Greg Ho Transcript

Clint Betts

Welcome to the CEO.com Show. My name is Clint Betts. On today's show, I talked to Greg Ho, who is the president, co-founder, and COO of Spring Mountain Capital. This guy's impressive. We've got an incredibly impressive guest today. He went to Yale and started McKinsey's Investment Office. He was one of the first people at McKinsey. He talks a lot about McKinsey in this interview. What he's doing in Harlem and in New York City for underprivileged and underrepresented groups is fascinating and really incredible what he's doing in the life sciences. We had a really great conversation on all of this, including artificial intelligence, how that's going to affect life sciences, and all sorts of things. It was a pretty wide-ranging, very interesting conversation. This is a very, very impressive man. So let's get to him. Here's Greg Ho. Greg, thank you so much for coming on the show. You are the president and COO of Spring Mountain Capital. Tell us how all of that came to be. How did you get to be where you are?

Greg Ho

I will keep it short. I was at McKinsey and Company, and one of the things I did while I was there was formed the McKinsey Investment Office. Then, according to my game plan, I exited McKinsey when I was 45, thought about when I wanted to do the next four or five years, and then formed Spring Mountain Capital in 2001 with my partner, Launny Steffens. The emphasis has been on investing in special situations, and we've done that over the last 20 years. Now, I was turning to another part of what we wanted to do at Spring Mountain Capital, which was something that was meaningful within the community, and thus, I formed a couple of years ago the social impact investing side of Spring Mountain Capital.

Clint Betts

What is it about McKinsey that produces leaders like you and the people who go on to create incredible companies like yourself? Can you tell us a little bit about what it's like to be at McKinsey? Obviously there've been tons of books written about this company. It's the leading consulting firm in the world. It might be interesting for some people to know more about what your experience was like there.

Greg Ho

Sure. I will put one caveat. I started at McKinsey in 1982 and left in 1996. So the answer that I give to your question pertains to the period then for which I have a very good explanation. McKinsey basically was started by James Oscar McKinsey, but very early on it was taken over by a fellow named Marvin Bower. And Marvin was a Harvard Law School person by training. One of the things he brought to McKinsey was the concept of investing, not for capitalist reasons but for purpose. One of the noticeable things that happened when you joined McKinsey back then was that Marvin sent you a copy of his book, which is private and which we all promised not to share with anybody, titled Perspectives on McKinsey. Marvin believed that the firm should not be operated on a financial basis. He was a believer in the philosophy that if you do the right thing, everything else will follow. And so there was a whole tradition of individuals that subscribed to that philosophy. And so there were individuals such as fellow partners, a senior partner named Jon Katzenbach who wrote a book; I know you probably ask about books I would read. I was very close to Jon, and he wrote the book The Wisdom of Teams and Creating a High-Performance Organization. One of the things about McKinsey was that they always thought about organizations and leadership and the themes of how to create a high-performing organization. Now there, I was brought on, not in a consulting role; I was brought on. Actually, I was McKinsey's first lawyer. And the project that among the projects I was tasked with was making the firm truly international. So we wanted at that time to be in the top 40 economies in the world. And at the time I joined, we were at about eight. The task ahead of me was opening offices in 32 new countries, which took me 16 years, going out and meeting the teams who proposed to go out there, and figuring out how to do it. So, 16 years, 32 countries later, I hit my target retirement date of 45 and announced I would leave the firm. But it was filled with individuals who thought about organizations and how to run them. So it was not only technically but from the leadership angle. And then we espoused basically. I was a little bit early, but I was very close to the partnership committees in terms of the future of partners and how to keep things open for young people coming up. The philosophy was that by the time you get to age 50, you should begin to think about what your next act in life should be. So, we were all encouraged to think about going out from the firm and doing something of significance outside the firm. So I would say that's the sort of longer answer to your question, but that's basically it.

Clint Betts

I have to ask, what was your experience like conducting business in so many different countries and so many different cultures? What did you learn about differences and commonalities there?

