Sramana Mitra: That brings us to 2009?
Vincent Yang: That brings us to early 2010.
Sramana Mitra: Then what happens next?
Vincent Yang: Then, I moved to Palo Alto. When I was in JP Morgan, my main job was to analyze companies. In particular, I developed a mathematical model to analyze public companies. It’s very funny. Investment banking is much like the military. If you’re a junior, nobody cares about you. You basically follow the order. For me, it was very interesting because before investment banking, I was actually a CEO. I was not a fit at all at JP Morgan. I remember in the first week, I was telling the partner, “Let me source a couple of deals for you.” The partner looked at me and said, “Now, this is what I want you to do. You just do PowerPoint.” I repositioned myself.
When I was doing models, I realized that the typical way that investment banks source deals is not ideal. This is more about the partners. They think, “I know the uncle of the CFO. Let’s get a deal for them.” As an entrepreneur, I was thinking about doing things differently. You cannot always find whose uncle’s cousin happens to be the CFO of this public company. Why don’t we analyze every single public company out there and identify what are the companies we should invest in. After two and a half years, we made some early success internally, but I realized that it’s such a big firm. My voice is never heard.
In the mean time, I got a head hunter cold call from Palo Alto. Someone called me and said, “We’re calling for a private equity firm in Palo Alto. Do you want to move over here?” As an entrepreneur, I’ve read about Silicon Valley but I’ve never been to the United States. That drove me. I moved over to Palo Alto in 2010 and joined the private equity firm called Summit Partners. I was an investment manager and worked at Summit for another two and a half years.
Even when I was at Summit, my main job was to do investment. The only difference moving from JP Morgan to Summit is, back then, my job was to analyze public companies and now at Summit it was to analyze private companies. There are only 30,000 public companies. But there are 24 million public companies in the US. A human being cannot possibly figure out a way to analyze them. In the first year, I had a terrible time because, internally, it’s a very strong cold call and sourcing model. I was not a native English speaker. I’d never come to the US before. I needed to do a lot of cold calls. While my peers were making 10,000 CEO calls a year, I could only make 3,000. I was thinking of how to do better.
The thing that inspired was watching the IBM Watson. I said, “What if we can develop a machine that reads every single company information about their news, website, and patterns and tells the human which company is interesting enough to invest. This was my initial idea in 2011. Then I thought about doing some internal prototyping to see how it works. It worked very well. That became the initial idea of Everstring— have the machine analyze all of the information and then help companies make better decision.