Silicon Valley’s Culture, Not Its Companies, Dominates in China
nytimes.com
nytimes.com
It did lead to people driving down our street, stopping, and taking a picture of my house and the houses around it. And asking, usually in broken English, where Silicon Valley actually was. When I answered I would suggest they put in the names of famous places in Silicon Valley. For a while I pondered a side business selling Chinese language maps to the valley from the front yard.
Eventually Google recalculated, or they realized it was annoying their maps users to land in what seemed like a random neighborhood, and moved where the push pin hits to an intersection of two fairly busy boulevards. Thus taking pictures and asking for information has become significantly more risky for map users, and our little cul-de-saq has less clueless traffic as a result.
It also crushed my dreams of selling my house to some billionaire who wanted to live right in the center of Silicon Valley and was willing to pay over market for the privilege to do so :-)
Hacker Dojo used to get some very attractive Asian women who were very interested in the details of what people were working on, and understood the technology. They had business cards with vague titles. They disappeared, presumably after the Second Department of the PLA had found out whatever they wanted to know.
Or determined that Hacker Dojo had very little to offer in the way of valuable intelligence. (In the geopolitical, not IQ sense.)
Echoes of cargo cult science[1].
Chinese could easily copy Facebook and call it something else but with built-in restrictions that they're looking for. They take our tech and perfect it for their culture. That's not identical to a guy in a hut with a wooden walkie-talkie. Sorry.
The only difference would be is that it's a closed network. Doesn't mean it's "less" or "primitive" or "savage" when compared to Facebook. Just different.
They'd like to have some of the magic fecundity of the Valley too -- and why not? Though copying the overt structure doesn't get you there -- many many many have tried, including many in the USA (https://en.wikipedia.org/wiki/List_of_places_with_%22Silicon...). Hell, there are many studies and theories of how the Valley got to be where it is, with no consensus. I have commented further down in this thread on some unique or highly unusual factors that make it so effective (for me) right now but I have no solid theories of how it got to have the magic mix it does.
(legitimately curious, please don't take my question wrong)
There's a lot of visible froth about the valley available in the press, most of which is useless bull. Folks are starting companies, getting funded, and shipping product to customers without bothering to make a single press mention or crunchbase entry. Many of them working with folks they've worked with before. None of that culture is visible from outside the valley.
The thing to pay attention to isn't whether they're copying it exactly right, it's that they're copying the spirit and adapting it to their own circumstances.
EDIT: s/worldview/world/
My guess is that the thinking is that they'll be able to do it even quicker than their western counterparts merely by numbers.
A couple of years ago I worked with a team of about 35 in Europe that made a global product that had 250M global monthly users.
Meanwhile in China, the team that had been set up to adapt our product there ended up being about 150 people. 90% of what they published there was made by those 35 people in Europe.
There was a lot of political pressure from investors etc to match the effort of a local competitor - who had sort-of (naturally they missed all the good, non-obvious bits) cloned our product with a staggering staff of 600 people.
So probably a little bit of both.
Most NYT articles on China have very neutral tones. It is only on interpretation of the reader is subtle bias detected, usually as a defensive reaction. Or do you have a good example in mind?
For example, a design firm I worked at in Taiwan absolutely had the margins to pay its employees better than it was, but non-technical junior employees were making ~30,000TWD (~1kUSD)/month with 60-70 hour workweeks. The designers made about 45K TWD, and the engineers about 60K TWD, each successively working more sane hours, but still much more than their American and European counterparts. Benefits were laughable. Not only were the hours absurd, they were inefficient - people would stay in the office because the boss hadn't left yet, the boss hadn't left yet because bosses should stay late. Meetings were comically disorganized and useless. Lunches were considered "unpaid" time. Holidays on Friday meant you had to come in on Sunday to make up for "lost time." Inefficiency combined, painfully, with a boss's idea that more hours = more work, and everyone suffered for it.
Maybe I'm being overly optimistic, but I hope to one day move back to Taiwan, pop open a company in design or hardware, pay 120kTWD/mo to my staff (that's 44k/year USD), focus on efficiency, employee retention, develop, and benefits, and start poaching the top talent in the country. Efficient practices would mean I'd be paying less people more and getting more bang for my buck as my employees would be highly talented and still getting as much done as twice as many subpar, overworked employees. It may not even cost me more, but if it does, not having a bunch of old and useless middle and upper management sucking up profit off the margins, and not having to funnel money to the pockets of Mainlander investors would more than make up the difference. I've developed the fantasy to the point that I've thought perhaps I'd catch media flak over my "stupid" high wages, and the debates I'd cause would only generate more interest and attention in my company and product - something like Stratton Oakmont or Gordon Ramsay's first restaurant, where he kicked out a food critic he didn't like and exploded in popularity for it.
