Silicon Valley legend inspires entrepreneurs

This Silicon Valley millionaire has shown how Pinoy ingenuity is part of the engine that drives swift advances in information technology.

Entrepreneurs and educators got a rare, close-up glimpse of engineer and venture capitalist Diosdado Banatao, who is in the Philippines on a brief visit from Palo Alto, California, where he runs the $300-million Tallwood VC fund that invests in technology startup firms.

Banatao shared his wisdom recently with members of the Go Negosyo entrepreneurial community in a forum taped for ANC’s "Straight Talk" program hosted by Cito Beltran.

Banatao was known as one of the pioneers of the worldwide technology boom that began in the 1980s and has yet to stop.

"Dado" is a serial entrepreneur with an enviable track record in the high-tech industry and is a prolific inventor as well.

Banatao helped develop the ground-breaking chipset design that helped make personal computers more powerful yet affordable. He also invented a graphics accelerator chip that was eventually used in nine out of 10 PCs.

He is credited as the creator of the first Ethernet controller chip, which enables computers to link up with each other in networks — now known as Local Access Networks (LANs).

He made his fortune by co-founding three startup companies in the United States: Mostron, Chips and Technologies, which has since been acquired by Intel Corp.; and S3, or "Startup No. 3," which was later renamed Sonic Blue.

In 1997, he was honored with the prestigious Ernst & Young "Master Entrepreneur of the Year" award in the US. In addition, Forbes magazine has often included him on its "Midas List."

As the founder and current managing partner of Tallwood Venture Capital, he invests in, oversees and divests technology companies when the opportunity is ripe for multiple returns.

During the "Straight Talk" forum, Banatao advised Filipino engineers and information technology (IT) professionals to consider focusing on developing technologies for Internet-based services if they want to make a global impact: "Nobody yet owns this technology space (the Internet) today so it has huge potential."

Banatao also admitted that, in his 30 years as a technology wizard, he has taken only one three-month vacation, adding that his family often vacations without him.

"My wife jokes that, for me, a long weekend is the equivalent of a vacation," he said.

He also credits his wife, Maria, for her important role in ensuring his success: "She was the one who held the family together and raised our three children to become well-grounded."

His secret for a lasting relationship? "Keep your spouse well-informed and in the know always about everything that’s happening with you at work."

Banatao said he is not picky about the personality traits of the people he hires; rather, he is more concerned that his employees are hard-working: "People have different leanings. There are those who like keeping to themselves in their cubicles; I also have marketing guys who like to party all the time. I welcome them all."

He describes the mythic entrepreneurial hotbed of Silicon Valley in the state of California as "nothing more than a 20-by-30-mile patch of land," though he added that "the size of (Silicon Valley’s) economy can be counted among the world’s top 10 countries."

This man regarded as a Silicon Valley visionary hails from Cagayan Valley, where he was born May 23, 1946 to a rice farmer and housekeeper. He speaks Itawes, Ibanag and Ilocano.

Banatao grew up in Barrio Malabbac in the farming town of Iguig, where he had to walk to school barefoot, along dirt roads. He later went to the Ateneo de Tuguegarao, where he was encouraged to pursue engineering because of his high grades in math and science.

At 15, Banatao went to Manila to enroll in the Mapua Institute of Technology, where he graduated cum laude with an electrical engineering degree. He recalls that, as a freshman, he assembled his own electric guitar when he could not afford to buy one.

Banatao turned down offers to work as an engineer in large firms and instead applied for a post as a pilot trainee at Philippine Airlines.

From there he was recruited by Boeing to work as a design engineer in the United States, a job that allowed him to pursue a master’s degree in electrical engineering and computer science at Stanford University, which he completed in 1972.

In the early 1980s, Banatao set out on his own, with $500,000 pooled mostly from friends, to start Mostron.

Struggling to keep the company afloat most of the way, Banatao hit the jackpot when Mostron came up with the first system logic chipset for the XT and the AT personal computers — an invention that lowered the cost of building PCs while considerably boosting their processing power.

In 1996, his second startup, Chips and Technologies, was bought by Intel for a reported $430 million.