Beijing's IT professionals plunge into startups

Industry experts say many Chinese young professionals once shied away from startups, preferring stable jobs instead
  • (IDG News Service)
  • — 20 April, 2011 00:29
Entrepreneurs present their idea at iWeekend, an event trying to improve Beijing's startup environment.

Entrepreneurs present their idea at iWeekend, an event trying to improve Beijing's startup environment.

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 (US$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."

Attitudes are starting to change, however. In the past there was more pressure to take care of one's family, said James Li, a 34-year-old programmer in Beijing. But now more young professionals want to test out their ideas in a market that has a potential for big returns, he added.

"There are a lot of young people now that are not that traditional. They think it's a good time to try," said Li, who is also working to build his own startup. "With startups, people don't have to work for another company, they can do what they want."

The rise of mobile apps and social networking in China has also made it easier for entrepreneurs to enter the Chinese market, said Stephen Wang, a cofounder of movie critic site Rottentomatoes.com, who is now working in Beijing's Internet industry. "People can quickly build an app and release it. With these apps, it's almost like a second generation of startup entrepreneurs is emerging," he said.

Beijing's startup environment also faces challenges, some unique to China. Due to weak intellectual property rights in China, one major concern is that a startup's idea or business model will be blatantly stolen and "cloned" by larger rival companies. Internet trends also quickly catch on in the country, making competition stiff. One example is how China currently has more than 4,000 group buying sites, all appearing in about a year's time.

"If there's no one copying you, then there's something wrong," said David Liu, the founder of Jiepang.com, a location-based social networking service.

Industry experts also point to the need for more mentors willing to give input to Beijing's young but inexperienced entrepreneurs. iWeekend, a non-profit devoted to supporting startups, is helping to provide such a platform. Last Friday, a roomful of young professional gathered to offer and discuss their startup ideas at an iWeekend sponsored event.

Tyr Chen, who left his job in March to begin his startup, attended and presented his idea. The site he proposed allows users to easily organize their travel plans. Chen came away from the three-day event recruiting other professionals to his startup, while also getting advice from experienced technology entrepreneurs.

"I like to travel and I have had this idea since 2005," Chen said, noting that his startup has already begun to attract attention from interested investors. "I really want to make this idea real."

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Michael Kan

IDG News Service
Topics: business issues, training, careers, internet, investments, Innovation Works, IT management
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