The Xiaomi IPO

Acquired kicks off our China tech mini-series by teaming up with the best in the business: Hans and Zara from GGV’s 996 Podcast https://996.ggvc.com! Together we cover the largest technology IPO in the world since fellow China tech giant Alibaba in 2014: Xiaomi, where Hans has been an investor and board member from the very beginning. This episode is chock full of history and insight on both Xiaomi and what’s happening in China tech more broadly, and why we all should be paying attention. No matter where you live, this is definitely not one to miss! Sponsors: Vanta: https://bit.ly/acquiredvantaServiceNow: https://bit.ly/acquiredservicenow26Legora: https://bit.ly/acquiredlegoraStatsig: https://bit.ly/acquiredstatsig26 More Acquired! Get email updates https://www.acquired.fm/email with hints on next episode and follow-ups from recent episodesJoin the Slack http://acquired.fm/slackSubscribe to ACQ2 https://pod.link/acquiredlpMerch Store https://www.acquired.fm/store! © Copyright 2015-2026 ACQ, LLC

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Ben Gilbert?

  I had something weird going on in my internet cutout, too. Did you get that? Did you see that? I mean, it's fine because we're not using any kind of like web upload thing. We're just doing a... But yeah, when I disappeared for a second, it was to go turn on a fan. Because I was like, maybe it's like hot and that's affecting? I don't know.

• 0:17David Rosenthal?

  Oh, good. I was so, I was worried. I was like, oh, no, Ben's super pissed that we're changing that.

• 0:23Ben Gilbert?

  No, no.

• 0:25David Rosenthal?

  He couldn't take it anymore.

• 0:38Ben Gilbert?

  Welcome to season three, episode two of Acquired, the show about technology acquisitions and IPOs. I'm Ben Gilbert.

• 0:45David Rosenthal?

  I'm David Rosenthal.

• 0:47Ben Gilbert?

  And we are your hosts. Today, we are covering Xiaomi. You may already know a few things about Xiaomi, that they make smartphones, they're from China, and they recently IPOed. But today, we're here to go deeper, understand what the company really is at their core, and talk about the exploding China tech sector. And we have with us today, two of the best people in the world to help us dig in on these topics, Hans Tung and Zara Zhang from GGV Capital. So Hans and Zara do a podcast called 996 that you should absolutely check out if this topic is of interest to you at all. I've listened to about half their episodes so far, and it's a fantastic resource for anyone who wants to understand what's going on with Chinese companies, one of our focuses here on season three of Acquired.

• 1:30Ben Gilbert?

  Hans was an investor in the very first round of Xiaomi and was involved in the initial ideation of the company, a rare and amazing feat to be with a company from conception all the way to IPO. And in another rare feat, Hans is a top venture capitalist, both in the United States and in China. He has been ranked six times on the Forbes Midas List and is a true pioneer in venture as one of the first Silicon Valley VCs to move to China full-time from 2005 to 2013. Zara is an investment analyst with Hans at GGV, also in their Menlo Park office. She's a former journalist, and it really, really shows on the creation of the 996 podcast. So, welcome so much, Hans and Zara. Thank you for joining us.

• 2:09David Rosenthal?

  Thank you for having us.

• 2:10Speaker 02

  Thank you for having us.

• 2:11David Rosenthal?

  We're going to aspire to at least do half as good as you guys do on a 996 episode. Oh, please. You guys are great. You're too modest.

• 2:19Ben Gilbert?

  All right, listeners. Now is a great time to tell you about a longtime friend of the show, Vanta. AI has scrambled the whole security picture. It used to be that you prove that you were secure once a year on audit or a static PDF, then everyone would nod and you're done. But in an AI-first world, that doesn't hold up anymore.

• 2:38David Rosenthal?

  Yep. Your risk surface changes every week now. A vendor turns on an AI feature, or someone writes in a new model without telling IT, and your posture is different than it was last week, let alone at your last audit. Vanta's own research found that around 70% of companies have this quote-unquote "shadow AI" running with no security review at all.

• 2:59Ben Gilbert?

  Right. And that's where Vanta comes in. They're the leading agentic trust platform, meaning they've built the thing that closes the gap. And the way that they close that gap is Vanta Agent. Think of it as a GRC engineer, that's Governance, Risk and Compliance, except that it's software and it doesn't sleep. It finds the issues, drafts the fixes, and cuts the time that you'd spend on vendor assessments in half.

• 3:21David Rosenthal?

  In half! Which is exactly why more than 16,000 companies today run on Vanta. Companies like Ramp, Cursor, and Snowflake all stay audit-ready and catch the risks that crop up between audits across every vendor, every AI tool, the whole environment.

• 3:39Ben Gilbert?

  And that's the real value. Trust has to be continuous now, which is why Vanta automates your security, your compliance, and the work to earn and prove trust. We're huge fans of Vanta over here, and literally hundreds of Acquired listeners have become Vanta customers at their companies over the years. So you can get $1,000 off Vanta at vanta.com/acquired. That's V-A-N-T-A dot com slash acquired for $1,000 off, and just tell them that Ben and David sent you. So David, let's dig in on China tech.

• 4:10David Rosenthal?

  Let's dig in. So before we get to the Xiaomi story itself, since we have Zaren Hans with us today, and this is our first China tech episode, we thought we'd spend a couple of minutes just kind of setting the stage on what is going on in China tech right now, because most of our listeners, we assume, are just reading the headlines. So there are a couple of points that, as we were doing our research, we kind of took away as like, not obvious things that most people don't realize right now about China, and would love to just get your take on it, too. So the big ones for us are, I mean, A, Sort of, obviously, huge companies are being built there. It's not just BAT, you know, Baidu, Alibaba, Tencent. It's Xiaomi, which we're covering on this episode. It's Didi, which we've also covered in the past. It's Meituan, Yamping. It's Tootiao.

• 4:55David Rosenthal?

  It's Pinduoduo, which is going public today. Fortuitous. All these companies are valued over $10 billion. And they're not just US copycats. Like, these are all super innovative companies that are innovating on their own business models, doing things that nobody's seen anywhere. And that's a big change from a couple of years ago. And you guys, you know, take like, when did this real shift start happening?

• 5:18Speaker 03

  Right. I first moved to China to do VC full time back in 2005. I think in 2004, Silicon Valley Bank, in addition being a sponsor for your show, also organized a fantastic tour for a lot of US VCs on Sun Hill Road and other places go to China together. And the pace of change, speed of growth in China was impressive. So a lot of people came back, start to either hire people in-house to send them to China or start to explore having affiliate funds.

• 5:51David Rosenthal?

  It's not on the VC side?

• 5:52Speaker 03

  VC are from the US side, that's right. And in China, for five years prior, since 1999, 2000, there were a lot of VCs that were looking to do investments in China. Some even tried in the 90s. And there were few IPOs of internet space in 99, 2000, during those two years. The most famous were the portals, Cina, Sohu and NetEase. And they, obviously, after 2000, the market went south and many companies were not doing well. So there's a lot of doubt as whether it could happen. But as internet penetration take off, both on the PC side via ADSL and then five, 10 years later via smartphone, the landscape of China changed dramatically.

• 6:33David Rosenthal?

  That's when, you know, a lot of these companies, of course, were getting started and Xiaomi in 2010, as we'll see.

• 6:38Speaker 03

  The first wave were the portals and then Baidu, Alibaba, Tencent were all started in the mid to late 1990s. The next wave, when you talk about a DD or a ByteDance, a Meituan, Xiaomi, they all happened mostly around 2010 and later. So during that 10-year gap was the first five years, 2005 were the tough years, the lean years. Then from 2005, 2010, you see the desktop, PC, the ADSL wave type of companies emerging, start doing well. And then people who gain experience from that wave ends up going after the next trend, the next wave, that was the smartphone wave.

• 7:19Ben Gilbert?

  That's fascinating. You say mid to late 90s. So it really is, for a lot of these companies, the initial Baidu, Alibaba, Tencent, the portals, it's more akin to Amazon than any of the more recent US tech companies. I mean, this was, they survived the dot com era rather than being born after it. That gets lost a lot in sort of the US news cycles is that these are 20-plus-year-old companies.

• 7:43Speaker 03

  Yes, and a lot of people think that they just came out of nowhere, but they've been around for a while. The more recent ones, the Meituan, Total, ByteDance, DD,拼多多 and JD, they came later. Of that bunch, JD is public about 55 to 60 billion dollars in valuation and they started in 2003, 2004 timeframe. Everyone else, including Xiaomi, started in 2010 and later.

• 8:09David Rosenthal?

  Yeah, I think one other point to really hit on before we get into Xiaomi is just the pace of execution and company building and growth is like otherworldly compared to Silicon Valley. I mean, Pinduoduo is a great example. It's going public today, going to be valued 15 to 20 billion dollars, raising over a billion dollars in the IPO. The company was founded three years ago.

• 8:32Speaker 03

  Right, Allstar first and then Lazada at her point as well. And the price range for IPO was 16 to 19 dollars and then open at 25, 26 dollars. And it's still trading at that range between 25, 27 dollars right now as we speak. The market is going to close in less than an hour. The round was way oversubscribed. It was impressive to see a lot of people looking at it as one of the next big things in China.

• 8:55Speaker 02

  I think in China, everything is sort of compressed. So I always feel like one year in the US is like five years in China. And you're sort of forced to do things quickly because if you don't, others will out-compete and out-execute. So if you talk about a bubble in the US, it's probably 20 companies doing the same thing. But a bubble in China is literally hundreds, if not thousands. So how do you stand out in that environment? It takes very, very fast execution and strong team and just a lot of determination and hard work.

