The Promise of Silicon Global

Draper University in San Mateo

Silicon Valley is going global but don’t count on any market to surpass it soon.

Today, just about every market in the world is aiming to capture the Valley’s magic: creativity, optimism, not to mention blue skies, clean air and mild year-round temperatures.

Brazil and Russia are two emerging markets that are vying to get on the tech map and Sand Hill Road investors have arrived. Both follow the lead of China and India, which continue to show the challenges and opportunities of creating world-class tech startups and innovations from developing markets. Read more at Silicon Asia post at Forbes. 

Of course, not every market can copy the Silicon Valley formula. It takes a special blend of talent and funds all clustered together to make it happen.

Where else but Silicon Valley could a venture capitalist open their own entrepreneurial school? See photo I took of Draper University, which VC Tim Draper is opening in the former Benjamin Franklin Hotel currently under renovation in downtown San Mateo.

We'll be exploring the theme of Silicon Global at our next event in the Valley, October 3, at Rosewood Sand Hill. See the program and sign up here: Silicon Dragon Valley 2012.

 

Chengdu Mixes Chips, Bytes, Pandas & iPhones

Chengdu entrepreneur
 Kevin Yang

Best known as a place to see pandas, sample spicy Sichuan food, and trek to Tibet, Chengdu is aiming high, trying to take on a new identity as a tech innovation hub in western China, following the lead of Silicon Valleys in Shanghai and Beijing.  

This surprisingly modern city today sports software parks, incubation labs, science universities, few bicycles, and yes, plenty of young entrepreneurs who still idolize Steve Jobs and are eager to make their mark with a successful IPO of their techie startup. Multinational corporations including Intel, Lenovo and Texas Instruments have landed in Chengdu to do research and development -- not to mention that Apple makes iPhones and iPads here.
 
The rapid growth of Chengdu's software and technology businesses -- revenues were up 64 percent in 2011 to $48 billion -- makes worries about a China economic slowdown seem ridiculous.
So too does the bubbling consumer economy. Work crews and cranes are putting up a theme park and shopping mall in one gigantic complex that is also supposed to house two 7!-star hotels. (Only in China.) Then on another major thoroughfare a brand-new Louis Vuitton store stands out -- one more shopping option for newly minted Chinese millionaires.

In recent years, Chengdu has set out to transform its economy from a manufacturing and logistics base to a tech innovation capital that could hold a candle to Silicon Valley.  It's what every city planner worldwide dreams of today.

Sign at Chengdu construction site:
"The inconvenience today is to
facilitate tomorrow."

From my recent explorations in Chengdu, this formula is beginning to show some results. The startup trend was particularly noticeable among the switched on technopreneurs I recently interviewed in Chengdu.

Take, for example, Kevin Yang, the founder of Tap4Fun, which makes games for iPhones and iPads. It's his third startup and Kevin acts and talks like a Valley boy, even though he's only been outside of China once, to Tokyo for a meeting with big-time venture investor Masayoshi Son of Softbank Capital.

Kevin says he has read all the books about Steve Jobs and has monitored on-line courses from Stanford and MIT. His computer science degrees come from Chengdu's top computer science school (USETC), where he cranked up his first mobile gaming startup while an undergrad. His second startup was a made-in-China Twitter application called TwitBird that proved popular in Korea and Japan but has been sidelined, Kevin says, because there was no revenue model for the ap. Sound familiar?

I got a tip-off that Kevin is now on to a good thing (he wants to take his current startup public) when I happened to run into a leading Shanghai venture capitalist at Tap4Fun's office. So much for Tap4Fun remaining in stealth mode!

Other venture investors including Chengwei, Gobi, Morningside, Matrix and Ceyuan are looking to Chengdu as a next, lower-cost frontier in China as entrepreneurs in China's major cities have gotten greedy about deal terms. Angel investors have arrived too such as Maipu Ventures, a spin-off of Chengdu-based networking equipment company Maipu Communication.

Several other startups caught my attention during my tech tour of Chengdu. Pinguo Digital Entertainment makes a social ap for sharing photos (like Instagram) and claims 30 million users. Then there's a very localized startup named the Institute of Care-Life that makes earthquake detection and protection equipment, a reminder of the massive earthquake that struck nearby in 2008. 

It's still early days for Chengdu but the potential is there. Chengdu is home to 1,400 IT companies, including 200 of those in the Fortune 500 big leagues. The ultra-modern and sprawling Tianfu Software Park aims to be a second city rival to Beijing's Zhonguancun district, the heart of tech in China. Christine Du, the president of the software park, talks up the city's Silicon Valley culture and spirit and its carefree style.   

Chengdu does have a friendly and relaxed culture. But it reminds me more of the U.S. Midwest than the San Francisco Bay Area. Chengdu's flat open plains and largely nondescript buildings signal big city Chicago to me but without the lake, extreme temperatures and the wind.

