How a Nation of Tech Copycats Transformed Into a Hub for Innovation

How a Nation of Tech Copycats Transformed Into a Hub for Innovation | WIRED

HOW A NATION OF TECH COPYCATS TRANSFORMED INTO A HUB FOR INNOVATION Related Galleries How GM Beat Tesla to the First True Mass-Market Electric Car Space Photos of the Week: A Supermassive Black Hole Burps The Best Photos of CES 2016: Drones, VR, and … a Pigeon Ricoh’s Theta S Camera Captures CES in 360 Terrifying, Beautiful Degrees Misfit’s Wearables Hide Their Tech Behind Cool Minimalism SLIDE: 1 / OF 6 . Caption: Employees at rising mobile star Xiaomi take a break at their office in Beijing. ZACHARY BAKO SLIDE: 2 / OF 6 . Caption: A worker at ecommerce giant Meituan. ZACHARY BAKO SLIDE: 3 / OF 6 . Caption: Offices of livestreaming enterprise YY. ZACHARY BAKO SLIDE: 4 / OF 6 . Caption: Zepp Labs employee testing hardware at the company’s office in Beijing. ZACHARY BAKO SLIDE: 5 / OF 6 . Caption: Meituan office lobby. ZACHARY BAKO SLIDE: 6 / OF 6 . Caption: Jerry Liu, CEO of ShenZhen YueJiang Technology, during an open house at a XinCheJian hackerspace. ZACHARY BAKO Advertisement Related Galleries How GM Beat Tesla to the First True Mass-Market Electric Car Space Photos of the Week: A Supermassive Black Hole Burps The Best Photos of CES 2016: Drones, VR, and … a Pigeon Ricoh’s Theta S Camera Captures CES in 360 Terrifying, Beautiful Degrees Misfit’s Wearables Hide Their Tech Behind Cool Minimalism SLIDE: 1 / OF 6 . Caption: Employees at rising mobile star Xiaomi take a break at their office in Beijing. ZACHARY BAKO THE YOUNG PROGRAMMER had an idea, and everyone thought it was nuts. Just out of college, he’d gotten a job writing software for YY, a livestreaming company based in the mas­sive city of Guangzhou, in China’s Pearl River Delta. More than 100 million users every month stream them­selves, or tune in to broadcasts of others, singing, playing video­games, or hosting talk shows from their Beijing apartments. The audience chats back, prolifically, via voice or text. The programmer thought YY should try something new: use its proven streaming technology to run a dating service, which would operate kind of like a TV dating show. A host would set up an online lounge, then invite in some lonely singles and coax them to ask each other questions and maybe find a partner. Company executives were dubious. “The CEO almost killed it,” says Eric Ho, chief financial officer, sitting in YY’s head­quarters, atop three floors of furiously coding engi­neers and designers. Are you sure you want to do this? the CEO asked the kid. This is very stupid. I don’t think people will like it! But the programmer was hungry and persistent, so they waved him on: Give it a try. The old attitude—keep your head down and stay safe—is vanishing, swept aside by the surge in prosperity. In China, this type of employee didn’t used to exist. Ten years ago, high tech observers complained that the nation didn’t have enough bold innovators. There were, of course, wildly profi­table high tech firms, but they rarely took creative risks and mostly just mimicked Silicon Valley: Baidu was a replica of Google, Tencent a copy of Yahoo, JD a version of Amazon. Young Chinese coders had programming chops that were second to none, but they lacked the drive of a Mark Zucker­berg or Steve Jobs. The West Coast mantra—fail fast, fail often, the better to find a hit product—seemed alien, even dangerous, to youths schooled in an educational system that focused on rote memorization and punished mistakes. Graduates craved jobs at big, solid firms. The goal was stability: Urban China had only recently emerged from decades of poverty, and much of the countryside was still waiting its turn to do so. Better to keep your head down and stay safe. That attitude is vanishing now. It’s been swept aside by a surge in prosperity, bringing with it a new level of confi­dence and boldness in the country’s young urban techies. In 2000, barely 4 percent of China was middle-class—meaning with an income ranging from $9,000 to $34,000—but by 2012 fully two-thirds had climbed into that bracket. In the same time frame, higher education soared sevenfold: 7 million graduated college this year. The result is a generation both creative and comfortable with risk-taking. “We’re seeing people in their early