Long belittled for ripping off Silicon Valley’s successes pixel-for-pixel, China’s web entrepreneurs are now starting innovate, argues William Bao Bean, former analyst at Deutsche Bank and now partner at Softbank China and India Holdings.
1- Ecosystem – For the first time China now has the large crop of bloggers, VCs and entrepreneurs necessary for business creation.
2- Foreign VCs – Silicon Valley VCs have now actually started setting up shop in China, something they have not done in any other country. William cited as an example his own fund, which is the third Softbank-backed fund in China.
3- In China, less is more – A good idea in Silicon Valley will attract several hundred thousand dollars in angel investment, while a Chinese equivalent will attract one quarter that. The good news: “You can get a lot further on US$50,000 in China than you can with US$200,000 in the US,” William said. A US$30,000 per month burn rate in China is equivalent to a US$300,000 burn rate in Silicon Valley.
To support his argument William cites a company that he recently joined, iTalki, as an example of a Chinese company innovating on a global scale. iTalki is a language exchange site with a global user base that supports more than 100 possible languages. While it does copy some good ideas from other sites, William claims iTalki is the world’s leading language exchange of its kind.
William’s conclusion: “You will soon see an awful lot more digital garages in China.”
What do you think? Do you agree?