The 150% Rule: How Eric Kim Built a $3.3B VC Quiet Empire

 Eric Kim tells potential hires at Goodwater Capital. It's a blunt warning that cuts through Silicon Valley's ego-driven culture, and it's exactly why his firm has quietly become one of the most successful consumer tech investors in the world.

While other VCs chase headlines and Twitter followers, Kim has been building something different: a $3.3 billion venture capital empire that spans 50+ countries and includes 700+ seed investments. His portfolio reads like a who's who of global consumer tech, from early bets on Kakao (Korea's messaging giant) to Coupang (the "Amazon of Korea"), investments that delivered 100x to 300x returns.

In this candid conversation, Kim reveals how childhood lessons about being "150% better" shaped his contrarian investment philosophy, why two-thirds of his team are data scientists rather than traditional VCs, and what it really takes to spot the next generational consumer company before anyone else sees it coming.

Eric Kim: Hi, my name is Eric Kim. I'm the co-founder and managing partner of Goodwater Capital. Goodwater Capital is a global venture capital firm that we founded in 2014. We're entirely focused on consumer tech investing.

So today, Goodwater Capital has grown to over $3.3 billion in committed capital. We're in close to over 50 countries at this point through our Genesis portfolio, which is over 700 seed portfolio companies, and in our core portfolio companies, that's for our early stage fund and our growth stage fund, that's about 80 companies at this point in about 20 countries.

Our thesis is that consumer technology is changing the world, and there's an opportunity to use the internet and digital technology for good. Our mission is to empower exceptional entrepreneurs everywhere, change the world for good.

I'm so thankful to my parents. My mother and father lived through the Korean War. They came to the United States to seek a better life with one suitcase with the little money they had in their pockets, but what they did have was an education that they were both trained as medical doctors. At that time, the United States had a severe shortage of medical doctors, and they're inviting overseas doctors to come, even if they didn't speak English very well.

In my school, we were the only Koreans. And I remember distinctly one day, my father calling me into his room, to his bedroom. I was 12 years old at the time, that's the same age as my oldest son at this point, and my father just sat me down and said, Hey, Eric, I need to have a talk with you.

At that time, my father, with these intense tears in his eyes, told me, Eric, you're growing up now, you're 12 years old. You're about to a teenager, and life is going to be hard because you're an Asian American, because you're Korean, because of the color of your hair, the color of your eyes, the shape of your eyes, the color of your skin. Life is going to be difficult. You will immediately be discounted.

And I think part of this was my father's own experience in the workplace facing racism there or maybe some bias as well. But he understood that for me as an Asian American, that it was important for me to understand. That because of that discount, he instilled into me that we really needed to be 120%, 150% better, so to speak, to really compare with our peers who didn't have this Asian face or this background.

And that really had a tremendous impact on my life in many ways. I felt a sense of urgency that I had to perform, that I had to just be better in many ways. That was a really important lesson.

I think as I've grown up and as I've matured, I realized that in many ways, yes, that bias exists and yes, the prejudice exists and racism exists and yes, education, hard work, all those elements were keys for me to be hopefully successful in life. Over time, what I've realized as well is that I also need to embrace and not always just perform for the sake of trying to be better itself. What if humility was a superpower? What if as myself, I could embrace that and not be afraid of that? That's something I'm really interested and excited about going forward too.

Eric Kim: As an undergrad, I had the opportunity when I was at Yale to also intern at McKinsey and Company during the summer. So in 2002, I graduated from undergrad and I was expected to start at McKinsey right away. I eventually went back to McKinsey and I spent time there for two years as a business analyst and consultant.

I learned a lot. I did a lot of global projects. I spent over six months in China. I spent time in Southeast Asia as well as spent time all over Europe and so that really helped provide a global perspective, which is something you see in Goodwater today as well.

Then went to Stanford University in 2005 and that's where I met my co-founder Qi Hua Qian, who was class of 2006, so we overlapped for a year.

So in 2007, I had the opportunity to join Maverick Capital. They were starting to build out their private investing practice and so myself and a gentleman named David Singer, we work very closely together from 2007 to 2014 and during that time, we invested all over the world and from early stage to late stage, we were part of the YC Y Combinator venture capital syndicate, so we invested in every single Y Combinator company to really late stage companies as well pre-IPO companies too, and that really gave me a sense of the art and science of investing and, and really to adopt an investor mindset.

Eric Kim: Actually, our first deal in Korea was Coupang. It was March of 2011 and then soon after that, we invested in Kakao in their Series A.

When we first invested in Coupang, they were the 28th social commerce company to launch in just South Korea itself. We launched a survey in South Korea and we asked dozens of people, asking them to compare Ticket Monster, We Make Price, Coupang, others, your retailers experience as well and over and over again for specifically women in their 20s, 30s, they loved Coupang because of their customer service.

