At 4 p.m. on a Friday afternoon in October, I am sitting in Beta Cafe with Xiaoyang and Chang, in the heart of Zhongguancun, Beijing. Xiaoyang and Chang both look like college students to me, but they did sound pretty professional in the e-mail conversations we had before we met. I was introduced to them via Yang, a friend I knew almost 5 years ago through a college student technology competition. Before coming to work for Microsoft in Seattle, Yang used to work for Innovation Works, one of the biggest and earliest IT start-up incubators in Beijing. When I asked about the start-up community in Beijing, Yang shared his old contacts in Innovation Works with me, and they were Xiaoyang and Chang. After graduating from a top engineering school in 2009, both of them came to Beijing with a passion for becoming IT entrepreneurs and started working for Innovation Works. "It's not fun to work for a big company. You don't see immediately how your work will have impact on other people's life," one of them proudly declares. In a society where people put stability, high salaries, and big company reputations in front of almost anything else, it's refreshing and inspiring to see young people making choices like this. Their paths in their not-too-long IT entrepreneur careers have been slightly different, though. Both of them started at Innovation Works, where they worked with small teams of engineers on original ideas. Chang and his team mainly worked on developing consumer mobile apps, whereas Xiaoyang's team focused on creating virtual server and cloud computing solutions for overseas game companies. In the two years that have passed, Chang had a few setbacks and just started working on a new mobile app idea. Xiaoyang's team, on the other hand, has received some funding and moved to a rented office space in Beijing. Neither of them is with the incubator anymore. "Why is it more difficult to attract funding for consumer apps?" I ask, with an answer already in mind. Chang smiles. "The first question investors would ask if you are developing a consumer app is, 'What if Tencent steals your idea and makes a similar (if not better) product?'" Tencent, an IT company that "controls" the majority of Chinese netizens via its predominant Instant Messenger QQ, along with the loose intellectual property policy in China, has become the biggest roadblock for B2C start-ups in China. "It's way easier for Tencent to add a button that links to a new service on their QQ messenger or QQ space than for us to do user acquisition from scratch." Neither Chang nor Xiaoyang seems optimistic about competing with Tencent. Indeed, if one out of 100 QQ users clicks on a button, that's already one million users. Not great odds for start-ups — “unless you are invested by a big VC, so you'll have enough money to do PR and marketing of your product before it gets beaten by Tencent," one of them says. "It seems that US users were more supportive of IT start-ups," Xiaoyang says. "How so?" I ask. "It feels to me that US consumers would associate the app and services they use with their identity and values," he says. "It's like, it's a cool thing to try out and use apps that come from start-ups. I don't think Chinese consumers would be annoyed or even think about the consequences if all of their apps come from the same company." Chang and Xiaoyang think there's still a long way to go for Chinese users to become mature software app consumers. With an inconvenient truth like this, B2B seems to be a safer route. That's the main reason why Xiaoyang's team survived and got funding. They are targeting overseas game companies as their consumers, who would pay for their services and are not part of Tencent or other big companies' interests (at least for now). "How do you guys think about UX?" I ask. I cannot wait any longer to throw out a question like that due to my UX background. According to Chang and Xiaoyang's experience, Innovation Works used to have 'in-house' UX/UI designers (similar to a designer in residence, or DIR, for incubators here in the Bay Area). However, those designers were soon overwhelmed by the work load given the number of teams and ideas floating around in the incubator. The UX process hasn't been streamlined very well. Over time, after a few good UI/UX designers got recruited by teams which eventually left Innovation works, the DIR policy was officially abandoned. "Of course we think UX is important," they tell me. "It might not have been a few years ago when the majority of Chinese people got started using the Internet. Back then, people thought the more information a website provided the better. But now, you need to make your product look sleek and actually usable. Successful B2C start-ups either have an outstanding designer or some engineers with outstanding design sense." "UX consulting is a cool idea — never heard of it before though. Most of the products and services can use some help in that aspect. However, you have to understand that start-ups usually start with very low budget, so you don't expect to charge them a lot when they first start." "There are tons of things on Chinese entrepreneurs' minds. Product development is something that they can control, but how to get past Tencent or similar big companies and how to protect their intellectual property are not." A lot of foreseeable difficulties in doing UX consulting for start-ups in China won't be too different from the issues we ran into here in the States. Products might be different, user behavior and segmentation might be different, but the possibility of UX improvement with more extensive user research is still there, and the concern of cost is still there, and to what extent your research results could or should change or shape the founding team's idea is still there. I changed the topic. "How do you guys think about the VCs in the Chinese market now? Are they approachable? Are there too many of them, or too few?" This seems to be the question that gets the most optimistic answer today: "Angels are mostly coming from local capitals, whereas larger investors are from overseas. It's not a problem at all to meet with investors in Beijing. There are networking events and lectures, or you could meet them in places like the cafe where we are sitting right now. For early stage start-up teams, they use cafes as their office." --- The latte I ordered was not as strong or as aromatic as the ones you could get in Peets or Philz in SF. Not sure where they get their coffee beans from, but I liked the way they drew a nice heart shape with steamed milk on the surface. What's more, you have more than twenty different latte flavors to choose from, pretty much like those take-out menus you see in Chinese restaurants. The Chinese translation of 'latte' and 'cappuccino' doesn't seem to bother young entrepreneurs in Beta cafe at all, as both Chang and Xiaoyang ordered their drinks very quickly. I am sure they've been here a lot. Yes, they (we) were drinking coffee (not tea!), with the lovely wifi in the air, and the loud sound of coffee grinder in the background — not so much different from the scene you'll see when you walk in a typical Silicon Valley cafe. As I see it, what has already happened and will continue to happen is the whole world adopting this IT start-up culture. The east, the west — we are both "brewing" this start-up culture and the ecosystem around it. It might take some time for the east to catch up (as we've been drinking tea for so long), but it won't be long. It's the information that we are transmitting and creating via the Internet, not the actual coffee beans, that needs to be physically transported. And remember that button Tencent could promote to its QQ users. If just 1% of Chinese "tea drinkers" start drinking coffee, that's already 1 million.
