 Good morning. My name is Ray Tsu Chiama on this show called All About Leadership. And today we have Ray Fee Gasper Asaoka, who is based in Bay Area today, but he's from Hawaii originally. In fact, the Pineapple Fields of Mililani, or what became Mililani Town. And we're going to be talking about Bay Area, about the high-tech industry, and the role venture capital and venture capitalists play in the development of that economy, now roaring and the center of the world, and envy of the globe in many ways. Welcome to the show. Thanks for having me. Well, and you're a Honolulu person, where did you grow up? So I was born and raised in Hawaii, grew up in Mililani, went to elementary and middle school in Mililani, and then went to Iolani for high school, but lived in Mililani up until college. Okay, great. And you went to college, and did you kind of envision yourself, had an idea what you wanted to be when you entered college? Absolutely not. Okay, what did you study, and where did you go? So I did my undergrad at USC in LA. I went into electrical engineering for a few reasons. One, math and science was sort of my stronger skill set back in high school, so I geared towards engineering. And when I was choosing electrical engineering, it was really, I didn't know too much about the different types of opportunities post graduation, but I was really interested in solar energy at the time, and just given Hawaii's abundance of sun and solar power. So I went into electrical engineering thinking that I would do something in the solar industry, but clearly didn't. Okay, well, life changes. Now when you're back as a child, can you identify a point where you said, wow, math and engineering or science are really fun, and this is what you wanted to do and really excelled? Or it took time to really get into that? And when was that? So I think when I was younger, I always liked numbers better. I think the thing that excited me about math and science in particular is that there was a definite answer. You're either right or you're wrong versus some of the other subjects, English and history. I remember there's a little bit more of a gray area where you could debate certain things and that didn't really sit as well with me. So I was always a little better in school at math and science from an early age. I liked numbers a lot, so just from a very young age, just geared towards. So you're ending USC and you're majoring in double E, electrical engineering. And where did you go from there? So when I graduated from USC in electrical engineering, I did an internship at Raytheon in LA, working on signal processing stuff for some of their chips that they were building for their radars for F-15 fighter jets. And I remember really great experience, large engineering company, my first real big stint in doing some engineering work outside of school. But I sort of felt lost. It was a really big company. I was working on a very, very small part, this testing part of a much larger project. And I wanted to really get a better understanding of what other opportunities you could do with the engineering degree. So I decided to go to grad school. So I went up north a little to Stanford and did a graduate degree in electrical engineering as well, just to take a little bit more time in school to explore what opportunities there were. So you're studying even more after your bachelor's. I really like school. So you're in there. And then from Stanford, you found yourself, of course, in the middle of the high tech universe, actually, the Bay Area in Palo Alto, Mountain View, Cupertino and so forth. So when you got there, was it a change from the LA kind of, you know, as we discussed before, Los Angeles and Southern California has more disconnects among the economic players. Like Hollywood is quite different to the defense industry, which is different from other types of retail and manufacturing. There's a lot of huge economic forces in Southern California, but not as focused and concentrated in the Bay Area. And did you find a new world when you got up there? Yeah, so two things there. So being an engineer in Silicon Valley or going and studying engineering is like the Wall Street of New York. It's the center in the capital and you use an engineer and doing something in tech feel like you're on top of the world there just because there's so many companies and opportunities. In LA, great experience like USC was fantastic, but there's the media industry, there's an entertainment industry. There's so many different things that you could do. Tech was just one small part of it. Whereas the Bay Area, tech is the majority of it, which was a very different experience. I distinctly remember a story. I was driving up the 101 from LA with all my stuff in the car. Couldn't see out the back as I was moving up to Stanford. And I was driving down University Avenue onto Palm Drive. And you see you enter Stanford and you see all that. You're on the side, right? And then you're passing by small coffee shops and you see these two people sitting on a like you and me just talking about something. And you're like, wow, this is where Facebook was created. This is the coffee shop where Twitter and Instagram and Google where they talked about their ideas. And that was just really inspiring. And so it was a really good experience. I remember going to a Starbucks at the Apollo Shopping Center. I could hear a pitch