Global Themes

On Globalization & Venture Capital

In Silicon Valley, a debate on India, China and Japan…

Last Tuesday evening (22nd Aug), at an ASVC event in Palo Alto, I had a great opportunity to share views & thoughts on the VC environment and ecosystem in India, China and Japan with Claude Leglise and Yasuo Miyazawa.      Thanks to the hard work by Vinie and her team, we had an impressive turn-out and a very lively Q&A that went well beyond what we had anticipated.Tom Savage from Wilson, Sonsini moderated the discussion during which Claude (now with W I Harper) shared his insights about China and Yasuo who heads NIF Ventures offices in Silicon Valley commented on recent developments in Japan. 

The idea to have this panel came about during a conversation that I had with Vinie at the Red Herring Conference in Beijing (April) this year.
In the past two years, I have had the chance to look at developments in these three countries at very close quarters – and I was keen to discuss some of my observations with others who had spent time in these geographies.

In his opening remarks, Claude mentioned his belief about China becoming a dominant theme in the global economy for the next several decades. He also talked about how seemingly mundane sectors in China had the potential to make spectacular returns on investments – I particularly liked his example of a business that he dubbed “HomeDepot.com in China”!

I made two points in opening. First: Although a comparison between India and China was inevitable at such discussions, the right way to think about this is “India and China” rather than “India vs. China”. Two: Although seemingly chaotic and messy on surface, the Indian economy and development paradigm had resilience and stability that was deeper and I felt more sustainable.

Yasuo spoke about how Japan was finally on the upswing after more than a decade of recessionary trends. He pointed out that the Nikkei (index) has now doubled from where it was at its worst…but in spite of being a high-tech economy, technology start-ups, exits and IPOs have been few and far between.

We also discussed:

  • the tremendous opportunities opening up in China by leveraging technology in traditional sectors (such as an employee health care plan for large Chinese cos. managed online)
  • how there are very powerful drivers underpinning India’s growth, in particular (i) the very “young” population and (ii) consumer expenditure which, as a % of the GDP, is the second-highest in the world (at 67%, just behind US at 70%)
  • the flood of “cheap money” in China today
  • how “United Airlines is not a substitute for local presence” (memorable quote from Claude)
  • the bubbling Japanese stock market and why is it so easy to go public in Japan (apparently on as low as $5m in revenue)
  • AIM – see my earlier post on NASDAQ, AIM and IPOs
  • the culture of entrepreneurship (and how it differs between India, China and Japan)

All in all, a very engaging evening and stimulating discussion…but I am sure this is not the last time this topic will be discussed. 

 

August 25th, 2006 Posted by | China, India, Japan, Venture Capital | no comments

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