Glenn Solomon, a managing partner at GGV Capital, was recently interviewed by Harry Stebbings on his 20VC podcast. GGV Capital is a venture capital firm focused on multi-stage investments in the US and China. They have ~US$3.8bn under management across eight funds and invest across a range of technology sectors. In the interview, Solomon discusses some of the changes he has seen in the venture landscape over time, his own evolution as an investor, current technology trends, China and more. You can listen to the full interview here. Worth a listen.

I have also included some highlights from the conversation below (these are mostly paraphrased notes and not comprehensive, any mistakes are my own):

• On his path into VC: He did his undergrad at Stanford, then worked at Goldman for a couple of years. That was where he first got intrigued by investing. He went on to work for a private investment partnership (SPO Partners), then went to business school. That was where he saw the internet for the first time, in 1994/95. He went to business school with the goal of combining his burgeoning interest in technology with his love for investing. After school, he joined Partech International and worked there for 8 years. He moved to GGV about 12.5 years ago.
• On how the venture landscape has changed since he started in the industry: He is reminded of a talk he attended at Stanford in 1996 by John Doerr. Doerr told the parable of computing paradigm shifts (he was referring to the shift from mainframe to client server). When you have these shifts, the incumbents get disrupted by new entrants and the new entrants become more valuable than the incumbents they replace. Network-based computing led to the rise of the internet and companies such as Yahoo, Google and, more recently, Facebook. Over the last 10 years, he thinks the 6 most important letters have been iOS (which ushered in the era of mobile computing, starting around 2007) and AWS (which ushered in the era of cloud computing, starting around 2006). They are probably the two biggest paradigm shifts he will see in his lifetime. They are giving birth to some of the most important network-effect businesses and protocols we have ever seen – think of the second leg of Facebook’s growth being mobile, WeChat, Xiaomi, Airbnb, Slack. Also giving birth to brand new industries – IoT, the growth in practical use cases of AI and machine learning. These paradigm shifts are very important for VC investors. He thinks we are perhaps already in a very important second act of paradigm shifts for cloud and mobile. These trends have created a sandbox that VC investors and founders are playing in that’s bigger than ever. They are also global, flattening technology markets. Many VC investors that are Silicon Valley-centric are missing this.
• On his evolution as an investor: As the industry has industrialized (and it has), it is incumbent on the actors to get more focused. He sees this happening at both the firm and partner level. People who are doing well are doing so in large part because they have learnt how to focus. In the last decade, 99% of his activity has been in and around application level software to solve modern business problems (e.g. Slack, Domo) and then the infrastructure to help support cloud-based applications (security, dev ops, application performance and monitoring). By the way, it’s more than just where you invest, it’s also how you spend your time. For example, he creates a lot of content (blogs actively) and tries to build out his network in these areas so he can help make the relevant introductions for his portfolio companies. Another way he has focused: earlier in his career he did a lot of cross-stage investments (including Series C, D). Over time, he has become more comfortable investing early. Many of his investments today are seed, Series A and Series B.
• On time allocation in the context of his portfolio companies: One thing he has learnt in venture capital is that you make all your money on the winners. You don’t want to get too involved, but you need to help create an environment where your winners can run. By contrast, with companies that are not doing as well, you have to give your best shot to help them achieve their goals, but if things ultimately don’t go as originally planned, it is important to turn the page (for both the investor and entrepreneur). The most valuable asset everyone has is time. He is not sure how his time balances out exactly, but it’s always more fun to spend time with the winners.
• On deal pricing: In the past, he has walked away from deals where pricing was too aggressive. In general, those have all been mistakes. He has learnt that there is almost no price that is too high to pay relative to where outcomes can be. Going back to what John Doerr said, the new entrants tend to be more valuable than the companies they replace. It is very difficult for the human brain to understand how big these companies can be. He has made mistakes getting caught up and missing a deal for valuation reasons, not realizing how big the upside is in fantastic companies.
• On boards: Being a board member is a full contact sport, especially if you invest early stage and join the board of young companies. You need to be there, be available, ready to listen, offer advice, roll up your sleeves and help out. Today, if you want to be impactful as an investor, you have to be ready to travel. That’s a change that has taken place over the last 5-10 years. When is the right time to establish a board? Probably by your Series A. He thinks that having a small board for the first several years is a good practice. Founders have lots to do and they shouldn’t be wasting their time educating too many people on the intricacies of their business. Having a few people who really know the business well is important.
• On how to structure a great board meeting: He gave the example of Domo’s recent board meeting. It is not about reporting numbers, but more about implications of the trends that the data suggests. Best to set up the board meeting up around just a few key topics so it can be deep and meaningful. Domo’s CEO also does a good job giving the board exposure to his key executives – so the product head, enterprise sales head etc. are all in the meeting. You get more texture that way.
• On China: GGV has been in China since day 1 (2000). Half their investment team is in China. Half their portfolio companies are in China. The returns from their investments in China have been stellar. When they got started, it was a way to provide diversification for their LPs. Now, as the world has become flatter, there is more interplay between the two markets (US-China), so being in both has helped a lot. The best founders in Europe and the US are also getting a lot more curious about what’s happening in China. More of their portfolio company founders from the US are visiting China. This is a new theme, it wasn’t something they saw happening 2-3 years ago. The founders want to learn from China and realize there are lots of innovative companies there (it’s not a copycat market anymore). They are also increasingly seeking capital in China, looking for local partnerships, and viewing China as an end-market (e.g. Airbnb).
• On the influence of BAT in the China venture landscape: Unlike the US, the big tech companies in China play a very meaningful role in the domestic ecosystem. Founders need to know what their strategy is with respect to these companies. It’s not that these companies are copycatting or trying to kill startups, but they are looking to identify breakout potential and invest money into them as soon as possible. Founders and VC investors in China have to figure out how that game is going to play out and who you are going to partner with. BAT have lots of capital, but controlling your own destiny can sometimes become an issue.
• On being a great start-up CEO: A key skill is the ability to manage momentum. Start-ups are very hard and you need to build momentum across every dimension of your business (in terms of financing, news and PR, customers, partners, the employees you attract and retain). You need to continually step up and to the right but without overreaching. Skip a step and you introduce quite a bit of risk into the equation.
• Book recommendations: Shoe Dog (Phil Knight), Born a Crime (Trevor Noah), Irena’s Children (Tilar Mazzeo).