Chi-Hua Chien

Chi-Hua Chien

Co-founder of Goodwater Capital

THIS CHAT HAPPENED ON April 04, 2017

Discussion

Hi - I'm Chi-Hua Chien, cofounder of Goodwater Capital, a venture capital firm focused 100% on early stage consumer tech ventures. I've spent the last 14 years investing in tech companies including early investments in Facebook, Twitter, Spotify, Chegg, Klout, and Path. Goodwater's recent investments include Stash, Zumper, musical.ly, and Memebox. Very excited to be here and answer any questions, plus talk about our new product Index that helps entrepreneurs figure out if it's a good time to raise money.'
Ben Tossell
Ben Tossell@bentossell · Makerpad.co
Hey! If you had to swap lives with an early tech CEO who would it be and why?
@bentossell for early stage, i think that the Brandon Krieg and Ed Robinson @StashInvest have an incredible opportunity to reinvent the entire financial services industry. they are doing good work and i believe that company will touch 100M+ people access to financial opportunity. for later stage, it would have to be Elon Musk. he is transforming transportation, space, AI and making all of our lives better. the Tesla is the best product i've seen since the iPhone.
Adam Revetta
Adam Revetta@arrev · Founder, CollaborDate & ScareHunt
Hi @chchien ! What's the greatest early indicator to success that you've seen consistently across startups?
@arrev it's all about one thing -- building a product that customers love. when you can't keep your servers up because there is so much demand for your product, you know you've got a great opportunity ahead.
jerod moore
jerod moore@jollymonatx · Co-Founder goKittr & Coffee hunter
What's the most common "Seed stage" mistake you see?
@jollymonatx investing in too much marketing is the most common seed stage mistake i see. companies that haven't yet built a great product sometimes think they can skip that step by starting marketing, buying FB ads, etc to drive customer adoption. but that never works because if your product isn't great, it won't retain users and those dollars are lost. so focus on the product first, then ramp your marketing once you raise your Series A.
Jake Crump
Jake Crump@jakecrump · Community Team with Product Hunt
What is your morning routine?
@jakecrump i wake up around 7am with my two kids (ages 3 and 8) and feed them breakfast. it's a special time in the morning for me because i get to take them to school and help them get a great start to the day. my son and i have a tradition of taking a selfie every morning before he goes into pre-school. i then head into the office and either do calls or listen to podcasts during my morning commute. most mornings, my partner Eric Kim and I catch up for a few minutes, and we set aside 2 hours on Monday and Friday mornings to talk through everything related to Goodwater and our companies.
Ayrton De Craene
Ayrton De Craene@ayrton · Code @ Clearbit
What characteristics do great founders share?
@ayrton great founders share a few things in common. 1) they have a huge vision and belief in accomplishing the impossible, 2) they can motivate others to join them on that journey, and 3) they execute relentlessly and with great detail. the best founders are also incredibly frugal and treat company resources with care, investing in the things that will create the most value.
Ben Tossell
Ben Tossell@bentossell · Makerpad.co
What do you believe that few agree with you on?
@bentossell i think few would agree with me on my perspective that PR for early stage companies is often a waste of energy. (ironic, because i'm saying this in a public forum...) but i have seen too many companies get wrapped up in PR that they forget to focus on their product. they get distracted by the press, networking events, panels, parties, etc. and invest way too much energy in those things. instead, they should be focused on their customers and product. building a great company requires staying at home and building a great product first. the accolades and public recognition will come in due time.
Harsh Pendse
Harsh Pendse@harshpendse · TCO Labs
What is your take on college students and startups ? Should they start their company at that point of time ?
@harshpendse age doesn't matter. you should start a company when you are so passionate about solving a problem that you can't sleep until you build the solution. if that happens in college, great. if it happens when you're 60, also great. Daniel Ek of Spotify had some great perspective to share on this in his talk at Stanford. http://ecorner.stanford.edu/podc...
Harsh Pendse
Harsh Pendse@harshpendse · TCO Labs
@chchien thanks a lot !
Theoharis Dimarhos
Theoharis Dimarhos@theo_dimarhos · Marketing+Biz Dev at AngelouEconomics
How can a young non-technical/business person that wants to get into investing be of service to a VC firm?
@theo_dimarhos i was lucky to get my start at Accel Partners by volunteering my time to help other portfolio companies. Peter Fenton (now at Benchmark Capital) and Arthur Patterson (the cofounder of Accel) sat on my board at Coremetrics and asked me to help a few other SaaS companies in their portfolio model out their finances and make operational improvements. i was the interim CFO at Coremetrics and we went through a pretty significant turnaround. from there, i got my shot on the investing side and went on to help the firm invest in Facebook, Trulia and others. so start early via a relationship and just volunteer your time to help companies or find new investments!
