Silicon Dragon

Startup Asia tour shines on India

2012-02-19T04:39:00.000-08:00

My tour of India's innovation hubs is generating some press. Check out the media coverage here:
Wall Street Journal @ LiveMint
FirstPost

In the first six days of the trip, I traveled from Mumbai to Delhi back to Mumbai and then to Bangalore! Check out some photos from the Startup Asia events here:

Startup Asia Tour

On February 21, I will be in Mumbai again, this time to moderate a Startup Asia panel discussion on India's rise in tech entrepreneurship. Panelists are venture investors Sandeep Singhal of Nexus Venture Partners, Shailesh Lakhani of Sequoia Capital and Hemir Doshi of IDG Ventures India. On stage, I will also interview Indian entrepreneurs Alok Kejriwal of Games2Win and Dippak Khuran of Vserve Digital Services.

Famed inventor and investor Kanwal Rekhi was on my VC Circle panel in Delhi

Startup Asia Mumbai 2012
February 21, 2012, 8:15-11:15am
Orchid Hotel, near domestic airport
Mumbai
Sign up

Days 1 & 2 of Silicon Dragon ventures in India

2012-02-14T08:23:00.000-08:00

Day 2 in India and already what an amazing experience! Yes,I’ve been here before . . . so I have some idea of what I'm getting into

Late yesterday morning, while I was fighting jetlag, my PC crashed and all my files disappeared.As luck would have it, a call to my good contact at Tie Mumbai managed to find a willingand able IT guy to rescue me. By mid-afternoon, this well-trained Indian software engineer showed up at myhotel, and in less than one hour – I am not kidding – my computer was back,better than before. Turns out my trusty laptop had picked up a nasty virus. A download ofsome malware fix-it software cleared up the problem fast! Wonder why Norton didn't find it. And we got the lowmemory problem solved too on my PC by dumping a bunch of http files.

The evening was time to celebrate that all was not lost. After an hour-long ride from my hotel in south Mumbai, Iarrived at the Grand Hyatt in Mumbai and attended the opening dinner, poolside, for NASSCOM speakers. There, I got an earful from a who's who of high tech in India about what’s wrong and right about entrepreneurshipin India.

This morning (Valentine’s Day), I checked in at Apex ‘Summit,where I got to witness legendary entrepreneur and investor Kanwal Rekhi speakcandidly about his outlook for the venture ecosystem here. Afterward, Rekhi wassurrounded by young entrepreneurs who hung on his every word of advice (I’mchairing a panel he’s on at VC Circle in Delhi, Feb. 15, so more on this topiclater on).

Then, today I managed to miss my flight from Mumbai toDelhi. We got stuck in a horrible traffic jam while passing through some of theworst slums I’ve seen in India. At theairport, I would have had time to make the flight – if only I’d realized that youhave to print your flight reservation and show the print-out to get a boardingpass. So much for high tech!

Jet Airways put me on the next flight -- with a change fee! -- and I passed the timeon the airport Wi-Fi – which by the way, you get access to through by a code sentSMS to your Indian mobile phone.

China Venture Hangover: Bottle or Pills?

2012-02-01T18:23:00.000-08:00

Venture capitalist Tim Chang says 2012 may bring a “returnto normalcy” for deal making in China. But he’s not ready to predict yetwhether deal makers will “reach for the bottle or take their medicine” now thatthe bubble has popped in an overheated China venture market.

“In 2010, the market was overheated, everyone was drinkingthe kool-aid and pumping it by the gallon. The story for every deal was ‘itdoesn’t matter if your startup is profitable, just get revenue doubling everyyear and we will take it public, and we can worry about getting profitable later.’

But in early 2011, that story fell apart,” said Chang, speakingat a recent Startup Asia event held in tech-central Silicon Valley.

The Startup Asia Chase Is On!

2012-01-31T19:40:00.000-08:00

Following the venture trail, the journey has led fromSilicon Valley to China and then on to India and Vietnam – and next, newly emergingmarkets such as Russia and Brazil, which are both angling to build their ownSand Hill Road ecosystem.

Just as Silicon Valley and China had their successes inonline travel, e-book retailing, gaming and social networking, the nextfrontier tech zones are following their example. I wrote Startup Asia to tracktheir progress.

Everyone knows China’s breakthrough Internet companies:Baidu, Alibaba, Tencent, Ctrip, DangDang, Renren. But they don’t yet know theircounterparts in India, which is fast on the rise. Nor do they know theirlook-alikes in Vietnam, Russia or Brazil.

But count on these copycat models to break through in theworld’s next hotspots. Why be so sure? Because if the business model works wellin one market and can be adapted locally to another culture and language, thenwhy not? If that new market has aswitched-on digital populace, it’s almost foolproof – particularly if the sameventure capital firm is behind them, which they are in most cases.

See venture capitalists (above) who spoke at our recent Startup Asia event: Kabir Misra, Kumar Shiralagi, Naren Gupta, Bill Tai, Tim Chang, Peter Wagner.

Keep reading at my Forbes.com column. Click:
http://www.forbes.com/sites/rebeccafannin/2012/01/31/the-startup-asia-chase-is-on/

Silicon Dragon Lady on DingDing.TV

2012-01-30T14:14:00.000-08:00

To ring in the Year of the Dragon, I recently appeared on web TV with Diana Ding, the founder and host of DingDing.TV on her talk show Innovation Dialog. See clip from show, Silicon Dragon Lady.

Diana is a terrific interviewer and she managed to get more comments out of me than most do. (Guess folks are curious about how a girl from smalltown Ohio could end up as a journalist and book author writing about startups in Asia.) See Startup Asia and Silicon Dragon. Those in the studio audience also had an opportunity to ask so many pertinent questions that I was under the mistaken impression that they were cued up in advance.

The show was aired live on several Bay Area stations just ahead of the State of the Union address by President Obama, so I'm not sure how many folks listened in. But the beauty of the web is that viewers can tune in later on. The show will be accessible for a month afterwards its original date, January 26, 2011.

2011-12-10T13:17:00.001-08:00

Mid-career U.S. and European professionals in their 30s and 40s are making it in China and can’t get enough of the place.

Fritz Demopoulos, (pictured) 43, a Southern Californian and MBA grad from UCLA’s Anderson School of Management hasn’t mastered Mandarin, but has scored two Chinese Internet successes over the past decade. In June 2011, Baidu invested $306 million in the travel search engine Qunar he formed in 2005 and he stepped down as CEO, turning management over to Chinese staff. Demopoulos, who was born in the U.S. to a Greek dad and Austrian mother, got his start in China as business development manager for Rupert Murdoch’s News Corp., working alongside Wendi Deng in the late 1990s in Hong Kong and mainland China, and running information technology portal Chinabyte.com. He next joined NASDAQ-listed Chinese portal and gaming company Netease and worked closely with the CEO on a two-year turnaround. In 2001, his first China startup, sports portal Shawei, was bought by Hong Kong-based Tom Group for $15 million.

With his credentials, Demopoulos could write his ticket. He’s exploring opportunities to start another business or become an active investor, and plans to continue working in either Hong Kong or Beijing. “I don’t think I will be based at the debtor to China, ie the U.S.,” he says.

Richard Robinson, 43, hails from Boston and still drops the “r’s” with his accent though he’s long ago broken through the language and cultural barrier on a whirlwind tech startup career in China.

To continue reading this Chapter One excerpt from my recently published book, Startup Asia, see Forbes post:
http://www.forbes.com/sites/rebeccafannin/2011/12/08/go-east-young-entrepreneur/

Tech Gets Exciting in India, 5 Years Behind China

2011-12-02T14:02:00.001-08:00

Mumbai street scene from Silicon Dragon ventures

The only other tech market in Asia that is halfway as exciting as China is India. It has the promise to close the gap with China but is no match yet. India’s mobile market is large, venture spending is vibrant, and high-profile IPOs such as MakeMyTrip are happening, with more on the way soon from up such swift up and comers as mobile ad service inMobi and PC help center iYogi.

Plus, India has proven it is rich in R&D and a lot more than outsourcing. Even so, red tape and poor infrastructure hold back the entrepreneurial spirit here. Investors Bill Draper, Lip-Bu Tan, and Sumir Chadha did the trailblazing in India. Today India’s venture leaders such as Ashish Gupta and Sudhir Sethi are looking for the next, new thing in mesmerizing India – the world’s second-fastest-growing economy and Asia’s third-largest economy.

At IDG Ventures in Bangalore, I met with Sethi, who is chairman and managing director and runs the tech media company’s $150 million India fund. It’s one of five funds in the IDG Ventures network established by Pat McGovern, the visionary founder and chairman of International Data Group in Boston. If a strategy works in one locale, then IDG works to bring the formula to startups in other places. China has proven to be a gold mine for IDG, where it’s made multimillion-dollar returns from early investments and successful IPOs of instant-messaging service Tencent and search engine Baidu. India could be next.

During a trip to India, I met founders of startups with advances for everything from detecting lung cancer at an earlier stage to recycling electronic waste in a cost-effective way, to bringing solar power to villagers, to offering superfast mobile searches, to three-dimensional online games, to robotic-powered vacuum cleaners. India’s also become a mecca for low-cost and sometimes jerry-rigged inventions—in Hindi, jugaad. Tata Motors’ tiny Nano car at an itty-bitty price tag of $2,500 and the Indian government-backed tablet computer selling for $35 are some examples. So is my favorite find: a Nokia cell phone with a built-in flashlight. India may not have a Google, Apple, Baidu, or Tencent yet, but it is moving into more technical work than writing software and answering phones.

Yet India’s entrepreneurial journey is at least five years behind China’s path. There’s no Jack Ma or Robin Li in sight or a big-time IPO like Youku. India lacks the entrepreneurial buzz and fast pace of China tech clusters. Indian entrepreneurship has been led by grassroots efforts, and the government hasn’t always been venture friendly.

If India is ever to break through, it needs to ditch an image as just for outsourcing or low-cost engineering and business services—a major challenge for the world leader of the booming $500 billion global outsourcing market. But India could eventually become a tech minipower and grab some of the limelight from China. Contemporary corporate centers such as Whitefield on the outskirts of Bangalore and the Gurgaon satellite city in Delhi showcase that India is rising.

See Forbes post, Nov. 27, 2011:
http://www.forbes.com/sites/rebeccafannin/2011/11/27/tech-gets-exciting-in-india-5-years-behind-china/

Kai-Fu talks Steve Jobs, Silicon Dragon, China angels

2011-11-15T05:46:00.001-08:00

Kai-Fu Lee, who wrote the foreword to my new book Startup Asia, is raising a second fund of $300 million to branch out to Shanghai, having stormed Beijing with a first fund of $180 million and investment returns he says are 10 times in two years' time. Not bad progress since he left the helm of Google China to set up angel investment fund and incubator Innovation Works in September 2009.
See the video interview and read more in Forbes at my post.
Will China see a Steve Jobs soon? No, says Lee.
How about the impact of angel investors and serial entrepreneurs? It's BIG.
Watch the mobile Internet for future China innovation.

Go East, Young Entrepreneur!

2011-10-29T21:46:00.000-07:00

Go East, Young Entrepreneur!

"The opportunity is now. In a few years, it will be too late."
Kai-Fu Lee, Founder and Chairman, Innovation Works

Read my new book, Startup Asia: Top Strategies for Cashing in on Asia's Innovation Boom
to find out how dozens of entrepreneurs and venture investors are getting ahead fast and how you can too!
Kai-Fu Lee wrote the foreword.

Startup Asia has endorsements from The Economist, Technology Review, a Columbia University professor, and numerous leading practitioners, including Dick Kramlich and Bill Draper.

The book sold out on its second day on Amazon. But I hear they're stocked up now!
Check it out.
http://www.amazon.com/Startup-Asia-Strategies-Cashing-Innovation/dp/0470829907

From Made in China to Invented in China? 'Chinov8!'

2011-09-22T14:03:00.000-07:00

A Silicon Dragon tech economy began in 2002 with Chinesereturnees—so-called sea turtles who came home to lay their eggs—who clonedGoogle, YouTube, and Amazon, grabbed Sand Hill Road money, and scored on NASDAQand the NYSE. Today, homegrown Chinese entrepreneurs are snapping up venturecapital from Chinese currency funds for even more clones—Beijing techie WangXing alone has cloned Facebook, Twitter, and a Chinese GroupOn.

Theneedle is gradually moving from “made in China” to “invented in China.” Micro-innovationstweaked for the local culture are cropping up more often. Sina’s Weibo, a hybrid Twitter-Facebook, layered in video and photosharing before Twitter did.The long-awaited promise of disruptive technology from China is coming, too,symbolized by China’s climb to fourth place worldwide for new patentapplications. GSR Ventures–funded LatticePower in Nanchang counts more than 150patents for making low-cost efficient LED lightbulbs.

But China technopreneurs are still in those awkward years of adolescence. The next Jack Ma of Alibaba fame has yet to emerge.

The fissures in the wall are there, for sure. Doing business in China also means dealing with corruption, fraud, lack of the rule of law, inflation, censorship of Web content, and China’s notorious counterfeiters, who have popularized a whole industry of cheap knockoff or shanzhai cell phones.

That’s a long list of ills, but the tides are shifting and swiftly. As China’s Silicon Dragon evolves as a startup frontier with multiple undercurrents, it could even one-up the original Silicon Valley and become a technology superpower. That may be only a decade or two from now.

We’ll be debating these trends at our Silicon Dragon ‘Chinov8!’ event, Oct. 6, at Rosewood Sand Hill. See http://siliconasiainvest.com/SiliconDragonCalifornia.aspx

Our expert panelists include Brad Bao of Tencent, Bill Tai of Charles River Ventures, Tim Draper of DFJ, Richard Lim of GSR Ventures plus Marguerite Gong Hancock of the Stanford Program on Regions of Innovation and Entrepreneurship. We’ll be hearing more from our featured Chinese tech entrepreneurs Jeff Chen of Maxthon (China’s Internet Explorer plus) and Haidong Pan of Hudong (China’s Wikipedia plus), who are flying in from Beijing to speak at Silicon Dragon ‘Chinov8!’ during China’s National Day Holiday.
Read more at my Forbes post:
http://www.forbes.com/sites/rebeccafannin/2011/09/22/from-made-in-china-to-invented-in-china-chinov8/

Silicon Dragon Second @ NASDAQ

2011-09-10T11:55:00.000-07:00

Following are my remarks by journalist entrepreneur and author Rebecca Fannin at NASDAQ, Sept. 8, 2011, the day her group Silicon Dragon rang the closing bell. It was a tribute to the Chinese entrepreneurs in this growing Dragon community who have taken their startups public in the U.S.

