This is a post I began while at Echelon 2010 three weeks ago but never got around to finishing. No matter, this isn't a time-sensitive topic.
Listening to Dave McClure's talk on Internet start-ups was, er, entertaining. He made several good, occasionally controversial points such as:
- Most Internet start-ups today don't need VC money.
- This is a great time for Internet entrepreneurs, with better bandwidth at lower costs, cheaper hardware, more people coming online, etc all available for the taking.
- Lifestyle businesses are a perfectly respectable pursuit. They're just not interesting to VCs. No shame in that.
- The VC model will change (is changing). The big guys have gotten bigger over the years and are finding it ever harder to deploy capital efficiently and effectively to achieve the sorts of results they achieved in the past. In a way, they're too big to succeed. He thinks that the successful VCs of the future will be the medium-sized ones and angels/angel funds/incubators.
So I generally agreed with all of the above. Except when McClure began arbitrarily applying the perspectives of his Silicon Valley world to entrepreneurship in Asia. His excessively US-focused themes were particularly apparent with the following:
- As I said, I agreed with McClure's opinion regarding the VC model. In many ways, he helped make the case for VCs like my employer! (We're a large VC in this part of the world, but about medium by Silicon Valley standards.) He, however, was talking specifically about the Silicon Valley VC model, although he didn't say so explicitly. Many of the big guys from his part of the world do operate in our part of the world and quite successfully at that.
- McClure repeatedly exhorted the audience of entrepreneurs to take advantage of the platforms provided by established Internet companies. But the companies he mentioned ranged from the cliched to the downright ridiculous. Google, Yahoo!, Amazon, eBay and AOL. AOL???
- The focus of the talk was entirely on the PC web. I wonder if he knows how many PC web users there are in the region compared to mobile.
- Related to the point about lifestyle businesses, McClure showed his utter cluelessness about the lifestyles of his audience, the economics of local deals and the expectations of capital markets. He painted the sale of one's company for a couple of hundred million dollars as a reasonable outcome not to be ashamed of; no need to worry that the xx billion dollar outcome never happened. I obviously don't remember the exact words he used but he was trying to encourage entrepreneurs to follow their passion and build reasonable-sized companies, an admirable aim in itself, but was utterly ignorant about what "reasonable" means here. An exit worth a few hundred million dollars? You'd be a shining star in the local community if you achieved that sort of exit in ASEAN and probably further afield too. Your investors would be pretty happy too because, guess what, it's the rare tech company that raises hundreds or even several tens of millions of dollars in investor money to begin with, so the few investors you do have will reap handsome returns.
Silicon Valley isn't "Asia". The US isn't "Asia". There is no "Asia". Each country in the region is different. Different languages, different companies, different cultures, governments, market sizes, capital markets, players, demographics, legal systems... do I need to go on?