Asian Venture 2005 Digest

I attended Asian Venture 2005 organized by venturewire of DowJones today and met with my friend Roger Li of InfoTech Ventures and Vinie Zhang of Hitachi Data Group, and many entrepreneurs from China. Dowjongs is really trying hard to bring asian innovations and investment opportunities into the backyard of valley VCs. Does it mean from now on VCs do not have to be tortured by the long flight and unfamiliar food? We will see and only time can tell.

I for sure re-learned some good observations from speakers and could not echoed more with most of them. Here are some highlights:


Ashish Gupta of Woodside Fund stressed that US VC firms need to put first-class team on
the ground to run businesses, and place huge premium on people/team who know very well how to run business.

Roger mentioned that more than 50% companies that have liquidation activities in China in 2004 are founded by people who never studied abroad. So it is fairly balanced in terms of team dynamic and experience. He also predicts that more and more VC firms will shift to early stage investment in Asia as the late stage investment becomes less financially attractive.

When asked how to define a company an Asian company or a US company, the panel agreed it is really a question of which market the startup is trying to serve. So the focus is more revealing than the geographic location.

Claude Leglise raised concerns on current US goverment's policies on open trade and level of inteference with business. Case in point, when US government blocked a Chinese company's quest to acquire a US based oil company for security reason, so how can US goverment convince other countries to be more open?

The keynote speech by George Schultz gave a few insightful personal views:
1. Changing in technologies changed entire worldwide economic philosophy. The world is truly Flat as Thomas Fredman wrote in his book;
2. Democracy causes fertility level drop in developing country as more women joined the work force; (bad for human race then?)
3. Environmental consequence is much easier for people to grasp. He once chatted with Chinese premier about his 30 minutes trip from the hotel to the premier's office and suggested implicitly that hybid cars made more economic and environment sense. 3 months later, the Chinese approved Toyota to manufacture Prius in China. Should he bill the premier for being shrewd?

Another panel talked about what type of businesses will eventually have to face the reality and either die or move to places where it can build sustainable competitive edges. to summarize:

Type A: Quantum leap type --> better stay in the SV or US
Type B: Faster, Cheaper, Better type (90%+ valley companies are in this category) -->save
yourselves sooner by moving operations to asia.

The notion of innovation has to have both a significant user group and an investing group, otherwise, it is merely an invention.

Areas Asia will lead include Gene Therapy, Stem-cell research, consumer centric technology and service businesses like VOIP, IPTV, Display technology, alternative energies, clean-tech etc.