This interview is with Linus Liang, co-founder of Embrace, which manufactures and distributes a low-cost infant warmer to mothers in developing countries. The interview was conducted and summarized by Andrew Chen. (Download the full audio recording of this interview here.)
Q. Tell us about your background.
A. Sure, I’m 30 years old. I have a B.A. in computer science from Berkeley and an M.S. from Stanford, also in computer science. Right after I graduated, I was a program manager at Microsoft. I worked there for two years before I went on to start several technology startups. The last one was a social gaming startup, which I eventually sold to Zynga in 2008. Afterward, I decided to try something different, so I started a social enterprise non-profit, called Embrace, where I was originally the CEO, and now I’m a special advisor to them.
Q. Tell us how your career path took you to your current role, and what were the key thought processes you went through at critical career decision moments along the way?
A. The career path for Embrace really started from my first job after college, which was at Microsoft. I worked there and it was a great company, but I was really looking to do something that was more impactful, something where I could change the world.
That’s how I got into doing startups. Being from the Bay Area, this is a community where a lot of different people are trying to change the world. So I did several technology startups. Unfortunately, they didn’t go really well, but I learned a lot from those experiences and the mistakes I made. I made a lot of mistakes in those first couple companies.
After that, I decided to pursue other things. I was very interested in design, and Stanford actually had a class where they teach you about design, and then you go and do something to actually try to change the world. They give you a social challenge and you try to tackle that with a team of students from different schools, like the business school, the law school, the medical school.
All these different schools come together to try to solve a problem in this class, and that’s where the concept of Embrace really started and was formed. So we did the class, and we actually came out with the product that we’re actually distributing right now.
But after the class ended, because I was actually a little older, I was the one who graduated first, and my other co-founders were still in school. So I went back to the technology world, and I did a social gaming startup which I eventually sold to Zynga.
After I sold that, I was looking for what I should do with my career next. I had done technology and I felt I was very successful at that. But I was really looking for something that was more impactful.
When I was making social games, it was very interesting and very challenging. But if you look at it and ask whether that really made the world a better place, whether it actually caused change that you wanted to see, I didn’t really think it did.
So after I sold the company, I actually started another company, this time in the mobile gaming space, but halfway into that company, my other co-founders from Embrace finally graduated from Stanford. They decided to take Embrace forward and they asked if I wanted to join.
I said yes. This was something I always wanted to do. It was the right opportunity, and I was never going to find people who were smart enough or capable enough to do something like this in the future. So even though my other startup was beginning to make a lot of money and ramping things up, I actually decided to quit the mobile gaming company I co-founded to join Embrace.
And when I left, my co-founders were very curious why I was packing up and leaving when we were just starting to ramp up. But I had this calling and I knew this was something I just needed to do at this point in my life.
So it was a very big career switch, transitioning away from something that was purely for-profit to a company that was non-profit and was purely trying to make a social impact in the world.
In two weeks, I left my other startup, moved out of my apartment, and booked my ticket to India, which is where Embrace was located.
I’ve been living in Bangalore, India, for the last three years, because the philosophy of Embrace is that we want to be very user-centric. We want to be very close to our users, to really understand them, to really make sure we understand what they need and what they want. So we can come up with a solution and make a product that is really catered to their needs and requirements.
We have to be on the ground to do that.
Q. Tell us more about what happened in that Stanford design class that inspired you to ultimately pivot your career toward the social sector in the second year after you graduated?
A. Well, I don’t think it was what was taught in the design class. What they actually taught in the class was how to design products that had the user in mind. How to really understand the user, how to figure out what is the solution to their real needs. Because most of the time, users don’t tell you what their problem is — they complain about a lot of things, but they don’t have the solution because they don’t know what the solution is. So that was the class.
But I think the good part about that class was that it brought together students who were very interested in making social change. It’s a very selective class, and everyone who is in it has to exhibit some passion or desire to do that. And I’ve always had this passion and desire to do it, but I don’t know if I necessarily had the strength to really go and make change. Because it is such a daunting task, it is something that is so grand and challenging, that I didn’t know if I could actually do it.
But being surrounded by other people who are just as passionate, and who share that vision, actually strengthens your ability and makes you want to do it. And it makes you believe you can do it. And meeting those types of people and having those connections, and having them last throughout the next couple of years afterward, really helped give me the courage to make the leap and do it.
Q. Tell us what it was like to build Embrace from the very early days of working full-time on it to its current form, and how did your role evolve from those early days to your current role as special advisor?
