The C100 sat down with Charter Member Scott Bonham to learn about his background and his current projects in the US and Canada. Don’t miss Scott’s expert advice on how to strategically place yourself in opportunistic situations and what the most important factors are for entrepreneurial success!
We know you are a big supporter of the startup community. What is your involvement in the startup ecosystem in Canada?
Just over a year ago I became an investor in The Fueling Station, an entrepreneur center in about 27,000 square feet of office space in Liberty Village. We house more than 40 companies that are showing lots of promise. And, as you know, I am also a Charter Member of the C100.
What do you think about Canada’s startup scene?
I really believe that Canada’s engineers can stand toe-to-toe with the best engineers from Silicon Valley. In fact, the biggest arbitrage in the world right now is the high quality of a Canadian education relative to its cost. I spend a fair amount of time in Canada and I’m very optimistic. There is this new, young energy among Canada’s entrepreneurs, with an emerging belief that they can change the world. A new wave of creativity and innovation is starting to crest.
How do we build the next billion dollar Canadian company?
Life doesn’t happen in a vacuum. Entrepreneurs need to be near many like-minded people. As they build their company, they need to hire the best and the brightest. Both Waterloo and Toronto have large talent pools. By the way, creativity is a renewable resource - it is the gift that keeps on giving. Canada should be encouraging more innovation and risk-taking to help drive the economy in the future.
What’s your advice for today’s entrepreneurs?
I’ve observed successful people have one thing in common: Strategic Serendipity. They strategically put themselves in situations where unexpected opportunities present themselves. There are two things people should do daily:
1) Invest in your network. When you meet people, follow up with something of value. Think about how you can be useful to that person. Pay it forward – provide favors without expecting anything in return. Be a connector.
2) Develop your skill set. What is it that people are going to value you for, and that you are going to be known for? You need to figure out what that is for you, and you need to invest in that every day.
What are you working on now?
Outside of GGV, I’m on the board of Magna – a large automotive supplier, with over 300 manufacturing operations in 29 countries. Although it’s unusual for someone from venture capital to serve on the board of an industrial company of that scale, I joined the board because it is a well-run global company focused on innovation and world class manufacturing. The Board gives me a "Board's-eye view" of one of Canada's most successful manufacturing companies. Magna is also one more way for me to stay connected to Canada.
Can you describe your background? How did you get started in the tech industry?
I’m originally from Kingston and I earned my degree in Electrical Engineering from Queens University in 1984. After graduating, I designed and implemented robotic systems for General Motors in Oshawa. Like many people, after three years I felt I needed a career reset, which took me to Harvard Business School.
Business school brought you to the states - when did you make the decision to move to Silicon Valley specifically?
In 1989 Silicon Graphics was one of the most admired tech companies, and I was fortunate to have the opportunity to work there. A 1994 cover feature in Business Week dubbed it ''the gee-whiz company,'' which I experienced first-hand. SGI eventually failed to keep up with technology, and its ultimate demise was a colorful example of dividends from Schumpeter’s creative destruction: SGI’s talent diaspora went on to build some of the great companies in Silicon Valley today. And Google’s headquarters are now housed in SGI’s old campus.
When and why did you decide to start GGV Capital?
Not many venture capital firms were hiring in the mid-90s, so I joined the Capital Group, where I invested technology stocks across a number of their mutual funds. My five-year period at the Capital Group during the dot-com bubble was an exhilarating time to invest in technology, and it was a great place to learn about Wall Street and the buy-side.
Around 2000 I realized I wanted to build something significant and enduring, rather than buying and selling stocks every day. I was in my late 30’s and felt it was now or never. So I joined forces with a friend from the sell-side of a leading investment bank and two other people to start GGV.
GGV has been very successful. What factors do you think contributed most to this?
The most innovative thing that we did was to broaden our focus beyond Silicon Valley, to include China. In today’s world, China has the world’s second largest economy and it is a clear focal point for investment. But back in 2000, this was not the case; it was heresy to even talk about investing venture capital in China. We were pursuing an investment strategy that had no precedent of success, and we faced daunting head winds. We set sail, landed on the beach and burned the boats — we had to move forward because there was no turning back.
What role did timing play in your success?
Our timing looked terrible to most investors, but in fact it couldn’t have been better. In the mess after the dot-com bubble burst, there were many opportunities to invest in great companies. Nobody else was investing in China and not many firms survived. But we went slow, moderated our investment pace, did a lot of homework, and made some great investments in both China and the United States. Our 2003 investment in Alibaba has been a tremendous success, and it’s a good example of how timing really worked out for us. Now, more than a decade later, we’re in our fourth fund. With a lot of hard work we’ve established a solid track record.
Any other advice?
First, I’d say, if I can do it, anyone can do it! I’d also say the place you choose to live is going to have a huge impact on your network, the skills you develop, and your activity and focus areas. The industry you choose is equally important. You can change this a few times in your career, but ultimately you need to pick and truly understand one. When you do, opportunities will come to you.