twenties starting companies—people just out of school, and there are even some dropouts,” says Kai-Fu Lee, a Chinese venture capitalist and veteran of Apple, Microsoft, and Google, who has spent the past decade crisscrossing the nation, helping youths start firms. Now major cities are crowded with ambitious inventors and entrepreneurs, flocking into software accelerators and hackerspaces. They no longer want jobs at Google or Apple; like their counterparts in San Francisco, they want to build the next Google or Apple. Related Galleries How GM Beat Tesla to the First True Mass-Market Electric Car Space Photos of the Week: A Supermassive Black Hole Burps The Best Photos of CES 2016: Drones, VR, and … a Pigeon SLIDE: 1 / OF 4 . Caption: YY programmer Mo Wengang, who pitched the idea of using the company’s streaming tech for a dating service. ZACHARY BAKO SLIDE: 2 / OF 4 . Caption: YY employees line up for a mid-afternoon snack. ZACHARY BAKO SLIDE: 3 / OF 4 . Caption: The offices of YY in Guangzhou. ZACHARY BAKO SLIDE: 4 / OF 4 . Caption: The offices of YY in Guangzhou. ZACHARY BAKO Related Galleries How GM Beat Tesla to the First True Mass-Market Electric Car Space Photos of the Week: A Supermassive Black Hole Burps The Best Photos of CES 2016: Drones, VR, and … a Pigeon SLIDE: 1 / OF 4 . Caption: YY programmer Mo Wengang, who pitched the idea of using the company’s streaming tech for a dating service. ZACHARY BAKO Anyone with a promising idea and some experience can find money. Venture capitalists pumped a record $15.5 billion into Chinese startups last year, so entrepreneurs are being showered in funding, as well as crucial advice and mentoring from millionaire angels. (It’s still a fraction of the US venture capital pool from 2014, $48 billion.) Even the Chinese government—which has a wary attitude toward online expression and runs a vast digital censorship apparatus—has launched a $6.5 billion fund for startups. With the economy’s growth slowing after two decades of breakneck expansion, the party is worriedly seeking new sources of good jobs. Tech fits the bill. The new boom encompasses both online services and the hardware arena. Recent local-kid-makes-good models like Xiaomi, the fast-rising Beijing mobile phone firm, or WeChat, Tencent’s globe-conquering social networking app, are leading the way forward. Homegrown firms have distinct advantages, namely familiarity with local tastes, the ability to plug into a first-class manufacturing system built for Western companies, and proximity to the world’s fastest-growing markets in India and Southeast Asia. The combination of factors is putting them in a position to beat the West at its own game. Xiaomi, for example, was the fourth-highest seller of mobile phones worldwide last year, behind Samsung, Apple, and Huawei. As for YY, it turns out it was good that the executives indulged their enterprising programmer. The dating show launched last year and became a hit. It also generated serious profits. YY has no advertising; it earns revenue when users fork over real Chinese currency to buy virtual items they give as gifts to each other or to the “broadcasters” streaming their own lives online. YY takes a 60 percent cut of each purchase, with the recipient getting the rest as actual cash. (Popular broadcasters make so much money that they live off their YY earnings.) At a laptop on Ho’s table, I peer at the screen, where a dating event is livestreaming. Money is flying around as male and female guests give each other—and the host—virtual presents: rings (worth $1.55), kisses (16 cents), and love letters (5 cents). Some items are pricier yet; for about $1,000, you can buy someone a virtual Lamborghini. In its first nine months, YY’s dating show brought in about $16 million, a sum growing rapidly every month. Last year YY itself brought in $580 million, and three years after going public on the Nasdaq, its market cap tops $3 billion, even after the market gyrations of 2015. The next Silicon Valley has emerged—and it’s in the East. CHINA’S TECH BOOM in the late ’90s produced its own Web 1.0: search engines, email and blogging tools, news portals, and Alibaba’s sprawling online sales market. Back then, China very much needed local copies of US companies, because US firms often couldn’t operate easily in China. The government blocked many