• 9:28Speaker 03

  This is probably a good time for a quick aside. Zara, why is your show called the 996 Podcast?

• 9:34Speaker 02

  996 is the term that refers to the standard work schedule of a lot of Chinese tech companies, which is 9:00 AM to 9:00 PM, six days a week. So that's how people work over there. And it's, a lot of people are doing that voluntarily because if they don't, they can't keep up with the pace of growth at their companies. And they want to work more because they're just so motivated to make a better life for themselves because the rewards are so great.

• 9:59Speaker 03

  There's definitely a bias here in the valley, in US in general. If someone works too hard, something's wrong because that means that person's inefficient, doesn't know how to work life balance. But in China, the level of intensity and drive is quite impressive. Some people compare this to the Japanese or the Koreans in the 80s and 90s. We disagree because in other places that we have seen this kind of work ethic, it tend to be in companies that are more conglomerates, bigger, then employees are getting paid on salary and there's less of entrepreneurial thing involved. Whereas this time in China. Yeah, these are all startups. These are all startups. So even some argue only the top 20% of people get a lot of options.

• 10:43Speaker 03

  But what we're seeing is that the ones who didn't get as much options in the company that they work at, they're willing to go out and catch the next wave by being founders. They go to new companies. That's right. So these two people starting new companies sooner, faster, quicker. Which is definitely not what happened in Korea and Japan. Correct. Yeah. Interesting. Well.

• 11:01David Rosenthal?

  That's probably the perfect segue into Xiaomi and where everybody there came from. So I'm going to kick off and I'm going to lead the history and facts, but Hans and Zara, jump in because you guys lived this. Tell us where we're going wrong. So Xiaomi history starts, as we've talked about, April 2010, the beginning of 2010. And there's really a superstar team that comes together, led by a guy named Lei Jun and folks from Google China, the former head of engineering for Google China, Microsoft, Motorola, academia.

• 11:31Speaker 03

  Kingsoft.

• 11:32David Rosenthal?

  And Kingsoft, right, of course, where we'll get into Lei Jun was the CEO of Kingsoft. But he's the leader, he's the CEO of Xiaomi and he's a pretty interesting dude.

• 11:41Speaker 03

  Right.

• 11:41David Rosenthal?

  So he started as an engineer. He was born in, I think, 1969, went to school, did a CS degree in engineering, graduated in two years from Wuhan University, which is a very prestigious engineering program. He starts work as a software engineer. He eventually, after a couple of years, joins Kingsoft and Kingsoft was like a early software conglomerate, right? They were a software publisher and developer, made everything from games to word processing software, almost like a Microsoft of China, much, much smaller than Microsoft, obviously, but same ambitions. He pretty quickly shoots through the ranks from like entry level engineer to becoming the CEO of the company within, I think, seven or eight years. I mean, is that, is that common?

• 12:24David Rosenthal?

  Like, I would imagine that's pretty special.

• 12:27Speaker 03

  It is, definitely it is not common, but also thinking about time, he's starting working 92, 93 timeframe. China was going through rapid changes. There was no internet yet, so software was the, was where tech, the action is. And obviously, Microsoft was this, you know, big impressive company dominating the world from Seattle and Chinese company look up to Microsoft. And the smartest, brightest Chinese tech engineers wanted to build software. That's how Kingsoft got started and Lei Jun joined quite early as one of the first 10 employees.

• 12:58David Rosenthal?

  Oh, wow. I didn't, I thought it was already a more established company when he, when he joined. So he was pretty early.

• 13:02Speaker 03

  He was pretty early. And then the company back then, the angel investor had most of the shares. The CEO had a lot less than people like Lei Jun joining didn't get much. At all, but he persevered, he ends up become the CEO of the company. And in that process, the first seventeen years I was he was there before he took the company public. The company evolved from a software company to a security company to a gaming company. And throughout the whole cycle, he learned how hard it was not to have option as a as a tool to get people to change and evolve a few times in order to find a better way to grow. During that time, he also came up with the idea to do e-commerce and spent off a team to do what is called JioYi. And that was later sold to Amazon and become Amazon China.

• 13:46David Rosenthal?

  Ah, wow, that's pretty awesome.

• 13:49Speaker 03

  So he was clearly inspired by Silicon Valley early on.

• 13:53David Rosenthal?

  Yeah.

• 13:53Speaker 03

  And one of the pioneers in China, the internet space to to sort of evolve from software into internet. Go from Microsoft to Google to now Amazon to now Xiaomi.

• 14:04David Rosenthal?

  Yeah, it's like the pace of, you know, these waves.

• 14:07Speaker 03

  Happened extremely quickly.

• 14:09David Rosenthal?

  Extremely, yeah.

• 14:10Speaker 03

  Extremely quickly, that's right. Uh. We actually did an analysis, we look at a top ten highest market cap companies in the world that's publicly traded. And ten years ago in two thousand eight, most of them were not tech. And most of them were oil and gas companies, wireless carriers, or financial institutions. Uh, Microsoft was only two tech company amongst top ten in the world back then. These days, it's the FANGS plus Alibaba and Tencent in China. So you see seven of the top ten are tech companies, many of them are internet focused companies. And then the market cap changed dramatically for them.

• 14:44Ben Gilbert?

  And Hans, to to pile on to that, so not only are the most valuable companies tech companies now, the ones that have performed the best in recent years are also tech companies. And I saw this incredible stat this morning, that is, the FAANG stocks, Facebook, Amazon, Apple, Netflix, and Google, were single-handedly responsible for the S and P five hundred being positive for the first half of twenty eighteen. If you take those stocks out of the S and P five hundred, it was actually down seven tenths of a percent, which is insane to think about.

• 15:14Speaker 03

  This is what we're seeing in the US, the gap is even wider in developing countries, where the offline world is even less efficient. And often world here in the US. So you look at Alibaba, GGB is already investing in Alibaba. We invested Alibaba in 2003. Valuation was a quote unquote very expensive, $180 million. That's 2003. 15 years later.

• 15:35David Rosenthal?

  That's million with an M.

• 15:36Speaker 03

  With an M, not, no, right. And 15 years later is to have a trillion, $500 billion. And during that same span, Google actually grew by less than 10x. Alibaba is 1000x. That's the thing we see that in developing countries worldwide. We will see the impact of tech, internet play even bigger role than it has done in the US.

• 15:58David Rosenthal?

  Before all the internet companies became so big in China, I mean, the big Chinese companies were the state-owned enterprises, right? And it seems like now, you know, like you were saying earlier, everybody either wants to work for these big internet companies or go be an entrepreneur themselves.

• 16:13Speaker 03

  Which is a big change. Even five, 10 years ago, we see a lot of people come out and want to have a good job that's safe. Often with the government institutions or state-owned enterprises. These days, you see a lot more people willing to work in internet companies, technologies, because they know the growth is a lot faster. And the chance for career advancement is a lot better.

• 16:32David Rosenthal?

  So Lei Jun, of course, being prime example. So he's now CEO of Kingsoft, where in the mid 2000s. And he makes kind of a surprise decision, or at least it seems in the researching, like a surprise decision. At the end of 2007, he retires from Kingsoft as CEO. He eventually would come back, and I believe he's now chairman again, but he retires day to day as CEO, takes a step back. But he doesn't really stop. He starts becoming a very prolific angel investor. And you were working with him a bunch during this time, right?

• 17:03Speaker 03

  Yes.

• 17:03David Rosenthal?

  You've talked about, and he's talked about too, that there were, there were kind of three main trends that he saw at this moment in time that he thought were going to create a lot of new companies in the future. And that was the rise of social, the rise of e-commerce particularly, and particularly in China, because there wasn't as much offline commerce developed. And then, of course, the coming wave of mobile, which was a huge global trend as well. How did you first end up getting connected with him and start investing with him as he's doing all this angel investing?

• 17:29Speaker 03

  I didn't know he was an active angel investor. He did never publicize it. I was looking for companies to invest in the online gaming space because you can see gaming take off. But the chance of each, any of the, any particular game do well is quite high. So we're looking for ways to invest in a gaming space that we're selling shovels. That can be the arms dealer. We'll look at media, we'll look at tools, look at a variety of ways to feed into the gaming market. One other company, the adventure become a company called YY and also listed in on NASDAQ. And GDB is an investor in it. I came across this, I met a CEO, got to know David quite well. And David introduced me to his angel investor and that was Leijun. So that's how I got introed to Leijun.

• 18:12Speaker 03

  The first thing he said to me was that, you know, he, he thought a lot about what he did for the seventeen years at Kingsaw. And he realized that in order to do well, one needs to capture the right trend that has a chance to take off. And over the next ten years, he's most bullish on these three trends, commerce, social and mobile. It happened to be the same thesis I had, except that he thought about this deeper and for far longer than I have. So it's, it's great to meet someone who feel the same way, but also has the operational experience to be helpful to the founders like he backs.

• 18:45David Rosenthal?

  Yeah. This whole concept of trends is super important in China tech in a way that it's, is different from the US. Like in the US, what's prized, you know, in Silicon Valley is like these disruptive innovations that no one sees coming. Like everybody thinks that Facebook is a toy or, you know, Instagram's a toy.

• 19:02Speaker 03

  Right.

• 19:02David Rosenthal?

  Nobody takes it seriously.

• 19:04Speaker 03

  Right.

• 19:04David Rosenthal?

  And then it disrupts everything. In China, it seems like it's much more about like, there are these big trends, let's capitalize on the trends. Like what, what's behind that?

