The Real Deal New York

Is Silicon Valley losing its edge?

Chinese tech entrepreneurs and a Sequoia Capital partner think so
January 21, 2018 12:00PM

(Credit: back photo by Christian Rondeau/Flickr; right photo by Anthony Quintano/Flickr; left photo by Nguyen Hung Vu/Flickr)

What was supposed to be an awe-inspiring trip to the Bay Area, turned into an experience of validation and self-affirmation for a group of Chinese tech entrepreneurs and start-up founders.

Far from being struck by the advances in technology and society in Silicon Valley, the delegation was shocked at the prevalence of cash, that food deliveries shut down overnight and most people drive, not bike, reported the Wall Street Journal. Their observations are backed up by stats; China is a more technologically advanced society if the bar is e-commerce — 20 percent of the country’s retail happens online, compared to 10 percent in the U.S.

“The age that Silicon Valley serves as the teacher and China follows step by step is becoming the past, at an accelerating pace,” wrote Beijing entrepreneur Li Gen on WeChat after the trip.

Though Chinese and American tech companies often invest in one another, the tech industries are relatively isolated in practice with each country blocking the other’s Internet giants. The result was the Chinese delegation’s disillusionment, particularly among the younger participants, according to the Journal.

But it’s not only Silicon Valley’s Chinese counterparts who thinks so: Sequoia Capital’s Michael Moritz agrees. This week, he wrote an account comparing behavior at Chinese and American tech companies in The Financial Times which concluded with him saying that “as the Chinese technology companies push ever harder outside the mainland, the habits of western companies will start to seem antique.”

“China is like a startup. The U.S. is like a big corporation,” Mobiuspace’s founder Ding Jichang to the Journal. “China runs very fast, tweaking along the way. The U.S. runs at a steady pace, doing a lot of research and development. It’s hard to tell who will win in the end.” [WSJ] — Erin Hudson