at every table. Yeah, that's all it is, right? And one of the most famous venture capital firms started out in that area called Kleiner Perkins. I think that's the granddaddy of venture capital firms. Your current firm, Canaan, what is that history when you go back in time? What was it that really put Canaan into the world and they made a hit? What was that? Yeah, sure. So Canaan Partners has been around for 31 years now. It started in 1987. It was actually spun out of GE. It was GE's corporate venture capital arm a long time ago. The four founders there decided to split off and do their own institutional venture capital, had an office out in Connecticut where GE was. And then they moved and created an office on Sandhill Road where all the VCs stay. Right, right, right. So this was the late 80s, early 90s. They invested very similar in early stage companies, seed series A, series B companies over now 11 funds. Companies in the past, match.com, success factors, double click, were some of the hits. More recently, companies like Instacart, Skybox was another one, and a bunch of others more recently that. So it's pretty spread across the board. No, there's a number of people like yourself in the group. And of course, some people have backgrounds in, say, health care or another person in software, another person in another ASICs or whatever. Now, do you have a niche that you look at? Or you have a lot of semiconductor chip ASIC experience, encoding experience. So very technical. To others, maybe really technical, but you don't have the industry experience. You haven't been in health care or banking or finance or whatever. What are you looking at? What is that category that you're assigned to? Yeah, so to Canaan, we look across the board in both tech and health care, which is what explains a little bit of the breadth of investors and their backgrounds. But also, I think that the thinking is that entrepreneurs, they come from all different backgrounds, some from industry, some straight out of school, and they've all created a lot of, there's a lot of stories about successful companies created with very different backgrounds. So as investors in these entrepreneurs, we like to match, have that same sort of idea where we want our investors to have a breadth of backgrounds as well. Diverse opinions creates diverse ways of looking at opportunities and investments. So, yes, my background is a little more on the technical side. I end up skewing a little more towards technical investments, just because it's where my skill set lies. But yeah, we have people that have very, very different backgrounds and all look at very different things. How different? I mean, usually in the VC world, I see somebody with a double E or a computer science degree and an MBA in like five years in finance or equity fund or whatever. And then coming into a VC, are there other people that you can think that are really from left field? Sure, so one of my partners, she has a PhD in Econ. Oh, good. That's one of them. Another one, he ran a startup. He was the CEO of a company, ran it from very first fundraising all the way to becoming a public company, sold it. So took the entrepreneurial route and then went to VC. Others have similar backgrounds to me where they did engineering. And some of them did an MBA and then came back. And then some of them are MDs and PhDs in physics or in biosciences. So very different. Now, yourself, you're in the Bay Area, but you're not from the Bay Area. How about your colleagues? Are there some from the Bay Area or most of them are from all over the place? I can't. I know one. I remember one colleague is from the Bay Area, but none of the other 15 or so investors that we have are from the Bay Area. So the Bay Area attracts talented people from all over the world. I mean, you must have people from Europe and India and Asia also. People from India, people from East Coast, West Coast, Hawaii. Now, is there a global focus now? Do you deal with companies solely in North America or in China or sometimes in Europe? Is there a geographic scope? I don't think there's any hard and fast rules. It's it's a lot more where we think that we can add value and where we have expertise. A lot of that lies in the U.S. today. But we've had investments in Canada and Europe and some in India in the past, but and even Israel. But because of time deficit, because it's so far away, our network is largely here in the U.S. It's a little harder to add a lot of value other than just capital. So we tend to not do as many investments there. We focus on the U.S. Typically, I've heard as a rule of thumb, you want to be within an hour's drive of your investment. That's a stretch. But but I but you're correct that you're adding value from your experience and from your network that you can identify C level people that you can pull in or some resource or introduce them to a potential customer. All the things that VC person should do. Yeah. And on top of that, I think we spend so much time looking at investments, looking at where the industries are headed, looking at what where the tailwinds are in a certain market. And that changes from place to place, too. So if we have a specific expertise around what's going on on the West Coast or what's going on in the U.S., that doesn't always apply to what's happening in China and why not. So we tend to focus our efforts on where we can add. What is