Venture Capital and Remote Startups

Marvin Liao (@marvinliao)

Marvin Liao is a Partner at 500 Startups, a global Seed Venture Capital Firm and Startup Accelerator based in San Francisco.

The business sectors Marvin is interested to invest include FinTech, Digital Marketing, Digital Health, IoT, Marketplace,

Enterprise sales, and SaaS.

500 Startups

[00:00:00] Jevin: [00:00:00] Hey everyone. We’re here with Marvin Liao from 500 startups. Thanks for being on the show today

[00:00:04] Marvin: [00:00:04] Thanks for having me.

[00:00:06] Jevin: [00:00:06] So you’ve been around you’ve been at Yahoo the days before Marissa when everyone is remote and now you were with 500 startups. I’m excited to have you here, but that whole journey first tell us where you working from today.

[00:00:19] Marvin: [00:00:19] Yeah, so I’m here in San Francisco. I’m actually normally based out here, but I do travel probably 50-60 percent of my time. So I’m probably doing it. I’m doing it the wrong way. I think I should be based on where else and then traveling here. But anyways, my name Marvin Liao I’m a partner of 500 startups, which is an early-stage Venture Capital fund and accelerator. So I run the accelerator program based here in San Francisco the core program that that probably best known for. In the Silicon Valley 20 years now so did startups for many years. I was executive at Yahoo for about 10 and a half years, then did a bunch of Angel Investing in Boards of several boards for a couple of years before I joined 500 So been in 500 Starups almost six years and so I helped start the San Francisco office.

[00:01:00] [00:00:59] Jevin: [00:00:59] Very cool and today so you’re at San Francisco are you at like a co-working space are you at a 500 startup office.

[00:01:05] Marvin: [00:01:05] Yeah, we’re at our office and we’re here at our office on Mission Street. So our headquarters.

[00:01:11]Jevin: [00:01:11] Awesome. I’m in Ottawa Canada. Although my wife is actually in San Francisco this whole week. So it’s pretty pretty interesting Yeah, we actually move rarely travels family. So that’s that’s great. Okay, so you are Yahoo! Yahoo for was famous for early on doing remote work before Marissa Mayer killed it. I think it’s 2012 early 2013. I can’t remember

[00:01:31] Marvin: [00:01:31] She killed it. She killed it. I think like 2013 or 2014. So Yahoo, is always a very global company, right? We had offices everywhere. We also had a fairly large sort of I would say remote sort of like work. We had some remote more culture which I would say is probably abused. And so what a lot of people didn’t realize and this is hearsay. I wasn’t there like I left Yahoo! End of 2011 beginning 2012 so Marissa came on board like end of 2012 and this is what I [00:02:00] heard from from friends who are still working. There was that when you work at a big company use of use VPS’s, right and this is data driven. So what they found out was just the remote work was actually abused and so they check that a lot of people weren’t VPN’ing in so they literally weren’t like you need to VPN to get access to your email. You need to VPN to get access to a lot of you sort of like the core infrastructure on Yahoo. So a lot of people weren’t doing that. So what I had understood was that it was abused and Yahoo. Frankly was not the best managed company. So I think a lot of people took advantage of the the sort of how should I say the free remote work culture?

[00:02:40] Jevin: [00:02:40] Right in that they probably just weren’t working unless they’re just opening, opening up like notepad and just working locally. You know, I’m just brain dumping their stuff but likely that’s

[00:02:49] Marvin: [00:02:49] not

[00:02:49] Jevin: [00:02:49] the case

[00:02:50] Marvin: [00:02:50] Yeah, no, but you actually but to go check your email. You actually need to VPN in right? So that’s just what I heard. I have no idea. I don’t know. What was the thinking behind it. [00:03:00] Like I you as you know, like a lot of people on your podcast like we’re all believers remote work if it’s done well, right.

[00:03:06] Jevin: [00:03:06] Yeah that makes a lot of sense but at the time but yeah, we’re you working. I guess what’s it look like was it like a distributed team where you had just offices all over the place and people still came to the office or were you at home?

