Jonathan Teo

Jonathan Teo

Founder and Managing Partner at Binary Capital

THIS CHAT HAPPENED ON June 30, 2016

Discussion

Jonathan Teo
Jonathan Teo@jonathan_teo
Hi everyone, I'm Jonathan Teo, cofounder of Binary Capital and a big believer that we can commoditize privilege across the globe through responsible technology products. I've been in a wide variety of roles including founder, employee, technical manager and now investor and am excited to answer any of your questions from those perspectives.
Tiffany Zhong
Tiffany Zhong@tzhongg · @ZebraIQ (gen z), ex Product Hunt
What are 3 companies you passed on but wish you hadn't in hindsight?
Jonathan Teo
Jonathan Teo@jonathan_teo
@tzhongg FusionIO back in 2009, Pinterest in 2010 (although I wrote a Quora post on it after I failed to convince my partnership then. Twice. https://www.quora.com/How-does-P...) and Dropbox in late 2010.
Harry Stebbings
Harry Stebbings@harrystebbings · Podcast Host @ The Twenty Minute VC
Awesome to see you here Jonathan and have heard a huge amount about you, my question is, obviously Tiffany is awesome and the whole community loves her but what was it about @tzhongg that made you realise how awesome she was? What was that factor or turning point? Were you concerned at how the VC community would respond to such a young hire?
Jonathan Teo
Jonathan Teo@jonathan_teo
@harrystebbings @tzhongg This young lady here is one of the most authentic, honest and expressive individuals I've come across. She also at core has a passion for technology and new ideas, and has an intrinsic understanding that the best people in her network have yet to do their best work and is constantly in support of them getting to that point.
Kartik Chaudhari
Kartik Chaudhari@kartik_chaudhari · fueled by innovation, starting up
@jonathan_teo @harrystebbings @tzhongg how did you discover her as a talent? as in what was the medium of communication?
COSTAS ANDRIOPOULOS
COSTAS ANDRIOPOULOS@candriopoulos · https://medium.com/strictly-curious
Hello Jonathan, thank you for taking our questions. Where do you look for emerging trends (e.g. sources, events, websites, etc.) and how do you pick ventures in nascent industries?
Jonathan Teo
Jonathan Teo@jonathan_teo
@candriopoulos I use a series of data pulls across public sources of data to figure out whereabouts in the service space there lack national brands in inefficient marketplaces but where latent demand exists. In the new media space I scour Twitter and other conversation rich sites to identify if any products are bringing about new content types that facilitate new ways of communicating.
COSTAS ANDRIOPOULOS
COSTAS ANDRIOPOULOS@candriopoulos · https://medium.com/strictly-curious
@jonathan_teo Dear Jonathan, thank you very much for your insightful answer. I appreciate it.
Andrew Ettinger
Andrew Ettinger@ettinger · 👟 @wearAtoms // ex @Twitter @ProductHunt
Do you think our social media bandwidth is at max cap? In other words, will the next big thing have to replace something we currently use?
Jonathan Teo
Jonathan Teo@jonathan_teo
@andrewett There's always going to be a limit as to the number of ubiquitous media products out there, just because we only have so many hours in a day. Yet we are now starting to see a real fracture in demographic specific products segmented by content and access types. More, smaller online communities will be developed.
Andrew Ettinger
Andrew Ettinger@ettinger · 👟 @wearAtoms // ex @Twitter @ProductHunt
@jonathan_teo As an investor, how do you evaluate which of these "small online communities" has the most growth potential?
Uhma
Uhma@deleted-594972 · Brr
Hello Jonathan, Thank you for giving us an opportunity to ask you questions . What are the indicators you look for, when scanning hundreds ( if not thousands ) of startup pitches? What is your preferred format of a startup pitch? Thank you.
Jonathan Teo
Jonathan Teo@jonathan_teo
@victorpolyushko Hey Victor, I'm going to attempt this with the caveat that there are always additional details to consider depending on the space the startup is innovating in. In no specific order and across different spaces, I look for 1) Clarity in understanding what user value the product is bringing to the market and the distinction between that and the founding vision (a founding vision that's greater than the product vision helps me be inspired that the founders understand the journey they are embarking on). 2) A consistency of that user value articulated by the founder and the message that users describe the service or product with. 3) A team that's self aware about why they can understand that user value best and how to keep that up (either belonging to the exact user demo, unique context, data centric product iteration process, etc.)
