I have been watching with a great deal of interest the departure of Kai-Fu Lee from Google to form Innovation Works, which has aggregated a $115 million fund that will be invested in tech start ups.
While $115 million is not enormous anymore by Silicon Valley private equity standards, that amount will go many times further in China and should be viewed as most significant. Some of China's most successful tech pioneers have contributed to Innovation works and according to Mr. Lee, the first order of business will be to "recruit talent."
I visited China for a little over a week last November and participated in presentations by more than 50 Web 2.0 startup executives. I found them hard-working, well-informed and bright. I thought their workspaces and employees felt very much like Silicon Valley during earlier--more entrepreneurial periods.
I came home impressed by what I saw. I got some sense of how vast and promising the China market was for Chinese Web 2.0 markets and only once heard an entrepreneur express a vision that went beyond China itself. I left with some sense of China's tech sector being a new Silicon Valley, one designed to hit places and people that the California-based tech innovation epicenter had never reached and probably never will.
I saw an infrastructure forming in China that was robust and growing, filled with the sort of relentless optimism that I had experience in Silicon Valley more than 20 years earlier.
It took some reflection to realize one key ingredient of Silicon Valley's secret sauce was missing for the most part. There were a few exceptions, but in all the company hoods that my group was invited to look under, I saw very little true innovation. I saw many companies that had emulated Western companies for chat and video and other popular functionalities. Then they recalibrated and localized for Chinese and Asian markets.
But I saw extremely few example of technologies that truly innovated: creating something that had not previously existed; providing technologies that changed the way people worked, played, communicated and so on.
I've come to wonder if this is a cultural thing: if a top-down government that regulates so much of people's lives, will allow a bottom up explosion such as we have experienced here.
I find the most interesting aspect of Mr. Lee's very interesting move is the name itself. Can Innovation Works make innovation actually work in China?
The answer to that question remains to be seen.