4 Crucial Issues Kai-Fu Lee should Pay Attention To

20080922091928015686According to Xavier’s previous post, Former Google China Chief to Establish an Investment Firm to Help Tech Start-Ups Grow in China, Dr Kai-Fu Lee finally decided to start his own business in order to help youth entrepreneurs in China:

He said on Sunday on his official Twitter page that he will launch his own business, most probably a venture business platform next week to fund Chinese technology start-ups. The main objective is to help young Chinese entrepreneurs to get “angel funding” to grow their enterprises. It has been claimed that Lee was expected to establish an investment firm with about 800 million yuan ($117.1 million) in funds to help technology start-ups grow in mainland China.

On his personal blog (in Chinese) which has attracted over 400,000 page-views and comments from Chinese netizens, he said that his goal was to help Chinese youth to achieve success in the technology sector. Speaking about his departure, he said, “With a very strong leadership team in place, it seemed a very good moment for me to move to the next chapter in my career.” on his blog post.
However, I am quite worried about the future of Innovation Works, which is the company founded by Dr Lee. That is not because I doubt his abilities to handle such a huge project, but, there really have a few issues that Dr Lee should pay attention on.

Issue 1: Small companies are quite different from large companies.

One of the biggest mistakes made by famous entrepreneurs is that they tend to treat a small company as a big company. Take for example, Kai-Fu Lee. He had never ever run a small business before as according to his bio, we can easily know that he used to play important roles in tech giants Apple, Microsoft, Google, etc. However, his vast experience is limited to research and management only.

In my own opinion, small companies should be operated using different methods, not only the issues of capital and funding, but the management. Kai-Fu Lee does not have sufficient experience when it comes to small-scale businesses, and that may cause the total productivity to fall, hence affecting the profits of his businesses.

Kai-Fu Lee should notice about this issue, and try to avoid any further problems regarding the different management methods. There is no doubt that entrepreneurs should be trained with smart people just like Kai-Fu Lee, but everyone should start with small business, and Dr Lee may lack of this kind of experience.

Issue 2: Trends in China are quite different from the trends in the world

In today’s world, as tech geeks, we have a wide knowledge about Cloud Computing, Virtualization, Semantic Web, etc. However, in China, there is almost nothing in these three areas. Many experts are doing researches everyday, but there is nothing for production and practical.

Kai-Fu Lee surely has lots of knowledge about all these things, but the problem is, they are not applicable for the target marketplace! Of course, youth entrepreneurs in China should know all these, but how they can produce with these concepts is the more crucial factor. There are more than enough people in China who can work on these concepts and invent new algorithms, architectures, etc. However, almost none of them can operate, deploy and produce.

The trends in China are – imitate the current technologies from other countries such as US and run a similar business, as well as study and invent new technologies but then sell to other countries for businesses. I think Kai-Fu Lee should focus more on operation and production, instead of just doing research and produce nothing practical.

Issue 3: Juniors are quite different from seniors.

Kai-Fu Lee is a typical senior manager and entrepreneur, and that is why he is so successful. Many youth in China are reading books written by him. Actually, I also have read one of his books, called “做最好的自己” (Achieve the best of myself). From his book, I have really learned many useful things of how to become an entrepreneur. However, young people have their own views about business and management, that something he should respect.

At present, the average age of entrepreneurs is heading south, and more people are passionate about running their own businesses, especially Internet Business. For young people, they have different views about business. For example, they love open and challenging stuff.
Internet Business is full of challenges, not only competitions, but also the trends (aka waves). Successes cannot be copied, and the trends will continue and never go back. The world needs more open minds to continue developing. Therefore, Kai-Fu Lee should know more about these juniors’ minds, and encourage them to face the challenges ahead, but not to limit them.

Issue 4: Is a 7,500 yuan professional website cheap?

Kai-Fu Lee announced that the official website of Innovation Works (http://www.innovation-works.com) cost only 7,500 yuan (Approximately US$1,100). Actually, in China, the cost of setting such a website should be around 2,500 yuan according to my experience.

However, he said he really paid the cheapest and did save the capitalists lots of money. True, if a company like Google wants to launch such a website, it may cost lots more. Nevertheless, the actual charge is still really out of market. I do not know why he still thinks it is cheap.

Besides the cost, the bigger problem is, Kai-Fu Lee actually hired a freelancer from Tsinghua University, and the development of the website is out-dated. ASP pages (Do you guys still remember this old stuff? Active Server Page) with table-designed layouts are not applicable for the main theme. I really cannot understand why the designer did that. (Many Chinese netizens are discussing about this, and some of them are feeling very angry)

Kai-Fu has great ideas and a vast experience. However, MARKETS ARE FAIR TO ANYONE, if he cannot open his eyes big, notice these issues, and make mistakes, then failures are still very easy to happen. Anyway, I believe that Kai-Fu Lee can do more for China, and the whole world of Internet Business.