Greg Ho

Oh, it was really fun. I really got a chance to see how different people think, how the systems that are put in place, the governing systems reflect the way they think and execute various things. For example, tax laws, exchange control, and ownership by local individuals are important if you want to come out as a big U.S. company. But the very, very interesting thing was even though you had these very different viewpoints, it all boils down to the same thing. There is an underlying philosophy, culture, which actually unites everybody. So in one hand, seeing the differences, seeing the different approaches, and realizing that they all come together in the same place and turned out it was a fascinating experience. And therefore, it is not as hard as one might expect.

Clint Betts

Yeah, that is actually fascinating. And now, at Spring Mountain Capital, you've started doing the social impact investing; I wondered, does that come from McKinsey? What makes you so excited about that, and how do you ensure? I always ask this question because I know a lot of different social impact companies; you may know some of them; a couple of them are in Utah, like Cotopaxi, which is an outdoor brand, and Warby Parker; these types of Toms shoes; I'm thinking of all consumer brands right now. But how do you ensure the companies you invest in are actually doing it for the right reasons and not because, man, it sounds good to be a social impact startup or company? Does that make sense?

Greg Ho

Yeah. I've looked at the area for quite some time. And first of all, to answer your first question, at this point, I'm 72, and you are going through your life journey. Basically, when I was in college, I studied motivation theory, and everything goes back to Maslow's hierarchy of needs. In reality, social impact investing is just moving along, which needs a hierarchy. You start with physiological needs such as safety and security, love and belonging, and self-esteem. Eventually, if you live long enough and think about it hard enough, you will get to the period of self-actualization. And that is, in one sense of the word, contributing back to society and the community and doing something that's truly impactful and changes things. So, after a long spell, I'm finally here. And when I thought about it, the thing is, I get that question all the time, the one you asked, in terms of how do you ensure that your companies are doing or on the path to social impact? Basically, we have a guide as to what we will fund in the project that I'm working on, which is called West Harlem Innovation Network. Social impact investing can take various forms and address various needs of the community. Ours is very specific. In the West Harlem Innovation Network, we will target companies that we believe will have a positive impact on the health and educational well-being of underrepresented minorities. So, if you're not a company that can explain that, we're not looking at you. So, first of all, your purpose, your reason for existence, has got to be something that will improve the health and educational impact of underrepresented minorities. The second thing is that we spend a lot of time taking a look at the team and talking about them, not necessarily about the idea but whether or not they are talented and passionate about the purpose more so than the dollar figure. Are they, for example, in what I mentioned earlier, attempting to do the right thing, believing that everything will follow? And that's a very subtle thing, that you don't have a checklist. You have to meet and talk with the individual to really believe that that is in their heart and in their mind and is what motivates them. So, one thing is the evaluation of the team. The third part, so purpose, team. The third part is we are multiple-stage capital, and we started at the very beginning. So we will grow with you and hopefully mentor you, have you be loyal to the cause, and have a fair amount of control over the process because we're a multiple stage of capital. We won't be investing in a company and then handing it off to somebody else and losing purpose. We will adopt people we think are passionate, talented, and true and fund them as long as they do the second part of what we consider the social impact, which is improving the economics of the community and providing higher-paying job opportunities to members of the community. So, in that way, we're pretty much aligned. I think purpose results are the big topic. So, in one sense, we are focused on neurodegenerative diseases, which is a very big concern to underrepresented minorities and socioeconomically disadvantaged individuals. And we may have some side impacts, but if you deliver an improvement along that path, I think you've delivered a pretty significant social impact. And if you've done it with people from the community, which is probably the strongest enabler, I think we have pretty good assurance that we'll stay on the track, and our measurements of success, in this case, they're aligned.

Clint Betts

Who have you invested in, or who have you seen that does this really well, that has really served and gone above and beyond in ways maybe you didn't expect? Or yeah, maybe give us an example or two, whether it's somebody you've invested in or somebody you see who does this really well. I love the way that you think about this, your approach, and the principles you have. It's pretty remarkable.

