I attended the panel discussion on Investment opportunities and strategies.

The panel includes VC, private equity investor, entrepreneur and consultant, all with many years’ experience in the China market.

The panel discussed the rapid growth of the Chinese economy and the trend of it decomposing from the US and Europe economy due to China’s increasing domestic consumption.

They shared insights on the investment opportunities in the China market. In recent years, while the overall foreign investment in China is increasing, the number of US and European investments is decreasing. Besides foreign investments, China’s domestic investment pool is large and growing. In big cities like Beijing, Shanghai and Suzhou, entrepreneurs can get local investor funding of around 100million RMB easily.

For foreign companies that are considering expansion into China market or entrepreneurs who want to start a business in China, they need to consider the newly published property laws, labor laws and other government regulations.

The panel also discussed the growing trend of investing on consumer product. VC firms are still focusing on investing in high-tech companies rather than consumer product companies because of the higher ROI high-tech companies generate. They consider entry barrier seriously, which can be either technical excellence or network effect. Compared to VCs, private equity funds are more interested in consumer product, because their typical expected ROI is 3 to 5 times while VCs are looking for ROI of about 20 times.

There was some miscommunication that led to a delay in the mentorship session, but that did not deter Salman Ullah from sharing his thoughts from a wide variety of topics. From being the Vice-President of Corporate Development in Google and having his own investment firm (Merus Capital) now, Salman has much experience to speak of for our benefit. My first impressions of him were that he is witty with his comments, and he has a deft ability to give concise answers to our questions. It was not only the content that we could learn from, but also his charismatic style of delivery that made me be in awe of him.

Amongst the numerous questions that we had for Salman (inclusive the impending merger between Microsoft and Yahoo!), the topic that stuck with me most was about the cross comparison of culture between Google and other huge IT-related companies. There is a public perception that there is a gulf in culture and practices between the ‘uber-cool’ Google and the ‘evil’ Microsoft. As Salman explained it, there is really no significant difference in the working patterns for both companies due to their sizes. When a company reaches critical mass, there is a need to have a structured organisation for the company to run efficiently. Google is not any much different from the other companies in this aspect. It is radically different from the start-up companies which we are all working in. At the discretion of the CEO, the company can change its direction and head towards the goal. Large companies, no matter efficient they are, will take time to realign itself when the focus is changed. Agreeing with that, I felt so fortunate to be working at such a dynamic workplace, and the size and reputation of the company does not matter to me anymore…

- Andy Teo, 13th Batch

Thoughts of a newcomer to the Valley.

One of the best things of being in the Valley is the rare opportunity to interact with people, entrepreneurs who have been there/done that, on a personal level and to learn from their experiences. And in a quaint coffee shop in downtown Mountain View on a wintery March afternoon, we did just that.

Role of a Product Manager
The topic of discussion for the day was Making a Career out of Product Management: Opportunities and Best Practices. So what exactly does it mean to manage a product? Product managers are a special breed of people. Essentially, they are charged with bringing the product to life: from concept to reality. The Product Manager is intricately and intimately involved in every single detail and with that, brings with it different challenges and required skills.

Outward Looking vs Inward Looking
As product managers, one of the key challenges faced is finding a balance between the issues of dealing with external business and marketing needs and handling the engineering and creative teams. Are you a more outward looking manager that focuses heavily on the business development aspect of your product or one that builds strong relationships with the engineering team? As with many things in life, there is no best way. Product managers with different styles have succeeded in creating great products. The best product managers understand this need and embrace it completely

There’s no I in T E A M
This extremely over-used cliché rings true, especially in product management. As a product manager, you are a team leader, a consensus builder. Between the inevitable complaints from the engineers that what you want done is impossible and the requests from the marketing department for a flashier product, you need to find a middle ground. At the same time, you want to make the impossible happen: to create a product that will change the world. How exactly do you do that? Communicate, communicate, communicate. Managing your team and their expectations and most importantly, bring out the best in them. Succeeding as a team only makes success all so much sweeter.