[00:03:17] Marvin: [00:03:17] So so my yeah, my last I would say four years four and a half years my my senior bosses were like, elsewhere either in Singapore or in like Switzerland and my entire team was completely distributed. So I ran a business group that was focusing on the Mia region. My last two years particular. I was running a business group of folks in the mia region. I was the only person in the u.s. So everybody else has reported to me was in Switzerland London Barcelona Mumbai Dubai. So like, you know all over the mia region. And and all our partners are all over the place, right? So I spent a lot of time I was traveling like three and a half weeks out of the month. So it was a [00:04:00] fully remote team.

[00:04:01] Jevin: [00:04:01] Alright, so we’re done with that. No one talks about Yahoo anymore. It’s over. So now you’re into the VC stuff and I first heard you and you were talking about where you’re about to speak at running remote and I looked into some of your stuff and I’m like, okay, this guy is is in the VC space and is actually, you know, a real believer in remote and and likely part of its just influence from your experience at Yahoo, where you know things seem to work at least with your team, where everyone being distributed. And The one thing that I’ve seem to noticed at least the past, you know, five to ten years is VCS are really wanting people to be in the office all together for you know, for whatever reason it sounds like you’re you’re less that way. So what’s like your current kind of feeling on the landscape for companies who wants that?

[00:04:46] Marvin: [00:04:46] I think yeah, that’s a great question. I think is changing. I think the traditional VC still think that way but a lot of them are dying out and I think if you look at a lot of that and I also think even one of them are coming around to the view that like, you know, think about like 5 years ago, [00:05:00] like VC’s would have been adamant about like know everybody needs to be here in Silicon Valley. I think because our cost structure and everything they’re going. And also I think Frankly Speaking the lack of loyalty of sort of like the mercenary behavior of like Talent here and marginal talent. I think a lot of like there’s great talent everywhere now, I think there’s realization of just like, hey, actually you can keep your engineering and back office somewhere else instead to Eastern Europe and Canada in Latin America wherever like, you know, but whatever there’s awesome Talent or India and keep your back office else there and keep your sales and marketing office here. That’s. Become much more widely accepted in general and I actually have a lot of VC friends up very big firms are like asking their companies like why is everybody here? Right? Like does it make sense to keep everybody here? Like why do you not have some of your back office somewhere else?

[00:05:49] Jevin: [00:05:49] Yeah, why can’t we just have a couple of Marvin’s all around the world? So this guy doesn’t have to be sitting in an airplane for the majority of his life.

[00:05:58] Marvin: [00:05:58] And I also think what’s also [00:06:00] happening in changing now just like it’s become much more Talent driven and I don’t think the talent wants to stay in these big expensive cities anymore. So it’s definitely changed. I think the millennial generation everyone throws that out there. They have different expectations of work. Now. I also think the tools that are available now, Versus when I was you know, Yahoo! Back in like 2009, 2010,you know 2011 was very different. Like they’re just so many more Amazing tools now to sort of enable, remote work. I think there’s also a lot more companies have pioneered the culture in the best practices that didn’t exist back then so it’s becoming easier. I’m not going to say it’s easy. It is becoming easier for companies to do remote work.

[00:06:37] Jevin: [00:06:37] So, okay. So the last four years 2000 like of the 2000s. You know, what yeah, what were you using to collaborate? I mean surely email was popular was that like it was post MSN like and AOL. IM days. Like how are you collaborating back then?

[00:06:54] Marvin: [00:06:54] You mean like now versus back in like twenty two thousand eight nine ten, actually. [00:07:00] Yeah just a lot like a messenger. So we you know, we are at Yahoo, yahoo messenger which is defunct now, but we did a lot of that. We did a lot of like we just did a lot of calls like just a lot of like voice conferencing right? So Skype.

[00:07:16] and video was it? Yeah, I mean we Skype video wasn’t optimal that’s still not optimal but like, you know, this is before slack. Like slack is a game changer in my opinion and in just a lot of email right email lot of, a lot of sort of like conferencing calls like either Skype or other other tools and a lot of messenger. Which is kind of like I guess equivalent to slack in some ways.

