Building Success with Heart

Ho Nam ’88 and President Harriet Nembhard discuss the role of kindness and curiosity in venture capital

At the impressionable age of nine years old, Ho Nam came to the United States with his parents and two younger brothers. They left established and comfortable lives in Korea to begin life over again, and Nam credits his responsibilities and experiences growing up with helping him to forge a different, unique path. In addition to his work as a venture capitalist (he’s managing director and co-founder of Altos Ventures, a global venture capital firm), Nam is a champion for work being a spiritual journey that includes kindness and patience. On the blog Venture Differently, Nam writes about the importance of curiosity, service and work ethic in building successful companies and being an effective investor.

In a conversation with President Harriet Nembhard on Feb. 29, Nam spoke about his formative years (including Harvey Mudd), his career path, his thoughts on leadership and his appreciation for the humanities, social sciences and the arts.

How did you come to select engineering as your major?

I did gravitate toward engineering because at some point in high school, I read that the No. 1 major of all the Fortune 500 CEOs at the time was engineering. I went to this summer program at Darden Business School at University of Virginia, so I was interested in business, but then I read about engineering. And I thought, well, it teaches you fundamental problem-solving skills, analytical skills, and I thought it would teach a really interesting skill set to enter the business world.

I had some exposure to MIT because I went to school in the Boston area. I actually didn’t know anything about Harvey Mudd. But when I found out about Harvey Mudd [through] “Junk Mail” [admission recruitment piece]—the statistics and other kinds of grad schools that people were accepted to, the average SAT scores, the kind of careers people went on to—I was very intrigued. But the thing that really made Harvey Mudd stand out is you had to take a third of all your classes in the humanities, and you had to minor in the humanities; I thought that was really interesting. I ended up taking so many classes outside of the core STEM work that I made up my own minor: politics, philosophy and economics.

In 1988, you received the Radley Prize awarded by the Department of Humanities, Social Sciences, and the Arts. How did you see it then and how do you see it now?

It was very gratifying in some ways because this is the reason I picked this College. This is why I was fascinated, and I was inspired by the mission. Harvey Mudd was founded in the ’50s, in the middle of the nuclear and the space age, and it was so critical for scientists and engineers to understand the potential negative impact as well as the positive impact on society. And that’s what really the founding principles of Harvey Mudd were all about. That inspired me, that’s what got me to come to school here in the first place. And to think that at graduation I got associated with this mission of the school, and that was quite special.

You can’t accomplish anything unless you work with other humans, inspire them and are committed to a common mission. The more I work in the real world, the more I realize this training that you have in humanities, philosophy, politics, economics, all of these things that I’ve studied at Harvey Mudd, how critical that is. And then, of course, we’ve had role models like Steve Jobs who was famous for saying that really interesting things happen at the intersection of the sciences and the humanities. It’s all about the intersection of the two, and Harvey Mudd represents that more than any other educational institution I know of.

Can you tell us about Altos Ventures and what the ethos of “venture differently” means?

I started Altos Ventures with two classmates from Stanford Business School. A Stanford professor had been advising an investor, and he no longer had the bandwidth to continue to advise. [He asked the investor] why don’t you just hire some young people to help manage this pool of capital?

So, we did not have to fundraise for our first funding in 1996. We were just kind of asked, and they had to convince us to consider doing it. Our recommendation to the investor was: Don’t do it. Let’s just stay in touch because when the markets crash, that would be a good time to start. They convinced us to get started anyway, in a small way, kind of learn by doing, and if the markets ever crashed, they would have a lot of capital to put to work, and then we would have a running start.

What happened was that we did eventually run into the crash in the dot com era, and we were incredibly humbled. We thought we were so good; we were doing so well. When the markets are going up, you think you’re so smart. It was really during that period that we understood what “venture differently” was all about. We had to do a lot of soul searching … It made us fundamentally question all of our assumptions.

It was around that time that I went to the first annual meeting at Berkshire Hathaway in Omaha. It was May of 1999, peak of the bubble. Of course, everybody’s asking Warren Buffett, how come you’re not investing in telecom and these dot coms; you’re missing it! He very calmly explained what he was doing and why he was going to stick to his knitting. I thought that was really fascinating. It was at the height of our arrogance, yet I sensed something was different. He talked for decades about how he was better off in Omaha; he was glad he was not in New York City with all the other investors, because all that noise, all that chatter, all that groupthink would have crowded his mind. So, he is the exemplar for think different, do things your own way, separate yourself from the crowd. And that really got us on the journey of how do we reinvent the venture capital model? How do we do things differently?

Things kept getting worse. [The year] 2000 is when the crash started. In 2001, September 11 happened, things kept getting worse, and it really bottomed out in 2003. We didn’t raise our first fund after the dot com crash until 2005. These days we raise a fund every couple of years; there was a six-year gap between our ’99 fund and 2005. We were able to somehow survive that deep, low, dark period. East Coast University Endowment backed us—they were the anchor LPs, a very established limited partner in some really famous venture funds—because we had a different thesis about how to make money in venture capital, and it was an alternate thesis to the mainstream. They continued to invest in the mainstream venture capital, but, they said, we have room in our portfolio for something like this—something different.

To me, it was a clear lesson in life that you could strive to be better or strive to be the best, but also you could strive to be different. The differentiation—something that’s uniquely authentic to who you are, and a unique voice in the world—that has a chance to be heard. Fast forward since 2005 to now, Altos has become the second-most important relationship they have across all of the managers across all asset classes, passing some of those other established firms that they’ve been involved with since the 1970s. But we did it in less than half the time with less than half the capital that they have committed over the years. So, we had to be different to just survive.