Sep 20, 2021 · 38m · 20vc
20VC: Investing Lessons From Rounds In Peloton and Square, Why Great Investing is Stock-Picking and Sector Penetration & The Next Decade in Venture, Is Tiger's The Right Model with Hans Tung, Managing Partner @ GGV Capital
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In this episode of 20VC, host Harry Stebbings interviews Hans Tung, Managing Partner at GGV Capital, exploring key investment lessons from Peloton and Square, multi-stage fund mechanics, navigating market downturns, and the global acceleration of tech digitization.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 29.5% of the talking time here. How this is scored →
Harry as informed peer 3.8 Guest teaching 4.0 Guest disagreement 1.1 Harry pushing back 2.3
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 15:05 Reframing Tiger Global's Competitive Threat
Hans subtly rejects the premise that fast-moving crossover funds are destroying traditional VC value, revealing how GGV anticipated Tiger's strategy years earlier and acts as a complementary partner.
Hardest push from Harry ▶ 14:36 Pressing on 48-Hour Term SheetsHarry directly confronts the traditional venture process by asking how firms like GGV can realistically compete against Tiger, Addition, and D-One issuing multi-million dollar term sheets in 48 hours.
Biggest teaching moment ▶ 11:35 Deconstructing Peloton's Household EconomicsHans educates Harry on how analyzing Peloton's monthly subscription split between household members proved it was a cost-effective substitute for gym memberships, explaining why early skeptics missed its massive market potential.
Harry holds his own ▶ 18:56 Analyzing Venture Unbundling and Regional ArbitrageHarry demonstrates keen market awareness by referencing theoretical venture unbundling and drawing explicit comparisons between valuations in the US, LATAM, and Pakistan.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Hans Tung's Path to Tech and Venture Capital | 2 | 3 | 1 | 1 | Harry asks introductory questions about Hans' path into venture capital and how surviving dot-com and financial crashes influenced his outlook. Hans explains how historical downturns build fortitude and reveal long-term category winners. The dynamic is polite and conversational. | |
| Developing a Consumer-Centric Investment Thesis | 4 | 4 | 1 | 3 | Harry probes whether rapid, back-to-back funding rounds concern Hans when capital growth outpaces actual company progress. Hans reframes early-stage valuations, explaining that hit-driven venture returns justify paying high valuations early for outlier founders. | |
| Case Study: Growth Stage Valuations and Peloton | 4 | 5 | 1 | 3 | Harry asks about growth-stage price sensitivity and exit multiple requirements. Hans uses Peloton as a case study, detailing how breaking down subscription costs versus traditional gym memberships justified a billion-dollar valuation. | |
| Ecosystem Bets: Connecting Peloton and Affirm | 5 | 5 | 2 | 4 | Harry challenges Hans on how traditional VC firms can compete against aggressive multi-stage funds like Tiger Global and Addition issuing rapid term sheets. Hans reframes the threat by detailing how GGV predicted Tiger's model in 2013 and positions itself as a value-add partner rather than a direct competitor. | |
| Global Expansion and the Square Investment Journey | 5 | 4 | 1 | 3 | Harry cites venture unbundling theories and notes extreme pricing discrepancies between the US, LATAM, and Pakistan. Hans explains that stock picking and understanding sector penetration curves remain paramount regardless of regional market noise. | |
| Market Timing Risk and Post-IPO Distribution Strategy | 5 | 4 | 1 | 3 | Harry asks how Hans manages market timing risk in hyped sectors like AR/VR and presses on post-IPO distribution timing to ensure LPs maximize upside. Hans details GGV's structured multi-year post-IPO divestment strategy. | |
| Learning from Venture Misses: DoorDash and Chime | 4 | 4 | 1 | 3 | Harry asks Hans to share his biggest investing misses and how he avoids recency bias from major wins. Hans admits missing DoorDash and Chime, citing lessons in re-engaging growth companies and applying continuous self-improvement frameworks like Kaizen. | |
| Effective Boardroom Leadership and Governance Style | 3 | 4 | 1 | 1 | Hans outlines his governance style, stressing that board members should focus on one or two high-impact points rather than creating noise. The pair then transition into a quickfire segment covering books, global firm culture, and decision-making. | |
| Digitization Trends and Final Thoughts | 2 | 3 | 1 | 0 | Hans reviews recent investments in global tech enablement across LATAM, Israel, and India, emphasizing the decade-long tailwind of global economic digitization. Harry concludes the interview with warm closing remarks. |
Statements from this episode (25)
Hans Tung: Today's crypto movement mirrors the 1993 Netscape internet boom
“Seeing some of my classmates end up going to Yahoo, end up going to Netscape, end up going to some other internet startups, It's kind of like what you see with crypto today, and you just see, wow, anything's possible”
Hans Tung: Innovating during market downturns creates stronger companies
“So having gone through a few cycles earlier in three big ones with Asia financial crisis, internet bubble, the first one, and then the financial crisis from the U S it gives you perspective on when other people are afraid and Stop investing or stop innovating.…”
Hans Tung: Venture investment outcomes take seven to nine years to determine
“And as you know about venture, you don't know exactly what will happen until year seven, year eight, year nine.”