A. My role has actually been changing a lot.
So Embrace makes a low-cost infant warmer. It’s a very simple device. It looks like a sleeping bag, but behind it is a special chemical that we designed that can actually store heat and then release it over long periods of time. And the idea here is to give babies this heat to stabilize their temperature, because premature and low birth-weight babies need this in their first few days of life. So if you can give them this care effectively, they will grow up living healthier lives.
So we designed this thing with the constraints that a lot of rural people face. For instance, it doesn’t require a constant supply of electricity. It’s easy to use. It’s easy to clean. It’s very safe and intuitive.
So that’s the product we developed at the end of the Stanford design class. And our mission when we first started was to get the product out to everyone who really needed it. We had a finished product prototype, and we spent time trying to shop it around.
The idea was not actually to start a company. The idea was to get this product out to everyone who needed it. And we wanted some NGO or some big world health organization to take it over, do further product development on it, distribute it, and run with it, so it could actually be useful and effective for people.
But unfortunately, there was nobody that wanted to take that risk. None of the non-profits wanted to actually take a product a see it through to the market. So we were very upset with that, because we already had a product that we strongly believed would really make impact in the world. And when nobody wanted to take it forward, we decided we should do it ourselves — and we were the best people to do it, actually.
So we went around and did business plan competitions, and asked donors, and really tried to get funding to do this project because we wanted to see it through.
We knew we should be a non-profit at first because we didn’t want to make any money off of this. Our vision was to see the product through and not to actually get rich off of it. But we understood the need for a sustainable business model. So we took that very consciously in mind as we developed our business plan and our strategy.
So we started out as a non-profit. My role was mainly to do the operational side of things, because I was coming from a tech background, and coming from the entrepreneurship and startup world. I had a lot of experience in making sure we could actually launch the product and get the product off the ground.
So that was my role. My other co-founder Jane was the business person who was the face of the company. She developed the connections, worked with grantmaking foundations, and was really the face of the company to present ourselves in a good light.
And my other two co-founders were engineers who did most of the engineering on the product, really getting it to the state where it was safe and effective.
But as the organization grew, we found that it took a lot of money to take something from a school project to something that is a medical device that is certified to be effective, and actually proven to be effective.
You have to run clinical trials. You have to get regulatory filings and approvals. You have to get ISO-certified to make sure all your documentation and all your results are kosher. And it takes a lot of money, unfortunately, to do something like that.
In fact, we were spending most of our time fundraising in the US from donors and foundations. And it took a lot of time to get that money to allow us to do what we were actually good at doing, which was to build this company.
So what we actually did was we decided that, instead of going to donors for little chunks of money — like $10,000 here, $5,000 there — we wanted to raise a large amount. We wanted to raise the kind of capital that would allow us to just purely focus on building the company, and get the product out to everyone who needed it.
And we were very lucky in the sense that we actually had a product we could sell – and that people wanted to buy. The original model was that we would just distribute it for free. But people wanted to buy this product and give us money for it.
So what we decided to do was actually look into social venture capitalists. These are VCs who don’t have such high expectations on their returns, and they want to use their money to give it out to non-profits to help them scale their businesses.
So we decided to start exploring that model last year. And last year was a big year for us because we spun out a different entity from the non-profit that actually took in investment from social VCs which allowed us to further develop the product and further scale it. And it allowed us to focus on that instead of just fundraising all the time.
They call it a hybrid model, which basically means we’re both a non-profit and a social enterprise. We modeled it off many different organizations. And when that happened, my role shifted from being the operations guy to being an advisor to the non-profit, where I try to instill our knowledge to the non-profit side. The rest of the team moved to the new entity.
But I actually spend all my time currently with the non-profit entity. I’m technically employed by the non-profit, and I do a lot of advising there. But I don’t have an executive role in the non-profit anymore, nor should I have one, because there is too much conflict of interest, and we were very conscious about making sure there was no conflict between the two entities.
So the original team has now moved to the new social venture, and we had to hire a new executive director for the non-profit entity and new program staff as well. I act in an advisory role to the non-profit and that keeps it clear what I can and cannot do, as well as what I have control over.
The two entities work very closely together. We share offices and we share ideas. But we make sure there is no conflict of interest and we’re very strict about that.
Q. If I shadowed you for a month, how would I observe you spending your time day-to-day?
A. Well, you do a lot of traveling, for one thing. So I am actually currently based in China because I’m trying to scale up our operations and programs in China.
We have a couple partners in China that are working with us and they really love the product. And as developed as China is, there are some areas that have been neglected or haven’t been reached by the government, and they need a lot of help.
So I’ve been working in those areas trying to get the product out there. So if you were to shadow me, you’d probably spend some time in China, but I go back to India quite often to work with our programs there. We’re in a couple different hospital networks out there, so I go and make sure the people there are using the product correctly and effectively.
