. And then you are about to issue a PO, a purchase order. How do you decide which one to give it to, assuming all things being equal?

And so that was the idea, was to use machine learning, to use the techniques and machine learning to solve for those reputational issues in an open marketplace. So that was the first startup that I got involved in in 2000. Yeah.

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Jeremy Au:

Wow. And how was that?

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Kuo-Yi Lim:

Yeah, it was early days of the internet, so it was how crazy it was. One of our first partner was Alibaba. We were introduced to Alibaba in China back then, in Hong Kong. And the idea was to apply our systems on their marketplaces. But the reality was back then, it was so early, there was so little data and truth be told, most of Alibaba's business model was still providing a listing of suppliers, not transactions. And so, without data, as you probably know now, you can't do meaningful machine learning.

So we pivoted, and we pivoted to selling software to folks who do have the data, and these are large companies. So I was a BD guy, partnerships, conversations, et cetera. And we did secure our first customer, which was Nike, the shoemaker out of Oregon, in the year 2001, early 2001.

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Jeremy Au:

Wow.

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Kuo-Yi Lim:

So we pivoted. We were one of the last guys to get funded at that point. You know, the dot-com crash was coming. Has already begun. And obviously 9/11 happened, and the year was already well into the coffin. The dot-com year.

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Jeremy Au:

Oof. What was that like, watching the dot-com crash? I mean, was it Scary? Did people know that it was happening? How did it feel like as an operator on the ground watching that happen? Because I think people today, all the founders today are looking at it, myself included, as like a historical fact, right? Like Black Friday.

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Kuo-Yi Lim:

So, clearly anything that goes up can come down. That's something that people are quite clear about. Secondarily I think substance matter. And I think the ability to demonstrate substance and traction and sustainability of the business truly was one of the things that I got out of that. Regardless of what the cycle is. And I went through the 2002 to 2009 relatively colder period of the tech world, where people are just so focused on substance and sustainability. Upcycle or downcycle.

The only thing that truly matters are the basic first principles of business. Of people paying you more than you are paying to get it out there. Simple. And is there more than one person willing to pay you for that? And not just your mom? And then it goes on from there. So it's pretty straightforward. And I don't think that has changed. I think that's something to keep in mind. Even now, as we are experiencing some level of exuberance in the market right now, it is good to keep those things in mind.

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Jeremy Au:

And one interesting thing is you entered this experience, start up as an operator, and eventually you started transitioning and building out a career in venture capital. Right?

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Kuo-Yi Lim:

Yes.

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Jeremy Au:

So I guess the first question is, why transition and start exploring the venture capital route from your perspective?

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Kuo-Yi Lim:

So I did a few more startups, and had the opportunity to work across the table from VCs, some really good ones from the US on Sand Hill Road. And so I think there's a little bit of exposure in terms of how that work is being done. And after a few startups, two things. One, that the opportunity presented itself, where I had the chance to apply my knowledge experience in operating startups to become the lead of a government-owned VC fund here in Singapore. So that was the opportunity.

And secondly, I think it speaks partly also to my other part of my, I think, personality and bias, which is to be exposed to a lot of things, and go back to first principles, and really get curious about every single thing that I come across. And so I think the VC experience really presented that opportunity, which turned out to be quite true for me personally. And so that the first VC role that I took on was to be the CEO of Infocomm Investments. This was in 2010, which is a co-investment strategy, series B, series C. And we worked with the top VCs in the world, to bring some of the good companies, top companies to Asia as a co-investor to these VCs. So yeah. That was how it happened.

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Jeremy Au:

What was that transition like for you? Because there you are on, having had experience on one side of the table, and now you are on the other side of the table. Right? So what was that transition like for yourself?

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Kuo-Yi Lim:

It's interesting. I think once you look at this, I realize there's always a emotional life cycle when you come across a deal, when you see something you really like, and there's this implicit emotional bias to try to justify why this is a good deal. I learned to step back and let it simmer, and maybe cool down a little bit, and reexamine as objectively as possible. Again, using a very first principles thinking around that. But that was learned through mistakes. That's learned through losing money, that is learned through companies that you were so sure about that just didn't work out.

A lot of these deals that were done and then you go, justify why these are good deals with theories and hypothesis, that sounded great on paper. But the bottom line is, all the first principle stuff we talk about before. And so I think those are the key transition. As an ex-operator you want to believe. And when you do believe, you believe really, really hard in something. That's the nature of an optimist founder or operator. Early-stage founder.

But the same time, I think weighing that, balancing that with just knowing what can go wrong, and being quite clear-headed about the balance of everything, and then making the decisions. Still learning. I mean, it's not done yet. It never is done.