Here are the lessons that anyone interested in product development should be thinking about :-

Judgement/ Decision Making -
It is inevitable that as a product manager you would be faced with hard challenges. And problems would not have a clear solution. At times like those, the product manager has to consider many factors like externalities, team feedback, economics, etc and has to make the decision. It seemed to me that making such trade-offs or judgement calls is more an art than a science.

Leading with influence rather than authority -
Good product managers build personal rapports and credibility over time with their teams. They invest not only in the products but in people as well. I am fortunate to have people in my office who lead with influence and  I am proud to work with them.

Always Over-communicate -
It seems very obvious but sometimes overlooked, meetings are the heart beats of a company. All meetings should be documented and there always should be objectives behind having a meeting, list of action items after having the meeting.

When I first heard about the ABC 2008, I thought it would be the perfect fit for what I am trying to achieve here in the Valley - get a global perspective on successfully doing business in Asia.

It came at the end of an extremely intense period of finals, case competitions and the like. But it was well worth the trip up to Berkeley on last Saturday afternoon.

I missed the morning sessions but heard the Keynote by Stephen Pratt, CEO of Infosys Consulting, was extremely insightful. I think it would be useful to find out if transcripts or recordings of the session are available online.

The second keynote by Laura Tyson, Professor at Haas, was much more than what I expected (and I expected a lot!!). She provided an amazing analysis of how China and India are shaping as business and investment opportunities.

Some keypoints I pulled out of Dr. Tyson’s session include:

1. China vs India’s Growth
China has been a great investment opportunity not only because of their double digit growth, but the fact it has sustained this growth for close to 30 years. When compared to India, who really only started its push toward this new phase of economic development in the 1990s, it had a good 15-20 years head start.

2. Concerns with China’s Economy
Dr. Tyson pointed out that China does have some fundamental concerns related to the political situation as well as it huge over dependence on trade, and particular trade with the US.

China’s trade balance surplus with the US has been likened to each (poor) Chinese lending every (rich) American about US$4000. Now that’s something to ponder over, huh?

Check out this article that is related to it: http://www.theatlantic.com/doc/200801/fallows-chinese-dollars

The currency controls also means that the Yuan is severely under valued at this point. A good opportunity to invest in the RMB, maybe?

Check out also:

- “China as a Fragile Superpower” the book by Susan Shirk

3. Cisco’s Decision to Base its “East HQ” in India

Recently, Cisco opened it’s Globalisation Center East in Bangalore, India. In discussing Cisco reasons for picking India over China to situate this state-of-the-art facility, Dr, Tyson framed nicely the competitive advantage India seems to have over India. They include:

- India being the largest free-market democracy
The fact that India transition so seamlessly through a rather unexpected elections turnout really underscored the health of democracy and socio-political climate (albeit its many other issues) in India. This truly lends for stability and investor confidence.

- large skilled & English-speaking talent pool
India’s ’subsidiary official language’ is English and the urban workforce is very proficient in the language. Coupled with the technical education of the Indian institutions makes this very appealing to tech companies like Cisco.

- reasonable IP protection system & courts that are active (to some extent)
One big draw back China had for Cisco (and other research intensive companies) is its poor IP/copyright protection infrastructure. This is a relative strength for India. Also, the judicial system and presence of courts to file for action against IP violations in India also lends to a perceived lower risk of investment

- a growing middle class of more than 100m (still not where China is though)

Challenges for India included it’s poor physical infrastructure, the fact that 70% of its population are still rural, the more pronounced poverty situation and the restrictive labour laws.

All in all, the ABC 2008 was a very engaging and enriching session with its relevant speakers and panel sessions. It is definitely an event I feel should be on NUSEA’s calendar every year.

I also picked up a prospectus for the Haas MBA…So that’s a new possibility in itself too.