I mean, I quit my crappy design job there to work 16/hour weeks as an English Teacher and pulled in 60k TWD/mo for my efforts. It's totally fucked in Taiwan.
EDIT: I'd like to add that when it comes to health benefits, they aren't really a thing in Taiwan because the cost of healthcare is shockingly cheap - and that's before you get national healthcare insurance, which is standard for employment. I mean benefits more in the sense of sane lunch breaks, vacation and personal time, options/stocks, bonuses, continued education, commuter benefits, etc. These essentially don't exist in Taiwan.
That being said, I was a white, foreigner, part-time English teacher in Taiwan. I had an actual Taiwanese teacher that worked full time with me teaching the classes that made less per month. I had Chinese English-teacher friends that made less than me. Foreign teachers typically teach in "buxibans," or "cram-schools," a remarkably profitable industry that soaks up absurd tuitions from the Taiwanese upper class parents so that their kids can be exposed to a native English speaker for a couple hours every day.
Chinese culture in general does have a much higher respect for Teachers, but you'll still make more money as an engineer.
EDIT: I rant a lot. My actual reply should be - technically engineers do make more than teachers in taiwan, just not more than foreign English teachers. Foreign engineers pull the same salaries they would back home - i.e. like 500% more than their Taiwanese counterparts.
Do you mean minor but incompatible gauge differences?
In India there are two main gauges (last I checked, which was a while ago), broad and meter gauge, but there is a lot of difference in the sizes of the two (bigger long-distance trains run on broad gauge and local smaller ones, like for remote or hilly areas, run on meter gauge). Wondering if you mean minor differences between gauges in adjacent countries, like 5.4 feet vs. 5.7 feet, (made-up numbers) which is only 3 inches, but would still make them incompatible.
Except the obvious "just move all cargo to a different train" solutions to the issue include swappable bogies and wheels that can be moved on the axle in a special device.
EDIT: wikipedia has a color-coded map! https://commons.wikimedia.org/wiki/File:Rail_gauge_world.png
Then yes, all of them, every industry.
Do their culture allow for experimentation? For disregard of hierarchy?
You need a license for having a website in China. Very innovation-friendly /s
The same goes for the US.
China doesn't have "rule of law" so much as it has "rule of context"
The same goes for the US, just to a different degree in different contexts.
I think that's somewhat telling in terms of which legal system is trusted more.
It would make sound financial sense for any rich person to move as many assets as they could out of the country, regardless of whether the nation's institutions were trustworthy.
> The same goes for the US.
Different scales! One has third-world law enforcement issues, the other has first-world law enforcement issues. At any rate, the US doesn't put out so many laws (at least at the federal level) that it knows it can't enforce because enforcement would destroy the economy, while China has no problem doing that. Heck, China has an entire "constitution" that guarantees many rights unequivocally (freedom of speech, assembly, all the good stuff), which is then unilaterally ignored. Say what you want about the US, but the supreme court isn't that horrible or ineffective (yet).
> The same goes for the US, just to a different degree in different contexts.
Yep. It is never black and white, just a very dark gray vs. a much lighter shade of gray.
Exactly what is the difference? Is it what you refer to below?
At any rate, the US doesn't put out so many laws (at least at the federal level) that it knows it can't enforce because enforcement would destroy the economy, while China has no problem doing that.
Funny, but the rhetoric from the political right in the US would have one believe this is happening. (There is undoubtedly some self interested bias at work there.) I did have some experience with export regulations when ordering a piece of industrial equipment from Guangdong province in China. (A knock off of a J-Cut laser cutter.) The Chinese company was surprisingly diligent in their technical support. However, they cheerfully agreed summarily then ignored my requests for the proper paperwork. The expediter I worked with on the US end explained that the US regulations that came up in response to 9-11 were basically unenforceable, so everyone exporting from China just ignored them.
Heck, China has an entire "constitution" that guarantees many rights unequivocally (freedom of speech, assembly, all the good stuff), which is then unilaterally ignored. Say what you want about the US, but the supreme court isn't that horrible or ineffective (yet).
The supreme court might work, but the US isn't perfect either. The US doesn't have "innocent until proven guity" enshrined directly in the constitution, though it's taken as being implied by other parts of the law. However, local governments do abrogate this principle on statistical grounds.
