China’s Watching Silicon Valley. Does Silicon Valley Watch China?

Every day, I meet entrepreneurs across the US and China. I often ask them about their competitors overseas. When I’m in China, I notice that Chinese founders usually have comprehensive knowledge about their US competitors, listing off minute product features and the latest numbers on their size and traction.

On the other hand, when I meet founders in Silicon Valley, the conversation often sounds like this: The founder declares, “We are the first company in the world to do X for Y.” I think to myself, “Company Z has been doing this in China for five years now… they’re worth hundreds of millions of dollars.” When I ask the founder about Company Z, they often have no idea about its existence. It makes me wonder how there can be so much information asymmetry in the tech world between the US and China.

Chinese people clearly stay on top of Silicon Valley. I can count at least ten Chinese publications that focus solely on Silicon Valley news. On 36Kr, a mainstream Chinese tech news outlet (think of it as the TechCrunch of China), close to half of the articles every day cover FAANG (Facebook, Apple, Amazon, Netflix, Google).

In fact, I oftentimes read headlines about the Valley through Chinese media first. When Facebook reported its security incident, related posts flooded my WeChat Moment timeline even faster than my Twitter feed. Once, I sent an English article about Instagram’s latest product change to a friend living in China, thinking that this would be news to her. She replied and said: “I read about this on Chinese sites three days ago. Have you been living under a rock?”

One thing is clear: my friends in China–at least those in the tech circle–are not living under a rock. As a Chinese person living in the Valley, every time I go back to China, I am humbled by people’s extensive knowledge of entrepreneurs and companies across the Pacific. I have met Chinese people who can recite Paul Graham’s essays, Ray Dalio’s principles, and Elon Musk’s latest tweets. The Chinese version of Crunchbase maintains extremely up-to-date–even encyclopedic–coverage of US startups’ fundraising activities. I sometimes wonder if the premium of my Western education and work experience is declining in value. Chinese people do not need me to tell them how the US works.

On the other hand, many well-educated Americans can’t name a single Chinese entrepreneur beyond Jack Ma. Even though China has become home to around a hundred unicorns (as many as the US), people I meet in Silicon Valley struggle to name even one. Some are shocked to learn that: 1) China is home to the most valuable private tech startup in the world (ByteDance, which is now more valuable than Uber). 2) Games like League of Legends and Clash of Clans are all owned by a Chinese tech giant (Tencent). 3) The single largest tech IPO in US history was by a Chinese company (Alibaba, on the NYSE). It is rare to encounter American entrepreneurs who have set foot in China, whereas many Chinese entrepreneur I’ve met have traveled to Silicon Valley. Many in the US are unaware that some of the world’s most innovative products come from China (check out the 996 Podcast for details), and I believe that China remains under- and poorly covered in most Western media outlets.

What explains this knowledge gap?

When my American friends visit China, the word “hunger” often comes up when they describe the Chinese entrepreneurs they meet. Why? Because if you are an entrepreneur in China, you are living a hunger game. The Chinese market is so brutally competitive that if you don’t do everything it takes and learn all the best practices to win, you will almost certainly lose. It’s part of the reason why Chinese founders are like sponges in water–always absorbing knowledge and learning what’s working in other markets, so that they can improve their products and themselves. This “hunger” is something I see more of in China (and other emerging markets) than in the US, and it is my best explanation for the knowledge gap.

Of course, language gap is another big factor–almost every Chinese entrepreneur I meet can speak English to some degree, whereas the number of American entrepreneurs who can speak Chinese can be counted with one hand. Granted, this has to do with the fact that English is a global lingua franca and Chinese is not. But I would argue that language proficiency is a function of hunger as well–if you are not hungry to learn about the outside world, you would not be motivated to take the time and effort to learn a foreign language.

Having lived in Silicon Valley for a while now, I see how easy it is to think that we are sitting in the mecca for world-class technology, that America still has the monopoly on real innovation (and everything invented elsewhere is a “copycat”), or that a VC can learn everything there is to know about tech without traveling much outside of Menlo Park. This kind of thinking can lead to closed-mindedness and insularity, the very things that hinder innovation. In an age where anyone, anywhere can have a great idea, learning from people in other cultures and geographies is key to creating a successful product. Great inventions happen when there is open-mindedness, curiosity, and humility.

And so, I would encourage my non-Chinese friends to learn about China and to, à la Steve Jobs, “stay hungry, stay foolish.”