[00:07:40] Jevin: [00:07:40] Mmm, saying things are becoming more Talent driven in the Bay Area and startups versus I don’t know. What does that mean? And what was it before?

[00:07:49] Marvin: [00:07:49] I think that this was a place to be and I still think in many ways. It still is the place to be but the rising cost of the last five years have really made a lot of people rethink like, [00:08:00] well do I really want to like live here anymore right like San Francisco? As much as I love to see i’ve been in here for 20 years, it’s kind of crap hole now like just really dirty. It’s not very well run it over run like very little work, even though the weather’s amazing, but just it’s kind of a hellish place to live and it’s just so expensive. So I think this really force a lot of people to rethink their lives. A lot of people are moving all over the place.

[00:08:21] Wait, San Francisco is getting worse. Like this is a non San Francisco person. You’re talking to I visited a number of times

[00:08:26] Yeah, it’s pretty crap. I mean I’m I mean if anyone who knows me, I’ve been I’m pretty vocal about stuff and this is I worked should have been the downtown sort of so my area and it’s just like it’s just horrible

[00:08:39] Jevin: [00:08:39] but with all the money come like with tech tech companies you think you’d be getting? Better?

[00:08:45] Marvin: [00:08:45] Yeah, you would think that.

[00:08:46] Jevin: [00:08:46] huh? Interesting, I did not know the things are getting worse in San Francisco. I just thought this is just more expensive than either the same or getting better.

[00:08:54]Marvin: [00:08:54] No, it’s not getting better. I think it’s just it’s always been a very poorly run City, but just it was a [00:09:00] city that’s not built to handle the traffic and influx of people coming in right like when I moved here, it’s like 500 600 thousand people and now we’re like 950 thousand people. So there’s just an influx of a lot of people so just like. The infrastructure is just is not set up for that.

[00:09:16] Jevin: [00:09:16] Makes sense. Okay. So now people are thinking okay. Do I actually want to move to San Francisco and VC’s are starting to ask themselves. Is this really the best way to deploy capital I guess is to spend whatever it is $110,000 on a grad engineer I suppose

[00:09:35] Marvin: [00:09:35] Yeah, I mean it is pretty ridiculous in the talent is also, tends to be disloyal.

[00:09:41] Jevin: [00:09:41] So tell me a little bit about that. You mentioned Yeah, you mentioned disloyal. You said it’s a bit more mercenary style

[00:09:48] Marvin: [00:09:48] you show me opportunities right? There’s so many opportunities. So you literally can go anywhere and everywhere right you literraly can even work in, you know for just an extra ten twenty thousand dollars, to go in like [00:10:00] work in the same building and another company in the same building.

[00:10:03] Jevin: [00:10:03] Really? So it’s so are you saying that people just don’t stay at companies very long then.

[00:10:07]Marvin: [00:10:07] Yeah, generally speaking.

[00:10:08]Jevin: [00:10:08] so how can that change if a company let’s say a San Francisco, right the therefore y combinator or 500 startups and now they’re getting serious of starting to build their company maybe the founders want to stay in San Francisco. How can they you know, what’s the alternative then with remote work? How could that look?

[00:10:27]Marvin: [00:10:27] I mean you’re seeing that already right? You’re seeing seeing a lot of folks like moving to sort of like low sort of I cost structures. I think a lot of stuff was, you know, I think there’s a very big difference between digital Nomads a sort of remote work places, right? But just imma spend a lot of time in Asia like well, there’s Thailand and Indonesia, Taiwan Portugal. Central eastern Europe like just you’re starting to see a lot more. There’s just a lot more prevalence, and I think there’s a lot better understanding of it. You’re seeing a lot of people move to Austin, Texas Portland Boulder, Colorado. There’s just a lot of really [00:11:00] really really really really really interesting and wonderful places to live now that you can just basically plug in from anywhere so you don’t have to be invested in these centers of like new york or LA or San Francisco, which are wonderful places like still good places to live and with just such a huge densities of talent , but I think like a lot of talent is just realizing like hey, I don’t have to be here and I can still there’s a lot of opportunities, there’s a lot of great companies doing remote work. Even the big companies are waking up to the fact that just like, you know, think about what’s the biggest cost structures people and it’s real estate, right? And they’re going wait a minute. You don’t actually some cases like saving time and money on the commute.