Promoters of Chengdu struggle to get the right message to tourists and to corporate investors alike about its attractions beyond pandas and assembly lines. Chengdu has put a major ad agency to work on crafting its brand and the city has hired a savvy social media strategist who tweets out chirpy messages on Twitter and China's Twitter-like Weibo. 

Getting people to think of Chengdu for chips and bytes could really begin to happen as more and more tech majors move west in China and deal makers find the gems here.

Silicon Dragon Entrepreneur of Beijing Award Goes to Borqs CEO Pat Chan

Congratulations to Pat Chan (left) of Borqs for winning this year's Silicon Dragon Entrepreneur of Beijing Award. News of the award was retweeted by Intel Capital to its more than 7,000 followers on Twitter.
Here's the press release, from PR Newswire:
Borqs International Holding Corp (Borqs), a leading global end-to-end Android+ and Cloud software solutions provider, recently announced that company CEO and President Mr. Pat Chan was honored as the recipient of the 2012 Silicon Dragon Entrepreneur OF BEIJING Award. Speaking at the awards ceremony on May 31 in Beijing, Mr. Chan shared his entrepreneurial experiences and Borqs' development story with other entrepreneurs from well-known mobile internet enterprises including Renren, Innovation Works, Dangdang and Yesky. Mr. Chan also highlighted Borqs' expanded global market development strategy. The award not only acknowledges Mr. Chan's personal entrepreneurship, but also reflects Borqs' numerous achievements in mobile internet Android+ software and services platform solutions in recent years.
Accepting the award, Mr. Chan said: "I want to express my thanks to Silicon Dragon for awarding this honor to me and my team. This is proof of Borqs' successes in the five years since we began in 2007 and the recognition we have received from the Silicon Dragon judges and some of the technology industry's most senior and respected individuals. Through five years of active exploration and practice in the mobile internet field, Borqs has accumulated a great deal of experience in providing Android+ software platform and service platform solutions for mobile internet while maintaining a healthy growth rate. Looking to the future, Borqs will continue to uphold its commitment to its customers around the world. We mean to become a representative for creativity and openness in the mobile internet industry, and Borqs will continue to leverage the innovative abilities of our outstanding staff of technical professionals to spur development throughout the industry."
We are very pleased to see Mr. Chan and his dynamic team continue with great strides in developing innovative solutions to further drive growth and openness in this industry," said David Xu (center, photo), Partner, KPMG China, the audit, tax and advisory services firm that sponsors the Silicon Dragon award series.
Mr. Chan, one of Borqs' founding members, has also been honored to receive the High-Caliber Talent from Overseas Award from both the national and the Beijing governments. Mr. Chan has brought over 20 years of executive-level experience in wireless communication and the information and ICT sector to Borqs. With Mr. Chan's guidance, Borqs has leveraged its strength in innovation and R&D to make a series of landmark achievements in the Chinese market. Internationally Borqs has established partnerships with operators in the US, the Asia Pacific region, Europe, the Middle East, and Africa. Borqs has entered into strategic alliances with the world's leading OEM manufacturers and chip vendors to provide commercialized Android+ software solutions. Under the guidance of its richly experienced management team, Borqs will continue to provide its customers with superior user experiences supported by scalable, stable and advanced back-end technologies.
About the Silicon Dragon Entrepreneurs Award
Winners of the Silicon Dragon Entrepreneur Award must meet the following criteria for selection:
"Must haves"

• An innovative product or service in a tech or related area: mobile communications, e-commerce, social networking, Internet, online games, cloud computing, outsourcing, cleantech and healthcare
• A dynamic, passionate CEO/founder with some international company experience and/or education at a top university
• A high-caliber management team with fully staffed positions for CTO, CFO, Sales and other top executive posts
• Raised at least one round of venture capital from a prominent firm
• Reported fast growth at least two years in a row for startup or emerging company
• A market leader, with sizeable market share that can be documented by an outside industry source
• Profitable or on a quick path to profitability
• A highly qualified board of directors from the industry
• English-language fluency
• A surprise factor such as a major milestone or accomplishment that seemed impossible

Rebecca A. Fannin, the well-known journalist and author of "Silicon Dragon", established the award in 2010 through the news, events and thought leadership group she leads, Silicon Dragon Ventures. "The award aims to showcase the latest developments in Asian entrepreneurship and encourage the continued growth of an innovation ecosystem in the region through sharing best practices," Ms. Fannin said At Silicon Dragon events held in Beijing, Shanghai, Hong Kong and key innovation hubs, founders, investors and leaders of companies from key industries such as venture capital, IT and social networking are invited to share their experiences and entrepreneurial spirit.

The Facebook Effect on China's Renren

It was little more than a year ago that China’s Facebook, Renren, went public on the NYSE. Now the spotlight is on Facebook and its debut on NASDAQ.

There’s debate over Renren really is a China Facebook, like Baidu is a Chinese version of Google. Certainly there is a world of difference. Facebook has not entered China while Baidu competed with Google for several years in China.

Renren is the top social networking site in China, while Facebook is a leader is just about every market globally except China. With a market as huge as China’s and with so much market potential for games, social networking and social commerce, Renren’s turf is China.

