By creating synergy and doing things differently
Renowned Silicon Valley inventor, entrepreneur, and venture capitalist Dado Banatao attributes his success to outworking, out-inventing, and out-innovating talented engineers. In a wide-ranging exchange with local software programmers and engineers, academics, and aspiring entrepreneurs Monday, Banatao said many of his competitors were brighter than he is, but they made the mistake of doing things in a “normal” way.
“Don’t do things the normal or easy way,” the Silicon Valley veteran told his admiring audience. Instead, “look for the best solution ever.” For Banatao, the competitive edge Filipinos enjoy over fierce Asian and Eastern European competitors is not their technical expertise, but their “creative side,” a product of the western-style education provided in the Philippines. “We (Filipinos) learn to take concepts, put them together, and create synergy,” he said.
To illustrate, Banatao related a story in which a group of programmers were asked to develop code for a particularly thorny issue, too geek-intense to go into here. His colleagues addressed the challenge in a traditional manner, which resulted in elegant code that worked, but that was both longer than necessary and inefficient in terms of the energy and processing capacity it consumed.
After spending an evening thinking about the problem, Banatao presented his colleagues a thin, 10-line piece of code, which they viewed with skepticism. There was no way, his colleagues reasoned, that this tight little application could perform as effectively as their 50-line code. “Sure it will,” Banatao retorted, inviting them to give it a test drive. Of course it worked, consuming less energy and computing power.
“It was just math,” Banatao explained. But this math was the product of understanding the core problem, devising a concept that represented best process rather than accepted process, and executing the solution. The episode sums up Banatao’s approach to business and explains his success. For the Silicon Valley inventor and investor, success is a product of applying the right technology to the right problem, defining the product in a way that is clearly understood, and executing on that vision. That’s synergy.
Banatao has created a lot of synergy over the course of his career. He is perhaps best known for inventing the first IBM-compatible chip set, creating the non-branded PC in 1985, which “made the PC cost effective and high performance.” Banatao has also consistently made headlines as an entrepreneur and venture capitalist. He continues to hold the record for founding to successful IPO for a startup, and firms he has helped finance are worth billions.
As is typical for Banatao, Monday’s session consisted of a five-minute talk and a 90-minute Q&A session, and it could have gone on much longer. His audience was mostly looking for insight, wondering what they should expect and if they would have his blessings if they chose to work in the U.S. (They do. Banatao expects them to learn and return, but cautions to be persistent in the face of daunting challenges.), if failure meant the end for an entrepreneur (No.), and what drove him to become an entrepreneur (Confidence.), given that Filipinos are typically risk averse.
When asked how to access capital quickly and “easily,” however, Banatao responded with sobering advice. “First, raising capital is never easy,” he explained. The “classic” mistake first-time entrepreneurs make in raising capital is failing to understand the market. “Many startups don’t know how to productize technology,” he explained, because they don’t understand whether their technology is relevant to a market.
One of the first questions he asks startups that pitch their ideas to Tallwood Venture Capital, his U.S. firm, or Narra Venture Capital in the Philippines where he is a limited partner, is “Who is your marketing guy?” If they don’t have a marketing expert, Banatao says he switches hats and offers some sage consulting advice: “Get one.” If they do so, there’s a chance they’ll get another chance to pitch.
Another recommendation: “Never bootstrap a good idea,” he said. By bootstrapping, Banatao is referring to the temptation to start small instead of setting big goals. Often, entrepreneurs lack the confidence to tap significant sources of capital, which typically involve amounts of $5 million as a minimum to be of interest to a big-time venture capital firm.
Building confidence comes with competing with the world’s best and brightest, an everyday occurrence in Silicon Valley. Learning to deal with failure, and learning from failure, is also key. “Almost every entrepreneur fails at least once,” Banatao cautioned, “including me,” referring to his first startup which ran out of money and was sold to investors. “Failure is not a big thing in Silicon Valley,” but the entrepreneur is expected to leverage the experience to become successful in the future.
Banatao doesn’t, however, expect Filipino entrepreneurs to emulate his success. As in most other things, he has a different idea, and that’s for an entrepreneur someday soon to do even better by doing things differently, long-term, and with confidence.