Monday, March 4, 2013

Angel Investing: No More 'Stupid Money'

Angel Investing Matures From 'Stupid Money' And No 'Do Diligence'

        
Silicon Dragon Alley
After reporting from the startup hubs of Asia’s emerging markets for more than a decade, it’s refreshing to see innovation clusters forming closer to home.
I’ve been spending some time interviewing angel investors and entrepreneurs in New York City, hanging out in neighborhood cafes in the Flatiron district and the former meat-packing area around Hudson Street.
Brian Cohen, chairman of the New York Angels group and a lead investor in Pinterest, perhaps best exemplifies this new undercurrent of entrepreneurial energy that’s resurfaced in the Big Apple. I recently interviewed Cohen to get his thoughts on the startup scene in NYC and to hear more about his soon-to-launch book from publisher McGraw-Hill, ”What Every Angel Investor Wants You To Know: An Insider Reveals How To Get Smart Funding For Your Billion Dollar Idea.”
The title just about says it all. But Cohen has a lot more anecdotes and insights to share about how angel investing has developed from what used to be ”stupid money.”  We did a Q&A at his office in a cool co-working space – a sign above the kitchen sink with dirty glasses reads “100% of all entrepreneurs who do their own dishes have successful companies.”
What follows is a few excerpts from my chat with Cohen, who’s on our digital media innovator and investor panel here March 21. Keep reading post at Forbes.

Sunday, December 30, 2012

Predicing Top Trends for Startup Asia In 2013

As we get ready to ring in the new year, here’s my top 10 predictions for Startup Asia in 2013 — with a decided Silicon Valley lens. In case you missed it, this forecast follows last week’s recap of the top 10 Startup Asia trends in 2012.


Here goes:

1. Silicon Valley will remain the global tech hub followed by China though innovation centers in clusters around the world will matter more. Think Indonesia, Brazil and Russia, and of course, the perennial, Israel. London too will help to jumpstart innovation again in Europe as Silicon Roundabout becomes a reality. Entrepreneurs from around the world still flock to the Valley for that spark of imagination.


2. Startups will consolidate or die in the emerging Asian tech strongholds of China and India as the strong get stronger and the weak get weaker. The result will be more concentration of breakthrough products from fewer players and more pressure on startups to scale up quickly with a distinct advantage or get swallowed up.

To read all 10 trends, click Startup Asia 2013 at Forbes.com.



Top 10 Trends for Startup Asia in 2012

As the 2012 calendar near a close in this Chinese Dragon year, it’s time to reflect on the top trends that defined the increasingly sophisticated Startup Asia scene over the past 12 months.


Here’s a few observations here from my many journalistic travels and interviews in China and India during 2012.


1. The rise of the serial entrepreneur. Those who struck it rich with their first startups are now going back in for another try, this time with more cash of their own and with lessons learned. It’s a phenomenon that jumpstarted Silicon Valley and has now spread to Asia’s tech hotspots.


2. The arrival of the angel investor. Serial entrepreneurs are turning to angel investing as a way to seed lots of startups. The jury is still out if these first-time investors can make good bets, but early signs indicate that they are applying their skills to this new artistry. Check out Shanghai’s AngelVest as an example of how this model works.


3. Going private. With stocks trading low, several company founders raised enough private equity finance to take their companies off US exchanges and private again. Witness Focus Media, and a lot more in the cue. When and where the companies are re-listed is a trend to watch.

4. Survival of the fittest for venture firms. Those with a good track record and investment returns raised new funds, such as GGV Capital, which raised a fourth fund. Those that couldn’t get traction have gone silent or shifted their management teams. It’s a natural weeding out of venture firms in Asia, following a pattern that happened in the U.S. a decade earlier.

Continue reading post at Forbes.com. Click Startup Asia 2012 Trends.

5. Venture club deals. Venture capitalists are hedging their bets by grouping together and investing in deals that seemed destined to be big winners. Particularly favored are deals that have earlier angel financing say from a big name like Lei Jun.



Tuesday, November 27, 2012

Tencent's WeChat Speeding Past QQ In Uptake

Tencent's WeChat international trio:
Ian Chan, Poshu Yeung, Norman Tam
at Silicon Dragon award event

Imagine a mobile phone ‘app’ so appealing that it reaches 200 million users within 8 months of launch without any promotion and quickly spreads to 30 countries.

