News

Millionaires – A Measure of Entrepreneurial Spirit

“What really matters is not how many companies have been created, but how many people have become millionaires,” Xiaofan Cao spoke empathically, com-menting on the entrepreneurial spirit of Silicon Valley. For Cao, co-founder of Avanex, the making of millionaires was the most important yardstick of the entre-preneurialism of Silicon Valley.

Business and Finance
World Journal, Nancy Lan-Hsin Kao
This article was originally published as a two part series entitled Ten Phenomenon in Silicon Valley in the December 5, 2001 issue of the World Journal

Avanex, an optical technology company, had its initial public offering in February 2001. On the day of initial public offering, its stock price quadrupled, ranking third in terms of growth rate in that year. According to Cao, Avanex’s initial public offering had created some two hundred millionaires in the company, and even the receptionist collected one hundred thousand dollars in net worth. Cao himself amassed several hundred million dollars in net worth, and was named “the richest entrepreneur from China in Silicon Valley” by a trade magazine.

Silicon Valley is undisputedly a wealth-generating machine. Judging with Cao’s yardstick of entrepreneurialism, there are indeed numerous examples of success in Silicon Valley. When BroadVision first went public, founder Pehong Chen and some eight hundred employees in the company became millionaires. In June 2000, when Marvell Technologies had its initial public offering, a company founded by a husband and wife team Sehat Sutardja and Weili Dai, it broke the record by achieving the highest market valuation in the semiconductor industry. The market value of both shareholders and employees soared overnight.

However, since the stock market crashed, those who have become millionaires remain millionaires on paper if they did not sell their shares in time. For many, the game of becoming rich was simply a dream. But where are those who have seized the opportunity to become real millionaires?

Cai, who was born in Guangdong Province, China, is an advisor to Guangdong’s “Optical Valley.” He once told the management of Optical Valley that learning and copying Silicon Valley’s way of entrepreneurialism is not simply a matter of spending several billions of RMB in building infrastructure. The key is to create circles of sustainable entrepreneurship by encouraging people to get rich from entrepreneurial activities, because once the entrepreneurs become wealthy and see their dreams realized, they would take their entrepreneurial spirit to wherever they go and keep creating new businesses.

In the Chinese chapter of entrepreneurialism in Silicon Valley, there is no lack of entrepreneurial circles that Cai spoke about. Many left their home companies and started their own ventures. Following the example of Hewlett Packard, a success story of a start-up company that began in a garage, many founded their own companies that either went public or got acquired. Similar stories were repeating themselves everyday.

The majority of success stories about Chinese entrepreneurs are semiconductor EDA (electronic design automation) software companies. Avanti is probably the most well known example. The co-founders of Avanti left Cadence and founded their own company, and later became involved in the largest lawsuit on intellectual property rights. Avanti was recently acquired by the second largest EDA company Synopsis for seven hundred million dollars.

Not all good companies in Silicon Valley have to go public. Being acquired for a high price is another sign of success. In addition, it is also a great way of generating wealth. When Silicon Perspective was acquired by Cadence, the company was already turning a profit. According to Silicon Perspective’s founder Ping Chao, “the acquisition turned out much better than IPO (public initial offering) would have.”

To better understand the entrepreneurial spirit of “traitors” in Silicon Valley, history is illuminating. One classic example is what was known as “Shockley’s Traitorous Eight” forty years ago.

Pioneering the development of semiconductor industry, William Shockley, inventor of the transistor, established Shockley Semiconductor Laboratory in 1955 and hired eight young talents. To his dismay, all eight of them left the laboratory and founded Fairchild Semiconductor. Among the eight people, Robert Noyce, Gordon Moore, and Andy Groove founded Intel, which has become the leader in microprocessors. Jerry Sanders went on to found AMD, Intel’s rival.

From the past to the present, and even to the future, technological innovation is a value upheld in Silicon Valley that goes beyond corporate loyalty. From the courage to innovate emerges an entrepreneurial spirit that will live on forever.

http://news.ncmonline.com/news/view_article.html?article_id=84d4a0ae8da982f51b5c11537c0b9701

Sorry, we couldn't find any posts. Please try a different search.

Leave a Comment

You must be logged in to post a comment.