Danny Tirmizi
Danny Tirmizi@danny_tirmizi · Founder : Icarus App
Hi Mr. Chien! I wanted to know how soon should a startup pitch to VC's ? Does having a good product alone help or a large user base thats convincing? www.IcarusNow.com
@danny_tirmizi a good product helps, and a rapidly growing user base helps even more. investors love to see clear customer proof points which demonstrate that you've built a product which addresses a large market opportunity. our Goodwater Index will help you get a sense of the current fundraising environment and VC sentiment. http://www.goodwatercap.com/index
Emily Snowdon (née Hodgins)
Emily Snowdon (née Hodgins)@emilyjsnowdon · Operations @ Product Hunt
Thanks for being here today! Can you share some tips or insights for early stage consumer founders on to acheive early growth?
@ems_hodge build a great product that customers love! if you do that, things will go well for you.
Emily Snowdon (née Hodgins)
Emily Snowdon (née Hodgins)@emilyjsnowdon · Operations @ Product Hunt
What metrics should early stage founders concentrate on?
@ems_hodge customer engagement is the most important metric. if you have a product that your customers love and use a lot (audience) or buy a lot of (commerce / paid service), then you will likely be able to scale your business. but if customers try your product and stop using it or aren't happy with it, you need to fix it before scaling up.
Tayler
Tayler@tayler2412 · Builder, Designer, StudioMinted.com
The work behind "Thesis" and "Index" is enormous (http://www.goodwatercap.com/index), what was the intent in publishing these publicly?
@tayler2412 two of Goodwater's core values are TRANSPARENCY and SERVICE. we think of both Thesis (http://www.goodwatercap.com/thes...) and Index (http://www.goodwatercap.com/index) as opportunities to serve the entrepreneurs around the world and bring transparency to things that are otherwise hard to understand in our startup market. for example, the Snapchat Thesis report helped many entrepreneurs understand how their companies would ultimately be viewed by Wall Street, so they can prepare for this as they mature their businesses. and Index is a great product that provides the kind of objective, data-driven advice that you would get from a good VC board member. Eric and I have been investing for over 25 years combined and we know that not every startup has access to good advice, so we are providing it for free online to anyone who wants to learn more.
Tayler
Tayler@tayler2412 · Builder, Designer, StudioMinted.com
@chchien its powerful knowledge and something that all of the readers have benefited from. Thank you
Tayler
Tayler@tayler2412 · Builder, Designer, StudioMinted.com
Also, Jason Fried, Basecamp published Ditch the elevator pitch ( https://m.signalvnoise.com/ditch... ) what is your thoughts on elevator pitches and presentations?
Danny Tirmizi
Danny Tirmizi@danny_tirmizi · Founder : Icarus App
What are your thoughts and predictions on the App market as it shows no signs of slowing down?
CODERED
CODERED@legaleagle767 · JJ, Stay at home parent
The DARPA Heliplane could and should have succeeded. Who killed it? Private equity and excellent leadership could resurrect life-changing technology.
Syed Ahmed
Syed Ahmed@tabishis · Altimus Solutions, Inc.
Do you think MOOCs will eventually replace traditional learning, specifically tech focused learning? Do you invest in products that are focused on solving problems for MOOC students?
@tabishis yes, i do think that MOOCs have the potential to replace traditional learning. if you think about primary education in the United States, it combines five factors which shouldn't be in the same business -- 1) education, 2) accreditation, 3) real estate, 4) union labor, and 5) day care. there are huge quality control issues that come about when you combine those five elements. if you can separate #1 & 2 apart from the others, you will likely get better results.
Dinesh Chandran R
Dinesh Chandran R@dineshvmr · Product Guy
What are ways I can validate my idea for a startup before starting the development?
@dineshvmr i like the Starbucks test. go to Starbucks and show a dozen people the design of your product, ask them if it solves an important problem in their lives and how it might fit into their daily routine. if you get very positive feedback and interest from a significant number of users, go for it! be careful not to only ask your friends. they will tend to be very much like you and may not represent a mass market opportunity.
Dinesh Chandran R
Dinesh Chandran R@dineshvmr · Product Guy
@chchien Thanks for the tip. Will try that
Jake Crump
Jake Crump@jakecrump · Community Team with Product Hunt
What are your top tips for founders looking to get their first investment?
@jakecrump solve a problem that you're passionate about and build a great product. don't worry about the investment part of things. if you build a great product that solves a problem for many customers, you will attract investment, team, and resources. my friend Daniel Ek (founder of Spotify) shared a great perspective on this during his talk at Stanford a few years ago. http://ecorner.stanford.edu/podc...
Seth Williams