Why was that so important? Was because it then created loyalty that if you had really, really strong customer service, consumers would come back to you because they knew that they would be treated well and that was a strong philosophy that Coupang had from the first day was how do you wow your end customer.

If you are doing something that the market generally agrees with, that is a really hard way to make a profitable investment because the rest of the market is already there. You have to have some kind of contrarian or differentiated insight, and usually that's through some kind of primary research that you've done that no one else has done itself, and that was the key to making that investment back in 2011.

Kakao is a really interesting story. I'm very thankful to Han Kim, who's a very close mentor and friend of mine that helped introduce me to the company. Prior to that, we had an overall thesis about mobile, the power of smartphones, and this whole transition away from desktop to mobile computing and how there are opportunities for gaming, for commerce, for communications to happen on mobile, and we were looking for that killer app.

What prompted me to really become interested in Kakao and to seek out the company was a really close friend of mine actually was visiting from South Korea. At the time, that person had a Samsung smartphone, and I asked her, why did you buy the Samsung smartphone, and she said, so I could use Kakao. It actually saved her money. At the time, every time you sent a text message, you are charged per text, and Kakao made that free. Buying a smartphone, which is very expensive, that upfront cost, was an investment to save money over time because it provided this core utility to everyone to be able to communicate for free, and that insight really struck me is that people were willing to buy $300, $400, $500 smartphones, so they could just use Kakao because they were saving money on the other end of that, that love, that customer love was something we saw tremendous potential in.

Eric Kim: So I remember approaching the CEO, the founder, the management team at Kakao, once I got introduced, I remember flying to South Korea and practicing the night before, presenting in Korean and the next day, actually, when I visited the Kakao headquarters, and there's only like 20 people, I remember pitching in Korean to the team there. They weren't pitching me. I made this whole presentation about our thesis and the research we had done, all of the consumers we had talked to. It was in Korean, so I'm sure it was terrible and it was with a lot of stuttering. They maybe were impressed by that and they were willing to take our capital early on, but we really saw, not from the outside in, but through the consumer voice, the love for the product.

I remember at the time, there's a lot of people who thought that investment in Kakao was crazy. Maybe even some of the early team members weren't quite sure about the future. But when we talked to consumers, when we talked to people who actually use the product, they loved it so much.

Oftentimes, one of the things I love to do when I go to cities, whether it's London or New York, I just like to hang out in the subway. You can see what apps they're using, just the color of the icons they're using, and when you go to Korea, a lot more people were starting to use this yellow icon, Kakao, and then you would talk to them, why did they use it? I can save money, I can communicate with my friends. There's a group chat that becomes my community.

And so that was our key insight is that you could scale this and create a powerful network effect that as more people got onto the platform, it would benefit all the pre-existing users as well. That's a really powerful phenomenon that increases retention, that as more people get onto the product, the product gets better. How many of those can you name? There are very, very few companies that do that. And so, once we saw that insight, we felt a very strong conviction to invest in the company.

Eric Kim: They were both very early stage deals, Series A for the Kakao and kind of Series A plus for Coupang. The returns were massive on kind of a venture scale, kind of the 100x, 300x type scales.

Eric Kim: I think most venture capital firms, in my experience, do great work, but they don't necessarily have a strong sense of mission and that's what was important to us when we started Goodwater was to have a really clear mission statement, again to empower exceptional entrepreneurs everywhere to change the world for good.

Goodwater had a tremendous impact on the venture capital ecosystem because we changed the mindset to go from an egocentric mindset where you have individual venture capitalists being celebrated for how much money they made, shifting that, there's nothing wrong with that, but shifting it more to a mindset of how can we as a venture capital industry have positive impact itself. If Goodwater, many, many, many years from now is known for that.

Capital is a really, really valuable resource that you have to steward, and that's why we're called Good Water. We think water is similar to technology and capital. Water is the source of life for every living organism, but the lack of water or too much water can lead to destruction itself, and technology and capital is the exact same thing that you have to steward it, it can be a source for so much positive influence in the world, but it can also be used for not so good things too, that knowledge and capital isn't always the source of goodness in the world too. So we want to be the good water in the venture capital ecosystem.

We also thought that the world didn't need another venture capital firm. There are so many great venture capital firms out there, Sequoia, Benchmark, Excel Partners, there are so many great venture capital firms out there. The world didn't need necessarily another venture capital firm, but what if you could create a venture capital firm that was not only mission oriented, but focused on consumer internet, consumer technology itself.

