David Chao is the co-founder and general partner of DCM. He has been active in the information technology industry since the 1980s. At DCM, he guides portfolio companies in formulating corporate and product marketing strategies, developing strong management teams and implementing domestic and international partnerships.
SM: Let’s start by talking about your background. What experiences have shaped your thought processes?
DC: I am ethnically Chinese. I was born and raised in Japan. By definition I am a Chinese/Japanese, but I came here for high school and college, and did work between college and business school in both Japan and Asia. I am a product of three cultures. I am a Chinese/Japanese/American.
SM: When you were growing up in Japan, what was the relationship between the Chinese and the Japanese?
DC: Chinese in Japan are more like model minorities, very much like the way Asians are treated in the US. We tend to be shielded from the worst of the discrimination faced by African-Americans and Hispanics in the US, but we still get our fair share. In Japan most of the discrimination is towards Korean/Japanese, so the Chinese/Japanese get shielded a little bit, but then we get our own fair share. Being a Chinese in Japan is like being an Asian-American.
SM: It reminds me of a funny story. I had a client who had put a Korean guy as the head of Japan [operations]. I remember thinking, ‘Why would you do that?’
DC: Although times have changed a lot, that would really depend on the industry. High-tech might allow it. I think that culturally there are times when I think I am Japanese, times when I think I am Chinese, and times when I think I am American. I am sure you go through this too.
SM: Mine is like 50/50 India and the US, with a pretty strong European influence as well. Those backgrounds shape us.
DC: Yes. It is pertinent to my career because I graduated in 1988. In October of 1987 we had Black Monday. I had a bunch of Wall Street jobs lined up and all the offers were rescinded. I went back to Japan and worked for a company called Recruit, which is one of the largest advertising companies in the world. I then worked for Apple in Japan and later Cupertino.
I then decided that I wanted to go to business school. I was originally in a six-year med program at Brown, but I left that program because there was a bug in me to do something else. My family are largely entrepreneurial in Japan. Chinese living in Japan, particularly in my parents’, uncles’, and aunts’ generation, could not get a job working for Sony or Toyota so they had no choice but to be entrepreneurs. They are a bunch of doctors, lawyers, or restaurant owners. It is very similar to the roles Jewish Americans and Italian Americans had to have when they came to the US.
For me to go to business school was different for my family. They did not know what it was about. My uncles would beat me up at Christmas when I would go back to Japan. They would ask me why I had to pay money to learn business. I have always had the black sheep thing going on.
I graduated from business school in the middle of the Gulf War. I was lucky enough to work at McKinsey in San Francisco and did projects in Asia as well. In January of 1995 there was the famous Kobe earthquake. My parents lived in Kobe. At the time I was in Vancouver working for a McKinsey client, and I flew back to Osaka. It normally would take an hour to go from Osaka to Kobe, but it took me 13 hours. It was three days after the earthquake and I had to go back because nobody could verify that my parents were alive.
That bus ride really changed my life. I was exposed to a lot of entrepreneurship because of my immediate family. I just kept looking at myself and I realized I had only worked for large companies. I had always wanted to be an entrepreneur but in so many ways I was comfortable being on a track. Luckily my friend saw my parents in a shelter on TV, so I knew exactly where to go. I was able to find my parents. At the end, however, that 24-hour process changed my life.
I kept saying, “If I were here, there is a 50/50 chance I would have died”. When you talk to survivors, they talk about the regrets of the things they did not do while they were alive, as if they had died. That is when I realized I had to go do something. I could not stand on the railroad track any longer.