Sil­i­con Val­ley keeps do­ing what it does best — spurring star­tups

China Daily (USA) - - ACROSS AMERICA - Chang Jun Con­tact the writer at junechang@chi­nadai­lyusa. com.

Sil­i­con Val­ley over the week­end lived up to its rep­u­ta­tion as the world’s cen­ter of in­ven­tion and in­no­va­tion by host­ing a se­ries of tech-savvy sum­mits fea­tur­ing in­vestors, en­trepreneurs and in­dus­try men­tors from around the world.

Among the flurry of pro­grams and agen­das, the DEMO CHINA Sil­i­con Val­ley Sum­mit seemed to of­fer all of the mak­ings of a feast for startup ex­plor­ers.

The sum­mit, spon­sored by me­dia com­pany En­tre­pre­neur China and staged at the Santa Clara Con­ven­tion Cen­ter on Oct 29, was ar­ranged around such top­ics as com­par­ing the en­trepreneur­ship cul­tures of the US and China, cross-bor­der in­vest­ment and the value dif­fer­ences among in­vestors.

Ac­cord­ing to Joe Wang, a part­ner at En­tre­pre­neur China, his com­pany is align­ing re­sources at home and abroad to help Chi­nese star­tups achieve their goals and cat­alyze en­ter­prises to grow rapidly.

“With our strate­gic re­la­tion­ships with world-class in­di­vid­ual and in­sti­tu­tional in­vestors in both the US and China, such as IDG Cap­i­tal, Se­quoia, Ten­cent, Qual­comm and DCM, we are able to help en­trepreneurs and star­tups de­velop well-rounded growth plans and lo­cate in­vest­ment,” Wang said.

Hans Tung, man­ag­ing part­ner of GGV Cap­i­tal who has been ranked as a top VC on the Forbes Mi­das list since 2013 and has been rec­og­nized as one of the Top 10 most en­trepreneurfriendly VCs in China, was in­vited to talk about over­seas mar­ket ex­pan­sion at the sum­mit.

A smooth mar­ket ex­pan­sion for Chi­nese com­pa­nies out­side of China re­lies on hir­ing lo­cal tal­ent, said Tung. With­out fa­mil­iar­ity with the lo­cal startup ecosys­tem and com­pre­hen­sive un­der­stand­ing of lo­cal rules and reg­u­la­tions, a for­eign com­pany can hardly sur­vive the fierce mar­ket com­pe­ti­tion, said Tung.

The ac­qui­si­tion of lo­cal tal­ent will re­ally make it or break it, Tung em­pha­sized.

That wis­dom could ex­plain why GGV an­nounced that Hugo Barra, for­mer prod­uct man­ager at Google’s An­droid di­vi­sion, joined Xiaomi in 2013 when the Chi­nese com­pany de­cided to go in­ter­na­tional. Cur­rently vi­cepres­i­dent of Xiaomi’s over­seas busi­ness, Barra is lever­ag­ing his tech­nol­ogy know-how and mar­ket ex­per­tise to help the Chi­nese com­pany grow in the US and be­yond.

One of the ear­li­est in­vestors and a for­mer board mem­ber of China smart phone pro­ducer Xiaomi, Tung fo­cused his in­vest­ment on con­sumer mo­bile in­ter­net, cross-bor­der ecom­merce, the In­ter­net of Things and mo­bile so­cial com­mu­ni­ca­tion in­vest­ments in both China and the US.

He led GGV’s in­vest­ment and serves on the boards of Wish, a cross-bor­der mo­bile com­merce mar­ket­place; Xiao­hong­shu, an app for cross-bor­der shop­ping in China; and Grub Mar­ket, a mar­ket­place for lo­cal farm goods.

Con­cern­ing how to make a com­plete busi­ness model and prod­ucts that can be­come pop­u­lar cross-cul­tur­ally, Tung and other in­vestors em­pha­sized the im­por­tance of brand­ing and prod­uct po­si­tion­ing.

Ad­mit­ting there are siz­able dif­fer­ences be­tween Amer­i­can and Chi­nese users when it comes to habits and de­mands, in­vestors sug­gested startup founders ex­plic­itly de­fine tar­get users and mar­kets, as well as tell en­gag­ing sto­ries be­hind the brands.

Cit­ing Se­quoia Cap­i­tal’s three in­vest­ments in ZTO Ex­press as a good ex­am­ple, in­vestors said they look into a com­pany’s struc­ture and de­vel­op­ment po­ten­tial be­fore de­cid­ing where the money goes.

Since 2013, Se­quoia has made three in­vest­ments into ZTO and had a pre-IPO share of 7.2 per­cent of the Chi­nese uni­corn. ZTO went public last week on the New York Stock Ex­change and raised more than $1.4 bil­lion to rank as the big­gest IPO in the US this year.

“In­vest­ment is an art that is not sup­posed to copy or re­peat it­self,” Zhang Shoucheng, a pro­fes­sor at Stan­ford Univer­sity and founder of Dan­hua Cap­i­tal, said in his speech.

The distin­guished sci­en­tist said in­vestors use their de­duc­tive think­ing to an­a­lyze cor­re­la­tions be­tween cross-dis­ci­plinary fields and seize in­vest­ment op­por­tu­ni­ties.

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