• 19:11Speaker 03

  It is very interesting. You know, having gone to Stanford, it's always thinking about the next big idea or do something disruptive. What rule can we, can we break this time to something that's shocking and something that's fun and kind of rebellious? In, in China, it's such a, it's so much about nation building. So that in order to catch up and do well, the country needs to push a certain agenda or promote certain, certain sectors to do better. In order to build a more prosperous nation. So there are trends that you can. Capture. So people look at, in order for the country to be more efficient, internet will need to play a role because it's a great way for someone in Beijing to know what's going on in other parts of the country and have people tell you what's happening on internet.

• 19:56Speaker 03

  It feeds you data in a way you cannot do it on your own. So there are things that's happening in China. If you look at it goes, hmm, I can see how it fits to what's going on from a country development standpoint. So this trend has better chance of taking off and will not be as regulated by the government.

• 20:10Ben Gilbert?

  There's sort of two things at play there. One is an advantage to a more centralized, even if not sort of governmentally centralized, but culturally centralized group of people. In the US, everyone's running around sort of doing their own thing, trying to create, trying to disrupt, trying to find a little edge wherever they can. And in China, where there's a more unified sense of we all need to do this to be strong together, you have sort of more adherence to trends.

• 20:33Speaker 03

  Right. But if you go even deeper, the stuff that's happening in the US is also trend dependent. Yeah, yeah. We just don't think of that way in the US. Like, why should PC take off? Why should we just live, continue living in the mini computer world or the mainframe world? Because distributing that power to the edges makes sense. It makes everyone more efficient. It's better for the country if everyone has a PC next to it so they can do something, be more productive. But we never describe that trend in that context. It's always like, oh, it's about freedoms, giving you empower everyone. So what do you want to think from empower standpoint of the individual, which is the Western way of thinking? Or the Eastern way of thinking, you made a country more efficient, the result is exactly the same.

• 21:18Ben Gilbert?

  Do some of these trends that are sort of being identified as we must be strong in this area, such as mobile or such as social, have they already been sort of solidified two to three years more in Western markets as like it was the toy, it was maybe disruptive, but not a real market yet. Now we can see it's a market and we know we have to win there. It's not fast following because the business models are tremendously different and the way that it interplays in the culture is different, but there's sort of demonstrated sort of the technology can work at scale notion.

• 21:48Speaker 03

  Well, for example, when Facebook started to show up, like you said. Some people, a lot of folks in the US view that as toy. Um, you know, how a cow can ever has to treat this seriously. It it doesn't seem like it's something that can that can last. But uh someone like Li Jing said in China or Wang Xin, who was the founder of a one seed in China. Says that is interesting. I think that's gonna be a big trend. Because it's in the Chinese context, you can see that it's a way for people to uh freely express what they're thinking. And uh get less of a pushback from the government, at least initially. So there are reasons why this could take off in China, but it has to be modified, it has to be localized. This model has to be different, but there's something there that you you that you you can look at goes, hmm, I think this can be big. But you know, I know how to make that big.

• 22:34Speaker 03

  So it's a combination of, you can call it a fast following, or you call it a micro innovations. Adding stuff that has to see, may not you have invented to see yourself, but you see that this could be something. Quite big and be quite different than the original intent. So I think certainly the US is an amazing place, both in Silicon Valley and New York, where you see a lot of new things happening. But most people treat it as a toy. Yeah, yeah.

• 22:56Speaker 02

  I think it's not so much about who's copying who, but more taking the world as your. Classroom and learning from everyone. I think Chinese entrepreneurs are especially eager to learn from western entrepreneurs. And maybe not the same can be said the other way around. So if you read.

• 23:13Speaker 03

  Although it should be. And it's changing, it's changing.

• 23:16Speaker 02

  If I read uh tech news in Chinese, like the major, like the tech crunch equivalents in China, over half of the news there is about the fans. In the US, whereas I read uh Bloomberg, Wall Street Journal, whatever, here, maybe only five to 10% of. The news is about Chinese companies. It's a lot of asymmetry in terms of uh interest. And Chinese entrepreneurs are very eager to come to Silicon Valley, meet everyone, learn what's working and take it. Home, not copycat.

• 23:44Speaker 03

  Yeah.

• 23:44Speaker 02

  But adapted to the local market because it takes a deep knowledge of what's going on in China to make a product work.

• 23:51Speaker 03

  You look at Steve Jobs, he he didn't invent graphic user interface. Right, right, it's the X part. He did, he did, he didn't invent object oriented programming, but when he sees that, he says, oh, that is gonna be huge. And here's the reason how, right? Yeah, yeah.

• 24:05Ben Gilbert?

  Let's not overcredit the amazing historical American innovators with being the true original entrepreneurs of things either.

• 24:12David Rosenthal?

  All right, so back to the Xiaomi story. Lei Jun, it's 2009, he's left Kingsoft over a year ago at this point. And he starts jamming with one of the people who would become one of his co-founders at Xiaomi, Lin Bin, who's the head of Google's China Engineering Division. Now, remember, this is going to become really important in a minute. Google does not operate in China. You cannot access Google services, search, Maps, YouTube, whatever, in China. However, the mobile and smartphone market is starting to rise. And it's pretty clear at this point that Android is going to be likely the dominant operating system in the whole world, including China. But there's this gap where there is no Google, yet there is Android in China. So they start jamming on this.

• 24:57David Rosenthal?

  They realize this opportunity. And even that was, it was still a little bit of a leap. At the time, Nokia was huge.

• 25:03Speaker 03

  It's slightly, slightly different. I think Google was operating in China and about close to 20% of the market was Google. So Android has come out, but it's very early. Back then, only HTC phones have done well, Samsung phones have not. So it wasn't that clear that Android can beat iPhone, because in the early days, iPhone was still offered a better integrated experience. So the discussion that Lei Jun and Lin Bin had was that, is it possible to build a phone using Android kernel that can offer a better integrated experience by owning both a hardware and a software piece? So that wasn't that obvious, but I'm glad you picked that out. It wasn't obvious to many, many other people that it wasn't a predetermined thing that

• 25:46Speaker 03

  someone should do hardware and then someone else should do, Google should do Android. And marrying the two together is sufficient to offer superior experience. That wasn't obvious back then because it was so early in the cycle.

• 25:56Ben Gilbert?

  Right, and that's the, you know, famous knock on the whole Android experience is that the software and the hardware are not built to be tightly coupled together. And for a company like Xiaomi that is so incredibly focused on the user experience to, you know, in an Apple-like way, you know, you could see how that would be an enormous sort of leap at the beginning of, you know, can we do this? Can we actually create an iPhone-like experience using this decoupled hardware-software combination?

• 26:20Speaker 03

  Yeah, and that was the key number one challenge. And a lot of people back in China even then didn't think that's possible because no hardware company in the phone-related space has ever become successful, starting from scratch. Every player we can think of kind of evolved and added the phone element on top of the infrastructure business that they were already in. So it was incredibly risky for anyone to try to make this work.

• 26:43David Rosenthal?

  Now, they decided to start the company along with seven other co-founders, I believe, seven or eight other co-founders, immediately raise forty one million dollars at a two hundred and fifty million dollar valuation.

• 26:55Speaker 03

  It happened in two tranches. The first time it was roughly around twenty million pre.

• 27:00David Rosenthal?

  Okay.

• 27:01Speaker 03

  And the lead investor was Richard Liu at Morningside.

• 27:03David Rosenthal?

  At Morningside.

• 27:04Speaker 03

  And I give him a lot of credit for having the guts to do that. Both he and I have known Lei Jun for a long time. So three, four people and a crazy idea, twenty million dollar valuation. And I remember someone told, told me back then, who's, who's very smart and very experienced, Google's first round, after having a product that was out there, people were using it. It was seventy million pre.

• 27:24David Rosenthal?

  Yeah.

• 27:24Speaker 03

  So having no product, nothing, and not even business plan, twenty million pre is, the valuation is not, not cheap. But if you believe in him and the team and what he's trying to do, you will bet. The challenge came one round later. That was only months after the first round was done. And that was at a hundred.

• 27:43David Rosenthal?

  It's years in China time.

• 27:44Speaker 03

  That's right. And the valuation become a hundred fifty million pre. And they were maybe fifty thousand users of MIUI, the operating system.

• 27:53David Rosenthal?

  Yep.

• 27:54Speaker 03

  Based on the Android kernel that Xiaomi had. And then, you know, both Richard and I decided to co-lead that round together to do this. Only a month later, before they actually had a first party to launch the phone, the valuation jumped up to a billion post.

• 28:08David Rosenthal?

  Remember, this is two thousand ten in China. This is not two thousand eighteen in Silicon Valley.

• 28:13Speaker 03

  That's right. By the time it hits a billion dollar valuation, it was only twenty eleven. And then I give Lei Jun and then Tuck Shunwei, also Richard at Morningside, a lot of credit for co-leading that round between Shunwei and Morningside. So there were, there were a number of people that had the guts, not many, but a number of guys had the guts to lead each round and step up with meaningful money at stake at that time. And so if you didn't think that the team can pull off that vision, it's, everyone who passed on it, I think is extremely logical and reasonable. And I know we never fought them for, for doing that because it's crazy.

• 28:48Ben Gilbert?

  It's always that way, Hans, but that's not how you drive returns.

• 28:51Speaker 03

  Correct. You have to somehow figure out a way to bet systematically and take enough risk to find those outliers.

• 29:00Ben Gilbert?

