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Chinese techies seek riches via startups

Michael Kan | April 19, 2011
Now Beijing is seeing a "huge increase" in startups, said Kai-Fu Lee, a former executive with Microsoft and Google.

Tyr Chen, a 29-year-old resident of Beijing, is doing what many of his friends won't: He's establishing a startup.

Chen, a former software engineer at Juniper Networks, now no longer has a stable income. Instead, his wife helps pay off the 8,000 yuan ($1,227) monthly cost to cover their mortgage.

"Sometimes I feel a little bitter about it," said Chen, who is working on building a travel planning website. "I'm very, very excited. But I'm also nervous."

By trying to establish his own startup, Chen is committing what is akin to a cultural taboo in China. In a society where stability is often times more valued, getting involved in a startup is a career move often shied away from. But with the growth of China's Internet market, industry experts have said they are seeing more young professionals willing to take risks, which has helped lead to a new wave of IT companies in Beijing.

China has the world's largest Internet population, at 457 million, according to the China Internet Network Information Center. This has made the country a major IT market, with Beijing seen as China's version of Silicon Valley. Already, many of the top Internet companies have offices in the city, including overseas players like Microsoft and Google, along with domestic giants such as Baidu and Lenovo.

Now Beijing is seeing a "huge increase" in startups, said Kai-Fu Lee, a former executive with Microsoft and Google. Lee currently heads a business incubator in Beijing, called Innovation Works. Last September, the incubator was funding a dozen startups. But now Lee reports Innovation Works is backing 28 companies.

Driving this growth is the success of Chinese tech firms filing for initial public offerings on the U.S. stock exchanges. At the same time, an increasing number of employees at larger IT companies have reached a mid-point in their career, where they want to move on to something new.

"A lot of these people have done well and are ready to come out. They are serious entrepreneurs and are ready for the next environment," Lee said. "There is also a lot of money from the VCs (venture capitalists). This has made it a good environment to produce good startups."

These factors contrast with some of the current Chinese attitudes about startups, which are related to the tendency for parents to push their children to take stable, well-paying jobs.

"Joining a startup is not a safe thing to do," said Steven Chiu, a cofounder of Zhaopin.com, a major job recruitment site in China. "If they had the choice between joining Oracle or a startup, most people would go to Oracle."

 

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