I’m very excited to be here today at NASDAQ with so many friends, colleagues and members of the fast-growing Silicon Dragon community. Thanks to NASDAQ and to Sidley Austin for your partnership and for making Sept. 8 a special day we can long remember – and not just because 8 is lucky in China.
Standing here today and getting ready to ring the closing bell gives me have a sense of what it is like for those Chinese entrepreneurs I’ve covered to actually go public on NASDAQ. I’m thinking of Robin Li who took Baidu public here in 2005 and then posed in front of that big NASDAQ neon sign at this Times Square headquarters. Robin is now one of China’s billionaires as the head of China’s search engine. And I’m thinking of Gary Wang of Tudou who went public here a few weeks ago and rang the closing bell. I recall interviewing Gary for the first time in Shanghai in 2006 when his video sharing site was new and picking up its first financing from venture investors. And yes, I’m thinking of Joe Chen of Renren, China’s Facebook-plus, who is now busily running a public company. Standing here on stage with me is David Chao of DCM who was an early backer of Joe’s startup and who was with Joe on stage when Renren went public this past May.
While Silicon Dragon is not about to go public any time soon -- well, who knows? Maybe someday we might! I do get inspired by the entrepreneurs I interview and profile! What we have done is play our part in documenting the historic rise of China’s entrepreneurs and their coming out party internationally. And we have helped to create a community linked across borders – from Beijing and Shanghai to Silicon Valley – by having gatherings such as the one we will have at 5pm today here for experts to exchange ideas and hopefully benefit from the learning.
While investing in China hasn’t really hit Main Street yet in my hometown of Lancaster, Ohio, (hi, Mom!), it’s no longer considered so foreign or even so risky – despite some recent accounting scandals we’ve read about in the press with U.S.-listed China companies and controversial reverse mergers. I know some here in the audience who have profited from well-timed buys and sells of shares Chinese companies that were financed by Sand Hill Road’s venture elite. So it is possible to get solid returns that can match those from US companies.
As a journalist and an author profiling China’s entrepreneurial leaders and up and comers, it wouldn’t be right for me to invest in those companies I cover. Sure, I have my favorites. It’s based on instinct and impressions of the founders themselves as well as hard-won access to the inner workings of their startup strategies.
I’m glad I’ve had this opportunity to be one of the few journalists documenting this unfolding story of China’s advances from ‘made in China to invented in China’ – the theme of my first book, Silicon Dragon. As I say this, my second book is off to the printers. Book 2, Startup Asia, takes the China story into India, Vietnam and other Asian hotspots and profiles the next generation of Asian entrepreneurs who stand a chance of ringing the closing bell.
This is work I love to do and do naturally, with no boss telling to me what to do (I am my own worst boss) something I’m sure all the entrepreneurs I’ve come to know in China, India and beyond could relate to and then some.
To quote one of the more famous Chinese entrepreneurs I’ve written about -- Jack Ma, the founder of Alibaba, who is now a billionaire from taking his Chinese startup public – “when I am myself, I am happy and have a good result.”
That rings true. Let’s all celebrate by ringing the bell!

Silicon Dragon Rang the Closing Bell

2011-09-09T13:15:00.000-07:00

NASDAQ newsSeptember 08, 2011 Silicon Dragon, a news, events and consulting group, visited the NASDAQ MarketSite in New York City's Times Square. In honor of the occasion, the force behind Silicon Dragon, Rebecca Fannin rang the Closing Bell.This news, events and consulting group was founded by journalist and author Rebecca Fannin in 2009. The group publishes international newsletters for entrepreneurs and venture capitalists, programs business conferences for startup founders and investors in New York, Silicon Valley, Beijing, Shanghai and Singapore, and provides editorial content for multinational tech and financial companies, including KPMG and Sony. Silicon Dragon testified as an expert witness on China's Internet before a U.S.-China Commission in Washington, D.C. Silicon Dragon draws upon a rich library, from Ms. Fannin's extensive reporting in Asia for nearly two decades for Forbes, CEO, HBR.com, The Deal, Red Herring and several other business publications. The content resources include two books penned by Ms. Fannin: Silicon Dragon (McGraw-Hill, 2008) and Startup Asia (Wiley, forthcoming Oct. 2011).

Silicon Dragon is Ringing the Bell at NASDAQ!

2011-08-24T09:49:00.000-07:00

Silicon Dragon NY 2011

Deals / IPOs / Returns: China Style
Chinese up and comers following the lead of Baidu founder Robin Li are racing to U.S. IPOs yet risks and challenges keep multiplying. What are the best startup and investment strategies to win the trophy?

Where: NASDAQ MarketSite
When: September 8, 2011, 4pm-8pm
3:30PM Guests Arrive, Registration Opens
4PM Silicon Dragon Rings the Closing Bell

5PM Welcome: Bob McCooey, NASDAQ OMX

5:05PM Keynote Talk: Peter Lighte, Chairman, JPMorgan Chase Bank China

5:30PM Panel Discussion, Q&A
7-8PM Cocktail Reception

Expert Panelists:

David Chao, General Partner, DCM

Tony Florence, Partner, NEA

Eric Xu, Managing Partner, Rock Rose Partners

Ron Posner, CEO, eChinaCash

Robert Pietrzak, Partner, Sidley Austin

Barry Silbert, CEO, SecondMarket

James Robinson IV, Managing Partner, RRE Ventures

Porter Bibb, Managing Partner, Mediatech Capital Partners

Moderator: Rebecca Fannin, Silicon Dragon, Forbes

Register here for the event:
Silicon Dragon NY 2011
http://silicondragonny2011.eventbrite.com/

Register for the live webcast or replay:
WEBCAST
http://bit.ly/pEYfSr

Thanks to our sponsors:
Sidley Austin NASDAQ OMX

Timing Not on Tudou's Side with IPO

2011-08-19T11:06:00.000-07:00

Timing is everything, as Tudou CEO Gary Wang knows all too well.

Tudou had the lead in China’s online video sharing space. It beat Youku to a product debut by one year. Tudou was also the market leader for several years. Now, Youku has jumped to the market lead and beat Tudou to an IPO by eight months.

You can bet that Wang wishes he could have gotten his startup public late lst year, when it was originally scheduled to go before getting detoured by accounting issues and the CEO’s divorce. The market is a lot tougher now than it was back in December, when Youku scored one of the best-performing IPOs since Baidu in 2005.

Bets were that Tudou might not make it out in this tough market. Credit for perseverance has to be given to Wang, co-founder Marc van der Chijs and Helen Wang, the venture investor at GGV Capital who spearheaded an initial $8.5 million investment in Tudou when video sharing was fairly new. They rang the closing bell at NASDAQ this week, and I get to do the same soon, though for different reasons.
http://siliconasiainvest.com/SiliconDragonNY2011.aspx

I’ve followed Tudou ever since I first interviewed Wang in Shanghai in 2006 for my book Silicon Dragon, shortly after he picked up the first venture financing for his video sharing site. See abov photo I took. Back then, the biggest issue was trying to figure out how to pay for increased bandwidth to run a surging number of videos.

I’ve tracked his career since then. See a Silicon Dragon video interview I did with Gary in 2008 for some insights into his strength of character. We were meeting at a shopping mall in Beijing at the time of this interview, during a Chinese government crackdown on video content.

When one of the Chinese entrepreneurs I profiled in my book, Silicon Dragon, gets his or her startup to NASDAQ or NYSE, I can’t help but feel a little proud. Tudou makes the fourth company to cross that line. Renren and Dangdang were also in that league. There are several IPOs among those profiled in my next book too, coming soon. The new book also covers India as well as China, and the Indian IPOs included MakeMyTrip and recently filed JustDial.

But of course, going public is really only the start of a new and tougher chapter, not a finale.
See my posts at Forbes:
http://www.forbes.com/sites/rebeccafannin/2011/08/19/timing-not-on-tudous-side/

Silicon Dragon Entrepreneur of Beijing: Si Shen

2011-06-28T10:45:00.001-07:00

Silicon Dragon is proud to announce our series of awards honoring the top entrepreneurs in Beijing, Shanghai and Hong Kong.

Our first award, for Silicon Dragon Entrepreneur of Beijing, was presented to Si Shen, the CEO and co-founder of Chinese startup Papaya Mobile, a Facebook-like site that runs on Google's Android operating system. Papaya Mobile has funding from DCM and Keytone Ventures.

Shen received the award at our annual Silicon Dragon Beijing event at Tsinghua Science Park, China's Sand Hill Road. Presenting the trophy was our award series sponsor, KPMG, and the management consultancy's partner Hermann Cheung. (see photo)

Criteria for our Silicon Dragon Award include:
1. An innovative product or service in a tech or related area: mobile communications, e-commerce, social networking, Internet, online games, cloud computing, outsourcing, cleantech, healthcare

2. A dynamic, passionate CEO/founder with some international company experience and/or education at a top university

3. A high-caliber management team with fully staffed positions for CTO, CFO, sales and other top executive posts

4. Raised at least one round of venture capital from a prominent firm

5. Reported fast growth at least two years in a row for startup or emerging company

6. A market leader, with sizeable market share that can be documented by an outside industry source

7. Profitable or a quick path to profitability

8. A highly qualified board of directors from the industry

9. English-language fluency

10. A surprise factor such as a major milestone or accomplishment that seemed impossible

Our award winners are selected by an editorial panel and confirmed with a judging group that includes professors from leading business schools in Singapore, Hong Kong and San Francisco, plus incubator lab executives in Beijing and Silicon Valley.

Our next awards will be presented in concert with:
Silicon Dragon Shanghai 2011, Nov. 7
Silicon Dragon Hong Kong 2011, Nov. 10

For more details, email me at rebecca@siliconasiainvest.com

Silicon Dragon Beijing 2011: "It's Great To Have A Bubble"

2011-05-30T23:26:00.000-07:00

Is there a bubble in China venture investing? Sure. And who could be more upbeat about it than the leading venture capitalists in Beijing and Shanghai.

“It’s great to have a bubble,” said Sonny Wu, managing director, GSR Ventures. “Bubbles are great,” agreed Richard Hsu, managing director, Intel Capital China.

What the heck?

The seasoned venture investors who spoke at Silicon Dragon Beijing 2011 have survived dotcom meltdowns and market crashes in China and Silicon Valley before. They can spot the signs of an overheated market quite well, thank you. And they intend to score in this very hot market before the opportunities are gone.

“We’re in the midst of a bubble but a good bubble. It’s going to create a flight to quality,” added DCM general partner Ruby Lu. “The bad companies will lose momentum or die. The market will shrink to a small base of companies. (Beware, 1,000 GroupOn clones in China.) See Silicon Dragon Video of Beijing show.
Click:
http://www.youtube.com/watch?v=gXdQUNQCMpc

What are some tactics that astute investors are trying to ride the roller coaster of this highly cyclical business?
Read more at Forbes:
http://blogs.forbes.com/rebeccafannin/2011/05/30/china-venture-its-great-to-have-a-bubble/

Silicon Dragon: China Fund Rush, Hurry to Do Victory Lap

2011-05-18T15:56:00.000-07:00

Just when China venture goes sky high, Qiming Venture Partners has jumped in with a new $450 million fund and plans to raise an additional 700 million RMB ($108 million) fund.

No one’s more eager to do a victory lap from investing in emerging Chinese companies than Qiming founder and managing director Gary Rieschel (see my photo). If he hurries, his timing may be good.

China venture is getting overheated and is bound to bottom out again in a few years. Rieschel noted there are “definitely sectors that are very hot.”

To read more of this post, please click Forbes link:
http://blogs.forbes.com/rebeccafannin/2011/05/18/china-venture-fund-rush-hurry-up-to-do-that-victory-lap/

Silicon Dragon: Renren & Kaixin001 CEOs to Face Off

2011-05-11T20:23:00.000-07:00

If it’s the entrepreneur who really matters more than the money or the model behind a startup’s success or failure, then the match between the two founders of competing Facebook sites in China ‒ Renren and Kaixin001 ‒ is going to be an interesting one to watch on Wall Street. Kaixin001 is expected to list in the U.S. soon, following the lead last week of Renren.

Quiet and unassuming where Renren CEO and founder Joe Chen can be dynamic and colorful, the bio of Cheng Binghao is a study in contrasts with that of his key rival. Cheng is a homegrown, first-time Chinese entrepreneur and geeky website developer while Chen, now a billionaire from the IPO, is a savvy returnee and startup master.

How each fare could point to the future of China tech startups on Wall Street. The model of CEO returnee has proven to be successful one, with western-educated and trained Robin Li of Chinese search engine Baidu as its best representative. Now Cheng, as his Kaixin001 is poised to go public, is at the start of a new and different parade of entrepreneurs who take their cues from Chinese culture and upbringing rather than from the West.

The contrasting resources in building these two competing Chinese Facebook sites showcases a shift from the first wave of China’s returnee entrepreneurs to today’s more localized homegrown generation.

Keep reading post at Forbes, click
http://blogs.forbes.com/rebeccafannin/2011/05/11/front-row-seat-as-founders-of-renren-and-kaixin001-face-off/

Silicon Dragon: Renren IPO Puts Joe Chen In Driver's Seat

2011-05-05T12:19:00.000-07:00

As shares of Joe Chen’s Renren began trading up on the New York Stock Exchange today, I couldn’t help but recall our interviews in Beijing a few years ago. Back then, he candidly shared his view of what it takes to win the Chinese Internet race.

“We gotta big faster than rivals, and we’re fairly fast in areas that really matter. We are land grabbing everywhere,” he told me. I also remembered him telling me about his supercharged approach to building websites: “In China, we just chunk it out. We just do it.”

As I went down memory lane, I could hear Joe telling me what he’d learned from reading investment books about such business legends as Bill Gates, Larry Ellison and Rupert Murdoch. He said then he was applying what he had learned from these masters to “buy companies of intrinsic value with a barrier to entry and then nurture them.” And, the biggest lesson he took away? “I want to make sure to have an ample supply of cash to do deals.”

Today, such strategies were rewarded as his Facebook-like Chinese startup Renren scored on Wall Street. Shares rose 28.6% above the $14 IPO price in the first day of trading. Now, having raised $743.4 million in the IPO, Chen certainly has the capital and resources to ride the China Internet wave as CEO of his newly publicly traded company.

In the lightning-fast China web scene, Renren has morphed into a social network powerhouse.
To read more at Forbes, click
http://blogs.forbes.com/rebeccafannin/2011/05/04/renren-ipo-puts-joe-chen-in-drivers-seat/

Silicon Dragon: Just How Hot Is China Venture? Very!

2011-04-29T11:46:00.000-07:00

You don’t need a meter to gauge that after a two dry years, funds, deals and IPOs are springing up in the busiest season yet. How long will it last? Hard to tell, but I do hear echoes of the dotcom boom here.

Let’s count up the IPOs among the leading Chinese venture investment firms. Qiming Ventures has five Chinese portfolio companies in the cue to go public soon: ramped up car rental service eHi from Shanghai, dating site Jiayuan, online video programming PPLive, social networking service Kaixin001 and kids entertainment site Taomee. GSR Ventures has four IPOs in the works. DCM is geared up for the debut of China’s Facebook Renren on the NYSE, closely following last year’s listings of Dangdang and BitAuto. NetQin Mobile, backed by Sequoia GSR, Ceyuan and Fidelity, is in the lineup too.

The recent listings of WI Harper-backed data center deal 21Vianet on NASDAQ and Qihoo 360 on NYSE all add to the buzz.

Consider too the sizeable financings of Chinese startups. GroupOn clone Lashou raised $110 million from a group including GSR Ventures and Norwest Venture Partners. Read more of this post at Forbes.

Watch this space for more of what’s happening: Silicon Dragon Beijing, May 25, at Tsinghua Science Park. We’ll be talking big deals, IPOs and mega funds with a who’s who of China venture and startups in the busiest – if not the best – season yet.
http://silicondragonbeijing2011.eventbrite.com/

Silicon Dragon Invite: May 25, Beijing

2011-04-25T19:57:00.000-07:00

SILICON DRAGON INVITE: Beijing Ventures Bloom
May 25, 2011, 4-8pm
VC panel/Tech Chats/Award/Q&A/Networking/Reception/Dinner Buffet
Tsinghua Science Park, Sunshine Club

Please register here:
http://silicondragonbeijing2011.eventbrite.com/
RSVPs: events@siliconasiainvest.com

Big deals, winning IPOs and mega funds spring up in the busiest season yet for China venture. Join us for our Silicon Dragon Beijing event with our Who's Who of Ventures & Startups.

Silicon Dragon: What's Left To Clone In China

2011-04-20T13:07:00.000-07:00

Just how many clone opportunities are left in China, now that the Chinese marketplace has copies of YouTube, Amazon, Facebook, Google, LinkedIn, eBay and yes, even Wikipedia (see my photo of founder Haidong Pan).

The latest cloning craze is localized versions of GroupOn. Consider that Lashou.com, a competitor to GroupOn in China, just raised the large sum of $110 million from venture investors.

Some white spaces do still exist for new categories, narrow niches or new local twists on the same ole thing. What’s surprising is how well some look-alikes have done in China despite getting a late start. What helps, of course, is that the big American Internet brands have crashed in China.

Take Ushi.cn as one example, China’s most popular business social networking brand.