  All right, listeners, now is a great time to thank our longtime friend of the show, ServiceNow. If you are running a large enterprise, AI agents are likely spread across every team, and deploying them is no longer the hard part.

• 29:14David Rosenthal?

  Yeah, the hard part is knowing what permissions they have, what employees are using them for, or what decisions AI is making. AI security for an enterprise at scale is not a small concern, like the risks are real.

• 29:28Ben Gilbert?

  Exactly, and the challenge with AI is governing it, securing it, measuring it, and making sure that it actually delivers value. That is why ServiceNow built the AI Control Tower.

• 29:38David Rosenthal?

  Yep, AI Control Tower gives enterprises a single place to see, manage, govern, and optimize AI across the entire business, and it works with any AI, not just theirs. Every device on your network, every permission across every system, every AI agent, visible and secure in one place.

• 29:56Ben Gilbert?

  And ServiceNow can do this because they've spent more than 20 years building the operational backbone of the enterprise. The workflows, governance, approvals, security controls, and institutional knowledge that power how work actually gets done across IT, HR, customer service, finance, and security.

• 30:12David Rosenthal?

  ServiceNow already runs more than 100 billion workflows annually, and trillions of transactions for more than 85% of the Fortune 500. So when companies need a place to govern AI at enterprise scale, they're building on a platform at the center of how their business already operates.

• 30:28Ben Gilbert?

  And in a future that isn't going to be one AI, it's going to be thousands of AI agents working across every function of the company. But the question is, who's managing them all?

• 30:38David Rosenthal?

  So if you're trying to turn AI ambition into real business outcomes and make it work safely, securely, at scale, go check out servicenow.com/acquired and tell them that Ben and David sent you. So one thing I want to pick up on that I think is super important to understanding what's going on at this time. Hans, you mentioned MIUI, which is the, it's a skin on the Android kernel that the company develops during this time before they have their own phone. Let's talk a little bit about that. So there was a company, I think it's bankrupt now, but there was a product and a company here in the US called Cyanogen. Cyanogen Mod, there was a great engineer up in Seattle, actually, who had hacked Android and basically, this was very, very early days of Android, and created this skin on top of it, not a

• 31:23David Rosenthal?

  full replacement of the Linux-based operating system, but a new UI. And that was Cyanogen. Ends up, they started a company around that, ends up getting backed by Andreessen and Benchmark. Doesn't work out. But so that's going on. And that essentially is the same thing that Xiaomi does for MIUI, and that's what MIUI is. How did that all come together? Did they see Cyanogen and see that this is possible? Was it developed independently? Because it happened pretty fast.

• 31:48Speaker 03

  There was something that was discussed in Xiaomi early on, but I think the Chinese entrepreneurs know that their execution is far better. So they didn't have to take away anything from what the other countries and teams were doing.

• 32:03David Rosenthal?

  And it was all open source, too.

• 32:04Speaker 03

  It's all open source. So once you know what is potentially possible, even though it's not proven yet, do you think you can execute it better and figure out a way to make a work in the ways other can't?

• 32:14David Rosenthal?

  Well, also, just that, you know, in China, with this opportunity, I mean, it's pretty amazing what Lei Jun and the Xiaomi team does. They create MIUI. There was no phone yet. They release it so that anybody with an Android phone can install it on their phone.

• 32:29Speaker 03

  That's right. It was open source.

• 32:30David Rosenthal?

  And it really takes off and it gets these super, hyper-engaged users on product forums. And that's kind of the root of the Mi fans that start, which we'll get into in a minute.

• 32:38Speaker 03

  Like Zara mentioned, that S6, I remember going to Visit Lei Jing and Lim Bin and the rest of the team in 2010. Actually, Min is not there. He was still at Google at that time. And then it would be around midnight and there would still be people in front of me waiting to talk to Lei Jing. You realize that they figure out a way to combine the best of the knowledge that they picked up while they work in the bigger companies, yet retain the nimbleness and the drive of a startup. And having the two culture be able to mesh together. It wasn't easy, but they made that work. They update MIUI every single week. No one has ever done that anywhere else in the world. They update that every single week. So if you are a fan of open source software and you like Android,

• 33:20Speaker 03

  you can help, but realize that this team out of middle of nowhere in Beijing was doing something revolutionary.

• 33:27David Rosenthal?

  Yeah, yeah. I wrote in my notes, it's almost a joke. We talked about in the Tesla episode on our last episode about the Tesla being the iPhone of cars because it's a computer, you can upgrade it, they ship over the year updates. It's almost like MIUI is the iPhone of iPhones. Like, you know, if you have Android or you have stock Android or you have iOS, you're getting yearly updates. But the Xiaomi team, like you said, is shipping major updates every single week to this new skin that they've developed.

• 33:53Speaker 03

  Right. And people responded, a lot of people said this is what Android should be doing, but not doing, you're doing it. So I know in the US, we value a lot on idea origination. We place a premium on that. And there's nothing wrong with doing that. But I think we also give people enough credit to take an idea and do whatever it takes to make that work. That's much harder and takes a lot more discipline and a grind for a longer period of time. And so both have value.

• 34:22David Rosenthal?

  Yeah. What I think is just super well illustrated here between Android, which is still on, core Android is still on an annual release cycle, maybe a little faster now, but not much. And Cyanogen, of course, is great and they're like working on stuff too, but not moving at anywhere near the same pace that Xiaomi is.

• 34:39Speaker 03

  No. So I want to look at this, this is not government influence. It's not like somebody gave Xiaomi extra salary or subsidy or grant to ask them to move faster. It's completely from within. This is why I love tech is it's true meritocracy.

• 34:56Ben Gilbert?

  So Hans, the original business plan was to build amazing phones at reasonable prices and sell them over e-commerce. What was the decision like when deciding how to enter the market around should we build a phone first or should we make a skin of Android first?

• 35:13Speaker 03

  Early on, Lei Jun had the inkling that to make it work, what is now called the triangular model, that you need to do three things well. You've got to be able to do the skin and make that extremely valuable. So people wanted more so than the Android software originally. So that's number one. Number two, you've got to be able to have a hardware that when it's integrated with the software can offer superior experience than a decoupled solution that was out there. And that was more a dominant form of alternatives. And then number three, you've got to be able to have internet services that you can roll out to create some kind of networking effects, create some kind of moat.

• 35:48David Rosenthal?

  And there's the opportunity for that because there's no entrenched Google search or Google Maps.

• 35:53Speaker 03

  Not much back then. That's right. So to figure out how to do all three things well is not easy, but Lei Jun identified early on that was a way to compete and potentially win. And for him, he also realized that none of the original team members had true hardware experience, hadn't shipped a lot of phones. So to focus on getting stuff right and getting user feedback, get validation on this triangular model co-work, they have to start with a skin with MIUI first.

• 36:21Ben Gilbert?

  Because that's what they had on the team.

• 36:23Speaker 03

  Before they can try. And also, it's less capital intensive. To build a phone, you've got to pay for all IP, and which they did. You've got to pay Qualcomm, which is expensive. You've got to pay a manufacturer three months in advance, if not longer. It's not installments. You have to pay all of it upfront because they need to make sure that as a startup, you're going to be around. So it's hugely capital intensive to build the phone. So before they can prove they can build a phone, they've got to make sure they can do MIUI first.

• 36:51David Rosenthal?

  In a lot of ways, I think those constraints end up driving Xiaomi's next big innovation, which evolves into hunger marketing and e-commerce model. I assume it's because they didn't have enough capital, even as well capitalized as they were, to place orders for parts and get phones assembled at the scale that a Samsung is. There were only limited runs and there was such demand. And so they evolved that into this hunger marketing model where now every Tuesday at noon, there is a limited amount of supply of Xiaomi phones that come available and you have to log on and buy it right at noon.

• 37:26Speaker 03

  Right. A lot of people criticize them for the hunger marketing strategy, but it was born out of necessity. Lei Jing told Li Wanqiang, head of marketing sales back then, that you have to figure a way to make it work. And by the way, you have nothing, no money, no budget to work with. And so I remember one of the marketing campaigns that came up with was a campaign that should share the phones that you have ever used in your life and talk about what you like and not like about them. So it was a way for true fans to show off their tech knowledge and their status as experienced user. Lei Jing was the first who did that and he showcased like the 50 phones that he ever used. And there were about 560,000 people on their own decided to participate and share what the phones they have used in their life.

• 38:10David Rosenthal?

  Half a million people.

• 38:11Speaker 03

  Half a million people. So not spending any money at all. Half a million people within a few weeks timeframe participated in a campaign. And that's when I know, even before they launched the phone, that there is a market there. Lei Jing was right, that people feel that their voices are being heard. They want a platform, a brand that listen to them and be willing to make changes quickly based on their input. So that's a winning strategy that hardware guys don't know and internet guys are not going to touch hardware. So if you can figure out these gaps of capability understanding amongst different disciplines, you can build something that's the best of everything.

• 38:46Ben Gilbert?

  Yeah, and to put a pretty extreme point on that, the point that Hans is making about taking community feedback, lots of companies talk about, "Oh, we listen to our users," and like, "Oh, we go and interview them," and we have empathy for them. Xiaomi literally has a forum that is a thing that they built in-house where anybody who uses a Xiaomi phone can request a feature, and it works like Reddit, and there's upvoting and downvoting, and the community basically says at any given time, "This is the most important thing to us that's not currently in the product," and when they roll out stuff every week, they look directly to that. I think that lots of companies have tried to do things like this, but to be able to actually successfully execute and have their product planning run on this intense heartbeat from the community is extremely unique.