foreign sites by using a complex system of filters known as the Great Firewall of China. Local firms had an edge anyway: They understood the particular demands of the Chinese digerati in the early ’00s, when Internet access was still scanty. Ten years ago, for example, eBay tried to dominate in China but failed, partly because many small businesses—the places that might otherwise have used eBay to sell their products to the world—didn’t yet have computers or a connection to the Internet. At Alibaba, however, founder Jack Ma understood this, so he assembled a huge sales force that fanned out across the country, teaching merchants how to get wired. (He also outcompeted eBay’s PayPal with Alipay, which holds a buyer’s payment in escrow until they receive their goods and pronounce themselves happy with the purchase; this helped build trust in online markets.) Riding that first crest, firms like Baidu and Alibaba became the “big dragons” of Chinese high tech, minting millionaires much as Microsoft had in the ’90s. The success of copycat firms paved the way for “little dragons”—creative, upstart Web 2.0 firms that emerged in the late ’00s. The big dragons provided role models, but even more significantly, they built the infrastructure crucial for today’s high tech boom, including the cloud services that allow any twentysomething to launch a business overnight and immediately start billing customers. One of the most successful in this second wave is Meituan, a firm that has become an ecommerce giant by enabling small merchants across the country to broadcast deals to nearby shoppers who have opted in, on the web and within Meituan’s mobile app. When I visit the Beijing headquarters, it looks like a tropical forest: There are leafy green plants plunked down between each workstation, while humidifiers puff clouds of moist air upward. It’s nearly silent, but there’s a lot of money flowing through the office. Suspended above dozens of coders is an LCD the size of a table for four that reads “8,309”: the number of deals Meituan has broadcast so far today. The firm’s revenue has skyrocketed in its five years of operation; in 2014 it processed more than $7 billion in deals for its 900,000 partners. It’s aiming to reach $18.5 billion by the end of this year. China’s techies don’t want jobs at Apple or Google—they want to build the next Apple or Google. Meituan’s CEO, the slender and soft-spoken Wang Xing, is a serial entrepreneur who tracks the emerging creative shift in Chinese startups. He had already made Chinese clones of Facebook and Twitter when, in 2008, he noticed the rise of Groupon. “There’s no doubt that we got influenced by Groupon,” he admits. But by then he was seasoned enough to spot the flaws in the discounter’s business model. Groupon took a big cut—up to 50 percent—of the revenue from each deal, which left participating merchants bitter. They’d routinely lose money by issuing Groupon deals, so they’d grit their teeth and hope it would attract new permanent customers; usually it didn’t. Wang, in contrast, wanted to make Meituan the easiest way for small merchants to charge their customers and stay in contact with them. Setting Meituan’s cut at only 5 percent ensured that merchants nearly always made money. He also began developing proprietary ecommerce tech. Wang whips out his phone to show me a recent example. His programmers fanned out to movie theater chains across the country, laboriously connecting Meituan’s app to their booking systems. It was a hassle, but now moviegoers can not only buy a ticket from the Meituan app, they can pick their seats. Wang clicks on The Hobbit to show me. “When you go to the theater you don’t have to wait in line and talk to any people—you can just go to a vending machine and scan your passcode” to get in, he says. It’s slick and simple, and now one-third of all movie tickets in China are bought via Meituan. Last year it was 10 percent of the firm’s annual income. Related Galleries How GM Beat Tesla to the First True Mass-Market Electric Car Space Photos of the Week: A Supermassive Black Hole Burps The Best Photos of CES 2016: Drones, VR, and … a Pigeon SLIDE: 1 / OF 4 . Caption: Zepp Labs’ cofounder Robin Han at the company’s offices in Beijing. ZACHARY BAKO SLIDE: 2 / OF 4 . Caption: Zepp Labs’ cofounder Xiaowei Dai uses the company’s