Calvin Chin, an American entrepreneur in China, wrote an insightful guest post in Techcrunch about startup culture in China. He recently attended the World Economic Summit in Davos, so you know that he has his ear to the ground on what’s going on in the largest country in the world.
Calvin Chin believes that the Chinese government has placed a premium on stability with the goal of lifting millions out of poverty at the expense of freedom of information. This emphasis on stability, with power in the hands of the few, allows for big decisions to made quickly and without opposition.
Many of our world business leaders are also placing a premium on government stability. Thomas L. Friedman, the op-ed columnist to the New York Times, noted that at Davos many are questioning the stability of the American government. With the Republicans unwilling to pass legislation in Congress and the Democrats running to the hills, the American political system is deadlocked. With the economy in crisis, and perhaps a Marshall Plan needed, many question the economic future of America.
Many successful tech startups in China understand that the stability of their government is paramount for economic growth, even if their freedom to operate is limited. Nimble startups are able to navigate by having a keen awareness of any political or market changes.
Because Chinese startups are obviously located in China, they are unable to pack up and leave simply because the law changes or if their computers have been hacked like Google.They simply adjust. When the government decides to censure microblogging sites, startups use the existing infrastructure to to set up a microblogging site that screen Tweets.
Other successful startups in China follow these models:
- Localize an international hit and making it cheaper and better. Chin cites Kuukie which basically rips off Moo in the custom business card business. Look for a Chinese startup to localize hot US startups like Foursquare.
- Look for a fit for Chinese net culture with a product that you don’t see elsewhere.
Founders of startups are still able to circumvent the censors and obtain information by using web clients. The system makes it difficult for big companies to compete locally.
Washington must learn from China and remove the clouds of uncertainty that plague our political system. American startups and small business are unable to take action unless they know the cost of health care. Without action now, look for more startups from Mao Inc. at the expense of Silicon Alley.