Investing in technology is like investing in fine wine, our founding managing partner Yinglan Tan has often said.
For the innovator navigating Southeast Asia and today’s technology bear market, we take some inspiration from wine in today’s post through the story of Joseph Phelps, the maker of the pioneering Insignia wine blends — which also happen to be the namesake of Insignia Ventures Partners.
As a wrap-up post for the year, Yinglan shared eight learnings as a venture capitalist from his conversations with the staff in his last visit to the winery. So in this article, we translate these eight learnings into actionable tactics for innovators and founders, from investing in market education as a competitive moat to developing internal hiring pipelines.
1. Never settle for less than the best.
From the post: “Joseph Phelps had one Golden Rule. “In everything we do, be the best we can be. No compromises. Second best will never do. Let’s make the best wine we can every year, using the best grapes we have.””
A takeaway for innovators: The costs of wrong hires are higher than missed ones. Take the time to develop relationships with potential hires, especially for leadership roles, and build pipelines to attract and develop the best leadership talent (e.g., internal training, special projects, etc.).
2. Hire for the future.
From the post: “Joseph never hired diplomas and resume; he hired from character and potential, not from what a man or woman was today but from what he believed they could grow into tomorrow.”
A takeaway for innovators: Expand hiring pools beyond the typical resume and diploma filters, especially for engineering talent. It also pays to hire seriously considering what the role of the person will be 12-18 months down the road (will they be leading market expansion, opening up business unit, etc.?).
3. Age like fine wine.
From the post: “His first vintage of Insignia in 1974 did not impress initially. As the wine aged, it kept getting better. By 2013, the 1974 vintage was appraised with a score of 99/100. Investing in technology is like investing in fine wine, it is not what it tastes like today but what it tastes like in 20 years!”
A takeaway for innovators: Successful tech companies that we know today have rarely started out with the products they ultimately become known for and gain massive traction on. It is important to hire people and leaders who can adjust quickly to the demands of product pivots and evolutions, as well as install robust communication channels with stakeholders to execute these changes.
4. Blend the best.
From the post: “Joseph Phelps brought innovation to California wine. Joseph Phelps was one of the great visionaries of Napa Valley and the first to see the merit in blending the best wine.”
A takeaway for innovators: Innovation in Southeast Asia is often achieved by leveraging both digital technology and existing behaviors or infrastructure to drive mass adoption. In this way, achieving product-market fit has a lot to do with the market understanding of the people behind the product as it does with the capability of operators to build products — being able to both empathize with the status quo and see opportunities beyond it.
5. Imitators just stay imitators.
From the post: “Just a few years after Insignia made its storied debut, Robert Mondavi joined hands with Baron Philippe de Rothschild, the lion of Chateau Mouton, to create a proprietary blend, Opus One. Imitation is the sincerest form of flattery. Despite new entrants, Insignia has managed to maintain its status. Many of the Insignia vintages are ranked as No. 1 in the world.”
A takeaway for innovators: Southeast Asia’s innovation landscape continues to invite new entrants and so enduring in a fundraising winter is not just about being defensive with cash but also maximizing capital efficiency: focusing on profit drivers, investing in competitive moats, and developing a loyal customer base.
6. Invest in the growth of others.
From the post: “Joseph Phelps believed in system of apprenticeship and trained people and empowered them. For Joe, there was no motivating tool more powerful than those three simple words” I trust you.””
A takeaway for innovators: Internal hiring pipelines and initiatives can be immensely valuable in an environment where leadership hires may be more expensive vis-a-vis tightening budgets for hiring. Done well, not only does it strengthen retention but also develops a culture of trust — trust in future generations of leaders.
7. Set the standards.
From the post: “Joseph Phelps is the unsung hero of Napa Valley and American Wine. Together with others like Robert Mondavi, he not only created a vineyard but helped created an industry and set the industry standard.”
A takeaway for innovators: Investing in market education may seem excessive, but for companies in nascent, emerging spaces, this can make or break the bottom line. For pioneers, thought leadership for incumbents and institutions (e.g., case studies, consultations) as well as an engaging educational brand (e.g., social media content) can become a competitive moat
8. Never end the learning.
From the post: “He was entirely self-taught, and it was entirely the result of passion. If something excited his passion, he was all-in.” With the fast-evolving technology space, you have to be constantly teaching yourself and be deeply passionate and all-in.”
A takeaway for innovators: C-levels, especially after achieving a strong initial product-market fit and traction on top of that, need to be able to spend more of their time learning about how else to be incrementally better than yesterday. This means letting go of non-needle-moving tasks and improving delegation to a growing organization.