tech to capture his golf swing. ZACHARY BAKO SLIDE: 3 / OF 4 . Caption: Hardware startup Zepp Labs in Beijing. ZACHARY BAKO SLIDE: 4 / OF 4 . Caption: A Zepp Labs employee tests hardware. ZACHARY BAKO Related Galleries How GM Beat Tesla to the First True Mass-Market Electric Car Space Photos of the Week: A Supermassive Black Hole Burps The Best Photos of CES 2016: Drones, VR, and … a Pigeon SLIDE: 1 / OF 4 . Caption: Zepp Labs’ cofounder Robin Han at the company’s offices in Beijing. ZACHARY BAKO It’s an adroit move, because service—and convenience—is what China’s urban middle class increasingly craves. Sporting high-end mobiles and elite fashion from Europe, they pull out their phones for nearly every purpose: using Alipay to cover a cab ride to a DJ’d party in the artistic outskirts of Beijing; opening WeChat and using its location-sharing function so their friends can find them; posting selfies on Meitu, a picture-sharing service with built-in beautifying filters. The service economy commanded 44 percent of all money spent by the Chinese middle class in 2013, a figure that consulting firm McKinsey expects will grow to 50 percent by 2022, as young urbanites splurge via their phones on everything from massages to takeout food, hairstyling, and nail salons. Even the market meltdown of this year doesn’t seem to have dented middle-class consumption: During China’s travel-focused Golden Week national holiday in October, box office sales were up 70 percent over the previous year, and overseas trips were up 36.6 percent, according to Bank of America-Merrill Lynch analysts. Ecommerce, already big in China, has an astonishing amount yet to grow—a tremendous number of everyday services are not yet online. For example, 80 percent of China’s hotel rooms are still booked offline. And people are eager for ecommerce not just because it’s convenient, but because it’s much less corrupt and opaque than brick-and-mortar businesses. As Kai-Fu Lee points out, the latter are, by American standards, riddled with inefficiencies and hucksterism. “In the US, hundreds of years of fair competition made commerce relatively fair and transparent,” he says. Not so in China. “If you were to sell real estate, there is no transparency. If you buy a used car, there is no Consumer Reports or Ralph Nader.” By removing middlemen and creating reputation systems, ecommerce firms are making transactions more transparent and trustworthy, he argues. “So a mobile social-based solution will be dramatically better,” Lee says. Corruption is just one of the many challenges China faces. The country’s leaders and investors also contend with nontransparent banks, government regulators on the take, rampant pollution, fierce crackdowns on political speech, and a rural population yearning for better jobs in the cities. It’s not clear whether the party can solve all these messy problems. In the short run, though, the high tech gold rush has produced manic and fierce competition. Whenever a new category opens up, it’s immediately swarmed upon by dozens or even hundreds of entrepreneurs. By comparison, competition in the US is mild; for example, there are only two major firms—Uber and Lyft—duking it out for car bookings. But Lee estimates that in its early days, Meituan had to fight 3,000 competitors dotted across the country. Whoever is left standing is battle-hardened. That’s Wang now. Halfway between the old guard and the new, he has become an angel investor himself, on the lookout for youngsters with daring ideas: the next little dragons. One company he’s investing in is eDaijia, which, rather hilariously, lets car owners find someone to drive their vehicle home when they’re drunk. “They are totally dominant in China, and last year they went to Seoul,” he laughs, “because, they told me, that’s the most drunk city in the world.” CHINA’S CREATIVE BOOM in web services is significant enough, but arguably it has an even bigger edge over the US in hardware. The country has spent 30 years becoming the manufacturing capital of the world, so coastal cities like Shenzhen and Guangzhou are now crammed with electronics facilities, from tiny three-person shops to Foxconn’s 30,000-employee city-factory complexes cranking out iPhones. All have a deep knowledge of how to make things, so it was almost inevitable that homegrown entrepreneurs