Danny Goh is a serial entrepreneur and an early stage investor. He is the founder and CEO of Nexus FrontierTech, an AI research firm that easily integrates AI into various organizations’ processes by using natural language processing to transform idle information into structured data, enabling organizations to run better, leaner, and faster. He is also a partner at the G&H Ventures fund, which invests in early-stage start-ups chiefly in Southeast Asia. The fund has invested in more than 20 portfolios in deep tech and is building its third fund to help start-ups into the growth stage.
Danny serves as an entrepreneurship expert at the Saïd Business School, University of Oxford and is also an appointed research fellow at the Center for Policy and Competitiveness at the École des Ponts Business School in France. He is an advisor and judge at several technology start-ups and accelerators, such as Microsoft’s accelerator program, Startupbootcamp IoT, and LBS Launchpad. Danny is also a visiting lecturer at various universities in Europe and has spoken at numerous conferences, including TEDx and fintech events.
“As early-stage investors, we are not investing just in the products or the growth, we are actually investing in people, the founders themselves.”
Worst investment ever
Danny’s focus is as an early-stage investor. He made his first such investment around 10 years ago in an education tech start–up in Israel and it did very well. After that early success, he was so confident that he believed and acted on the belief that he could just as easily invest in start–ups in Europe to help them to grow. After he spent around six years trying to build ventures and help founders in Europe “it was a complete disaster”. He puts it down to his perspective that perhaps doesn’t suit everyone that “as early-stage investors, we are not investing just in the products or the growth, we are actually investing in people, the founders themselves”. He says that is the very the reason why founders come to meet investors for just US$50,000 or $100,000 to start creating a business.
So he developed his technique of looking into founders, hearing what they say about their “beautiful” vision, and realized that it is more than just about the vision itself. He discovered that to be a successful founder requires three things for the investors to actually buy (see Some lessons below).
Danny describes key qualities investors should seek in a start-up founder:
- Vision has got to be big.
- Execution skills must be strong.
- Flexibility. He defines this as the ability to keep going and the ability to pivot. He went on to explain that in his experience this quality is particularly lacking in Europe and perhaps other developed countries, where if things go wrong with the start-up, it appears easier for founders to give up and find another job or company to work for.
- Toughness. The start-up life is tough and definitely not as glamorous as people read in the media; there are great pressures involved, as shown in start-up statistics. Danny says that the typical lifespan for early-stage start-ups in Europe is around six months.
“More than 75% of start-ups fail in the early stage before moving out of the first year.”
- Southeast Asian founders are more flexible. They have big vision, good execution skills, but the price they pay for a start–up to survive is much lower. Also, the reward for the price of success is comparatively far greater than for them to return to a day job. This means he has seen many more serial entrepreneurs in the region who have had five or six start–ups fail, but they keep on going. So investors still believe in them, talk to them, and like to discuss their problems and how to solve them.
- Founders should listen to and learn from investors. It has been a principal idea that an investor should be very knowledgable, very experienced, and very rich. The founder should listen to everything the investor says.
- BUT: Danny says his biggest lesson from working with start-ups was …
- Investors should also listen to and learn from founders. Investors must play a bigger role in understanding the start-ups and equipping themselves with better knowledge so that they are not putting themselves in the wrong shoes of the founders and making wrong decisions when they are advising them. Investors should know what they need to do, and know what they are supposed to be telling founders, instead of simply blaming the founders. Investors have to take part of the blame when things go wrong and must have the ability to identify and work with founders of all kinds and from all regions.
The ability to be flexible and pivot when necessary is a key lesson. Andrew notes that Danny himself displayed such flexibility when he pivoted back to Southeast Asia after giving Europe a shot and learned that very lesson about flexibility by doing so.
No blame principle and “principles before personalities”. From Andrew’s own experience with his own start-up company, CoffeeWORKS, during tough times when difficult decisions had to be made, he and his partner had to remove blame from the equation, set personalities aside and stay focused on principles founded in recommending, encouraging, and supporting, not blaming. In that way, he learned to understand and appreciate the variety of serious pressures his partner was under.
Dollars may look the same but not all money is the same. The motivations, objectives, needs, backgrounds, countries of origin, and investing styles of investors can vary greatly. The money a start-up receives has different demands and understanding that is critical.
“(Founders should look to) Get the type of money that fits your needs.”
Avoid overconfidence. Many factors result in a success so don’t think you are successful just because of your skill and acumen. Danny says his overconfidence resulted in a lot of brash actions and bullish dealings with other people.
No. 1 goal for next the 12 months
Calling all deep-tech AI companies to join Nexus FrontierTech’s third fund
Danny and his team are trying find more companies to add to their portfolio of start-ups they would like to assist in the region. If there are any deep-tech companies in the region or in greater Asia who would like some help, he would like to hear from you. The focus of his funding is on deep tech, especially in artificial intelligence. By that he means any start–ups in any industries that utilize this technology to do better than their competitors that don’t use such technology.
Nexus FrontierTech is looking to support you in making the most of your competitive advantage.
Enjoy the next 12 months and enjoy life every day.
You can also check out Andrew’s books
- How to Start Building Your Wealth Investing in the Stock Market
- My Worst Investment Ever
- 9 Valuation Mistakes and How to Avoid Them
- Transform Your Business with Dr. Deming’s 14 Points
Connect with Danny Goh
Connect with Andrew Stotz