Ryan Hoover
Ryan Hoover@rrhoover · Founder, Product Hunt
Jonathan! Snapchat is an obvious big win during your time at General Catalyst. Which three emerging but lesser known social platforms are you most excited about?
Jonathan Teo
Jonathan Teo@jonathan_teo
@rrhoover I think social is a tough space now to innovate in. Most of the relationships have been codified with existing platforms. I do think there are areas to continue innovating in (e.g. group conversations), but in general we have been focused in this space on products aggregating content and their distribution across multiple platforms as we move away from the monolithic html based content world where Google was most dominant.
Marius Chawa
Marius Chawa@marius_chawa · Analyst, Hewlett Packard Enterprise
For a startup with less than 1000 total users, no revenue yet that's seeking funding.. Would they typically raise a pre-seed or seed round? and how can they send you a pitch deck?
Justin Wilson
Justin Wilson@jawhster
@mariuschawa great question. I'm looking for answer too. Thank you
Jonathan Teo
Jonathan Teo@jonathan_teo
@mariuschawa Just send it over to me at jt@binarycap.com. I'll certainly respond.
Marius Chawa
Marius Chawa@marius_chawa · Analyst, Hewlett Packard Enterprise
Martina Grgic
Martina Grgic@martigrgic · Co-founder @ SmartLumies
Hi Jonathan! What is the biggest mistake founders do while pitching to you, especially non-US founders (in case you had experience with this)? If I can be honest, my biggest fear now, as a European founder, is that I'm not as valuable as an US founder because of the cultural differences and being away of the startup epicenter. I guess it will change with time :)
Jonathan Teo
Jonathan Teo@jonathan_teo
@martigrgic Don't be! The only mistake a founder can make when pitching is to pitch another person's point of view.
Martina Grgic
Martina Grgic@martigrgic · Co-founder @ SmartLumies
@jonathan_teo good advice :) is there a way I can pitch you my point of view?
Kartik Chaudhari
Kartik Chaudhari@kartik_chaudhari · fueled by innovation, starting up
Hi Jonathan.. how would you consider the venture capital scenes in India to be.. It is the fastest growning it hub in the world and already has the 3rd largest startup ecosystem in the world but, without a major VC presence .. Would you invest?
Jonathan Teo
Jonathan Teo@jonathan_teo
@kartik_chaudhari I would but given the stage we invest in, the geographical constraints of where our network and experience can be most helpful get diminished with that distance. I also don't tend to get preferential deal flow outside of the US.
Kartik Chaudhari
Kartik Chaudhari@kartik_chaudhari · fueled by innovation, starting up
@jonathan_teo geographical constrainsts aside, would you invest if you had presence in India?
Danny Espinoza
Danny Espinoza@abcdannye · Founder @looksyvideo
Hi Jonathan, at GC was there a key factor leading to your investment in Snapchat? Clearly traction was there at the Series A but I'm wondering if something really stood out for you that made you see the potential there and pull the trigger?
Jonathan Teo
Jonathan Teo@jonathan_teo
@dannyjespinoza Interestingly, it was a tweet I saw from a young 13 year old teen regarding Snapchat that went "Finally it's ok for me to post an ugly photo of myself!" that raised my eyebrows. I actually met Evan and Bobby in early 2012 and told them I would invest then, two rounds prior to the investment GC made that I led while there. He had articulated clearly then that he wanted to "make it fun to talk to [his] friends again". When I looked into the numbers at Snapchat, what stood out was that over 93% of active users on the platform (then at 110k daily actives) across all cohorts were coming back to the app over 5 times a week. It was starting to resonate as a communications tool, and our conversations around how to bring it into the broadcast arena centered around the storytelling aspect, which only came into being in late 2013 but had its clarity articulated then.
Vishal Gurbuxani
Vishal Gurbuxani@vishal_gurbuxani · Live Life Happy
Hi Jonathan, what are the top 3 things you do to maintain work/life balance?
