Here come China’s tech giants. Last week, Alibaba and China’s Twitter-like Weibo announced massive IPO plans. Today, in Silicon Valley, China is front and center in the news. Let’s take a closer look at Chinese entrepreneurship in Silicon Valley. How will it change the tech innovation capital of the world? And will a longer term view take hold?
A version of this story aired on BBC’s Tech Tent on March 14, 2014. Listen to the podcast below: @17.35
The latest wave of Chinese immigrants to Silicon Valley is impacting everything from the housing market to the way business is done in the high tech capital of the world.
Stuart Evans, a Brit who arrived in Silicon Valley 30 years ago, has been studying the unique ecosystem of Silicon Valley for decades. Today, he teaches entrepreneurship at Carnegie Mellon Silicon Valley, and says he’s seen a sevenfold increase in student applications from China and South-East Asia in the last year.
Evans: “It’s been like a racehorse that’s been choked back in the stalls and now the gate’s open and the race is away.”
He’s witnessed millions of dollars from Chinese tech giants flooding into Silicon Valley startups; and incubators popping up for entrepreneurs arriving from Chinese tech hubs in Beijing and Shanghai. In Palo Alto, home of Stanford University, the number of home purchases by Chinese nationals has tripled since 2011. A local realtor recently reported that for every seven offers for a home, three of them will be cash offers from Mainland China. As well as teaching, Evans mentors young entrepreneurs at Innospring, a Silicon Valley based incubator that offers advice, funding and partnerships to fledgling Chinese startups and American ones seeking to expand in China. Here’s how he describes his role:
Evans: “A bouncing board to bounce ideas…to critique, to make connections, to suggest better ways to go about doing things.”
Better ways, and American ways. For example, he’s had to help young Chinese entrepreneurs adapt to the strict American legal system and US privacy concerns. Evans recalls telling a Chinese student that he might run into legal liability and privacy issues his new device for a car steering wheel.
Evans: “It seemed at first to hit a raw nerve…’Why not? Why don’t we just do it anyway?’ …was the entrepreneur’s initial response. Yet Evans found that they did eventually come round to an Americanview of the world.
Evans: “When you reason with people and show them the implications, they very quickly respond and come up with inventive solutions.”
Evans points out that there is no work/life balance in Silicon Valley: your work is your life. He says that fits well with the Chinese mindset and intense work ethic. It’s intensely competitive to get into the best schools in China.
Evans: “I’ve had students who would get up at 4 o’clock in the morning to be prepped before they went to school.”
Innospring founder, Eugene Zhang invites me to tour during a visit by a delegation of “20 under 20” college students from Jiangsu province in China.
Zhang: “Innospring is about capturing that positive energy…the big opportunities…the next Google or Baidu…the giants.”
So how are these Chinese entrepreneurs in Silicon Valley changing the way things are done? One of Evans’s entrepreneurs is Nan Zhong, cofounder of startup TIKL, a walkie-talkie app for smartphones. He describes a different mindset in the Chinese culture.
Zhong: “Letting go instant gratification is driven into my head…you go for what’s eventually going to be good for you, not necessarily what makes you happy at the moment.”
That long-term view colors the way Chinese entrepreneurs run their businesses he explains. They focus on growing market share and endure long-term losses to do so.
Zhong: “People take the pain, take the time, take all the hard work to grow an idea all the way to something that’s global.”
This contrasts with the short-term term view of many Silicon Valley startups, which often focus on being acquired or going public within two years. Evans agrees. In his experience, American and Indian entrepreneurs are generally happy to be acquired by companies like Google and Facebook; whereas his Chinese entrepreneurs prefer growth and autonomy, treating their startups like a precious baby.
Evans: “The idea of bringing up a baby and teaching it how to walk and learn as the company progresses is something that fits very well with the Chinese culture.”
Whether that longer term view takes root in Silicon Valley remains to be seen, but some influences already go both ways. Evans recalls the tale of a US colleague working at a startup in China who shocked his colleagues by cleaning up the tea cups on a Friday afternoon, a job typically done by the ‘ladies’ in the office, even the VPs. Gender and hierarchy boundaries were breached.
Evans:“It transformed the culture of the office with just that one act (finger click) and sent a message that this new way of doing things has implications.”
van Diggelen: “Do you think that’s rippling beyond that startup?”
Evans: “Yes, Silicon Valley is culturally diverse, intellectually homogeneous…it’s a heavily networked ecosystem and what works comes to the surface very quickly.” Instead of a clash of cultures at the surface, Evans says there’s a melding; creating what he calls ‘a global mosaic of talent.’ And Innospring is a focal point in that mosaic. Evans has witnessed a change in the way companies grow in Silicon Valley over the last 30 years. He points to the Chinese being an important part of the valley’s technical competency, with their strong math and software education, which increases opportunities for innovative collaboration.