Read the rest of the post here at Forbes.com:
http://blogs.forbes.com/rebeccafannin/2011/04/20/whats-left-to-clone-in-china/

Silicon Dragon: Tick-Tock Goes the Tech Clock as China, India Close Gap

2011-04-15T13:47:00.001-07:00

China and India are coming up fast as tech powers though a big gap still exists between these emerging markets and developed nations. That gap is bound to narrow over the next decade. Photo: Tsinghua Science Park, site of our Silicon Dragon Beijing program May 25: http://siliconasiainvest.com/2011Events.aspx
A new Global Information Technology Report by the World Economic Forum predicts that these two powerhouses will drive much of the growth in information technology over the next ten years. Out of 138 countries tracked and ranked by widespread use of mobile phones, Internet, personal computer as well as regulatory environment and IT infrastructure, China ranks 36th and India 48th. Among other high-scoring Asian countries, Singapore excelled in second place while Taiwan checked in at sixth, Korea came in at 10th and Hong Kong as 12th.
Take venture capital investment as another indicator of this balance of power tech shift. Last year, China and India accounted for 13 percent of the $37.7 billion poured into startup and emerging companies globally, according to Dow Jones Venture Source. For 2010, China investment was up 59 percent to $4 billion while India weighed in with a 14 percent increase to $895 million – higher than the 11 percent spike for the U.S. to $26.2 billion.
Patent applications are another trend pointer. Over the past four years, quick gains by emerging Asian nations have put this region at more than one-third of the word’s patent filings, statistics from the World Intellectual Property Organization show.
See my post in Forbes for more:
http://blogs.forbes.com/rebeccafannin/2011/04/15/tick-tock-goes-the-tech-clock-as-china-india-close-gap/

Silicon Dragon: China Counts in Forbes Midas List

2011-04-07T17:49:00.000-07:00

Any surprise that China plays a major role in the Forbes Midas list this year? All in all, three-quarters of the firms on the just-published 2011 rankings are backers of China startups and emerging companies. Ten of the 100 tech investors on the tally have done deals or overseen their firms’ strategy in China.
Jim Breyer of Accel Partners, who ranks tops with Facebook, is also the Palo Alto-based investor’s biggest champion for China deal making. He has led Accel’s deals and funds with Beijing-based IDG Capital Partners, a high achiever in China (think Qihoo 360, Dangdang, Baidu, Soufun, Ctrip, QQ).
Other scorers on the Silicon Valley heavy list who have shaped their firm’s China strategies:
To read more of this post, see my regular blog at Forbes:
http://blogs.forbes.com/rebeccafannin/2011/04/07/china-counts-in-the-forbes-midas-list/

Sequoia Scores While Kleiner Fumbles in China

2011-03-31T18:29:00.000-07:00

What’s up with Kleiner Perkins in China? While Sequoia Capital China continues to score one IPO after another on NASDAQ and the NYSE, Kleiner struggles in China.
Just this week, Sequoia saw the listing of Beijing portfolio company Qihoo 360 Technology, its ninth IPO of a Chinese company since July 2010.
How about Kleiner? Sure, the firm has seen listings on the Hong Kong Stock Exchange, but there aren’t any high-profile IPOs in the states for several years. Yes, Kleiner counts such trophies as Baidu, Alibaba, Focus Media and Hurray, but that’s going back to 2005. AND, these deals were under the watch of TDF Capital, which formed an alliance in 2007 with Kleiner to set up KPCB China.
The same story goes for acquisitions or portfolio companies. Portfolio company CGen was sold for $168 million to Focus Media, but that deal dates back to late 2007. And last year, portfolio company United Automobile Association was sold but that was to Legend Holdings, whose venture firm Legend Capital had earlier invested in UAA.
Meanwhile, partners have continued to defect from the Kleiner team in China.
See more at Forbes post:
http://blogs.forbes.com/rebeccafannin/2011/03/31/sequoia-scores-in-china-while-kleiner-fumbles/

China's Facebook May Be Next Big Tech IPO

2011-02-21T22:01:00.001-08:00

Chinese entrepreneur Joe Chen could claim title to the next hot Chinese tech IPO when his Beijing-based social networking brand Renren goes for a $500 million public listing on NASDAQ this spring.

Chen won’t match the stratospheric $63 billion market valuation for Mark Zuckerberg’s Facebook. But that’s not taking anything away from Chen. Renren should reach an estimated market cap of $2 billion to $3 billion when investment bankers Morgan Stanley, Credit-Suisse and Deutsche Bank take the startup public – significantly, the first Chinese lookalike brand to go IPO ahead of its American counterpart – putting it on par with two recent China IPO hits, YouTube lookalike Youku and Amazon replica Dangdang.

Read my blog at Forbes for more:
http://blogs.forbes.com/velocity/2011/02/21/chinas-facebook-could-be-the-next-big-tech-ipo/

Why India doesn't have a Baidu--and May Not Ever

2011-02-17T20:19:00.000-08:00

I remember venture capitalist Sumir Chadha telling me that he had just made his best business decision. That was back in 2006 when he merged his young firm Westbridge Capital Partners with the well-known tech investor Sequoia Capital.

The move certainly did jump-start his career as India’s premier venture capitalist. But now that Chadha and his core team of three partners have split from Sequoia Capital India to focus on investing in public companies, the break-up spells a new era not only for the Goldman Sachs-trained investor but also for venture capital in the subcontinent market.

India does not yet have a Baidu or Alibaba – two of the most successful among dozens of Chinese startups that have gone public. And the odds for India startups to fly high are slimmer now that one of the most experienced venture teams in India is shifting to PIPE (private investment in public equity) deals. Their reasoning? Why do venture when you can invest $10 million like Sequoia did in late 2008 in Nagarjuna Construction Co. and get $23 million in six months. Sequoia Capital India has made at least seven PIPE deals.

Venture deals in India take a much longer runway and only one startup has generated a return that could measure up to China – though the promise still remains. As five remaining managing directors take over at Sequoia Capital India, it’s not going to be business as usual at India’s leading venture firm and its portfolio of 94 tech, consumer, financial, healthcare, energy and outsourcing deals.

Could the same thing happen at Sequoia Capital China? Not too likely. But keep in mind that founding managing partner Neil Shen has trended from venture investments in startups to larger funds for fast-growth emerging companies. He’s also done some PIPE investments – just like the India team under Chadha’s leadership.

My reasoning why it won’t be repeated in China? Investment returns in China startups have far outperformed those in India, and many more young Chinese companies are set to go public this year.

Read more in my blog for Forbes:
http://blogs.forbes.com/velocity/2011/02/17/why-india-doesnt-have-a-baidu-and-may-not/

China, India & the Next Silicon Dragon Frontier

2011-02-03T10:38:00.000-08:00

Announcing our February 9, 2011 Silicon Dragon event:

China, India & the Next Silicon Dragon Frontier for Startups, Ventures & Fortunes
Panelists:
Bill Draper, Draper International and author, The Startup Game
Bill Tai, Partner, Charles River Ventures
Jake Seid, Managing Director, Lightspeed Venture
Claudia Fan Munce, Managing Director, IBM Venture Capital
Keith Larson, Managing Director, Intel Capital
Ajit Nazre, Partner, Kleiner Perkins
Charles Comey, Partner, Morrison & Foerster
Chris Evdemon, General Manager, Innovation Works

Dialogs
Steven Chan, president, Suntech America with KPMG parnter Maria Walker
MakeMyTrip investor Vispi Daver of Sierra Ventures with NASDAQ Senior VP Bob McCooey

Panels/Networking/Q&A/Cocktail Reception

REGISTER:
http://silicondragonfrontier.eventbrite.com/
Rosewood Sand Hill, Menlo Park, CA
February 9, 2011 6-9pm

SIGN UP FOR WEBCAST
http://siliconasiainvest.com/Livewebcast.aspx
For those who can't make it to "Sand Hill Road"
Viewers can chat online, query the panelists, and archive the video

--------------------------------------------------------------------------------
Thanks to our event sponsors: KPMG, Wells Fargo, Morrison & Foerster, NASDAQ OMX
Reception host: K&L Gates
Marketing partners: AAMA, Asia Society, CCICE, CSPA, SFEntrepreneur, IVCA
Media sponsor: DingDing.TV
Live webcast courtesy of Intel Capital
SIGN UP FOR WEBCAST:
http://siliconasiainvest.com/Livewebcast.aspx

Silicon Dragon time: Taiwan LED maker places in race of China startups to NASDAQ

2010-12-13T09:27:00.000-08:00

Add one more venture-backed IPO with a Greater China tagline to the stockpile accumulating on NASDAQ. This one comes from venture investor WI Harper and managing director Y.K. Chu, who led a $7.5 million financing in the firm three years ago. And, it's in red-hot energy savings sector--yes, you guessed it, another LED deal, SemiLEDs Corp.
I first interviewed the founder of SemiLEDs, Vietnamese native Trung Doan (see photo), in Taiwan about 18 months ago, and he related not only his own interesting international background and his growing number of patents, but the story of his firm's link to Boise, Idaho. Turns out that potato king J.R. Simplot helped to form and invested in SemiLEDs six years ago. We joked then that Boise may some day become known for a different type of chip, the kind that goes into LEDs.
Now, that day has come closr, thanks to the Dec. 9 debut of SemiLEDs on NASDAQ and its 52% increase in value on the opening day of trades. The IPO offered 5.3 million shares, priced at $17 each.
Unlike some mainland China deals that are going public with high valuations before turning a profit (read Youku), SemiLEDs is churning out profits from its operations-$10.8 million based on $35.8 million in revenues.
SemiLEDs has two plants in Taiwan and is ramping up operations in mainland China, leverage a Greater China strategy and presumably lower production costs. The six-year-old startup aims to triple its number of chips from a new, $350 million production facility in Foshan.
WI Harper, like other venture firms, is making a bet on LEDs as the light of the future. The firm has investments in two other Taiwanese firms in the LED business--NeoPac Lighting and Testar Electronics.

Silicon Dragon Startups (Dangdang) Show Their Stuff

2010-12-08T18:19:00.000-08:00

I was at a holiday party recently for DCM, a well-known venture firm in the Valley that has seen a series of IPOs from among its China portfolio — e-commerce retailer and bookseller Dangdang and automotive website BitAuto as the latest examples — when I was asked once again. Why don’t you raise a venture fund? No, really.
I’ve always been terrible at math so I figure anything that has to do with high finance is better left to the numerically gifted. But all joking aside, this isn’t the first time the suggestion has been made.
Maybe I do have a knack for picking promising entrepreneurs and their startups to profile – though I never invest in these startups myself and don’t offer investment advice.
Just this week alone, three venture-backed Chinese tech startups I wrote about in my book Silicon Dragon – e-commerce retailer Dangdang, video sharing site Tudou and an energy savings producer LatticePower — are marking major milestones.
Each is on their way to being the talk of Wall Street as investment prospects: Beijing-based Dangdang for raising $272 million in an IPO and seeing its opening share price soar, video sharing site Tudou from Shanghai for being next in line to go public (following the lead of rival Youku and its share price surge of nearly 110 percent over the IPO) and finally LatticePower for raising $55 million from the IFC to continue developing its breakthrough light-emitting diodes from Nanchang.
Just three years ago, most Chinese startups were unheard of in the West, aside from search engine Baidu and online trading marketplace Alibaba, which were among the earlier wave of Internet startups to make a splash with successful public trading debuts. But now more and more small China businesses are following the lead of these trend-setters a few years ago and being recognized on the global investment stage as attention turns to emerging markets for improved returns.
The sheer numbers of listings and IPOs from mainland China alone is a head turner. So far this year, NASDAQ counts 34 new listings and 15 IPOs from Mainland China while the comparables at NYSE are 24 and 19.
Of the 34 mainland China IPOs this year, 19 are trading upward from their IPO price, with a few showing triple-digit gains such as NASDAQ-listed ChinaCache International and Hisoft Technology. Most of these startups have venture capital support, and from such leaders as Sequoia Capital, which alone is an investor in four of the newly traded Chinese companies on U.S. exchanges.
I wasn’t too surprised by Dangdang’s impressive opening day of trading. I recall interviewing co-founder Peggy YuYu back in 2007 for my book, when she and her husband were establishing the online bookseller. Then, I had been impressed by her quiet determination and keen intellect. Since that initial interview, she wisely kept a low profile, taking a cue from DCM investor David Chao to stay focused on fast and profitable growth of the startup and not get distracted by the noise of China’s booming marketplace.
The ten-year-old startup turned a profit last year. Moreover, it solidified its lead in the Chinese marketplace over an Amazon-owned rival, Joyo.com – thanks to micro-management of the business details – like relying on bicycle couriers to deliver orders — and Peggy’s own flair for merchandising in moving Dangdang from an online bookseller to an e-commerce retailer with a range of popular goods.
Next in line for an IPO among the Silicon Dragon startups is video sharing site Tudou.com.
Founder and CEO Gary Wang is another returnee who, like Peggy, got his education and work experience in the West before moving back to his homeland about a decade ago to try his own business – albeit both versions of business ideas that were proving successful in the U.S.
Over the past decade, these and many other Chinese startups have evolved quickly, and judging from insights I’ve gained from interviews with their founders, investors and competitors, are measuring up to the best from Silicon Valley.
Now, I’m spotting a new trend as Chinese entrepreneurs go to the next level and begin to show enough confidence to come up with new ideas and innovations – no longer just close copies of U.S. originals.
LatticePower, started by a physicist with skills and experience honed in China, is a good example of this new trend with its breakthrough technology for making a highly efficient source of light. I went to tour LatticePower in Nanchang and can still hear Sonny Wu, the investor at GSR Ventures, telling me that LatticePower will be a “billions” IPO.
That may be an exaggeration, but it’s clear that Chinese startups are maturing – and fast. They are beginning to set their own standards – be it on Wall Street or in the lab – and are a force that’s here to stay.

Silicon Dragon startup LatticePower raises $55M from IFC

2010-12-07T22:44:00.000-08:00

Though I couldn't be in Beijing today for the signing ceremony at the China World Hotel, I know Sonny Wu of GSR Ventures is grinning. His deal, LatticePower, has just raised $55 million from the IFC to continue its expansion and breakthrough designs for LEDs.
Venture capitalist Sonny deserves the credit. He has been running LatticePower as CEO, a necessary step since the founder is a physicist by training. He'd rather be in the lab than in front of a PC crunching numbers.
LatticePower is Chapter 12 in Silicon Dragon, by the way. Don't say that I don't identify these innovative rising stars from China early on!

