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Chinese entrepreneurs have a completely different definition of winning than other startups, and Google's former China boss says that's a big problem for US tech companies


Kai Fu Lee

  • Former Google China president and legendary tech investor Kai-Fu Lee says China is outpacing the US in the development of its mobile applications and AI.
  • He predicts that the country's tech will usurp the US in the fields of retail, education, and healthcare in upcoming years.

When Kai-Fu Lee, prominent Chinese tech investor and former president of Google China, considers some of the leading technology products in the United States, he's underwhelmed.

"Look at YouTube or Instagram or Snapchat," said Lee in an interview with Business Insider. "If China had one of those companies and it moved at the pace that those companies move, it would likely be dead in the water."

For decades, Chinese developers closely watched America's tech sector for signs of innovation. But now, with its fast-developing mobile market breaking new ground, the country's tech sector is swiftly gaining confidence.

According to Lee, China has already outpaced the US in terms of creating better mobile applications and mobile payment systems. In the future, he predicts that technologies in the fields of retail, education, and healthcare will all soon leapfrog ahead of their US counterparts.

Notably, said Lee, Chinese entrepreneurs aren't interested in being followers.

"Chinese entrepreneurs are at a stage where they no longer feel they have to copy anyone else," said Lee. "They have enough experience and knowledge of the market and know how to build a deep, long moat around their castle."

This so-called "castle" of China's burgeoning tech sector is among the fastest developing markets in the world, and Lee predicts that it's on track to outpace the US, particularly in the area of artificial intelligence. 


Among the 13 companies Lee has invested in that are worth $1 billion or more, five are artificial intelligence companies. Together, said Lee, these five companies make up a cumulative value of $23 billion. 

See more: 'The future will be won or lost on this technology. I'm very concerned': The co-founder of a $9 billion company warns that China is on track to dominate the US in AI

There's several factors at play in the country's flourishing tech economy.

For one, Chinese companies simply innovate differently than those within the US. 

Lee offered up an example of how video has evolved within the country.

"China pushed the market to change from longform videos to short-form videos," he said. "From there, it changed from videos being watched to videos that you're apart of, and then to real-time videos, to using videos as a form of social networking. There is always someone trying to iterate and do something more."

"In China you assume from the start that someone is coming after you"

Chinese entrepreneurs think differently, as well, said Lee. 

"The business practice in China is 'winner takes all,'" said Lee. "They're not constrained by cornering only a sliver of the market. It's not about having a niche. The entire eco-system is interdependent."

This ecosystem differs from the way US entrepreneurs innovate, said Lee. 

"The American system is a gentlemanly system that involves respect, innovation, and consensus," said Lee. "People work in teams. They brainstorm and go into stealth and then come up with something."

But in China, entrepreneurs are less preoccupied with cultivating a creative, communal process.

"China is a giant experimental ground where people test things out," said Lee. "If they don't work they keep iterating over and over again. They want to be first. In China, you assume from the start that someone is coming after you."

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