Silicon Valley insights for Sri Lanka’s budding entrepreneurs
In Sri Lanka to empower and enlighten Sri Lanka’s business community and budding entrepreneurs, Chair Emeritus and board member of the MIT/Stanford Venture Lab Gigi Wang will host a seminar titled ‘Success drivers of Silicon Valley – venture capital, investment and business opportunities for Sri Lanka’ tomorrow in collaboration with Infotechs Ideas.
Speaking to the Daily FT, Wang gave a brief overview of the topics she will cover at the forum, expanded on the Silicon Valley culture, offered insights into setting up a successful start-up ecosystem and into current global trends and upcoming technologies. Following are excerpts from the interview:
By Cassandra Mascarenhas
Q: Could you give me a brief overview of the topics you will be covering in your seminar tomorrow?
A: The seminar actually has two sections. We have the morning seminar targeted towards the executives and so the content in that will focus more on leadership – the characteristics of leadership in Silicon Valley that has led to all these successes – and how the ecosystem actually works there and all the different components. For example, there is a huge ecosystem in Silicon Valley that makes it work. It’s the way it includes multiple players like universities, start-up companies and investors. It also very much involves other players that support the industry like bankers, lawyers and human resources companies – they all actually work together and it’s like a living being.
Q: Could you explain more on the Silicon Valley’s ecosystem?
A: One aspect that is very important and I want to cover is the culture of Silicon Valley. When you read about Silicon Valley, you read about investors, how much money they’ve spent, what their returns are and technology. You read about all these tangible things and as a result, many regions try to copy Silicon Valley with all these tangible things but they do not succeed and there are only a very few regions that seem to be capable of producing the calibre of companies that Silicon Valley does.
The reason behind that is the cultural aspect – how people work together, the level of trust, integrity and one really important aspect which is going to cause people to step back is a lack of jealousy. I really want to touch upon those because unless leaders are aware of the huge cultural drivers that make a company or region successful, they can pour all this money, put lots of people behind it and they are still not going to create successes the way they want.
That’s more on the management and strategic side. Later on in the morning session, I’ll cover some of the hot technologies, the processes for funding, how they are incubated and I’ll share several different models for incubating companies depending on the type of company and the industry – it’s not a one size fits all.
Lastly, I’ll talk about some of the hot areas for investment, areas to look at which might be really good opportunities for people to either start companies in, for venture capitalists to invest in and for corporations to put some expertise behind these hot areas of technology.
What will the second session focus on?
Q: The second session is targeted towards start-up companies. It’s more towards people who are leading a company or trying to start one and I will focus somewhat on the same things in terms of leadership and culture but then it will be more focused towards someone building a company versus someone doing it across a whole ecosystem.
A: Sri Lanka has a very strong ICT industry and a lot of people have a lot of experience looking for the most leading edge stuff so I will be talking about some of the specific industries and technologies. One area Sri Lanka has been a huge leader in is the mobile industry. Sri Lanka was one of the earliest to go 3G and I’ll spend a bit of time on the mobile industry and trends especially iOS versus Android, because right now smartphones is the direction the market is taking so everybody is going to have smartphones but with different platforms – iOS, Android and also Microsoft and Nokia trying to emerge.
And then, what we do at the MIT Stanford Venture Lab we like to focus on identifying the leading edge technologies and industries and showcasing them. We’ve identified a whole bunch of leading edge technologies which are emerging as big commercial opportunities and business processes. I’ll be covering some of the new ones like video, vision computing, gaming, virtual goods and predictive analysis.
There’s a huge market in data analysis and also of course cloud computing and I’m just going to go into all these areas because I think one of the things that the audience in the afternoon session, many of them will be from the IT industry and will be interested in hearing about the latest and greatest that is coming from Silicon Valley with regards to ICT.
Then we will have a discussion and have people exchange ideas and give attendees to share their insights and knowledge about what is happening in Sri Lanka and I’m very interested in hearing about what are some of the interesting things Sri Lanka has developed or is working on.
Q: Sri Lanka is trying to build up a strong entrepreneurial/venture capitalist culture for start-ups to take off but there is reluctance in terms of investment. Could you address this issue?