Silicon Dragon Social with Who's Who

2010-11-21T12:36:00.000-08:00

A who's who of China venture recently attended our Silicon Dragon Social dinner in Hong Kong, co-hosted with financial group SecondMarket. The event proved so popular that we had an encore! See a selection of photos from the event, above: (l to r) Joe Zhou, Keytone Ventures with Bruno Bensaid, ShanghaiVest; Cadol Cheung, Fuel Capital; and Joey Chen, General Atlantic with David Berger, SecondMarket and Alice Au, Heidrick & Struggles.
See more photos from our Silicon Dragon PhotoStream:
http://www.flickr.com/photos/32790202@N06/sets/72157625314203833/detail/

Silicon Dragon Shanghai: November 8, 2010

2010-11-04T00:10:00.000-07:00

Featured Event: Silicon Dragon Shanghai
November 8, 2010

Ray Zhang, Founder and CEO, eHi Car Rental (right)
Gary Wang, Founder and CEO, Tudou (above)
Gary Rieschel, Managing Director, Qiming Ventures
William Bao Bean, Partner, Softbank China & India
Tina Ju, Managing Partner, Kleiner Perkins China
Jixun Foo, Managing Partner, GGV Capital
Joe Tian, Founding Managing Partner, DT Capital
Thomas Chou, Partner, Morrison & Foerster
Intro: Egidio Zarrella, Global Partner-IT, KPMG
IPO trends: Eric Landheer, NASDAQ, head-Asia Pacific
Moderators: Rebecca Fannin, Silicon Drago
Russell Flannery, Shanghai bureau chief, Forbes

Shanghai Art Museum, Kathleen's 5
November 8, 2010, 6-8:30PM

Panel discussion, Talks, Q&A
Networking, Cocktail reception

To register, please click:
http://silicondragonshanghai2010.eventbrite.com/

In Partnership with AAMA Shanghai Angels

Sponsored by Morrison & Foerster, KPMG, NASDAQ, and Ushi.cn

Silicon Dragon: China Startups Battle the BAT

2010-10-18T22:26:00.001-07:00

China Startups Battle The BAT
Rebecca Fannin
Forbes column, 10/18/2010
Chinese venture investing is growing ever less dependent on Silicon Valley.
Entrepreneur Joe Chen, who runs China's leading social-networking sites from his Beijing-based startup Oak Pacific Interactive, no longer looks to Silicon Valley for clues on strategy.
A Stanford MBA grad who formed and sold his first startup while still a student, Chen is rarely in the Valley anymore. That's because China's entrepreneurial roots have shifted away from there.
What concerns Chen most about keeping Oak Pacific Interactive healthy is not Silicon Valley stars Facebook, Google or eBay, but three giant Chinese brands he collectively calls the BAT--search engine Baidu, e-commerce powerhouse Alibaba and instant messaging service Tencent.
(See video)
http://www.youtube.com/user/RAFannin?feature=mhum#p/u/3/nnge-NM68Bg
These Chinese upstarts are so hypercompetitive that Chen finds himself continually aiming to outsmart these super-sized brands. But even as Chen does battle with the BAT, he has his eye on driving Oak Pacific Interactive to an IPO. See photo (right) of Joe with DCM venture investor David Chao.
In China, the action is shifting from returnee entrepreneurs--so called "sea turtles" who were educated in the U.S., got experience there and then moved back to China to start companies--and tilting toward what Chen calls "pancake turtles." Known for their ferocious eating habits and for being a Chinese delicacy, the pancake turtle is an exceptionally aggressive Chinese entrepreneur who is increasingly one-upping the returnees.
Not everyone agrees. While venture investors along Sand Hill Road may dig China, they still think Silicon Valley has a decided edge over the Mainland for innovative, if not disruptive, technologies--and will have it for at least another decade.
See Forbes column continued here:
http://www.forbes.com/2010/10/18/facebook-startups-venture-investing-intelligent-technology-china.html?boxes=Homepagechannels

Silicon Dragon: The Steve Jobs of China

2010-10-18T22:26:00.000-07:00

Silicon Dragon: Silicon Dragon: The Steve Jobs of China

Silicon Dragon: The Steve Jobs of China

2010-10-18T22:15:00.000-07:00

The Steve Jobs Of China
Rebecca Fannin
Alibaba's Jack Ma shows off his marketing flair at the annual AliFest summit.
Forbes column, 9/14/2010
Hangzhou, China -- If there is a Steve Jobs of China, it is Jack Ma, the founder and leader of Alibaba, China's largest e-commerce group. No other Chinese entrepreneur has the Jobs-like star quality, strategic vision and flair for promotion that Ma does.
Each September Ma can be found on stage at his annual AliFest in Hangzhou, the Chinese city known for its scenic West Lake and the home base for Alibaba. Labeled a "Netpreneur Summit," AliFest is, in effect, a love fest for Alibaba, its maverick founder and its accomplishments, which in ten years has gone from rising Chinese Internet startup to publicly listed player with global ambitions. In 2009, Alibaba earned $148 million on roughly $573 million in revenues (RMB 3.874 billion) and currently sports an $11 billion (RMB 77 billion) market capitalization. Yahoo invested $1 billion in Alibaba back in 2005 for a 40% stake.
This year's summit, held on Sept. 10, was on Ma's 46th birthday. To help him celebrate, Alibaba put on a show of impressive speakers: California Governor Arnold Schwarzenegger (on his first stop of a week-long trade mission), the U.S. Ambassador to China John Huntsman, and even a rival, eBay President and CEO John Donahoe. Last year's AliFest featured basketball legend Kobe Bryant and former U.S. President Bill Clinton.
Each one of these speakers complimented Ma for building Alibaba into an online trading platform for small businesses and creating millions of jobs. All called Ma a good friend, and presented him with a gift onstage.
Schwarzenegger gifted Ma with dark sunglasses and a form-fitting leather jacket, which Ma promptly put on. On cue, some 300 Chinese journalists and dozens of international reporters from madly snapped photos and shot video.
Later, at an Alibaba press conference, Schwarzenegger posed for more photographs and fielded questions as attendees were told that Alibaba aims to create 100,000 jobs in the U.S. (mostly in California, if the "Governator" has his way) and develop a Schwarzenegger-branded scholarship to train youngsters to be entrepreneurs.
See Forbes column continued here: http://www.forbes.com/2010/09/13/ebay-yahoo-ecommerce-china-technology-alibaba.html

Making Sense of China, Google and Censorship

2010-07-17T12:33:00.000-07:00

Making Sense Of China, Google And Censorship
My Forbes Column, July 9, 2010

I had never been called a Communist until I testified at a hearing on Capitol Hill.
The hearing in late June was on "China's Information Control Practices and its implications for the U.S." U.S.-China Economic and Security Review Commissioner Carolyn Bartholomew was introducing me as an expert on China's leading search engine company, Baidu.com, and the Internet. What she meant to say was that I am a "columnist" for Forbes--a slip of tongue she immediately corrected.
That slip-up gave me an insight into the types of politically charged censorship issues that would be raised during the day-long hearing. I tried to present a balanced perspective of the Chinese Internet in a business context and point out how Baidu had modeled itself on Google and opened up the Internet to billions of Chinese. But many of the points I made about Baidu got caught in the political crosswinds over U.S.-China tensions.
The questions I was asked to address included some tough ones:
--Describe the nature of Baidu's relationship with the Chinese Government.
--Explain Baidu's censorship activities.
--How do these activities compare to those of other firms that operate in China?
--What are the implications of American involvement in China's Internet censorship activities?
--Two of Baidu's five directors are American, American investors provided much of the startup capital for the company, and U.S. institutional investors own significant stakes in it. Is Baidu, therefore, something of an American organization? If so, what is its responsibility for Internet censorship?
--Explain how Google's recent decision to scale back operations in China has affected Baidu and Chinese Internet users.
While I've covered the rise of Internet startups in China as a journalist for more than a decade, these are not the types of issues that regularly come up during my interviews with venture capital investors and entrepreneurs in Beijing, Shanghai and Silicon Valley. I'm used to reporting on the communications boom in China through a business lens.
But it soon became quite clear that the U.S.-China Economic and Security Review Commission, which is charged with submitting an annual report to Congress on the national security implications of trade and economic relations between the two countries, had a political agenda. It provides recommendations to Congress for legislative action.
Commissioner Jeffrey Fiedler started off questioning me by noting that he had invited one of Baidu's American directors--Greg Penner, general partner of Madrone Capital Partners--to testify, but Penner had declined. Fiedler pointed out that Penner moves among the higher reaches of American society and is closely connected to the Wal-Mart Stores fortune through his marriage to a granddaughter of Sam Walton.
I tried to keep focused on the cross-border China-U.S. investment issues that are central to my book, Silicon Dragon. I pointed out that Baidu owed its origins to Silicon Valley's culture of entrepreneurship and was not unlike dozens of startups developed by Western-educated and trained young Chinese who returned to their homeland as China was opening up via economic reforms. Venture capital investment in China-much of it from Silicon Valley's Sand Hill Road-peaked at $10 billion in 2008. Also, China has the world's largest Internet and mobile communications markets, and text messaging is quite routine.
Baidu, like all Internet companies doing business in China, self-censors its content on the Web. Google's recent rumblings over censorship in China--and its decision to redirect searches from inside China to Hong Kong, where it is still subject to the Great Firewall of China but no longer required to censor itself--has strengthened Baidu's financial results and share price. Internet analysts such as Richard Ji of Morgan Stanley are predicting Baidu will capture between 20% and 30% of Google's market share in China. (Google itself has 31% of the Chinese search market.)
Seated next to me at the hearing was Rebecca MacKinnon, a free speech activist and expert on Chinese Internet censorship. As Commissioner Bartholomew correctly pointed out to me during the hearing, MacKinnon's perspective did not match my own. She forcefully argued that American investors in China--institutional investors and private equity financiers alike--should own up to a broader responsibility to invest ethically, whether the issue is human rights, the environment or censorship.
The talk turned to how to deal with Chinese censorship and ethical investing. Commissioner Fiedler asked me if there should be a censorship tax on American companies that invest in countries where speech and information is restricted. My reply was greeted with a frown from Fiedler: It would have to be a very high tax to discourage investment in countries such as China where returns have been outsized in recent years as dozens of Chinese startups have gone public on the Nasdaq and the New York Stock Exchange.
I do agree with MacKinnon that the Chinese people would be worse off if all American companies and investors were to abandon the Chinese Internet. A policy of engagement to work for positive change, rather than withdrawal, will result in the best outcome.
Perhaps in an acknowledgment that my own statements were falling on deaf ears, Commissioner Bartholemew, a California lawyer who was previously chief of staff to House Speaker Nancy Pelosi, pulled me aside to let me know that she was probably the only one on the commission who understood what I meant when I referred to "Sand Hill Road." That did make me feel more at ease for a moment. Even so, I think the issues of censorship, American companies and the Chinese Internet will be with us for many years to come.

Silicon Dragon: DCM invests $4M in Silicon Dragon-like startup PapayaMobile

2010-06-23T08:03:00.000-07:00

Silicon Dragon: DCM invests $4M in Silicon Dragon-like startup PapayaMobile

DCM invests $4M in Silicon Dragon-like startup PapayaMobile

2010-06-23T07:58:00.000-07:00

Not too many 28-year-old female entrepreneurs manage to land $4 million in financing from savvy DCM for their first startup in China. But then again, Si Shen is far from average. At age 16, she got into the prestigious Tsinghua University in Beijing, soon graduated with a degree in computer science, then moved on to Stanford and picked up two Master’s degrees in three years’ time—all before starting her career as a product manager for China, Japan and Korea at Google.
Transferring from Silicon Valley to Beijing in 2007, she spent a year building the team for Google’s mobile business to 40 staffers. That grass-roots experience only served to reinforce her dream of starting her own business.
After leaving Google in 2008, she and former classmate Wenjie Qian raised some angel funding from friends and cranked up PapayaMobile to be what Shen describes as “the mobile Facebook on Android.” By September 2009 and after a few bumps in switching from the Java platform to focus instead on the open Android platform, she says the startup was profitable.
This is the classic stuff of successful Chinese entrepreneurs who returned to their homelands and put 'Silicon Dragon'--China's Silicon Valley--in motion beginning about a decade ago. This story of this startup, and the young female entrepreneur behind it, also showcases the energy level and smarts of China's entrepreneurs today.
It wasn’t too long before David Chao, who was clued into Shen’s progress, made sure that DCM backed PapayaMobile with $4 million to build its base.
Some three months-plus passed before government approvals were in place in China for investment in the startup, set up as a wholly owned foreign subsidiary, like many of the early venture-backed Chinese startups, in the Cayman Islands. DCM worked with Chinese law firm Hankun on sealing the deal.
It’s these kinds of entrepreneurial tales that show that the traditional Silicon Dragon model continues strong in China-–even while more and more investment moves locally within China, with less connection to Silicon Valley.
With DCM on board, Shen got the benefit of working with DCM partner and SINA co-founder Hurst Lin on dealing with operational issues in China. She was also able to rely on DCM’s connections to tap into the developer community in the U.S. and Japan, while building a customer base in the U.S., home to 85% of its revenues.
Today, PapayaMobile counts 3.5 million users for its mobile social networking service that offers up social games—including PapayaFarm--and virtual goods.
What’s next? Shen says she’s totally absorbed in building the business, flying regularly between Silicon Valley and Beijing to keep pace with the startup’s fast growth. Given the competition in China in the social networking and gaming sector, that’s likely a good thing.

Silicon Dragon: China's Coming Age of Invention

2010-06-07T18:17:00.000-07:00

Silicon Dragon: China's Coming Age of Invention

China's Coming Age of Invention

2010-06-07T17:47:00.000-07:00

When will the familiar label "Made in China" switch to something more challenging: "Invented in China"? Not for another decade at least, according to investors and technology entrepreneurs who gathered recently at an event in Beijing to discuss the topic. For video of the event, click here:
http://www.youtube.com/watch?v=PflvUVq4NC0

Sure, some things are already being invented in China. Internet whizzes have pushed advances in mobile gaming and instant messaging. But many obstacles prevent a full-scale leap into widespread inventing.
Keep reading my column at Forbes:
http://www.forbes.com/2010/06/06/pfizer-ipad-invention-intelligent-technology-china.html

Silicon Dragon 2010_Beijing Highlights-Invented in China?

2010-05-31T17:05:00.000-07:00

Silicon Dragon: Silicon Dragon 2010_Beijing - Invented in China?

Silicon Dragon 2010_Beijing - Invented in China?

2010-05-31T14:37:00.000-07:00

Our Silicon Dragon 2010-Beijing panelists debated the topic of whether China is a tech innovator. The conclusion? The trend is starting, but will be more pronounced in another decade. Sonny Wu of GSR Ventures (right) showed the LED lightbulb that his portfolio company LatticePower has just begun to produce for the mass market. Feng Deng of Northern Light Venture Capital (left) pointed to one of his China deals as a breakthrough poised to hit big-time! But he noted that stronger links between China venture capitalists and university labs need to develop as they have in Silicon Valley with Stanford and Berkeley universities. KPMG's Egidio Zarrella pointed out (center) that while small and medium-sized businesses are at the forefront of disruptive technologies, we shouldn't ignore the vast amount of R&D going on at major corporate labs in China's massive software parks. Sina co-founder Hurst Lin of DCM (left) argued that China needs to develop more of a creative culture akin to America's before it can truly innovate. He also pointed out that China needs education reform to encourage students to go beyond tests of their memory skills and to develop critical learning skills. Former Google China leader Kai-Fu Lee argued that there's no tech race between the U.S. and China, a point well taken by his fellow panelists. He pointed to the arrival of 3G mobile communications as a catalyst for innovation in China.
His own Innovation Works incubator lab has eight business projects in the works, with 30 planned by the end of this year. Look for IW to need more funds soon to back all the startups it's doing. I know. I've recently visited the labs and they're running out of space, just in time to move to bigger quarters. Tech entrepreneur Charlie Paglee (right) of Brannan Auto told how his Shanghai-based subsidiary is working on more efficient batteries for electric vehicles-a must for China and the polluted air in all the major cities I've visited! Meanwhile, Faming Zhang (left) described the discoveries that Crown Bioscience is making in finding a cure for cancers common in Asia--lung cancer being the most predominant. I recently visited Crown Biocience, housed in one of Beijing's immense life science parks and out so far from Beijing central that it's nearly at the Great Wall. Look for China to move upstream in biomedical, judging from the multiple interviews I've done recently with CEOs of several emerging companies in the life sciences.
Before the evening was up, Silicon Dragon author Rebecca Fannin autographed copies of the new, updated Chinese edition of her book. The books were graciously provided for the guests by her co-publishers McGraw-Hill and the University of International Business and Economics Press.
Our thanks to Roc Yang of China Data Group, an emerging player in outsourcing of financial services, for making introductory remarks and donating the books to our guests. Roc (left) also helped to facilitate the translation.
And a big thanks to our sponsors KPMG, O'Melveny & Myers, DCM and GSR Ventures. We couldn't have held this event at Beijing's Silicon Valley--Tsinghua Science Park--without you!
Finally, let me acknowledge AVCJ's Dan Schwartz for his own newly published book. Forbes Beijing bureau chief Gady Epstein (left) led an active Q&A session to ferret out the contents of Dan's book, which focuses (among other topics) on the future of venture capital globally.
Now onward to Sand Hill Road, October 7, and our next event! The program will be held at Rosewood Sand Hill, with an all-star group of panelists once again--Dick Kramlich of NEA for starters. And there's likely to be a surprise appearance by one of our best-known Silicon Dragon entrepreneurs. The theme of our next event? Of course, it is "China Shakes the Venture and Entrepreneur World."
We plan to continue to capitalize on the trend by holding our next China-side event in Shanghai, November 8. See Events at www.siliconasiainvest.com for more details.