[00:11:36]Jevin: [00:11:36] you know if traditional startup they want to get VC money do they have to approach VC’s differently or like I have a higher threshold that they need to be able to attain. To get money from VC’s. like is it different now if feces are more open to it, or maybe they’re not maybe in someone’s not sure who he sees open to the idea of remote.

[00:11:54]Marvin: [00:11:54] there are some I mean the reserve there are some that are like that that have, there still a [00:12:00] lot of these things. I don’t like that. I think either the day though, you know, whether your remote or here, you’re sort of like everybody is in the same office. I think as long as they’re sort of thoughtful about it and it makes sense. I think a VC will back the business is owns a business in the team. You know, the team is good in the business makes sense. I think I think these are much more open-minded to it. So at the end day right it’s being remote is a small feature. And so I don’t know about would dissuade investors get the business is really really interesting and the team is really really good from investing as long as it’s done thoughtfully. Right? Like as long as the remote work is done thoughtfully. Like it’s you know, I don’t think it’s a big of a deal as a lot of people.

[00:12:40] Jevin: [00:12:40] Okay. Well, that’s that’s encouraging then I guess probably for for anyone listening and I guess by the same token, if VC’s in general are more open to it, then they don’t all just have to go to San Francisco to try to raise money. But presumably they can’t go anywhere now, I guess we don’t have an office in your town. But like we could talk all the time if you want. Mr. Ms investor.

[00:13:00] [00:12:59] Marvin: [00:12:59] Yeah, and I’m seeing a lot of like I said it just like a lot of the VC’s in the valley after a long time to be honest are now starting to invest doing a lot more Investments like outside of the outside of the valley and even some cases like outside of the US. So you’re starting to see a lot of change right? There’s so much money flowing around and I think there’s wider recognition. There’s also companies everywhere. So there’s there’s more stuff happening and I think that’s a great thing.

[00:13:23] Jevin: [00:13:23] That’s great. Do you have I guess would you if someone’s a remote company would you say, hey maybe head towards these VC’s more than these other VC’s. Is there like a general bucket that you recommend or names of companies?

[00:13:36] Marvin: [00:13:36] I mean,you kind of just got to do the research but like, you know, my friend said Initialize are big fans of remote work. I think a lot of the early stage. He sees the CVC’s in general tend to be much more open to that.

[00:13:48] Jevin: [00:13:48] Yeah, that would make sense. You have less money. You’re trying to squeeze out the value from whatever money you have and remote can be a good way to do that.

[00:13:56] Marvin: [00:13:56] And they also tend to be less traditional, right?

[00:13:58] Jevin: [00:13:58] sure. Okay looks plain explain [00:14:00] what that means?

[00:14:00]Marvin: [00:14:00] I just think like if your CVC there’s, you don’t have as much my deploy, but you’re also much more earlier stage and I just think in general you’re hungrier. And so I do think that there is a lot there like I just think it’s a mindset thing too. Right by being early stage. You have to be in general a lot more Cutting Edge and just be a lot more tune with sort of like the the sort of like the larger Trends in general and I’m obviously generalized.

[00:14:25] Jevin: [00:14:25] Yep, what would you say for the for the opposite for so maybe a start-up whose is in San Francisco? And they’re like or New York or wherever, you know with the high very high expensive cost of iving and they’re like no I want to build in an office right now.

[00:14:40]Marvin: [00:14:40] I don’t think there’s anything wrong with that. I just think as long as you like. You know why you’re doing that right? Like I have friends who’ve run very very successful startup single several hundred, several hundred people making like a lot of Revenue raised a lot of money and for them. They’re like no like we’re for us. We’re always going to have anybody here in the same office, right and like that’s [00:15:00] fine. I think as long as you are thoughtful because like this is a culture we want we want everybody here. That’s fine. Right, like I don’t think there’s anything wrong with that. I think this idea just like I don’t think it’s binary just yet to be one or the other right? I just think like that to be one of the other as long as your thoughtful about it and then just thoughtfulness so just like like and I think it’s a type of culture you want a bill like I have a lot of friends who are like these hardcore remote workers. I know remote source of future. I’m like, yes in general. I think you’re going to see. A lot more remote work fully remote work companies like several hundred even some cases like thousands right? Like I do see that that’s possibility, but I think that’s a conscious decision.