Greg Ho

We've seen some companies that have come up with particular attention to the various factors of diversity in their ranks, participation by people from the community, and attention to a much neglected, overlooked demographic. So they're individual companies. We have not actually seen anyone do it in the manner that we intend to do it. Studio model in the community versus incubation of individuals who leave the community. So, a studio model in the community, hiring people from the community and looking for a fairly wide platform that can bring synergistic capabilities when people are united in an effort. If one were to say, well, said a little bit broad, well, if you ask yourself why this particular demographic is experiencing poor health results? And if you ask anybody who knows anything about the business, there are several parts to the equation. Not several, there's a whole pile of parts to the equation. And so, a single does not answer the question. It may have a great impact, and I greatly admire those individuals, but I don't know of an example that is trying to bring the multiple parts of the equation together to approach the problem in a way that unleashes the synergies of multiple areas and multiple companies that approach the problem.

Clint Betts

What does a typical day look like for you?

Greg Ho

My father was a baker who held two jobs and he used to get up at three o'clock in the morning, and when I wanted the car, he asked me to drive him to work at four A.M. So I'm getting a little older. So I start up at 4:30 AM, sort of in my DNA, and continue on through the rest of the day until I go to bed outside of time with family, and my wife in terms of some leisure. But starts at 4:30.

Clint Betts

Wow.

Greg Ho

36 weeks of the year it starts with some kind of training which involve running. I run marathons and I run marathons in the spring and the fall and they're 18 week training program. So 18 weeks in winter, early spring, I'm training with usually a run or cross-training for about an hour to hour and a half and catching up on emails, hopefully squeeze that all in before 8:30, eight AM in the morning where hopefully I show up at work.

Clint Betts

That's incredible.

Greg Ho

And then it's reading, reading and interacting with individuals and focusing on the main project as well as running, the running of Spring Mountain Capital. So Spring Mountain Capital also invests in special situations, which is how we started. It has a growth equity component, uni bond investing and so forth. And we're adding to that. Fund to funds business. And then we're adding to that social impact investing.

Clint Betts

How do you decide where to spend your time each day? Once you get to the office, how do you decide? Here's what I'm going to focus on today, here's what I'm going to be reading in-depth about, here's who I should be meeting with, how do you make those decisions?

Greg Ho

Those order of priority and the order of priority is getting West Harlem Innovation Network off the ground. The order of priority is making sure all of the components that people are in place and that if there's any new thing we ought to be looking at, we added it. So, anything that pertains to moving West Harlem Innovation Network takes the first precedence. Obviously, there's the running of the firm and the fact that my partner Launny Steffens and I are on every single one of the investment committees for the various other parts of the firm. There are scheduled meetings, and those things take place so that they don't get kicked off because they don't have the highest priority. So there are scheduled meetings. So, outside of that, we stuff everything in between.

Clint Betts

What do you read? I'm particularly interested in what you read when you first get into the office.

Greg Ho

I have news feeds from a variety of sources on developments in life sciences. My main role in the West Harlem Innovation Network will be in the life sciences wing. So, there are feeds from various sources reporting on developments, new papers, et cetera. There are alerts, and so catching up to that, the feeds are constant. They come in about 1,000 emails a day, so they just come through. I don't have to select. It's in your face, and as I tell all of the young people we mentor, they should really like reading. I probably, if you say what is the main activity of the day, it's reading. And everything from emails to articles to papers, I probably spend about six hours a day reading.

Clint Betts

What book recommendations would you have for us?

