Riding Unicorns: Venture Capital | Entrepreneurship | Technology
00:02:40 · James Pringle, Yaron Valler
[00:02:40] S0: Awesome. And you've had a very successful career as an investor now, and obviously, you were a founder prior to that, and you bring this engineering edge as well. So you you kind of go Swiss army knife there, Yaron, of of everything you'd want in an investor with all that different experience. What do you think has been the most important skill that you've had as an investor and also one that you've improved that has really helped you as an investor? [00:03:07] S1: I can tell you what I think the most important skill is, period. I'm not sure how good I am at it, you know, for other people to say. It's understanding people and understanding what motivates them. At the end of the day, almost everything else is fixable, but having a bad team is something that you cannot fix. I'm also speaking about it in the book, I'm explaining why this is such an important trait, but finding people with a long ego and a very high energy is usually the key to success. [00:03:36] S0: Incredible. How do you try and spot that as an investor? Obviously we have many calls with lots of founding teams. How have you learned to pattern recognise low ego, high energy and agency?
00:03:36 · James Pringle, Yaron Valler
[00:03:36] S0: Incredible. How do you try and spot that as an investor? Obviously we have many calls with lots of founding teams. How have you learned to pattern recognise low ego, high energy and agency? [00:03:49] S1: It's someone that is very confident, but doesn't take themselves too seriously. Someone that is real and not busy saying what they think that people wanna hear. Someone that has... Usually a good indicator is someone that is very detail oriented. Someone that has a good plan. Having someone which has detail orientation, a lot of energy, and at the same time, not overly pompous or doesn't think that they are the gift of mankind. That's usually the trick. What I miss, I usually miss there. I usually miss by misinterpreting the personality type and the... Or misunderstanding the cues. [00:04:27] S0: So you think you misunderstand those? [00:04:29] S1: Oh, for sure. [00:04:30] S0: Do you think we're all susceptible to... [00:04:32] S1: By portfolio, you know, I don't know. I only have successes. I've got lots of failures and the failures are failures are usually caused by me not understanding something at the beginning. Sometimes it was just how things evolved, you know, market or whatever it happens. But sometimes it was definitely me misreading the team leaves and not understanding that the team doesn't have the right makeup or has some deficiencies. [00:04:54] S0: Absolutely fascinating. And so tell me a bit how that that kind of understanding of what you're looking for evolved into the thesis that underpins your new book.
00:05:07 · Yaron Valler
[00:05:07] S1: Maybe I'll explain the motivation for the book and that will become clear from that. So I've been a sort of a foreign implant in other countries for most of my life. I've never been an immigrant per se, right? I was much more of an expat than an immigrant, but I was always an outsider. And one of the things that I've noticed over the years is that outsiders make really good entrepreneurs and that the vast majority of successful companies that we have are driven by either people who are really immigrants, outsiders, or people that are very comfortable with moving around and share the same traits. And they started noticing this, and and then they said, wow. You know, maybe this is enough. Maybe this is something that needs to be validated. I mean, there's a lot of anecdotal evidence about it, but why don't they try to validate it? And from there, after I was convinced that this is a validated phenomenon and something that you can show, I started thinking about the broader implication of immigration. And of course, you know, having lived in Europe for so long, the issue of immigration is burning. It's almost self explanatory that a continent or a geography that doesn't grow in people, doesn't grow demographically, and doesn't grow economically, will decline. And the ways to offset this decline are also self evident. So there's a huge discrepancy between this logical understanding of the importance of immigration to Europe and The UK in the current circumstances that they're facing. And at the same time, there is a lot of resistance to it, which is very natural. So I was trying to understand the roots of the resistance, the value that this brings, and to explain how we can overcome them as a society without losing our identity.
00:06:38 · James Pringle, Yaron Valler
[00:06:38] S0: Absolutely fascinating. So tell us a little bit about what you discovered in the research and the benefits of new ideas, new energy are obviously massive. But how can nations harness that in the best way? Because it's not always harnessed in the best way and it could be improved. You know, governments have a responsibility to not only welcome immigration, but also to harness that new energy. So what have you kind of discovered through your research around that topic? [00:07:08] S1: I think there are several identifiable traits that we're seeing with immigrant entrepreneurs. Some of them are very trivial. You know, people that don't have a safety net work harder. It's very clear. But some are less evident. For example, the fact that people see things from the outside, this gives them a fresh perspective. You know, one of the examples that I give in the book is Wise, where the founders were horrified by the cost of transferring money. And this is something that they saw because they were outsiders, because they had to use this service. So many times it comes from a need. It comes from a need that you see as an immigrant. And this is something that is identifiable and you can show it with research and you can show how this fresh perspective is driving lots of the unicorns or lots of the successful stories in in entrepreneurship and tech, particularly in tech. You asked me about what governments can do, and I think that's the... [00:08:03] S0: Yeah. What can governments do? Yeah. Because it's a... Obviously, it's quite a topical kind of conversation.
00:08:08 · Yaron Valler
[00:08:08] S1: First of all, let's understand why people are resisting immigration. They're resisting immigration because of imagined fears and real fears. One of the fears is that immigrants are gonna take their jobs, and clearly, that's not the case because the jobs that immigrants are going after usually are not competing so much with the local population. The other thing that they're afraid of, and this is much more tangible, they're afraid of the cultural change that their country is going through. And this needs to be addressed. First of all, disregarding it and telling people that they are wrong, that what they are seeing and what they're feeling is wrong is not gonna go a long way towards fixing the problem. It's going to drive them towards voting for parties that are offering instant solutions. Forget, you know, for a second, the moral argument, whether these methods are moral or not, they're just not practical. And these instant solutions are not going cheer and result. So in order to address these issues and not avoid them and not push these people, not push the people that are concerned or afraid of immigration, not push them towards the extremes of the political map, the key thing that governments need to do is integration. Integration is the key for everything, and this needs to be a two way street and an agreement with the immigrant, and it needs to be both provided and supported and enforced. I'll give you a few examples. One of the things that I'm talking about in the book is generations of immigrants that live in a country and don't speak the language. You can see that, for example, in Germany, where second generation immigrants sometimes still don't speak the language or don't speak the topic, and they live inside the ghetto. And you can't blame the immigrants for congregating into a certain area because they want the support system. They want to create the same support systems that they had in their original countries. What you can do is encourage them by providing support, by providing financial incentives to not congregate and integrate and learn the language. Some of it is really simple, like being able to transfer skills. You know, one of the stories that I'm talking about is about a doctor that moved to The UK from Afghanistan and had to work as cleaner in many years.
00:10:18 · Yaron Valler, James Pringle
Given the shortage of doctors that The UK is facing, I don't think that benefited either her or The UK. So dealing with credential recognition, but mostly providing and insisting on cultural and legal integration. We shouldn't tolerate separate education systems, for example, because separate education systems are just making the problem worse. They are creating separate national narratives within one nation, and having separate national narratives is the beginning of fragmenting the nation. That's just one example. [00:10:47] S0: Absolutely fascinating. So you're saying that immigration is this massive, powerful regeneration of ideas and energy into a society. However, it's most maximized when there's integration and support for those new entrants so that they can take advantage of the existing system, but with a fresh perspective to hopefully improve that system. And if you end up with no integration, you don't get that same benefit because you just get two sides entrenching into their own preexisting world rather than analyzing the one world and making it better. Is that is that a fair summary? Absolutely. I love that. That's so interesting. And just because people might be thinking about it, how does sort of illegal immigration fit into this? How do you try and accommodate for that entry route into the the hopefully net benefit of new ideas, new energy, new people?