• 39:29Speaker 02

  And Xiaomi engineers and product managers are required to spend time in that forum. It's part of their job. Like, they have to spend hours there per week.

• 39:39Speaker 03

  And answer questions.

• 39:39Speaker 02

  And answer questions and be engaged themselves.

• 39:42Speaker 03

  Could you imagine if Google did that? Like, they should. Again, there's no government support. There's no government subsidy. There's no government grant, nothing. It's purely based on execution. You care. Lei Jun says, you know, "Treat your customers as if you're treating fixing phones for your friends. Your friends come to you and say, 'Hey, your phone's not working.'" You're gonna bust your ass to make sure that their needs are taken care of. So that's what he tried to do to get his colleagues to react and serve the customers better.

• 40:07Ben Gilbert?

  So one other point I want to make for listeners, taking a step back. If you look at the founding team, and you look at some of the original investment theses, Hans, that you've talked about and that Lei Jun has talked about in how he started the company, the notion was, "We're going to manufacture these phones. They're gonna be world-class hardware. It's gonna be a great experience. We're going to do e-commerce. We're gonna sell them online, which is fairly unique at this time. So we need people that are amazing at e-commerce, because that's blowing up in China, and that's the strategy for selling these things." And they had that on the team. They had people who've built world-class services and run large software companies. But if you look at the things they had and didn't, they had nobody really in hardware and nobody in manufacturing. Think about, you know, anybody out there right now, you and your friends sitting around

• 40:50Ben Gilbert?

  saying, "Let's start a company," and you're like, "Oh, I think we should start like a SaaS company," or maybe like, "We could sell some things on the internet," but thinking Like I'm gonna start a hardware company and learn how to manufacture that at scale. To me, the one of the most impressive things about Xiaomi's evolution over time is that they actually did figure out that competency. For Hans, I have a question for you. Is that unique to China that they could do that because they're actually manufactured there? And because there's so much competency around actual building of physical things?

• 41:22Speaker 03

  Once they've been joined full time, both he and Li Jing together, they spent a lot of time and effort to interview everybody they know. Whoever made phones for Motorola, Nokia and other major brands in China.

• 41:35Ben Gilbert?

  Which were companies that were dying at this point in time.

• 41:37Speaker 03

  Well, no, to be fair, Motorola and Nokia were doing well in China.

• 41:42Ben Gilbert?

  Not in the beginning.

• 41:43Speaker 03

  That's right. But some of them were frustrated for the fact that these companies are moving much slower than smartphones. They weren't adopting smartphones quickly. They were not willing to use Android as their operating system. They were pushing their old, as you recall. So these.

• 41:55Ben Gilbert?

  Nokia had that awful operating system.

• 41:56Speaker 03

  That's right. That's exactly right.

• 41:58Ben Gilbert?

  The burning platform. Yes.

• 42:00Speaker 03

  And so there were people who were frustrated at these big firms that are sort of want to come out and put their vision to the test. And Li Jing was the first to talk to them and be able to get one of them to join them to do this. It's not easy because again, most people in these big companies haven't tasted value of options. They haven't gone through an IPO themselves. It's hard to leave a big company that has a prestigious job to join a no name startup that just had a bunch of MIUI users.

• 42:31Ben Gilbert?

  Well, to run through quickly what happens, I mean, short story, it works.

• 42:36Ben Gilbert?

  They released the first phone, the Mi 1 handset at the end of 2011.

• 42:41Speaker 03

  A16 2011. I'll never forget that date.

• 42:45Ben Gilbert?

  And I know, Hans, you've talked about this. I know you'll never forget it. More than 300,000 pre-orders in the first two days, right?

• 42:51David Rosenthal?

  For this phone from this company that like, nobody's ever heard of before.

• 42:55Speaker 03

  Within the first day of 340,000, within the first couple of days, 460,000. It was mind boggling. And at the, at the party, lunch party, 2,000 people showed up. And when they just said the phone, at the end of his present presentation, he said the phone cost, you know, 1999 RMB, which roughly translates 310 US. Everybody, audience stood up and applauded. And that's when I know, okay, my job is saved. I did not make a mistake for doing crazy things. Again, a lot of kudos to Lei Jing and Tuck and Richard for all having the guts for money where mouth is. And the Xiaomi team's amazing. A lot of people don't know this, but in a series B that one I led, a lot of employees of Xiaomi put their personal money into the company.

• 43:39Speaker 03

  So Lei Jing made sure that if you want to do this, you have the option of doing so. No pressure and no need. It's not obligation. But all those folks, 56 of them who did, are all very, very well off right now.

• 43:50David Rosenthal?

  Wow, that's awesome. I wish more, more companies should do that.

• 43:55Ben Gilbert?

  How does that work mechanically? Do they sort of buy in?

• 43:59Speaker 03

  They all put money into a SPV. SPV show up on the cap table as an investor.

• 44:04David Rosenthal?

  And they get preferred shares?

• 44:05Speaker 03

  They get preferred shares. They all got preferred shares. That's right.

• 44:08Ben Gilbert?

  More companies broadly should do that. That's awesome.

• 44:10Speaker 03

  Yeah.

• 44:11David Rosenthal?

  Well, okay, so things are going well. The next year, the Me Too comes out. They sell just under 20 million of those phones, which again, this is now a three-year-old startup.

• 44:23Speaker 03

  Amazing.

• 44:23David Rosenthal?

  It's made, you know, not the Linux kernel, the Android kernel, but like a full operating system on top of it. Two phones, bunch of services plugged into those phones and sold 20 million of them. Pretty impressive. Then also in 2013, they come out with their first non-phone product that Xiaomi made and still makes a TV.

• 44:42Speaker 03

  That's right, a smart TV.

• 44:43David Rosenthal?

  How did the strategy develop to go from that, you know, like, Apple like makes a few products. They make great hardware, but Xiaomi has taken this other approach, this ecosystem approach where, well, I'll let Hans describe it, but you know, long story short, all these scooters that you're riding, there's one in their office right now, are Xiaomi branded. Scooters made by ecosystem companies. So how did that strategy get developed?

• 45:06Speaker 03

  Again, Lei Jing thought ahead and I think his experience as an operator entrepreneur, as well as an angel investor was super helpful. He understood that for Xiaomi to be great, it can't just be on the phone company. He has to buy multiple products. But if he ever tried to assemble everybody in-house to do this, not many products in-house can be as big as the phone business. So you're not going to have people who do the greatest work doing smart devices other than the phone and maybe a TV. So he knew that he needed to figure out what incentivized people outside of Xiaomi to do this. And so he's willing to become an investor in their companies, minority, never control, minority for the most part.

• 45:49Speaker 03

  And then be able to lend the Xiaomi brand to them and share gross profit on top of that. And then open up the Xiaomi e-commerce platform to allow these devices to be sold on Xiaomi.

• 46:00David Rosenthal?

  And then eventually it's still.

• 46:01Speaker 03

  And there's a store down the road. And then having the supply chain to be willing, you know how hard it was for him as a startup, to gain the trust of supply chain to manufacture stuff for him, even after they have a great design. So he wants to make sure that Xiaomi brand can help these startups to get access to supply chain to manufacture.

• 46:19David Rosenthal?

  It's incredible for listeners who, you know, probably aren't familiar with this. The first big ecosystem product that's a hit is the air purifier, right? Made by a separate company that Xiaomi has invested in, branded Xiaomi, sold through all of Xiaomi's distribution channels, but a completely separate company that makes it. And it becomes a massive hit. And now there's been so many other products, everything from umbrellas, all the scooters. Again, branded Xiaomi scooters made by a company called Ninebot, which is a separate company. Anything you can imagine, it's pretty incredible.

• 46:47Speaker 03

  They have over 80 products now designed and then manufactured by supply chain from over 100 companies.

• 46:53Ben Gilbert?

  Only three of them, I think, are full stack Xiaomi. That's the phone, the TV and the laptop.

• 46:59Speaker 03

  That's right, only three are. And the smart TV one is also interesting. The founder or the head of the business right now is Wang Tuan, Richard Wong, and someone that Adrian has known for a long time. He started off wanting to do something that's more the Kindle of China, for lack of a better term, and more a reading device that has an integrated hardware software experience. And I was actually a small personal investor in that company. But it was harder to make that work in China, just a different market. Adrian and he actually invested in Xiaomi early on as a personal investor himself. So he and Adrian stayed close and eventually decided that if he joined Xiaomi full time, then the team he built at Kindle can come in and ends up build a smart TV. And so without him joining, it may have taken a while for Xiaomi

• 47:43Speaker 03

  to figure out who's going to drive the next product.

• 47:46David Rosenthal?

  The next product, yeah.

• 47:46Speaker 03

  And Xiaomi goes, this will only happen after smart TV becomes something that can be a successful example, his study for others.

• 47:54Ben Gilbert?

  All right, listeners. Now is a great time to talk about a new partner of ours here on Acquired, Logora, the agentic operating system that is redefining how the world's best legal teams work.

• 48:07David Rosenthal?

  Yep, it's sort of obvious that AI is going to completely change the legal industry. I bet most of you listening have dropped a contract into some sort of AI chatbot out there. Logora took that insight and asked the question, what if you really built something with that power from the ground up for the legal industry?

• 48:23Ben Gilbert?

  So the founders did exactly what great founders do, operate with obsessive customer focus. They embedded inside a massive law firm for months. They sat with the lawyers just watching how the work really gets done.

• 48:38David Rosenthal?

