Frontier tech – emerging technologies such as robotics, computer vision and machine learning – are transforming so many of our industries.
Established companies need to understand and figure out the right way to react. On this episode of Agile Giants, I sit down with Vin Tang, the Co-Founder of Samsung’s Q Fund.
The fund’s tagline is: “we’re more CVPR, less CES.” Referencing the annual research event, the Conference Of Computer Vision and Pattern Recognition versus the Consumer Electronic Show in Las Vegas.
This is clearly a different type of venture fund, but there are a lot of lessons for other corporate venture investors.
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Full Transcript
Sean Ammirati (00:08):
Welcome to Agile Giants: Lessons From Corporate Innovators. I’m Sean Ammirati, your host, co founder and director of the Carnegie Mellon Corporate Startup Lab and partner at the early stage venture capital fund, Birchmere Ventures. Each week, I’m going to talk to guests who are experts at creating startups inside large corporations. I believe fundamentally, a startup within a company is the same as one inside the proverbial garage: a group of entrepreneurs, trying to make the world a better place, using new ideas and inventions. However, I also believe some of the techniques and processes are just inherently different. This podcast is going to explore those similarities and differences.
Sean Ammirati (00:56):
Is your CVC struggling with how early stage frontier tech startups will fit into their overall mandate, or is your company in general trying to figure out how emerging technologies such as robotics, computer vision and machine learning are going to impact their organization? Well, in this week’s episode of Agile Giants, I sit down with Vin Tang, the founder of Samsung’s Q Fund. The fund’s tagline is, we’re more CVPR, less CES, referencing the annual research event, the Conference Of Computer Vision and Pattern Recognition versus the Consumer Electronic Show in Las Vegas. When I asked Vin where he could be found online, suggesting LinkedIn to help him out, he stepped back and actually pointed to his GitHub account. This is clearly a different type of venture fund, but I think it’s worth thinking about for many of you in Samsung’s case, this was launched out of their Samsung Next Fund, but regardless, either as a standalone fund or pillar within your CVC activities, I think there’s a lot you’ll take away from this week’s conversation.
Sean Ammirati (01:58):
All right. Well Vin I really appreciate you taking time to connect with us on Agile Giants today. Maybe a good place to start would be if you could just walk through your background and what led you to helping Samsung with the program we’re going to talk about today.
Vin Tang (02:12):
Yeah. Happy to and thanks for having me. I’m a big fan to the conversations you have and I’m honored to be part of it. For my background, I have somewhat of an unorthodox or nonfictional path. At Carnegie Mellon, I spent a lot of time in scientific computing, mostly around computational biology.
Vin Tang (02:34):
And in the decade that followed, I spent most of my time into startup ecosystem. Either starting companies or being part of early stage startups. Doing things like applying natural language processing to text analytics or applying computer visions for pathology. Those sort of things I did for about 10 years. We’ve had lots of early stage success, but never could quite break through that Series B barrier, like many founders out there.
Vin Tang (03:05):
Five years ago, I joined Samsung as part of their ML team, doing work around gesture recognition wearables, lots of the different products that they have in their portfolio. So my focus has always been on AI while at Samsung. About 18 months ago, I launched a fund called Q to help Samsung think about innovation. Specifically, the mandate is to invest in the futuristic sci-fi stuff. And I think a good way for you to think about is it, Sean, is if DARPA had a venture fund.
Sean Ammirati (03:44):
That’s good. I like that. If DARPA had a venture fund. I think that’s a provocative thought for many of our audience. So talk a little bit maybe more about what that venture fund looks like. So who are the companies you’re targeting investing in and what’s the typical investment stage, check size? That kind of thing.
Vin Tang (04:00):
Yeah. So when I thought about the fund, I wanted to have the look and feel of a traditional venture fund. And that means a couple of things. That meant that financial returns were most important. The second thing was not emphasizing collaboration as much because the things that we were investing in were companies and founders that were trying to invent entirely new product categories that didn’t really have immediate impact today.
