A real-life Queen of the Gambit, Yuanling Yuan (YY) was the youngest Canadian to ever become a Woman International Master in chess. Now YY focuses on SignalFire’s health tech investing practice—staying several moves ahead as AI transforms this massive industry—and was recently promoted to Partner at the firm. We asked her about what principles of chess apply to venture capital, how she’s building a differentiated investing strategy, and how new technologies can keep healthcare costs in check.
You’ve had quite an interesting journey from national chess champion to venture capitalist. YY, tell us your story!
My path to venture is a bit different than most VCs. I grew up playing chess, eventually becoming the top female player in Canada and the youngest ever to achieve the Woman International Master title at 14. In high school, that interest led me to found a nonprofit called Chess in the Library that ran more than 30 chess programs in public libraries across Canada, and I was the highest-rated Canadian female player from 2008 to 2015. I went on to study economics at Yale, where I cofounded a student-to-student summer subletting marketplace called Sublite. After my entrepreneurial experiences with Chess in the Library and Sublite, I knew I one day wanted to help build things from 0 to 1.
After graduating, I made my way to Blackstone, initially working on the emerging markets team, evaluating macroeconomic and political risks in countries like China, Brazil, and Egypt before eventually working on late-stage and IPO investment opportunities. While those were all great experiences, it was the growth equity deals I worked on that I enjoyed most because I got to spend time with exciting, innovative companies that reminded me of my own entrepreneurial experiences. That realization, combined with my desire to roll up my sleeves and work alongside startups and founders, led me to move to earlier stage investing and join SignalFire four years ago.
What skills from chess have you found useful as an investor?
The benefits of growing up as a chess player are enormous. It has helped me develop so many cognitive and noncognitive skills that are transferable to any analytical career—the ability to see the big picture and not miss the forest for the trees (what’s happening across the whole board, not just in certain squares), conduct scenario analysis (what are the five possible moves my opponent will make and what will I do against each) and predicting how the future informs us of our decisions today (calculating 10 moves ahead).
I think the most transferable chess skill that applies to investing is pattern recognition. To get to the master level, you need to spend thousands of hours studying patterns and finding ways to apply those nuanced patterns in each game, which is always unique in nature. The same rule applies to investing—no two companies are ever identical.
I try to bring that approach to investing at SignalFire, whether it’s analyzing companies as I evaluate potential deals or working with companies post-investment. I’m constantly trying to foresee how all of the different dots connect to a line and how to develop my own pattern recognition. It’s also made me a stickler for doing postmortems on everything—I have a habit of always analyzing my games after a tournament, win or lose. For example, if we don’t win a particular deal, perhaps because we stayed disciplined on price, I always want to know why. Conversersely, if we do win, I still want to understand why! The point is that there is always something that I can learn and store away in my mental database of patterns.
It took me well over 10,000 hours to get to mastery in chess and so I treat investing the exact same way—I am embarking on a lifelong journey to achieve the same level of mastery in investing.
With that background, you probably had your pick of venture firms. What was different about SignalFire?
What drew me to it is just how differentiated it is: the data driven approach, the way the firm was built more like a startup than an investment firm—we have our own engineers, PMs, home-built tools and infrastructure to support our investment process and companies that we invest in—and that we actually measure our own NPS with our portfolio founders every year to make sure we deliver on our promises.
Tech has always been a part of our DNA and so today we have roughly a dozen data scientists, engineers, and product managers on our team. In addition to helping our portfolio companies directly on specific projects, they work on a proprietary AI data platform called Beacon that tracks more than 80 million companies and over 495 million people worldwide.
Over the past four years, I’ve been honored to work very closely with our portfolio founders and drive home SignalFire’s promised value add
“YY is the #1 Principal I’ve worked with over my 8 years as a founder. We chose to work with YY because she’s been in our shoes and believes in our mission—so when she said that SignalFire would change the game for Recora, we believed her.
“SignalFire has since gone beyond our highest expectations. YY has helped structure financials, recruit talent, form connections, build partnerships, and find solutions to our hardest problems. Over the last two years, she has guided us with conviction and empathy. She has moved mountains to help Recora succeed. Her advent to Partner comes as no surprise, and we’re excited to see her vision come to life.”
