Louis Nguyen: The venture capitalists are getting a wake-up call, realizing different perspectives on what used to be considered "exit strategy": a homerun IPO or a big acquisition. So how has it changed? The VCs are going back to a more fundamental level such as revenue, profit, defensible technologies, real markets, management team that is not twenty-something without any operating experience… People now seem to favor more hard-core technology companies or a click-and-mortar model, a traditional company that already has the resources to try and expand their presence online to benefit and widen their customer base. Hardcore technology businesses such as broadband, wireless, optical, networking, voice recognition, software--stuff that is not easily created overnight--are probably in a stronger position, too, because barriers to entry are more formidable. This is much different compared to a year ago when everyone I know had a business plan in their pocket with various eCommerce models.

Foster: How does this relate to startups? What is the lesson to be learned?

Nguyen: It's best to bootstrap as far as you can before going for Angel or VC money. Go back and look at the fundamentals of your business plan and have your story straight before going out there. If you talk to VCs and they aren't interested, you need to know why. Do you really have enough expertise, confidence, and proprietary technology there to support a large and fierce market? How far are you from revenue and profit? I believe the VCs are interested in more of the "show me the money" part sooner now than before. VCs also like the involvement of brand-name people in the company. They want to take less risk now. Companies that are backed by fairly prominent angels or founders may have better chances since these people help add value and make the VCs pay more attention. Their involvement can quickly validate the company's value. Another consideration is to change your business model if you're having problem raising funding, but don't change it as a fashion, like today everyone wants to be a peer-to-peer, wireless, or optical company. Before that, it was ASP, B2B, B2C, etc… I think it's difficult to build a good solid business, but those with the good team, experience, smarts, hard work, and courage tend to last longer or actually make it.

Foster: Do you still have ties to Vietnam? Do you see anything coming out of there?

Nguyen: Not immediately. Clinton was there recently in December so hopefully good things will come soon, but I don't think the country is ready yet. But then again, I have not been back to Vietnam since 1975 to make any judgment. Closer to home, in Silicon Valley the three largest technology workforces are Chinese, Indians, and Vietnamese. The Chinese and Indians have been here longer and are definitely kicking butts in the tech sector. Vietnamese are catching up as I'm starting to notice more Vietnamese entrepreneurs and founders of tech companies that are backed by brand name VCs… very encouraging and delightful to see.

Foster: What is your take on VC investments in Asia?

Nguyen: If you're talking breakthrough technology development, I haven't seen much. It would be beneficial for Asia to have more companies along the line of innovation or commercial success similar to NTT DoCoMo. Looking for breakthrough technology deals in Asia is tough so the US venture guys are not as willing yet, except for the corporate guys. So why would any VCs invest in Asia? The VCs making money there are Asian VCs, on the ground, with a greater knowledge of local customs and influence. They know what's going on and are way more connected than the Sand Hill boys. Other than that, I know very few US venture guys in Asia.

Last year, I understand the Singapore government through NSTB (National Science & Technology Board) gave Draper Fisher Jurvetson $100 million to open a fund there, but the head guy just quit in December 2000, which caused some raised eyebrows within VC community seeking to invest in Asia.

It's tougher to find deals in Asia because some believe Asian technologies are still a little behind the US--perhaps the only exception is wireless. Some people might disagree, but you don't see US venture guys standing up a boast about any significant exits out of Asia. The money making appears to be through joint ventures and taking existing technologies in the US and implementing them in Asia.

Foster: What do you think is happening then? If so much here is being fueled by immigrant Asians, is it just the culture here, the opportunity, that lets ideas germinate? I was recently in India, for example, and it appears that Indians who've been successful here are going back to India to try and make something happen there. Now they have money, they know who is coming out of which schools, etc. They're trying to re-create a Silicon Valley back there.

Nguyen: That's absolutely true and a good topic to explore. Asians are perceived as hard-working folks and have the general understanding that the ticket out of poverty is education, specifically technology education, and Silicon Valley, USA. There are those who either have made it here in the US, or think their experience in the US will be useful back home. They are heading home to recreate other Silicon Valleys or successful businesses. I'd be interested in tracking their accomplishments and how it can be done. I'm sure the local governments in Asia would love for these people to return and share what they have learned.

Foster: And a lot of places all over the world are trying to start their own Silicon Valley, but why is it that much of the innovation doesn't begin there?

Nguyen: That's a valid question, but if everyone knew the answer to that, Silicon Valley wouldn't be so special. I think that's why so many international organizations open up venture funds, incubators, business development offices here in the Valley: to understand, emulate, and capture technology to bring back home. I believe people around the world look to Silicon Valley as the model for the new economy and the center for technology development.

I created ASVC (Asia-Silicon Valley Connection) for this reason: to help bridge the gap between Silicon Valley and Asia. I noticed there is a strong support group for the Indian tech community called TiE (The IndUS Entrepreneurs). TiE is my role model for ASVC. There are other strong organizations for different ethnic groups such as AAMA (Asian American Manufacturing Association), CSPA (Chinese Software Professionals Association), Monte Jade, and so on, with similar missions to TiE but not as influential as TiE. I would like to help to change that. ASVC was formed as a networking forum for high tech professionals with interest in Silicon Valley and Asia, a pan-Asia group promoting the collaboration and networking for those in Silicon Valley as well as between Silicon Valley and various countries in Asia. I believe when you get all the smart people in one place willingly, good things tend to happen.

It's tough to create another Silicon Valley. Where else can you find the vast availability of a great pool of technology talents, the great educational system (San Jose State, Santa Clara, Stanford and Berkeley), the local presence of the VC and technology community, a melting pot of cultures, international governmental support, the awesome climate and entertainment - the total package makes the Silicon Valley ecosystem different. It's tough to re-create this valley anywhere else. At the same time it appears that Silicon Valley is willing to share its resources since it can only strengthen itself.

Foster: Where do you think Singapore stands?

Nguyen: Singapore appears to be the most advanced out of all Asian nations. With the great support from the government and its sophisticated citizens, they are most likely to be ready for the new economy and they are putting a lot of effort into it. If another Silicon Valley was to emerge, it will likely happen in Singapore first.

Foster: I imagine you are a good person to ask about finding the conditions and opportunity to succeed because I presume that when you came over from Vietnam you had absolutely nothing.

Nguyen: We came to Silicon Valley in 1975 as political refugees. We had nothing and were struggling to survive, that's true. When I was growing up, this valley was not at all like it is today. Asians back then were mostly manufacturing workers or owning small businesses. Now a third of the valley's CEO's are Asians and you see the Asian influence throughout the Valley, beyond technology, in key government positions, entertainment, sports, and media.

Today, the three main tech ethnic groups in Silicon Valley are Indian, Chinese and Vietnamese. More than 50% of the tech workforce in the Valley is Asian. How did today's Asian-American leaders get to where they are today? It's a major achievement that these pioneers paved the way for future generations and have gained the respect of Asians as well as Americans. This was part of the reason I created ASVC: to recognize the great achievements of these pioneers of yesterday, today, and tomorrow.

Foster: What's next for ASVC?

Nguyen: We have a series of joint programs with other tech groups beginning January 2001. We're also gearing up for the ASVC Summit, which will take place June 16 at the either the Fairmont or Westin Hotel in the Valley. We're shooting for 1000-plus people at this event to recognize leaders and companies with breakthrough technologies and innovation.

I'm hoping through events like these and by building the ASVC organization, we will bring more business opportunities for Silicon Valley and Asia, and at the same time raise awareness that it's not just for Asians but for all technology people, regardless of your race. We hope to make a difference for those involved with ASVC, both professionally and personally.