Former Google China head Lee Kai-fu sows seeds of change

Lee Kai-fu uses his microblog to plant new ideas, and his role as an entrepreneur to nurture innovative Chinese tech start-ups

PUBLISHED : Thursday, 08 August, 2013, 12:00am
UPDATED : Thursday, 08 August, 2013, 8:51am

It's afternoon, but technology entrepreneur Lee Kai-fu, has already had a busy day online. He's written 15 updates for his microblog, offering his views on a range of issues to his 50 million followers.

"You can see the first one was put up at 6am, and every hour there was an update," says the 51-year-old former head of Google China, who has emerged as one of the mainland's most influential social critics. "I sleep at 10pm. I don't drink, and I don't know any [government] officials in intimate ways."

That Lee tried - in vain, I should add - to obtain some gossip about the South China Morning Post at our meeting shows the brisk openness and inquisitiveness which has made the Taiwanese-born, US-educated Lee a breath of fresh air for mainland internet users, who are blocked from much of the web.

The same qualities may also have led to him being banned from Sina Weibo for three days in February, after he posted several pointed questions on his microblog about Jike, a search engine unit of the Communist Party mouthpiece, the People's Daily, and its chief executive, Deng Yaping.

The ban only added to his popularity, though some of his Weibo followers came to fear for his safety and suggested that he should start pulling his punches.

"But I don't really think I punch," he said. "I'm pretty moderate and reasonably constructive. I think Weibo and the Chinese social media in general need more people who tell it like it is."

"On my Weibo, I speak my mind on what's happening in society, and when bad things are happening, I want to speak up and make sure people are aware of them," Lee says. "Outrageous, inaccurate statements made by other people will lead me to want to continue the course even more."

Lee, whose latest venture is business incubator Innovation Works, is no stranger to scurrilous and often outrageous gossip - often based on his background in Taiwan and the US. There have also been lurid and false accusations about his time working for Apple in the US, escalating the mudslinging and leading to an online war of words among Lee's fans and detractors.

It caused some to question the true intentions behind Lee's prolific blogging, with critics accusing him of being anti- communist. Of his critics, he says: "I don't spend much time speculating about why people say bad things about me … for anyone with a reasonable ability to analyse, it should be obvious what I stand for. So, whatever," he adds with a laugh. "When you love a country or its people, you need to point out the shortcomings, rather than blindly praising it or even speaking against your conscience. Anyone who thinks blind praise is any sort of love is very shortsighted," he said.

Besides stoking controversy, Lee uses his blog to offer guidance to young people on everything from how to show sympathy to how to learn from failure. He stresses that creativity is a product of a blend of curiosity and critical thinking.

As mentor to about 60 start-up companies, Lee's passion for showing the tech entrepreneurs of the future the way to success shines through. But he sounds a note of caution for those who aspire to follow the buccaneers of Silicon Valley.

"In the US you have many college dropout entrepreneurs, like Mark Zuckerberg and Bill Gates and so on, but in China I don't generally advise that," he says.

"Competition is tough in the internet industry in China. People are very scrappy. There are big companies who copy small companies' products. So it's a tougher environment than the US."

Some of the mainland's biggest internet businesses, including Tencent and Baidu, have been accused of just that.

For instance, Tencent's WeChat messaging app, which has almost 400 million registered users and is often said to have revolutionised mobile communication on the mainland, stands accused of taking its lead from Miliao, an app put on the market months earlier by Xiaomi.

Aspiring entrepreneurs should work for an established company for a few years before striking out on their own, Lee says.

Another problem for entrepreneurs is that the mainland's educational system does not prepare students to think independently and overcome new challenges.

"The Chinese education system isn't as well connected to the realities of the marketplace. So if you take a college student and drop him into a start-up, there are so many errors he would make," he said, "whereas people in the US, they are more independent thinkers who are able to solve problems on the fly and more suitable as entrepreneurs."

That may go some way to explaining why a quarter of the start-up founders in Beijing's Zhongguancun technology hub, the area touted as China's answer to Silicon Valley, are Chinese people who have studied or worked abroad, according to a study released in May by the Zhongguancun administration.

Lee's Innovation Works is based in the area. He and his 15-strong team screen an average of 300 companies looking for support each month, and his company has pumped some US$100 million into 60 companies. That represents about one-fifth of Innovation Works' total funds.

Typically, companies approach Innovation Works seeking initial funding of about US$400,000. Those that succeed will later return for so-called Series A financing, typically running into millions of dollars and eventually Series B financing, worth about US$10 million.

Investors in the fund include Silicon Valley veteran Ron Conway, Lenovo co-founder Liu Chuanzhi, Foxconn founder Terry Gou, YouTube co-founder Steven Chen Shih and a long list of financial institutions.

Observers say the innovations coming out of companies incubated by Innovation Works, and Chinese companies in general, are still limited in scope, though some successful ones call to mind their US counterparts.

But Lee is hopeful that China can challenge the United States as an innovation hub by taking advantage of its faster pace of development.

His hopes are bolstered, he says, by the fact that once in a while he comes across someone with all the attributes needed to be a great entrepreneur - most recently the 28-year-old chief executive of an Innovation Works-funded start-up, who turned down a tempting offer to sell his business.

"When a 28-year-old sees tens of millions of dollars hanging from a buyout offer, and they say 'no, we aspire to being more', this kind of courage and self-confidence is very fulfilling to see," he says.

"Maybe one day he'll be a billionaire and he'll be happy that he didn't sell his company, or maybe the company will fail and he'd be kicking himself," Lee says. "However this turns out, I think what's more important is that he will learn and grow."

As for Hong Kong, Lee sees a different problem: too much top talent is being sucked into established businesses and the government.

"And in the entrepreneurial world, you want the top talent," Lee says. "You don't want to have the leftovers to run companies."

In fact, Innovation Works did pursue a "very innovative" mobile app company from the city some years ago but did not put money in eventually because the team was not willing to move to the mainland or focus on the promising aspects of the app.

"Only six months later, their idea was sort of copied by a mainland Chinese company and it ran much faster than they did," he said. "The copycat is still popular and they - well, I haven't followed them, but I don't know anyone who's using their product any more."


Lee Kai-fu

Born: Taipei, December 3, 1961

Education: Columbia University, Carnegie Mellon University

Career: Apple, principal research scientist, (1990-96); Silicon Graphics, vice-president, web products division (1996-97), president, multimedia software division (1997-98); Microsoft Research China, founder (1998-2000); Microsoft US, vice-president, interactive services division (2000-2005); Google, head of China (2005-2009); Innovation Works, founder and CEO (2009-)