Michael Li moved from engineering at Nortel in the 1990s to Wall Street research, then venture capital in China. He traces how telecom companies like Nortel and BlackBerry shaped tech talent migration to Silicon Valley, and how Chinese entrepreneurs adopted U.S. business models.
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In fact, what you do today for sure, and very different from even what you did right out of college, right?
Yeah.
And you, I remember you were on Wall Street.
Yeah, yeah, that's another transition. So you have seen that I have done this, my career has been changed a couple of times. The reason I got into finance is also purely after my interest. I gradually developed more interest in, in finance. As I say, I, I consider myself not as the type of person that I can have the guts and, and the braveness to do the venture. So I think as a professional, maybe for me to do engineering is really not a long-term devotion that I can think of myself putting. Maybe more in the direction, I think, professional, like finance, financial service, medical, and legal practice. They would have a long-term value. As you grow, your network becomes more valuable and that kind of thing. So that actually my initial thoughts. on my transition to the financial services. So I, again, you know, I was just at the beginning of my career. I actually did work for a tech company. I worked for Northern Telecom for a few years as an engineer. And then I—
What year in Nortel?
That was— I graduated in '92 and then worked for a very small company for 1 year, then joined Nortel. So that's '93.
That was actually when telecom really picked up with optical communication. Because back in the days, communication really was a— it's what, phones and no cell phones?
No cell phones back then.
And certainly no internet, high-bandwidth internet. No.
It was just purely a fixed-line world. The project I was involved particularly is called CTI, Computer Telephony Integration. So basically doing a lot of voice recognition and all that. That was—
It's kind of interesting. Nortel is one of those companies that had a lot of strong engineers, R&D, a lot of core IP. If you were to sort of bet someone to become successful in the communications world, you would say that's a company you would bet on. But interestingly enough, these days you don't hear Nortel anymore, right?
It's gone.
So it's almost like, you know, we know hindsight is 20/20. Communication industry has grown, right? Who would have imagined you could have internet at your fingertip? But Nortel actually was in the prime position to benefit from that, but they didn't. Right. It's a clear case of incumbent, you know, in the industry that actually took off, but then they were left behind. What did you— did you see, if you were to look back, did you see something in that company that they— what they could have done differently so they would have been the beneficiary of The telecommunications revolution?
Well, I think that's a really good question. This is a very typical case where you could have been left out. One particular reason for Nortel and all other Canadian companies, they were actually really the front runner. Nortel, or as a bigger platform called Bell Canada. Bell Canada is a bigger umbrella company. They were doing a lot of studies and the technologies in communication. I think one of the reasons they did not catch the wave, or they actually did not sustain their leadership. They actually did try to manage to catch the wave. One of the reasons is because of the loss of talents.
engineer. Right.
You know, I saw a huge wave, you know, for Canadian engineers migrating to the US, especially Silicon Valley here, you know, you know, one of the reasons because of the high, more higher compensation. And I think more important is because of the venture culture here. You see a lot more opportunity than in Canada. I think it's a much more laid-back culture. People tend to be very laid back, and not many people are geared up for doing their own startups.
Yeah, right.
And also venture industry was not that developed. So those are the reasons contribute to the loss of engineers and talents. And that's, I think that's a very important reason for Canadian companies. You've seen a couple of times that happens. Including the downfall of BlackBerry. It's another startup from my own university. Oh, is that right? Yes.
Great device. At one point it was dominant.
It was the king of the smartphone for a few years. And then, you know, they didn't see the new waves coming. They did not react fast enough.
They think basically email is the way to go.
Yeah, yeah, exactly. Exactly.
So in looking at the geography, it's kind of interesting. Now you're in China, right? That sort of has certain similarities with Canada in terms of having the talent, but that seems to be a more sustainable innovation market, right?
Yeah.
You don't see Chinese rushing to Silicon Valley. In fact, you see Chinese graduate students rushing back to China to explore the venture market there.
Right, right. Well, that is true. Oh, I didn't finish the part of the Wall Street part. I actually gradually taught myself with the finance industry knowledge and all that. So gradually moving to the financial industry and had an opportunity to work in Wall Street, at Lehman most of the time. And then I moved back to—
Which part of Lehman?
Banking or trading? It's the research part more. Oh, research, okay. Yes, it's based on—
Doing real work.
Doing real work, doing really, really work, painful work. Yeah, well, and then in year 2000, I, you know, went back to China. Just because I saw the— I think part of the reason is because of the internet boom. It was the beginning of 2000, that was just at the height, but we're already seeing some early signs that this thing is going to fall apart. But I see China as just the beginning of that wave.
Yeah.
So, you know, went back. I was again very fortunate to get involved in the VC industry. This is something I've I truly fall in love with, with a lot of passion because I didn't know much about venture capital industry before I went back to China.
I think back then in China, nobody did.
Well, you can say that, yeah. I was definitely among the first batch doing this VC industry. Nowadays we see venture capitalists, typically they have engineering background and with MBA from top school, that's the usual formula. But back then, if you look at Chinese VC industry, not many people have that kind of combination. So you see, that's really interesting, the beginning of the new industry, you see people from very different backgrounds coming into the industry, and they gradually play out. So that's how I started. Back to your question, I think, I think China is really, experiences the most rapid growth in the last 2 decades. And I was very fortunate to be part of that. And that's why you see a major trend for the Chinese overseas students returning to China and trying to, you know, start their own business. based on their knowledge and experience here in the US. And also, you know, in the early days, especially in the internet world, you see a lot of companies, they are trying to copy the successful business model here. I think that makes a lot of sense, you know, it's a proven model, you don't have to try it out, so you can quickly launch the local service.
Right.
Quickly. with higher certainty. So in early days, we see a lot of success based on that kind of model.
