In a decade since Marc Andreessen’s famous Wall Street Journal op-ed “Software is eating the world,” much has indeed transpired. The broad shift in technology and our economy towards software has taken place. Today, software is a critical component of almost every business, almost to the point where we can think of every business as a software business!

Enterprise software, and in particular software as a service (SaaS), has become a key peg in this digital transformation journey. There are many established large enterprise software companies. Hundreds more are perhaps founded each year. What drives this interest in enterprise software? What’s the state of the union when it comes to SaaS technologies and their adoption? How are established companies and upstarts coexisting in this highly dynamic area? What is at the absolute forefront of enterprise software?

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To help us answer these questions, we sat down with Frank Wang, Engineering Director at Salesforce. Frank is an entrepreneur with hands-on experience creating software solutions, growing engineering teams, and developing go-to-market strategies. He’s seen the evolution of SaaS up close for more than a decade, between his time at startups and software behemoths.

In this interview with 7investing, Frank gives us his impression of where SaaS is in the adoption curve and delves into the pace of innovation at smaller companies versus established corporations. We discuss what areas are at the forefront of software right now and discuss some areas Frank finds exciting outside of software. We finish up with a discussion of 3 stocks Frank likes right now and why.

Timestamps

4:14 Building the Early SaaS Applications at Business Objects, Later Acquired by SAP

7:51 From SAP to Salesforce.

14:16 The State of Adoption of SaaS Technologies by Enterprises: A Look Back and Where Things Are Headed

21:23 David vs Goliath: How Upstarts Find Their Place Amongst Today’s Behemoths in Enterprise Software

26:49 Digging Into the Pace of Innovation in Enterprise Software

29:41 The Bleeding Edge of Enterprise Software: What are 3 Areas to Watch and Why?

34:14 Frank’s Interest in Investing: When, How and Why?

41:21 3 Areas of Interest Outside Enterprise Software

43:05 3 Stocks Frank Likes Right Now and Why

Transcript

Anirban Mahanti  0:01

Hello, everyone, I am Anirban Mahanti, lead advisor, one of the lead advisors at 7investing. And with me today, I’ve got Frank Wang, who’s an engineering director at Salesforce. Salesforce, as you all know, is one of the biggest, you know, SaaS companies on the planet. And, you know, I’ve been following Frank on Twitter, and we will give you the Twitter handle when we tweet this out. But now, you can also follow Frank, and just have interesting discussions with Frank.

You know, I love people who are at the intersection of technology, and investing. Because a lot of the investing that I personally do, and a lot of investing we recommend actually at 7investing are technology companies. And you know, we have a lot of SaaS companies that we have recommended, and I love it when we have people with that sort of background that we can still get, you know, the knowledge from the ground. So that’s what we are, you know, trying to, you know, we’re trying to learn a little bit about Frank today. And, you know, how did his investing journey begin? Who is Frank? What does he do? And how does he see the world of SaaS? That’s what we’re going to cover today. Frank, welcome to the show.

Frank Wang  1:12

Thank you for having me, Anirban.

Anirban Mahanti  1:14

You are most welcome. Frank, I want to start, you know, by asking a little bit about yourself, like, you know, where you’re from? How was your childhood? How did you do, you know, what did you do in the process, I guess, when you were growing up, and just just a little bit about yourself. So I think I find that very fascinating. Just to know that, you know, the world is full of people with such diverse backgrounds that we can learn so much from each other. So let’s start there. And then we’ll take it from there.

Frank Wang 1:44

Yeah, sure. Yeah, I was born in China. Particularly Wuhan, where it became famous last last year, because the pandemic originated from. Yeah, nothing very interesting. In my childhood. I was kind of a normal student. Normal life. Yeah. So. But, uh, yeah, I think that maybe the interesting part is Wuhan. He got a hit last year really hard. We have like about 11 to 12 million people in Wuhan. And when the pandemic started, really, it locked down the whole city, my parents, my relatives, everybody’s there. It creates these really, really scary moments. And my parents actually stuck in the, in their condo, small apartments for like three to four months without going out of the door. So yeah, and they were so worried, oh, are we even getting food? Are we going to be hungry to death? So fortunately, yeah, the government really, really like kind of pushing the whole country to deliver food, giving supply to the city. And, and so my parents are actually getting food every day from the community, they send food, drop-off outside the door. So finally, they get past this really quickly. But it was really scary. Watching the news. Especially when I was here. I couldn’t help them.