And then I head back to the US because our board is over here, and I help manage that relationship. I work with the executive director here, I work on fundraising, and I do a lot of different things to try and spread my knowledge and expertise around to the staff now.
We’ve hired, and we have the ability now to hire, people who are more competent and better at doing what we want them to do than we could have ever done. We’re at that stage where, as founders, we need to take a step back and let the people who are really good at non-profits, or really good at programs, or really good at sales or marketing or distribution, run the show now — because they have the expertise and knowledge and can do it better than we can.
But we want to make sure the vision is always there so they can be steered in the right direction.
Q. Are the infant warmers currently distributed through both the non-profit and the social venture? How do you decide how much to distribute through each channel, and to whom?
A. The non-profit distributes the warmer to other non-profits for free. Our donors have expressed that they want us to give them out to the communities we work with. So the non-profit basically works with other non-profits. We don’t charge for it, we just give it away, and we couple that with things like education and nutritional programs.
This is what we call an encompassing program. Because we provide a device for after a baby is born, when it’s premature, when it’s low birth-weight. But we don’t actually do anything to prevent that from incurring in the first place. So there are proper things you can do, such as nutrition and education, and we want to make sure we create a holistic solution on the non-profit side.
On the for-profit side, we do sell the device out to clinics and hospitals that can afford it. These are for-profit hospitals and clinics that do charge patients money, but they are looking for a more affordable solution. Often, their only option is a $20,000 very expensive incubator, and they want something that is a little bit cheaper.
So the for-profit side will sell it to these organizations, and then it gives money back to the non-profit. So this is how the hybrid model works, where the for-profit, through its sales, actually sustains the non-profit. Consequently, the non-profit doesn’t have to always fundraise and raise money, and the for-profit also takes some post-sale margin to sustain itself and to scale itself bigger as well.
Q. What was the formation process with your founding team, how has your relationship with your co-founders evolved over time, and what is it like working with them now?
A. The founding team is a great set of people. Like I said, we met in this Stanford “extreme affordability” design class, and they’re just deeply passionate about making change and making the world a better place.
I was thrilled to meet and work with them — I still am — and we get along very well. We’ve been together for almost four or five years now. And it’s interesting because we weren’t friends to begin with, we didn’t know each other before the class, but I think what really drives us is that we all share that passion to change the world.
And that keeps us together. We don’t always get along; we have our arguments; we get into disagreements. But that doesn’t matter at the end of the day, because we all have the same vision.
And I think that’s key to a founding team — to make sure you all have that vision and that passion to really be focused on something.
And because we’re all on the same page in that regard, it allows us to work very effectively together. Because we know we’re not in it for ourselves; we’re not in it to boost our own egos or whatever. We just want to make that change in the world.
That’s why we work well together, and over time, we’ve also gotten better at learning each other’s weaknesses and strengths, and playing to those more effectively.
By now, we know each other pretty well and that relationship has evolved into one that’s kind of like a spousal relationship, where you just know what people are thinking, how they’re feeling, and how they act without them even saying anything.
Q. What are the biggest lessons you learned about how to build a company for the long-term, with co-founders who started out essentially as strangers? What advice would you offer to other founders who may be facing some of those same challenges?
A. That’s always tough, and I actually had some bad experiences before with previous startups. It comes down to the same old cliches you hear all the time, though: “roles” and “goals.”
When you start a company with someone, you have to be very, very clear on the roles. In my first startup, for example, we both wanted to be CEO. And you hear it all the time, but it’s true — there’s a lot of ego involved in that type of stuff.
We should have settled that before we started the company, but it was just something we wanted to try, and we were so ambitious and excited to start the company that we never really talked about it. And then we got to a point where we got funding and we got some employees, and when it came down to our egos, it kind of destroyed the company and it didn’t do very well.
So always determine the roles before you start a company — that’s very key.
And then the second part is goals. Are you in it to make a lot of money? Are you in it to actually make the next Facebook? Are you in it to change the world? What are you in this company to do? Have those be very clear.
So another startup that didn’t go very far was one where, again, after I learned about roles, we had very clear roles, but I didn’t really talk to my co-founder about goals.
It was another social gaming startup — the one I did before my startup that sold to Zynga — and we were doing well. We were making good revenue. I then wanted to exit and sell the company, because we were making enough revenue to make a good chunk of change, and I thought that was enough. But my co-founder wanted to grow the company and take it to the next level to become the number one social gaming company in the world.
And that’s where we really differed, and that again hurt the company, I believe. Because we didn’t have the goals of the company set properly. So talking about that and making sure you’re really on the same page with your co-founders is what you need to do.
