Why Kai-Fu Lee Turned Down Steve Jobs (And Is Still Cool with That)
by Sarah Lacy on October 15, 2009

Charlie-The-UnicornBEIJING, CHINA– Kai-Fu Lee may have left his post as president of Google China, but he didn’t go very far. While still president he learned that Google was going to give up some of its space at Beijing’s Tsinghua Science Park.

He called the landlord and told him he’d take as much as he’d give him. And now he’s in the next office on the same floor, hoping a Chinese version of Larry or Sergey walks through his door.

As we reported a few weeks ago, Lee is also taking a few Google China staff members and indirectly some of that Google cash in the form of an investment from YouTube founder Steve Chen, among others.

His new venture is called Innovation Works, and it’s a sort of angel fund/incubator to help encourage Chinese entrepreneurs to eschew staid-but-prestigious corporate tech life and start a company instead. I met with Lee this week at his new digs in Beijing and so far, they’re pretty empty. There are a few analysts and engineers huddled by the door, near a table overflowing with different kinds of tea that people have given Lee as a good luck gesture in starting this new venture. (There’s so much tea, in fact, he insisted on my taking a tin.)

That elbow room won’t last: Lee got 7,000 resumes on his first day of business and has gotten some 40,000 total. It’s taking a while to plow through them, but he expects to hire at least 100 more people in the coming months. In fact, between our meeting Monday morning and sharing some Peking Duck later that night, he made four hires. (I shot a quick video with Lee talking more about Innovation Works. Unfortunately, my Flip has died for good, and it’s gone. So text will have to suffice.)

Lee is that rare unicorn-of-a-specimen that Silicon Valley companies and investors salivate over: He’s held key product and management roles at Apple, SGI, Microsoft and Google building a deep bench of respect and contacts in the inner circle of the U.S. tech business, but he’s also a hero to many young techies in China.

Want an example of the former? Back in the late 1990s, the product line he’d developed for SGI was struggling and being sold off to a company that would later be bought by Computer Associates.

That ultimately meant Lee was looking for a new job. His father—a Taiwanese diplomat—had asked Lee on his deathbed to return to China one day, and a job with Microsoft was making that promise a reality.

Lee had decided to take it, but few people knew yet. He went home one day and his wife said, “Steve from Apple wants you to call.” Lee mentally paged through the Steves he’d worked for at Apple—never thinking of the obvious one. Lee had worked at Apple during the bleak years before CEO Steve Jobs returned to the company, or as Lee likes to say, “I was at Apple between Jobs.”

“I think it was Steve Jobs,” his wife said of the caller. Lee insisted it couldn’t be true, since he’d never even met him, but called the number back all the same. It was Jobs and he personally asked Lee to come back to Apple. Lee demurred.

“I know you’re going to work for Microsoft in China,” Jobs said. Lee was stunned. Almost no one knew. For a moment he must have thought his-iPhone-ness really was as all-powerful as the fanbois say. Then Jobs added, “Your wife told me.” When Lee asked why she divulged the closely-held secret she shrugged and said Jobs was so nice on the phone, she assumed he was one of Lee’s close friends.

Lee resisted Jobs, and you could argue missed out on the golden era of Apple as a result. But the Microsoft job meant that Lee was also an early multinational tech manager in China. Since then, between Microsoft and Google he’s given fat incomes and prestige to hundreds of Chinese entrepreneurs, building quite a following in China. (At dinner a young woman shyly came over and asked for his autograph.)

To be fair, Lee has his detractors in China too. Critics question whether the longtime corporate executive has the chops to pick and fund truly innovative ideas. After all, Lee himself said in our interview a few weeks ago that executives at multinationals typically don’t have the hunger to be great entrepreneurs. Others say he’s one of those bridge-builders between East and West that benefits by talking up business in China as being more complex than it really is.

After one meeting and one dinner, I can’t say whether either of those complaints are fair. But after spending several weeks in China in the last few months I will say this: If his well-cultivated reputation convinces more Chinese entrepreneurs to start businesses, that’s good for China and the tech world globally.

(Image of Lee courtesy of Abondance)

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  • charlie the unicorn != youtube fyi.

  • Where are Google, Microsoft, Apple India presidents? Are you reading this guys?

  • Interesting how Lee’s wife felt so comfortable to open up to Jobs. Nice talent to have in your arsenal.

  • Great article, hope you check back in six months and see how it’s going. Tell us how you killed your flip or did it suicide?

  • Charlie the Unicorn rocks!!! LOL!

  • I really want to work for Innovation Works!

    Mr. Lee please contact me….

  • Sarah, I hope you read “Guanxi” before your Kai Fu Lee interview. Very good book with a signficant portion dedicated to Kai Fu’s Lee’s rise.

  • whats the big friggin deal with this guy? does he shit gold? everyone gets excited about him but i can’t point to anything in the real world with his name on it that is notable.

    • I think you get the point that matters, dude. Really. Except the fact that he ever worked for those BIG names, what else did he actually do?

    • Seriously… I worked for this guy @ Cosmo (that division of SGI the article mentions that managed to burn through an obscene amount of SGI’s money chasing insane pipe-dreams of VRML) and while Lee seems/ed like a really nice guy personally, he was a horrible, horrible, horrible leader. He was so easily swayed to make too many ultimately disastrous decisions by underlings that were more interested in personal advancement rather than organizational success.

      In the intervening years I keep reading about Lee and all I can think is that he must have the most amazing personal PR staff in the world.

      I’d also LOVE to see any list of notable achievements that extend beyond the fact that somehow he’s able to bounce from one insanely high-profile and ultimately high-paid position to the next.

      I guess some people are just able to break into that golden zone where personality and social status are enough to keep you rolling along.

  • The Chinese are really breaking out of the Chinese stir fry business and diversifying into other fields like tech I thoughi all you can do if you were Chinese is Wonton Soup and Moo Goo Gai Pan and maybe dry cleaning now I starting to see Chinese engineers and even chinese executives like the lady Ms. Tammy Le she a Principle at Market-Bridge …. go Jet Li !!! Ay Yaaa!!!

  • Thanks for the great post Sarah.

    As a Chinese blogger in the tech field, I know there are different voices regarding Dr. Lee’s incubator. Combing out most of the unreasonable speculations, one of the legitimate questions left on the table is:

    Can a greenhouse flower become a giant tree?

    As you may have noticed, most US internet companies are not doing so well in China, be it EachNet (Ebay), ELong (Expedia), or Guge(Google).

    Why?

    An easy answer is to blame the government (yeah, right, it’s communism and is evil by definition). But if one use his brain and open up his eyes, it’s easy to find Taobao, CTrip and Baidu deserve their success – they fight for it and they got it.

    Will Creative Works create some company like them? It’ll be interesting to see.

  • I still have not found out why he turned down Steve.
    Was that part also in your broken Flip.
    Did you Flip flop ?(ahahahaha)

  • It’s really incredible to see the volume of PR that Kai-Fu Lee has generated with Innovation Works! Now for the hard, long hours in building it! I wish Kai-Fu well. The concept is well-timed, and the cause a good one.

  • haha…what a joke…from outside it’s all good. But Kai-Fu Lee is a fake, or put it more positive way, he is good at person marketing.

    Google China is a mess

  • I can’t comment on what Kai-Fu Lee did in his corporate career beginning with Apple (because I don’t know much about it), but what he did at CMU for his Phd was and still is very impressive.

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