Anirban Mahanti  3:26

Yeah, like I mean the pandemic has been, you know, rough for all of us in various different ways. Right, you know, we’ve all been separated, especially, you know, people, you know, you and I, immigrants in different places. And we have families in various parts of the world, which we haven’t seen. I haven’t seen family for a long, long time. So I totally appreciate the difficulties.

I noticed that you then landed up somehow in Canada, and you went to Victoria. So I’m just curious about that. But I also saw on your, on your LinkedIn profile that you did a couple of startups along the way, or at least were part of a couple of startups, I think Swap Guru and Delight Read were a couple of things that I saw there.

Tell me a little bit about you know, landing up in in Canada. And, you know, doing those startups?

Frank Wang  4:14

Yeah, sure. So after I graduated from high school, I, I was sent to Canada to study and so we landed in Victoria, Vancouver Island, near Vancouver. It’s a beautiful city. So I was kind of studying computer science there with a business minor. And yeah, I actually didn’t know a lot of computer stuff  before I came to study in the university. So a lot of catching up to do a lot of interesting projects, everything so it really stimulates my interest into learning more and more computer science stuff.

And fortunately, I was landing an internship in a company called Business Objects later acquired by SAP. So I was doing some interesting projects there. And then they offered me a job after I came back to school. And then later on I, after I graduated, I was fortunate enough to just to work there without worrying about finding a job if I couldn’t find a job, like within three miles, Canadian, like you cannot stay in Canada for for long. So I was fortunate about that. And then later I get the immigrate status. And I was working at Business Objects for six years in Vancouver. Yeah, we’re literally building the first SaaS kind of applications there. And I was involved in many different interesting area of, of work.

For example, my first project was actually to kind of migrate data from Salesforce into SAP data warehouse. And then we can do very good BI,  business intelligence reporting on top of the data, because at that time, Salesforce does not have a very good BI tool. So it was very interesting. I worked on, like, from the data warehouse, to the web service backend to the full stack, everything.

So after doing a couple of these kind of projects, everything, I really want to start up my own kind of a projects or startups, that was kind of my dream, even until now. So I started with a project called the Swap Guru. So the idea was just kind of selling used items, making friends. So kind of like a social type of things. Yeah, so today, I think it’s something very similar is like, let go or offer now. So at that time, yeah, I kind of imagined similar things. And under the other project I worked on was like, kind of like, personalized the news. So we are renting the news, which, once you browser, you can deliver perfect, interesting news to you. So that was like, back a long time ago. So today, we have very similar services as well. So it’s just I always like to explore things. So but I never thought about investing in the first place. I was just thinking, Oh, building startup everything. So yeah, that was a kind of leading to my regret, I guess, started really investing last a couple of years.

Anirban Mahanti  7:39

So how did you land in SAP? And then how did you land up in so from SAP to Salesforce? Like, what’s the journey there?

Frank Wang  7:51

Right, um, so after I build up a lot of a SaaS applications in Vancouver, there are some opportunity came up in SAP in, in Palo Alto office. So they want to build the first generation of SaaS for kind of a data migration tool. They’re kind of like Mulesoft, you know, in a sense. So they kind of find me in Vancouver, me and a few other colleagues kind of moved to Palo Alto, we build out this new product here. And then later on, I joined Successfactors, as well, which is doing like HR, similar to Workday. And, and then after that, I really got in getting my status, everything ready. So I, I jump into a small startup called a health tab, which is doing exactly what the teladoc is doing today. I was there for like, three, three to four months build out the kind of the, the video chat application with a lot of rich UI in iOS app. And then later on my, my boss, he joined this startup in joining this startup, very, very early stage, so I joined them. And then last year, we got acquired by Salesforce. So that’s, that’s how I ended up in Salesforce. Long story.

Anirban Mahanti  9:16

So what I’m curious about is, you know, you one of the things you didn’t mention is a time timeframe. Like when, when we’re actually building these SaaS applications for SAP, like, you know, the BI, you know, the warehouse and data warehousing applications, and then when were you actually building you know, like, a telehealth applications like what, right, right, what, what, what was your timeframe?

Frank Wang  9:42

Sure, I can give you a little like kind of timeline. So I started 2007 to build out this data warehouse. So at that time, we call business intelligence on demand. So kind of, we have a really core product called a Crystal Reports. So we are kind of moving that on premise software into the cloud. So you can kind of mash up data with analytics. So you can kind of collaborate there. So I build something like that 2007 to 2009.

Also, we’re also building another product very similar to today, I guess Slack, Chatter, Salesforce Chatter or some other, like kind of Twitter in the sense for enterprise. So I was also building out of that 2010, 2009 ish.

