Startups

The most successful Filipino entrepreneur in Silicon Valley and probably the whole of the United States is a gentleman by the name of Diosdado "Dado" Banatao. He is in the Philippines currently sharing his enormous reservoir of knowledge derived from business successes of such an impressive dimension that his name is now a byword in the Philippine context. Having been consistently listed these past few years in Forbes’ "Midas List," every startup entrepreneur – for that matter, every venture capitalist – should be inspired by his story.

I met him about a decade ago when former President Fidel V. Ramos included me in his delegation for meetings with the Phil-American business community from Silicon Valley and California, which was headed by Banatao. I had already heard about him and felt good about having this opportunity to meet him in person. The discussion centered on entrepreneurship in Information Technology (IT). That early, one of FVR’s thrusts was to pursue more collaboration between these successful businessmen and their motherland in relation to that well-known valuable human resource that is "the Filipino in IT."

Banatao is in his 50s today, and is the managing partner of Tallwood Venture Capital, a venture capital firm focusing on semiconductors and semiconductor-related technologies. Prior to that, he was a venture partner of the Mayfield Fund and now serves as chairman of current Tallwood portfolio companies. He’s got an excellent technical background, having graduated cum laude with a Bachelor of Science degree in Electrical Engineering, and a Master’s degree in Computer Science and Electrical Engineering from Stanford University in California. At present, I have been informed, he’s got a special dedication to funding science and technology education, especially engineering.

Born in Cagayan Valley, he forged one of the most successful careers – in fact, the most successful – in the US.

Now that he is here in his home country, my son Martin, who is vice president and country manager for the Philippines of Walden International, told me about having attended a forum sponsored by the La Salle Graduate School of Business where Banatao was a special guest. At that assembly, startup entrepreneurs made presentations of their enterprises, then he gave his comments and asked questions.

Being in the venture capital discipline, Martin found the forum, entitled "Get Together With Dado Banatao," extremely rewarding. The way he said it to me, my son is very proud to know Dado personally.

Just the other day, as I was switching my television from one channel to the other, I chanced upon Dado on ANC’s Cito Beltran show. A small group of young entrepreneurs was sitting theater-style, asking questions and, of course, endeavoring to learn from him. I asked myself, why was this group confined to such elite names in business and society?

Banatao grew up in Cagayan Valley. In his youth, the place had no running water and electricity. His father was a farmer, his mother took care of the family, and many of his friends never studied beyond grade school. He now advises top business leaders and presidents, and gives back generously to promote the education of engineers and scientists.

Banatao did not become a success by inheriting the family business, land, or family fortune. Neither did he have the social or political connections. Neither did he indulge in liaisons with representatives of the mighty. He did it through the use of his own intellectual capital and a great deal of hard work, where he invented high-tech products and founded and funded successful technology startups.

I am certain that he was not particularly inspired by the privileged young entrepreneurs he faced on television. "There is absolutely no substitute for hard work" was the message I got. One of the things he said was that Silicon Valley has a very high rate of divorce. "During the first five years of your startup, don’t get married; otherwise, share your startup rigors with your wife and get her involved."

That’s the reason I am also featuring the husband-and-wife team that founded in August 2004 – hardly two years ago – a successful startup, not in technology, but a family-oriented business establishment called "Kidsports" catering to children three and above, offering the widest range of active and athletic footwear, apparel and equipment.

Kidsports was founded by Edgar Joselito "Jun" and Marylou Arceo, who were classmates at the Ateneo. They may not have invented any high-tech products to sell in the market nor used a great amount of capital, but the startup they founded and conceptualized in January 2004 involved a great deal of hard work for the couple. The inspiration for their concept was their children who were very much into sports, but found it difficult to look for footwear, apparel and equipment.

It was the hard work of this couple that made them achieve such success within a relatively short span of time. The first Kidsports store was opened on the fourth level of the Shangri-La Plaza mall in Mandaluyong, a second branch was opened in October 2005 on the third level of the Festival Supermall in Ayala Alabang, and their long-term plan is to open around six to seven branches in Metro Manila’s strategic locations. Their very own enterprising spirit and business acumen of course had a lot to do with their current success, but the hard work, jointly given by husband and wife, is definitely the underlying reason for their success.

Kidsports is a multi-branded affair and carries only authentic and original products from Nike, Adidas, Wilson, Yonex, Converse, Dunlop, Spalding, Speedo, Croc, etc. Specializing in sports such as soccer, baseball, basketball, swimming, martial arts, running, golf, etc., there is always something new to look forward to every month, especially from Nike and Adidas. One of the compliments Jun and Marylou Arceo received is the fact that Kidsports is "heaven-sent," because it is a one-stop sports store for all the family’s sporting needs.

Aside from hard work, the couple has indeed done their homework well in identifying a particular need for something and providing for that need. In approximately two years, they have a very impressive client base. The Arceos told me that the store capitalizes on two seasons, summer and the holidays, although all year round sales are extremely brisk. During the very fast seasons, husband and wife go home exhausted and fatigued.

Together Jun and Marylou evolved a definite, sound business plan, and have the capabilities to rework it should circumstances demand, and have an operating plan, which is one perspective Dado gave at the La Salle forum as a critical factor in any startup enterprise.

Banatao is a three-time startup veteran. He founded Mostron focusing on PC motherboards; Chips and Technologies which, though founded in 1995, went public after less than two years – one of the fastest IPO listings on record. It was later purchased by chip giant Intel in 1997 for a reported US$430 million. Another one, S3, now known as Sonicblue, had a $30 million IPO in 1993. Banatao continues to invest in a variety of cutting-edge semiconductor-related companies through Tallwood Venture Capital.

Whether semiconductors or sporting goods, sophisticated technology products or simple family-oriented products, there is no substitute for commitment to one another in a team, and very definitely, hard work.

In today’s world, when books like M. Scott Peck’s The Road Less Traveled can remain on the best-seller list for close to three decades now – and as Peter Senge explains succinctly in The Fifth Discipline, "People really do want to make commitments, and, united in a common cause or business vision, work very hard, and get extraordinary things accomplished."

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