COMPUTER Innovations Invented by a Filipino Engineer

If you’re looking for the Filipino version of Bill Gates, one name comes to mind: Diosdado (Dado) Banatao. Both come from a technical background, introduced technologies that transformed the computer industry, and built hugely successful companies from the ground up. Gates may be the co-founder of the biggest software company in the world and the richest man in the planet, but Banatao might just have a better track record as an innovator and entrepreneur.

Banatao is widely considered a true Silicon Valley visionary. As an engineer, he is credited with developing several key technologies. His new chip set design produced ten times more power at a thousandth of the cost, ushering in the era of the PC - personal computer, making it more powerful and at the same time affordable to millions of people worldwide.

He also invented a new graphics accelerator that is now being used in nine out of ten PC’s. Moreover, he developed the first Ethernet controller chip that enabled computers to link up to and communicate with one another, hastening the spread of networking computing.

But Banatao is not just a prolific inventor, he’s also an entrepreneur. He co-founded three technology startup companies: Mostron, which made motherboards; Chips and Technologies which developed chip sets; and S3 which produced graphics chips. In 1997, he was honored with the prestigious “Master Entrepreneur of the Year Award” by Ernst & Young, Inc. Magazine and Merrill Lynch Business Financial Services. Forbes Magazine has often put him on its “Midas List.”

Today, Banatao has proven to be a master inventor and venture capitalist as well. He is one of the few venture capitalists or VCs, that were veteran entrepreneurs. That sets him apart from many other VCs who never ran a business. As the founder and managing partner of Tallwood Venture Capital, he invests, oversees, and sells several technology companies, including Cyras Systems, acquired by Ciena; Newport Communications, acquired by Broadcom; Acclaim Communications, acquired by Level One; Stream Machine, acquired by Cirrus Logic; Marvell Technology Group and New Moon Software.

Cagayan Valley to Silicon Valley Who would have thought that the man hailed as one of the most successful technology entrepreneurs and venture capitalists in Silicon Valley was actually born in Cagayan Valley, Philippines?

Born two years after the Japanese occupation in the Philippines during World War II, Banatao was raised by a rice farmer and housekeeper parents. He grew up in the sleepy town of Malabbac in the farming town of Iguig in Cagayan Province. As a kid, Banatao used to walk barefoot to school along dirt roads. He later went to Ateneo de Tuguegarao, where he was encouraged to pursue engineering, thanks to his grades in math and science. He went to Manila to attend college at the Mapua Institute of Technology (MIT), where he graduated cum laude with B.S. Electrical Engineering degree.

The first job he got was a pilot trainee at Philippine Airlines (PAL) which offered better salary package compared to working with Meralco and NPC – then top choices companies for new graduate engineers. But his career as a pilot was put to a halt when Boeing recruited him as a design engineer and brought him to the U.S. That proved to be the turning point of his career. Banatao realized he enjoyed engineering much more. He once said that when you like to do things, you usually end up good at it. But you also have to be trained properly. So when he discovered he needed more training, he pursued his Masters in Electrical Engineering and Computer Science at Stanford University, which he completed in 1972.

Computer Breakthroughs Banatao then worked with some of the leading-edge technology companies, including National Semiconductor and Commodore International – where he designed the first single-chip, 16-bit microprocessor-based calculator and Intersil.

In 1981, while working at Seeq Technology, the inventor of the Ethernet asked the company to look for a more efficient way of linking computers. Banatao was asked to collaborate, which led to his breakthrough discovery. Instead of using big boards, he was able to put the Ethernet controller on a single chip. That was the first 10-Mbit Ethernet CMOS with silicon coupler data-link control and transreceiver chip.

At that point, Banatao decided it was time to set out on his own. He went out on a limb and with US$ 500,000, mostly from friends, he started Mostron in 1985 to develop chip sets. As the owner of a struggling startup, Banatao had to be more resourceful. He could not even afford to buy reference manuals, so he debugged chips by using equipment from another company that wasn’t used on weekends. His perseverance soon paid off. Mostron came up with the first system logic chip set for the PC-XT and the PC-AT, which lowered the cost of building the personal computer and made it much more powerful.

About the same time, Banatao launched his second startup, Chips and Technologies (C&T), which created enhanced graphics adapter chip sets. In just one quarter, the company generated sales of US$ 12 million. And in less than a year, without any venture capital funding, C&T went public, one of the fastest IPO (initial public offering) listings in the history of the U.S. stock market. In 1996, semiconductor Intel bought out C&T for a reported US$ 430 million.

But even before this, Banatao had already made his millions. Earlier, his third startup, S3, pioneered the local bus concept for the PC in 1989 and introduced the first Windows accelerator chip in 1990. In 1993, S3, estimated to be the world’s most profitable technology company, had an IPO worth US$ 30 million.

Awarding of the 10 Most Inspiring Filipino Technopreneurs (Techno Negosyo Expo Philippines, September 2008) 

1.  Diosdado Banatao (Computer Chips- Mostron and S3) 
2.  Nonoy & Ben Colayco (Online Gaming- Level Up) 
3. Joey Gurango (Software Development- Webworks OS)
4. Danilo Manayaga (Biotechnology- Servac Philippines)
5. Dennis Mendiola (Wireless Technology- Chikka Asia) 
6. Manny Pangilinan (Telecommunications- First Pacific, PLDT) 
7. Dr. William Torres (RP Internet Pioneer- Mozcom) 
8. Peter Valdes (Software development- Vinta Systems ) 
9. Orlando Vea (Mobile Communications/New Media - SMART founder, MediaQuest) 
10. Jaime Augusto Zobel de Ayala II (Diversified IT investing-iAyala) 

Multimillionaire Investor Like the famous inventor Thomas Edison, he believes that genius is one percent inspiration and 99 percent perspiration. Now a multimillionaire, Banato invested privately in several networking companies that were eventually sold, making him a very rich man when he joined the well respected venture capital firm Mayfield Fund in 1998. When Mayfield after two years offered to promote Banatao to general partner, Banatao said no. Used to being his own man, he left Mayfield to start his own fund in Palo Alto, California, called Tallwood Venture Capital, with his own money, all US$ 300 million of it. Today, Banatao continues to fund and incubate companies that are making breakthrough technologies. His philosophy is to build businesses and the money will just follow. True enough, his companies are creating value. His Cielo Communications is developing the vertical cavity surface emitting laser, or Versel, which speeds the transmission of data along optical lines. His SiRF Technology is designing a chip for global positioning system (GPS), which utilizes satellite to locate objects. All the Silicon Valley stress is well worth it. He may have sacrificed his social life, but now he enjoys a great family life with his wife – an educational psychologist, as well as his two sons, and a daughter. Banatao has more than three homes in the U.S., including resort properties. He travels all over the world and has often visited the Philippines, where he continues to be esteemed by the government, the academe, and the business community. He owns luxury cars, including a Porsche and he flies his own jets. More than a life of luxury, Banatao contributes money, time and experience to companies and institutions in the Philippines and the U.S. His Banatao Filipino American Education Fund assists high school students of Filipino heritage in pursuing a college education, particularly to promote rewarding careers in the field of engineering. As for his childhood town in Cagayan Valley, he went back to build a computer center at his grade school, probably the only public elementary school in the Philippines with the most modern computers on a network. From walking barefoot along dirt roads to riding luxury cars and flying fast jets, Banatao has really come a long way.