It’s not just Silicon Valley any more

5 min read
Panel on open innovation in Japan at TechCrunch Shenzhen. (Image credit: TechCrunch)

Whenever I go on stage to introduce myself, I always say: tech blogger is the best title I’ve had, ever. As a blogger, I always want to write; as a frequent traveler who gets to see innovation all over the world, I always want to share. But unfortunately, as founder of a company, I have to spend more time on management work. So a big thanks to TechNode’s English media team, who pushed me and also helped me set up this column. And I do hope I can force myself to write more, as a tech blogger, like the old days.

I spent last week at the TechCrunch Shenzhen 2019 conference. As you may know, TechNode has organized the event as TechCrunch’s China partner since it began in 2013, and we’ve seen tech trends come and go. As you can see from the image below, there were so many true innovators who were almost unknown when on our stage but what they work on now is huge in China and the global tech space.

A list of China tech luminaries who have appeared at TechCrunch China events in years past. (Image credit: TechNode)

This year’s TechCrunch is no different, and we managed to keep the standard of high-profile VCs, founders, and influencers.

But to me what stood out this year were the ones that came from overseas.  Just two or three years ago, every time we organized a TechCrunch event, we’d think about which companies from Silicon Valley we could invite to China. But now it’s different—there are loads of good startups in Silicon Valley, but the focus in the global tech space from China is more and more diverse.

Southeast Asia

What we saw the most of this year was Southeast Asia. Quite a few VCs, or even companies, were from SEA. They are looking at the Chinese ecosystem, and they wanted to discuss, meet each other, and meet the Chinese VCs. SEA also accounted for two whole side stages, and on the main stage we also had sessions talking about the region.

Today, you can feel the gap between China and the United States getting further, speaking from a non-political perspective. Frankly speaking, three to five years ago, every time we talked to a Chinese startup, they’d always start their pitch: “I’m kind of like Facebook” or “I’m kind of like Uber.” They’d always use some Silicon Valley benchmark. That meant that their model has been proven by Silicon Valley, so it’s more likely they receive money from VCs.

But now the situation has changed—if you look at all the stages at TechCrunch, and all the Chinese unicorns on stage, they don’t really have benchmarks from Silicon Valley.

However, if you go to Southeast Asia now, there it’s the time for copying from China. I met quite a few SEA-based startups, and when they come to pitch you, they would say something like, what we do is like Eleme, like Bytedance, etc. Even when you talk to SEA-based VCs, they say they want to work with Chinese VCs to co-invest in SEA startups. This is a lot like China VCs a few years ago—then, if you could raise USD money, it was a kind of endorsement.

China tech’s history with Silicon Valley is repeating itself with SEA and China. What’s next? Just to give you an example, in the e-commerce sector, when Alibaba’s Taobao was recognized as a popular e-commerce platform, there were loads of agencies to help traditional businesses set up e-shops on the platform. The next wave is probably going to be more and more merchants, who want to sell stuff not only to Chinese people, but to Southeast Asia. So I’m quite interested in ecommerce agencies like the Lazada alumni-founded one, named Intrepid.

Of course, China eventually outgrew the “as seen in America” approach. In another three to five years, who knows who could be going to Bangkok or Kuala Lumpur to learn from SEA models and bid for VC money?

Japan

For Japan, it’s a different story. We know the mobile internet business China is ahead of Japan, and the language barrier in Japan is truly painful. However, it does not mean Japan has stopped innovation or that there is nothing we can learn from Japan.

This year, we invited a few people from Japanese big corporates, government, and VCs to talk about the innovation situation in Japan, and how the Japanese ecosystem can work with the Chinese ecosystem.

In recent years, when we talked about tech innovation, we talk about the US, we talk about Israel. And we talk about SEA for the market. It is true that Japan does not have that many startups, or you can say at least not many startups from Japan want to do global business. But I’ve started to notice an interesting trend: we see more and more Japanese corporates that have money—and huge resources as well—but they can’t find that many good startups inside Japan. So instead of looking for local startups they can work with, corporates are coming to China, looking for startups that they can work with and then bring the technology back to Japan.

These corporates believe Chinese startups are more aggressive, working even harder than Japanese startups. Coming to China, Japanese corporates want to invest, work with, or buy services.

Europe

With the EU and China, we see something similar to Japan, but a little different.

Like, there’s quite a good few good family businesses, or corporate businesses, which have huge of industrial resources are looking at China. Examples are, BMW brought its corporate innovation program “Startup Garage” to China; Airbus is looking closer than ever into the smart transportation sector in China.

Communication between China and EU is missing. In China we know the AI company DeepMind, but most of us consider it as an American company. It’s actually headquartered in London. Offstage, I met investors from France and other EU countries. Everyone is thinking now is a good time to do something in China. They all agree on this: in tech space, it’s time to educate China, and educate the EU market about each other.

There are still, or at least we still expect lots of, interactivity and partnership between China and Silicon Valley. And technology wise and research wise, there is still lots China needs to do to catch up with Silicon Valley. But the whole tech world is a lot like the mobile phone market: iPhone is still important, but we have many more options besides Apple. Silicon Valley is not the only place to go for technology innovation.