A recent researched showed that in China, about 50% of the graduating college students are interested to start their own business as oppose to 65% of the students in America. This is a drastic increase from the generation of their parents who grew up in the Cultural Revolution era. Many of these students have decided to take a leap of faith and broke free from the traditional thought of “swallowing bitterness” taking on, an ever increasing popular career path, their own start-up.
Where westerners stereotype as the land where manufacturing jobs are outsourced, cheap labor, and a country ran by an elite few, Chinese start-up gaining momentum within the venture capital community and creating value by significantly redefining many American concepts, if not, creating new ones themselves.
Prime Example for Value Creation
WeChat, for example, is redefining the way how instant messaging work. Instead of one having to looking at the screen and type, WeChat allows one to hold a button on the screen to record a short message. In order to send the voice message, one only has to release his or her thumb giving off the feeling that it is like a walkie talkie.
Furthermore, WeChat includes other features not found in other IM apps. It allows you to see who is within your vicinity (say, within 5 miles), allowing you to chat with people nearby. Personally, I have used this feature and have made several friends. It is especially useful for people like who travel a lot to meet the locals and make friends quickly. Another, rather entertaining feature, is the Shake feature.
If you are a person who is into making friends on a whim or you are just simply bored, there’s another fun feature for you. Once you shake the phone, you can see who else shook the phone and you can send him or her a message.
We can talk forever and not come to any conclusion. To look at the broader picture, China is home to nearly half a billion internet users, twice the online population in the US. It is also home to two of the world’s top five internet firms by market valuation.
In 2011, $11.7 billion were invested in VC funds for 1401 deals. In the internet space, about 1000 deals were made during the same period representing $6.9 billion in funding. Furthermore, this is an increase of 71% increase in the number of deals from 2010, which came out to be 817 deals, and an 117% increase in VC funding.
Central Government’s Attitude
Another jump-started in the Chinese start-up mentality is Chinese government’s active push for domestic entrepreneurship.
There are many programs within the Chinese government for start-ups. The benefits include start-up funds, matching funds, discounted office space, registration assistance, tax benefits, and more.
In addition, Chinese government is actively recruiting talents from overseas such as in United States, promising superb benefits, to work at science parks in addition to fully fund students to be educated abroad, creating a surplus of talent.
It is no doubt that China is on the rise, especially in its class of entrepreneurs. It is no doubt that what the trend may be for the future. Well, for one, Chinese companies will start to dominate the global scene and in a few years, I would not be surprised to see people using electronic products as well as apps that are ‘made in China’.
What is more elusive is the fact that China already has an aggressive homegrown venture capital industry and these firms are taking leaps across the ocean to invest in American start-up firms.
With the current rate, it would not be surprising to see ‘The Next Big Thing’ down in Mountain View, California, to be Chinese-venture backed, and even spearheaded by a Chinese CEO.