Vin Tang (04:31):
So if the fund was structured with that in mind, and when we thought about the different characteristics or entry points, what we came up with, or what we concluded was the earlier it was, the better the returns, especially when it comes to deep tech or frontier tech. Whatever people want to call it. And what that meant is we invest early where you see the first institutional capita into a round. We’re on a first call, first name basis with a lot of these highly technical researchers.
Vin Tang (05:04):
We invest in categories that don’t necessarily exist today, but there’s a good shot or decent probability that they will be relevant in the future. So things like quantum computing is a big one. AVs in the warehouse is another one. Industrial robotics, BCIs, brain computer interfaces. Things that might seem like toys today, but you know, 10 years is a long time. 10 years is a good amount of time to see those things happen.
Sean Ammirati (05:37):
There’s a lot I want to unpack about that, but let’s just first… The check size for those. What’s a typical first investment for you?
Vin Tang (05:45):
Yeah. Because we’re going in fairly early and these are usually companies that are either spending out of universities or first time founders, the first initial check is probably anywhere between $250k to half a million.
Sean Ammirati (05:57):
And then do you reserve for follow on or is it a kind of one and done investment for you guys?
Vin Tang (06:02):
Follow on is our measure of success. When I think about successes is putting capital in, is easy. Finding the winners where you want to do the super prorata more than where you’re allocated, that’s an indication of you’re doing something right. So what that means is for most of our companies, we invest $250k or half a million dollars in their seed round with the intent to do our super pro-rata as the company matures.
Vin Tang (06:30):
A good example would be a startup like Covariant, for example. This was the team that spun out of professor Beal’s lab at UC Berkeley. We put half a million bucks into their seed round, did our super pro-rata in their series A. And they recently, or two days ago, announced a $40 million raise from next ventures. That’s sort of the canonical example of our strategy here.
Sean Ammirati (06:53):
That’s great. And then let’s talk about how you find those. So you said research, universities, first-time founders. How do you fill the top of your funnel for deals like that?
Vin Tang (07:04):
Yeah. It’s not easy because it’s a little bit different from the typical founder VC circuit. I think if you think about the traditional ways of sourcing it is, we know who the good founders are, you know that they’re going to pass through YC or Techstars and it’s a circuit that people understand. In our case, it’s a little bit different. These universities, these professors might not know what Y Combinator is and they don’t really have much of an interest in Y Combinator.
Vin Tang (07:34):
But they know that what they’re working on has technical value and usually that’s approximated by things like conferences. So a good example is for my AI investments. Sourcing or meeting these entrepreneurs or founders usually comes from spending time at conferences like NeurIPS, which is the big AI conferences each year. CVPR, which is a big computer vision conference each year. And so the tagline that I use for sourcing is we spend more time at CVPR than CES, because that’s where the conversations happened for us.
Sean Ammirati (08:15):
I like that. Okay. So you’re really like on the ground with these researchers, with these academics, you’re talking to them. How does the work you’re doing influence the rest of Samsung? So I know you had said financial returns are the North Star metric for you, but I assume for Samsung, there’s other benefits they’re looking to get out of this beyond just the returns as well.
Vin Tang (08:37):
That’s right. And like most corporate VCs, as you know, Sean, they’re more interested in the linkages between outside innovation and internal innovation and financial return, it’s an important one, but it’s not the primary metric. What I say to that is Samsung is a big company. There’s a reason why there are multiple venture funds inside Samsung. Some of these funds have a strict mandate around collaboration, meaning they can write large, large checks and they can do that because they see collaboration potential today. As a result, they tend to focus on later stage companies, so ventures B, C and beyond.
Vin Tang (09:21):
So that’s how Samsung thinks about the broad spectrum of corporate venture. Some funds are expressly or explicitly designed with collaborations in mind. In other cases, like the Q fund, the mandate is to stay on top of these technologies, find the strongest teams and founders, try to build a reputation or community, or have a dialogue with these entrepreneurs that are creating the next billion dollar product category. So that’s what they want to get out of it. And it just so happens that the guys who will create the next billion dollar product category are also the ones that will probably generate the highest venture returns. And so from that perspective, that’s the nature of the Q fund.
