As readers know, I’m working on a new book about global entrepreneurship that is taking me around the world at the pace of roughly one country per month for the next year and a half. The plan is to focus on several contrasting hot spots for entrepreneurship and revisit them throughout the next year or so to see how the entrepreneurs and economies evolve over that time.
But since it’s early in the process, I’m still hitting many places for the first time, and it’s a challenge. I’m continually throwing myself into a culture and trying to absorb as much as I can from being on the ground, meeting with hundreds of entrepreneurs, and trying to ferret out some TechCrunch-worthy and book-worthy stories. Two-to-three weeks can go past in the blink of an eye, and frequently I leave with more questions than answers. More maddening: That’s usually a sign I’ve done my job. No place should be decipherable in two weeks. Especially not China.
China has just exploded with entrepreneurship, funding and economic opportunity over the last five years or so, and unlike most of the world there doesn’t seem to be a slow down yet. In 2002, U.S. investors pumped $437 million into China. By 2007 that had grown to $2.8 billion. And last year, it swelled again to $4.2 billion. All numbers courtesy of Dow Jones/VentureSource which should be releasing its first quarter China figures this week. Imagine Silicon Valley in 1999 times a huge sprawling country and population, and that’s what I’m wading into for the next two weeks.
On one hand, it’s exhilarating. In the US, we’ve all heard so much about the amazing Chinese economic engine, looking on with a mix of terror, greed and awe. It’s stunning actually to be on the ground here. But sifting through hundreds- even thousands- of Mandarin-speaking entrepreneurs is also a bit like trying to do an estate sale for Howard Hughes. There are priceless old films, keepsakes from starlets and antique aviator equipment, but also stacks of milk bottles, newspapers and nail clippings—where do you start?
This mild panic I’m finding myself in has me thinking a great deal about two characteristics of China that people have been referencing in the last few weeks as I’ve been planning this trip and doing pre-interviews: Patience and speed. They’re seemingly contradictory, and perhaps part of that is the collision of tradition and modernity in China right now.
It’s important to realize that patience isn’t the same thing as being slow. It’s a mindset thing, not a factor of how fast you are moving. The Chinese people have always known they’d be one of the world’s major superpowers, known it with such conviction; they just had to let it unfold. And unfold it has. Even Internet entrepreneurs share this view, as Jack Ma of Alibaba said in this 2000 Forbes interview, “One must run as fast as a rabbit, but be as patient as a turtle.” Interestingly, Ma picks the good attributes of each animal: The speed of the rabbit but not the impatience and cockiness. And the patience of the tortoise but not the slow speed. (One could argue those are traits of large, fat and happy American multi-nationals that both Chinese and Silicon Valley startups seek to out-do.) Ma has also said that employees and customers come first, shareholders second. Why? They’re incapable of holding a long term view and he refuses to run his business quarter-to-quarter. For Ma, ten years is a short time. For U.S. investors—even VCs—ten years is a long-term investment horizon.
What many U.S. investors find baffling is how that patient mindset co-exists in a world that moves so quickly. Last night I had dinner with several ex-patriot entrepreneurs who said it’d be hard to leave Shanghai now because the speed with which the city runs has become addictive. Every few weeks there are new buildings. The restaurants open and close so quickly, one of the ex-pats says he calls a restaurant before he leaves the house, not to make reservations but to make sure its still there. Another laughed at the idea that he used to think Manhattan was fast-paced. He goes back to visit now, and it all seems the same.
I’m not even 24-hours into my adventure in China, but I’m interested to learn more about how these two traits manifest themselves in the startup world here. Already, I’m hearing about a distaste for raising U.S. money because of an insistence on predictable and unnatural growth metrics. My guess is the successful investors will be the ones that yield to the Chinese way of thinking on this, not the reverse. Indeed, a short-term nature of investing is a big part of why our capital markets are broken, and over the last few decades as Wall Street funds and endowments have become the main backers of VCs, that short-term-thinking disease has spread into what used to be a risky but patient asset-class.
Wow. Sucks to be you.
JK
good luck with the book Good insights : )
Wow, Lucky to be you. I want to travel around the world too. Is Techcrunch sponsor reader to be able to travel around the world?
Awesome post Sarah. What an insight into the Chinese way of doing things. Yes, I hear from a few of my Facebook Shanghai friends the same – it is fast paced yet they still hold on to their virtues of patience and steadiness.
