"Follow your passion."
Dave Liu is a 30-year veteran of Wall Street and Silicon Valley. He started his investment banking career working for Goldman Sachs and then joined Jefferies. During his 25-year career, Dave progressed from the entry level of analyst to Managing Director, co-running all digital media and Internet investment banking activities. He completed over $15 billion of transactions with hundreds of companies including IBM, Google, Microsoft, Sony, Yahoo!, and Yelp.
After retiring from Wall Street, he became an entrepreneur and started four companies in technology, merchant banking, asset management, and media. He is CEO advisor and investor to multiple companies, several of which have reached multi-billion dollar status including Internet Brands WebMD, MobilityWare, and Vobile. He’s also involved in the entertainment industry with investments in Stampede and TEG Live, and was previously CEO advisor to ProSiebenSat.1 Media, one of the largest media companies in Europe.
Dave completed the Management & Technology Program at the University of Pennsylvania where he received a BS in Engineering and a BS in Economics from the Wharton School. He also attended Harvard Business School where he received his MBA. He currently serves on the Executive Board of the Management & Technology Program at the University of Pennsylvania and on the Trust Advisory Committee of Tau Beta Pi.
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Table of Contents
Thank you for joining us today. Please introduce yourself to our readers. They want to know you, some of the background story to bring some context to your interview.
Dave Liu: I’m a 4x entrepreneur who has started companies in asset management, technology, media, and merchant banking. My last company has 1000 employees. I’ve started business from a napkin.
I’ve also invested in a dozen companies of which 4 have become multi-billion dollar unicorns. I’m eager to share my lessons with your readers.
You are a successful entrepreneur, so we’d like your viewpoint, do you believe entrepreneurs are born or made? Explain.
Dave Liu: They are both. I analogize it to being a parent. The best parents are gardeners. They toil the soil for their children and then children grow into the people they will be.
To be a successful entrepreneur, your birth determines the “soil” you are born with. You might be born into a world where because of your parents, you have soil conducive to entrepreneurship. You may have the right networks for raising money, recruiting people, for pursuing your ideas. But you need to make those into a reality much like a gardener takes the soil and creates something living.
Conversely, you may be born in a barren land where you don’t have all the advantages but despite the odds, you can still be successful. So I liken it to gardening. The “luck” of birth determines the soil you start with. The rest is up to you and you need to make it into something. The combination is the key.
If you were asked to describe yourself as an entrepreneur in a few words, what would you say?
Dave Liu: I’m a renaissance man who has started companies in areas I find interesting and where opportunity exists. Here are my companies:
La Mesa Capital: I started a primarily long-only fund that is taking advantage of the secular growth of Internet companies. It’s an area I know well and we’ve done well during the past pandemic.
Liucrative Endeavors: This is my merchant bank. I started a firm to be the antithesis of Wall Street. I invest my own money and take equity positions in a small select group of companies that I can help. If you watch the film, “The Godfather,” I am the “Tom Hagen” or consigliere to these founders. I’ve found it to be a winning combination. Four companies I have invested and partnered with have become billion-dollar franchises: Internet Brands WebMD, Vobile, MobilityWare, and FIGS. I have many more that are breakout successes (e.g., Data, World, Francesca’s, Philz Coffee, etc.).
Liucrative Media: I’m a big believer in creating and promoting content for disadvantaged groups; particularly Asian Americans. So I’ve invested in Stampede Ventures (2 Asian American founders), TEG (the top Asian American Broadway producer). In addition, I’ve created my content:
- The Way of the Wall Street Warrior. This is a book that will be published by Wiley in November 2021
- The ABC Life. A cartoon series syndicated to AsAmNews.com
Bowers & Wilkins: This is a tech audio speaker company I started and got to 1000 employees. We sold the business in 2020.
Tell us about what your company does and how did it change over the years?
Dave Liu: I have four companies but my primary one is Liucrative Endeavors which is a merchant bank investing and partnering with tech and entertainment companies.
Thank you for all that. Now for the main focus of this interview. With close to 11.000 new businesses registered daily in the US, what must an entrepreneur assume when starting a business?
Dave Liu: That the hardest part of any business is distribution, not just the product. The key is to find your tribe or customers who care passionately about your business. This can be done online but few opportunities exist to build this organically so you need to have a really good plan for how to cultivate demand.
Did you make any wrong assumptions before starting a business that you ended up paying dearly for?
Dave Liu: I assumed that I knew how to hire people. I hired so many people who didn’t work out. In hindsight, I just needed to be ready for large turnover because people rarely tell you or show you their true warts until much later.
If you could go back in time to when you first started your business, what advice would you give yourself and why? Explain
Dave Liu: Master human psychology. Learn what makes people tick. That’s the key to any successful business. Understand what motivates customers to buy your product, employees to work at your company, and investors to invest in your company. If you understand their motivations then you can spend all of your time building the right incentive mechanisms to get them to do what YOU want!
What is the worst advice you received regarding running a business and what lesson would you like others to learn from your experience?
Dave Liu: Follow your passion. This advice without any regard for (1) what am I truly good at, and (2) what society values, is terrible advice. You can end up investing a lot of your life into something that yields little to no value and then it can demoralize you.
So my advice is to find the intersection of 3 things:
- Your passion
- Something you are great at.
- Something society values.
That’s the magic circle!
In your opinion, how has COVID-19 changed what entrepreneurs should assume before starting a business? What hasn’t changed?
Dave Liu: Distribution is mostly online now. The offline world is hard with COVID-19. So you need to become well versed in how to get customers online or your business won’t survive.
What is a common myth about entrepreneurship that aspiring entrepreneurs and would-be business owners believe in? What advice would you give them?
Dave Liu: That through hard work and diligence they can succeed. This simply isn’t enough. You need a lot of luck and a lot of relationships to make it happen. You need to network to find investors and great employees. And you need the market to turn in your favor. Remember, rising tides lift all boats. Don’t just assume that hard work will get you there. Always go to markets that are growing.
What traits, qualities, and assumptions do you believe are most important to have before starting a business?
Dave Liu: As I’ve said earlier, I think these are the key attributes:
- Relationship building: You need to know how to relate to other people
- Human psychology: Understand people’s motivations so you can build the right incentive systems
- Hard work: Nothing in life that is good comes without hard work
How can aspiring leaders prepare themselves for the future challenges of entrepreneurship? Are there any books, websites, or even movies to learn from?
Dave Liu: My favorite movies are those that show how hard it is to build power and wealth. Some favorites include Glengarry Glen Ross and The Godfather. The best way to prepare is to start small. Start with small business opportunities where the cost of failure is low. There is nothing like being in the arena of battle rather than watching from the bleachers.
You have shared quite a bit of your wisdom and our readers thank you for your generosity but would also love to know: If you could choose any job other than being an entrepreneur, what would it be?
Dave Liu: Cartoonist. I’ve always wanted to be a creator so I’ve written a book and also syndicate a cartoon series:
Thank you so much for your time, I believe I speak for all of our readers when I say that this has been incredibly insightful. We do have one more question: If you could add anyone to Mount Rushmore, but not a politician, who would it be; why?
Dave Liu: Charles Barkley. Because he is not a hypocrite. He says he’s not a role model and has all the human vices but is transparent about it. Hypocrisy is rampant in this country so it’s great to see someone own up to his real self.
Larry Yatch, VIP Contributor to ValiantCEO and the host of this interview would like to thank Dave Liu for taking the time to do this interview and share his knowledge and experience with our readers.
If you would like to get in touch with Dave Liu or his company, you can do it through his – Linkedin Page
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