Yep. It is never black and white, just a very dark gray vs. a much lighter shade of gray.
I suspect the 5 downvotes were from people with rather black and white viewpoints.
Of course the US isn't perfect! No one is. I don't see how that is relevant to "doing business in China" and "how business works in China". This isn't a face/pissing contest.
Did I say that it was, or did you imagine it to be? I think it's instructive for people in the US to realize that our system has the same kind of flaws, and that the difference is just one of degree. In fact, I think it's dangerous for people in the US to be ignorant of these facts.
It seems to me that in many such discussions, some participants regard the US as something like a workable approximation of perfect. The sentences are often written this way: it suffices to say that China does this or that. That's like talking about an outbreak of E.Coli and not understanding that just about any creature with a colon contains a bunch of E.Coli. The significant idea is that the bacteria gets to places it shouldn't. In this analogy, it's not conveying the complete picture just to say there are bacteria. Since I pressed people in these threads, people specified exactly in what contexts with regards to business and IP that China's approach to law made a difference. Just to say that China selectively enforces laws 1) conveys the false picture that the US doesn't do this and 2) doesn't specify the exact problems and can be reduced to, "China primitive and bad."
I probably wouldn't disagree with anything you had to say on this matter, but I want substantive discussion and think it often stops short.
The fact that I could point such facts out, and people would react so strongly to them because of the possibility they represent "the other side" is another interesting data point.
I was talking about my own observations working in China, how we couldn't do the same things that the local companies could. It is not just "China primitive bad", it is "things work differently in China, don't you know?" as any Chinese would tell you on your first day of work!
Its like we were having a conversation about a bad pollution day in Beijing, say 600 2.5 PPM, and you pointed out that LA was currently at 90, so the Americans living in Beijing had no right to complain about this.
Please provide a quote that indicates I held anything resembling a position like that, or admit that you projected that.
Even French and other European nations which use Civil Law instead of Common Law systems operate a good bit differently than the Anglo law systems. In fact, Chinese Law is kind of a Civil Law system mixed with Soviet Socialist Law and Traditional Chinese Law, so you'd have much more luck comparing German Law with Chinese Law.
But to then equivocate between US and Chinese law, calling them basically the same, it ignores larges differences and for seemingly no benefit.
If you wanted to say Hong Kong law system and US/UK law systems were so similar that the differences in this conversation aren't worth discussing, that's one thing.
But Mainland Chinese law, the Socialist Law system, is very different. Their Western Civil Law + Soviet Socialist Law + Traditional Chinese Law system is different, especially the Traditional Chinese legal influences, which is the topic of discussion here: how native Chinese companies can often navigate traditional law while foreign companies are held to a more strict western-influenced civil law standard.
No. I'm just observing a few factual items, like the New Hampshire law that defines a brothel as 5 or more unmarried women living together under the same roof. There are also many more laws in the US than are enforced in practice. Our Supreme Court does get around to invalidating some of them, and they arise from a very differently structured system, but the US clearly has these too.
https://en.wikipedia.org/wiki/Sodomy_laws_in_the_United_Stat...
The "false equivalence" was only in your mind, not in my text. It was only in how you imagined my motivations must have been to write such a comment, not any content of the comment itself.
It's sad that you bristled so indignantly at my words that you were unable to think them through and form a good understanding.
In your haste to screech that I put words in your mouth, you in turn became the very object of your scorn and put words in my mouth.
Let's be frank:
Silly archaic laws like NH's brothel law are wholly unrelated to Business, and if a business in NH or America formed to take advantage of archaic laws they would be smacked down aggressively by a court or legislature.
That is a wholly false analogy to the Chinese Traditional and Socialist Law systems, which have precedent and are aggressively used, today, in today's world, by natives and native businesses.
We're discussing a complicated 3 headed legal system where natives have a different experience than foreigners. Your NH brothel law, and American law in general, DO NOT OPERATE THIS WAY. It's not three headed, it's one headed. It's not an amalgamation of 3 disparate world concepts, it's an evolution of 1 concept.
What a terrible analogy, what a terrible reply.
Really now. You speculate on my motivations/intentions in black and white right here: "I think you're falsely equivocating the British-inspired American Common Law system with a fundamentally, institutionally different Chinese concept."
Silly archaic laws like NH's brothel law are wholly unrelated to Business, and if a business in NH or America formed to take advantage of archaic laws they would be smacked down aggressively by a court or legislature.
I never said otherwise. However, thanks for writing the above sentence, that cuts to the heart of the matter. I find this useful and informative.
