Meet Tony Xiao, an entrepreneur bringing mindfulness to finance. Tony was born and raised in China before moving to Canada for high school. Prior to starting Alka, he attended Princeton University and was a member of the Summer 2012 batch of Y Combinator. Here is his story!
Who are you and what are you working on?
I’m Tony Xiao. I was born in China, and am a Canadian living in the US. I’m currently building Alka, a company that creates accounting software so that individuals can manage their personal finances with the same rigor that companies manage business finance. Though I never would have expected to end up being a glorified accountant, here I am building accounting software!
Take us on the journey from China, through Canada, and now to Alka. How did you get from there to here?
For the first 16 years of my life, I lived in China. To put it lightly, I was a very nonconformist kid, which did not go over very well in that environment. My parents were really concerned about me, and all of their friends kept suggesting to them, “Hey, have you thought about sending your son abroad? Maybe he would do better in a more liberal Western society.” At least that was the story my parents told me. So when I was 16, my whole family moved to Vancouver, Canada. I attended high school in Vancouver before coming down to the states to attend Princeton on the East Coast. Now I’m on the West Coast and I haven’t looked back ever since! San Francisco is a great place for the kind of work I’m doing.
What can you tell us about your time at Princeton and going through Y Combinator?
I changed my major three times while I was at Princeton–I even tried, unsuccessfully, to change it a fourth time! I started off in mechanical and aerospace engineering, but I didn’t even take thermodynamics, so I wouldn’t classify myself as an actual mechanical engineer, even though I was deeply interested in it.
In my second year, I switched to computer science. It was something that had always been interesting to me, but then in my third year, I switched to economics. A really good friend of mine interned at a hedge fund in New York City over the summer and then had the brilliant idea that maybe we should do one ourselves. I thought that if we were going to do that, studying economics would be a good way to prepare myself.
I think the real reason I studied economics is that all the cool kids were doing it and I didn’t think of myself as very cool. I thought that “if I could just be cooler, then maybe everything in life would be better.” That didn’t quite work…
Anyway, in my final year, I actually wanted to switch back to computer science. While I was studying economics, and while we were working on our hedge fund, I ended up working a lot on our technical system to help analyze financial data. And after about six months, I realized that the only thing I actually cared about was building that technical system. I didn’t particularly care about analyzing the price of silver or rice over time. That wasn’t actually at all interesting to me. The software we built was interesting, and that’s what got me back into computer science. However, my advisor told me that since it was already my senior year, and I was missing a few things here and there, I should just get my degree and get out of there. Then I could do whatever the hell I wanted. While I didn’t successfully manage to change my major back to CS, it did end up starting me on this path.
In school, I was part of the entrepreneurship club for a long time, but I never fully dove into it, as college was a very distracting period of time. Come senior year, there was a trip called TigerTrek, where a bunch of students were taken to Silicon Valley to meet people and get connected to what’s going on there. So I applied for that trip thinking that since I’d been in the club for four years, I’d definitely get in. It turned out that I wasn’t actually accepted onto the trip! The computer science department sponsored the trip, so the fact that I wasn’t in the CS department probably factored into my rejection.
Because I wasn’t invited to the trip, I thought, “You know what? I still want to go!” So I just made my own trip and crashed their events. I flew out on my own and contacted a bunch of alumni and just started meeting people. I remember going to Sequoia once and I just sat in their office until one of their partners met with me.
That turned out to be the best trip ever. The fact that I actually had to create it and make it happen myself made it so much more valuable for me. I made some really solid connections and slept on some startups’ couches. Taking that trip gave me complete clarity that building a company is what I wanted to do with my life. Y Combinator came a few months after that. I started working on something I thought was a good idea and we received an investment from YC before I graduated from school. So in a way, I kind of got started early. Even though for the first three years of college I was sort of all over the place, I found my stride in the last year.
What does growth mean to you?
I recently completed this huge exercise called the values exercise. It’s a paper with a full list of things that you could value. It includes things like acceptance, adventure, beauty, caring, challenge, compassion, connection, courage, and creativity. The idea is that you are supposed to figure out what you value. The challenging thing here is that every value on the list is good, so where are you supposed to begin? Who doesn’t value courage? Who doesn’t want creativity? Safety? Self-worth? They all sound so good, so how am I supposed to pick?
It took me about 10 months to complete. I kept putting it aside for the longest time, but eventually, right before New Year’s this year, it came to me. This is one of the reasons I was really excited about my interview with Vöxtur. Through the values exercise, I realized that the two things that I care the most about are love and growth. Everything else for me sort of derives from either love or growth.
Even in the career I happen to be pursuing, I still have to ask myself, “What is love and growth? What does that mean in the context of working with our customers and employees? What does that mean in my personal life, in my relationships with other people?” The thing I love about it is whether I’m a plumber in rural India, or if I’m an entrepreneur in Silicon Valley, growth and love always apply. It’s just like the North Star: regardless of my location on the planet, I can always point myself at the North Star.
The other thing is that growth, in many ways, appears contradictory to love. Growth tends to come with change, discomfort, fear, and failure. But love in so many ways creates stability. There’s this idea of unconditional love, for example. No matter where you’re at, whether it’s for yourself or for other people, it doesn’t matter. It’s constant. It’s warmth. Growth and love seem very contradictory on the surface, but in reality, the two can stimulate each other.
Have you ever had a make or break moment where you had to risk it all?
A few months ago! We recently raised a pretty significant amount of funding for the company—about three quarters a million dollars. But before that, it was all on my credit card. We only had about $2,000 in the company bank account. I’m pretty blessed to have really good credit, so I had about a $70,000 credit limit, and it was the main mechanism we used to finance the company.
Growth really does require an investment. Warren Buffett said that the best thing to invest in is yourself, but that actually can demand a lot of time and money.
I’ll probably never be homeless and I’ll always have a place to live. I’m very lucky to have a big support network around me, but if the funding hadn’t worked out, it could have been emotionally disastrous. In reality, it would have been just like an expensive MBA, except at the end of it all I wouldn’t have earned a degree.
I think of building Alka as an investment in myself. I think I’ll learn more from this than an MBA and an MBA will cost more. So this seems like a good investment. But there’s just something about having tens of thousands of dollars on a credit card, that makes it feel so risky.
How do you overcome obstacles?
There’s this famous commencement speech by Steve Jobs. He expressed the idea that remembering you’re going to die one day is the best tool you’ll ever have for staying alive. When I’m frustrated, or when there’s an obstacle, I think: “Who cares? I’m gonna die one day anyway. What does any of this matter?” I mean all of that in the best of ways. If nothing actually matters because I’m not even going to be here in the future, then I don’t have to stress too much about the obstacle. I can be more patient.
Another thing is, I really try to be resourceful and to learn from people who’ve done it before. People have done what I’m trying to do before so let me go find someone who can teach me something.
What do you do to take care of yourself?
Therapy is a big part of what I do to take care of myself, and that’s just one of the many things I’ve done. I also have an exec coach, which is different from therapy for anyone unfamiliar with it. I read a lot. I enjoy engaging in communities of other people who care about the same things I do.
I do meditation, mindfulness, and physical fitness, and I surround myself with people with positive energy. I spent last New Year’s Eve by myself at a yoga retreat about two hours south of San Francisco called the Mount Madonna Center. We were meditating on New Year’s Eve, and then we had a little dance party. And I didn’t know anyone there! I could have chosen to spend it with this girl I was seeing, but I found it incredibly healing. It was so nourishing because that’s actually what I needed at the time. Self-care is a journey. It’s not one thing. Just like you can grow in your career, you can grow in learning how you take care of yourself.