That’s Tencent WeChat, the highly popular text and voice messaging service from China that is becoming the ‘must have’ communication tool among the global technorati. WeChat is one of the first tech services from China to tap an international customer base and to sport more users outside the home country than domestically.

Even Poshu Yeung (photo center), VP of Tencent’s international group, admits he’s a little surprised by how quickly WeChat took off. He notes that WeChat surpassed QQ, its wildly popular instant messaging service in China, in

its adoption rate — partly because the name of the service was changed from Weixin or micro message to the easily pronounceable WeChat.

Yeung (see photo) was recently named Silicon Dragon Entrepreneur of the Pearl River Delta 2012 at a Silicon Dragon event in Hong Kong recognizing the break-out success of WeChat. A former group tech manager at Google for five years and a graduate of UC-Berkeley, Yeung joined Tencent in 2008 as a quiet techie who later

took on managerial roles requiring constant communication. 

Accepting the award on behalf of the team, he described the work environment at Tencent, which borrows some entrepreneurial script fom Google with innovation baked into its culture. There’s competition among teams for innovations and developers can devote 20 percent of their time to explore new projects — (remind you of Silicon Valley?) with performance results as the key motivational driver, not salaries. More than half of Tencent’s staffers are software developers or engineers, which gives an idea of the culture.  

To read more of this post at Forbes, see WeChat Speeding.

The Silicon Dragon Entrepreneur Award is aimed at recognizing startups that fit three distinct criteria. First, they must have created an innovative and breakthrough product or service. Secondly, the startup’s management must be dynamic and passionate leaders that have brought their company to an industry leading position. Finally, the company must have achieved rapid growth over at least two years consecutively as a startup or emerging enterprise. The Silicon Dragon award, which is presented annually in Hong Kong, Beijing and Shanghai, is sponsored by KPMG.

 

                    








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Monday, September 3, 2012

Silicon Dragon Eyes Shanghai's New Tech Hub

Silicon Dragon (above) recently interviewed Charles Chan, the executive director of Shuion Land, about the company's new tech hub in Shanghai, Knowledge and Innovation Community or KIC.

It's the site of our Silicon Dragon Shanghai 2012 event, held on September 13 with the city's leading venture investors and tech entrepreneurs. See you there!


Charles Chan
l  What is the vision for KIC and is it a kind of Sand Hill Road for Shanghai?
 
        Compared to Sand Hill Road, Sand Hill Road is notable for its concentration of venture capital firms, and easy access to Stanford University and Silicon Valley. KIC is dedicated to become a platform to align with different resources from “Campus” , “Community” , “Tech Park” to cultivate and incubate start-ups and help them grow to a greater scale. But KIC not only integrated the scientific innovation spirit of US Silicon Valley, but also absorbed the creative culture of Paris Left Bank. It has become a place for communication, information exchange, negotiation and cooperation, and even relaxation. It's a cradle for entrepreneurship and innovation in China, and accelerating it through international best practices.


l  Why was KIC located close to Fudan University? Is this because of the cluster effect, such as Silicon Valley with Stanford University?
 
Of course. KIC is located in the Wujiaochang sub-center in the Yangpu district of Shanghai, clustering within 14 major universities and colleges, including Fudan and Tongji. The abundant resources of universities and research institutions nearby cannot be found anywhere else in Shanghai. Those nearby universities provide talent support and bring continuous energy to those MNCs in KIC. For example, both ebaoTech & EMC signed a strategic partnership with surrounding universities including internship program/training course/lab research, etc. The key concept for KIC is “three zones integration:” “Campus” , “Community” , “Tech Park.” We believe that our “Knowledge and Innovation Community” will eventually become a platform for information exchange and communication based on the resources and talents from “Campus”, supported by the domestic and international high-tech corporations in “Tech Park”, venture capital firms and the government services, inspired by the atmosphere and lifestyle in “Community”.
 

l  Will Shui On Group develop other tech centers like this in other locations in China, in addition to Shanghai and Dalian?

KIC (Knowledge and Innovation Community) is a new business model, and we are still exploring possiblilities to make our vision come true. Now Shuion Land has a similar project, Dalian Tiandi in northern China, with GFA 3 million sqm, and focused on the global software and outsourcing industries to provide an integrated community. While we are extending our reach in the Chinese property market, we have stepped up our effort to set the trend and contribute to the creation of large-scale, multi-faceted knowledge communities to provide a total "work-live-learn-play" environment. I think KIC sets a model for us to introduce similar projects in other key cities in China.

l  How did Shui On Group get the idea for KIC? How long was the idea in development? how does this project compare to Xintiandi?

