Invest in the Edge of Major Market Transformations: Seize Opportunities in Technological and Social Change

Since 2004, we have invested in 14 funds, covering over 230 projects across various fields including social media, marketing, development tools, education, healthcare, fintech, Web3 and decentralized systems, as well as energy and climate.

Looking back on the investment journey of the past 20 years, our investment themes have always revolved around technologies or moments of social transformation that can give rise to new paradigms:

• In 2003-2004, we seized the opportunity to build the application layer of the internet.
• In the mid-21st century, we recognized the immense potential of building new types of networks (such as social networks, markets, etc.).
• In the early 2010s, we began to focus on vertical networks (such as in the fields of education and healthcare), new infrastructure layers (development tools, fintech), and decentralized computing systems.
• At the end of the 2010s, as the position of internet applications became increasingly important in the global economy, we began to seek to expand our involvement with key resources and enhance our trust in these systems.
• Around 2020, in the face of the increasingly severe climate crisis, we began investing in entrepreneurial projects dedicated to accelerating the energy transition and adapting to environmental changes.
• Nowadays, we focus on the rapid development of large language models (LLMs) and artificial intelligence, as well as the demand for new forms of digital trust that arise from this.

After careful consideration, we have summarized the investment philosophy that runs throughout:

Invest in transformative opportunities at the margins of large markets under pressure from technological and social change.

The common characteristics we are looking for include:

Marginality

The "margins" of the big market are often the best incubators for new ideas and new methods. Marginal startups may initially seem strange, but they have the potential to challenge existing businesses in innovative ways. For example, early social media did not seem to compete with traditional media; early cryptocurrencies did not seem to challenge the financial system; many consumer learning products appeared not to directly confront the traditional education system.

New technologies make what was once impossible possible. These innovations may seem mundane in hindsight, but they required bold experimentation and exploration when they first emerged. Rapid trial and error is the best way to drive progress, but changing an industry is never easy, as established institutions and vested interests often resist change.

The "fringe" methods, such as consumer-first, productive consumers, developer-first, and open-source models, can bypass market gatekeepers and create space for free experimentation. This is exactly what we favor.

transformative pressure

Technological and social change pressures may disrupt existing market structures, creating opportunities for new companies and networks to meet market demands in innovative ways.

Technological pressures may include new operating systems, cryptographic assets, and artificial intelligence technology stacks. The most powerful technological pressures can give rise to new business models, which are often structural changes that existing companies find difficult to catch up with.

Social pressures may include global forces such as the climate crisis, the loss of citizen trust in institutions, or shifts in social norms and attitudes. These pressures can quickly trigger behavioral changes that were previously unimaginable or considered unlikely.

These pressures coming together may transform the originally static market structure into a dynamic one. Startups have the opportunity to leverage these pressures to adjust their positioning, enabling them to compete with traditional enterprises even when at a disadvantage. We are constantly seeking out these pressures to uncover opportunities for startups.

Future Outlook

Looking ahead to the next 20 years, as global changes accelerate and new technologies continue to emerge and mature, we will continue to articulate new discoveries. However, we believe that these discoveries will always be aligned with our core framework: seeking opportunities at the margins of large markets driven by transformative pressures.

We look forward to continuing to work with like-minded founders to explore and innovate together on the fringes of the market.