How This City’s Entrepreneurs Are Out-Hustling Their Silicon Valley Counterparts
Beijing, China, is angling to become the world’s startup hub. Silicon Valley, you’ve been warned.
Plenty of cities are vying to become the next Silicon Valley. But one city just might have what it takes to not only take on Silicon Valley, but surpass it to become the world's big hub of innovation: Beijing, China.
Cyriac Roeding, a Silicon Valley angel investor and a former entrepreneur-in-residence at Kleiner Perkins Caufield & Byers, wrote in a recent Re/Code piece that after spending three weeks in Beijing, he's convinced that the Chinese capital is the only "true competitor" that can take on Silicon Valley in the next 10 years.
Recent news seems to support that assessment. On Friday, the city scored a big victory: Beijing-based Didi Chuxing, a ride-sharing startup that's been billed as one of Uber's biggest competitors, has received a $1 billion investment from Apple.
One of the most obvious advantages Beijing has over Silicon Valley and other hot spots such as Chicago and Stockholm, Sweden is its enormous population--11.5 million people live in the city proper, but that number goes up to 22.5 million when you include the metropolitan area. The Chinese market is big enough that most startups can make a good amount of money without ever expanding outside of their homeland. And the Chinese government has collected a formidable pot of money to invest in startups--$231 billion in 2015, to be exact.
But one of the most interesting advantages Beijing entrepreneurs have over Silicon Valley entrepreneurs is their culture around work.
Duncan ClarkAccording to Roeding, most Beijing startups live by the 9/9/6 rule. "It means that regular work hours for most employees are from 9 a.m. to 9 p.m., six days a week," Roeding writes. And many entrepreneurs there live by a 9/11/6.5 rule. It's a work ethic that isn't specific to China's startups: the average Chinese worker works between 2,000 and 2,200 hours every year, according to 2014 data from China's National Bureau of Statistics. Meanwhile the average American worker works around 1,700 hours per year.
To be sure, insane work hours have proven to be pretty unproductive, and increase the likelihood that employees will burn out. And Roeding has his doubts that many of Beijing's now-hot startups are sustainable.
But it could help explain why an Uber competitor like Didi Chuxing, which was founded in 2012, was able to gain traction so quickly. (Uber, by comparison, was founded in 2009). Roeding says that it takes approximately three to five years to build a big startup in China, versus five to eight years in the U.S. It also means that Silicon Valley can't ignore its competition from the East.
So what's the big takeaway here for U.S. companies? Roeding believes that U.S. entrepreneurs could learn a thing or two from their foreign counterparts about drive, and how to stay passionate.
"I loved the lack of pretense of Chinese entrepreneurs, their authentic entrepreneurialism," Roeding writes, while he suggests that Silicon Valley entrepreneurs are too focused on attracting the attention of venture capitalists, or building an office with nice perks. Duncan Clark, the author of a recent biography on Alibaba's Jack Ma, expressed a similar sentiment in a March interview with the New York Times.
Clark called Ma, one of China's entrepreneurial icons, more of an "entrepreneur's entrepreneur" than, say, Mark Zuckerberg, because Ma didn't go to a prestigious university, or come from a wealthy background. Rather, Ma spent his early years looking for ways to supplement his income (such as learning English to work as a tour guide), which shows his strong work ethic.
As for other Silicon Valley entrepreneurs, Roeding has some advice about how they should emulate the spirit of Chinese entrepreneurs, without working themselves to death: "Get to the core of it, the true entrepreneurial endeavor, the obsession with the product and the company, come hell or high water."