And believe me, as all others over here say, you should be remarkable to have undertaken this project and to be traveling the world at such a fast pace. Tell us, is 24 hours a day enough for you?
All the best on the project!
Yet another post that noone will read because you are droning on and on about yourself, I feel sorry for the Chinese who might speak English, someone should warn them that Sarah is around.
I can relate to this really well. China: recession where?
OMG Sarah Lacy posted something. Hurrah!
Sheesh, tough boss!
What’s better? An interesting, well written post once in a while or heaps of ‘news’ on twitter desktop clients, internet memes or vague buy/sell rumors?
Totally agree with you. I’m sick of those stupid twitter posts!
Looking for an RSS aggregator/Firefox plugin with a filtering option to remove all twitter posts from TC.
I think someone has to build out a firefox extension or something that will remove/mask twitter stories from our browsers while we read TC. I am sure I can charge over 100$ for that
I’m tired of the posts **complaining** about twitter posts… please, guys, stop! Stop!!!
At least if there’s a twitter-related article I can choose to read it or not.
But the anti-twitter comments are diluting the meaningful comments.
She had been away for so long that I assumed she pulled a Hendrickson–leave Techcrunch to start a company so revolutionary that it Techcrunch’s collective brain explode.
I would definitely take an article like this once a day over 5 daily non-sense articles on twitter.
+1
Man, that sounds like an amzing mesh of culture and vision.
I would love to work in China!
Tre Kool!
Have fun, looking forward to reading your book!
asfdfsdf
Interesting, let us know when the you plan on finishing the book.
In my experience as an expat small biz owner in South Korea, it’s incredibly hard to be an entrepreneur in a B2B field because we get ZERO respect due to the Confucian hierarchy. If we had 5 million dollars in start-up capital it would be a different story entirely, but there is just no respect for the ‘little guy’, or any kind of ‘pull yourself up by your bootstraps’ ethic (if you’re not rich to start out with, you’re supposed to work for someone that is. If you don’t people think there must be something wrong with you). I’ve written in detail about this here: http://www.korp...n-introduction/
correction, I should have referred to myself as small biz investor. I’m one of three partners. Don’t want to misrepresent myself.
Don’t forget to try the xiaolongbao
and go visit Suzhou and Hangzhou if you haven’t already.
Good story Sarah. I can tell you that if you come to Shenzhen during your travels, you see all you’re seeing in Shanghai but in a different light. This city is 80% migrants from all over China and is truly the melting pot of China. You must come here and experience China’s richest and most dynamic city. I have been living and doing business here for 3 years and I realize that I am in one of the very best cities in the world to be in for business. The growth here is like nothing I have never seen; even compared to Los Angeles where I come from. I enjoyed your story and look forward to reading more from you.
Great to see you writing from Shanghai. You are right. Patience and speed. The entire city and country for that matter is full of contrasts.
Look forward to reading more of your thoughts in the coming weeks.
Nice sharing Sarah. I agree with you. Seemingly contradictory, until you’re “in it”. That’s the thing I was told by people here in Asia (Greater China) before I moved out here from the Bay Area. Conceptually, you think you might get it, but you really don’t until you experience it for yourself. “Seeing is believing”!
Good luck with your book!
Sarah Lacy said…
…I’m working on a new book about global entrepreneurship…
Sarah, perhaps you may like to make contact with Prof. Michael Cusumano of MIT Management School, where he had published a number of books (and also papers in various management journals) relating to software & IT entrepreneurship. He is the top dog in this area. He may give you some of his research data if you request. I have attended one of his public lectures when he visited New Zealand earlier this year to give a talk on IT Entrepreneurship, which was held at the University of Auckland’s Business school. Him and his researchers have collected data on software companies that go back to the 1970s, which is a valuable dataset for anyone who is interested in analyzing IT Entrepreneurship.
I think one of those ex-patriots done Shanghaied your vocabulary.
Sarah great article. I am traveling to China next week for the International Women’s Forum as Vice Chairman for Spain. Would love to meet Ma any hints and help?
Thanks for you insight
Ana Maria LLopis
ideas4al.com CEO
Sarah,
Which countries do you plan to visit?
Hope you go to India too, would like to hear from there too. There is lot of hard-work and enthusiasm for business there too, but its all bogged down and messed up by its politicians i hear.
Good point about India David,
I would love to hear more from there about support for start-ups in India without red tape and bribery.