We're discussing a complicated 3 headed legal system where natives have a different experience than foreigners.
And I deny this, where? Please look back at the comments. I'm not saying any of the things you say I'm saying. Rather you infer those things and run with them. Provide a quote that shows otherwise. In any case, thanks again for clarifying what the effective difference is.
I wonder if you even live in North America, the difference is night and day.
If I was in China and a company violates my IP and trademark, what punitive measures are enforced to ensure that my brand is not damaged as a result of knock-off products that ultimately turns out to be unsafe?
What if you bought an iPhone only to discover it was a fake and customers are uploading burning batteries with the Apple logo on WeChat and Weibo?
Clearly such practices are not allowed in North America or Europe and I can rest assured that there's very little chance of that continuing. There's no middle ground, it's
A) did you use their trademark?
B) If yes, you broke the law.
C) Enforcement of the consequences.
D) Scares everyone else to follow the law
What possible context do you need here to justify trademark violation? Does China understand the value and role trademarks play? Without a clear authenticity, you can't control the quality, and the consumer and the producer lose. The economic loss as a result of not enforcing is great enough in the long term that the Western nations have long adhered to it.
Being fair to China, it's still a growing economy and it's learning all these pieces. I feel like the future Chinese economy will be very similar to the US, and only then, will it truly shine. Unfortunately with a communist themed leadership where a central government is controlling everything, such maturity will not come in time and it will ultimately be it's undoing.
The rule of law is interpreted as it is. Context should never be used as an excuse to say that the law doesn't work. Clearly, in the US or Canada, any trademark violation is enforced swiftly.
Are you seriously trying to suggest that is the case in China?
Ah yes, the knee-jerk reaction to simple factual statements that reveal the biases of the commenter, through how they imagine the other comment was motivated. No, sorry, but the statement is factual. Both the US and China have laws that are selectively enforced.
I wonder if you even live in North America, the difference is night and day.
No one said anything about relative severity. That part is entirely in your own head. If you disagree, please provide a quote. Also ask yourself, why do you imagine such motivations, and react so strongly? I think that would be most instructive.
I was born in and have lived in the US all my life. I have an Ivy league education and lots of life experience at all levels of the socioeconomic ladder. I think I have a good sense of this society's biases. (From both the political left and the right.)
The rule of law is interpreted as it is. Context should never be used as an excuse to say that the law doesn't work.
In the US, context is used to abrogate principles as fundamental as "innocent until proven guilty." That's simply fact. I never said the US was just as bad at protecting intellectual property. I merely stated that both the US and China bend the rule of law based on context. I didn't specify the contexts. You imagined contexts that you could get incensed about, apparently.
Do you even live in China?
The PLA/CCP are not anacrhonists who want to keep the country backward. They want the country to advance and become a leader in all areas but to the benefit of the PLA/CCP (and of course, the understanding is that will by and large be good for the people, even if they don't know it or want it).
The valley is a very profitable bubble that thinks it powers the world - but it's still a bubble.
Mark my words. Beijing is the biggest competitor to Silicon Valley in the coming years.
Why aren't there more companies in SoCal? Weather's nicer and so many more people live there. Then we could use Santa Clara for prune farms again.
SF has a different culture than the Valley; the peninsula is its own, highly technical world which SF has fewer tech businesses (though more than it used to). Sure SF has some crazy building constraints, but in the larger contexts (good universities, good laws, a much more "anything goes" environment) the whole region is really strong. SF has had a historical tolerance for crazy people since the gold rush (that kook might have $10K worth of gold in his pocket so if you send him away you won't get any of it) that few other places have had.
So cal (both SD and LA) has a different culture, more extractive, and has a different mix (lower university density for example). Remember when the film industry fled the east coast patent monopoly they went to the Bay Area first, only moving to Hollywood because of the sun (they still had to film outdoors in those days as artificial lighting wasn't good enough).
Been hearing that since 2009. Any day now. I'll believe it when Peter Thiel moves to Beijing along with other Silicon Valley VC.
Obviously that isn't happening and why, the richest Chinese citizens are moving to SV permanently. Why would they permanently move all of their assets if they believed in China?
There's an important distinction between imitation and innovation. What Chinese product have reached the scale American grown SV companies outside of their own borders where they won't have the same level of protection from their own government?
I can't think of any. I don't know any white people using WeChat or Baidu because FB messenger and Google isn't good enough.
It doesn't help the rest of the world speaks English while Chinese pumpers insist that eventually everyone will speak and write Mandarin, which is syntaxtually and linguistically a lot harder to learn and use. I'm certain Japanese thought the whole world would eventually learn Japanese...in 1989.