Sean Ammirati (10:13):
So that all resonates with me, especially with my sort of day job as a traditional venture capitalist. What I’m trying to think through is if you’re communicating with whomever your executive sponsor is inside of Samsung, what would he use or she use to track the success of the Q fund.
Vin Tang (10:35):
Yeah. So we roll up to the Chief Innovation Officer. I think that’s a fairly common structure for a lot of these corporate VCs.
Sean Ammirati (10:44):
Increasingly popular for sure. Yeah.
Vin Tang (10:46):
Oh, yeah. And I think your conversation with Citi Ventures, it sounds like that’s the case as well.
Sean Ammirati (10:54):
It’s what Matt does. Yeah, that’s right.
Vin Tang (10:56):
And so it’s similar in our case. And when he thinks about internal success, it’s a number of things. It is the number of internal conversations that we’ve had inside Samsung, that shapes product decisions, that shapes MNA conversations, or thinking around MNA. The conversations or insights that we bring when business units think about new products to bring to market. And I think those are the high level, senior, senior conversations that’s really important.
Vin Tang (11:27):
It’s a little bit qualitative, but the important thing here is that we’re bringing ideas and insights to the folks who are responsible for the major, major decisions. And I’ll give you a concrete, specific example. And I wasn’t part of this, but one of the things that Samsung Next did was develop the internal thesis around speech assistance four or five years ago. And after a number of conversations, it did take some time, it was concluded we helped shape the thinking around the acquisition of Viv back in 2016. So that’s the biggest metric of success internally.
Sean Ammirati (12:09):
Excellent. I think that’s really good from their perspective. Now for the entrepreneurs, right, obviously, I like your sort of where you spend time and where you’re hunting is probably a little less competitive, but still there’s lots of pre-seed and seed funds in the world today. How do you distinguish your fund versus the others when talking to entrepreneurs?
Vin Tang (12:33):
Yeah. I’m really glad you asked that question because I spent a lot of time thinking about this. There are a handful of funds who have the gravity to pull in the best founders. And for everyone else, it’s a hustle. I get it. And so I think a lot about how to have the conversations with the first rate founders. Guys who are really visionaries and who can do the fun stuff.
Vin Tang (13:01):
And I think it comes down to hard work, meaning before the first conversation that I have with a founder, I spend as much time preparing for that conversation so that when I have that first conversation with the founder, I’m able to say, you don’t even need to walk me through the deck. I know everything about your business, about your products, and what you’re trying to do. And so you can skip the investor deck. You don’t need to think of it as an educational meeting.
Vin Tang (13:33):
I spend an immense amount of time reading research papers and technical papers. So the first conversation is a real conversation. And for founders, at least I like to think, it’s refreshing, because here’s someone who sits down and says, I’m not going to waste your time, I know everything you do and I’m interested. So what can we do together?
Vin Tang (13:57):
And from my perspective, that is a good way to show our sense of focus, our ability to invest with a clear, strong mind. And I think one thing that’s under appreciated and overlooked is that we’re not wasting anyone’s time. So that’s how we’re trying to differentiate ourselves. We’re longterm investors. We know what we’re doing. In our first meeting, we’re ready to talk.
Sean Ammirati (14:24):
That’s awesome. So another, I guess, related question then for maybe technical founders who stumble across this interview. What’s the best way for them to get in touch with you if they want to enter that process? Have you start reviewing their papers. That kind of thing.
Vin Tang (14:39):
Yeah. Oftentimes there’s a couple of entry points. One is we have about 40 or so professors and researchers on our advisory roster and each one of them are usually the leading researcher in their corner of the universe. So that’s usually the best way. That sort of introduction.
Sean Ammirati (15:00):
And is that advisory board public? Can they see that? Can entrepreneur see the advisory board?
Vin Tang (15:05):
About half of them are public. The other half are folks who are either working on their own startups right now. And so they want to stay under the radar. But yeah, about half of them are public. The other way to find me or find Q is talk to our portfolio companies. All of our portfolio companies are out there. We put it this way, Sean, if you can convince that you’re smart enough, you’re smart to someone like Pieter Abbeel, then you’re definitely good enough to, I want to have that conversation with you. I’m not smart enough to make that assessment. Yeah.