And then 2012, I guess, we I started to build in all these data services, moving the data into SAP type of products. And then 2012, I, I, I was working on Successfactor, kind of human capital management, mobile apps.

And then 2014, we started building out the health tab. So they already have that at that time, they already have like 15 million users, kind of like Cora, so you can post questions doctor will answer your questions, but they don’t have a way to talk to the doctor directly. So that’s where I joining and then build out this a very interesting video chat, video calling feature, we charge you like $100 per month, we thought we can get like a 1% 2% of our customer base. Yeah, so it was an interesting journey, we work super hard, nine to nine, six days a week. So very, very interesting.

Anirban Mahanti  11:41

One of the things that I find very interesting what what you said is just that’s just like we look at the timeline, and when you are doing things, a lot of times what happens is this is anecdotal, right. But, you know, you’re building the first, you know, among the very first SaaS, you know, human capital management software, which is probably what, like 10 years, 15 years before, you know, SaaS has become trendy, right, then everything is now on the cloud and sassy. Right?

At the same thing. If you think about Teladoc or other, not, let’s not even use Tilak as example. But you know, telehealth is sort of, you know, just maybe now hit this. Maybe inflection point, let’s call it for the lack of a better word, but it is sort of now migrated from being niche to being, you know, maybe more mainstream, right. And what happened to this is very common in technology, where we see that a lot of things get developed early on, and then they’re just too ahead of their time, and that they, you know, get shelved, or, you know, they didn’t have the right go to market strategy, or they didn’t have the right in the technology was not mature enough. To enable it. You’ve seen that many times, like even in things like, you know, tablets, right, you know, the iPad is not the first tablet. You know, and you know, the Palm Pilot is probably one that people would remember as well before the iPhone and things like that, right? It’s a lot of things that technology is just not mature, but you the people who have experienced it have seen it, and then technology matures, and then you know, it starts becoming mainstream.

And that’s what I think from an investing point of view, it becomes really, really interesting. So I find that aspect of your story very interesting is that, you know, how, how these things happen ahead of time.

Switching gears a frame, you know, and we’ll come back to such investing that maybe let’s switch gears and talk because you talk about SaaS, and SaaS being mainstream. You work right, I call Salesforce, the granddaddy of the SaaS world, it’s the you know, I guess the biggest one of the biggest SaaS players in, in the world today. So I guess what I’m trying to think about is, if you think about the SaaS industry today, how are you thinking about, you know, adoption in enterprises? Like what you see are, you know, enterprises clearly realized probably, that they need to use SaaS tools, they probably need to be on the cloud. But what do you see how, what do you see has been the, I guess, the journey? Right? If you go back five years, what was the sort of level of acceptance and you know, what, how much did you need to push to get sales done, and people to realize the value of the technology and, you know, just the the paradigm shift in usage?

And then if we go today, where we are in terms of the journey, and I guess, you know, is it early innings? You know, second innings third innings? Right, that sort of, you know, I’m just trying to understand where you think we are in this journey?

Frank Wang 14:46

Right. That’s a great question. I guess I can give a little bit background how I observe these because when I was in SAP or when I was in Successfactors. Yeah, because the company already very big. So we already kind of kind of doing your own focus area. So I did not observe a lot of activities until I joined this startup called velocity. I joined as like number 11 employee there. And we say in five years, we grew to over 1000 employees 20, office globally, we have about 200 customers, big customers. So I, I kind of played all different roles in the velocity, starting from engineers to, you know, building the team and building the products, and then sort of selling into customers. And also helping customers deploy, go live everything. So I talked to a lot of customers.

I sort of see the journey, being in Silicon Valley really give you some kind of forward thinking, a thought everywhere is the same, but it’s actually not, quite different, the opposite. So for example, I can give you some examples. One of the biggest insurance companies in the US did not even know all until 2014 2015, they were still mainly using papers, to, to collect information and go door to door to help their clients. So they really, they wanted to transform that into, you know, into using tablets, recording the data in a digital way. So they can collect data, they can do a lot of interesting analysis. Also be more efficient, in a way.

But I did not know there’s so many customers actually still using papers, still doing the old way. So yeah, so that that’s kind of mind blowing.

And in terms of where I see the trend, so quite a few years ago, I think customers are always willing to pay us, because that’s their kind of culture, oh, they will use to pay, you know, like a lot of money for Siebel systems back in the 90s. And then later on, they will still willing to pay in Salesforce. So they are willing to pay. But the mind shifting into SaaS is getting accelerated in a way. Because before we’re trying to push them all you got to do this, because this will you know, save your money, save your cost and deploy faster, we we come up with a lot of a value propositions for those customers trying to convince them.