would get in on the act. Living next to the factories or being able to stroll the electronics markets, they’re the first to know when trends in hardware emerge: for example, when a cutting-edge sensor arrives that lets you collect new forms of data—or when the cost of an existing one suddenly drops to a penny, allowing it to be sprinkled anywhere, like dust. The high tech gold rush has produced manic and fierce competition among the swarms of entrepreneurs. “It’s easier in China than in other places,” Robin Han says, “because we have Shenzhen.” Han is the 32-year-old cofounder of Zepp Labs, a Beijing-based hardware startup that is the darling of the sports world: It makes a square sensor that tracks your swing—of a golf club, a baseball bat, a tennis racket—then uses an iPhone app to help you improve. Han got the entrepreneurial itch five years ago as a PhD student working in Microsoft’s Beijing research office. Big-company life might be stable, but you could toil for years on a project that might never become a real product. Success was out of your control, he tells me, sitting in the brightly lit Zepp office, where, behind him, two dozen coders and designers pilot keyboards. Han had noticed gyroscopes being used in HTC and HP phones as well as Nintendo Wii remotes and figured they would go down in price as big companies continued to include them in their products. That had potential. He and a friend, Peter Ye (now Zepp’s head of R&D), loved sports and hit on the idea for a swing sensor. Players could analyze their motions or compare them to those of professionals; coaches could scrutinize an entire team’s practice swings, even remotely. Han and Ye started with golf. They figured duffers would be willing to spend money on a sensor that promised to improve their game. They lead me to the basement, where they have constructed a huge batting-and-golfing cage. “We spent a lot of hours in here perfecting the sensors and working on our swings,” Han says. The walls are studded with marks from errant balls. Their prototype worked so well it attracted the attention of an Apple rep who was touring China, looking for products for the Apple Store. Satisfying Apple’s precise aesthetics required them to slowly refine the design through 14 prototypes, but it paid off: Since the Zepp sensor launched in Apple Stores worldwide in 2012, Zepp has activated more than 300,000 of them. Han and Ye got Zepp Labs off the ground with $1.5 million in seed money from angel investor Xiao Wang and worked their contacts to find a good factory to help prototype and mass-produce their device. That last step—finding a talented, Foxconn-class factory that has deep experience in elegantly solving design challenges—has traditionally been the hard part of getting things made in China. But in recent years, that’s gotten easier too. A set of middlemen has emerged specifically to help bridge that gap, including Highway 1, a program by the manufacturing giant PCH: It picks gadget inventors from around the world and finds topflight factories willing to take a risk manufacturing a product by an unknown new talent. There’s also been a hackerspace movement in China. The first one—Shanghai’s XinCheJian—was cofounded in 2010 by Chinese Internet entrepreneur David Li, when he noticed how cheap prototyping tools were allowing kitchen-table inventors to produce increasingly slick prototypes. Now local creators from across China mix with expatriates who flock to XinCheJian from around the world, brainstorming ideas with each other and going on tours of factories organized by Li to help them understand how China’s hardware ecosystem works. Much like a gym, members pay monthly fees to XinCheJian, which gives them access to the hackerspace’s tools and, just as important, advice and networking from fellow inventors. “I always encourage people: Get to your prototype fast, try to find manufacturing partners, and get your Kickstarter campaign finished,” Li tells me, sitting at the hackerspace’s main table, in front of a fridge emblazoned with a sticker that reads DO EPIC SHIT. The rooms behind him are filled with metal lathes, electric tools, and rows of 3-D printers. One successful product that recently emerged from XinCheJian is Wearhaus headphones, which enable one person to stream music from their phone while friends listen