Mike? Om? Is this something worth investigating? I could ask around. Mail me if it is something you would also like to look into.
Regards,
Me.
Sarah,
If you do plan to come to India, I would suggest that you check out http://headstart.in and try to attend one of the Startup Saturdays that are held on the 2nd Saturday of the month in Delhi, Mumbai, Bangalore, Kolkata, and Hyderabad. It could be a good source of seeing what’s really happening in India and also connecting with lots of entrepreneurs and startups.
Looking forward to the book and more posts.
Cheers
Nice Post Sarah,
Only today my cousin (someone obsessed with the economy) kept on talking about China, and their fight against the Dollar as the international currency etc.
A recent TC post talks about the Social Networks in China and their revenues compared to MySpace and FB. One example of many cultural differences which, apart from the recession – facilitate ongoing growth and profitability. Even if it is the buying of ‘useless’ virtual gifts.
I look forward to seeing China lead by example, for us all to learn how it is really done. If anyone is fluent in Mandarin and interested in starting something (almost fully designed and ready for launch) in China, please – add me on Twitter.
My favourite quote from your post was:
Jack Ma of Alibaba said in this 2000 Forbes interview, “One must run as fast as a rabbit, but be as patient as a turtle.”
Thanks. Enjoy your travels. Not jealous, at all.
amateur, this is China. We knew this 5 years ago.
anyways, I hate it when people use this term incorrectly. “ex-patriot” = traitor. I think you were looking for the word, “expatriate”, just my hunch
what a moron. where in this post is she implying she’s an expert? and why don’t you comment on her insights she’s sharing rather than picking apart her grammar and doing drive by anonymous comments on her spelling.
or do you not have anything of substance to say? geez. people who armchair quarterback china expertise like they own it annoy me.
“China has just exploded with entrepreneurship, funding and economic opportunity over the last five years or so…”
Thanks for making me laugh today, Sarah. And no, I’m not laughing with you.
Sarah Lacy: putting Mr. Bean to shame.
The only thing you can offer is a criticism wrapped in a lame joke? I found her story far more interesting than the misplaced frustration you directed towards Faceboook. Act like a decent manager. Encourage what you like publicly, discourage what you don’t privately.
” … That’s usually a sign I’ve done my job. No place should be decipherable in two weeks. Especially not China. … ”
Asians and Chinese in particular, just love Westerners expressing their impressions, gleaned during their visits.
As Christine Lu, also I’m looking forward to reading more of your oriental musings.
Nice post, Sarah…keep us posted
I’ve worked in Beijing now for 5 years. Most with an MNC and now with a small tech startup.
I think that she is dead on on her perception of China’s startup environment. Chinese companies are fast, quick and dirty but they improve on each release.
No US internet company or VC has succeeded here. The closest success metric is Blizzard’s WoW
That’s why she shouldn’t be talking to ex-pats about entrepreneurship in China if she wants a real picture. She should be talking to natives.
She should be talking to both. Expats offer first hand perspectives on challenges of westerners entering the China market that local Chinese can’t offer.
Just the same, when it comes time for Chinese companies to enter the US market like they’re doing, they are more likely going to have their transitioned eased by Chinese who have gone that route.
And to be honest, people don’t always share the real picture. So it’s not a matter of how “native” one is, but how many perspectives you can incorporate into a bigger overall picture.
Interesting. ” Speed is nothing without timing and patience. “
Sarah,
Best Wishes For your Book.
“Patience and speed”. Means a lot now, as I am on the verge of starting a business myself.
Thank you for the insight on the busniess cultures. Hope you learn more in the rest of the time you sepnt in China. Keep giving more posts.
Regards,
Suman M
isnt there any news about twitter?
#cupnoodles #swineflu #ABBA
Love this post, Sarah. Good luck on your project. Yes, the Chinese are that way. Patience and Speed co-exist in beautiful harmony there. Whereas if you come to India, you would see Chaos and Order co-exist. I think this is a trait with every Asian country/culture. Utmost dissimilar things exist in peaceful harmony.
And being an Indian, I can tell you that Indian cities are also warming up to a Shanghai-like culture.
After the long depression starting in 1873 and lasting almost 20 years, US took over from Europe as leading nation in farming, production and finance.
During the depression starting in 2008 China took over from US …
Once upon a time in the west just moved more west.
A characteristic I’ve noticed about the Chinese – their willingness, or ability to integrate into other cultures:
They have no problem moving into Africa and doing business, either on the street or at government/ enterprise level.
