05.18.10 View full article at AdvertisingAge
There's been heated discussion in recent months regarding how U.S. businesses (namely Google) can, should and actually do operate in China. What's been lost in the rhetoric and debate is China's overall increasing attractiveness to entrepreneurs, as it has become a marketplace for driving innovation. There are companies that are successfully navigating the country's political and cultural intricacies, and that's the untold story worth sharing.
Recruiting the best talent in a short period of time is key to a technology startup's success. In China, the inherently competitive nature of the education system, influenced by Beijing's dense advanced degree populations, has turned the nation into a hotbed for elite-level engineers and developers, most of whom are clamoring to work at startups.
Out of the 10 million high school graduates who take China's college-entrance exam each year, less than 7,000 of them are admitted into Peking University and Tsinghua University, the top two schools in China (both in Beijing). Who gets accepted? Go beyond high school valedictorians and picture the top one or two students from entire regions, selected from thousands of classmates.
It is this tier of elite students who come to Beijing to receive their education and most of them choose to stay here post-graduation to jump-start their careers. Envision the engineering talent of Silicon Valley, New York , Seattle, Boston, Austin and Denver, in one city -- that's Beijing. When my co-founders approached me to start FreeWheel in 2007, I made it clear that I would not join unless we could operate our tech team in Beijing. I knew there was no other way to build a world-class team in such a short period of time. Luckily, my partners agreed.
Why was it easy to attract such talent to a newly formed U.S. startup? Let me explain. The accelerated growth of China's overall domestic economy has created a severe imbalance in the country. Graduate degree holders often find there are not enough jobs that meet their expectations in terms of environment and salary. The government can't support them nor can developed Chinese companies. At the same time, stories of successful entrepreneurs are recounted on Chinese TV, in magazines, and just about everywhere. Robin Li from Baidu, Jack Ma from Alibaba and Charles Zhang from Sohu have become household names. Even more so than here in the U.S., developers and engineers in China want to work at start-ups. They especially want to work at U.S.-based startups, because generally we provide better pay and a more open culture.
Very often startups choose to build their team in one geographic location to avoid communication costs for distributed departments, but because of that inherent limitation, they face the challenge of recruiting top-tier talent. We decided instead to follow the talent, and developed communications systems that addressed our geographic diversity (our two U.S. offices are in San Mateo and New York). We utilize the project-tracking system Jira to monitor all products, requirements and developments, and this tool has dramatically helped reduce the communication barrier. Skype and IP phones have also proved extremely practical for scheduled and impromptu conference calls and meetings.
As we've grown we've actually found that our geographically divide has not hindered us but has become quite beneficial. Due to time zone differences, we literally operate around the clock, providing 24/7 client support with no additional staffing needed. Our customers love the fact that they can file a support ticket as they leave the office and know that the issue will be resolved before they wake up.
My founders and I took a major gamble when I convinced them that the best move was to build our tech team in China. And it turns out we were right. If I could go back and build our business from scratch, I would, without question, take the exact steps we took: go to the best talent, build a team in Beijing, and use the right tools to establish processes that mitigate communication risk. What has worked for our business can in fact work for yours as well.