A: It’s a chicken and an egg problem and I think part of the thing is that there needs to be good companies, companies that have the training and be wisdom in the way they develop the company. And the companies need to have leaders and management that can guide them to success.
I think one of the things Sri Lanka needs is probably some help to develop the whole start-up community in terms of how they get trained, how they learn to identify what it takes to be a start-up, how to build a team and how to develop technology and products.
Once there are more companies that know how to successfully launch their products and become a successful company, then I think investors will be more comfortable investing. I think part of the challenge right now is because Sri Lanka is early in the stage for having a start-up ecosystem and having a bunch of successful start-up companies, investors are hesitant because they do not see those companies and they don’t necessarily see the ecosystem, the communities and the culture that is producing the companies that they want to invest in.
There may need to be efforts to build up an ecosystem to produce start-up companies, maybe partly funded by the Government, corporations and investors who want to jumpstart this whole effort.
On the flip side, investors need to realise that investing in start-up companies and making tons of money, is a high risk return. A very important element of Silicon Valley is risk taking. They also need to have things that they feel have some hope of a chance of success.
One of the things you see in Silicon Valley is that the investors are often very involved in helping the companies succeed. They have frequent board meetings to meet with the companies, they make introductions to potential customers, give them advice on all aspects of running the company and so it’s a really productive, working-together relationship that investors have with the start-ups rather than just giving the money and then expecting them to come back with huge returns.
Q: In terms of the downward trend that’s still being witnessed in European markets and to a certain extent the US, how will this affect the industry overall and Asia in particular?
A: There may be a downward trend for two to three years but right now interestingly enough, in Silicon Valley, despite all the disturbances of the European market, the US is on an upward swing to recover from the real estate crisis. Currently, the big crisis is actually the European market.
It seems to have short term affects on the market in the US at least and in regard to the venture capital community, following the real estate crisis, there has been a huge upswing with money going into the venture capital industry so the money is already there and they are still trying to spend it. We haven’t seen it going to a significant downward trend yet because there happen to still have a lot of money from the impact of the upward swing.
As long as the US is spending money, I think the repercussions that will spread to Asia are usually pretty positive because it seems like the Asian markets seem to follow the US more closely and the US follows the European markets a little, but not as much as you think. I also think that in Europe, the EU is actually very involved and invested in keeping Europe stable and I think they will take what steps it will take to keep Europe stable because right now, they are in it together.
Q: Comparing different regions, what have you identified in the different countries you’ve been in and what are your thoughts on Sri Lanka in terms of building a start-up ecosystem?
A: In the last one year, I have spoken in Shanghai, France, Ukraine, Moscow, Hungary, Spain, Netherlands Malaysia and Singapore. I’ve spoken in so many countries and all these regions all really want to accelerate their start-up community. I will compare and contrast different regions trying to build up their start-up communities during the seminar.
For instance, Singapore has sunk so much money, hundreds of millions, in trying to create a successful start-up ecosystem and to create successful mega start-ups and they have not succeeded and part of it is because of too much government intervention and their biggest problem is they have the wrong culture to do it.
Q: What do you mean by ‘the wrong culture’, specifically, in terms of Singapore?
A: The thing in culture is risk-taking, trust, collaboration, relationship integrity with a win-win attitude not a win-lose game, empowerment, and that too really empowering the team rather than top-down and very importantly, a lack of jealousy. There are so many regions where jealousy causes people to try and destroy other people.
In Singapore, when I worked with entrepreneurs, they would show me their business plan and the first thing they say is ‘How do I protect it from being stolen?’ and I felt like saying your idea is not even worth stealing! You need to share your idea to find out where it is weak and make it better. The regions that I find are pretty successful because they have the right culture and the right government involvement, the right pieces of the ecosystem are Southern Sweden – they’ve created a bunch of start-ups that have been acquired, one of them by Apple. Another region is the Netherlands. So the big question is, does Sri Lanka have the different pieces it needs to build a really successful entrepreneurial ecosystem? From what I have seen and the people I have interacted with, yes, there is a desire and passion to do it, but part of my trip is to get to know and work with the people here to realise their dreams.