Their shaolin monks have no problem teaching their arts in NY or SF.
Quite a useful trait when you’re going global.
I think it’s not just the patience and speed that has made the Chinese do so well even in such economic climates. It’s also the fact that they’re so driven to succeed, given the amount of competition they face not just globally, but even amongst their own countrymen in the country itself. I certainly give them credit for their drivenness. Of course, the back side of the competition within their own country also means that they would do almost anything, ethical or not (think plagiarism), in order to succeed.
> Of course, the back side of the competition
> within their own country also means that
> they would do almost anything, ethical
> or not (think plagiarism), in order to
> succeed.
And as an example of unregulated greed and the desire to succeed, take a look at the US financial crisis.
Unfortunately, a lot of otherwise law abiding, very compassionate Chinese are doing unethical deeds just to merely survive.
Hi,Sarah Lacy, i am a developer for app store. i have supplied hundreds ebook to app store. i can make your new book to app store. it’s free.
my email: ijourinc@gmail.com
waitting for your news.
welcome to the true developing country
obey the communist leaders
fear the greed of people
things doesn’t work as they do in your world
you still don’t know nothing
Good luck on your quest Sarah, a book about global entrepreneurship (and i believe its focussed on technology, right?) is a good call. Which countries do you plan to visit?
Brovo,
I think this is a course worth pursuing.World class project and rich revelations and experiences.Did you you say you will be travelling Africa too-Ghana, where the people are hospital.You can rely on my support man, if you should venture into my emerging economy.Thanks man
Sounds like an awesome trip. Enjoy.
In the late 20th century a Chinese diplomat was asked ‘What were the consequences of the French Revolution?. His response – ‘It is too early to tell’.
Good read Sarah. I’m an entrepreneur in Hangzhou China focusing on the fitness industry. I can’t say I agree with you statement:
“Chinese people have always known they’d be one of the world’s major superpowers”
This blanket statement overlooks the complexity of the society. And it reflects an outsiders view of the China as a “Massive Beast.” Most Chinese are optimistic. But, they also have their doubts.
Although they do not admire the fast spending nature of America, many admire America’s status…still.
I do agree with your patience/speed statement, however. It is somewhat paradoxical. Just like the culture.
nature of America, many admire
I do agree with your patience/speed statement, however. It is somewhat paradoxical. Just like the culture.
Im an American who moved to Asia nearly 6 years ago. I spent more than 3 years living in Shanghai, Guangzhou and Hainan Island. My business focus has been web development and I am always looking for good developers. The problem is out of more than 1,000 (not joking) developers interviewed I have found maybe 10 with Linux skills. In other words most developers are .NET ASP Microsoft educated. I have noticed in the past 2-3 years many tech universities are carrying L.A.M.P. classes. But it will take a good 10 more years before China sheds Microsoft as the dominant developer technology.
We have an office in Sanya, Hainan and as we locate skilled developers we move them to Sanya. In case you don’t already know Sanya Hainan is the Hawaii of China, tropical weather and decent beaches. Sanya ironically has nice surf nearly 360 days a year! We give them an apartment, food and a nice salary. Our office environment is fun! We have a big screen TV with American TV shows, snacks and we encourage everyone to exercise. Our number one thing is making sure everyone gets at least 8 hours of sleep.
To be fair I tried living in Hyderabad, India and built a 20 person development team. I can tell you 101 horror stories. The stress level just living in India is very high. The food is costly (western food) and the worst thing about India is the transportation! The Taxi system drives me crazy
The other HUGE issue with India is the workers jump to other companies like most people change their socks. I also find the competitive environment makes me feel constantly concerned about intellectual properties. I don’t know what to say but India would be my LAST choice to build a development team.
Anyway good luck on your book!
Every sarah lacy post is publicising a book she has / or is about to write.
Yawn.
As an expatriate living in China for the better part of the last nine years I have come to understand one key point that is essential to doing business and living in China. This may sound strange, but the longer you are in China the less you know. How can this be possible? Simple, the pie of total information is much larger than what originally perceives it to be. Culture, language, relationships, all have a depth that an outsider has a difficult time sinking his/her teeth into. So, if someone says they ‘understand’ China, they are gravely mistaken. I think Sarah makes some valuable insights into the pace and method to the Chinese growth model, and her discussions with both expats and locals begins to scratch the surface of how things get done. Keep digging, and you will open new doors with new insights.