Silicon Valley keeps doing what it does best — spurring startups
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.