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How a Nation of Tech Copycats Transformed Into a Hub for Innovation

THE YOUNG PROGRAMMER had an idea, and everyone thought it was nuts. Just out of college, he’d gotten a job writing software for YY, a livestreaming company based in the massive city of Guangzhou, in China’s Pearl River Delta. More than 100 million users every month stream themselves, or tune in to broadcasts of others, singing, playing video ­games, or hosting talk shows from their Beijing apartments. The audience chats back, prolifically, via voice or text.

The programmer thought YY should try something new: use its proven streaming technology to run a dating service, which would operate kind of like a TV dating show. A host would set up an online lounge, then invite in some lonely singles and coax them to ask each other questions and maybe find a partner.

Company executives were dubious. “The CEO almost killed it,” says Eric Ho, chief financial officer, sitting in YY’s head­quarters, atop three floors of furiously coding engi­neers and designers. Are you sure you want to do this? the CEO asked the kid. This is very stupid. I don’t think people will like it! But the programmer was hungry and persistent, so they waved him on: Give it a try.

The old attitude—keep your head down and stay safe—is vanishing, swept aside by the surge in prosperity.

In China, this type of employee didn’t used to exist. Ten years ago, high tech observers complained that the nation didn’t have enough bold innovators. There were, of course, wildly profi­table high tech firms, but they rarely took creative risks and mostly just mimicked Silicon Valley: Baidu was a replica of Google, Tencent a copy of Yahoo, JD a version of Amazon. Young Chinese coders had programming chops that were second to none, but they lacked the drive of a Mark Zucker­berg or Steve Jobs. The West Coast mantra—fail fast, fail often, the better to find a hit product—seemed alien, even dangerous, to youths schooled in an educational system that focused on rote memorization and punished mistakes. Graduates craved jobs at big, solid firms. The goal was stability: Urban China had only recently emerged from decades of poverty, and much of the countryside was still waiting its turn to do so. Better to keep your head down and stay safe.

That attitude is vanishing now. It’s been swept aside by a surge in prosperity, bringing with it a new level of confidence and boldness in the country’s young urban techies. In 2000, barely 4 percent of China was middle-class—meaning with an income ranging from $9,000 to $34,000—but by 2012 fully two-thirds had climbed into that bracket. In the same time frame, higher education soared seven-fold: 7 million graduated college this year. The result is a generation both creative and comfortable with risk-taking. “We’re seeing people in their early twenties starting companies—people just out of school, and there are even some dropouts,” says Kai-Fu Lee, a Chinese venture capitalist and veteran of Apple, Microsoft, and Google, who has spent the past decade crisscrossing the nation, helping youths start firms. Now major cities are crowded with ambitious inventors and entrepreneurs, flocking into software accelerators and hacker spaces. They no longer want jobs at Google or Apple; like their counterparts in San Francisco, they want to build the next Google or Apple.

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