a typical way a person comes to you? Does it come from referrals from other, you know, from other banks or a close colleague or a friend of one of the senior partners? How does a person come to you and says, you know, I want to make a pitch to you. Can I have, you know, 30 minutes of the time? A lot of it is from referrals that what I've learned here in the Bay Area or in the Bay Area, at least as Silicon Valley is actually really small and very, very well connected. Once you've been in the Bay Area for a couple of years, your connection, your one or two nodes away from most people in tech, which I find fascinating on its own, right? But that means that leads to you being able to get networks and connections to a lot of people very quickly. So a lot of it is referrals. Some of it is cold or inbound. But I think referrals tend to show that they really want to meet, that they that they have an interest in getting to know the ecosystem well and getting to work with network well. So they got to a person who knows that. I think that's the key. And we will take a break and come back about all about Hawaii and tech. I'm Jay Fidel, Think Tech. Think Tech loves energy. I'm the host of Mina, Marco and me, which is Mina Marita, former chair of the PUC, former legislator and Energy Dynamics, a consulting organization in energy. Marco Mangostorf is the CEO of Provision Solar in Hilo. Every two weeks, we talk about energy, everything about energy. Come around and watch us. We're on at noon on Mondays every two weeks on Think Tech. Aloha. Aloha, I'm Richard Concepcion, the host of Hispanic Hawaii. You can watch my show every other Tuesday at 2 p.m. We will bring you entertainment, educational, and also we tell you what is happening right here within our community. Think Tech Hawaii, Aloha. Hi, I'm Ethan Allen, host on Think Tech Hawaii of Pacific Partnerships in Education. Every other Tuesday afternoon at 3 p.m. I hope you'll join us as we explore the value, the accomplishments and the challenges of education here in the Pacific Islands. We are back with my guest, Raifi Gasper-Asaoka, on another program all about leadership. And in fact, this is turning out to be all about venture capital, which he is an expert in. And we're still continuing to explore the daily life of a VC person and what this person does. And it's kind of like a mystery to people in Hawaii because there aren't many VCs that you meet on King Street. Downtown, or Moilili, and so forth. So you're a rare breed when you're in Hawaii. You're not, of course, in Silicon Valley or Bay Area. You can bump into three venture capitalists at Starbucks and the Sanford Shopping Center or in Mountain View or Alpha Nile. I hope it's still there. It's the restaurant in downtown Palo Alto. And so we're talking about venture capital. And it's part of the ecosystem to create new companies and hire people and really foster growth in the economy. And we've been talking about Hawaii. And can it be part of this high-tech world? And we discussed that there is an ecosystem of research universities, disciplines of computer science and engineering plus business. You have to have people who can pitch, can speak English, fluent and really dynamic and can travel to India or Japan or Korea or Silicon Valley or London. And so we're talking about, you know, I do work in Kalihi Palama, I mean a math club at one of the schools there stays until 5.30 each evening because they don't have a PC or internet home. So we're talking about, you know, a population in the public schools, especially that's disconnected from careers in engineering and math. There is no working with a person at Farrington High School right now to bring AP computer science to Farrington High School, but that's like in every school in the Bay Area. Today every high school and there's only 14 high schools that have AP computer science, DOE high schools out of 45 in the whole entire state. So we're catching up, but it's slow. It's difficult. It's a challenge. And so you're been in the Bay Area in the trenches. So what advice do you have to get things going for Hawaii? Yeah, I'll tell you an interesting story. So when I was graduating from Stanford in the Bay Area and I was trying to figure out what to do, talking to my friends about what jobs they're going to go into, there was a hierarchy or a rank of how cool a job was. In most areas, when I was in LA, I talked to my other friends in Boston or whatnot. The coolest jobs you get were the big companies, the Facebooks, the Google ones that had Apple, the ones that had a big name to it. In Silicon Valley, it's actually the inverse. Interesting. The smartest people, the most ambitious, the most driven people go out and do a startup, either work at a startup or start their own. Yeah, OK. And then the hierarchy of working for Apple or Google is down the line. That's really a culture of innovation when you think about it. But it's subtle, but that has massive implications all down the line, not only from the universities to the startups, but then you think about the large companies, the Facebooks and Googles, they know that the best talent is with these early stage startups. So they want to help them, they want to work with them, they want to eventually buy them. And so this flywheel from big company all the way down to little one to the universities is really working and it all stems from this perception that the