In 2009, then-Google executive Kai-Fu Lee wrote a letter to Chinese college students discouraging them from the start-up world. Young people then simply weren’t ready to strike out on their own, he said. The gist, he said: “Don’t start a company. It’s tough. There are wolves out there.”
Today, he says, China’s young people are themselves proving to be an innovative pack. Internet availability, manufacturing know-how and the smartphone revolution have fueled a surge of Chinese startups in China over the past few years, many run by members of a post-digital generation of youngsters. The rush has led to a wave of investment in Chinese startups by investors looking for the next Alibaba, and thrown into question China’s longtime reputation as a market dependent on copycatting.
Back then, “there were so few serial entrepreneurs in China,” he said on Thursday at Converge, a technology conference co-hosted by The Wall Street Journal and f.ounders. “We really had to find either very young people or find professional managers or senior engineers out of companies like Google and Baidu and help them start a company.” Now, he says, “there are serial entrepreneurs everywhere.”
In some places, the rush may be getting ahead of itself. Mr. Lee—now chairman and chief executive of investment firm and tech incubator Innovation Works—sees “totally crazy” valuations among Chinese tech initial public offerings. Many of the best already went public overseas, including in the U.S. The few left in China “have been blown out of proportion,” he said, adding, “everybody’s chasing those few stocks.”
But overall, he says, “I’m very bullish about the future.”
Mr. Lee, famous in China for his roles at Google and Innovation Works, is also a social-media presence. He says that since forming Innovation Works in 2009 he has seen attitudes change among young Chinese.
“They grew up their total lives on the Internet, unlike us, who have all this baggage,” he said.
That’s potentially good news for Beijing, which is looking to sustain growth by broadening the world’s No. 2 economy, making it more than the world’s factory floor.
Innovation may take a different form than what the U.S. expects, Mr. Lee said. Innovators in China and elsewhere, rather than inventing the next iPhone, “can change the world because of a very clever business idea.”
“China is completely ready to build a Facebook-equivalent type of company, an Uber-equivalent type of company, in many other areas, because the market is very large and the people are very innovative,” he said.
Innovation Works currently sees promise in startups with products like a piano that can teach the user how to play, a household robot and even an online joke platform “for people to share the embarrassing moments in their lives.” And then there’s a venture built around a Chinese girl band, SNH48, that takes a page from Japan’s AKB48 and hopes to make money selling virtual products to an online community of fans.
Even if many of the ideas from China’s startups are themselves derivative, he said, “they will wow people.”