After that, it’s about the people, how you work together, your different working styles, and you can vet them out that way — I think that part is actually the easiest part. But the roles and goals are the toughest conversations to have, and they’re the most important ones, too.
Q. What do you find most exciting about your current role, and what do you most wish you could change?
A. So my role has changed actually over time. It went from being a co-founder to being more of an operational person building the company, to now being more of an advisor as we hire more competent people into the organization.
So because my role has actually always changed, I love learning stuff that is new to me. Everything I do, I know a little bit to some extent, but I’m not an expert at it, so I try to improve myself on that stuff.
And having that ability to constantly learn new things is what has really kept me very excited. And with this company, in particular, it’s a new country, I’ve never lived in India before, I’ve never done business in India, and China is the same way. So learning how to do all that stuff has been really rewarding.
And then obviously helping people. When we put our first baby in the product, that was incredibly rewarding.
A baby who had no chance at survival, who in any other case probably would not have survived, and giving the baby that opportunity and chance at a healthy life was very rewarding. The expression on the mother’s face, the feedback from the doctors. All that makes my job very rewarding and exciting and makes me want to come to work everyday. So I really appreciate that aspect.
In terms of what I would change, the one thing I would love to do is to make sure I don’t get stuck in any role. To make sure I keep learning new things, keep doing new things, and really grow as a person. I think that novelty would always keep me interested in my job.
Because we spent the last three to four years building a safe and effective product, and now is the fun part where we actually get to give it away to people who really need it, at least on the non-profit side. And I love seeing the units get out there. I love seeing babies put inside. That’s very exciting.
Q. Where do you see yourself and Embrace going in the future, and how do you think what you’re doing today will help you toward that goal?
A. For myself, it’s growing with the company and making sure it fulfills that social mission we set out to do five years ago — not only for myself, but also for our donors and hundreds of thousands of supporters who followed us, gave us money, provided us contacts, and invested time throughout the years. I want to make sure we commit to them and deliver on the promises we made.
That’s what I’m looking forward to, because I think we’re at the point now where we have the opportunity to do it. Whether it’s as a special advisor, or operations, or even back to a founder role, the one thing I do know is that I want to see that change happen.
I see this as a career. I’ve been doing this for a long time and I’ve loved every single day of it, so I wouldn’t give it up for anything. And as long as I’m contributing and making that impact and doing good work, then I’ll continue working at Embrace for sure.
Q. What advice would you have for others who might be interested in transitioning into a role you’ve either done previously, like working in a big tech company or co-founding a startup, or a role like your current one in the social sector?
A. I think the most important thing people should do when thinking about changing careers or starting something is to really understand what they want to do.
Doing Embrace makes me very happy and it’s very rewarding, but I don’t know if it’s right for everyone. Some people get happy from other things. And to really find that out, I think people need to take time to explore that.
For example, when I was at Microsoft, I had a really great job, really good co-workers, it paid really well, I had good hours, and it was a good environment to work in. But even so, I wasn’t very happy or satisfied, because I felt something was missing and I wanted to do greater things.
I actually used to watch that Steve Jobs speech, his 2005 Stanford commencement speech, and it was very inspiring. I would watch it over and over again — every day in fact. I encourage everyone to watch it, or to watch it again if they haven’t done so in a long time, because it does give that inspiration that really helped me figure out what I wanted to do. It gave me the courage to make that career change and do something different.
I always tell people, if you want to do something to change the world, you should do it in your 20s and early 30s, where you don’t have as many responsibilities, like kids, or a mortgage to pay, or a spouse. You really have the freedom and opportunity that you won’t get anywhere else in your life to make that change and to take risk.
And you should take advantage of the things America is very good at. So one thing I found with America unique to this country — and I’ve lived in India, China, and traveled the world; I’ve seen a lot of different countries and how they do business — is the fact that it’s encouraged here to take risks, and it’s not bad to fail.
In most countries, it’s actually very bad to fail. They blame it on your abilities, your competencies. But a lot of times, business is just luck. So people should really take advantage of that culture America has to change things.
The other thing America is really great at is it compensates you very well for the risk you take. It’s the only country I’ve ever seen that does it that well.
I always use the analogy of poker, because I used to play a lot of poker. When you play poker, you’re always calculating the pot odds. That means, when you put money into the pot, how much can you return? How much can you win with the risk you’re taking?
In America, those pot odds are hugely in your favor compared to many other places.It’s almost begging you to take that risk, because if you win it, you’ll knock it out of the park.
So those were some of the things I thought about and did, and some of the things I would encourage everyone to think about, when contemplating switching careers, or doing a startup, or whatever else it might be.
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