Greg Ho

Book recommendations? Well, let me go back to one that I think is very important because if we're talking about leadership and organizations and functioning, one of the books I think are seminal to my thinking is one written by my partner Jon Katzenbach, right? That's the one I mentioned earlier, The Wisdom of Teams. Now, there are many, many books on teams and so forth, and you could read that, but this is one of the seminal books that I think is very important. It's very important this particular time as people begin to work away from teams, namely remotely. And really understand the book and the value or believe in the value of the team. This helps you form; you can probably get over it by skimming it, but it gives you some very, very important principles for forming high-performance teams. That's one book I would certainly like. But now, in terms of the area that we're in, I find it fascinating. Specifically, in West Harlem Innovation Network, we will approach things like artificial intelligence. We will approach a question of bioethics; we'll approach a question of neurodegenerative diseases. And so the books that I find fascinating to help expand the platform of thinking versus a thing, in particular, is Max Tegmark's book, which he wrote before AI really took its recent [inaudible 00:23:49]. Max Tegmark's book, Life 3.0. Very, very interesting book, which I read when it first came out and I'm rereading currently. His book, the subtitle of the book is Being Human in the Age of Artificial Intelligence. So find that book very interesting. There's an entire discussion about the brain and thinking; there are several books on that. One I'm about to read, which is interesting topically because the researchers have done a fair amount of work in the area, is Charan Ranganath, and his book is titled, Why We Remember. And books about brain plasticity, memory recall, and thinking, I think, are very, very interesting because they tie into the topic of where we are headed with artificial intelligence, where we are headed, and where humanity is headed in that. So that's another book that I'm aching to read. I haven't read it yet, but reputationally, Charan has done a fair amount of very, very interesting work. With respect to the area that we are in, I think it is very significant to inform us as we deal with underrepresented minorities. This book I became aware of there's an author named Amy Chua who is famous for Tiger Mom or whatever, but Amy Chua's book titled World On Fire, which she wrote some time ago, talks about embedded minorities that become dominant minorities and then embeds it into politics really causes people to reject democracy and causes global instability. And it's really well worth reading as one thinks about the importance of crossing racial lines in incorporating underrepresented minorities. And it was very well received when it came out. It's really worth it; wow, this was very prescient in terms of what has to be addressed and what we have to do and could do individually.

Clint Betts

How do you think artificial intelligence is going to change life sciences? I know that's a very loaded question and probably something you're thinking about all the time, even reading about, as you mentioned before, but with the rise of AI and kind of having its moment currently, like you said, what do you think, in particular where things could get out of hand I imagine is in the life sciences area if we're not careful or am I wrong about that?

Greg Ho

I think tools other than artificial intelligence are going to cause things to get out of hand, such as CRISPR, gene modification, and so forth.

Clint Betts

Yeah.

Greg Ho

Now, in terms of the answer to the first part of your question in terms of artificial intelligence, I think it has the potential, and this is not an earth-shaking statement, to really move us, accelerate the pace of personalized medicine and address some of the complicated diseases that [inaudible 00:27:55] from neurodegenerative diseases to cancer. Why is that? On the one hand, we have better life science research tools, for example. Those life science research tools get to subcellular levels, they get into spatial omics, and they really begin to understand the mechanisms by which they may correlate but certainly may explain why diseases happen. But there's so much data becoming available that we're unable to process it and put it together to see if there is something that might accelerate our understanding. Secondly, I think it can put it together way beyond our capacity to process that information. We see it because one of the companies we've funded, when we funded it just a couple of years ago, had 100 pieces of more data than one of the other large spatial omics firms. Three years later, we have 1,000 times more data than we had just three years back. And this is more data than scientists are able to process. It leads to advanced mathematics to develop the algorithms that actually show that there are things that we can't see through our senses that might cause the explanation from diseases. So I think there are some very, very interesting possibilities to understanding diseases that artificial intelligence, probably coupled with quantum computing, which I know is still a ways off, but to unleash what you could do with the vast amounts of data and artificial intelligence. So it's not my own conclusion; I sense there's a lot of excitement when we drill down to the researchers that this is the potential that artificial intelligence, large data sets, and quantum computing might put together to advance our state of understanding of complicated diseases.

Clint Betts

Why West Harlem?

Greg Ho

The proximity. I live on the Upper West Side of Manhattan. Something new. So I said, no one's tried. There's no model to follow. I have to be there. I want to hire people from the community. Our team is not composed of investment bankers or experienced long-term venture capitalists. They're a team of mentors. We mentor, and our value add is mentoring. We do have a wing that can figure out how to shape the deal and everything else. We have a lot of experience on that. But when you are in a studio model, long-term, new individuals fostering their passions and talent, you want mentors. Mentors, it's an in-person kind of thing. It's not a remote kind of thing. So we're there, we're in Harlem. Secondly, we believe that to really make headway, you have trusted people, passionate people, and people from the community, and that means Harlem. We don't grow people that send them elsewhere. We grow people to stay within the community, build companies within the community, and then hopefully, through their success in corporate [inaudible 00:32:03], address all the other things that have to be done in the community. So we're starting there. Hopefully, some other people will decide to come along. We do have one associate who is from another city down the coast who is going to learn here, and we'll probably go there, but it's an in-person kind of thing.

