Article title: Silicon Valley East?
Publication: Upside
Author: Chuck Lenatti
Date published: 1997-10-06
While the San Francisco Giants were rolling to their first successful season since 1993, the real heavy hitters on the Peninsula were in Singapore taking batting practice in front of the country's high-tech community. Attorney Joel Kellman of Fenwick & West in Palo Alto, Calif., and Thomas Ng of TDF Management Pte Ltd. in Singapore arranged for some of the Valley's premier investors to come to Singapore in late September and explain how they work with startups.
Among the sluggers at the three-day Tech Venture conference were John Dean, president and CEO of Silicon Valley Bank; Len Baker, general partner at Sutter Hill Ventures; Gary Morganthaler, general partner at Morganthaler Ventures; Tony Sun, general partner at Venrock Associates; and Lip-Bu Tan, chairman of Walden International Investment Group. (The name Tan may be unfamiliar, but pay attention to this man; when Lip-Bu Tan speaks, no one leaves the room, not even the other VCs.). Even though the panels were standard Silicon Valley fare--"The Venture Capitalist's Role in Technology Startups," for example--the Singaporeans in the audience hung on the VCs' every word. You could hear a cell phone battery drop.
One panel at Tech Venture asked the question on most of the Singaporeans' minds: "Can There Be a Silicon Valley in Singapore?" One answer, from Sutter Hill's Baker, was, "You're aiming too low." Tan, reciting the litany of social woes in the Valley--congestion, traffic, soaring real estate prices, escalating divorce rates and high VC burnout--also questioned the wisdom of following the Silicon Valley model.
Even if the Singaporeans were foolish enough to try to adopt the Highway 101 mentality, it's unlikely that the Valley's wild and woolly financing model will work in Singapore in the near future. With rare exceptions, Singaporean venture capitalists are more enamored of investments they are comfortable with, such as real estate, than they are in taking a chance on the nebulous promise of a high-tech startup.
Another panel, titled "Managing Startups," pinpointed another key distinction between the two environments. While leading a company that fails is practically a badge of honor in the Valley and most successful executives have stumbled at least once, in Singapore, as in most of the rest of the world, there's a stigma attached to failure, and executives may not get a second chance.
That's not to say there aren't some riverboat gamblers in Singapore, though. For example, the peripatetic Philip Yeo, head of Singapore's Economic Development Board, came up empty after sinking a cool $5 million in Kamran Elahian's ill-fated Momenta venture. After reading that Momenta had tanked, Yeo got on the phone to Elahian. "Kamran, what happened?" asked Yeo. "Bad luck," Elahian replied. Yeo simply hung up and went after his next investment.
The lack of business acumen among Singapore's entrepreneurs is another stumbling block to replicating a Silicon Valley-type environment in Singapore. Before the conference, the VCs were treated to the kind of dog-and-pony shows typical of the Valley, but with a difference. It was as if they had not only traveled through space, but backward through time as well--about 10 years. While some of the entrepreneurs' ideas seemed to have product potential, the concept of marketing remained elusive. "It was like, 'Hi, I'm now an entrepreneur. Now tell me, what are my instructions?'" said Baker
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