A Look Back at ByteDance Founder Zhang Yiming’s 2014 Article: “The Golden Age of Chinese Technology Companies Is Coming”
In the fall of 2014, Zhang Yiming, the founder of TikTok’s parent company Bytedance, who was then little-known, paid a visit to Silicon Valley with a group of young Chinese entrepreneurs, including Xiaomi cofounder Li Wanqiang and OnePlus CEO Pete Lau. They met several SV tech leaders including the CEOs of Tesla and Twitter and founder of Yahoo.
Zhang also gave a presentation titled: “The Future of Information from Reading Habits in China” at Facebook headquarters. At the same time, Chinese tech giant Alibaba went public on the New York Stork Exchange. Zhang was delighted and at the end of the trip, he wrote an article focusing on his view of the Chinese & US tech industries. Six years later, things are quite different.
Here is a full translation of his article, which can be found at GeekPark:
At the end of September, I went to the US to participate in the Silicon Valley trip organized by GeekPark. During my trip, I visited many popular technology companies such as Tesla and Airbnb, I also had the opportunity to meet face-to-face with Silicon Valley legends such as Yahoo cofounder Jerry Yang. After a week, I was very impressed.
During this short week to Silicon Valley, I realized one thing: The “golden age” of Chinese technology companies is coming. There are two reasons.
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First, the Chinese market is no longer just a part of the global market, but is becoming the most important part. Alibaba went public while I was in the US, with its $220 billion market value surpassing Amazon, which made Americans realize that you can become the top company in the world by just doing a good job in the Chinese market.
Second, I found that Chinese companies and their products are rapidly “invading” Silicon Valley. No longer selling cheap small commodities and small appliances to the US like we did a decade ago, we now export more technological products, both hardware to software.
I found a number of Xiaomi fans at Facebook and Twitter headquarters. Rising star OnePlus also has a lot of users there. Being able to be recognized by picky Internet elites is enough to prove the standard of these products.
In addition to products going overseas, capital from China is also rapidly converging in Silicon Valley. The design company Fuse Project that we visited during the trip was invested by BlueFocus. The Jawbone UP bracelet, which has become quite popular in the China’s Internet industry in the past year, was designed by this company.
I’m particularly happy to see many Chinese in the US are already using Toutiao. This strengthens my determination to promote Toutiao overseas. I believe that you’ll see our results soon.
How Chinese companies can succeed overseas
While seeing so many familiar products in the US, I couldn’t help thinking why products of Chinese tech companies can put down their roots overseas now. After visiting multiple leading companies, I found an answer: Chinese companies are not only as good as Silicon Valley companies in execution, but even stronger.
Specifically, the R&D, design, and product promotion of Chinese companies are already very competitive. Of course, companies in Silicon Valley still have advantages that we can’t catch up with in the short term. I’ll talk about it in detail later.
Back to the point of execution. I personally think that this is the magic weapon for Chinese companies to expand overseas. The reason why Chinese companies have stronger execution may be related to the fierce competition in our domestic market.
With the emergence of a new model of products, a bunch of copycats will soon appear. Along with start-ups following the trend, big companies will also use their advantages to suppress rivals with similar products that they’ve invested in. In addition, the fierce competition and expansion of tech giants in China have forced many young and growing companies to pick sides. In contrast, the environment in Silicon Valley is much better.
Jerry Yang gave some suggestions to companies that are interested in overseas markets at his private reception. He thinks Chinese products can surely enter overseas markets. Also, when promoting products overseas, we don’t have to emphasize that this is a product from a Chinese company. As long as your product is good, users will love it.
Actually in just one week, almost all the investors and people in the tech industry that I met would ask me if I have plans to go overseas, or when it’s going to be. The answer I gave was the same, “Of course, we are recruiting talent.”
All in all, this week has convinced me that Chinese dot-com companies have the abilities to participate in global competition. In fact, there is no longer a gap between the entrepreneurial environment of China and the US, there are just differences.
Finally, I have two more thoughts to share with you.
On the second to last day of the trip, we visited Y Combinator, the most famous incubator in the US. In the past few years, it has invested in many star companies such as Airbnb and Dropbox. I found that YC doesn’t provide workplaces for start-ups. It usually invests in young people who just graduated or have only worked for one or two years. The amount of investment is not much either, only tens of thousands of dollars, accounting for about 5% of the shares.
Although it doesn’t provide workplaces, it matches well-known entrepreneurs as mentors with start-up teams. The only requirement of YC for these start-ups is to make good products and gain more users. In fact, after nearly 10 years, YC has accumulated a lot of personal connections and resources in Silicon Valley, which is more helpful than a free workplace for entrepreneurs. This is what Chinese incubators can learn from.
Another thing that impressed me a lot was Stanford University. It is located in a large rural ranch, but the emergence of this university changed everything. Especially the Stanford Research Park established in the 1950s, which not only incubated many tech giants that had a profound impact on future generations such as Hewlett-Packard, but also created today’s Silicon Valley, and made the US the center of the world’s tech industry. From a business perspective, the establishment of Stanford is undoubtedly an investment with a high return. I really admire the long-term vision of its predecessors.
In short, this is the “golden age” of Chinese tech companies. The opportunity is right there. I wish the best to all Chinese start-ups, including Bytedance.