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Business

VC giant looking for the next Facebook in Asia

Jeff Jordan, general partner at the venture capital firm Andreessen Horowitz, speaks to the Nikkei Asian Review.

TOKYO -- Jeff Jordan's early life didn't revolve around the tech industry. He was a political science and psychology major at college, went to Stanford University Graduate School of Business, then worked for the Boston Consulting Group and the Walt Disney Company for a combined 11 years.

When he finally decided to jump ship, he loved it.

It was around that time, in 1999, that Steve Jobs came to interview him for a position at the animation company Pixar.

"He was wearing [a] tattered long sleeve T-shirt and gym shorts, and he was late," Jordan recalled in an interview with the Nikkei Asian Review during his recent trip to Japan. Jobs had two questions for him. "One of which [was] why did you work at Disney? Disney sucks!" The other, Jordan said, was, "You graduated from Stanford business school in the late 1980s, you are working in Silicon Valley, the most dynamic place in the world where new things are being invented and you went to work as a management consultant in Los Angeles. What the hell were you thinking?"

They were questions Jordan could not quite answer, but they were questions that dictated the rest of his life. Since the interview, he has become a famed figure in the tech industry; he was the president at PayPal and OpenTable, an online restaurant reservation service. Currently, he sits on the board of up-and-coming companies like Airbnb and Pinterest. He is also currently the general partner at Andreessen Horowitz.

Andreessen Horowitz is a U.S. venture capital firm founded in 2009 by the influential investors Marc Andreessen and Ben Horowitz. It was an early investor in the internet telecommunications company Skype. It also got in on Facebook and Twitter. It has raised $5.85 billion in the seven years since its founding, according to U.S. database CrunchBase. It is also constantly ranked among the top in the VC rankings.

But it has seldom invested in Asian companies. Rather, the firm has opted to stay in its home country, especially around Silicon Valley. "There is this poker saying, if you don't know who the chump at the table is, you are the chump at the table," Jordan said. "We see these fascinating companies in different markets, and if we don't know the competitive set, don't know the management team, don't know the incumbents well. We feel we are at a disadvantage. We hold very high standards on breaking a pattern."

Learning about Asia

Geography is a problem, Jordan said. "Anytime you are on the board outside of Silicon Valley, it takes more time. I could do three board meetings a day in Silicon Valley. If I had to travel to Seattle, I can do one a day. If I have to travel to Europe, I can do one every three days."

One would have thought that a VC investing in technology companies would utilize technology and not be held back by real-world constraints. But human interaction goes a long way. "You try to leverage technology, but you are building a relationship with a founder that is really important," Jordan said. "Phoning in typically doesn't have the same impact."

That said, with so many important developments in the tech industry happening in Asia right now -- taxi hailing service Didi Chuxing's planned acquisition of Uber in China is one -- Andreessen Horowitz is casting a keen eye over the region.

"We are increasing the amount of time we spend in Asia, and learning about Asia, just because increasingly great ideas are being incubated in Asia first that we think we can learn from," Jordan said.

He particularly holds Tencent's messaging app WeChat in high regard. "A bunch of U.S. companies, I think, have learned that WeChat is so much [more] advanced in terms of user interface, ecosystem," Jordan said. "So that was the case where the learning was so intense ... it affected our thinking about messaging, about maps, discoveries and all those are incredibly important things to understand."

Jordan is also excited by the fact that prominent tech figures are emerging from Asia who have the potential to compete on the global scene. "There are a bunch of names that are already global celebrities," he said, then listed Jack Ma of Alibaba; Hiroshi Mikitani of Rakuten, Japan's big online retailer; and Victor Koo of Youku, a Chinese video-hosting service. "You are getting these people who are already global celebrities. The roster is growing, that is very clear.

"I love the list of most valuable companies in the world, just because increasingly it is not just the U.S. list you pay attention to, it's a lot of companies around the world."

Andreessen Horowitz now has a partner dedicated to China, and its members are increasingly spending their time in Asia. "Ben was in Japan last year, I'm here this year," Jordan said. "We meet with different Asian companies all the time. We are dialing up our awareness and learning in Asia. ... If I can make the case on why we should [invest in Asian companies], we should do it. There are no hard and fast rules; we don't have a 'we cannot.'"

Multiple headwinds

Meanwhile, the tech industry as a whole is facing some strong headwinds. Technology has always been the harbinger of further globalization, but anti-globalization sentiment now runs wild in many parts of the world.

Ever since former CIA contractor Edward Snowden in 2013 disclosed extensive U.S. government surveillance programs that intercept online communications, many Silicon Valley giants like Facebook and Google have been hit by an erosion of trust.

Jordan admits these are "interesting headwinds," and that VCs like Andreessen Horowitz as well as tech companies are spending more time on them than before. But he is an optimist.

"There is a line of argument that says the nation-state is getting less and less important because the important networks increasingly are alternative networks," Jordan said. "I think they are making the same argument on technology. Increasingly with Facebooks, with Twitters, with those, it reduces, dilutes the impact of the nation-state. I find that a very intriguing argument. I believe there is a core of truth there.

"I do think it just gets more and more connected, the data is getting overwhelming, which has massive privacy concerns, but that is going to lead to more connection. I don't think you can put the genie back in the bottle."

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