It's hard to have an objective debate when the answer to everything is because China is big.
Okay SV has its advantages but this is just American imperialism at its finest.
American imperialism is such an overused propaganda term from the Soviet-friendly bloc., it's actually quite laughable.
The more accurate term is American economic hegemony. The rest of the world relies on American institutions that ensure trade between countries flourish because they have long understood that without economic activity and dependence, it has always led to conflicts.
Without physical force you cannot act as the single source of truth for everybody trading on your platform. This is why America has the largest and most advanced military in history. They understand the fundamental coupling of diplomatic projection and enforcement of their economic policies.
Is America perfect? No. Are they good in all intentions? No.
But it works. There has been no world war 1 or 2 scale conflicts for quite some time now. Countries are now tightly ruled by multi-national corporations with backing by central bank that makes compromises and wins concessions according to American policy.
It's very expensive and tough to offer an alternative, although China seems to have the right idea by starting AIIB etc., but everyone is wary about the strings that come attached with it, as they've inevitably always has been from American monetary foreign policies.
The devil you know is better than the devil you don't. China is a big unknown for the rest of the world. Americans have been around and will be around for this century, unless China successfully manages to usurp their military power, which doesn't seem possible since their military complexes haven't even matched those of the Russia. For instance, producing a stealth fighter from stolen blueprints from Lockheed Martin but not able to produce a jet engine and relying on Russia (who are also wary of having their tech stolen) who sells them expensive crap.
If America is an empire, great, because I shudder to think what a Russia or/and China hegemony is going to look like.
Take a look at Kleiner Perkins. KPCB has offices in Menlo Park, San Francisco, Beijing and Shanghai http://www.kpcb.com/china
http://www.forbes.com/sites/ceibs/2014/09/19/chinas-many-typ...
Clearly, KPCB's millionaire VC's aren't buying a high rise penthouse above Beijing's cloud of pollution, and neither are China's rich, and neither are their offsprings attending Beijing university but prestigous US institutions.
For sure there are many Chinese moving to SV, but certainly less willing to do so than compared with a decades ago, and more common that people already in SV moves back. It doesn't mean immigration to US would be less though, when the best people don't want to come, there will still be tons of other people that do.
It's an entirely different situation for those who are familiar with Chinese culture and speak the language going back to China to do business. It's another for non-Chinese individuals of high net-worth to uproot their American life for a foreign one.
If some remote time in the future, when Trump's offsprings send their offspring to Beijing University instead of Harvard, then we would know the tide has turned-this new China offers more or less the same benefits and comfort America provides to it's elite.
Obviously, it's a one way street right now, in our direction.
Masayoshi Son made lots of fortune investing in Alibaba in its early days, and Warren Buffett has long known to be investing in China. It's not unprecedented. Chinese companies like Baidu and Alibaba are also investing a lot in SV companies. Neither of these activities really have further implications.
Heck, even Chinese VC's are massing their investments in US companies, it hasn't been the case for US capital. Even in developed economies like Japan and Korea, US based VC's are largely uninterested.
I'm not discounting China's economic rise and it's growing startup scene. I can see the entrepreneurial spirit is there but there are no evidence to suggest it's any different than other country's startup scene. There's simply more activity in China because of it's sheer population, there's little to suggest it even meets the same level of quality outside of China.
Warren Buffett has largely pulled out of China as a result of him selling his Sinopec shares. I'm not aware of him investing in Chinese startups.
The fact that Alibaba and Baidu is investing in SV companies but not Amazon and Microsoft in Beijing companies signals that even the Chinese side regard US in a higher light. It has to because why would they risk doing business with an ideological enemy? Because you can trust the US won't interfere with free market practices unlike China's active protectionism and unfair laws against foreign corporations investing in it.
It should be pretty damn clear where one would have a better chance to succeed in, one where free market is practiced and enforced or another where the centralized government actively interferes and seeks to practice favoritism for their local brands.
As an outsider and non-Chinese, the odds are stacked against us going into China. However, such barriers are not present for Chinese VC's coming into the US until recently with the blocking of core industrial/security related deals. China has certainly earned the reputation of stealing technologies and it's only natural for the US to practice due diligence.
For example, Masayoshi Son had no problem buying US telecom companies. His investment in Alibaba has been great but it's unlikely that he will be able to control his stake or wealth in the future if he suddenly finds himself in the cross hairs of the Chinese ruling party. International laws simply are unlikely to be respected and enforced inside China than other US allied nations where they can project their interests.