Growing up as a Chinese-American in New York, Thomas Tsao was among only a few young Asians in his community. He encountered many opportunities as a young man and won the US Presidential Scholars Award.
As his career progressed, Tsao decided “to give the underserved an equal shot at opportunity” through his work as a venture capitalist.
In our latest session of “Oasis Talks,” we discussed what it means to be a leader with Thomas Tsao, now co-founder and managing partner of Gobi Partners. With more than 20 years of experience in the venture capital industry, he told us how his mentality has evolved over the years and drew from his own experience to offer advice to young entrepreneurs.
Not everyone is cut out to be an entrepreneur
Entrepreneurship is meant to be tough, and working hard isn’t necessarily enough to attain success. For example, Tsao said fundraising often takes twice as long as you think it will to raise only half as much as you want.
Those who commit to the endeavor should build companies around what comes naturally to them. For the best entrepreneurs, managing their work and formulating new businesses is “almost effortless,” he said.
Tsao’s talents are applied in his work as a VC: he identifies opportunities and talks to entrepreneurs, blending analysis with people skills. But that’s not to say it was always smooth sailing for him.
“When we started Gobi and tried to raise our first fund, we couldn’t do it,” Tsao said. “We thought about shutting down many times.” There were days when he pretended to be hard at work when he was actually playing his favorite real-time strategy games, Age of Empires and Age of Mythology.
As difficult as those times were, Tsao believed in the long-term upside for Gobi and didn’t quit. He learned to strike a balance. “You should decide which are the long-term risks you should deal with and which are the short-term ones you should let go of.”
Be an orchestra conductor
A startup is a combination of many relationships. When asked whether anyone could be the founder of a business, Tsao said, “Not necessarily. A successful founder should be able to manage all types of egos.”
Essentially, a good founder has to be like an orchestra conductor. They must match each person with an instrument that fits them and then lead them to make beautiful music.
When Tsao was young, he always tried to be the smartest guy in the room. However, as his mindset matured with his career, he stopped “trying to be interesting, and tried to be more interested in other people.”
“I try to listen to others, let others shine, care about the challenges they’re facing, and offer advice,” said Tsao.
Learn to trust your instincts
When the floor was open for questions, one attendee asked Tsao how he leveled up so quickly as a leader. To that, Tsao said he used to play a lot of sports as a child. “There is this saying that, everything you need to learn about leadership, you learn on the field. I think that is pretty true.”
Naming leadership traits such as being fair and leading by example, Tsao said a good way to evaluate an individual’s leading ability is to see whether they play sports. This is because as a team captain or equivalent, one would naturally have some leadership abilities that were nurtured during games.
Tsao also mentioned the importance of trusting one’s instincts when it comes to making major decisions. For example, before co-founding Gobi Partners, when he was in China, he had the opportunity to buy into and operate a Starbucks franchise. However, as an American-born Chinese, he felt that he had to first ask other people’s opinions.
The common response he got from relatives and close friends was not what he expected. “Tom, you don’t know what you’re talking about. No one drinks coffee in China; we drink tea.”
He gave up on the Starbucks franchise and eventually set up Gobi Partners. “Instead of trusting my instincts, I listened to everyone I thought had a better idea of what China really needed,” Tsao said. “This ended up costing me the greatest investment opportunity I’ve had in the last 30 years.”
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