A lot of venture capital firms at the time and still today diversified away from consumer tech. They went to enterprise, SAS or security or hardware or climate tech or biotech. If you think about the best venture capital firms, where they started was by investing in companies like Google, like Amazon, like eBay, 6 out of the 8 largest companies in the world are all consumer tech companies like Facebook as well. Not only are there great equity returns there, but if you own that end customer relationship, then you can create so much innovation that backward integrates all the way into the enterprise as well.

So we had this thesis that consumer technology, consumer internet was incredibly powerful, that owning those end customer relationships was very powerful, that would span not just social networking, not just e-commerce, but that would span also financial services, healthcare, education, all these big industries would be increasingly consumerized because you could own those end customer relationships through digital technology. That was our big thesis when we started the firm in 2014.

Eric Kim: At Goodwater, our philosophy is that investing is both an art and a science, and so we leverage our technology and our software to get to the truth of the science part as quickly as possible. Of our 65, 66 person team, 2/3 of that team are actually data scientists, product managers, and engineers, and since day one, we've been building an infrastructure, a software layer to enable us to look at consumer technology companies.

So we find so much value in looking at the data, being able to have this infrastructure to see companies on a global basis, we track over 10 million companies in real time. So we have very, very accessible reports, consumer research, analytics, benchmarks that allow us to understand a company we think better than any other firm because we have so much data around it and we know how to apply it.

So when we see a new opportunity to invest in, we're very quickly able to assess is this company best in class, not only on growth, but also retention, customer love, what's their differentiation, all the hard science of investing, we've really locked into a very strong process and a platform itself.

What's as important and it goes with it is the art part and that's really understanding the entrepreneur, understanding that person's will and desire to win, that person's desire to have impact itself by taking all the science and being able to really get to truth as quickly as possible, then you can spend a lot more time on spending time with the entrepreneur, understanding their motivations, understanding what their long term goal is, their vision for the company.

So, if you have 7 days in the week, in the old process, it used to take 6 days in the week to do all the science, and then you have 1 day to maybe understand the soft part or the art. We've reversed that, is that it takes 1 day to understand the science part of it, the analytics, all the components that you can have software and our data platform really understand very quickly and spend the other 6 days to really understand the entrepreneur.

Can we partner with this person? They have a similar philosophy around putting the company first. Are they open to feedback, doing reference checks deeply, those soft elements of what makes for a great entrepreneur, we're able to spend the vast majority of time because of this dual approach between art and science. And so that's been the heart and soul of Goodwater since day one and something we continue to innovate on too.

Eric Kim: We interview a lot of venture capital associates, VPs, principals and partners. One of our screening criteria, if you want to be famous, this is not the place for you. The Goodwater approach is one that is obsessed with finding generational companies that will have tremendous impact.

One firm that I admire greatly is Sequoia Capital, and they had this saying that they were just one away if they just missed one great deal, then that would lead them to potentially being a mediocre firm. And so they had this obsession with finding great companies. If that is someone's singular purpose, if that is their obsession as well, which is to find great companies and to invest in them, that's what we look for in young venture capitalists, and I think that's what young people who are looking to get into the venture capital should ask themselves, is this something that I'm really obsessed with that I would go the ends of the earth to?

I will fly over 200,000+ miles, going back and forth to countries to visit entrepreneurs. It's a really hard lifestyle. It's not glamorous, but you do it because you love it, that you are obsessed with finding that insight about a company that will lead to investment that no one else in the world might see.

And if that's something that young people really want to do, and they're willing to put in the hard work to have the discipline, it's like playing a sport. You have to be like an athlete, you have to be able to invest in your craft day in, day out and get incrementally better every week, and it's not something that will ever be handed to you. Maybe some venture capitalists just get lucky, that's certainly possible, but to sustain a franchise and to sustain a career over the long term, it really takes a lot of discipline, hard work and an intensity that is driven by a passion to find and invest in great companies and support them throughout the life cycle of growth.

Eric Kim: I teach a class on this at various institutions, but how do you have an investor mindset that is able to see the big picture, always having that big picture, that home run vision in your mind, B, understand what are the key components that allows that to come true? What do you have to believe for that big vision to come true? C, understand what are the key risks to those and being able to then research those and underwrite those risks, and ultimately, taking a leap of faith that allows you to put it all together to have conviction in your ideas, whether you're an investor or whether you're a founder, having those key components and being able to break it down, I think having this mindset for the key decisions you need to make is something that we talk about internally.

We certainly teach it for our investors, and also, I think great CEOs also have this investor mindset too, because they're doing capital allocation, and they're making decisions. So how do you go through that framework and be able to follow it and then also know when not to follow it? When do you know to break the rules too? That's really where the poetry comes about, that you can be able to innovate and create new things when you're able to have exceptions. But to do that, you actually have to know the frameworks and the rules first. We preach both that the frameworks are really helpful, but also really importantly, knowing when to break the rules too is really important too.