Sean Ammirati (15:49):
And I’ll make sure in the show notes to link to your portfolio page so that folks can get a sense on who those are. So the other stakeholder group that I think is important for a fund like yours is actually downstream investors. Right? Because you’re investing so early. How do you think about relationships with those downstream investor funds?
Vin Tang (16:09):
I don’t think we do a good job. Quite honestly, as a new fund, we don’t have the multi-year, decade-long track record. There are a few funds that we consistently co-invest with that I admire and respect. Funds like Amplify Ventures, for example.
Sean Ammirati (16:26):
Sure.
Vin Tang (16:27):
But the reality is we just haven’t been in the market long enough to have those deep connections with the next class investors. And that’s something that we need to do better. And I think there’s no better way to build those relationships, then bringing good opportunities and founders to the next class investors. That’s the best way to gain credibility, to build a reputation. And that’s something that I’d love for us to do more of.
Sean Ammirati (16:57):
Awesome. That’s incredibly honest. And I think it’s things that a lot of early stage investors struggle with, to be honest. So let’s step back now to Q from kind of a strategy within Samsung. So do you guys disclose how big your fund is?
Vin Tang (17:13):
No, we don’t. The venture fund within Samsung Next is 150 million.
Sean Ammirati (17:20):
Okay. And Q is a subset of that, is that correct?
Vin Tang (17:23):
Yes. Right.
Sean Ammirati (17:24):
Okay, great. So if somebody’s listening to this… And I actually think frontier tech, it’s easy to think about frontier tech at Samsung or Intel or SAP, but you know, frontier tech also could impacts a lot of companies that may not think of that as being impactful for them. Right? Cost example would be like, I think two years ago, grocery store CEOs would have been less thinking about the applicability for their business than they have over the last year between the whole foods acquisition. So if someone wants to set up kind of a frontier tech fund as a maybe subset of their overall CVC activity, what’s a couple of things you would encourage them to do on the front end then?
Vin Tang (18:09):
Yeah. The two most important things, I think would be, one, articulating a clear message to the senior executives. By nature, you’re investing in things that may look like toys today, may look like science projects today. And it’s a little bit harder for them to comprehend because they’re focused on short term. So that’s the first one.
Vin Tang (18:32):
And the second one is making sure that the different corner set is of interest. Eventually, lines up with what the mothership is trying to do. So frontier tech, for me, as it relates to Samsung, means doing things in HCI. So human computer interfaces, because I know that 10 years from now, Samsung is still going to pay attention to HCI. So That makes me feel a lot more comfortable.
Vin Tang (19:06):
On the other hand, and I’ll use the contrived example. If there was a Agtech startup and doing wonderful things, you might be able to invest in it, Sean, because you’re a seed investor, you have that profile. But I’m not sure Agtech is going to be relevant to Samsung 10 years from now. So that’s sort of out of bounds for me.
Sean Ammirati (19:28):
So that makes sense. I mean, I guess another thing that I would encourage them to think about is the right team. And maybe this is easier for me to say than you, but I think you really need people who can interact like peers with the faculty and this type of entrepreneur.
Sean Ammirati (19:49):
I think your path getting from where you are to the Q fund is relevant for firms thinking about this. How do you think maybe… So this doesn’t feel quite as much like asking you to brag about yourself. Let me just ask it this way. How do you think your background doing the ML and AI, both entrepreneurial startups and then work inside of Samsung, has influenced your ability to lead this initiative within Samsung next?
Vin Tang (20:15):
Yeah. So I haven’t figured it out. And a lot of the things I invest in I’m surrounded by people who are far smarter than me. So I do not have it figured out. The one thing that I would say is, I might not know what works, but I at least have a clear idea of what doesn’t work. And as you know, as an investor yourself, avoiding unforced errors or stupid mistakes goes a long, long way. So having that sort of technical background, being able to have that conversation with these highly technical founders. Not putting them in a position where they sort of have to abstract too much what they’re doing. It goes a long way with these conversations.
