Carving paths on trackless slopes, exploring where few have ventured | 5Y View
When We Talk About 3Sigma, What Are We Actually Talking About?
This August, we hosted the inaugural 3Sigma Bootcamp. Twenty young people working on frontier technologies came to Shanghai to think, talk, and collide.
Why does 5Y Capital seek out young potential founders? That's precisely why we launched 3Sigma Bootcamp — because we believe in the power of youth, in the compounding returns of time, and in their capacity to bring innovation far beyond 3Sigma. We remain committed to identifying, accompanying, and supporting them at the earliest possible stage.
They come from different fields with seemingly little in common, yet they share one metaphor: they are full of hope, driven by an impulse toward an entirely new future, possessed of an open and hungry tension. They blaze trails and build roads on slopes where none exist, exploring territories where no one has yet set foot. They are founders unconstrained by convention, transcending established paradigms, and imaginatively engaged with the future.
This article draws from keynote speeches by Qin Liu, Founding Partner of 5Y Capital, and Zhang Fei, Partner at 5Y Capital, delivered during 3Sigma Bootcamp. There are many ways to interpret 3Sigma, but the actual paths that innovators walk are far more complex than any words can capture. 5Y Capital hopes to be the partner who climbs alongside you.
Beyond 3Sigma
The essence of innovation is challenging the existing order. And it is precisely this quest to push beyond the boundaries of paradigms that often appears as madness in the eyes of others.
Innovators refuse to be defined by others. They want to define themselves and the world they inhabit. They are doers. They dare to make changes and accept the possibility of failure. They may be misfits in the crowd. They may be gifted artists, athletes, explorers — and founders.
Entrepreneurs are the explorers of modern society. Like Magellan in his time, they represent all of humanity in exploring and expanding new frontiers.
— Qin Liu, Founding Partner, 5Y Capital
Do What Lies Beyond Convention
There are two kinds of events. One consists of independent events that follow a normal distribution. The other consists of extreme-distribution events. Within extreme events, there is an even more extreme category — perhaps not beyond 3Sigma, but beyond 6Sigma. History is full of such extreme events: the invention of the first steam-powered automobile, the invention of the first computer.
Often we mistakenly treat the second kind of event as if it were the first. When you set out to build a company, strive for the second kind. Don't expend tremendous effort on something conventional.
— Zhang Fei, Partner, 5Y Capital
Your Flaws Are Your Unique Signature
In interviews, candidates are usually asked: what are your strengths? I prefer to ask: what are your weaknesses? What are your major flaws?
All strengths can be replicated. You may be smart, hardworking, emotionally intelligent — but there is always someone smarter, more hardworking, more emotionally intelligent. Our flaws, however, are difficult to imitate. Scars are the most distinctive marks of a person.
What you perceive as an insurmountable defect is actually your most scarce characteristic. We call it a flaw only because it makes us different from others. But that very difference is your greatest trait.
— Zhang Fei, Partner, 5Y Capital
Don't Hide from Pain
The root of pain is the conflict between emotion and reason. Signals of happiness are often fleeting, random, and unreal, while signals of pain are profoundly real. The capacity to feel pain is a gift. Do not hide from it.
Pain is the greatest potential energy a founder can possess. If you can truly understand its source, analyze its root causes, and confront honestly the factors that produce it, you may gain extraordinary energy. Like mountain climbing: when every step feels easy, you are likely depleting your potential energy. Those who are actually gaining greater potential energy face difficult choices — they are in a state of strenuous ascent.
Immense pain is the beginning of your transformation.
— Zhang Fei, Partner, 5Y Capital
Find Your Own Evolutionary Path
Sometimes we categorize founders into three types: arbitrage founders; intuitive, gifted founders; and vision-driven founders. Arbitrage founders are businesspeople, sensitive to spreads and profit, while 5Y Capital concentrates its time and energy on the latter two types.
A founder's gift and intuition may resonate powerfully with the innovative variables of their era, but talent and intuition alone are insufficient for success. A true entrepreneur can elevate their intuition into vision and mission, and guide those around them. At the same time, they must learn to cross boundaries — from vertical specialist to business, capital, and organizational management — and thus become a leader.
Entrepreneurial spirit has always been a scarce resource in this world. When we speak of 3Sigma, we do not mean that founders should become "freaks." Rather, we hope every founder can identify their own scarce traits and find their own evolutionary path — growing from an intuitive founder into a true entrepreneur and leader.
— Qin Liu, Founding Partner, 5Y Capital
Turn Negative Feedback into Fuel
Founders need to distinguish signal from noise. Too often people spend excessive time on noise while giving insufficient weight to genuinely valuable signals.
When you face all kinds of external information, how do you read and identify these signals? This is a problem many founders encounter. This is also what 5Y Capital can offer founders — high-quality listening and feedback on various signals.
Many founders are not adept at processing different types of feedback. They become overconfident with positive feedback and tend to escape when negative feedback arrives. The crucial thing is to find ways to make negative feedback a driver of your growth.
— Qin Liu, Founding Partner, 5Y Capital
Preprogram Your Emotional Response
Fear is a very typical emotional program. When we face the unknown, fear is often triggered — a suffocating sensation like being caught in a whirlpool.
At its core, fear is self-protection. All emotional signals are profoundly real and accurate; they are telling you that something is wrong. To understand fear, to understand emotion, you need to preprogram your emotional response. Each time you face emotional turbulence, each time fear takes over, examine your preprogrammed response. Often it is not our emotions that are flawed, but our coping mechanisms.
If you are in a hostile environment, all emotional fluctuations will intensify dramatically. In a more trusting, friendly, and robust social network, fear decreases significantly. This is why choosing partners and investors during the entrepreneurial journey is so crucial — they affect your emotional fluctuations. If you spend extended time with someone who possesses greater mental fortitude, their influence on you is profoundly positive.
— Zhang Fei, Partner, 5Y Capital
Truth. Excellence. Integrity.
5Y Capital's values are truth, excellence, and integrity. Within 5Y Capital there is no hierarchy or authority. We respect independent thinking in every individual, just as we respect every founder. We pursue excellence because only excellence gives you the courage to challenge the impossible. And integrity, of course, is paramount.
These missions, visions, and values give 5Y Capital the conviction and courage to stand with founders at the earliest, most nascent stages. This is our strong cultural armor.
5Y Capital hopes to be the first partner who believes in you on your entrepreneurial journey.
— Qin Liu, Founding Partner, 5Y Capital
5Y Capital (formerly Morningside Venture Capital) currently manages approximately RMB 32 billion across USD and RMB dual-currency funds. 5Y Capital seeks out, supports, and inspires solitary entrepreneurs, providing support from the spiritual to the operational. We believe that if the "crazy" you in others' eyes begins to be believed in, the world will become a different place.
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