Jonathan Teo
Jonathan Teo@jonathan_teo
@vishal_gurbuxani I travel. A lot. Helps me get a different perspective. I actually like backpacking more than any type of travel, staying at hostels and visiting less-trodden locales. There's also a vibrant art community I enjoy engaging with. Practically, I take no more than 6 meetings a day, and always have open time for my friends.
Ethan James Appleby
Ethan James Appleby@ethanappleby · Vango Founder, Kiter, US History Buff
@jonathan_teo well said... answer to this question is usually very generic. yours was not.
Andrew Ettinger
Andrew Ettinger@ettinger · 👟 @wearAtoms // ex @Twitter @ProductHunt
Which company in your portfolio do you think Product Hunt users should be using, but might not know about yet?
Jonathan Teo
Jonathan Teo@jonathan_teo
@andrewett You should check out Bindle!
Corey Hubbard
Corey Hubbard@corey_hubbard · Founder - DreamHighr
Thanks for being here Jonathan, and I wanted to ask what are your thoughts of the plus and minuses on the Brexit vote on early-stage investments in the USA?
Sarim Haq
Sarim Haq@sarim_haq · AI Whisperer
Hey Jonathan, how/why did you make the switch from being an Engineer with a hardcore tech background (Bachelors/Masters) to being a VC?
Jonathan Teo
Jonathan Teo@jonathan_teo
@sarim_haq It happened by chance. Peter Fenton over at Benchmark convinced me I could be helpful in evaluating deep tech companies given my technical background, and it just evolved from there!
Emily Snowdon (née Hodgins)
Emily Snowdon (née Hodgins)@emilyjsnowdon · Operations @ Product Hunt
Hi Jonathan thanks for joining us today. During your career to date, what is the best piece of advice you've ever been given? Flip side - what's the worst?
Jonathan Teo
Jonathan Teo@jonathan_teo
@ems_hodge Hey Emily, best advice I got for my career actually came from my mom. She said "never let anyone regret that they spent time with you. Worst advice I got was "You don't need to give the right advice, just have a perspective." It came from another VC early in my career and it's terrible.
Nikhil Srinivasan
Nikhil Srinivasan@nvs · CEO at Cleargraph
hey jt 👋🏻 curious, who do you consider your closest mentors and what did you learn from them? (people who were catalysts and supporters of personal growth opportunities)
Rodrigo Argumedo
Rodrigo Argumedo@rod_argumedo1 · Occasional Hunter
Hello Jonathan, how long did it took you to build an early stage venture capital? Also, does it take the same risks as in a form of a startup tech business?
Jonathan Teo
Jonathan Teo@jonathan_teo
@rod_argumedo1 It took years of immersing in the technology space, building a network of great founders and technical talent and a cadre of fantastic mentors. When I started Binary with my partner Justin Caldbeck, we already had some good investments and relationships behind us so the risk we took on was mostly about whether investors would support our story and thesis. A startup's risk profile is dramatically different, with many more operational variables and a more rapidly evolving ecosystem.
William Maio
William Maio@williammaio · Software Engineer at TerrAvion
Hi Jonathan, what are some of the untapped opportunities that people are not focusing on?
Jonathan Teo
Jonathan Teo@jonathan_teo
@wmaiouiru Hey William, I'm a big believer that we can build value by focusing on the large number of new users coming online into the digital economy, mainly inner city users and users in developing economies.
Hi Jonathan, in which type of company are you more comfortable investing? Is it something that evolved? Thanks.
Jonathan Teo
Jonathan Teo@jonathan_teo
@patry_francois Broad question! I am most comfortable investing in a company where I can play a clear support role, and the founder is clearly in the driver's seat. That hasn't changed.
Mike Moulton
Mike Moulton@mike_moulton · co-founder @ echo | partner @ mmllp
Is there anything you have learned in your capacity as an investor that you wish you had known in your capacity as a founder?
Jonathan Teo
Jonathan Teo@jonathan_teo
@mike_moulton I with I had known how important it is to move fast on data driven testing of product ideas, and to move thoughtfully on team building.
Laf. Julius
Laf. Julius@laf_julius · co- founder @evolvesports
How's it going Jonathan, have you experienced any unfair vesting situations? How's did you resolve?
