TECS 2013: Hurst Lin at DCM
Before our final farewell to Beijing the group had the honor of sitting down for a talk with Hurst Lin from DCM China, a global VC fund that mostly engages in series A investments in technology, media and telecommunications.
I felt compelled to write about our discussion because it was so thoughtful and authentic. Hurst Lin is best described as a casual Chinese man with a Brooklyn accent and a sense of openness and rhetoric that most often characterize a typical college student. While his list of accomplishments was long, he is probably best known outside the VC world for his role in founding the online Chinese newspaper, Sina. Throughout our talk his intelligence and humility continually impressed me and it was inspiring to get to hear from such a great VC.
With such an opportunity for understanding, I wasted no time in diving in to ask questions, two of which I’ve tried to capture the essence of below.
“What are the qualities you look for in good entrepreneurial leaders and good teams when selecting companies?”
Mr. Lin noted first that at the core of VC investing is sensing gut feelings and using a structured approach. In relationship to China, he said, “It’s easy to get carried away because the economy is growing at 9-10% a year.” His approach was simple: a good company has the right timing, positioning, and team.
Timing is all about figuring out if society is ready for your product or idea. It’s as simple as that. For positioning Mr. Lin was pretty straightforward, saying, “If your idea sucks then it will die, but if it’s good it will get copied and competition will form, so you have to position yourself properly from the start. A lot of this is about marketing and public perception.” The fundamental question in this case is if the product in the right position.
The last part of figuring out whether the team or person leading the company will succeed is really an art. As Lin clarified, “You don’t get to really know the person or team, and so you have to really make a tough decisions about how they will perform early on and with little information. That’s where operating on gut is so important.” After his words, I couldn’t help but think of my beloved mentor, Dr. Bennis, and his philosophy about leaders operating on instinct.
What makes up a good entrepreneur?
In his experience, Mr. Lin has come across two types of entrepreneurs: the ones that are super smart and the ones from humble beginnings. The first kind are rare, as he described, and are “really brilliant, but they only come around every 10 years or so if you’re lucky.”
The second are the ones that he usually comes across and they are smart and driven individuals, but what sets them apart is that they really have something to prove. In his own words, “These guys want to show others that they can make it. They are not necessarily super smart, but they run through walls to make things happen. You know, all of these guys have general self-confidence in themselves and they can inspire others to join their team – which is really important if you’re convincing people to quit their jobs to come to a startup. They are good at understanding people and psychology and there is a type of maturity within all of them to think about others. These entrepreneurs think about how people can fit differently into an organization and make things happen.”
A number of other questions came about, but I think the main points can be quickly recapped. Mr. Lin thought that good VC’s and good business leaders should continually re-examine if the timing of their product is still right. Between moments of thought he summarized saying, “Technology is cruel and opportunities are fleeting. Sometimes the competition can catch up faster than you think and render your idea irrelevant. So ask yourself constantly, is my product still relevant?”
Another salient point he made was that the heart of the entrepreneurial spirit, in his mind, comes from chasing the new idea – one that can act as a substitute or change human behavior just a little bit. Beyond asking about relevancy and timing, its good to think about an idea that impacts people daily. “If you can just change the way people go about their lives a little bit then you really got a great idea,” he noted.
Overall Hurst Lin had some amazing insight on the world of VC in China, and he also had incredible practical advice on life. His humility and honesty came across in the way he answered our questions and I left the meeting wondering how I will ever be able to master the skills, knowledge and personal qualities that make people like him so great.
Before we wrapped up he offered some final advice to us all: “Don’t take yourself too seriously.” The words really resonated, but like so many other things in life, it’s always easier said than done.
*TECS 2013 is short for my adventures with Stanford University's TECS two week immersive business and technology program in China. Over the next two weeks I am travelling from Beijing to Shanghai and meeting with incredible businesses along the way. All posts from the program will be tagged.