—Abhishek Chandra, Cofounder and CEO of Recora Health*
As you’re focused on the healthcare space, what are some of the most exciting trends and investment opportunity areas you’re seeing?
One of the big challenges in the healthcare system right now is the labor crisis. Not only are people churning out of the industry as a result of pandemic-related burnout, young professionals just aren’t pursuing healthcare jobs as much as they used to. That’s particularly true among nurses and primary care physicians, where the pay isn’t as attractive as in areas like surgery, oncology, or dermatology. Meanwhile, many doctors and nurses are rapidly approaching retirement age and will be exiting the workforce over the next 10 to 15 years.
These dynamics are affecting labor costs. Over the past two years, healthcare labor costs have increased by between 10 and 15 percent as demand outpaced supply. One of the areas we’re interested in is how technology can be used to address these issues, such as using software to automate specific workflows within the healthcare industry, which led to our investment in autonomous medical coding platform CodaMetrix.
“YY’s deep industry insights, proactive approach, and an unwavering commitment to CodaMetrix’s growth was obvious from the onset. She exemplifies why SF’s value-add extends beyond just financial contribution, offering strategic guidance, introductions to key industry players, and even hands-on operational support when needed. Her genuine interest in understanding our mission and vision ensures a partnership built on trust and aligned objectives.”
—Hamid Tabatabaie, Cofounder and CEO of CodaMetrix*
Another area we’re following is the spike in the cost of healthcare driven by our aging population. There are 60 million seniors in the U.S. today, and that number is expected to double in the next 2–3 decades. Healthcare costs also rise rapidly with age—the cost of caring for someone over the age of 85 averages out to $32,000 per year, while the average is only $5,000 for those between 19 and 44 years old.
So the question is, how do we get ahead of this problem and reduce healthcare costs, particularly among the oldest part of the population? One possible solution is the concept of home health and aging in place—the doctor comes to the patient. That way it’s possible to proactively screen for and address any medical conditions early, thus avoiding the higher costs associated with providing treatment when it may already be too late. To tackle some of these challenges, we’ve backed Recora Health, which partners with health systems to provide a platform where patients have access to cardiac care at home, and Wellth, which uses behavioral economics principles to ensure our elders are taking their medication every day at home.
Of course, given SignalFire’s data-driven approach, we’ve been building our thesis at the intersection of healthcare, data, and AI for a while now. For further reading, please check out our blog post How AI and analytics could solve healthcare’s big data problems and our investment in Health Gorilla, the leading data interoperability platform:
“YY has been a fantastic strategic resource for Health Gorilla’s management team, offering insights that have accelerated our mission to modernize our nation’s health data infrastructure. Her experience as a founder and operator makes all the difference, providing hands-on, tactical contributions to our growth and product strategy. I’m thrilled to see her well-deserved promotion to Partner.”
—Steve Yaskin, Cofounder and CEO of Health Gorilla*
What advice do you commonly give founders?
The number one message I keep delivering to our founders is that the next two years won’t be easy, neither from a funding nor from a revenue perspective. We try to help companies figure out the trade-off between growth and burn. Over the last few years, many believed in growth at all costs. Now things have shifted and the focus is on how much it costs to obtain that growth. We try to work with our portfolio companies to think through all of the options to build a much more capital-efficient business.
We’re also having a lot of discussions about org design and how companies can use the current environment to proactively restructure the business and make smart decisions to set themselves up for long-term success. I always tell founders that cost-cutting doesn’t have to mean you’re in trouble. In fact, it’s often a sign of strength.
That being said, I’m also very excited about the next decade ahead for the startup ecosystem as some of the most resilient businesses were built during the last financial crisis. If you are a founder in health tech at a post-product market fit stage, please reach out! I’d love to get to know you and jam on all things healthcare. You can find me at [email protected].
* Portfolio Company Endorsements: Certain portfolio company founders listed above have not received any compensation for this feedback and did not invest in a SignalFire fund. Please refer to our website for additional disclosures.