But later on in the when we are in a later journey. A lot of customer you know this is do or die moment, they have to transform, otherwise, they’re going to beat by other competitors. Like one of the competitors.

One of the interesting thing is we’re doing many different verticals in velocity. We’re doing like insurance, telecommunications, we’re doing like government, many different verticals. So the trends a little bit different from each vertical, like telecommunications, actually, much more advanced vertical than health insurance or insurance space. But later on, they are picking up.

So one of the interesting thing is insurance space, we got a few bigger customers, and they’re like, oh, there’s a little startup called a Lemonade, they are really grabbing our shares they are creating something really cool. You know, you can easily just using the app to get an insurance quote, we want to do something like that. So actually build some something similar to Lemonade, mobile apps to help all the insurance companies.

So it’s sometimes it’s not about the technology to build out the Lemonade technology is not that difficult, but is how the business can transform. Because even they have this may or may not be easy for them to adapt, because then what what happens to their existing customers how they are transforming, right? But they clearly see the need of transform. Otherwise they will be you know, be behind a lot behind.

Telecommunication is the same. We work with Verizon, they came up with a sub brand Verizon Mobile, and it’s cheaper, very easy to sell in self service mode, and people can just sign up by themselves.

So yeah, a lot of transformation all around the globe.

Anirban Mahanti  19:27

And so, I was gonna say that, you know, I think you know, that makes sense that there’s a lot of transformation happening. Certainly industries are potentially just you know, starting to adopt. Some industries are well advanced in their adoption phases of, you know, technology digital transformation, as you rightly put it.

One comment that you made what I thought it’s very interesting is you said that, you know, certain things like you know, that’s not even you know, be specific to say Lemonade as an insurance you know, technology that is making insurance easy. But a lot of the time, I think what you’re basically implying is a lot of the time the technology underlying something is potentially not groundbreaking, not that difficult. Right? This, this will be, of course, you know, there’s, you know, I guess the, the limiting factor probably is high, the engineers you need, and, you know, having a product manager or a, you know, chief technology officer who can build the roadmap, and then, you know, building the product is number one, and then I guess, having number two a go to market strategy.

So, related questions, this is real, there are tons and tons of competitors, they’re propping left, right and center, right. So a Lemonade could say that your insurance market is fragmented, and I want to get in with technology as an edge, and then capture market share. So lots of different, you know, as you said, Slack, for example, just got acquired, right. But it did build a a pretty significant business being a chat application effectively, right, if you think of the basic chat applications that have been around for ages, right? I mean, you know, people used to do Yahoo chats back in like, you know, in the 2000s.

So, I guess if technology is not a differentiator, then how do you see the, the landscape, right? I mean, there’s new companies and existing companies that are trying to, you know, maintain their lead. How do you see the tension? And, and how, I guess, how do you distinguish between, you know, what’s going to win? And what might not win? I know, this is a difficult question, probably. But, you know, as someone who works on these things, what do you think?

Frank Wang  21:34

Right. Um, so usually, why those startup companies exist, is they usually maybe aninsider, excuse me, and they observe some huge pain in customers area, and bigger companies, they are not addressing it quickly enough. So that’s why they like Eric, from zoom video, right? So he is kind of frustrated, he comes out and builds his own startup, really addressing the biggest pain point for customers. So that’s how they started. And later on, when they build him better and better, the bigger company will notice this all this is now becoming a little bit more interesting competitors, and they are eating our space, we want to get into so they start to building out similar, maybe shifting their focus to to compete in certain area. So there are always going to be, you know, a very, how do you say like a very good healthy competition, because in the end, customer will getting all the benefits, right?

So I guess the bigger advantage for the bigger company of courses, they got a lot of more resources, a lot of bigger, you know, presence, they can leverage their existing, you know, ecosystems to, to say, Oh, you want to buy this, you know, Marketing Cloud, but you will get in a benefit of moving to other clouds. So, so then you don’t have to worry about upgrade, and we always have the biggest, you know, all the feature for you. And then in a smaller company, they will help address the problem quickly, they will, you know, tend to the customer, you know, helping customer more deeply, because they basically, live with the customer, you know, so there will solve the problem faster.

So then customer will have a kind of a interesting dilemma. Who should I choose bigger company, or the smaller ones? Right. So I think that that’s where the kind of the the competitions are.