Silicon Dragon Event: Tech Innovations in China, May 20, Beijing

2010-04-25T16:01:00.000-07:00

Silicon Dragon: Silicon Dragon Event: Tech Innovations in China, May 20, Beijing

Silicon Dragon Event: Tech Innovations in China, May 20, Beijing

2010-04-25T15:52:00.000-07:00

Event Registration Online for Technology Breakthroughs in China:
Panelists Kai-Fu Lee, Hurst Lin, Feng Deng, Joe Zhou, Sonny Wu and leading entrepreneurs in biomedical and cleantech
Moderator-Rebecca Fannin of Silicon Dragon
Q&A: AVCJ's Dan Schwartz with Gady Epstein of Forbes powered by Eventbrite

Online Ticketing for Technology Breakthroughs in China:
Panelists Kai-Fu Lee, Hurst Lin, Feng Deng, Joe Zhou, Sonny Wu and leading entrepreneurs in biomedical and cleantech
Moderator-Rebecca Fannin of Silicon Dragon
Q&A: AVCJ's Dan Schwartz with Gady Epstein of Forbes powered by Eventbrite

Silicon Dragon: Silicon Dragon Meets the Future of Private Equity

2010-04-23T11:15:00.000-07:00

Silicon Dragon: Silicon Dragon Meets the Future of Private Equity

Silicon Dragon Meets the Future of Private Equity

2010-04-23T09:57:00.000-07:00

The talk of midtown Manhattan this week was a heated discussion about the future of private equity, led by panelists (right to left) Leonard Harlan of Castle Harlan, Dixon Doll of DCM, Michael Pralle of Caprice Capital Partners, Xiaohu Ma of Morrison & Foerster, Ron Schramm of Columbia University and author and AVCJ chairman emeritus Dan Schwartz.
Schwartz, photographed here with guests Miki Kashiwagi and Tom Bingham of White Oak Research, John Kjorlien of Aladdin Capital and New York University's Ann Lee, challenged the panelists to concede that the golden era of private equity is over and that a new model that reflects greater focus on operational performance rather than financial engineering for the business is past due.
Harlan emphasized that the mega-funds in the private equity business are struggling with the credit crunch and that a fall-out is coming. He stressed that mid-sized firms have a brighter future and noted that Castle Harlan has bypassed the banks to finance deals and get them done. Venture capitalist Dixon Doll noted that the number of firms is being compressed as invesmtent returns have shrunk due to the plunge in portfolio companies going public.
Even so, both Harlan and Doll agreed that returns for the top half of private equity and venture firm will be in a healthy 20-30 percent range--a prediction later challenged by Schwartz. Doll made the case for a vibrant venture capital business as a job creator and growth engine of the economy. Harlan argued that the middle-market private equity firms should flourish, particularly if longer holding periods of portfolio companies can become the norm.
China was a core topic of discussions, with Morrison & Foerster partner Xiaohu Ma pointing out the importance of the Chinese government's involvement in fostering the growth of private equity and providing a legal framework for dealmaking.
Asked where the business is on the pendulum of greed and fear, Pralle responded that the era of greed ended with 2007, while adding that the highly cyclical business has encountered other downturns previously. As for real estate, the current game is finding the right acquisition opportunities now that there are motivated, over-leveraged sellers and cash or under-leveraged buyers.
The Harvard Club of NY offered a good networking venue for guests. Shown here are Howard Krongard of the China Investment Group (left) and Neil Jairath of UBS.
Below, moderator Rebecca Fannin of Silicon Dragon chats with fellow panelists Doll and Schramm.
We'd like to thank our sponsors Morrison & Foerster and DCM for their generous support. We'd also like to give thanks to the Global China Connection's David Zhu and Amy Shi for helping to make our event a successful one.
Now, it's on to Beijing, May 20, for our panel on leading edge technologies in China. The event will be held at the Silicon Valley of Beijing-Tsinghua Science Park with panelists Kai-Fu Lee, venture investors Joe Zhou, Sonny Wu, York Chen and two leading technology entrepreneurs.
For more info, see http://siliconasiainvest.com/Events.aspx

Silicon Dragon: Sand Hill Road Event Highlights in Photos

2010-03-28T22:11:00.000-07:00

Silicon Dragon: Sand Hill Road Event Highlights in Photos

Sand Hill Road Event Highlights in Photos

2010-03-28T21:37:00.000-07:00

Silicon Valley may not be as dead as some folks think, at least judging from the remarks of our venture capital futurists gathered to discuss the state of the industry. Dick Kramlich of NEA pointed to the solid returns his firm has scored, Ted Schlein of KP fame talked up cleantech (and later got a lecture from Stanford's Tom Byers--see photo), Gary Rieschel of Qiming spoke of a China fever and Charles Comey of MoFo confided that's he working on a lot of new deals (even though he wouldn't confess just how many RMB funds he's working on for investment firms in China.) AVCJ's Dan Schwartz (photographed with George Drysdale) challenged the industry leaders to reconsider whether it's time that venture capital needs some sort of facelift or just a new strategy to face the new millennium, considering the losses of the last decade. At least March was a lot better than the previous 18 months for the venture business. So for now, I'm all for keeping up an upbeat spirit.
Our next futuristic event to challenge conventional thinking is April 21, at the Harvard Club NY. Contact me if you want an invite.
Thanks goes to our sponsors NEA and Morrison & Foerster. Couldn't have done this Silicon Dragon-Future of VC event without you! Rosewood too.

Silicon Dragon: China sourcing: $1 billion and ambition

2010-03-19T16:44:00.000-07:00

Silicon Dragon: China sourcing: $1 billion and ambition

China sourcing: $1 billion and ambition

2010-03-19T16:31:00.000-07:00

$1 Billion and Ambition
What China is doing to become the world’s outsourcing giant
By Rebecca Fannin
Forbes, March 18, 2010
The chief executive of VanceInfo, Chris Chen, had no qualms in telling me that he wants the business he founded in 1995 to “become the biggest outsourcing firm in the world.” We met between flights at Beijing’s airport. He is on this way, counting Microsoft, Hewlett-Packard and IBM as clients.
He’s not the only one advancing China’s push into the vast, varied outsourcing market. In northeastern China’s industrial city of Shenyang, I recently met with Liu Jiren, the CEO of Neusoft – the largest Chinese outsourcing company with $540 million in revenues, 15,000 employees and 8,000 corporate customers, the majority of them in China and nearby Japan.
China offers a large talent pool of skilled workers who can handle both basic jobs such as processing insurance claims and mortgage loans to more technically advanced information technology jobs. Its outsourcing firms position their services for both local as well as international companies. One big selling point: cost. Compared with India, pricing for this labor is generally 30% less.
Then, there is ambition. China’s quest to lead the outsourcing ranks has no match. Name another country in the world that would craft a plan to spend $1 billion in subsidies, incentives, and training like China has in outsourcing. In grand fashion that recalls successive five-year government plans, this project seeks to develop 1,000 vendors, attract 100 multinational customers and foster the growth of 10 hubs nationwide for outsourcing. The goal is to create 1.2 million jobs in China by 2013.
China’s disadvantages compared with India are real, though. First, India has a natural advantage with English language skills. Secondly, India is typically considered less risky when it comes to intellectual property protections. India also has an edge in managerial skills to tackle more high-end, technical projects.
Last year, the Mainland’s outsourcing market grew by 25% to reach $25 billion in revenues, according to Chinese government statistics. That’s a fairly sizeable chunk compared with the $60 billion and 16% growth rate that industry association NASSCOM pegged for India in 2009.
China has the opportunity to surpass India in outsourcing in a couple of ways. Infrastructure is one. The Haidian tech district of Beijing is home to several challengers, all with the suffix “soft” in their name -- Beyondsoft, iSoiftstone, ChinaSoft – headquartered in modern office parks that resemble the finest in Silicon Valley. In Shanghai’s Zhangjiang Park, state-of-the-art facilities can be found in structures built to resemble a modernized version of Versailles, complete with moats and landscaped gardens (plus sports facilities, too). The scale of these zones is far larger than those in Bangalore, home to Infosys and Wipro.
But China needs to develop a global reputation for outsourcing. It’s a factor that Neusoft CEO Liu readily acknowledges, and one reason why he’s initially focusing on getting customers closer to home. Chinese outsourcing vendors rely on a large percentage of their work within the region or domestically – unlike India which derives the bulk of its business from abroad.
Currently, any manager at a multinational company looking to outsource work to China would face challenges in navigating through all the options of firms, locations, pricing and specialties. It takes on-the-ground insights to figure out, for instance, that Nanjing is making a claim as one of the country’s most promising biomedical hubs for outsourcing of pharmaceutical research and development and clinical trials. That’s in spite of outreach efforts.
Last May, municipal officials staged a welcoming ceremony for a group of investors, biomedical experts, entrepreneurs, technologists and real estate developers – even a doctor from Mayo Clinic – to witness the establishment of a biotech center in a city software park.
Later the group toured a lab that is standardizing herbs for use in Chinese traditional medicine, the facilities for an animal testing lab (still empty) and met with Gian Gao, dean of the Nanjing University’s School of Medicine and a professor at Yale. Chuck Zhu, CEO of a NJ PharmaTech, a startup that moved from New Jersey to Nanjing to do contract research here, beamed as he showed the delegation his new office space at the biotech zone.
Former Chinese government official Roc Yang, who today leads Beijing-based China Data Group, an outsourcing firm that specializes in financial services, is leading the charge for Chinese outsourcing firms to develop a unified voice and higher profile. He and others in the business would like China to have an industry-wide association like India has had for years with NASSCOM.
It will take some time before China gains the spotlight in outsourcing, but its rapid rise is just one more sign of the Dragon’s power.

Silicon Dragon: Inventor makes robotics vacuum cleaner!#links

2010-03-12T16:09:00.000-08:00

Silicon Dragon: Inventor makes robotics vacuum cleaner!

Inventor makes robotics vacuum cleaner!

2010-03-12T16:00:00.000-08:00

Need I also mention that I wouldn't mind having one of these robotics vacuum cleaners? Only in India can you find it now. But the inventor I met in Bangalore--Janesh Janardhanan at Robhatah--tells me this nifty device is coming to shelves soon at less than $150. Watch it work here:

Silicon Dragon: Northern Light picks up Lei Yang as venture partner

2010-03-11T18:24:00.000-08:00

Silicon Dragon: Northern Light picks up Lei Yang as venture partner

Northern Light picks up Lei Yang as venture partner

2010-03-11T18:06:00.000-08:00

Feng Deng didn't mention this to me when I saw him recently at Tsinghua Science Park, but his China-Siicon Valley firm, Northern Light Venture Capital, has just made a new hire: Lei Yang as venture partner.
Lei, a returnee to China from the U.S., is sourcing deals from the Beijing office in some of the firm's key areas of investment: cleantech and semiconductors.
He joins NLVC from VantagePoint Partners in San Francisco where he was a principal for three years focused on investment in solar, electric vehicles, lighting and energy storage. A PhD from the University of Wisconsin-Madison who also sports a degree from Peking University, Lei began his career at McKinsey & Co. in 2001.
Expect to hear more from Lei soon, as he is well-connected in the venture capital and tech space in China and Silicon Valley.

Silicon Dragon: India, the gap is narrowing

2010-03-10T14:54:00.000-08:00

Silicon Dragon: India: The gap is narrowing

India: The gap is narrowing

2010-03-10T14:25:00.000-08:00

India's entrepreneurial journey is a few years behind China's own path, but the gap is narrowing. I was surprised to see this in a recent three-week stint of interviews there.
Like China, India has a growing number of startups with innovations designed to disrupt standards and help solve big problems in sectors including biomedical, clean technology, digital communications and e-commerce. Yet China still has unique advantages over India, which I'll get to later.
A Chennai-based entrepreneurial team led by S. Nandakumar has a robotics system to precisely guide a needle to a tumor for a biopsy. A geek named Bikash Barai showed me a demo of a simulated cybersecurity attack, and the software his startup, iViz, has developed to prevent hackers from stealing confidential data.
In Bangalore, Robhatah founder Janesh Janardhanan, demonstrated how this soon-to-be-launched robot-powered vacuum cleaner works. At a retail price of less than $150, it seems like a bargain. I'm curious to see if Wal-Mart stocks it. Two Stanford and Indian Institute of Science Ph.D.s have a 3-D interactive application that makes online games, avatars and greeting cards come alive on mobile screens. Their startup, 3D Solid Compression, will soon debut software on Nokia and Sony handsets.
I also met with an impressive group of entrepreneurs in India working on the next generation of electric cars (Reva), recycling facilities for transforming electronics waste into precious metals (Attero), energy monitoring systems (Connect M), plus solar-powered LED lanterns (DLight) and water purification pumps, lights and energy (Kotak Solar). (See my Forbes Velocity blog: "Cleantech Startups Heat Up in India")
The Silicon Valley culture of tech entrepreneurship and venture capital has been slower to take hold in India than in China. Venture investment in both markets accelerated during the dot-com boom and quickly deflated with the Internet bust.
It took India until 2006 for a second wave of investors to arrive, joining veteran shop Sequoia Capital India. In China, funds from Sand Hill Road poured in earlier and by 2008, $9.3 billion was invested in Chinese startups. The comparable figure for India was $8.5 billion in 2008. Combined, these two countries make up 80% of Asia's venture investment.
Mirroring China, India is undergoing its own surge in mobile communications, and much of the startup action is centered in this market. Already, India counts more than 500 million mobile phone subscribers, second only to China's approximate 700 million users.
The popularity of mobile has led to a swarm of startups relying on the cellphone as a business platform, from gaming companies Nazara, Games2Win, and Kreeda, to search firm Just Dial, to ring tones and advertising, inMobi.
But Internet usage in India lags far behind China. Only about 81 million users surf the Net in India, with a mere 5 million using broadband connections. That compares to 384 million Internet users in China, 83 million of them on high-speed.
This gap in Internet usage is one reason why China has turned out so many publicly listed online winners while India has struggled to break through.
For instance, in China, search site Baidu, e-commerce marketplace Alibaba, travel site Ctrip, online classroom New Oriental Education and Technology, and gaming and social networking sites Shanda and Tencent all have gone public--many with lofty valuations.
The comparables aren't there yet in India because the Internet is still in the early stages of development. India has numerous online travel sites--TravelGuru, Cleartrip and Yatra. Not one has scored yet. TravelGuru was acquired by Travelocity last year for $12 million in a money-losing deal for the venture investors.
While India has its share of outsourcing, portal and mobile startups that have gone public, the success stories among dot-com players nearly starts and ends with job site Naukri, the Monster.com of India, which founder Sanjeev Bikhchandani took nine years to take public.
India's startups must go public first on in-country stock exchanges while Chinese startups can detour to Nasdaq or the NYSE without listing at home. This helps explain why China gets more credit for financial homeruns.
As India's Internet population grows, more home-grown startups in e-commerce, gaming and social networking could take off. Some up and comers I met with include online book seller Flipkart, customized merchandise seller Myntra, Twitter-like GupShup and a Facebook wanna-be named Minglebox.
Many of these Indian brands compete with big American Internet brands, partly because of the shared English language. That's a key difference compared to Chinese startups that have used their local language advantage to beat Google, Amazon and eBay.
One advantage for India's startups over China's: Entrepreneurs there have a faster runway to selling abroad. Some of their young businesses are really just a new twist on outsourcing, building upon the early successes of Infosys and Wipro in the early 1990s and later public listings of smaller firms such as Mindtree.
I stopped by TutorVista, the brainchild of serial entrepreneur K. Ganesh. His service offers unlimited sessions with Indian tutors to U.S. residents for $99 a month. I also met with Uday Challu, the entrepreneur at iYogi, which markets a remote PC service hotline staffed with workers in India who provide unlimited tech support for $149 annually.
The most visible difference between these two rapidly evolving consumer and technology markets is infrastructure. Beijing and Shanghai are a marvel of upgraded highways, subways lines and architectural achievements such as the new airports, mag-lev trains and up-to-date software parks. India's faulty infrastructure is improving, though hardly on the scale of China. In Bangalore, Delhi and Mumbai and other major cities, metros, bridges and multi-lane highways are being constructed, if slowly. Power supply is still sketchy.
Modern commercial zones are popping up, ranging from Whitefield on the outskirts of Bangalore to Gurgaon in Delhi and lots of recently erected skyscrapers in Mumbai's Lower Parel district--easier to get to now thanks to the Sea Link bridge.
Signs of India's growing middle-class population and consumerism are appearing as well. Café Coffee Day's founder VG Siddhartha has made his chain nearly as prominent as Starbucks in the U.S. Another positive indicator is an ample supply of five-star hotels from India such as Oberoi, Taj and Leela that are bustling with business--that in spite of the recent terrorist attacks in Mumbai and the extra security that is still very much in place.
It's easy to be seduced by China and its fast forward economic and technologic achievements. But even after years of reporting extensively on China, I find India to be refreshing. I left India encouraged by the groundswell of innovation and entrepreneurship and the spark of creativity that democracy encourages. The open access to the Internet in India helps too.
(from my Silicon Dragon column in Forbes)

