Anthony Xiao has been investing in VC funds since 2019, but it wasn’t until he moved into a product role at Halter that he felt he had something to contribute to early-stage startups.
“Product is a new term and idea. It's very different at every company, and varies depending on a company's lifecycle too. I feel I can give some pointers,” he tells me.
“It's never going to involve me telling someone what to do, but rather, just sharing my experience and allowing founders to take what they think is applicable to their company.
“Giving founders the right comments or ideas at the right time can really steer how a company goes. You are always going to fall on the track. But you could fall fewer times, and get up even faster.”
When I prompt Anthony to tell me what success looks for him as an angel investor, he notably doubles-down on his desire to meaningfully contribute.
“Success is companies seeing value in me beyond the money,” he says.
“Success is them being able to come to me, email me, or call me for questions once in a while. It doesn't have to be every week. But when the right time comes, it’s them knowing they can rely on me, and me proving to be that reliable person for them.”
Applying a product mindset to angel investing
There are two main product philosophies that lend themselves to investing, Anthony tells me. The first is asking the right questions and the second is tactically learning as fast as you can.
Asking the right questions
In product, you’re never the expert, Anthony tells me.
“You’re always working with a very diverse set of skills, from software engineering to design to data science,” he says.
“In investing, you're always interacting with different companies in different industries. Again, you’re never the expert.
“You need to learn to piece the right information together, so you can understand enough to make a call on whether to build a product, and whether to invest in a company.
“The key to understanding is asking the right questions. Nothing’s ever so hard to understand that you can’t get it.”
To further illustrate his point, Anthony tells me about his experience participating in the Startmate Accelerator selection process as a First Believer.
“The exercise of reviewing and voting on the 600-or-so companies that applied for the Accelerator helped me learn to see things from a different perspective.
“I lean towards things I'm more familiar with. There was one company I thought was bad that everyone thought was a great idea. It triggered me to ask the right questions and dig into why people think the way they do.”
Learning as fast as you can
“I am a big advocate of learning as fast as you can, without massive losses. This idea translates to investing well, and specifically, investing small amounts of money in more companies,” Anthony explains.
“When you’re early in your investing journey, you don't have a strong sense of what a good or bad company is. Obviously, you can look from the sideline and guess ‘that one's good’, and look back in five years and find out if you were right. But there’s nothing quite like doing it.
“If you can invest $1K or $2K or even $50, and get that rep in, you can then start learning.”
The objective here is to learn very fast and get an increasingly evidence-based feel for what a good company looks like at the earliest stage.
“I don’t know if this is a good or bad thing, but I always say, if I don't trust my instinct, and I make a decision another way, I'll regret it in the end,” Anthony says.
“My gut and my instinct will always give me a direction to go in. And then, at some point, I will stop and reassess, and if nothing disproves my gut instinct, I'm going to keep going.
“I've just started this journey. I wouldn't say I'm past chapter one. But the more I learn, the better I will be. I'm going to be right at some stage.”
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