And then in many case, why nowadays there’s a lot of microservices a lot of a plug and play type of software is because the customer realize all I probably buy Oracle, or some bigger company does not going to solve all our problems, and may not can differentiate us to our competitors in some ways. So I want to pick, choose the best part of each different components. Let’s say if I want to, you know, if I want to build a cloud, I probably pick like AWS. But if I wanted to do analytics, I, I maybe pick a Google GCP Google Cloud Platform, and I maybe pick, you know, deploy somewhere else, like for CloudFlare for CDN, or may want to build a maybe portal using CRM, so they want to choose and pick their best technology they think. And also it also depends on the customer, who their teams are. If they have a very heavy IT team, a very talented developer team. Maybe they will choose differently than some other customer they just do things differently. Right. So the I think the startup have a have a good way to kind of see the picture and pivot to the needs.

Anirban Mahanti  25:18

Yeah, yeah, I actually love that. Because I think what you described is basically ecosystem of innovation, right? There is always going to be, you know, there’s gonna be pain points that companies, you know, there’s so many pain points that you need to address, it’s just hard for a big company to choose and select which one thing to do, right. So there’s always going to be an issue of I want to focus on this, this is my core business, and I’m going to focus on that. And if somebody has a passion and a business, that’s not really the core business, then they may be spinning out, or, you know, doing a startup to solve that problem. And then they eventually, you know, because it’s not the core focus of anyone.

I think the Eric Yuan example of video calls, you know, we’re using zoom today, right? I mean, video in some form has been around for a long time, right? That’s been Skype there has been no, there’s, there’s been WebEx there’s been so many other things. But this just made it slightly better, a little bit better, a little bit easier to use, with a good market, you know, go to market strategy that you know, and then you you become the product of choice, once you become the perfect choice, you can quickly grow. And I guess competition doesn’t take note of you until you’re big enough. At which point, I guess you have the best people developing the best solutions in sort of the video world for you. And it’s, you know, it’s a competitive game. Right? Which I think it’s fascinating. And of course, the markets tend to be pretty big, right? if, if, if, if zoom is this big today, it is because this market is big, right? And video comms are important. And so I love that I think that’s a great, interesting insight.

Frank Wang  26:49

One thing I maybe I can add a little bit, I think it’s a common kind of misunderstanding from the investor point of view, I think it’s a missed understood opportunity here is that they all think, Oh, it’s a big company, they’re gonna have, they’re gonna run the smaller guys, they’re going to crush them. Because why? You know, like, why AWS CloudFront cannot build something that destroy Fastly, or CloudFlare. So from the bigger company perspective, actually, it’s a lot harder to disrupt the space, in many ways, like, one way would be, you know, it’s, the bigger company already have a ton of different feature, they’re going out, you know, according to different cadence is very difficult actually, to say, I want to quickly build out these and deploy to customer, like, within like a month, it always has to go go into like, slowly. So that actually add a lot of constraint.

For example, when I was in velocity, we build out a feature that a customer wants, maybe two or three weeks, and then ship it to customer maybe like in a month or two. But, but for a bigger company, they probably take like six months to a year to really do the same thing, push out the door. So if you multiply that by a lot of more requests, a lot more feature, you can imagine a big company will be much, much more delayed in that sense. So I yeah, like in terms of talent, probably, they got both got a very good talent, but because the process, the way they ensure all, if I deploy this feature to like, a million different customers, how can I assure all customer getting the same, the best quality, they don’t report error to us, whatever they, you know, ship a really unpolished feature, then customer will feel all the meaning of them will have like mission critical states. And then yeah, the company will get burned, right, the big company, so. So yeah, it’s just the, it’s too big to really move it fast enough to accommodate a customer’s needs. So that’s where I think the smaller company has a huge edge.

Anirban Mahanti  29:10

Excellent. I will ask you one more thing about enterprise software before we move on from enterprise software. Where do you think in enterprise software, there’s gonna be most value created, say, the next 10 years? Like what what’s the, I guess, the leading bleeding edge of enterprise software right now? Just not even? Not specific companies, but just the areas like which, which ones are really like if you had to pick three, top three enterprise software areas? What would they be? And why? I guess?

Frank Wang  29:41

Yeah, so I think why SaaS company, create value. I think Andreessen Horowitz wrote a paper saying software is eating the world, like back 10 years ago, and somebody else quoted you know, everything company will becoming a technology company, otherwise they will be, you know, eliminated obsolete. So now a lot of companies, they want to transform, they want to, you know, digital presence. So those SaaS company can help them, you know, get there also, you know, make them more efficient, in a way, lower cost of their internal, you know, organization, they probably can do things like five people instead of 10 people before, like before you have a huge IT team. Now, the biggest company has a very small IT team, that says a lot. So those are the areas that SaaS really creating values here.