Facebook likely faces a challenging time if it does enter China. Keep reading this post at Forbes.

Startup Asia Deals Count in 1/4 of Forbes Midas List of 100 Top 100 VCs

What a difference it makes to have China and India included in the Forbes’ Midas List 2012.

Of the top 100 venture capitalists who scored in this annual ranking, 12 who have funded startups in China are new on the 2012 list from last year. Two VCs active in India emerged on the 2012 ranks.

DCM and IDG Accel were among those firms that excelled with the expansion of China to the mix in 2012. The inclusion of India this year propelled Accel India and Mayfield Fund in the 2012 rankings.

The list reflects the importance of China and India as emerging hotspots of technology innovation, as well it should! China and India accounted for 17% of the total venture capital invested in 2011. Overall, the 2012 rankings highlight the growing range of dealmakers globally who have become active in China and India over the past five years.

What the dealmaker rankings also factor in is the fast increase among their funded Chinese startups that have gone public in the U.S. over the past five years. Prominent on the list of the VCs portfolios are recently listed Chinese companies Renren, Tudou, HiSoft Tech, Dangdang, Bitauto, VanceInfo and Qihoo 360.

China’s Facebook-plus site, Renren, appears on four of the VCs’ portfolio of deals. Other Chinese deals that repeat on the deal list are outsourcing company HiSoft Tech and video sharing site Tudou. From India, travel sevice MakeMyTrip was notable among the deals made by the top-100 ranked VCs.

Perhaps next year’s list can take into account the post-IPO performance of the deals! Many of those recently listed companies noted above are trading below their IPO price.

Privately held companies in China and India mattered in the rankings of the top 100 as well. From China, among the prominently cited deals are GroupOn-like Lashou and gaming portal Duowan. From India, medical device maker Perfint and online retailer Flipkart from India are notably recognized.

Here’s my tally of the 12 VC newcomers in 2012 doing deals in China, in order of their rank.
See Startup Asia tally at Forbes.

Silicon Dragon Beijing 2012: Serial Entrepreneurs Set up Shop in China

If at first you do succeed, try, try again! That must be the motto of a growing group of startup founders in China who just won’t quit! More and more young entrepreneurs are racing to do their second or third startup in China’s highly energized markets — before this opportunity to catch the wave is gone.

The first generation who made it with Baidu, Alibaba, Tencent, Sina and Renren are moving on to do their second or third startup in China. It’s one more sign that China’s Silicon Valley is growing up fast! and becoming more and more like the original.

In the Valley, I often meet entrepreneurs who are on to their next new venture. Ask them their track record and most will admit that they have at least one failure among the bunch. The culture of moving on, despite failure, is one reason why Silicon Valley has thrived. Now, this same mindset is catching on in China, and as the fear of failure goes away, we may see another golden era for startups in China that outdoes the first wave from 2004-2008.

Read more at my Forbes post.

Silicon Dragon Beijing 2012 will spotlight these trends at our May 31 program featuring venture investors Hurst Lin of DCM, Neil Shen of Sequoia Capital and CEOs Joe Chen of Renren and Andy Tian of Zynga China – all examples of serial success.

Startup Asia Tips for Entrepreneurs: Kai-Fu Lee

The following is an excerpt from my Startup Asia interview with Kai-Fu Lee, founder of Innovation Works, in China. Based on his experience as former president of Google China and now head of his own incubator and venture fund in Beijing, he shares three key lessons for the next generation of Chinese entrepreneurs.

Startup Asia writer Rebecca Fannin with
Kai-Fu Lee of Innovation Works

Any advice for tomorrow’s entrepreneurs coming up in China?

My first advice is don’t think your idea will change the world, but understand the trend. That’s much more important. If you are growing in an explosively growing trend, you just have to do a good job and it will take you to the top. And if you are in a flat trend and you think are going to do something that will kill all the competitors, I think that is going against the wind and not productive. The trend is your friend.

The second trend is focus and simplify.

The entrepreneurs are all smart and they all want to do everything. They have a new idea every day, a new product, a new feature, a new market. The model to develop new companies — especially new Internet companies — is to build something simple and target a very small group of people and then experiment and grow from there. The lean startup process, for example.

The third thing is, don’t go it alone.

So many Chinese entrepreneurs want to be that big boss. That is very Chinese to want to be the big boss, and everybody is your underling. But in the road to build a startup it is so challenging and lonely and there are so many downers, you want a partner who can encourage you and work with you and help lift each other up to go through the troubles. And you also want someone whose skill set complements you, and who has implicit strong trust with you to take it to the next level. Almost all our entrepreneur proposals are a one-person show. I would encourage more two or even three people working together.

See the Startup Asia video for other out-takes from my interview with Kai-Fu Lee, who by the way, wrote the foreword to my latest book, Startup Asia. Stay tuned next for his view on serial entrepreneurs, which happens to be the theme of our Silicon Dragon Beijing 2012 event on May 31.

Read more posts at Forbes.