Global Entrepreneurship: Stanford Trailblazers in China

Stanford, Feb. 26 — E-Week crossed the International Date Line today, as three Stanford graduates discussed what entrepreneurship is like in China.

To an audience of over 150 people, including such notables as Chairman of Stanford's Board of Trustees Burt McMurtry,
the panelists for "Global Entrepreneurship: Stanford Trailblazers in China" spent much of the two hours stressing the differences in the business environment between China and the US, including the role of government and local partners in creating successful Chinese ventures.

"On one hand, there's the picture of China as being a black box. On the other hand, there's a picture of China that's China being just another territory. Both of those views have proven to be very problematic," said Derek Ling, who received a master's degree from Stanford in 1995 and founded Chinese social networking service Tianji.com.

The panelists agreed that China can be a complicated place for entreprenuers where much that is assumed in the US cannot be taken for granted.

"If the US is like a zoo, China is more like a jungle," said WebEx Communications co-founder Min Zhu, drawing laughter from the audience for a creative metaphor that captured how unexpected problems can arise across the Pacific.

One of the things entrepreneurs have to deal with in China at all levels is the government, panelists said. Calling that part of business "B2G"- in a play off of B2B, which stands for business-to-business- several of the speakers spoke about the importance of maintaining a good working relationship with the government.

"If you're tight with a son of a minister, you can do great business that no one can touch," Ling said. "But if you don't have that, it's probably better to stay away [from that business]."

Unlike in the US where people tend to stay with companies for a while, there's a large turn-over of workers in Chinese IT ventures, the panelists said. "There's a mercenary attitude there," Hong said of people who work in IT companies in China. He added that many Chinese IT companies "need to learn" how to handle this problem, suggesting that one solution may be to "hire faster than attrition."

But there were also similarities between China and Silicon Valley. Don't expect to make millions overnight, the panelists warned. "Only the ones who last longer than the other people, they will win," Zhu said.

Survival in China, like in the US, also needs good salesmanship, Zhu added. "You need a great vision, and you need to sell your dream continuously."

While the panelists agreed with each other on most points, there was some disagreement over which Chinese city is the best place for start-ups. Zhu, in particular, touted alternatives to Beijing and Shanghai, pointing instead to places like Hangzhou- the city 180 km southwest of Shanghai where he founded his company Cybernaut in 2005.

Though the panelists all have some roots at Stanford, they took different paths. Ling, for example, studied philosophy here, while his fellow panelists were in the sciences.

What they did share, however, was an appreciation of Silicon Valley and what they learned from their time here.

"There's some magic in Silicon Valley that works very well," said Jack Hong, principal and founder of SN38, an incubation fund focusing on social-networking start-ups in China and the US. "That's why I came back here in '06 for business school."