In terms of the trend, or the big needs, I see, pandemic create this really big huge working from home trends, hybrid working mode. But the software really actually not very good, right now. We can only using zoom, maybe some slack, or Microsoft Teams are really, you missed the environment of working with your team, because it’s still different.

So I think that’s a big area, a lot of a company will try to do something really good in this space to make you feel in the future. It’s equally the same as working from home or working in the office, we already see some kind of a shift before, because before you have to be in the office, you know, because we don’t even have a zoom or some software, and all the servers, you hosting in the companies. So you have to go to a company to, you know, to do things. But now everything is in the cloud, you don’t have to go to office. But I think we’re going to go into much further, further advanced in this hybrid working software. So I think that that’s one. So there’s a lot of going to be a lot of collaboration tools, a lot of video tools, a lot of tools that help, like really just talking each other, like clubhouse type of things. So that’s number one.

Number two is, you know, the data, we’re getting a ton of more data. So the data part will be so how do we make make the data make sense? So like the machine learning AI, on top of a data lake data warehouse? That’s sort of a innovation, I think it’s going to be driving the future, as well. And then the third one would be how do we further enhancing the the enhancing the like the collaboration, make sure like eliminated cost, like the UiPath is one of the company I really love like five, even five, six years ago, I look at their demos. So they’re really eliminate a lot of manual work, anything we do repeatedly, I think it will be easily eliminated in the future. So like the machine, or the computer program can do it for you. And human should be focused on innovative creative work. So I think that’s where we’re going. So Uipath, or like the newer kind of robotic processing software will be a big, bigger space, in my opinion.

Anirban Mahanti  33:15

Okay, so robotic automation, automation, basically, of almost like it’s like outsourcing that to the robot, right. So, you know, one version of outsourcing was business process outsourcing to humans at a cheaper labor point. Now you’re saying that, you know, the next step, next step is to outsource it to software that’s potentially cheaper than the human. Which is interesting, because has implications for jobs in various locations? Excellent.

Okay. I want to ask you some investing things and then we’ll come back to sort of investing areas. So I guess, quickly, when did you start get actively interested in investing in or taking your knowledge and applying it to investing and then sort of, you know, briefly, you know, what you were doing in sort of your earlier, you know, early days investing what you’re doing now, so how is your investing journey or process changed? You know, if you if you want to share that with us.

Frank Wang  34:14

Yeah, it’s changed a lot. In my 30s in my 20s, I never thought about investing. I, I just really interested in building a startup. So my friends told me something interesting idea, like, oh, investing gold, so I actually bought some gold bars until now. It’s still in my security box. I bought it in 2008. It’s worth practically the same. So that was a really bad investment.

Later on I because I was getting married and everything. So I bought some properties in Canada, but that wasn’t really interested in investing. I was just buying a condo moving to a townhouse. I couldn’t sell my condo. So I kind of kept all my properties nowadays, So when I realize all actually it was a good investment, I made some made some money on that. But by serious investing, I think started in like 2018. So it’s just a few years ago. The reason I was doing that was you know, like, my, my wife actually diagnosed from stage four cancer in 2018 2017. December, and it was devastating, you know, news for our family. Yeah, I have two young kids, they are now nine and five.

So at that time, I was kind of a shock to everything. So and then, yeah, so we kind of went to doctors, everything. I was doing research on like, a biotech kind of a, to help her. That type of thing. And then 2018 I, you know, I thought about all what I’m going to do in my future. Because I need a plan. Right? So I started thinking about how to invest. Yeah, and and, uh, yeah, I was like, watching watching YouTube doing a lot of research. At that time, I think also, because of my wife’s kind of condition, and also like kind of things. So I was less of a hands on coder in my company. So I was kind of managing people let them to do the work instead of me. So I have a little bit more time, but a fragmented, so I was just trying to do a lot of research on how should I invest. So I came across like, Phil town, like Mohnish, Pabrai, a lot of value investors, Buffett, Charlie Munger gave me some good ideas. And I switched a lot of different investing styles as well along the way. A really, I think, my like, really, the ones I really liked was from Motley Fool. At the time, I came across David Gardner. His like YouTube channel, and what he said about the Rule Breakers is really hit my heart. I really like it. So I subscribed, and then listen to them, I think. So the investing not only changed my kind of a financially, like changing my life, in a way, but also, it helped me overcome my fear. Because at that time, I was in a very hard situation. And every night, I was just listening to some recording from the Motley Fool. And other investors have also changed my kind of listening, a lot of motivation, video, videos will talk. So it really changed my mind, focus less about my, my wife condition, more of how I am going to, how are we going to talk through that? So so that’s how I started and yeah, really, really, really helped me. And learning a lot of, you know, the history, the presence, the big picture, the micro, economics, the future, so it helped me.

