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Ho Nam
Works at Altos Ventures
Attended Stanford
Lives in Menlo Park, CA
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Ho Nam

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Comparing the box.com IPO to the 40 top SaaS IPOs of the last decade http://www.altosventures.com/2014/04/analyzing-saas-ipo/
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Ho Nam

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Love this quote (paraphrased) from a customer of one of our portfolio companies doing big data analytics: "Without Kontagent we'd be flying blind. It's the first bill we pay after rent" http://altos.vc/pGT63m
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This is the first time in my life someone has referred to my job as "sexy". Woo hoo!
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Ho Nam

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During a time when people are selling stocks in near panic mode due to economic and political concerns, this Warren Buffett quote should serve as a reminder of what is important in assessing stocks:

“We will continue to ignore political and economic forecasts which are an expensive distraction for many investors and businessmen. Thirty years ago, no one could have foreseen the huge expansion of the Vietnam War, wage and price controls, two oil shocks, the resignation of a president, the dissolution of the Soviet Union, a one-day drop in the Dow of 508 points, or treasury bill yields fluctuating between 2.8% and 17.4%. But surprise - none of these blockbuster events made even the slightest dent in Ben Graham’s investment principles. Nor did they render unsound the negotiated purchases of fine businesses at sensible prices. Imagine the cost to us, if we had let a fear of unknowns cause us to defer or alter the deployment of capital. Indeed, we have usually made our best purchases when apprehensions about some macro event were at a peak. Fear is the foe of the faddist, but the friend of the fundamentalist.”

— Warren Buffett, Berkshire Hathaway 1994 Annuel Report
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Your call CSCO was gutsy. You got it right. Congrats. I was wrong with most critics on this one, though I did not short it.
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Replacing a CEO, especially the founder, is never easy. Boards don't like doing it but sometimes there is no choice. This post talks about when it's more likely to happen. http://altos.vc/oatczM
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Ho Nam
 
I added this to the post because some people are reaching the wrong conclusions from the data.

The data points out a strong correlation, not causation. For example, it's possible that VCs are more likely to replace CEOs in companies that run out of money and have to raise more rounds. It's also possible (and very likely) that start-ups that hire professional CEOs tend to raise more money and go through more rounds of funding.Founders are much more sensitive to dilution compared to professional management that are granted more options if a company goes through a massively dilutive round. Founders also want to maximize control. The biggest fortunes have been amassed by founders who have been able to retain quite a bit of control over their companies, sometimes decades after the IPO.

The punchline of the article should be "get profitable" rather than "avoid the 4th round."
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Linking to my blog post from last April about the iPad. Absolutely incredible that it has gone from zero to $6B last quarter. $24B/year is more revenues than 78% of Fortune 500 companies. Just stunning. http://www.blog.altosventures.com/vc/2010/04/who_is_right_about_the_ipad.html
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Ho Nam
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Yep, total bargain hunter. People said the same thing about IBM and Apple in the past. Those companies made it and so will CSCO. If you think they have no future, you should short the stock. I'm betting a lot of money that they will have a future. I don't see a single scary competitor which is a huge threat and the market will only get bigger. The world needs more bandwidth. There is almost an insatiable appetite for continued growth.
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Ho Nam

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Excellent article. Loved the football point spread analogy and this quote: "We need to turn executives from the useless, vapid task of managing expectations to the psychologically and economically rewarding business of creating value."
http://www.forbes.com/sites/stevedenning/2011/11/28/maximizing-shareholder-value-the-dumbest-idea-in-the-world/
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Ho Nam

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There's a lot of buzz around the gang of four shaping the digital future - Apple, Google, Amazon and Facebook. To me, it seems Apple stands alone in battling the titans of two completely different eras. At first, Apple took on IBM and Microsoft/Intel. Now, going against Google, Amazon and Facebook. An amazing history of innovation over 36 years. Unprecedented?
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Ho Nam
 
What IBM is doing now is impressive. Took them a while to get their groove back. Interesting to note that Watson Sr ran the company for 42 years. Then Watson Jr until 1971. Takes a long time for a founder to make his imprint and make a company great.

Even IBM floundered for a while. Billions in losses. I'm sure Apple will go through a tough transition at some point after Jobs. It'll be interesting to see what happens. He's learned from Pixar. He was both investor, majority owner and CEO (although not founder) and after his departure, Pixar has done fine without him. Apple has already learned once what it was like without Jobs. Hopefully, they won't forget those lessons the next time around.
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Ho Nam

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Apple's sitting on so much cash that it seems they will get even stronger as the market sinks. They will continue to lock up suppliers and guarantee lowest prices of critical components through pre-payments. Hard to compete against the new Apple which not only has better products but great prices.

http://daringfireball.net/linked/2011/08/09/apple-pricing
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They might surpass Exxon by the end of this week as largest market cap. They have been on a long winning streak. Great company.
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Ho Nam

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As congress works all weekend to resolve the debt ceiling issue, I have faith it will happen before markets come crashing down next week. Remember what Winston Churchill once said about America: "America will always do the right thing, but only after exhausting all other options."
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Since both sides are complaining about the debt ceiling deal, I guess that must mean that there was actually some compromise on both sides.
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Ho Nam

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In response to why Costco pays much higher wages than industry average (while the CEO gets much lower salary than average):

"Wall Street is in the business of making money between now and next Tuesday. We're in the business of creation an organization, an institution that we hope will be here 50 years from now. And paying good wages and keeping your people working with you is very good business." -Jim Senegal, founder/CEO of Costco, which has five times lower turnover than the competition and promotes almost 100% from within.

Costco has more than 25M members that pay annual dues for the privilege of shopping at Costco (that's more than a billion dollars a year in membership fees!).

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Really nice quote! I'm always amazed at how many companies make critical decisions based on Wall Street perception even if it doesn't make longer-term business sense.
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Have him in circles
1,868 people
Han Kim's profile photo
Work
Occupation
Venture Capitalist
Employment
  • Altos Ventures
    1996 - present
  • Silicon Graphics, Inc.
    1994 - 1996
  • Trinity Ventures
    1990 - 1992
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Currently
Menlo Park, CA
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VC
Education
  • Stanford
    1992 - 1994
  • Harvey Mudd College
    1984 - 1988
  • Phillips Academy
    1981 - 1984
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Male
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Hodong Nam
Best restaurant in the Bay Area
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reviewed 8 months ago
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