  And that's how you get features that customers love, like tabular review, where you drop in a folder of hundreds of contracts and it pulls every key term into a grid a lawyer can actually work with. Logora's bet here is interesting. Since it lets each lawyer handle more complexity, any given person can increase the quality of their work and do higher value work. And this means that the pie can grow even as each individual task takes less time.

• 49:02Ben Gilbert?

  And they recently launched Logora Agent, offering greater intelligence and performance. The agent lets lawyers set an objective. Then it can handle the planning and the execution and delivery of the final product. Legal teams get to maintain full control and transparency since they're still involved where judgment is required.

• 49:21David Rosenthal?

  And Logora works where you already work. You can use it within Microsoft Word while redlining or drafting. The early Logora numbers essentially speak for themselves. When they have a head-to-head pilot with their top competitor, they win 70% of the time. Logora now has over 100,000 lawyers on the platform from 1,200 legal teams in 50 countries. And crazily, they went from 1 million to 100 million in ARR in about 18 months.

• 49:51Ben Gilbert?

  Truly insane numbers. And that is the real test. Plenty of things demo well, but the question is whether a busy associate actually reaches for it during crunch time, or whether a partner trusts it before going into a conversation with a major client. If your legal team wants to check it out, whether you're a law firm or you're in-house at a company, you can learn more at logora.com/acquired and just tell them that Ben and David sent you. All right, so this is a great part of the show because this is where we're really starting to tease out what is Xiaomi as a business? And how is it different? Because I think that a lot of people at first blush say, oh, maybe it's like the next Apple. They're making smartphones. Everybody's using them. They're doing a lot of the software themselves. And the question about Apple is always, can they have another iPhone?

• 50:34Ben Gilbert?

  And most people think no, that they'll never have a product at that scale that's that profitable again. And, you know, what have they done about it? They've come out with the watch that's doing well. They have some of these other products that will never be as big as the iPhone. And the approach that Xiaomi took to that is, well, we have all these competencies and we could sort of platformize those competencies in a very Amazon-like way. So the way that Amazon opened up AWS to other people to sort of start a new business line. Xiaomi is sort of doing that same thing with their manufacturing, with their supply chain, with their branding, with their e-commerce. But rather than, you know, silently running on AWS in the background, a lot of these products are actually now Xiaomi products. And so not only

• 51:14David Rosenthal?

  It'd be like Airbnb by, you know, by Amazon, which in some sense it is, right? It runs on AWS.

• 51:21Ben Gilbert?

  Yeah, but it's just a really fascinating strategic move that we just don't really see in the US.

• 51:27Speaker 03

  Right, Li Jing has always been impressed by Muji Uniqlo in Japan, also Costco in the US, obviously Amazon as well, since he sold his second startup, Zhiyao, to Amazon. So he knew that there's more things that are rising middle class in developing country like China will want to buy, be on the phone. So how to take advantage of that? And when someone trusts the brand for one product category, give them more products that they will want. And how can you do that at a world-class design for every single product, but it makes the price much more affordable for the mass market, the rising middle class in these countries? The goal all along was not just to do a phone, but how to do more than phone was much bigger

• 52:12Speaker 03

  of a challenge and question. And I think over time, you figure out the ecosystem approach, making the product leader for each product, a true founder and entrepreneur, was the best solution. The everything store. That's right.

• 52:25Speaker 02

  I think he's mentioned before that his goal for Xiaomi is really to allow customers to be able to shop in their store with their eyes closed. They can buy anything they want and trust that it will be of high quality and they will like the product. So it doesn't take, like, if you like the brand, you're gonna like whatever it makes. So whatever Xiaomi makes, I will buy it. So that's their goal.

• 52:47Speaker 03

  And the beauty, the beauty is that when you have that model like that, the frequency of visits per store or per online, much higher, much, much higher, right? How often do you replace a phone at best? How often do you go to the Apple Store? Even though it's an amazing store, right? You don't need to go there that often. But the Xiaomi store becomes a place that people just go, love to go check out every couple of weeks, because that was something new from one of the ecosystem companies.

• 53:10Ben Gilbert?

  It's like Brookstone, but all the things are super useful.

• 53:15David Rosenthal?

  I was gonna talk about Hugo Bear here. I'll just mention him.

• 53:18Speaker 03

  In further, I will add that selling the phone over internet was not easy, even though e-commerce in China was doing well back in 2010, 2011, but Google had tried to sell their first, its first

• 53:29David Rosenthal?

  Nexus, yeah, the first Nexus.

• 53:30Speaker 03

  That's right. Great phone, but it was just hard to sell later. People just like, you know, why? I'm used to buying offline. So it was not obvious that that can work. If they joined the team, did not do MIUI well, did not have a lot of users who like MIUI already, and the price phone wasn't that competitive, you cannot start a bus. I remember after the lunch party, I went to a barber shop to get my haircut, and I whip out the MI1 phone, using it, and my barber was asking me what I was, because she has never seen it before. And she asked around, no one else has seen it, after I said it's Xiaomi. But there's one guy in the barber shop, one of the barbers, who is probably the most tech savvy of the bunch, and he knew Xiaomi phone, because he, you know, follows what's cool and hot online. So he said, oh, this is the best

• 54:15Speaker 03

  phone right now. It's so cheap, but it's world-class. The chip is the best Qualcomm chip you can find right now on Snapdragon, and it is amazing. When you say that, the other six people all turn their heads. They all come over next to me, want to check out the phone, say, oh, my God, it's only 1999 RMB, it's so cheap, it looks so good. Immediately, the fan, MI fan, turned the other six folks in the barber shop, immediately because someone wants to buy Xiaomi phone.

• 54:40David Rosenthal?

  And then you called up late, dude, and you're like, can I give you more money, please?

• 54:44Speaker 03

  The cost of that promotion is zero. No government subsidies needed, no government grants needed, but just by our thinking, our executing, you become a phenomenon in itself.

• 54:53Ben Gilbert?

  Why not sell through channel? So, you know, in the US, until, you know, the iPhone, everyone's going to the AT&T store and the Verizon store to buy their thing. Is it a gross margin problem? Is it a...

• 55:02Speaker 03

  Right. Apple's in a different position. Apple doesn't have to give away as much to the channel. All the other phone companies do. And you look at a marketing cost and sales cost, even for Apple, for most phone companies, ends up being somewhere between 30 to 40% of sales. So you look, Apple's gross margin on iPhones is roughly a bit over 50, two-thirds, if not three-quarters of that. Of sales marketing. And then what's left is just operating overhead. So those are the three biggest cost drivers, right? Obviously, you have components, all that stuff in there too. But beyond that, it's an expensive item. And for phone company that's not a iPhone, then you have to give away more to the channel as well. And it's just not as, and you don't get feedback as quickly because people cannot tell you the problems themselves.

• 55:46Speaker 03

  So doing over the internet makes a lot more efficient if you're going to make it work because the feedback's immediate, as you know.

• 55:52David Rosenthal?

  I mentioned Hugo Bera. Hugo was a very famous celebrated Google executive. At this point, Andy Rubin has now left Google. Andy Rubin, of course, being the founder of Android, as we've covered. Hugo is basically running Android within Google. He's head of, head of product for Android. Huge announcement. Xiaomi recruits Hugo to move from Mountain View to Beijing and join Xiaomi. And even more curious, he's not going to head product or software. He's going to head international. And this becomes a huge, huge move for Xiaomi. And, and really under Hugo's leadership, Xiaomi goes into India, into Malaysia, into many other countries, particularly in Southeast Asia, to preview the end here.

• 56:34David Rosenthal?

  Xiaomi is now by far the number one smartphone brand in India, which is incredible. So my view, I don't think this was normal at the time that Chinese tech startup would be thinking, you know, because everybody's thinking the China market is so big. There are 1.3 billion people here. Why do we need to go outside our own borders? But Xiaomi and Hugo say, we are going to be a global brand. We are going to dominate all these other countries, even more so than US counterparts or whomever. How did that all come together?

• 57:00Speaker 03

  Well, I think, you know, Limbi Nasa from Google. So he knows Hugo Bera from before. And also there were mutual friends, in particular Robin Chen, who helped to bridge that gap. And then a bunch of us have met Hugo over the years. I first hosted Hugo and Robin and JP, three folks to visit China in 2006. Before Hugo joined Google at that time. And then by the time that Xiaomi tried to recruit Hugo, you already have a lot of investors in the company, including DST, Uriah. whom Hugo knows quite well as well. So there's not enough people around the table that Hugo already know and feel if he ever tried to do something that's different.

• 57:43Speaker 03

  Xiaomi probably is the one, then he also see the numbers of Xiaomi has has gone up. So it's a combination of a lot of factors that made it possible for something like this to happen. It was unprecedented and it's not easy for someone who had never lived in China to leave a current, a great current job to do this. And as soon as he joined, I remember his Sina Weibo fans shot up. So Sina Weibo, you can think of it as a Twitter of China, but much bigger. On Twitter, he had probably tens of thousands of fans on Sina Weibo within the first month of joining Xiaomi. He shot up to a million and more. So the impact that he was able to create in China was much bigger than even what it was doing at Google.

• 58:22Speaker 02

  I think he really became the international face of Xiaomi and it became really like a celebrity in himself. Like people in China call him Hu Ge, which means tiger brother, which sounds like his name. Very endearing and people see him as the face of the company that can be appreciated by people outside of China. And that was pretty important.