And then last year, it was difficult because my wife passed away last June. Yeah. But, uh, but I just keep going, keep keep, like, looking forward. I was of course in a, like, devastated, you know, depressed state. But, uh, yeah, investing is really helped me. So I still continue to do my ritual, you know, keep learning keep doing things. I counted from 2018. Like, I started 2018. June. Until now, I spend over almost 10,000 hours in investing, like just learning different things, everything. So yeah, now I think I’m getting getting better getting back on my feet and everything. So, so yeah, so that that’s kind of my journey.

And along the way, I get to know a lot of people from Twitter a lot of good advisors like 7investing was one of the service also look it up and watching you guys talk, also smoothly, not just, you know, the talk, the stock ideas, but also kind of like I have a friend, they’re kind of talking. So really, really helped. And so yeah, that’s kind of my you know, habits now just watching 7investing, watching Motley Fool, a lot of good investor their mindset, focusing on the long future. And now I have a goal. My goal is to really because my company got acquired, so actually got a very sizable amount. So, so I want to build this in the longer future, maybe 10, 20 years, maybe in 10 years. I want to start to have some funds going to help him like other patients like my wife, cancer patients in China, because they couldn’t afford a lot of expensive medicines. So they sometimes they don’t get a treatment. So I want to help them, you know, with my funds. So that’s kind of my goal for investing. And then myself, hopefully, these funds is large enough. And comfortably, I will do my own startup. So that’s kind of my future goal here.

Anirban Mahanti  40:25

I did not know this story, Frank. You know, my, my sympathies and condolences with you, I actually didn’t know that your wife passed away. So I’m so sorry to hear that. And it’s good that you have figured out a way to you know, move forward. It’s really hard, right? I mean, moving forward, when when you lose, you know, near ones and dear ones. So I understand, sympathize and know, offer my best wishes really going forward. I appreciate that. And I really like the fact that you’re, you’re thinking about doing something for others, which is really commendable. That’s excellent.

I was gonna ask you. So outside of software, enterprise software, what are sort of, few areas that you watch? You know, what’s exciting and why?

Frank Wang  41:21

Right, um, I think you really like the biotech, you know, healthcare industries, because I while I was doing research, for my, for my wife’s conditions, I came across a lot of good companies that they are trying to, you know, help their patients help the world run better. So, definitely in 10 years, I want to focus more on that, right now, I realize it’s very difficult to invest in that space. I invested a couple of companies later on, I transfer bigger fund into ArkG type of ETFs. So that helps.

Our personal interest. I really like ecommerce space, because I build a lot of us kind of startup ideas around e commerce. So that’s one area I like. And then EV is another place I really like it just I just love like Tesla and some other Chinese EV cars. So invest in that place, watch a lot of videos. So yeah, that’s and also ecommerce, EV, it’s similar. It’s just sometimes different matrix. But once you get a feel, you know how to evaluate them how to how do you invest? So? So yeah, those are my area of interest.

Anirban Mahanti  42:41

Excellent. Okay. So if I asked you to be a stock picking person for one day, and I said, Okay, give me three stock ideas, which three companies? Would you be comfortable saying that the interesting buys at today that people could potentially hold for the long term? I’m just curious, what do you think, are interesting ideas today? And why? Okay,

Frank Wang  43:05

Yeah. So for my investing, I really like to invest in, you know, a great product first. And then the product can addressed a large space, following maybe a big trend. And then I really like to, to invest in leadership’s because when I, when I was in velocity, I see the how leadership can overcome those really, really difficult situations. So no matter how great the, you know, the products or the company, you’re always going to have lot of issues. So the leadership management are really important there to solving the issues. And also, the last one would be, you know, like the potential growth, also very important. So based on all these criteria, I, I, I kind of have my watch list or the stocks I own.

So, like my favorite SaaS company is Zoom videos. So definitely I want to invest in that. Because it’s, it’s really a great product, right? So we started from very small, but last year, even during the pandemic, he got like hundreds, millions people using that and they don’t like crack down like everything is working smoothly. So they got like great leaders and great engineering team everything. And now it’s cheaper than ever. So I was actually running a chart. Right now the EV, EV to sales ratio is like 30. So it’s cheaper than 2019, 2020. So with so much improvement under they are relatively you know, cheaper zoom, so I would definitely invest in them. I think in 10 years, probably zoom will be our major way of doing everything communication wise, doesn’t matter, consumer or enterprise price. So I think they’ve got a huge way to go. So that’s number one.

