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Success is the mother of failure, says Sandy Chau, Acorn Campus co-founder
Luke Lin and Joe Tsai, DIGITIMES, Silicon Valley

Sandy Chau, co-founder of Acorn Campus Ventures as well as an active real estate investor, engages in investment undertakings throughout the United States and Greater China. His success in startup investment and business operation can be attributed to what he experienced as he was growing up. Born in Shanghai, Chau received primary and secondary education in Hong Kong and Vietnam as he travelled back and forth between the two places. In Vietnam, he witnessed social unrest including the Vietnam War, political coup and student strikes, while in Hong Kong he saw the social stratification and inequality between Chinese citizens and the British ruling class. He learned how to quickly adapt to new environments and figured out how to survive and thrive. Such characteristics helped him reach success.

Eight golden lessons from Chau to entrepreneurs

In the 20 to 30 years of time from his childhood to adulthood when Chau first began his business, he frequently had to transfer schools and move to new cities. He transferred schools six times and lived in seven different places, staying an average of four years in each of them. Having to constantly adapt to new environments, Chau has learned that past experiences may not always apply to new situations and he must be able to look at things from new perspectives. This works for venture capital investments as well. Drawing from his years of hands-on experience and realization, he offers some suggestions to people who look to start a business.

Success is the mother of failure

An ancient Chinese proverb says, "Failure is the mother of success." Having experienced small failures helps people cope with major defeat. However, to business starters, success is the mother of failure, Chau believes. When people who have had everything going their way face a new situation and have problem carrying on with their success, it's because they are limited by their old success models. Chau thinks it is like learning to play ping pong - breaking old habits is more difficult than starting anew. In other words, the biggest challenge in high-tech venture is not whether one is able to analyze the issue but whether one can think outside the box and learn to look at things from new perspectives.

Be open-minded and keep learning

People in the high-tech business have to keep learning and always stay on top of the trend, especially as business models are constantly evolving. If you think you are successful and become full of yourself, you will probably stop learning and fall out of reach. A young entrepreneur who Chau once counseled became CEO at the age of 30. After receiving investments from large venture capital funds and private equity funds, the entrepreneur followed their advice to acquire other firms. Then, he grew arrogant and thought he knew everything. Eventually, he stopped learning and his business also stopped moving forward.

It's more important to stay flexible than to stick with the original startup plan

A business plan is only good on the day it is written because afterwards, the market is changing every day. As such, it is imperative to stay flexible than to stick with the original business plan.

Leverage technology to manage your business

A high-tech business needs competent R&D professionals but the efficiency and quality of the management team is also critical to a company's success, particularly their ability to use high-tech advances to manage business operations.

Reach deep into the market

Look deep into market factors in the planning stage of your business. Without first knowing where your market is, even if you have the best technology in the world, you have no one to sell it to.

Engage in teamwork

No one can do it all alone. You need professionals of multiple disciplines to build a dream team. A business founder should be open-minded and search for talent that can complement the team. The founder is usually a creative person that can come up with new ideas but corporate management requires people with control and managerial capabilities. As such, the founder should be able to recruit talented professionals and adjust or enhance the original business plan.

Finish what you start and see what you are capable of achieving

It generally takes 12 years from the time a high-tech startup develops a product prototype to the time it goes public. Many people try to sell their companies in the fifth year just to make their investors happy. The decision is made merely for investment returns. Their startups have no chance to develop into full maturity and they have no chance to unleash their personal potential. Therefore, as a startup grows from one stage to the next, the founder has to think carefully how to proceed. With investments pouring in, there will be pressure on how the company should operate, which may be for the sake of investment returns, rather than for the good of the firm.

Step out of your comfort zone and take on a challenge

You will have a shot at success if you are bold enough to be different and travel a new path. Have the courage to try and innovate. Step out of your comfort zone so that you don't limit yourself. When an entrepreneur originally working at IBM's German subsidiary started his own business, his plan B was to drive a taxi for a living in case he failed. As it's important to have some stability in life, with a contingency plan in place, he was able to get his wife's support and went ahead with his venture.

Chau came to Taiwan to invest in real estate in 1986-1987, so he is no stranger to Taiwan. Chau pointed out a group of daring young people created Taiwan's high-tech business in the 80s but most young people today stay in their comfort zone. They are not willing to venture out to explore opportunities or study abroad. They may dream big but do not follow up with actions. They talk like a wolf but act like a sheep. He asks those who with the drive to start a business not to be deterred by failures. If you stumble and fall but you get up and stand tall, you'll earn more respect.

"Many people are afraid of making a mistake so they hesitate to make a decision. That is a bigger mistake," said Chau.

(Editor's note: This is part of a series of interviews focusing on the problems and opportunities that Taiwan-based startups face. The interviewees are venture capitalists and angel investors from Silicon Valley and Taiwan.)

Sandy Chau, co-founder of Acorn Campus Ventures

Sandy Chau, co-founder of Acorn Campus Ventures
Photo: Joseph Tsai, Digitimes, May 2018

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