in, letting them privately enjoy the same music while, say, coworking or studying. The first run of 3,000 headphones sold out, and now a larger run is in the pipeline. THE ACME OF China’s innovation boom can be found in four office towers that loom over a sprawl of condos in the suburbs of Beijing. These are the headquarters of Xiaomi. Founded in 2010, the company has become famous for making mobile phones comparable to the iPhone—fast processors, large screens, and a sleek operating system called MIUI—but at half the cost. It may be even more famous for its chiefly online sales model and explosive growth. Xiaomi sold 61 million phones last year, and for part of 2015 it was the top-selling mobile brand in China. Though it’s still private, last year investors said it was worth $45 billion. Xiaomi was founded by a serial entrepreneur who got a chance to make his early mistakes—and fortune—10 years ago: CEO Lei Jun founded the online bookseller Joyo, which he later sold to Amazon. He quickly became an angel investor, pouring money into the next generation of innovators, like YY, and making connections with the country’s brightest young designers and engineers. By 2010, a new vision had taken hold: to build an operating system and a new business model for selling mobile phones. Lei formed Xiaomi and hired a team of crack talent to quickly produce a gorgeous mobile phone OS and put it online in August of that year. China’s techies loved it. But only the most nerdy were willing to endure the hassle of downloading an OS to their existing phones. If Xiaomi wanted to get the system into the hands of millions, it would need to make—and sell—handsets. Foxconn became one of Xiaomi’s primary manufacturers. Meanwhile, the startup hit upon a hugely effective sales system. Each new model would initially be sold in a limited quantity—perhaps 50,000—via a weekly flash sale on its website. The exclusivity drove fans wild. The lucky few who scored phones would flaunt them to their envious hipster friends—and later, Xiaomi would open up a larger run to satisfy pent-up demand. Related Galleries How GM Beat Tesla to the First True Mass-Market Electric Car Space Photos of the Week: A Supermassive Black Hole Burps The Best Photos of CES 2016: Drones, VR, and … a Pigeon SLIDE: 1 / OF 5 . Caption: David Li, cofounder of hackerspace XinCheJian. ZACHARY BAKO SLIDE: 2 / OF 5 . Caption: XinCheJian’s first 3-D printer, an open-source machine called Printrbot. ZACHARY BAKO SLIDE: 3 / OF 5 . Caption: A vintage oscilloscope at XinCheJian in Shanghai. ZACHARY BAKO SLIDE: 4 / OF 5 . Caption: The SofaBike at XinCheJian. ZACHARY BAKO SLIDE: 5 / OF 5 . Caption: Every Wedneday evening, XinCheJian hosts an open house where makers present their ideas to the public. ZACHARY BAKO Related Galleries How GM Beat Tesla to the First True Mass-Market Electric Car Space Photos of the Week: A Supermassive Black Hole Burps The Best Photos of CES 2016: Drones, VR, and … a Pigeon SLIDE: 1 / OF 5 . Caption: David Li, cofounder of hackerspace XinCheJian. ZACHARY BAKO Xiaomi’s office is brightly lit and decorated with huge paintings. A mutt that workers adopted off the street sleeps in his doghouse on the first floor. One flight up, a sprawling room is filled with customer-service reps chattering into phones, attempting to solve users’ issues around the world. Though China is Xiaomi’s largest market, in 2013 the firm hired Hugo Barra, previously Google’s product manager for Android, to oversee global expansion. “These are phones for the generation that will never have access to a computer,” Barra says. “They’re discovering the Internet from their phones.” Xiaomi’s edge, he says, is that it continuously produces new upgrades. “We build hardware, but we take a very software way of doing it. We do a software update every week!” These updates often incorporate the voluminous feedback that Xiaomi gets from its deeply involved fans: A single post by Xiaomi’s team on the company’s customer forums can receive 100,000 replies discussing the latest tweak to the operating system. Indeed, Xiaomi’s willingness to talk online with its customers has been a key part of both understanding the demands of young consumers and cultivating their manic devotion. Xiaomi sells its phones at close to cost; much of the company’s revenue comes from its line