Jessica Liu (AppWorks): We focus on Founders’ characteristics

Jessica Liu is a partner of AppWorks, leading the company’s efforts in Southeast Asia and the region’s burgeoning blockchain ecosystem. Specifically, she has been closely watching the development of consumer Internet applications, especially as they intersect with the increasing ubiquity of deep technologies. Jessica loves helping visionary founders realize their full potential. She holds B.B.A from the University of Southern California.

Jessica, how did you find yourself in the venture investment business?

I have been active in the digital industry since 2010, starting my career managing online marketing for Standard Chartered Bank’s cross-selling strategies before joining AppWorks in 2014. Here I served as an Associate in charge of the company’s Accelerator and Southeast Asia initiatives amongst many other major projects before becoming a Partner in 2019.

At what stage you prefer to enter and what’s the geography of your projects – Southeast Asia or maybe other countries?

Our company provides two main services that cater to startups in two different stages: AppWorks Accelerator helps seed-stage startups go from 0 to 1. AppWorks Funds provide financing to help growth-stage startups scale faster. Nowadays we are focused on Greater Southeast Asia (GSEA, Southeast Asia + Taiwan), thinking of spreading our geographical coverage however.

How do you select startups to support? What are your criteria?

We do early stage investments to startups. First of all we try to understand philosophy and we have so-called “3H approach” from accelerator to venture investment: founder’s head, hand, and heart. “Head” means if he is smart enough and able to learn quickly; “heart” is usually to consider whether it’s enough evaluation, determination, and motivation; “hand” stands for execution, attraction, the speed of growth.

What industries are you interested in?

We are more Internet-related. So it’s basically everything connected with Internet application, general Internet, mobile Internet, also blockchain startups, artificial intelligence startups.

How do you conduct pitching or what is your model for selection?

We focus on Founders’ characteristics. For startups in early stage, the point is not their current business model, product or service. The most important thing is find PMF (product market fit), if their 3H are good, they can find PMF and pivot to the right way faster than other startups.
This is one kind of outsourcing and another kind of outsourcing we have due to the accelerator and very good connection in Southeast Asia and Taiwan. That’s why we have a lot of experienced entrepreneurs who join this network being mentors. Also referrals from friends or information in media are the ways to finding founders or they find us.

How long due diligence procedure may take?

Sometimes it may take 3-5 months.

How many startups or ideas do you revise per year?

So far Accelerator receives about 60 startups per year. For AppWorks Funds, we invest 10 – 15 deals per year.

How big is a check you usually issue?

The check may vary between $200 thousand and $10 millions.

What are your business interests?

We are interested in 3 (ABS) topics where A=AI, B=Blockchain, S=Southeast Asia. We believe the paradigm shift brought about by AI and Blockchain are the two mega opportunities founders in the 2020s must leverage. At the same time, GSEA is rising, displaying impressive growth in middle-class incomes and in GDP. Its citizens participate in an acceleration of tech usage that makes it one of the most pivotal regions in the world for innovation and economic growth. We believe that founders in this region must use these technologies to make the most of the opportunities.
Therefore, this is where we are putting our focus. Founders should think carefully about how to leverage these three areas as much as possible to make the greatest gains with new business models.

In your opinion: the best margin interested to exit?

We are looking to perhaps 30% of that.

What are your red flags? What makes you stop from cooperation?

Integrity issues. Founders should demonstrate honesty and transparency at each stage.

Have you ever rejected support of any startup and now you think it’s a wrong decision?

In the early days, when we were doing investment 6-7 years ago, some kind of evaluation scared us because of a high cost, but today I think our thorough evaluation procedure gives us a clear picture of future prospects.

Do you remember any unusual startup?

I think each of them was quite unique. Most of them impress us, especially when we use 3H approach. I can’t name anything specific, but founders’ stories are always interesting.

Any plans to invest in other industries?

Currently I think coverage of blockchain will be interested for us in the next 2-3 years. Most products we invest in tailored for Southeast Asia clients, mostly b2c model, sometimes b2b model.

How do you see blockchain development as technology for the future?

It hasn’t matured yet but it has already maiden a change in technology and currently there are a lot of interesting applications. It’s early days. It’s still hard to tell how it will evolve in the next 3-5 years. I think that in the next 5 or even 10 years it will become a very important milestone in the world history of hi-tech innovations.

What business qualities a person needs to work in the investment business in Southeast Asia?

I think that each of 6 countries where we work – Taiwan, Singapore or Indonesia or others – has its different culture and customer behavior so it’s difficult to tell something about South Asia as a whole. Although the speed of Internet and customer behavior is not mature as in other developed countries, the speed of growth and speed of using applications is impressive. And here different kinds of services are very very welcomed.

What inspires you professionally: books, blogs, people, something else?

I think that with the Internet many things are convenient now – there are a lot of blogs and platforms, social media. I actually follow this a lot. Especially in this situation of covid I actually see what other countries and companies do in this situation. There is different information to take into consideration.

Some people call venture investors gold diggers in that sense that they hunt for really worthy and financially promising ideas. Are you agreeing with that statement?

It depends on what stage you are. But yes, you need to filter much information and to support a right project.

And what are your, to say, “career plans” you may share with us: how would you like to develop professionally in this business?

I think that I am quite happy with my career now, so in the future I need to do more writing, more industry analysis, to have my own publications which will help to digest different issues or professionally explain some issues for the community. Becoming a contributor to some business or specialised media would be an option too.

Nowadays there are almost no offline conferences and networking. Do you need this? Do you miss those pre-corona times, full of professional events?

Now I attend many online events where I am invited like a panelist or an expert. I am open to learning other different areas and what people know about venture investment business.