Evans: “Even though they’re from a different culture and a different background, they speak the same language, technically.”
I suggest the melding that goes on in Silicon Valley in terms of innovation and business practices produces a special Asian Fusion, a bit like the fortune cookie, a Japanese-American creation, that’s largely known as “Chinese.”
Evans: “An Asian Fusion fortune cookie, wow (laughter)…at my age I try to steer clear of cookies…but the idea of fusion is something which is part of Silicon Valley’s DNA, it’s in the sharing and pooling of ideas that brings about the innovation in Silicon Valley.”
Find out more about Alison’s other contributions to and appearances on BBC
In this exclusive Fresh Dialogues interview, former Energy Secretary Steven Chu shares his reaction to Obama’s major speech on climate change; explains how a carbon tax will drive U.S. competitiveness; has a message for climate deniers; and even shares tips for being more energy efficient in the kitchen. When did you last get cooking tips from a Nobel Prize winning physicist who’s been described as the One Hundred Billion Dollar Man? It’s time to listen up folks! It’s time to listen up folks!
“This is a real issue. We have to do something about it!”
When asked if he wrote or was involved in writing the speech, Chu joked that he has ‘been involved’ for 4 1/4 years and recently regaled several heads of state (including President Obama) with his powerpoint pitch for raising appliance efficiency standards, reminding them that “there’s money to be made…and saved.”
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On Carbon Tax
“A carbon tax must be non-regressive and revenue neutral. It will drive efficiency…competitiveness. Educating the public (on climate change, energy policy) is very important, but it’s about economic opportunities and (creating) a growth market. Change will be partly market driven.”
On Climate Change Deniers
“I’d put them in the same category as people who said, in the 60’s and 70’s, that you haven’t proved to me that smoking causes cancer.”
On Chu’s vision for distributed energy
“Distribution companies partnering with the private sector have the opportunity to access fairly inexpensive capital and be part owners in distributed power and energy storage in benign environments, like inside a home or building. When you do that, the price of electricity will go down (3 to 4 times). All of a sudden utility companies will be in a growth business…Utilities should wake up and see there’s money to be made!”
Chu cited the advantages of black-out reduction thanks to demand control; and underlined the multitude of opportunities that low-priced software and sensing equipment offer.
On Cooking with Chu
Tip #1: “If you’re boiling a pot of water: if you put a lid on it, it comes to boil much more quickly.”
Tip #2: “Pick the right sized pot, don’t pick a pot five times bigger, twice as big.”
– Steven Chu, Nobel Prize winner in physics 1997, Former Energy Secretary, 2009-13.
No word yet on whether Steven Chu is planning to give up his new job at Stanford University for a prime time cooking show…Though we hear there is an opening.
The interview was recorded at the Silicon Valley Energy Summit, presented by the Precourt Energy Efficiency Center, Stanford University on June 28, 2013. Photos by Lina Broydo.
SolarCity’s CEO Lyndon Rive sat down with Fresh Dialogues last week to share details of the solar company’s business model, rapid growth, and ultimate goal of being the world’s largest energy provider. Yes indeed: this 35 year-old entrepreneur from South Africa anticipates no less than world domination.
Although Rive was tight lipped about the impending IPO expected in Q3 this year, he referred to the $280M investment from Google last year and said, “Our expectation is that companies like Google and other Fortune companies start making similar investments.”
“In order to monetize the full benefits of the solar system you need a large tax paying company. .. might as well use that tax bill to motivate the growth of the renewable industry…” he added. “We are approaching hundreds of Fortune 100 and 1000 companies…and will continually be raising funds, potentially in perpetuity.”
SolarCity is targeting companies that can benefit handsomely from the 30% Federal Business Tax Credit for solar investments. Although Rive wouldn’t name names, Apple Inc. springs to mind immediately. Record profits and enormous tax base? Check. Recently inclined to alternative energy investments? Check. In case you missed it, Apple recently invested in a massive 4.8 megawatt fuel cell development using Bloom Energy technology. Watch this space. We’ll keep you updated.
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Business Model
SolarCity’s innovative model offers a range of solar options. Customers can buy systems outright or pay zero down and lease or purchase the power the system produces. Large investments from partners like Google allow the company to make solar affordable and continue growing rapidly. Rive described the company’s business model thus: “(We) install solar systems for free, so we need capital to pay for that, and take a long term revenue stream on the electricity that we sell. So, as fast as we grow, that’s the business model that we’re in.”
Today Bill Weihl, Google’s Green Czar confirmed that he’s leaving the company as of November 8th. What does this mean for the future of Green at Google? And the future of green innovation in Silicon Valley and beyond? Weihl has been the leader of Google’s Clean Energy Team, spearheaded many innovative initiatives; and over $800 Million in green investment since 2006.