best people go out and do startups. And I think that's a unique culture to Silicon Valley. Not a lot of other places yet have that same mindset in spades that Silicon Valley does, but that really fosters a lot of interconnectivity and a lot of connections between all the way down from the stack, from big tech companies. As opposed to Hawaii right now, 103 people work for the city, state or federal government and those are great jobs in Hawaii. So it's a reverse, you want pay and benefits and long-term pension, you work for the government. In Silicon Valley, it seems you want really to create your own innovation, your own product. It's all about taking risk and trying to reap the rewards. That entrepreneurial spirit and that culture of innovation really pushes you to try new things and Silicon Valley rewards that. So I heard what's happening there. So what does that story have to do with Hawaii? So I think there are a lot of lessons that we can take from Silicon Valley and hopefully apply to Hawaii or any other areas and places that want to start to foster more innovation as well. You look at places like LA, like we talked about. When I left LA, there wasn't as much going on there in the startup community, but now it's the third biggest, maybe the third biggest startup ecosystem there. Silicon Beach is what they call it. But they've really tried to push and innovate in a lot of the ways and help startups in the same way that you see Silicon Valley is done for decades on decades. And you're starting to see that in other pockets like Chicago, like DC and Denver and whatnot. I think Hawaii is doing a good job. There's, whenever I come back home, I try to meet some of the people doing entrepreneurial activities here and it's great, I love seeing it. I just want there to be more. When you see and meet an entrepreneur in Hawaii, is there anything that, if only that person had this, they could be more successful? Being an entrepreneur is hard. Oh yeah, that's right. I think that when we meet entrepreneurs in Silicon Valley, I spend, I mean maybe four companies, new companies a day. So meeting 15 to 20 new companies a week. That passion and that drive to risk everything, to max out their credit cards, quit their job that has a nice pension and go out and do this. That's the go big or go home mentality, I think is, I haven't seen the level at which it exists in Silicon Valley in other places. Well, how about the other thing, technical expertise? I mean, you have people with a great idea. If only I could find a great coder to do my product. It's that they don't have that CS or coding background. And so the two things, product and technical expertise are not aligned within that person. And so there's a lot of angel investors in Hawaii complain about deal flow. There aren't that many people with ideas coming out or their products are not for the global market. It's for tiny niche market in Hawaii, won't go anywhere. So why fund it? Well, I think a lot of that access to deal flow, the ability to create deal flow comes again from that idea that entrepreneurship should be the thing that you do. It should be the thing that's rewarded, not the, all right, I can't find a job at a big company, I'll go out and try my startup. The startup should be the thing that you do. And if we can foster that innovation and that entrepreneurial spirit, I think you'll see a lot more deals and a lot of deal flow coming. Because I mean, I know at least my classmates that I graduated with, there's a ton of smart people that come out of Hawaii every year. There's a lot of people that I graduated with that went into technical fields. So there's a lot of people that wanna come home and that either are home or want to come home. So I think that we have the right ingredients for it. It's a little bit of a mindset shift that I think is happening. And you were at USC in Stanford and Stanford especially is the mecca of entrepreneurship and innovation. Any lessons from how they foster innovation and really drive entrepreneurship within the campus and get startups outside. Sure, so two things there. You have people on campus, your students, your classmates, to your teachers and professors that you have an idea with them. They come to their office hours, let's jam on it, let's work on it together. And if you find something, we'll find funding for it. There's no barrier to making innovation happen. And that mindset is pervasive throughout Stanford. Anyone can start anything and you just find some friends and you have a good idea and you wanna work hard, like let's make it happen. So that's one. And then secondly, you have support from larger companies, you have support from the university. Stanford, a lot of patents and a lot of innovation comes out of Stanford. The Stanford Patent Office I know is really helpful with helping students take that idea from research or whatnot and commercialize it. So there's a lot of things working in their favor. And there's also been a huge investment from alumni. I went to, and like companies, as you said, I've spoken at the Bill Gates Computer Science Building. It's unbelievable and there's been buildings all over the place built for new labs, facilities in the last barely 10 years while I've been visiting and giving lectures there. So that's been a tremendous boost. The connections of alumni to capital, venture capital and also the companies. And like