William Bao Bean
Rebecca Fannin: Silicon Valley Moves East?
Rebecca Fannin, author of the recently published Silicon Dragon, adds her voice to the debate between William Bao Bean - Expect more Digital Garages in China - and Vivek Wadhwa - China is NOT the new Silicon Valley - about whether China’s tech sector is creative.
Not surprisingly, given the title of her book, Fannin argues that China offers a great deal of digital creativity.
Does she convince you?
Vivek Wadhwa: China is NOT the new Silicon Valley
While William Bao Bean said in a recent interview that we should Expect More Digital Garages in China, Vivek Wadhwa disagrees, asserting that China is not innovating and has still has not moved beyond copycat status.
“China is simply unable to innovate,” said Wadhwa, a Harvard fellow and Duke University professor. A former technology entrepreneur, Wadhwa now specializes in studying business creativity and innovation.
China’s tech economy is built on copycats that totally lack any sort of innovation, particularly given the amount of money spent on research and development by companies and the government in China, Wadhwa said.
As to Bao Bean’s assertion that creativity and digital garages will be inspired in part by the high level of investment brought in by foreign venture capitalists, Wadhwa said: “There is a lot of money being wasted by a lot of VCs in China.”
China’s younger generation is extremely creative, but those running China’s research and development are not bringing anything new, Wadhwa said.
Asked for numbers to back this assertion, Wadhwa said that the numbers tell the exact opposite story. China files a large number of patents and produces a large number of research-related papers, but there are few actual innovations coming out.
Nonetheless, those good number hide a total lack of creativity, based on Wadhwa’s qualitative analysis.
Wadhwa said the exact opposite seems to be true in India, where relatively little is invested in research and development. India has fewer patents and papers than China, but the country is building itself into a innovation powerhouse.
The fundamental difference, Wadhwa said, is that Indian engineers are encouraged to think beyond their narrow role and build more innovation into their activities.
William Bao Bean: Expect More Digital Garages in China
Long belittled for ripping off Silicon Valley’s successes pixel-for-pixel, China’s web entrepreneurs are now starting innovate, argues William Bao Bean, former analyst at Deutsche Bank and now partner at Softbank China and India Holdings.
Why?
1- Ecosystem - For the first time China now has the large crop of bloggers, VCs and entrepreneurs necessary for business creation.
2- Foreign VCs - Silicon Valley VCs have now actually started setting up shop in China, something they have not done in any other country. William cited as an example his own fund, which is the third Softbank-backed fund in China.
3- In China, less is more - A good idea in Silicon Valley will attract several hundred thousand dollars in angel investment, while a Chinese equivalent will attract one quarter that. The good news: “You can get a lot further on US$50,000 in China than you can with US$200,000 in the US,” William said. A US$30,000 per month burn rate in China is equivalent to a US$300,000 burn rate in Silicon Valley.
To support his argument William cites a company that he recently joined, iTalki, as an example of a Chinese company innovating on a global scale. iTalki is a language exchange site with a global user base that supports more than 100 possible languages. While it does copy some good ideas from other sites, William claims iTalki is the world’s leading language exchange of its kind.
William’s conclusion: “You will soon see an awful lot more digital garages in China.”
What do you think? Do you agree?
William Bao Bean: China’s one child policy and the Internet
I discussed the impact of China’s one child policy on the Internet with William Bao Bean of Softbank China & India.Growing up in a one-child household makes Chinese children lonely and keen to connect, hence the obsessive use of the Internet by China’s young generation. Chinese, Bean says in this 2-minute video, are much more likely to connect with people than their counterparts in other nations.I would add to the incentives for going online the censorship of state-owned media. The low quality of the competition gives the Internet an added impetus.The implications for Internet use should be clear: Not only are there more people using the Internet in China than any other nation, but they use it with a passion seen in few other places.
William Bao Bean
Formerly a technology analyst at Deutsche Bank, William Bao Bean started in March 2007 as a partner at Softbank China and India Holdings.
AdTech: William Bao Bean on China’s Internet youth
William Bao Bean, a former analyst at Deutsche Bank and now partner at Softbank China and India Holdings opened AdTech with a quick rundown on Internet usage by China’s youth.
China’s young Internet users interact more online…
Nearly 70 percent of Chinese youth use social networking sites and they have a lot more Internet friends than in the US. Chinese have 37 friends whom they have never met before, whereas US youth have 18 online-only friends.
…download more music…
Nearly 60 percent of youth in China download music, compared with 32 percent in the US.
…enjoy playing free games…
China has 40 million gamers, but only 21 million pay. Advertising supported gaming is gaining traction.
…watch more Internet video than US youth…
The video platform Tudou (which claims 47% China market share) claims 15 billion minutes uploaded per month vs 3.5 billion for YouTube.
Average session Tudou 40 minutes vs 15 to 20 for YouTube
Tudou is now launching an ad system where ads come before the videos.
…and even prefer Internet video over television…
US vs China
18% vs 33% Watch video online
15% vs 27% Watch full length video online
45% vs 30% Turn on the TV to watch a specific television show
…yet, online spending remains relatively low.
While the total adspend of China will be $25.8 billion in 2007 only about 4.3% of total goes online (compared with 12% in the USA). That said, online spend is growing strongly, with 55% growth in 2007. Search ad spending in particular is expected to grow 64% in 2007 and 2008.
Technorati Tags: AdTech, AdTech Beijing, Beijing, China, Softbank, Tudou, William Bao Bean
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