Starting up in China

Over the last few months, I’ve been struck by how many of the really talented fellow graduate students I’ve met at Berkeley are Chinese and interested in founding companies.

It got me thinking about the start-up scene in China – who’s involved, what are they building and what are the opportunities and the challenges?

So – thanks to the flexibility of graduate school! – I’m putting together a project to find out, with the help of some Chinese friends.

Two trends

Although much debate surrounds the exact figures, China is graduating a vast number of engineering students and many more are traveling to the US for their education. Increasingly those students are choosing to return home after their studies to find jobs.

As the quantity and quality of Chinese engineering talent increases, the market opportunity at home appears to be growing.

The scale of the consumer internet market in China is significant.

There are 477 million internet users in the country to North America’s 272.1 million. The total transactions amounts in China’s B2C market reached 240.07 billion yuan (USD 38.03 billion) in 2011, with an increase of over 130% compared to 2010.

A founder’s perspective

There’s quite a bit of literature focused on Chinese corporate R&D, basic science and the attempt to create clusters of innovation which mimic those found in Silicon Valley. (I helped out with one such study of science and innovation in China, India and South Korea a few years back).

But to what extent is there a viable Chinese start-up ecosystem? What’s it like to start a company in China from a founder’s perspective?

I’ve come across a couple of personal accounts, but nothing that really goes into any depth.

So I’m setting up an interview and survey-based study of Chinese founders and their companies with the intention of getting a better understanding of what’s going on.

Here’s what I’m interested in:

1.) Entrepreneurs and their companies: Who is starting up in China and what kind of companies are they starting?

2.) Challenges and opportunities: In terms of talent, money and legal infrastructure, what are the key challenges these companies face?

3.) Implications for the US: What does this mean for US VCs and entrepreneurs. As a current Berkeley student, I also can’t help wondering what this means for universities like Berkeley, who attract so many Chinese students. How can they make the most of their Chinese connection? What can they offer these entrepreneurs?

I’m going to be in Shanghai and Beijing in May. If you’re interested in being interviewed or know someone I should talk to, drop me a line!

Image: Startup Weekend Beijing. Courtesy of TechRice.