The story traces back to Shui On Group founder – Vincent Lo. Mr. Lo himself is a successful entrepreneur, and he has the strong passion to help young people. When he visited Silicon Valley over eight years ago, he was inspired and dedicated to create a “Silicon Valley” in Shanghai, which was quite forward looking in China. In his vision, KIC will be a think tank to assemble world famous enterprises and top class elite talents in scientific research, finance, and business consulting, and also become a platform for cultural exchange regularly for organizing various cultural activities, promoting communication, and enriching community life.

Both XINTIANDI and KIC have a full range of modern facilities for residential, office, retail, entertainment and leisure. Shui On projects provide a unique environment enabling life enrichment of "Live-Work-Play".
 
In terms of difference, XINTIANDI is the “city’s living room”, a Shanghai landmark, a trendy place for people from all over the world to play, entertain, live, work and enjoy. It blends the architecture charm of "shikumen" with modern features and facilities. While KIC is a knowledge community, it aims to create an environment where innovators and entrepreneurs can share knowledge, communicate, negotiate, cooperate, and relax.

 l  How is KIC encouraging startups in Shanghai?

Part of KIC’s core offering is an enterprise ecosystem where companies, foreign and local, big and small, can interact and work together for mutual benefits. While big companies and technology leaders would be a major anchor to this ecosystem, innovation and entrepreneurship would provide the talent and creativity needed to sustain the long-term vibrancy and growth of the Community.

Towards this goal, KIC has been actively promoting and nurturing entrepreneurial culture and spirit since its inception. It cooperated with Dragon TV in 2005 to launch a TV entrepreneurship competition named Winner in Shanghai, which set off a surge of entrepreneurial activity. Impressed with KIC's offerings, the winning players have subsequently hosted their operations in KIC.

Learning from the successful experience of Silicon Valley, KIC also founded the IPO Club where dozens of innovative entrepreneurial activities are held every year. As Shanghai’s first entrepreneurship club, IPO rolled out KIC Star incubation program, for prominent and successful businessmen and industry leaders to share their knowledge and experiences, as well as mentor aspiring entrepreneurs. More than 10 aspiring entrepreneurs have been successfully matched and coached by KIC mentors in the past two years.

KIC has nurtured technology startups since its inception. Some of these companies are now market leaders in their own right. Some have successfully obtained funding and even listed in overseas bourses. KIC now seeks to further enhance its incubator platform. Apart from the usual provision of plug-and-play venue for entrepreneurs, this incubator will offer a whole suite of services to help support and nurture the growth of startups from business match-making to technology partnership and licensing to fund raising to even international expansion.

 
 l  How many companies are now located at KIC -- both startups and SMEs, plus tech companies?
 
KIC is home to now more than 300 enterprises, with more than 6,000 talents working here. Small and medium-sized companies (SMEs) and technology startups make up more than 80% of this Community. Fortune 500 companies like EMC, Oracle, IBM and Deloitte are some of the MNC member companies of our Community.
 
l  How important are Silicon Valley Bank, Bay Area Council and Innovation Works to the success of KIC?

As part of its holistic enterprise ecosystem, KIC works very closely with key players like government bodies, universities and research institutions, professional bodies and so on, to help companies to grow and expand. Silicon Valley Bank, Bay Area Council and Innovation Works are some of our partners in this ecosystem. In particular Silicon Valley Bank and Bay Area Council work closely with us to provide an effective landing pad for American companies to expand and grow in China and in turn, for our Community members to expand and grow in US as well. In fact, we have a Joint Venture with TUSPark, Silicon Valley Bank and Northern Light Venture Capital in the form of an incubator in Santa Clara, USA to do just that. We launched this incubator called InnoSpring in mid-April this year, and demand for its services has been encouraging; with some 30 companies being hosted in InnoSpring.

KIC also works closely with partners in other major technology hubs such as Japan, Korea, and Hong Kong, to actively link our Community members with potential partners for market and technology access, as well as funding. Through our networks, our Community companies could also have access to launches in these overseas markets. For example, our Japanese partner has made available its incubating space and services to KIC Community members for free. Through its strategic partnership with key players both domestically and internationally, KIC constantly seeks to improve its enterprise ecosystem to better support its Community.

 

Sunday, August 26, 2012

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.

 

Monday, July 30, 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.