Jonathan Teo
Jonathan Teo@jonathan_teo
@laf_julius Would love more context, and we can take this offline if you'd like.
Kartik Chaudhari
Kartik Chaudhari@kartik_chaudhari · fueled by innovation, starting up
.
Theoharis Dimarhos
Theoharis Dimarhos@theo_dimarhos · Marketing+Biz Dev at AngelouEconomics
Hi Jonathan! What are 3 things you would change about conferences/events
Chibi
Chibi@girlchibi97 · Instphil
@theo_dimarhos I have a same question
Vnessa Lim
Vnessa Lim@vnssalim
Hi Jonathan, thanks for holding this chat session. I'd like to know your views on companies borrowing ideas from another market instead of creating the next big thing, and do you also look at these companies. Do you follow the same view that a company that is 5x better than its peers is a worthy investment, even if it isn't a completely new innovation?
Jonathan Teo
Jonathan Teo@jonathan_teo
@vnssalim Yes absolutely! Next big things don't come around that often, and great companies can be built from consilience across markets and approaches. However, the statement that something is 5x better generally doesn't excite me, as I'm more excited about what is different about the company that makes it 5x better, and can that advantage be parlayed into a sustainable advantage.
Vnessa Lim
Vnessa Lim@vnssalim
@jonathan_teo Thanks so much! Will definitely brush it up in the pitch :)
Brian Sirgutz
Brian Sirgutz@sirgutz · Founder Ampathy
Hello Jonathan, I noticed that you and Binary have a deep commitment to social impact and social innovation. What are the most recent things Binary Capital have been doing to further this along and do you feel that most companies that are funded by VC's should have an Impact component in their business models and overall ethos? Thank you for taking the time to answer my question.
Frederick Lee
Frederick Lee@thefrederationn
Hey Jon, thanks for taking our questions. Here's a question from Singapore -- Where do you think there are gaps in the "commoditization of privilege" round the world, and what advise do you have to a young person on the best way to bridge it?
Shiva Singh Sangwan
Shiva Singh Sangwan@shivagg · 1947🌎
Hi Jonathan! How do you go about identifying and doing research into potential companies that you might want to invest in, and is this different from how other VCs approach this? Can you tell us about Snapchat investment? How did you get in, did you think the company would get as big as it's become?
Jonathan Teo
Jonathan Teo@jonathan_teo
@shivagg I certainly did not imagine how big it would become. Ambition grows one success at a time. Keep building on the small successes and the bigger plays will present themselves.
Justin Wilson
Justin Wilson@jawhster
Do you see Snapchat, Facebook, and other social media as valuable to users? Clearly valuable to company because revenue from users and advertisements. Are the users better off or in long term, users will not benefit because of time wasted and addicted to distraction?
Jonathan Teo
Jonathan Teo@jonathan_teo
@jawhster I think they can be. Most aren't, and largely related to the revenue models they employ. While users have a choice to move off any specific platform, it's getting increasingly difficult to do so when a platform gets to scale as it begins to dominate the content creation-consumption cycle. New products and platforms will keep coming up, and we should be working on the ones that have revenue models that closely tie user value with company value.
Liam F. Tjoa
Liam F. Tjoa@liamtjoa · Founder GoSpooky
Do you have any insight in when the on-demand Geofilters are coming to Europe?
Jonathan Teo
Jonathan Teo@jonathan_teo
@liamtjoa I don't, and if I did, Evan would not be keen on me mentioning it :)
Ben Holloway
Ben Holloway@ben_holloway · Private Equity, Turn/River Capital
Hey Jonathan, thanks for doing this. Couple of quick questions 1. Who are your favorite investors in the Valley right now and why? 2. What are some characteristics that make junior level VC employees (Associate, Senior Associate) stand out to you? Thanks!
Jonathan Teo
Jonathan Teo@jonathan_teo
@ben_holloway I've always looked up to the investors who know what they're good at and stick with it. Examples are Peter Fenton, Steve Anderson, Michael Dearing etc. Characteristics of junior folks at VC firms that stand out to me are elements of pure hustle, passion for people and their successes, and an ability to dissect topics down to the fundamental drivers.