Number two, I like Fastly. I also like CloudFlare. But Fastly, I think it’s, it’s misunderstood, the opportunities here, they got a really great products. Average selling price of now is like $800,000. And get the best company to using those products like Shopify, Ticketmaster, a lot of great companies using them. From the startup point of view, I know how hard it is to sell into those the best company in the world, it took years, and they don’t have a really great sales team enabled, but they already can sell to those companies. And, you know, so that says a lot about their products. So now because of their difficulties, right now, I think they are in a very attractive EV to sales multiples, if they enable their sales team, they can really grow, accelerate their growth. And then they can be like, growth and multiple expansion. So they can achieve like 10 times I believe Fastly, if they can execute well, it will be 10 times from here in five years. And they also behind a cloud edge computing trend as well. We already see a lot of good applications, they can just deploy to the edge computing and you don’t have to reload using the like centralized servers anymore. So that’s the second one.

The third one would be I like to I like to invest in a little bit early in the in the trend, like lower multiples still, but a great potential companies, Pager Duty is one of them. I really like from two years ago that IPO until now their stock price did not move a lot. But they have actually doubled their customers, they create a lot of more software features. They they just got a lot stronger, but their prices are not moving much. So actually I entered in a very good price. So now it’s like already 60% up, but I think they have a long way to go. A lot of time in in the company, I see we are using a lot of new software. So like pager duty. I really like it. So you really can help team organize make it efficient, some other software as well. So this is one of the another area or category I like to invest. So Pagerduty is in this category.

Anirban Mahanti  47:44

Pagerduty is audio software. What does Pagerduty do? I have not looked at pager duty carefully.

Frank Wang  47:52

PagerDuty is an instance management software. So basically, they help resemble if there’s any issue with production, they will send notification to whoever is responsible either developers or it or DevOps. But they organize in a way that it’s easier to coordinate, who is actually on call to help out on issues. Because we are moving to the cloud, you could deploy to AWS, Azure, many different cloud pieces with micro services. So you need a monitoring software like DataDog to monitor. But if there’s any issues, Pager Duty will be helping out on that. Like, oh, this guy’s on call, we reach out to him, and he can solve the issues. So I think because of this bigger tailwind to the cloud, so we really need this kind of incident management software.

Anirban Mahanti  48:53

So this is like taking the Motorola sort of phone that the police and the fire people used to carry long time back and basically saying this is the software version of that sort of, sort of like, you know, taking the you know, making, I guess audio calls or pings or text messages or whatever, sort of this basic idea. Very interesting. Okay, cool. Okay,

I guess the final question, or is what would you say to your younger self, like, from an investing point of view, for example, what would you do differently? And what advice do you have for people want to get into investing and start the investing journey?

Frank Wang  49:34

Right? To my younger self, I because I started investing really late, late 30s it’s never too late. But uh, I would tell my younger self usually invest early,  make mistakes and then learn from it, finding your you know, your expert areas, and then just keep doing what you’re doing and build build a financial independence. So Then you can go on more free to do whatever you want to do. And that is really actually, because my company acquired. So actually my perspective changed a lot. And my wife, of course, my wife instance, so I’m, I feel totally different from before. So I think if, if younger myself, start investing early probably will be changing their perspective and learning more different aspects of the things. I feel invest really opened up a lot of new windows for me, in a sense, as far as for, you know, whoever is investing, I think, I think we should invest in a way that I read, like, I think the David Gardner, quote, you make your investing really reflected the future of, of what you imagined in a world. You treat your investment as your you know, you are a stakeholder of those companies, and you are kind of working with them. Let them create, you know, a new future for us. So, we should think about long term, not just oh, I want to gain like 30% 40% if you are looking at gains, just like startup, you will be very short term focus. You wouldn’t make the startup really huge to address huge problems. So I, I hope everybody can thinking longer term and really make your investment like, like,  meaningful impact in the world.

Anirban Mahanti  51:35

Thank you. Thank you, Frank. I enjoyed this conversation. To our listeners, 7i listeners, Frank Wang, engineering director at Salesforce. If you want to follow Frank on Twitter it is @FrankYenWang. Give him a follow and hear his thoughts. He asks lots of questions on Twitter, which I find very interesting. And yeah, thank you, Frank, for being with us today, spending your precious time, and stay in touch.

Frank Wang  52:09

Thank you so much for having me. Thank you.