Silicon Dragon: WI Harper seals third LED deal in Taiwan#links

2010-03-09T17:26:00.000-08:00

Silicon Dragon: WI Harper seals third LED deal in Taiwan#links

WI Harper seals third LED deal in Taiwan

2010-03-09T14:26:00.000-08:00

Energy efficient light-emitting diodes or LEDs for short are the new venture investment hotspot, judging from the swarm of businesses that are getting funded.
WI Harper just inked a deal with a Taiwanese firm that tests LED chips, Testar Electronics Corporation. It's the venture investor's third company in LEDs in Taiwan: SemiLEDs Corp. and NeoPac Lighting Group are the two other promising firms. I've met with the founders of both of these in Taipei. Trung Doan (in photo with Silicon Dragon author Rebecca Fannin), the founder of SemiLEDs, has several patents for producing LEDs at lower cost but still with reliability and quality. Jeffrey Chen, the founder of NeoPac, has patents for bright light with less power. See earlier blog post for more info, June 22, 2009.
As LEDs go mainstream, expect to start seeing them used in households. For example, Sonny Wu of GSR Ventures in Beijing just showed me an LED light bulb that one of his firm's five portfolio companies in this space is launching soon.
Currently, LEDs are most often used for street lights, and the backlights of personal computers and TVs. Projections by industry analyst iSuppli are that LED shipments will nearly triple from 63 billion this year to 166 billion by 2013.
The "sweet spot" for Testar, which was founded in 2007, is an outsourcing service to test LED chips.
WI Harper has recently closed a new investment fund, and has been inking several new deals in Greater China to fit its early stage tech focus, including a new wind blade manufacturer in the Mainland: Jiangsu Chuangzhou CTC Technical Fabrics, Co. The firm also made news recently by linking up with Kai-Fu Lee's Innvoation Works as a backer of the incubation lab founded by the former president of Google China.
In Hong Kong, I recently interviewed David Lam, managing director of WI Harper, to hear his views on the firm's investment strategy in cleantech. Lam, in case you didn't know, is now the president of Silicon Valley's Asia America Multi-Technology Association.
See Silicon Dragon Video.

Silicon Dragon: Sand Hill Roadsters debate the future of venture capital

2010-03-07T20:31:00.000-08:00

Silicon Dragon: Sand Hill Roadsters debate the future of venture capital

Sand Hill Roadsters debate the future of venture capital

2010-03-07T19:59:00.000-08:00

Silicon Dragon: Sequoia, NLVC lead $22M deal in China energy storage company

2010-03-02T23:01:00.000-08:00

Silicon Dragon: Sequoia, NLVC lead $22M deal in China energy storage company

Sequoia, NLVC lead $22M deal in China energy storage company

2010-03-02T22:53:00.000-08:00

Energy storage is a hot investment area in China. The latest deal in this sector is a $22 million Series C deal in Prudent Energy Inc., a manufacturer and developer of technology that can improve the efficiency of delivering energy on demand to telecom and power utilities.
Northern Light Venture Capital and Sequoia Capital China led the investment, which was over-subscribed. Returning as backers were DT Capital and Draper Fisher Jurveston, which has been making numerous deals in the cleantech area in both China and India.

CEO Johnson Chiang said Prudent will use the new capital to expand its battery manufacturing operations in Beijing, where it relocated last year.

Silicon Dragon Meets Cleantech in India

2010-02-23T09:14:00.000-08:00

Silicon Dragon: Silicon Dragon Meets Cleantech in India

Silicon Dragon Meets Cleantech in India

2010-02-23T09:09:00.002-08:00

Cleantech Startups Heat Up In India
Rebecca Fannin
Forbes, Feb. 21, 2010

Everyone knows cleantech is a hot investment category in the U.S. But what about in such emerging markets as India?
On a recent tech tour (self-guided) of Bangalore, Delhi and Mumbai, I found that India too has its share of entrepeneurs and investors who want to save the world. I interviewed the founders of several young businesses that are helping to improve the environment -- from electronic waste recyling facilities to solar-powered LED lights to electric cars and water purification systems. These startups are proving that cleantech enterprises can make money, scale in size and do social good at the same time.
Several of of these are startups funded by the same venture investment firms in Silicon Valley that support cleantech deals in the U.S.--Kleiner Perkins and Draper Fisher Jurvetson, to name two prominent examples.
Here's a sampling of some finds during my three-week journey.
On the outskirts of Bangalore in an industrial area, Kotak Solar is churning out solar-powered products of many kinds--to light up streets and gardens with LEDs, heat swimming pools and provide drinking water. Chief Executive K. Srinivas Kumar gave me a tour of the operations housed in the same building as his office.
To prove a point that solar can work for every day practical uses, Kotak Solar recently electrified a village in India with solar power. Now 120 families in this remote spot pay just five cents per day to get light and drinking water, plus juice for a community-shared mobile phone, plasma TV and Internet connection.
The next step is to take this pilot project to more villages in India, where 80,000 villages or 45 percent of the total, are still not on the grid, Kumar says. "We want to take this trend-setting model on a much larger scale," he adds.
Kotak Solar generated revenues of $25 million in 2009 -- up from $15 million the year before -- and the Chief Executive says the business has been profitable since one year after it was formed in 1997. Little wonder that it attracted $6 million-plus from Kleiner Perkins and Sherpalo Ventures in October 2008.
In Delhi, I met with a Stanford MBA grad and former Peace Corps volunteer Sam Goldman, who's also into solar. He's formed a startup in Delhi named D.Light Energy that produces and sells solar-powered LED lanterns to replace kerosene lights in the emerging market villages. In two years' time, he's sold 100,000 lanterns to villagers in India, east Africa and Latin America. The lights help moms work on handicrafts at night-time to earn some income and get kids to study after sun fall.
The potential is huge. Goldman says about 1.6 billion people worldwide are off the grid. He's aiming to reach 5 million people. His startup has funding from Draper Fisher Jurvetson and Garage Technology Ventures plus two social investor groups and is aiming to generate revenues of $25 million this year.
About an hour's drive from DLight's offices in central Delhi, I arrive at the offices of Attero Design in a gritty area of the Noida district. Here, CEO Nitin Gupta describes how his startup recyles electronic products and extracts precious minerals for sell on the London and Indian metal exchanges. His one-year-old startup made $1 million in revenues in 2009 and is aiming for $12 million in 2010.
With only a powerpoint and a dream to improve the environment, Gupta raised $6.3 million from Draper Fisher Jurvetson and NEA-IndoUS Ventures in May 2008. He's looking to soon raise about $7 million. So far, the startup has invested $5 million. Most of that went to setting up the plant about 200 kilometers north of Delhi in Roorkee. To build the plant, Attero got tax breaks from the state government and research help from the local Indian Insittute of Technology.
Forbes discovered the Reva electric car back in 2005, but that didn't prevent me from meeting with the founder Chetain Miani (pictured, with the author) at his headquarters in Bangalore, about a twenty-minute drive from the world headquarters of Infosys. Here, Miani showed me the electric powered-roadster that Reva is coming out with in 2011.
Not wasting a PR moment, Miani led me through car's features: a top speed of 130 kilometers, a range of 200 kilometers, an optional solar panel that can add eight kilometers driving distance, a choice of 2,000 colors, automatic transmission, and a telematics system where drivers can send a SMS to get a power boost to make it home in case the battery runs low.
Reva's new solar-powered plant that I toured will produce 30,000 of these vehicles -- there are 3500 on the road now, including Miani's own Reva -- and take the cars into Europe and Latin America, Japan, thanks in part to investment of $55 million from Draper Fisher Jurvetson, among small investors. So far, the cars are sold mostly in Bangalore and London. Once the 30,000 vehicles are sold, Reva will not exactly be within GM's range but will generate a respectable $500-$600 million in revenues, up from the current $10 million currently.
I asked Miani why anyone would want a city car other than Reva? He laughingly answered, "Good question. Let the consumers decide."
When Reva gets to the U.S., I may even give up my Honda Element!

Silicon Dragon Talk: Silicon Dragon Meets Singapore

2010-02-23T09:09:00.000-08:00

Silicon Dragon: Silicon Dragon Meets Singapore

Silicon Dragon Meets Singapore

2010-02-23T09:02:00.000-08:00

I've managed to squeeze in an entrepreneurship talk in Singapore! Here's the details. Thanks to the Entrepreneurship Centre at the National University of Singapore for hosting the event.

NUS Entrepreneurship Centre
(divison of NUS Enterprise)
Presents

Title : "Emerging Tech and Venture Investment Trends in Asia”
Speaker : Ms. Rebecca A Fannin
International Business Journalist
Author of Silicon Dragon (McGraw-Hill, 2008)
Date : 3 March 2010 (Wednesday)
Time : 6:00pm - 8:00pm
Venue : National University of Singapore
University Hall Auditorium, Lee Kong Chian Wing Level 2, 21 Lower Kent Ridge Rd
Please click HERE for campus map

Registration : Admission is FREE
Please register your details HERE by 3 March, noon
Seats are limited so please register early to secure a place

Program : 5:30pm – Registration
6:00pm - Emerging Tech and Venture Investment Trends in Asia by Rebecca Fannin
6:45pm – Panel Discussion
• Moderator, Prof. Wong Poh Kam Director of NUS Entrepreneurship Centre;
Chairman of Business Angel Network (SEA) Ltd

• Michel Birnbaum, General Partner, iGlobe Partners

• Neo Kok Beng, Co-Founder, President & CEO, AWAK Technologies

• Dr. Jeffrey Chi, Vice President- Investments, Vickers Capital Group

• Rebecca Fannin
7:30pm - Networking and Refreshment

Mobile, Internet, e-commerce, gaming, biotech, cleantech – they’re all booming in the emerging markets of Asia. Some startups with venture funding in these spaces have already scored successes with public listings at high valuations and acquisitions. Others are poised to return profits to their investors as the IPO window begins to open. Startups in Asia scale and get to profitability quickly. The region’s rapid economic growth and switched-on digital communications markets provide the spark for successful entrepreneurship and innovation. Rebecca Fannin, author of Silicon Dragon and a columnist with Forbes, discusses the emerging trends she sees from dozens of recent interviews with entrepreneurs and investors in China, India, Vietnam, Hong Kong and Singapore.

Silicon Dragon Meets Mumbai

2010-02-20T01:35:00.001-08:00

We're having a Silicon Tiger Social in Mumbai, February 22, at the Four Seasons rooftop bar, 6-8PM. Please drop by and say hello.
See http://silicontiger-mumbai.eventbrite.com/

Silicon Dragon Meets Bangalore

2010-02-08T17:47:00.000-08:00

We're having a Silicon Dragon Social in Bangalore! Drop by and say hello, if you're in town for Entrepreneur Week.
Talking tech, signing books & feasting @ KaatiZone, for Entrepreneur Week. Sign up here:
http://silicondragon-bangalore.eventbrite.com

Silicon Dragon: Here come the Viet Gamers

2010-02-05T00:34:00.000-08:00

Silicon Dragon: Here come the Viet Gamers

Here come the Viet Gamers

2010-02-05T00:19:00.000-08:00

Here Come the Viet Gamers
Rebecca Fannin
Forbes Asia Magazine dated February 08, 2010
Can IDG add its Tencent magic to a mini-Shanda?
Perched above a Big C supermarket on a street jammed with bipeds dodging mopeds, the Ho Chi Minh City headquarters of VinaGame is easy to miss. But inside, amid funky warehouse decor and lots of young staff (see photo) glued to big computer screens, sits Vietnam's leader in online gaming and social networking services. VinaGame aims to be one of the first homegrown Internet successes in its would-be tiger economy, a Vietnamese counterpart to China's huge hits, Shanda Interactive Entertainment and Tencent.
With stated 2009 revenues of $50 million on the back of what it says is 50% annual growth, VinaGame is capitalizing on Vietnam's rapid rise of digital communications and consumerism. Its chairman and chief executive, Le Hong Minh, 32, is an avid gamer himself.
Yahoo! BuzzSo much of one, in fact, that he aborted a financial career to start VinaGame in 2004 with a few fellow gamers. Duty calls now, however: The Saigon native has cut his playing time to one hour a day from his previous four to five hours.
Shy and modest about his accomplishments, which previously entailed posts at Vina Capital Group (no connection) and PricewaterhouseCoopers, Le nevertheless has big dreams. In a barely audible voice, he confides that he wants to take his startup public within a few years on Nasdaq or the Hong Kong Stock Exchange.
A large player in a relatively small pond compared with China or Korea (see table), VinaGame, by its own estimate, has a commanding 65% share of Vietnam's $109 million online-games market. Its titles, such as a localized version of Kingsoft Corp.'s Swordsman Online, attracted 3.5 million to 4 million gamers a month in 2009.
VinaGame also has moved into social networking--and plans to rename itself VNG to reflect its broader services. Two years ago it introduced the Zing.vn portal. Web research service Alexa.com ranks Zing.vn behind only Google and Yahoo in national Web traffic. Meanwhile, ZingMe, which offers music, entertainment, news, e-mail and instant messaging, leads the market with 4 million active users. "VinaGame is being modeled after Tencent," says Benjamin Joffe, chief executive of Asia-focused digital strategy and research firm Plus 8 Star in Beijing, referring to Ma Huateng's popular Internet and instant-messaging service, now worth billions on the Hong Kong exchange.
To read the rest of the story, please click:
http://www.forbes.com/global/2010/0208/companies-technology-online-games-vietnam-social-networking.html

Silicon Dragon: IDG's Scores

2010-02-05T00:13:00.000-08:00

Silicon Dragon: IDG's Scores

IDG's Scores

2010-02-05T00:04:00.000-08:00

Patrick McGovern recalls when people told him he was crazy to invest in China. That was back in 1993, when International Data Group set up IDG Venture Investment Fund. But he knew something they didn't grasp at first--through its technology, media and research business, IDG had an up-close look at which promising startups might turn into tomorrow's winners.
Since then there's been a gold rush to China, no doubt spurred by the handsome gains that IDG made from early calls. Besides a score on Tencent, IDG sold its holdings in search engine Baidu for $100 a share after buying them for $2.
IDG Ventures has since expanded to Vietnam (2004, with $100 million), India (2006, $150 million) and Korea (2007, $100 million). Says Henry Nguyen (see photo with Silicon Dragon author), IDG's Vietnam chief: "We are trying to replicate what we did in China and do what countries like Korea and Japan have in tech, media and telecom. We are obviously very bullish on Vietnam. It's a matter of using our collective experience across our funds."
Worldwide, IDG manages $3.6 billion in funds--$1 billion of that the firm's money and the remainder from outside investors--and has invested in 240 companies. The Asian deals have generated returns twice as high as those from its U.S. portfolio.
For the remainder of the article, please click:
http://www.forbes.com/global/2010/0208/companies-patrick-mcgovern-china-idg-scores.html

Silicon Dragon: Keytone Ventures finalizes investment in China's Travelzen

2010-01-23T14:51:00.000-08:00

Silicon Dragon: Keytone Ventures finalizes investment in China's Travelzen

Keytone Ventures finalizes investment in China's Travelzen

2010-01-21T23:16:00.000-08:00

Specialized travel sites in China have emerged as a hot sector for funding, the latest proof being a recent $15 million financing of travel search provider Qunar.com in Shanghai as well as a just finalized Series A investment by Keytone Ventures for Travelzen.com, an innovative travel site that offers bookings for Greater China and payment in multiple currencies.
Qunar’s third-round financing was led by GGV Capital, with participation from prior investors GSR Ventures and Mayfield Fund, which provided the series A funding in summer 2006, as well as Tenaya Capital (then Lehman Brothers Venture Partners), which was involved in a November 2007, Series B round. With the new financing at Qunar, GGV managing partner Jixun Foo joins Tenaya managing director Ben Boyer and GSR managing director Richard Lim on the Chinese startup’s board of directors.
The travel market has attracted considerable startup action and venture financings and early positions have been taken, most notably by NASDAQ-listed Ctrip.com, which, according to Analysys International, commanded a 52 percent market share as of the second quarter of 2009. Business for such sites has continued to boom as the increased standard of living among Chinese consumers sees growing demand for leisure travel. The online travel booking market in China expanded by 13 percent in the second quarter of 2009 compared with the same period last year, Analysys International figures show.
Qunar differentiates its business model from rivals by focusing on online vertical search for hotels, flights and travel packages, explained CEO and co-founder Fritz Demopoulos. It also differs from competitors by selling advertising on the site, but not handling the travel transactions or bookings, he added. Moreover, unlike Ctrip, the market leader in the travel space with both online and offline bookings, Qunar is purely online.
Qunar’s CEO said ample opportunity exists for expansion of travel sites in China, despite a proliferation of contenders. He pointed out that the online component of travel bookings and services is still only about 10 percent of the market versus about 60 percent in North America and Europe. “In a sense, we have only started this race and it is going to be a long one,” said Demopoulos, who brings 10 years China Internet experience to the job, having most recently served as senior vice president of corporate development for gaming company Netease.com. He pointed out that in the U.S., Expedia was a “late starter but eventually rose to prominence.”
Other specialized sites vying for room in the travel sector are Tuniu.com, a reseller of package tours, which was funded by Gobi Partners in April 2009, and HUBS, an online hotel booking wholesaler that picked up backing in November 2008 from GGV and Matrix Partners.