you say, the faculty and the collegial atmosphere really are inclusive and it's not siloed. I think that's something that universities could take heart in to have interdisciplinary, product-oriented, really integrate a lot of ideas and expertise together. Absolutely. I mean, I think Stanford's a good example about you being able to create your own major. There's a lot of people out there that end up putting together a bunch of classes that they think will help them in their career further on and then they just package it together and create a major. It's super interdisciplinary and comes with a bunch of different degrees together. And Stanford's really good about letting people do that. Now, you go back to passion, I guess, and risk-taking. I think that's what I'm hearing from you. That's an endemic and barrier environment in society. How would you foster that? How would you grow that? How would you trigger that in Hawaii? So I think I'll go back to what I was saying about Silicon Valley. What makes it work so well is that every piece of the stack, there's a commitment towards entrepreneurs and a commitment towards helping entrepreneurs get better and fostering that innovation of new ideas and new companies from universities and even big companies. If you look at when I meet a bunch of startups and they're pitching me their ideas and we get to a customer slide, the customers on that slide are often really big tech companies, the Salesforce, the Facebooks, the Googles, and they're the ones buying, being the early adopters of new technology and the ones trying and buying new things. And that has two benefits. One, they get to be on the cutting edge of why our technology is headed and they get that first early look. But two, I mean, they're helping entrepreneurs get into that mindset of we can build this stuff and these big companies are gonna help us grow. Like we're all working together to push innovation forward. Well, I think you have, if I can infer from what you're saying, the disconnected pieces in Hawaii, Bishop Street, Waikiki, UH, and there's a lot of people from Japan, from Asia and mainland and elsewhere. And of course, it has to be connected on the back end with the public school system, K-12. And when I was with MIT, I was at a meeting where Paul Gray, the former late president, was asked, how do you teach creativity at MIT? And he thought about it and he says, well, if the student freshman does not have creativity, but at the time he or she enters MIT, MIT won't teach him. It's a very interesting concept. The K-12 is very, very significant. And by the time it hits a major university, that person has the skill set really to absorb more technical skills and programs and so forth. And then afterwards can create a new product. After graduating it and just go forward in that. And so K-12, for me, is very, very important. And I think it's the number one priority in the state going forward. And so, Rafe, for the future, where do you see yourself in five to 10 years? So my goal with being in that area, being involved in tech from the VC angle is to try and take all these learnings and lessons of what makes Silicon Valley so successful and try to come back home and take some of those learnings and see if we can help the ecosystem there. Because I, someone told me something really interesting. There's no other place other than Hawaii where there are so many people that are really smart, really passionate from Hawaii that wanna come home, but that the excuse is we're always like, what are we gonna do? We're looking for a job, looking for a way to come back home. So I think if we can catalyze something here in Hawaii, if we can take some of those lessons of what makes other ecosystems successful, bring them home to Hawaii, I think you'll open the floodgates for a bunch of talent and a bunch of people that wanna come home and will help build this ecosystem. Oh, I think that sounds tremendous. Vegas has attracted, unfortunately, or fortunately, 60,000 to 70,000 former Hawaii residents living there for economic reasons. And there are also thousands of people, like you said, in the Bay Area. We know of people who have startups employing UH graduates in San Francisco and other parts of Silicon Valley. So there is talent out there and they just fit in better today in Silicon Valley but wish to really return and be part of the new economy of Hawaii. And that will drive more investment in K-12, will drive more investment in infrastructure here and Hawaii will be truly a innovative place. Yeah, like you said, I think it takes everybody working together, right? It takes the regulators, the government working with the startups, working with the economy that drives Hawaii today, tourism, and everybody working together to really foster innovation and push it forward. Well, I hope that will happen, it has to happen, because I always believe that we are innovators even from the kingdom. King Kala Kawa put in electric lights in the Ilani Palace before the White House. He was an early technology adopter and I think we've forgotten that, that people in the kingdom in the past were really trying to propel Hawaii. Like Governor Burns said, he wanted to see a Hawaii economy based on research. Yeah. And you're gonna be part of that, I hope, in the future. I hope so. Thank you very much, Refi, for your time and this is all about leadership. My name is Rezu Chiama.