Tech Innovation in China | Hacker News Reader

Tech Innovation in China

wired.com

40 pointsdenzil_correa12 comments

Two huge advantages the Chinese have over Silicon Valley when it comes to innovation: Cost and Market Size.

Cost of innovation is at an all time low and is getting lower in China. VC money is increasing, more talented engineers are on the market and more of them are willing to try start ups. You wouldn't be renting office in San Francisco (a 2nd rate city with 1st rate cost) competing for a small talent pool against tech giants, and hiring/firing employees cost much less. You can hire a great software engineer (great as in they'd have no problem passing Google/Facebook interviews and successfully work there) for about $40k USD/year.

Market size is also tremendous in China. I remember talking to a Chinese engineer and they told me when they turn on A/B test for features, the small percentage of users that gets hit with the test are numbered in the 10s of millions. When you roll out a startup the adoption numbers are staggering, as in even with low marketing effort it's not difficult to see over 100,000 downloads within a week. Silicon Valley started the "fail fast, try again" mentality, and the Chinese has been perfecting it through practice.

One last thing that impressed me: The no-bs attitudes and pure capability of these young entrepreneurs. Few of them are worried about generating PR through the Chinese equivalent of TechCrunch, or super worried about upkeeping a pretentious blog with periodic entries of psuedo-philosophical opinion pieces. Many of these guys were super hard working students their entire life, and passed the absurdly rigorous Chinese University Entrance Exam and got into elite schools, and now believe in the hardworking + intelligence > anything else formula.

We are going to see a lot interesting things from the Chinese tech scene in the coming decade.

The property market in China is extremely manipulated, so you could be asked to pay SF rates in Beijing or Shanghai for space that isn't obviously worth it. And if you want to go after the international market, you can't really do that here: startups focusing on China work great, startups focusing on the rest of the world fail compared to SF given a huge lack of perspective that comes with a closed internet (e.g. what the heck is Facebook? Is that like WeChat?).

Talent...if you can find it, great! But the discount is like 70%, not 50%, that 40K USD/Year (20k RMB/month) dev is going to be junior/not that experienced in a city like Beijing.

I haven't run into these young entrepreneurs yet, though I can totally believe they exist! However, in the bigger companies, there is still deference to authority, lots of face exercises, pretension blogs, and so on. Things are totally moving here, but they are only posed to take over China; they aren't in competition with the valley.

Come to Guangzhou! Rents are sub-Boston/Portland/Denver, and the air quality, weather, and food are better! Plus easy access to Shenzhen and HK.

Agree on the perspective issue. Even crappy US tech companies know more about China than Chinese companies will ever know about the US. I mean, look in the hallways of any US tech company and there are more people from abroad than in a Chinese tech company. People here have a pretty sheltered, ethno-centric outlook which is only an obstacle if you really are trying to launch something international.

The market is incredibly manipulated. You can find reasonable rents in Beijing and Shanghai if you look hard enough. But it's this lack of transparency that works against non-local companies wanting to do stuff in China.

"Things are totally moving here, but they are only posed to take over China; they aren't in competition with the valley."

But which one is more important? If you manage to serve 15% of the Chinese market it will be the same as serving 100% of the American market.

But most successful USA services are successful world wide. China is a 1.3 billion market vs. 6 billion non China market. WeChat will never be as popular as Facebook.

Apart from market size, it's the taste of market and its condition is something that is helping these young entrepreneurs to earn huge profits. One thing that we all know is that in the Silicon Valley or the USA, in particular or most of the market, in general, an entrepreneur with limited budget can get to know about the market taste, its wants, conditions, etc. This makes any firm to enter there easily and any product from any part of the world to dominate and disrupt. On the other hands, this is not possible in Chinese market. An American entrepreneur, for example, can't expand his services to Chinese market. Thus, competition is way more less there. Which means whatever consumers are getting, they are loving it, using it, and making the founder bag profits. This, however, is not that much easy in other market where consumers have multiple choices.

Another neat story from NPR on a specific piece of hardware tech from China: the hoverboard.

http://www.npr.org/sections/money/2015/11/27/457404184/episo...

It's my recollection when they went down the rabbit hole on this one, ultimately it was determined the most likely source was from a person of Chinese descent in Portland Oregon who started a Kickstarter for something very similar to a hoverboard and thus the direct precursor?

From https://en.wikipedia.org/wiki/Self-balancing_two-wheeled_boa...

> Shane Chen, an American businessman who founded the company, Inventist, has made an early claim of inventing the device.[5] Chen started a Kickstarter for Hovertrax, in 2013. In an interview with the Los Angeles Times, Chen voiced his frustrations regarding patent rights in China. He claimed that Solowheel, his self-balancing unicycle, was copied by other manufacturers after it appeared in Happy Show, a Chinese television show.[6][7] In August 2015, Mark Cuban announced plans to purchase the Hovertrax patents from Chen.[7] Also in 2015, the American company, Inventist, claimed to hold patents and announced its intent to pursue litigation.[8]

> The fast pace of the Chinese manufacturing industry makes it difficult to pinpoint which Chinese company was the first to manufacture the device. According to Wired's David Pierce, the device was likely invented as the "Smart S1" by Chic Robotics, a Chinese technology company founded in 2013, and associated with Zhejiang University.[4] The Smart S1 was released in August 2014, and found success at the 2014 Canton Fair trade show. The company patented technologies associated with the board, but due to China's lax patent enforcement, the product was copied by several Chinese manufacturers.[4]

> As of June 2015, the board is made by several knockoff manufacturers in China – a pattern common in the country's technology and industrial sector.[9] The copies vary greatly in price and quality, and may exhibit various defects.[4] Most of the boards are produced in mass manufacturing factories in Shenzhen, China.[10] Some newer boards have incorporated Bluetooth speakers, allowing the driver to play music.[11]

That's an interesting rundown. It's sad the guy got essentially fleeced of his inventions, but in a karma like fashion the outfit that would have benefitted in turn got fleeced.

I'm going to guess Kickstarter is a decent place to mine for ideas in a place with lots of line manufacturing plants and a loose regime with regard to patents.

I'm wondering if Kickstarter isn't firewalled.

Lower opportunity cost makes Chinese young adults more willing to try new things, including starting their own business. In developed countries, salaries are much higher. In China, university graduates only get RMB3000/ month(less than USD500). They have less concern on what they have to give up. This makes Chinese more willing to gamble on new opportunities.

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