Silicon Dragon: VCs weigh in on Google quitting China

2010-01-18T12:19:00.000-08:00

Silicon Dragon: VCs weigh in on Google quitting China

VCs weigh in on Google quitting China

2010-01-18T11:57:00.000-08:00

My column at Forbes about the real reasons why Google is quitting China has generated a strong response. Check out the comments if you don't believe me.
http://www.forbes.com/2010/01/15/baidu-china-search-intelligent-technology-google.html
I asked a number of leading venture capitalists in China and Silicon Valley if they agreed with my premise: that it was primarily a business decision--not censorship--that is leading Google to quit China.
Here's what they had to say:
"You hit the nail on the head. Nice ink."
"Yes, I agree. This was purely a business decision. It is what is called a 'Hail Mary' in football."
"Interesting . . "
"Interesting perspective."
"One thing is real: arrogance is like the hare losing the race to the turtle. It's true that expats can't play local."
"Many people are happy that Google is taking this decision. We will see how this plays out. . . I think Google is on the right side of the discussion."
"Is it 100 percent business decision, probably not. But if they had been #1 in the market, would they say they were pulling out? Unlikely. So it definitely factors in that they are not winning and have a lot of bodies there."

Silicon Dragon: Forbes column-Why Google is Quitting China

2010-01-15T14:06:00.000-08:00

Silicon Dragon: Forbes: Why Google is Quitting China

Forbes: Why Google is Quitting China

2010-01-15T13:58:00.000-08:00

Why Google Is Quitting China
by Rebecca Fannin
It's not censorship. The search giant just couldn't compete with Baidu.
It's easy to give up if you've already lost the battle. And Google is doing just that in China. Eric Schmidt's move to quit offering a censored Google.cn search engine to the Chinese market has been read by idealists as the right thing to do. But it is first a business decision.
Even though Google's market share climbed from 15% in mid-2006 to 31% today, the company had hoped for a bigger share by now. Kai-Fu Lee, Google China's former president, told me in 2006 that Google not only wanted to have a competitive product to Baidu's, the local search leader, but a superior product. This didn't happen: Baidu has only increased its market share, going from 47% in mid-2006 to 64% today. That's a big lead.
Baidu, started by China-born entrepreneur Robin Li in late 1999 just as Larry Page and Sergey Brin were cranking up Google in Silicon Valley, understands the local Chinese market better than Google's Mountain View team.
Google fumbled with an initially inferior Chinese search engine launched in 2000, while Baidu grabbed the lead in China--and kept it--with several innovative search features customized for local tastes. Baidu introduced community-oriented services that appealed to Chinese Internet users, including bulletin boards where leads on information could be exchanged--a service that Google China's former president Kai-Fu Lee dismissed as having nothing to do with search. Baidu also offered instant messaging, a hit with China's Netizens.
Plus, Baidu was first to the market with mobile search and information offered up in multimedia, including video clips. Baidu also set up a national network of advertising resellers in 200 Chinese cities to educate businesses about the power of online advertising--a step that Google did not take.
Baidu's search feature for music also proved highly popular. Google, realizing the potentially illegal nature of the free music downloads, opted to provide links to music stores instead. Baidu later began collaborating with music labels on authorized downloads.
One other key factor put Baidu in the lead: Its search technology was considered superior to Google's in the Mandarin language. Scrambling to catch up, in 2005 Google hired the experienced Lee as its president from Microsoft. Then in 2006 Google launched its first Chinese-language search engine run from China, Google.cn. With Lee at the helm, Google recruited dozens of top engineers and linguists to its Beijing headquarters to perfect search results on Google.cn. Working at the towering headquarters of Google China at Zhongguancun Software Park in northeastern Beijing, some 100 engineers wrote codes to deal with inputting Pinyin or Roman letters to signify Mandarin sounds and such intricate tasks as delineating words in Chinese characteristics that don't clearly define white spaces.
The efforts paid off with speedier and more precise search results as well as more reliable service. But no matter the global brand name, the maximized effort and the financial resources, Google's Chinese search engine couldn't trump Baidu.
Perhaps Google should have turned over its business to local rival Baidu and let Baidu run with it. There is a precedent. Back in 2005 Jerry Yang turned over the management reins for Yahoo! in China to Jack Ma, the charismatic leader of China's e-commerce powerhouse Alibaba. Yang knew that Ma, thinking local, acting local, would have a better shot at getting the right formula for China.
Granted this is still a work in progress as Yahoo! refines its features for the Chinese market. But as Zeng Ming, former president of Yahoo! China, told me, "The net is about culture. You can't have expats running it."
Indeed, why give up now--unless you realize there's no way you're ever going to win the race. After all, Page and Brin had already crossed the line back in 2006 by agreeing to have their new Google.cn, run from China, subject to censorship. They didn't have much choice. All companies doing business in China follow the same Chinese government rules. Yes, Baidu's search results are also censored.
It wasn't all that long ago--2004--that it looked like Google might use Baidu as its entry route. Google invested $5 million in Baidu for a 2.6% stake but shifted strategy in mid-2006 by selling those shares for more than $60 million and rolling out Google.cn the same year. In hindsight, and given its bumpy history in China and this latest jockeying with the Chinese government, maybe Google should have pursued the go-with-Baidu strategy.
If Google exits the $300 million Chinese search market now, it's giving Baidu runway to be a monopoly. And if that happens, Baidu has a shot at becoming the world's dominant search company (it's already entered Japan) by sheer arithmetic alone.
By serving China's nearly 300 million Internet users and 670 million mobile phone users--both the world's largest markets--Baidu may someday be bigger than Google globally, something Robin Li once told me he has no doubts will happen.

Rebecca A. Fannin is an internationally recognized author and journalist who has been writing about entrepreneurship and innovation for nearly 20 years. Her book, Silicon Dragon, was published by McGraw-Hill in 2008 and translated into several languages. During the height of the dot-com boom from 1999-2001, she was international news editor at Red Herring, later joining the Asian Venture Capital Journal as international editor and writing for several leading business publications, including Inc., The Deal, Worth, CEO and Fast Company. She also authored "A New Dawn" for KPMG in 2009. Fannin has lectured at several universities in Asia and the U.S., and has made numerous public speaking appearances worldwide.
See Also:
Google's China Blues
Google Takes on China
Baidu Rises on Google News

Silicon Dragon: Supersize status for VC funds

2010-01-13T17:55:00.000-08:00

Silicon Dragon: Supersize status for VC funds

Supersize status for VC funds

2010-01-13T16:13:00.000-08:00

Super-size is the trend among venture capital shops that can still raise funds in the current depressed economy. That's how I'm reading such recent developments as NEA's newly raised $2.5 billion fund plus a $1.2 billion fund for Norwest Venture Partners and $1.1 billion for Khosla Partners. More power to them! Many firms along Sand Hill Road keep trying and trying to close new funds and capitalize on the ripe opportunity to invest. These giant funds currently in the market doing deals will have the advantage as the venture world shrinks with winners separated from the losers. Valuations to get into entrepreneurial deals are lower, quality teams are easier to assemble and even the IPO exit route shows signs of getting more traveled in 2010.
Sure, venture returns are depressed and fund raising is not much fun, hitting a five-year low in the U.S. with a 68 percent drop to $95.8 billion in 2009. But don't count venture out. It's a highly cyclical business, as I know all too well having endured the dotcom ups and downs when I was doing international editing for Red Herring. And, when venture is less crowded, that's when the investment returns are best.
Another interesting thing these funds have in common--besides size--is an outlook on India and China. NEA now has teams in both India and China, and Norwest has staffed up an Indian office and may open in China, Promod Haque told Silicon Dragon. He pointed out that India has strengths in software development and outsourcing of business processes, while China kicks in with hardware as well as semiconductor production and logistics. Over the past year, Norwest has funded three companies in India: the National Stock Exchange of India, mobile value-added service OnMobile and Shriram City Union Finance Limited. Norwest also inked a deal in China: mobile software startup Borqs Inc.
Spotted at the recent holiday party Norwest had in the Valley, Vinod Khosla also indicated that he's got at least one cleantech deal in India. I bet there will be more soon.
Not to be outdone, NEA's Dick Kramlich has spearheaded his firm's outreach in both India and China-and even moved to Shanghai for a few stints to show NEA's commitment to the region. He has two public listings of Chinese semiconductor companies to show for it too, plus more in the works. Next to make the move to China may be Scott Sandell, at least from what he recently told Silicon Dragon. Stay tuned.
Meanwhile, some well-known firms that have scurried to raise new funds and are still on the fund-raising trail have downsized their ambitious targets. Draper Fisher Jurvetson is one. While the firm now has two RMB funds, Tim Draper told me, the much-heralded shop has dropped its fund-raising goal to $400 million from $600 million.
Look for other funds to follow that lead as the big get bigger and suck up the also constricted limited partner dollars for lesser groups.
History shows just how cyclical the business is. When I was working at Red Herring during the dotcom bubble, super-size venture capital funds were the trend then too. Then came the meltdown and suddenly the 'in' thing to do was to downsize. Walden International was one of the pioneering leaders who took down the size of its fund, in this case from $1 billion-plus to a more right-sized fund of $600 million with its latest fund at $380 million.
Walden went on to score successive hits, and the industry too shored up for several more years until this latest meltdown in late 2008. Again, let's not count venture out just because of the poor returns of 2009. It's a new year, and a new beginning for those who tough it out.

Silicon Dragon: Tudou, Youku going IPO in 3 years

2010-01-04T06:42:00.000-08:00

Silicon Dragon: Tudou, Youku going IPO in 3 years

Tudou, Youku going IPO in 3 years

2010-01-04T06:25:00.000-08:00

Video sharing sites worldwide have struggled to get the right money-making model and competition has been heated, but two Chinese video sharing sites–Tudou and Youku–are both expected to reach profitability and go public within three years.
Tudou.com founder and CEO Gary Wang (see photo) recently told Silicon Dragon News, “If we do go IPO, NASDAQ is a natural choice and it should happen within three years.”
Likewise, Youku CEO Victor Koo said in an interview with Silicon Dragon News that his video sharing site will reach profitability within three years and will then file for an IPO in Hong Kong of New York.
Predictions are that the field will narrow from four players to one or two standalone survivors in the highly competitive sector.
The positive outlook by Youku and Tudou comes as the online video ad market gained considerable momentum from the fourth quarter of 2008, with strong sales growth into 2009, noted one venture source in China. An IPO within three years is possible, he added.
China’s Youku, though getting a slightly later start in the market than Tudou, has gained the lead. It ranks eight in page views next to 12th for Tudou, according to recent CR-Nielsen rankings for page views.
Youku raised $40 million in mid-2008 from Sutter Hill Ventures, Chengwei Ventures, Farallon Capital and Brookside Capital, a fund affiliated with Bain Capital. Most were repeat investors from Youku’s prior round of financing at $25 million.
Tudou is backed by China’s IDG Technology Venture Investment Fund, which was a seed investor in late 2005, as well as GGV Capital. A second round of $8.5 million in 2006 was joined by IDG and JAFCO. A third round of $18 million was completed by Capital Today, General Catalyst Partners and KTB Network in July 2007.
Rival KU6 Holding Limited, which was funded by Draper Fisher Jurvetson, DT Capital Partners, UMC Capital and SBI Broadband Fund, was recently sold to Hurray! Holding Co., Ltd. for $37 million in what a Silicon Dragon venture source said was a distress sale since KU6.com was out of cash.

Silicon Dragon: Google's China Blues

2009-12-21T20:31:00.000-08:00

Silicon Dragon: Sillicon Dragon: Google's China Blues

Sillicon Dragon: Google's China Blues

2009-12-21T18:59:00.000-08:00

Commentary: Google's China Blues
Rebecca Fannin, 12.21.09, 06:00 PM EST
Will the search giant shutter its local operations in China?
Rumors have been flying about Google's future in China ever since the company's China head, Kai-Fu Lee, resigned in early September to start an incubator lab in Beijing. His departure seemed awfully abrupt.
Lee scurried to set up an office for his incubator, raise a fund and assemble a team from thousands of job seekers. Lee's PR reps in China and the Valley hyped his new project as his fulfillment of a dream to coach young Chinese entrepreneurs and support their best start-up ideas.
My venture investing sources in Beijing and Shanghai suspected then that there was more to Lee's departure than was being told. Maybe Larry Page and Sergey Brin want to exit China and Lee knew this, my sources speculated. Certainly, the rush to the exit door by Google staff in Beijing since September suggests that.
Indeed, Google has been trying to become the top search engine in China for nearly a decade, without success. Google hasn't said it is shuttering its local operations in China, but the company plans to power its Chinese search business from its Mountain View, Calif., headquarters.
Why did the mighty Google fail in China? For years, the company fumbled with inferior search results and unreliable service, not to mention censorship issues and that annoying upstart Baidu, which raced ahead with innovative technology that had a search algorithm for generating results that were more relevant in Mandarin.
To compete with Baidu head on, Google set up business on Chinese soil, recruited former Microsoft exec Lee, and began to gain traction. Lee hired more than 100 Beijing-based engineers and linguists. The effort moved the needle on Google's market share to 31% in 2009 from 21% in 2007.
But Baidu couldn't be crippled. The Chinese search company widened its market dominance of Chinese search to 64% from 58%. Not only was Baidu considered superior to Google for Chinese search, the team led by founder and CEO Robin Li proved nimble and innovative at introducing new popular features.
For example, Baidu began offering mobile search in China in 2006. It took Google nearly a year to catch up. Baidu also was first to use social media for conducing searches. It beat Google to the market with video clips too.
It shouldn't be all that surprising to see a big American brand being one-upped by a local competitor. Indeed, the story of a home-grown Chinese start-up triumphing over an iconic Internet rival is by now a familiar theme.
Just like Chinese search engine Baidu trumped Google, online bookseller Dangdang outsmarted Amazon in China with better merchandising skills while Alibaba-owned Chinese auction site Taobao took the lead from eBay by giving sellers a free listing of their goods and charging only for premium accounts.
In all three cases, astute local managers who were attuned to the culture and able to gauge consumers' buying and surfing habits on the Web were able to grab first place.
What helped was being on site to respond to China's fast-moving marketplace rather than in a faraway office on the other side of the Pacific.
But Google had the formidable Lee in China building a strong team. Still, the company's efforts proved too little too late to grab market share from Baidu.
Who could really blame Google for shifting gears? The censorship of the Internet in China has been a big enough headache for Google, let alone competing with Baidu. It was tough for top management to agree to Chinese government censorship in order to do business in China. Moreover, Google's standard, English-language Google.com site has continually faced blockages and search directs to other sites.
Google faces major challenges in China that are not going to disappear anytime soon. Stay tuned for the next chapter on Google's saga in China. I wouldn't be shocked to see Google retreat from China.
Rebecca A. Fannin is an internationally recognized author and journalist who has been writing about entrepreneurship and innovation for nearly 20 years. Her book, Silicon Dragon, was published by McGraw-Hill in 2008 and translated into several languages. During the height of the dot-com boom from 1999-2001, she was international news editor at Red Herring, later joining the Asian Venture Capital Journal as international editor and writing for several leading business publications, including Inc., The Deal, Worth, CEO and Fast Company. She also authored "A New Dawn" for KPMG in 2009. Fannin has lectured at several universities in Asia and the U.S., and has made numerous public speaking appearances worldwide.
See Also:
The Man Who's Beating Google
Google China Will Lose Head, Gain Bodies
Why China Will Win The Web