• 58:44Speaker 03

  Right, and he also helped to recruit a lot of great people, young people in their early thirties or late twenties to join the company. Including Manu, who runs Xiaomi India. And so a lot of people he recruited now that managed and have done well within Xiaomi. And on their own have end up making great, great contributions. So without Hugo joining, Xiaomi may not have been able to attract those people to join them. And I think they didn't put all that emphasis on recruiting the right people to make things happen. And he he's even planning ahead these days, trying to get younger people to do more. He's experienced enough that he always think ahead about what else he needs to continue to scale the business.

• 59:25David Rosenthal?

  So on the back of all this, end of 2014, Hugo's now been in the seat for a year. They're getting moving into India in particular, but all these other countries. Xiaomi raises a billion dollars at a forty five billion dollar valuation, becomes the most valuable startup in the entire world. Pretty amazing. After that. There's some hard years.

• 59:44Speaker 03

  Right, for about a year and a half.

• 59:46David Rosenthal?

  Yeah.

• 59:46Speaker 03

  It was not as easy for Xiaomi.

• 59:48David Rosenthal?

  And we probably don't have time to cover in depth, but I mean, basically this was, so now we're in 2015, 2016. A couple of things happened. One, globally, smartphones become a lot more commoditized. It had been such a huge growth market across the world for so long, but now Android's very established. It's Android, it's iOS, and all the Android manufacturers are duking it out and Xiaomi gets sucked into that. Also, though, e-commerce growth in particular in China plateaus itself. And so China growth, which had been incredible for the last few years, slows down a lot, even as all these other countries are coming online. That must have been a real test of faith, and as we'll see, the company makes it through this period.

• 1:00:30David Rosenthal?

  But on the inside, you know, I mean, because I assume India especially was really, really growing at this point. Were you guys seeing the signs of hope that the company would get through this?

• 1:00:39Speaker 03

  I think a couple of things that happened. One, Lei Jing, in addition to deciding to do Xiaomi ecosystem, also decided to launch a phone called Redmi. That's not as popularized. Redmi costs less than a hundred dollars to users. It's a different brand than Xiaomi, but it's in the Xiaomi family of products. And it's very effective to beat competitor from who can potentially undercut them from below by going after the market themselves.

• 1:01:03David Rosenthal?

  Right.

• 1:01:03Speaker 03

  That was a controversial decision. It wasn't clear that was the right answer to do. But Lei Jing eventually took the guts and made that work. And that helped them with international expansion as well. The second thing that it did well, and it's not as obvious from outside as that, the Chinese e-commerce penetration rate back in 2014, 2015 is roughly close to 10%, which is the e-commerce penetration rate in the US.

• 1:01:28David Rosenthal?

  Yeah.

• 1:01:28Speaker 03

  So to penetrate even further as a percentage of retail in China, it will need time to prove that it can continue to grow, which it did later.

• 1:01:37David Rosenthal?

  Yeah.

• 1:01:37Speaker 03

  But for a brief moment in time, people need to see whether this can be, could more people shop online in China than they are in the US, which invented e-commerce in the first place. And that took some effort to show that, yes, indeed it will. And by that time, Xiaomi's phones have done so well in the market. And have such a great market share. Anybody who was willing to buy phones online at a point in time. Have either heard of Xiaomi or bought Xiaomi phone.

• 1:02:00David Rosenthal?

  Yeah, yeah.

• 1:02:01Speaker 03

  So you want to grow and get the another ninety percent of people who are used to buy stuff offline. To also buy a phone, you can't just do it online anymore. And that was the lesson that they and the team eventually figured out. And start experimenting idea of doing offline store to see if it makes sense. And they had a lot of Xiaomi stores that were fan stores. People come in and get their product fixed. But can you turn that into a retail store and do well and end up thinking a way to make that work?

• 1:02:29David Rosenthal?

  So in two thousand seventeen, though, things really turn around. The company goes from flat revenue growth to seventy percent revenue growth in one year.

• 1:02:38Speaker 03

  Incredible.

• 1:02:39David Rosenthal?

  Incredible, much on the back of India really working.

• 1:02:42Speaker 03

  And and having offline stores in China.

• 1:02:44David Rosenthal?

  And having open stores in China. And ecosystem finally coming along this now twenty two percent of revenues.

• 1:02:48Speaker 03

  That's right.

• 1:02:49David Rosenthal?

  May of two thousand eighteen, just recently, they announced they're going to file to go public. Estimated could raise up to ten billion dollars.

• 1:02:55Speaker 03

  In May, they announced that they file with Hong Kong Stock Exchange.

• 1:02:59David Rosenthal?

  Yep, that's right. Originally, the idea was to do a CDR listing even before the stock, Hong Kong Stock Exchange.

• 1:03:07Speaker 03

  Oh, simultaneous.

• 1:03:08David Rosenthal?

  Oh, simultaneous, interesting. They end up pulling CDR and listing just on the Hong Kong Stock Exchange.

• 1:03:12Ben Gilbert?

  And David, what's CDR?

• 1:03:14David Rosenthal?

  China depository receipts. So it would have allowed the company to be traded on mainland China stock exchanges. But that was going to add a lot of complexity, I would assume.

• 1:03:25Speaker 03

  Yeah.

• 1:03:26David Rosenthal?

  Ends up pricing July ninth at seventeen Hong Kong dollars per share.

• 1:03:30Speaker 03

  Yep.

• 1:03:30David Rosenthal?

  Or a fifty three billion dollar market cap. So up a little bit from the last private round, but not too much. But then, within the first week, it gains another twenty percent. Closes at twenty one forty five at the end of the first week in a sixty one billion dollar market cap. And the net of all that is it's the biggest IPO, tech IPO in the world since.

• 1:03:51Speaker 03

  Alibaba.

• 1:03:51David Rosenthal?

  Alibaba. In twenty fourteen, which is kind of amazing.

• 1:03:55Speaker 03

  Yeah, the team is is amazing. It has a great board as well. And the collective have done a good job of rebounding from those. Tough eighteen months and the offline store definitely is working out well. And it's pretty clear that strategy is exportable to other countries they're in. Xiaomi announcing seventy-four countries. And I remember when I first invest, started investing in China in two thousand and five, the world had about a bit over a billion Internet users. And now the world has about three point five billion. The additional two point five billion ads over one-third came from China. And that power China's migration from a more or less a more industrial country to become something that's more a tech country.

• 1:04:38Speaker 03

  Because you have so many people online and then the rates are affordable. You spend so much time online, it's better to build business on top of that. So over the next fifteen years, we will see another one point five billion people get online. And most of them will be doing their smartphone. And most will be coming from countries that Xiaomi is in already. A lot of people ask me whether Xiaomi will come to the US or not. They've been talking about it, but I don't think it's a priority for them. They should really go after the markets that they're in already and get the next one point five billion Internet users. Right, there's so much more greenfield. That's much, exactly. And not only are they doing that well, they also invest in companies who is providing localized services, Internet services. And that could be bundled into the phone. So they curate them and also invest in them.

• 1:05:23Speaker 03

  And so the traffic they can bring to these better localized solutions will be quite impressive. And we have seen a lot of Chinese internet companies got big over the last ten years on smartphone. You will see something of similar trajectory in these countries with startups, some of which will have their apps bundled into Xiaomi. So I think that's what a lot of people don't truly appreciate the value of the Xiaomi potential. And all they see is a smartphone, maybe smart TV and, you know, based on Android, is a really compatible with Android. A lot of questions I hear from institutional investors are still quite at a basic level, which is completely understandable. Because it's not an easy story to understand, but over time, people will see that it isn't just a hardware company. It's very different.

• 1:06:08David Rosenthal?

  Phew, a lot. That takes us to today.

• 1:06:12Ben Gilbert?

  Yes. You want to go into narratives?

• 1:06:15David Rosenthal?

  Let's do it.

• 1:06:17Ben Gilbert?

  So what is Xiaomi today? And what is the company's business model? How is it being valued in the markets? I think one major thing that we have not talked about yet, that is definitely the, the sort of buzz of the company is they have a $54 billion market cap. The way that you could perceive them is like their business model is like Apple's that's primarily around selling hardware. They kind of have this one hardware product and they're starting to partner with all these other companies and have, you know, expensive retail stores to sell all those other ones. But the one hardware product they sell is at a very, very thin margin. It's not like Apple in that sense. So sort of the-

• 1:07:00David Rosenthal?

  And in fact, Lei Jun has recently announced that Xiaomi will never make more than a 5% profit margin on any hardware that it makes. So they're, they're institutionally committing to that.

• 1:07:12Ben Gilbert?

  After analyzing that a little bit and, and reading some good articles about it, it's a very nice press release that they're nowhere close to a 5% margin. So it's like, well, okay, great. Like that sounds really charitable.

• 1:07:29Ben Gilbert?

  That would be the way to look at it, that I think a lot of the people who are pulling their hair out and saying, this is so highly valued, that, that, that's sort of their argument. I think when you look at the Xiaomi business model, that what they really are doing is they're selling phones at a relatively thin margin. They are selling all of these other things that they've, they've basically pioneered this ecosystem strategy in order to really get people familiar with the brand, create a ton of brand trust, brand loyalty, make their stores a fun place to shop, build habit around, I go to Xiaomi and I buy things there and I buy nice things there and I buy expensive things that are important in my life. And I don't mean expensive, like they're not high, high dollar expensive. They're nice things at an appropriate price.

• 1:08:14Ben Gilbert?

  And what they're really looking at from there is- Is being able to kind of have a services business model where their high margin revenue is really all from the same thing that Apple's beating the drum on, that people are buying iCloud and people are buying apps. And I think Xiaomi is really committed to it because they don't have a high margin business model elsewhere. It's really about kind of getting penetration with the hardware to have a very meaningful services revenue stream in people's lives.