Sean Ammirati (21:02):
Yeah. I’m not sure that many pre-seed and VCs read or have the capacity to read the technical papers that you’re reading for what it’s worth. So I think that is actually quite a competitive advantage and something I’d encourage firms to think about if they were doing something like this. I also like your unforced error comment. One of the things… We invest in very different kinds of companies at my venture fund, but one of the things I tell my entrepreneurs a lot is I want you to make different and new mistakes. I’ve got a lot of scar tissue from the mistakes I’ve made and let’s help make new and different mistakes and be successful together.
Vin Tang (21:39):
That’s good advice.
Sean Ammirati (21:41):
But that also really resonates with me in the frontier tech. For you, it’s kind of a different category of mistake, but it’s the same sort of message. Right? Like, hey, I don’t know exactly how to commercialize the exact path from zero to a billion dollars here, but we’ll figure it out together. And I know where there’s danger lies over here and there, and we can help you avoid those mistakes.
Sean Ammirati (22:03):
So let’s wrap up with the question that I always like to ask VCs, really any of the guests when we’re doing this, which is career advice. Lots of the audience are all the people that you would think. People like yourself, but we do have a lot of students who listen to this as well. And if you’re a student coming out right now with a technical degree, like yours from STS, what advice would you give them if they’re trying to have a similar career to yours?
Vin Tang (22:32):
You mean going into venture investing?
Sean Ammirati (22:36):
Yes. I mean, both your entrepreneurial background and then getting into venture investing. And if someone thinks like, hey, that’s an amazing career path, I’d love to have a similar career trajectory, what advice would you give him or her?
Vin Tang (22:48):
Yeah, I have a strong opinion on this. Well, let me start by saying, I think the game, the venture investing game has changed. I think in the first few decades you had mostly sort of the generalist investors who went to Stanford business school and Harvard business school. And they worked at investment banks or McKinsey and so forth.
Vin Tang (23:12):
So that was the architype and that dominated for a few decades. I think that’s changing. I think going forward, we’re going to have more investors that look more like me. Guys who come from product backgrounds, engineering backgrounds, guys who have operational experience. It might not be successful. I didn’t have any success. But having that experience gives you sort of a perspective and empathy that’s required in venture investing.
Vin Tang (23:38):
I think that the game is going to be more specialized, meaning it’s hard to be investor that says “I’ll invest in good opportunities or be opportunistic.” It’s going to look a lot more like I have a very specific thesis in quantum computing, and I’m going to spend the next five, seven years to nothing else, but understanding the space.
Vin Tang (24:02):
I think the landscape is changing for… The biggest reason is the pace of innovation and technology advancement has gone up quite a bit. Mostly because of the fact that we’re moving from a world where you can use ML to supercharged things. You can use all these different technologies to bootstrap yourself very quickly. And so having that specialist will be very important.
Sean Ammirati (24:29):
Excellent. I think that’s amazing advice. Let me just ask the last question I also ask everybody, which is, what’s the best place for people to connect with you online? Is it LinkedIn, Twitter or anything like that, your website? What’s a good way for people to find you and follow along?
Vin Tang (24:43):
Yeah. The best way is my GitHub profile. My name is Vin with two N’s on GitHub and you’ll find all the contact information you will need.
Sean Ammirati (24:53):
Again, I think excellent reflection on the type of fund you’re running. I’m not sure anybody has ever said GitHub before, but we will link to that for sure. And it definitely demonstrates the type of fund you’re building. I really appreciate you making the time today and connecting with us and best of luck as you continue to build out the Q fund.
Vin Tang (25:11):
Well, thank you so much. It’s been a wonderful experience. Thanks again, Sean, for having me.
Sean Ammirati (25:20):
I hope you enjoyed this episode of Agile Giants. If so, consider sharing it with a friend. And if you think it’s worth five stars, which I hope you do, please go to iTunes and rate it so that others can find this content as well.