[00:15:37] Jevin: [00:15:37] Yeah, that makes sense. I really like the term you use thoughtful right like you’re being intentional or being thoughtful, you putting in the effort to decide what you want your company to be your company culture. Whatever that really means, you know. And being really deliberate in that and so that you can build the company in the way that you want and you’re not just kind of falling into it and not asking those questions [00:16:00] because I think at least for remote a lot of people are just like at least traditional companies are afraid of it. They’re like, I just don’t trust my employees like well have you actually been deliberate enough?

[00:16:10] Marvin: [00:16:10] I don’t know I think that points. I think that points you larger issues.

[00:16:15] Jevin: [00:16:15] Oh, yeah, I totally agree. Yeah, if you don’t trust your employees to do a couple days of work from home and actually think that they’re going to be productive. There’s probably bigger issues.

[00:16:23] Marvin: [00:16:23] Yeah, I I just think and I think that’s a traditional industrial mindset to.

[00:16:28] Jevin: [00:16:28] For last couple of minutes here Marvin, what are the kind of companies that you’re that you’re particular looking at? If someone want to reach out to you to start exploring getting investment, or joining the accelerator you.

[00:16:39]Marvin: [00:16:39] Yeah, I mean, I’m looking at it any business that sort of like software-driven that is like, you know focusing on like a huge problem who they know their customers really well and you know, like I would say in general like I look a lot of fintech. I look a lot of sass I look at a lot of marketplace businesses. I would be like really almost everything every single space in [00:17:00] general. That’s as long as like, it’s mainly software-driven is kind of where we can add a lot about.

[00:17:05] Jevin: [00:17:05] that makes sense Marvin thanks a lot for coming on the show.

[00:17:10] Marvin: [00:17:10] Yeah, I hope it’s helpful and interesting

[00:17:12] Jevin: [00:17:12] Yes, it is helpful and interesting, both two for two last

[00:17:16] Marvin: [00:17:16] Yes.

[00:17:17]Jevin: [00:17:17] know, you’re a big fan of remote you to work motor work remotely. What is the one thing that you need to have with you? That makes your remote life totally bearable?

[00:17:28] Marvin: [00:17:28] Yeah, I mean it’s probably basic but it’s just like it’s there’s two things. I think it’s my like my iPhone because you need that for everywhere you go, right and then yeah that’s boring it is boring and actually my Kindle.

[00:17:40] Jevin: [00:17:40] Kindle. Tell me about

[00:17:42] Marvin: [00:17:42] I’m a reader and so especially sitting in traffic or you’re flying a lot like I do like having a Kindle is great. Like, you know where before my previous life at Yahoo. This is before Kindle like I’d had to carry like four or five books, right? And which can be very heavy in this magic of just having hundreds of books in your [00:18:00] Kindle is wonderful.

[00:18:01] Jevin: [00:18:01] Wait, sitting in traffic plus Kindle. How does that work? Your are you driving

[00:18:04] Marvin: [00:18:04] I’m just being able to read you don’t know no like I mean, I don’t drive like, you know, sitting in traffic and and having you know having the opportunity to go in like read.

[00:18:12] Jevin: [00:18:12] When you’re in the passenger seat, right?

[00:18:14] Marvin: [00:18:14] Yes. Yes. Yes in the passenger

[00:18:16] Jevin: [00:18:16] Great. Okay, just making sure

[00:18:18]All right, Marvin Liao from 500 startups. Thanks a lot again for coming on the show. So for everyone listening to the show now, thanks for listening, and we’ll see you next time on building remote teams. See you around.

[00:18:32] Bye.