Hans Tung: Fast-funded startups and venture funds will fail medium-term
“Medium terms, you know, some of the companies are not going to make it. Some of the funds are not even going to make it.”
Hans Tung: The best startups are always expensive in every funding round
“One of the key lessons I learned as a multi-stage investor over my career is that the best companies are always going to be expensive every single round.”
Hans Tung: Sub-$100M startup investments can reach $100B valuations
“I invested in some of the companies at, you know, sub one hundred million valuation. When they become, you know, five, 10, 20, sometimes even a hundred billion dollar valuation, it really doesn't matter what I'm to the rest of a portfolio.”
Hans Tung: GGV Capital invested in Peloton at a $1 billion valuation
“I remember investing in Peloton at about a billion dollar valuation.”
Hans Tung: Growth-stage financial models rarely predict returns beyond 5x
“So even in the analysis that you do, it's hard to predict anything beyond three to five X in the growth stage. So you have to pick ones that has a special possibility for a lot more.”
Hans Tung: Venture scale requires replacing fundamental behavior, not just incumbents
“If you believe that is a substitution of gym membership and enlarging the pie, and you can argue for those that miss Uber or anything that drive sharing, it's a car ownership substitution, not just a substitution of taxi services, then the pie becomes a lot bi…”
Hans Tung: GGV invested in Affirm after analyzing its Peloton partnership
“In fact, we end up investing both Peloton and Affirm because of that. When we are talking to Peloton, we know of Affirm, and we were interested to see who Peloton works with in order to have that payment plan, because we know that will make it more affordable.…”
GGV Capital and Wellington were the only firms in both Peloton and Affirm
“And I think the only other firm that did that was Matt at Wellington. So both of us only went and invested in both companies.”
Tung: Back multiple interconnected players forming an ecosystem around a trend
“If you're betting on the trend, you want to bet on multiple players that are somehow working together, forming ecosystem to grow together.”
Hans Tung: Tiger Global's public-private hybrid model is the future of VC
“But I mentioned that I think back in 2013, the model to look at will ends up being something what Tiger Global is building because it's multi-stage and it is a public fund that if you do that well, The profits of that can help to subsidize growth of their priv…”
GGV Capital's AUM expanded from $1B to $8B in its second decade
“And in our AUM for GGV, the first 10 years was a billion. The second 10 years is eight billion.”
Hans Tung: Andreessen Horowitz limits global expansion due to operational intensity
“And you talk to fine folks at Andreessen, they're not trying to go global. They do mostly in primarily US and they will dabble here and there, but primarily focus on the US market because it's operational heavy to scale their model.”
Hans Tung: Emerging tech markets experience valuation busts within 3-5 years
“Anytime you look at a new market, initially it will be something that needs to be proven out. So people are cautious. And once you reach that inflection point where people think, oh, this could be the next big thing. And then short term, a lot more capital rus…”
Tung: GGV Invested in Square at an $800 Million Valuation
“We invested in Square at about an eight hundred million dollar valuation, and then when a company went public, the valuation for the first two years was not great, but thereafter, they really found the right market fit and found the right engine for the scale,…”
Tung: Multi-stage investing is superior to single-stage venture capital
“Again, this is why investing in multi-stage is much better than investing in single stage, because you get to see and choose, okay, I love this sector, I love this founder, but it's just a bit too early, or they're at a tough We should come back to it later wh…”
Hans Tung: GGV exits post-IPO positions by selling 5-10% quarterly
“Once our company go public, instead of trying to figure out which one's likely to be the next square and next Zendesk and continue to, or Airbnb and continue to rise, we have sort of adopted approach of being willing to exit evenly, quarter by quarter, a finit…”
Tung: Public investors evaluate future growth potential, ignoring early venture returns
“Those public investors don't care how much money this company has made for their early stage investor. They only care at the time of their own entry, how much more growth is ahead.”
Hans Tung passed on early investment rounds in Chime and DoorDash
“If I look at some of the misses we had, you know, I did not invest in Chime. I did not invest in DoorDash.”
Hans Tung: DoorDash scaled by targeting fast-food chains over high-end restaurants
“Tony has done extremely well since they found that working with a fast food chain restaurants made a huge difference for them and then make the address market even bigger. It's not working with the niche high end specialty restaurant, but for the mass market”
Hans Tung: Multi-stage VCs should aggressively pursue missed startups at inflection points
“If somehow miss them early, wasn't as sure if they can make it. Once they reach that inflection point, once they have developed a new nugget of truth, I should be more aggressive or encourage my partners and I to be more aggressive to go back and invest in the…”
Hans Tung: Board members should limit feedback to one or two priorities
“Because you give someone 10 things they need to work on, they're not going to do most of them. You tell someone there's one or two things you've got to really think about, they remember it.”
Hans Tung: Tech will face regulation because its benefits are unprecedentedly concentrated
“You will see regulation. You will see some pushback because tech does not benefit all. It does not benefit all. It is more concentrated than almost any form of innovation we have seen before, so that needs to be dealt with.”