Seth Williams@sethbwilliams · Designer, Product Hunt
What does success look like for you?
@sethbwilliams i think of the super long term when i measure success. my friend Brant Cryder has a great perspective -- he asks, "What will you do that will cause your kids to say, 'My Daddy was a legend.'" so I think of this on five dimensions. i want to be a legendary son, a legendary husband, a legendary father, a legendary friend, and a legendary colleague. in that order. getting your priorities right and focusing on the things that matter define success.
Adam Revetta
Adam Revetta@arrev · Founder, CollaborDate & ScareHunt
What are the most important factors that you use to determine whether you will invest in a startup?
@arrev i mentioned earlier that product-market fit is critical. that means that customers love your product and are using it / buying it more and more over time. once we identify that product-market fit is achieved, we look closely at the team and size of the market opportunity. to help entrepreneurs understand the overall funding environment, we just launched a new product called Goodwater Index that measures VC sentiment. it'll give you a sense of whether or not the current time is a good fundraising market. http://www.goodwatercap.com/index
Jacqueline von Tesmar
Jacqueline von Tesmar@jacqvon · Community at Product Hunt ⚡️
What do you look for most when making investment decisions? Is it the founder, the team, the idea, initial traction?
@jacqvon we focus 100% on consumer tech companies, and the #1 criteria is product-market fit. if a company has not yet shipped a product, or if that product is not yet attracting happy customers, it's too early for us. once we understand the dynamics of consumer adoption then we spend a lot of time getting to know the team and the market opportunity. ultimately, a startup has to have a GREAT team, LARGE market opportunity, and STRONG product market-fit to become a Goodwater investment. we are more than comfortable taking business model risk and most of the companies that we invest in haven't yet figured out their business model.
Kiki Schirr / 史秀玉
Kiki Schirr / 史秀玉@kikischirr · Founder, WeKiki Video Chat Platform
You recently stated on your Twitter, "US companies are structurally disadvantaged in China." Although I'm inclined to agree, I'd love to hear more of your thoughts on this subject. What puts American/外国 companies at a disadvantage when they attempt to expand into the golden egg of China's tech market?
@kikischirr one of the most interesting challenges facing companies today is how to go to market in China. China has a completely different set of regulations, content filtering requirements, and factors of success. for example, in China, GR (government relations) is more important than PR (public relations). Chinese companies are configured to address all these issues and compete aggressively in that market. US companies aren't well equipped to do it which is why you've seen Google, eBay, Facebook, Uber, etc all fail.
D'Andre Ealy
D'Andre Ealy@dreunlimited · Growth @ Disney
How do you feel about the future of AR and VR?
@dreunlimited AR and VR are very powerful technologies that have tremendous potential, but haven't yet found their customer use case. in particular, VR went through a hype cycle a few years ago and people began to realize that it requires a fundamental shift in customer behavior before becoming useful. in order to use VR, you have to isolate yourself from the rest of the world, which is a different experience from every other previous media form (newspapers, radio, TV, internet, streaming music). so that requires an adjustment in consumer behavior before it can really become a mass market platform.
Kevin Park
Kevin Park@kevinepark · Business Development Manager @PitchBook
What are some of your favorite books and why?
@kevinepark i recently read Phil Knight's "Shoe Dog." finished it in a weekend. it was an amazing story of entrepreneurship, commitment to product excellence, and perseverance. i had no idea Nike struggled for so long just to stay afloat. good read, highly recommended for all entrepreneurs.
Kevin Park
Kevin Park@kevinepark · Business Development Manager @PitchBook
What are your thoughts on having an MBA degree? Do you think its necessary for founders or for anyone looking to get into Venture Capital?
@kevinepark i loved my MBA program but it is not essential for starting a company or getting into VC. it's more a personal choice than anything else.
Shane Mac
Shane Mac@shanemac · CEO of Assist
@chchien @kevinepark Do you believe your comment to be true if you don't have an undergrad from a place like Stanford?
Does Mentors play big role in running companies?
@ommansvi mentors are critical in every part of life, not just running companies. i was lucky to have good mentors over my career and in my personal life, and i still speak to many of them regularly. find mentors that care about you personally. they have a wealth of wisdom and if they invest it in you, it will help you make better choices and avoid key mistakes.
@chchien Thank you :)
Shane Mac
Shane Mac@shanemac · CEO of Assist
What's something you think you've done poorly or something you've learned to do better in the last 5 years as a VC that has changed how you go about working with colleagues (founders / partners / LPs) in the future?