of accessories, like headphones and step-tracker wristbands, as well as from app store purchases of things like new OS skins. The hope is that eventually even more revenue will come from the many ecommerce transactions that Xiaomi owners will engage in, buying everything from meals to plane tickets to clothing. But to see the company’s broader vision for the future, you need to head downstairs to a spare and elegant showroom. It’s filled with Internet of Things devices that the company is bringing to market, all of which can be operated remotely via the mobile OS. There’s a smart lightbulb, a connected webcam, a bathroom scale, a TV, a power strip—and an air purifier, a crucial appliance for the Chinese, who must contend with the country’s out-of-control air pollution. Once you buy one product, you’ll very quickly buy the others, because they all work so well together, Barra boasts. “The game in China is building walled gardens and getting them to stay in your garden.” Xiaomi didn’t design and manufacture this hardware itself. The executives went on a hunt for the country’s hungriest cutting-edge startups, then invested in them and demanded they produce Apple-quality design. It is astonishing to see the ecosystem laid out. It makes Google’s toe-dip into the Internet of Things—its Nest smart thermostat and security camera—look several years behind the curve. Western entrepreneurs now flock to hardware and software accelerators in China’s coastal cities. China’s creative generation, in other words, has proven it is ready to compete head-on with the world’s top high tech brands. “Apple and Samsung are right to be worried,” says Bunnie Huang, a well-known hardware hacker. (Indeed, Samsung’s global share of the smartphone market dropped to 21.4 percent in the second quarter of 2015, from 32.2 percent in the same period of 2012.) When it comes to hardware, Chinese inventors benefit from proximity to the world’s largest base of consumers, which is growing fast. Xiaomi’s first major foreign expansion wasn’t to the US but to the much huger—if poorer—India, where it sold 1 million phones in the third quarter of this year. Sew up China and India, it realized, and that’s a third of the planet. In context, the US, where many consumers already own smartphones, isn’t a particularly big market. Yet while Chinese firms like Xiaomi are challenging the big tech firms, the flow of opportunity goes both ways: It’s getting easier and easier for Western entrepreneurs to go work in China. They now regularly flock to hardware and software accelerators in the coastal cities so they can meet local collaborators or find factories. One French woman arrived in Shanghai last year to team up with Chinese coders and create an online market for French wine, targeting the chic restaurants where urbanites dine. Young American inventors congregate at H@xlr8r in Shenzhen, where they prototype everything from retro animated-GIF cameras to customized-pill-creation robots. China is essentially becoming a mecca, a destination for people with ideas—much as Silicon Valley did a generation ago. RELATED STORIES CADE METZ China’s Alibaba Just Beat the US in a Global Machine Battle ISSIE LAPOWSKY Techies Are Trying to Get Chinese Consumers to Rack Up Debt ANDREW CURRY Building a New Silicon Valley in a Post-Soviet Dictatorship I saw that one day toward the end of my visit. I dropped by David Li’s XinCheJian hackerspace, where Li was meeting with a startup team he’d been mentoring, including a Dutch-Italian man named Lionello Lunesu, who has lived in China for eight years, and a Latino man named Berni War. They were looking over their latest prototype, which had been sent by courier from a nearby factory. It was a little device that gives you alerts from your computer or phone, almost like an Apple Watch that sits on your desk instead of on your wrist. “For David, we’re not going nearly fast enough,” Lunesu says. Li picked up the gadget and stroked its sleek white sides. “That’s the same plastic they use for the iPhone 5c,” he says. The entrepreneurs grin. A lot of this opportunity is not available in the US. That’s why they’re here. Contributing editor CLIVE THOMPSON (@pomeranian99) is the author of Smarter Than You Think. Go Back to Top. Skip To: Start of Article.

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