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El Centro de Tesis, Documentos, Publicaciones y Recursos Educativos más amplio de la Red. I just spent a few weeks in Japan and China on a book tour for the Japanese and Chinese versions of the Startup Owners Manual.  In these series of 5 posts, I thought I’d share what I learned in China.
The previous post, part 4, was about Beijing’s entrepreneurial ecosystem these are my final observations. For the last 10 years China essentially closed its search, media and social network software market to foreign companies with the result that Google, Facebook, Twitter, YouTube, Dropbox, and 30,000 other websites were not accessible from China. The Chinese Social Media Landscape diagram below from Resonance does a great job of illustrating the players in the Chinese market. The down side is that with so much venture and angel capital available, investors have been willing to fund the 10th Groupon clone.  For the last few years, there really hasn’t been a demand to innovate on top of the ecosystem that’s been built. Not only is the Chinese ecosystem completely different but also the consumer demographics and user expectations are equally unique.
It was interesting to learn about China’s digital divide – the gap between East China and Midwest China, and between urban and rural areas. Internet penetration in Beijing is  greater than 70% while it’s less than 25% in Yunnan, Jiangxi, Guizhou and other provinces. My guess is the current wave of “copy to China” will burn itself out in the next few years as the smart money starts to move to “innovate in China” (i.e. Entrepreneurs in Beijing were knowledgeable about Silicon Valley, entrepreneurship and the state of software and tools available for two reasons.  First, there are continuous stream of “sea turtles”—Chinese who have studied or worked abroad—returning home.
Second, most websites that a non-Chinese would use are blocked including Facebook, Twitter, Youtube, Google Docs, Scribd, Blogspot, Dropbox, New York Times, etc. Right next door to Zhongguancun are China’s top two universities, Peking University and Tsinghua University. While I didn’t get much time with the academic community, in talking to students, education seems to still be one of China’s bottlenecks – rote lectures, passive learning, follow the process, exam-based performance, etc.  And while startups and entrepreneurship courses are now being added to the curriculum, “How to write a business plan” seems to be the state of the art. Though they’re familiar with technology in the valley, I picked up some important cultural difference from students and startup engineers I talked to.
I heard from a few investors that as the startup ecosystem is relatively new, there’s a battle for experienced engineering talent and lack of experienced C-level execs.
Because salaries are cheap, startups seem to try to solve every problem by throwing bodies at it. Startup teams feel like they are 2-5x the size of American teams.
I was surprised that startup teams ask what seems like the kind of questions Americans learn at their first jobs. Team: ”We keep spending money trying to get people to our web site but they don’t come back.
On the plane ride home I started to think about the similarities and differences between the innovation ecosystems of Silicon Valley and the TMT segment I saw in Beijing.
The second difference in ecosystems – the lack of freedom to dissent – goes deeper to the difference between the two systems. The bet the government is making is that if they can keep the economy cooking and distract the masses with ever increasing consumer goods and foreign adventures, maybe it can survive.

I wonder how many of these people each month get thrown into the local jail for getting caught using a vpn service? Yes, China is envy of the World, but there is Vietnam, because they need same thing, job at any price. More than 350 UC Berkeley scholars share their perspectives on local, national and global issues. In a new report, Business Insider Intelligence compiled and analyzed the best data available on how e-commerce and mobile commerce performed in the United States on the three key shopping days at the end of November: Thanksgiving, Black Friday, and Cyber Monday.
Total e-commerce grew 24% to $4.6 billion on Cyber Monday, Black Friday, and Thanksgiving, according to our estimates. The mobile component of e-commerce a€” retail purchases made on tablets and smartphones instead of PCs a€” grew even faster. The report is full of charts and datasets that can be downloaded and put to use in your own presentations and reports. Includes seven charts and datasets on the growth of mobile and e-commerce in the United States and internationally.
Analyzes how tablets in particular are emerging as power shopping devices, while smartphones are used more for browsing.
Places results for Black Friday, Cyber Monday, and Thanksgiving in the context of our projections for how mobile and e-commerce will perform through year-end.
In B2C model, business Website is a place where all transactions take place between a business organization and consumer directly.
In B2C Model, a consumer goes to the website, selects a catalog, orders the catalog and an email is sent to business organization. In traditional commerce, there are intermediating agents like wholesalers, distributors, retailers between manufacturer and consumer. Now-a-days, a new electronic intermediary breed is emerging like e-mall and product selection agents are emerging. This left  an open playing field for Chinese software startups as they “copy to China” existing U.S. The large players like Alibaba, Baidu and Tencent historically would be more likely to simply copy a startup’s features than to hire their talent. China’s education system needs to give more attention to fostering students’ innovative thinking, creativity and entrepreneurship.
Even though they’re next to Zhongguancun, the hottest place for startups in China, there seems to be a lower appetite for risk, a lack of interest in equity (instead optimizing for a high salary) and very little loyalty to any one company. The lack of a previous generation of successful startup CEOs means the current pool of mentors to coach this generation is almost non-existent. I’ve talked to entrepreneurs who view the investors as a “boss.”  A good number of startups in Beijing seem driven by the VCs – and not the founders.
They are the signs of a leadership frightened not by external enemies but by their own people.

How long will it take before even more folks get turned on to what the west has to offer over the net? This process of shifting of business layers responsible for intermediary functions from traditional to electronic mediums is called Reintermediation. Queda bajo la responsabilidad de cada lector el eventual uso que se le de a esta información. However, there’s a growing belief that the “design preferences” of Chinese consumers are just bad design. The large companies strategy seems to be to cover every possible market niche by copying successful models from others. When the Chinese government censors (run by their propaganda department) shutdown access to yet another U.S. This might also be a hangover from the command and control system of a state-driven planned economy. Iterations and pivots are a tough concept if you’ve never been taught to think for yourself.
What do we have to do to be creative?”  ”You Americans just seem to know how to do things even if you’ve never done them – can you show us how to do that?”  This seems to be an artifact of the Chinese rote educational system and its current system of government. The Beijing software ecosystem I saw has spent the last decade in a protected market copying successful U.S.
Because they started to realize there is better life, there is rich people and most of people want to get that point, and that starts from raising wages.
This process of removal of business layers responsible for intermediary functions is called Disintermediation. They’re used to using the web and increasingly the mobile web for everything, commerce, communication, games, etc.
But the differences are worth noting – it’s a young ecosystem, so startup management tools are nearly non-existent. The one caveat about online commerce is that while Chinese users will buy physical goods online (Taobao is huge), they seem to hate to pay for music or software, and the model for games seems to be moving to free play with in-app-purchases for accessories and powers.
But there’s a difference in the culture of failure and risk taking –  the current cultural pressure is to “work for a big company or the government.” Outward facing Universities are just starting to appear, and while there’s a free flow of information inside China, it suffers from the constraints of the Great Firewall. Perhaps products like WeChat, designed for an international market, might be the beginning of real innovation.
An interesting consequence of the rigid censoring and control of mainstream media is that blogging – reading and writing – is much higher than U.S.
Beijing has awful weather and pollution, it’s a temporary place to get rich and then leave.

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