Google has taken a unique role in green policy advocacy as well as cutting edge clean energy investment. In July, Fresh Dialogues covered Google’s Green Dream, an audacious report outlining how the right green investment and policy could positively impact the economy and the planet. Without Weihl at the helm, Green at Google may lose some impetus. A new Green Czar has not yet been announced.
So what’s next on this Hero of the Environment’s agenda? Has he been tipped as President Obama’s Green Czar? Certainly Tom Friedman has turned down that job (saying he gets enough aggravation playing golf). Is Weihl heading to Europe where the debate about climate change is (thankfully) over. Or perhaps China has promised him a fortune to lead the ambitious green agenda for its new five year plan?
For now, he’s being tight lipped.
He simply told me, “It’s time to move on and find something new.”
Plus he’s standing by his statement made in September at the GoingGreen Conference that, despite the naysayers, “The Solyndra debacle will not impact smart venture capital investment.” Emphasis on the “smart.”
Stay tuned.
Fresh Dialogues will update you as soon as Mr. Weihl shares plans for his replacement and his next exciting chapter. Bets are on that he will stay in the green arena.
UPDATENovember 8, 2011 1pm PST
Will a new Green Czar be appointed soon? Google’s Parag Chokshi confirmed today in an email response, “Bill (Weihl) played a unique and important role bridging several different internal teams. But we have a strong team in place. Urs Hoelzle will continue to lead our data center efficiency and renewable power purchase efforts, and Rick Needham leads on sustainability and renewable energy investments.”
We assume that means “no.”
Parag Chokshi, Clean Energy Public Affairs Manager, also confirmed that it was Rick Needham and his team who spearheaded the $800M in green investments (another $45 M was made by Google.org).
Chokshi said that Weihl would be having a good send-off today. Just what that means in terms of low carbon celebrations and green-themed surprises is yet to be revealed. Watch this space.
Read transcripts, see photos and check out our ARCHIVES featuring exclusive interviews with Tom Friedman, Paul Krugman, Vinod Khosla and many more green experts and visionaries…
“Believe in yourself.” That’s the core advice from Weili Dai, cofounder of Marvell, whom some are dubbing the new Tech Wonder Woman, given the recent ouster of Carol Bartz from Yahoo. Dai’s advice for women in business is resonating, given the focus on women’s crucial role in reviving the economy at the historic APEC Women and the Economy Summit in San Francisco last week, chaired by Hillary Clinton. The summit concluded that that increasing women’s participation in the economy could lead to a 14 percent rise in per capita income by 2020.
Weili Dai spoke at APEC and has strong views about women’s role in the business world. She argues that the best way to grow the world economy is to fully engage women as business leaders. She points out that fewer than 29% of global decision making positions are held by women. Encouraging more women to focus on science and technology is key she says. At the Game Changers Conference in Silicon Valley, despite calls from other delegates for trade intervention against China, she voiced her preference for collaboration not confrontation. “We are powerful, China is powerful. Today, we live in the global world….let’s collaborate…cooperation is the healthy thing to do.”
In this Fresh Dialogues interview, she shares some tips about how to succeed in the tech world. A native of Shanghai, Dai attended UC Berkeley and cofounded Marvell in 1995. Since then, she’s helped to grow the company into one of the world’s largest chipmakers. Marvell touts a few admirable green policies but could do better as a green leader, coming 434th in Newsweek’s green ranking of America’s largest 500 companies.
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Read transcripts, see photos and check out our ARCHIVES featuring exclusive interviews with Tom Friedman, Paul Krugman, Vinod Khosla and many more…
Here are video highlights from the SVLG Game Changers 2012 Conference which took place in Silicon Valley, September 13, 2011.
Gavin Newsom, CA Lieutenant Governor was on fire as he talked about California’s struggling economy and political disfunction: “We’ve been flat lining for 30 years…we have to wake up!”
California State Senator, Joe Simitian echoed his frustration with polarized politics and called for a popular public uprising. Striking a more optimistic viewpoint, the charismatic Shai Agassi, CEO of Better Place, the EV infrastructure, battery replacement company shared his vision for making the San Francisco Bay Area a model for the future of electric vehicles to “show Detroit…DC the way to go.”
Weili Dai, the intriguing cofounder of Marvell, the fabless semiconductor company, reiterated the need for cooperation with China, despite several calls for taking a more aggressive stance to protect and nurture America’s deteriorating manufacturing base.
This interview was recorded in Silicon Valley on Sept 13, 2011. With thanks to the SVLG and SV Community Foundation for front row seats. See video at the Fresh Dialogues Channel here
Here is an exclusive Fresh Dialogues interview with Marvell’s VP, Weili Dai – she gives tips to women in business. Number one: believe in yourself
Read transcripts, see photos and check out our ARCHIVES featuring exclusive interviews with Tom Friedman, Paul Krugman, Vinod Khosla and many more…
On Cooking with Chu