Clint Betts

What do you think makes a great leader? Are there specific traits or specific types of personalities? What makes a great leader? You've probably dealt with hundreds and hundreds of leaders. What is the commonality between all of them?

Greg Ho

I think they have to really think they have insights versus being the smartest person. I think they have to be humble enough to realize they might not be the smartest person, might not know the answer, and therefore have an atmosphere where they have people who aspire to be where they are and feel that they can add to the equation. So, the traits for a leader are to have a fair amount of self-realization, insight into themselves, and the humility to believe that as good as they think they are, there is more to be learned. To feel that also in this journey of getting through Maslow's need hierarchy, getting to self-actualization is there in front of them, and the only way it will be achieved is through collective labor. So somebody who really understands and believes in the power of the team versus a conviction that one was born with all the things to solve all the problems of the world, and therefore a great desire to create the team. So, that ambition to create a team creates the ambition to create the kind of leadership that I most admire.

Clint Betts

What are your thoughts? We're heading into an election year. We're in it, but we're heading kind of barreling towards an election here in November that I think is bringing a lot of uncertainty to people. The macroeconomic environment is really fascinating. There are good parts of the economy; there are really bad parts of the economy. There are people who are struggling, and there are people who are doing really well. What are your thoughts on just the macro environment we're in right now, and what are your expectations for how this year will shake out?

Greg Ho

Unfortunately, I'm not very optimistic at all. I think we're getting very strong signals, just like we are getting signals from the environment, that bad things are going to happen unless something changes. And so I'm not at all optimistic about outcomes. I'm concerned about it. But I haven't given up. And so one should do their part. And so I don't think it's a particular issue that I would rather hang my hat on. And it's not one party. I think it's actually a number of issues that people have got to come together and try to decide; listen, it's less important for me to have my way and my belief in the way to do things as opposed to bringing the group together for a unified discussion and getting the compromises so we can take a step forward. Until more people do that, I think we're going to continue on the same trend we seem to be heading in terms of the environment. Now, one of the very, very significant things is to get people in the room together more often. One of the very significant things is to get them to live together so they consider themselves as part of a community versus separate communities trying to make sure that they protect their way of living. And so my negativity perhaps drives the urgency and importance of what I'm trying to do, which is do something in the city, bring people together in an issue of interest, and hopefully, other people will have an example and decide to follow some. Hopefully, some people will listen to this and decide to adapt to what they may think is a solution and do it by bringing people together.

Clint Betts

Finally, at CEO.com we believe the chances one gives is just as important as the chances one takes. And I wonder when you hear that, who gave you a chance to get you to where you are today?

Greg Ho

It started randomly with, I guess, in reality, and I'm so sorry, I forget his name, the admissions director of Yale University back in the sixties who decided he'd expand the participation of underrepresented minorities and other people into Yale. This was not only Yale but some other schools, but it also brought me out of where I was probably headed back into the University of Hawaii or a Catholic university on the West Coast or the military, out into the East Coast. And that was the break that you want. Having arrived there, there were other individuals who decided, just as we saw at McKinsey when we branched out to other individuals, someone who wanted to see the program through and adopted the individuals and mentored them into it. Because just because you're accepted into the organization does not mean that you automatically get there. There are a lot of other steps. So, seeing the people who crossed the lines and decided to reach out was what caused it, and that was totally fortuitous.

Clint Betts

Greg, thank you so much for joining us. Man, I've learned a lot in the short time we've been able to spend with each other. Best of luck with everything you're doing. Congrats on everything you're doing. What an incredible career. You don't look anywhere near 70, by the way. It seems like you have another 100 years left in you. So, thank you so much for everything you're doing in the world.

Greg Ho

Thank you very much, Clint. Really appreciate it and this was a wonderful opportunity and thank you very much.

 

 

Edited for readability.

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