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Jeremy Au:

When you say that you the learning isn't done yet, what would you say that you've learned so far? One of the things you've learned is about how to see about emotional bias. What would you say are things you feel like you've learned so far, versus things that you feel like you're still learning or seeking to learn?

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Kuo-Yi Lim:

I think what I've realized was helpful, in going back to my training as a PhD student, as a graduate student, was to really be able to demarcate between first principles and things that should always be questioned. It's a fine line to know what that means. Certain things, you just go, "If this works," this set of first principles you believe in, most things can be derived from that because the first principles are typically quite immutable.

But it was also the role of a researcher, an Explorer, et cetera, to question the status quo. So one thing that I learned investing now over time is to always question the status quo. So what we saw, for example, what I saw maybe a few years ago, that didn't work, doesn't mean it wouldn't work now. So the propensity to go, "Oh, I've seen this before. It didn't work. No, it wouldn't work. It's a dangerous shortcut," until you're proven wrong. Then you go, "Wow, it actually can work." Just because the first principles are X, Y, Z, remains the same, but the environment had changed.

So I think to be really cognizant of that, intellectually, is something that we continue to want to do, to be able to do. Imagine, and you know this, we see 20, 30, 40, 80 deals a week, sometimes. You just want to get through with it. You rely on some sort of quite primal instincts. You've seen this before, it doesn't work. It doesn't work, move on. And so the ability to step back as much as you can, applying curiosity and first principles, maybe to dig a little bit deeper, to doubt your instincts, could be helpful. But obviously easier said than done when you have so many things to look through. But it is important to keep that in mind.

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Jeremy Au:

On that note, when you think about instincts, there's a lot of folks who are thinking through, which is, as a founder, you're thinking, "How do I appeal to the VC's instincts? And how do I story tell better? How do I make my company look better to appeal to those instincts?" And then, the secondary question is like, "What is the actual business and the core of that business?" How do you advise founders? Because you've been on both sides, right? You've been a founder and operator before, and now you're in a VC side of it. And you've also been a coach to working alongside these founders as well. So how do you help them, or how would you coach founders to be thinking through both the bull and the bear markets? Whatever they be. How would you advise them to be thinking about going out to fundraise, or to think about storytelling?

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Kuo-Yi Lim:

So first of all, you're absolutely... Founders should be thinking about all the up and down bull and bear cases, and all the possible things that can go wrong, and what success should look like, and what it takes, or what are two, three main levers and main success factors that you really got to nail to win the game. I mean, those things need to be quite clear. My personal recommendation, and this really depends on individuals and all of that, my recommendation is to be quite open book with the investor you're talking to. Yeah, it is a game, it's an exercise in convincing and selling the other person. But you can remember this is more than a transaction. You're getting to something that's long-standing, hopefully, and possibly, and very likely long-standing. And so it's important to lay the cards, to make sure that everybody's aware about what the boundary conditions are, the upside, downside, risks, et cetera, before you get into a relationship and collaboration.

VCs are adults, VCs should be able to calibrate the risk and decide this is something that they want to do. Eyes wide open. I think the last thing that I think founders should try to do is to sell a VC too hard and revel in having sold to the VC. I think it's more important to, having come to this on the same page at this VC, having the same thought process, expectations about the business, same excitement about the business, at the start of the relationship. So that's what I would recommend founders to do, to be quite open-book, to be quite clear about the extents of the businesses with the investors.

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Jeremy Au:

On that note, I'd love to wrap up this great episode by summarizing the three big themes I got away from this. The first is, thank you so much for sharing your early years. I think the theme keep moving actually is a great theme for all of it, for how you kept moving through your early years as a student, playing softball and soccer, but also as a science and physics and engineer, and eventually PhD and consultant. So I love that keep moving segment, especially that culture of experimentation and being at the frontier of knowledge as a computer help desk dynamic. So, love that set of experiences.

Second is, thank you so much for also sharing what you learned as a professional around questioning the status quo. And I think you shared the boundaries between first principles thinking, and how you learned that in different domains, from physics to business, to also how you think about it from inductive versus deductive reasoning in the business context/economics, and eventually venture capital. So that's interesting.

And the third, I think, that we touched on very briefly is actually some of your thoughts about why you joined venture capital, which is to some extent because you got to work alongside them, because the opportunity presented itself, and also some of the learnings that you had around what it means to truly align and create value together, and have that be a true partnership between everybody. So thank you so much, Kuo Yi, for sharing all your thoughts on the podcast.

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Kuo-Yi Lim:

Thank you. Thank you very much.