Silicon Dragon: Turning Down Google

2009-12-11T08:20:00.000-08:00

Silicon Dragon: Turning Down Google

Turning Down Google

2009-12-11T07:37:00.000-08:00

Commentary, Forbes.com
What entrepreneur in his right mind would turn down an acquisition offer from Google? Nguyen Xuan Tai, the chief executive of Vietnamese-language search site Socbay, did. He is 26 years old and has no regrets. The self-described PC addict and programming whiz who grew up poor in northern Vietnam has made the gutsy decision to compete with Google.
The way Tai sees it, Eric Schmidt offered him about half what his start-up, formed in 2006 with classmates from the Hanoi University of Technology, is worth. He figures Google may eventually come back with a better deal as a short cut to developing a Vietnamese-language site.
Socbay isn't profitable yet, and operates out of a spartan office in an unfinished building in Hanoi alongside home-made servers. (See photo of Tai with Silicon Dragon's author.) Tai and his venture investors are betting that Socbay can break even within three years by focusing on search over the mobile Web--an area that Google doesn't dominate in Vietnam--and by refining Vietnamese-language search as local content on the Internet expands.
Tai has a chance. Doing local language search isn't simple, as Google discovered in China. And Chinese entrepreneur Robin Li of Baidu beat Google in the mainland. He too turned down an offer from the giant rival, back in 2005, before taking his start-up public.
The tech entrepreneurial spirit in Vietnam reminds me of the super-charged scene I've witnessed in China over the past decade. Many of the same forces--a young, switched-on population, a dedicated group of venture capital investors eager to fund enterprising start-ups, and a fast-expanding marketplace newly opened to commerce--provide a good base.
A digital communications revolution is underway today in formerly war-torn Vietnam. Of the country's 86 million people, a relatively high 26% have access to the Internet, 3 million surf the Web with broadband, and 32 million have a cellphone--with third-generation mobile service coming soon.International venture capital firms naturally have arrived to finance the same kinds of Internet, mobile and gaming start-ups they profited from during the earlier dot-com boom in China (including Baidu, Alibaba, Tencent, Focus Media, Shanda).
Since IDG Group Chairman Patrick McGovern opened IDG Ventures Vietnam in 2005, his firm, which made millions from investing in scores of China start-ups at an early stage, has backed 40 Vietnamese start-ups--including Socbay--from a $100 million fund. (See photo of yours truly with IDG's Henry Nguyen in the Ho Chi Minh City office.) Two other investors from well-known groups busily seeding Vietnamese start-ups with capital are Softbank China & India Holdings and DFJ VinaCapital Technology.I recently had lunch in Hanoi with CEO Nguyen Hoa Binh, 28, a programming ace who started online marketplace Peacesoft in 2001 as a second-year undergrad student at Vietnam National University in Hanoi and later earned a master's from Osaka City University. His fast-growing business, funded by IDG and Softbank, has more than 500,000 registered users, with a goal of 1 million by next year--boosted by an escrow-based online payment service in a market where credit cards and bank transfers aren't common. He was traveling the next day to Shanghai for a meeting with eBay about a possible investment deal to follow up on the partnership they'd formed the year before.
In a Ho Chi Minh City office near the Saigon River, I interviewed another Vietnamese entrepreneur with a story that has echoes of China start-ups in it. Nguyen Thanh Van An, 37, is the chief executive and founder of Internet bookstore Vinabook.com, a clone of China's online bookseller Dangdang.com--itself a version of Amazon.
He's grown Vinabook to 200,000 customers in five years, and following the lead of Dangdang, aims to become his market's leading online retailer, selling not just books but also software, movies, music and calendars. He's dealing with logistics and deliveries headaches, and handling them in similar ways to Dangdang. Books are delivered by moped, and most customers pay by cash.
Next stop: VinaGame, a $50 million in revenues, profitable business that runs the country's leading gaming and social networking sites. It's being geared to become Vietnam's Tencent or Shanda, two runaway success stories from China's early start-ups.
An avid gamer, Le Hong Minh, 32, started VinaGame in 2004 with other players after getting an undergrad degree in finance from Australia's Monash University and giving up his investment banking career. His start-up, housed in a warehouse decorated with colorful posters of VinaGame's blockbuster hits, (see photos) is upbeat and reminds me of the funky spaces I've seen among leading Web businesses in China. The culture is based on Silicon Dragon entrepreneurship--it has venture capital funding, all employees have stock ownership and the team is like a family, even going on annual camping expeditions together.
The next step? Of course, Le says he's going to take the company public within a few years, ideally internationally so he can benchmark with the best in the business globally.
To go to Forbes column, click:
http://www.forbes.com/2009/12/09/vietnam-google-socbay-intelligent-technology-fannin.html

Why he said no to Google: See YouTube

2009-12-09T18:17:00.001-08:00

Watch the video interview I did with the founder of Socbay, Vietnam's Google. Hear why the gutsy entrepreneur who turned down an acquisition offer from the search giant. Click: http://www.youtube.com/watch?v=-hhp6rerk8Q

Why VCs like their veggies in China

2009-11-30T19:35:00.000-08:00

My latest column in Forbes examines why venture capitalists prefer "veggies" in China.
Enjoy: http://www.forbes.com/2009/11/23/silicon-valley-china-intelligent-technology-venture-capital.html

Silicon Dragon: 3 variations on a Hong Kong hotel theme

2009-11-22T16:27:00.000-08:00

Silicon Dragon: 3 variations on a Hong Kong hotel theme

3 variations on a Hong Kong hotel theme

2009-11-21T22:36:00.000-08:00

Silicon Dragon keeps exploring new frontiers and continues to come up with new hotels to recommend--this time for executive travelers on a budget to the jet set on an expense account. The most recent explorations took place in Hong Kong.
Let me start with the low end and work up. The newly opened Harbour Plaza 8 Degrees makes up for its out-of-the way location in Kowloon (close to the old Kai Tak airport) with hospitable service, starting with marketing communicatons manager CeCe Hoang (pictured above, who pinch hits as duty manager as she was when I stayed there. And talk about going beyond the call of duty! She bought my book and asked me to autograph it. Back now to the hotel, which is still working out some kinks, like designer-ish faucets that send water sprays over the top of the equally designer-ish sinks. There's also some raised number lettering on the doors that is so sharply easeled it can cut. These are minor issues in an otherwise sleeky designed hotel, and CeCe assures me they're being fixed. In fact, she's making a list of all the guests' feedback to send to the hotel management. One thing that definitely does not to be fixed is the plentiful breakfast and dinner buffets here at the ground-floor cafe. Some highlights of the hotel include a hideaway terrace bar overlooking an outdoor pool with a waterfall and the well-equipped fitness center. The executive lounge wasn't opened yet when I was there, but work was underway for completion soon. Once the old Hong Kong neigborhood gets more developed--and it will now that the airport has been moved to Lamma Island--the Harbour Plaza will be an excellent affordable choice. Until then, the hotel's shuttle service to the nearest ferry, metro and commercial area will do just fine.
Next stop was the Mira Hotel, also in Kowloon but in the heart of Tsimshatsui. More for the fashion crowd, the Mira is over-the-top with design elements. My first impression wasn't so good when I was put in a smoky-smelling room with no view. But a word with the club lounge staff and presto, I found myself in a smoke-free room with a view of Kowloon Park, where I watched Hong Kong'ers doing morning tai chi. One irk: housekeeping staff who didn't observe do not disturb signs.
Many rooms forget that executives traveling on business need to have comfortable desk chairs, but not the Mira, thankfully. It was fun staying at the Mira and commuting by Star Ferry to business meetings across the harbour.
I am saving the high-end option for last--the recently refurbished landmark Mandarin Oriental hotel. What can top a spacious room with a view of Victoria Harbour, a rendezvous in the Clipper Lounge, or the old-world British flavor of the place--down to afternoon tea or a night-cap of whiskey and cigars at The Chinnery. That's why the place continues to attract the well-heeled from all points of the globe. A check of the spa upstairs showed it hopping with both male and female guests who didn't mind splurging a bit more on themselves. Another great thing about the hotel: the fact that you can access the elevated walkways that lead directly into Hong Kong's finest designer boutiques. Of course, shopping isn't for everyone, and I prefer to use the walkways as a short cut to the in-town flight check-in and the 22-minute express train to the airport. You can't beat Hong Kong for mass-transit infrastructure.

Silicon Dragon: Why 3 VC investors still love China

2009-11-13T20:25:00.000-08:00

Silicon Dragon: Why VC investors still love China

Why NEA, IDG and WI Harper still love China

2009-11-13T19:43:00.000-08:00

Let me count the reasons why venture investors love China. Or better yet, hear it directly from Scott Sandell, David Lam and Hugo Shong. I caught up with them at AVCJ's annual forum.
Here's Hugo Shong of IDG explaining why he's keen on the new RMB funds that are rapidly emerging in China.
http://www.youtube.com/watch?v=DXaAOEFzBC4

And David Lam of WI Harper describing two of his firm's hot cleantech deals in the Mainland.
http://www.youtube.com/watch?v=DGv7emcakqU

Here's Scott Sandell of NEA chatting about why he may move his family from Silicon Valley to Shanghai for a year or two. It's not just to advance his career!
http://www.youtube.com/watch?v=dF9FE_nkDPw

I recorded these videos with my Flip camera -- thanks goes to Jim Boettcher of Focus Ventures for introducing the cam to me. Jim was an investor in Flip and made a lot of $ with that deal!

Silicon Dragon: Tell-tale signs of tough times

2009-11-10T19:00:00.000-08:00

Silicon Dragon: Tell-tale signs of tough times

Tell-tale signs of tough times

2009-11-10T17:10:00.000-08:00

It's been a tough year in the Asian private equity community, and it shows! The AVCJ awards dinner at the China Club was a time to celebrate those who survived and achieved against all odds. But the mood was not very uplighting.
Stephen Roach of Morgan Stanley Asia set the tone with a speech about how a V-shaped economic recovery will be hit by four headwinds: the remaining half of the toxic assets still to be written down, the breadth of the downturn globally, an inability of China and India to boost the global economy by making up for a slowdown in U.S. consumer spending, and China's continued reliance on a boom to bust export-led economy. He encouraged those gathered to enjoy the night's food and wine because "it's not going to get any better soon."
On with the show: awards for best in the business, with a few asides. Picking up an award for private equity professional of the year, Jean Eric Salata of Baring Private Equity Asia took a look at his photo displayed on the screen, and couldn't help but remark about his thinning hair line. George Raffini of HSBC, collecting an award for lifetime achievement, also commented on his photo, where he sported brown hair, not the mostly grey today. It could be that photos used were out of date. But I think it's probably just a sign of how tough the business has been over the past 18 months.
Moving on, the venture capital of the year award went to Andy Yan of Softbank Asia Infrastructure Fund. It's interesting to note that three of the five contenders for this trophy have Softbank in their careers. I think this says a lot about the venture empire that Softbank's maverick investor Masayoshi Son has built.
PS: Dan Schwartz (photo above) did not leave the event empty-handed. Though a nominee for the lifetime achievement award for his "lifetime's work in Asian private equity," the former publisher of AVCJ got a trophy, naturally enough, for publisher of the year. That brought smiles to those gathered, including those insiders (AVCJ publisher Allen Lee, for one) who master-minded the show. It's always good to have some light-hearted fun at these industry events, as Qiming's Gary Rieschel, who was taking bets on the winners, knows all too well.

Forbes: Beware Sand Hill Road

2009-11-08T04:06:00.000-08:00

In case you missed this, here's my debut Forbes commentary on tech. Here, I comment on how Sand Hill Road is losing its thunder to Chinese tech hotspots--and why. After more than 10 years covering emerging tech trends globally, I'm bound to have formed some opinions and viewpoints. So here goes. Click on
http://www.forbes.com/2009/11/06/china-kaixin-baidu-intelligent-technology-fannin.html
As usual, turn to the Asian Venture Capital Journal, better known as AVCJ, www.avcj.com, for my regular news coverage of tech and venture (and some other topics too!).
Happy reading! Rebecca

Silicon Dragon: Kai-Fu Lee & Peter Liu

2009-09-06T21:31:00.000-07:00

Silicon Dragon: Kai-Fu Lee & Peter Liu

Kai-Fu Lee & Peter Liu

2009-09-06T21:20:00.001-07:00

Now that many venture capitalists in China are no longer funding young companies, it's little wonder that there's room in the market for initiatives like Kai-Fu Lee's Innnovation Works. The incubator lab will seek to identify and nurture winning ideas among young Chinese entrepreneurs, and the best among them will have a chance to be funded by Innovation Works and its backers, which include Chinese venture capital firm WI Harper. Wonder if we will see more types of companies like Maxthon, the China-based web browser that Peter Liu of Harper funded a few years ago? I'm also wondering how the link-up with Harper will impact the lab's ability to work with other venture firms to tap the best startups.
Lee has considerable connections and knowledge of the Chinese entrepreneurial scene, and his backers -- Liu as well as Steve Chen of YouTube and others entrepreneurial leaders -- are equally well suited for the task. But amid all the press and PR about the new venture, questions continue to swirl around about what Lee's move means for Google China, and why he's leaving now. The fact is that he was not able to move the market share needle much against local search competitor Baidu. Even so, his departure from Google China is likely to mean Baidu may gain an even stronger advantage.

Silicon Dragon: China lessons

2009-08-23T14:13:00.000-07:00

Silicon Dragon: China lessons

China lessons

2009-08-23T13:53:00.000-07:00

After following venture investor Lip-Bu Tan of Walden International for more than a decade now, I found it interesting to hear him talk about how he might have done things differently. At a recent China 2010 panel discussion at the Churchill Club, Tan says the number one lesson he learned in 20+ years of Chinese dealmaking is the importance of going local. These days, Tan is spending one week every month in Beijing. He's also made sure to hire local Chinese who can get into the inner circle with other dealmakers and importantly, government officials. Interestingly, Tan found that bringing in talent from Hong Kong or Taiwan didn't work well in China. But, hiring a Caucasian manager who could speak Chinese DID work. Tan surmised that's because there's a fascination in China with westerners who can speak the language better perhaps than even he -- a native Singaporean -- can. This made some folks in the crowd wondering what role they might have in China. See CNReviews post by Silicon Valley mover and shaker Elliott Ng.
PS: Tan is looking noticeably relaxed despite the fact that he now holds two jobs at the same time. Not only does he still lead the team at Walden, but he's the head of Cadence Design Systems.