• 1:08:42David Rosenthal?

  That's the Xiaomi narrative, as we've talked about throughout the episode. I think, you know, as also Hans has referenced here, you know, at least in the Western press and investor base, there's also lots of questions of like, you know, on the opposite side that, hey, this is a smartphone manufacturer. Why is it arguing it should be valued like an ecosystem company or an internet services company? These multiples don't make any sense.

• 1:09:09Ben Gilbert?

  The jury is still out and we'll talk about it in grading, but there could be a fundamental misunderstanding of what this sort of newer business model is and how it should be valued. And there isn't necessarily a great US comp. So, you know, I think that's the exciting thing about Xiaomi right now.

• 1:09:23David Rosenthal?

  Hans was just saying, yeah. So tech themes?

• 1:09:27Ben Gilbert?

  Tech themes.

• 1:09:28David Rosenthal?

  Let's do it.

• 1:09:30Ben Gilbert?

  We talked a bunch about this, Chinese companies having global ambitions. The US has always been a big enough market in itself and the most lucrative market that US companies tend to focus on the US and then start to pay attention to emerging markets or China is too hard to enter. So we're not going to actually go there. I think, you know, what Xiaomi is doing from the start is they're in the market everyone's talking about and they're already thinking international. And I think that that's a, that's a unique bet. And as Hans was alluding to also that, you know, Xiaomi is, is, people ask them like, when are you going to come to the US?

• 1:10:02David Rosenthal?

  That's not the relevant question.

• 1:10:04Ben Gilbert?

  Why would we go to the old market? Like that one's sort of taken and will be smaller at some point. So we'll focus on all these emerging markets and, you know, we'll be the future there.

• 1:10:13David Rosenthal?

  So, I mean, I think. My big tech theme, and this is why I'm so glad we have Hans and Zara with us. You know, I think we've kind of shown through the Xiaomi story so far. Some of the things we talked about in the beginning of the episode about how there's so much innovation coming out of China right now and all the interesting things happening. What I want to know from you guys is like, what does that mean next? Like, where are you guys looking? You've invested in a number of companies, Lime and Wish being great examples of companies that are inherently cross-border, trying to take the best of the DNA of China tech and the best of the DNA of Silicon Valley and do something uniquely interesting with that. What is going to happen going forward?

• 1:10:53Speaker 03

  Having the benefit of seeing how China internet space grew over the last 10, 15 years. Again, a lot of that is not government-related. The reason those companies are successful is not because of government support. They just figure out a way to execute better and figure out a way to innovate on top of the idea that's kind of funny, kind of interesting, but unproven. In our experience with Alibaba, it made it a lot easier for us to want to take a bet on someone like Wish. And our experience with Hollow Bike in China made it easier for us to want to take a bet with Lime. And our experience with DD made it easier to want to force a bet on Grab in Southeast Asia. What we're seeing is that anyone who has, should be wanting to have a desire to learn from multiple markets.

• 1:11:34Speaker 03

  And our desire to learn and put our money at risk to work in both the US and China allow us to be able to take what we know, be helpful to startup teams or founders from other countries. And we love engaging founders from other countries who are equally curious about what we're seeing.

• 1:11:54Speaker 02

  I think it's really important to have an open mind, just not to associate Chinese companies or products with particular preconceived notions, but really see them as products. Like, how are they engaging their users? How are they being responsive and improving their products? And just treating them equally as, and learning from them.

• 1:12:13Speaker 03

  It's very easy to make someone a boogeyman. Very easy to say where we are because someone else did that to us. It is psychologically and logically very easy to gravitate towards that because that's the easy alternative to answer. But in reality, if anyone who's willing to learn, experiment and execute, there's just so many things tech internet could do and all the inefficiencies in the offline world. We have seen what has happened with media, entertainment, transportation, retail, the impact that tech and internet made. More offline economies will be affected by internet and tech. And you'd rather be on the winning side and be the one that helped to make changes possible and benefit from that rather than be left behind and not be able to share the upside.

• 1:12:56David Rosenthal?

  Yeah, so many of these companies now are cross-border, like are taking all these learnings from China and from Silicon Valley and bringing them together.

• 1:13:04Ben Gilbert?

  So this is the part where David and I will take grading. And while we're not as sort of harsh as we used to be, it's still definitely a little bit of a sort of paint the barren bull case. David, what will make this an A+ a few years from now, looking back on it? And you know, what will make it, let's just call it like a C-? Not great.

• 1:13:24David Rosenthal?

  Yeah, thinking about how something could become an A+ often you're like, man, what's the like, the analogy we always use of like, you're driving towards a cliff, you pull the e-brake, you spin around like, in this case, it's almost like the ambitions are so large of Xiaomi already.

• 1:13:40Ben Gilbert?

  Right, that they actually come to fruition. That would be the A+.

• 1:13:43David Rosenthal?

  The ecosystem play, the services play, which is, you know, they're still building out the, you know, internationalization and dominating all these other countries. You know, I think the A+ is they do what they say they're gonna do, right?

• 1:13:57Ben Gilbert?

  Yeah, I completely agree. I think it's they continue to be able to spot really great companies that they can bring into their ecosystem. They invest early, they sell a ton of those products and they build out the very material services revenue that I think is the most obvious successful path for the company.

• 1:14:16David Rosenthal?

  You know, and then C-

• 1:14:19David Rosenthal?

  There probably is existential risk in that like all of these things are capital intensive, right? So like an F is the company doesn't have enough capital to operate.

• 1:14:27Ben Gilbert?

  Well, they did just raise 4.7 billion of it, so.

• 1:14:30David Rosenthal?

  You know, I think that although as we saw with Tesla, sometimes you can underestimate capital expenditure needs. You know, I think C minus rate is probably like they do okay, but that they become, they don't have enough resources to fully execute on these plans and they become a HTC, Huawei, like again, super good companies, but phone manufacturers, right? Like Li Jun and Xiaomi's ambitions are to be so much more than a phone manufacturer.

• 1:15:00Ben Gilbert?

  Yeah, and they've had to pull back before. I mean, when they, you know, when the supply chain couldn't keep up in 2015, 2016, and they had to retreat from Brazil and Indonesia. I think, you know, they're a company that learns fast and adapts. And so I could see a world where if they're sort of writing on the wall, they react very quickly and are able to pull through successfully, but not, you know, realizing the grand ambitions that they had hoped. That's not my bet, but that's sort of what I think the C minus would be. Listeners, since we're running long, we're gonna, gonna skip carve outs this time and let Hans and Zara run, but we'll be back with carve outs next episode.

• 1:15:34David Rosenthal?

  We'll get to next time. Thank you. You guys want to sign off?

• 1:15:38David Rosenthal?

  Where can our listeners find you guys and interact with you with 996 with GGV?

• 1:15:43Speaker 02

  Sure. If you Google the numbers 996 in any podcasting app, you will find us. We're on all platforms, including the Chinese ones like Himalaya FM. And we also have a listeners community. It's over 1,000 people strong. That's both on WeChat groups and Slack channels. So you can join that at 996.ggvc.com/community. And we also organize offline meetups for our listeners around the world.

• 1:16:10Speaker 03

  We're not a podcast that's telling everyone that China is better. That's not the purpose of the podcast at all. We firmly believe that anybody that's more open minded and willing to learn and share what they're seeing around the world will eventually become better for it. And this is why we love tech, we love internet. We know of the problems that can cause. And we also want to figure out how to learn from that and have technology and internet to make a positive contribution in society. I think it's very easy to get lost about the cool things that anyone is working on and lose sight of the impact it creates on society. But we also want to make sure that internet and tech is accessible to a lot of people and people kind of have the desire to want to embrace that.

• 1:16:53Speaker 03

  We saw how China changed in the last 10, 15 years. And a lot of people were lifted out of poverty because of the positive contribution a lot of internet companies made. They're not perfect. They have rooms for improvement, but the potential for positive change definitely outweighs the risk and the shortcomings. So we want to have a podcast that promotes openness and promotes idea sharing. And we feel that anybody who's willing to do that, we all gain from that. And we ourselves are gaining and learning from the people we feature on our podcast as well. And then we enjoy being here, have a chance to interact with you two. You guys ask great questions.

• 1:17:29David Rosenthal?

  Thanks. All right, listeners. Now is a great time to talk about one of our favorite companies, Statsig.

• 1:17:36Ben Gilbert?

  Yes, there is a reason why the best product teams rely on Statsig. Whether they are iterating on their core product features or shipping AI powered experiences at scale.

• 1:17:47David Rosenthal?

  Yep. In the crazy speed of today's AI world, shipping fast is just table stakes now. It's basically trivial to build and deploy your app constantly. The real advantage is how quickly you learn what changes actually created value for customers and how fast you can use that signal to guide what you ship next.

• 1:18:07Ben Gilbert?

  This is where Statsig comes in. It brings experimentation, feature flags and product analytics into one unified system so teams can ship safely, test rigorously and directly link what they changed to how users actually behaved.

• 1:18:20David Rosenthal?

  So if you want to make learning your competitive advantage, whether you're building new AI experiences or just evolving your existing core product, go to statsig.com/acquired to get started.

• 1:18:31Ben Gilbert?

  Awesome. Well, thanks, Hans Zara. Really appreciate you coming on the show. Listeners, if you want to learn more, acquired.fm and go to, I think it's 996.ggvc.com. All right. See you next time.

• 1:18:43Speaker 03

  Thanks, gentlemen. See you next time.

• 1:18:44Speaker 02

  Thank you.