I got up at 5, worked out, and had the wrong breakfast. The off-hours phone staff isnt very reliable I ordered an egg white fritatta and ended up with an American breakfast. I met Claire at 7:30 to start my last day in China in the dark (the downside of the otherwise efficient single Chinese timezone). We took yet another taxi ride about half an hour to a 9:00 meeting (Claire being overly concerned about travel time) at the Chengdu Hi-tech Zone Innovation Service Center (mysteriously CDHT). We were given a brief tour by Jiao Xian Feng, Chief of the Enterprise Department and stopped by to see the Director, Li Gang
Three buildings that were CDHTs, but were taken back by the government
CDHT is an incubator, primarily for electronics and biotech companies. They have had as many as 600 in the park, and currently house 120. Most come as start-ups with just a few people. In addition to low rent (2-5 yuan/meter squared/month, or less than $1/sf!), they receive an array of support services. Most importantly, CDHT helps with government relations. They also have a platform of software (from Microsoft, IBM, BEA, etc), training, legal, etc services. Again, there was mostly empty capacity in the data center, despite an investment of about $1 million. I didnt get very far with the question of how results are measured, but that might have been the language barrier. They do have a display for visitors:
The Director invited to lunch, which would have been very interesting and easy, since his English is excellent, but we already had plans.
We were picked up there by two professors from the Chengdu Textile College, who were to accompany us to my next meeting, with Sofmit Group. A hilarious series of parking misadventures ensued. They had parked inadvertently in a lot belonging to a bank in the same building as CDHT. To exit the lot, you need a ticket from the bank which they hadnt been told when they parked there. Of course, since they hadnt gone to the bank, they didnt have a ticket. The guard couldnt take cash. We sat, half in and half out of the lot for almost 15 minutes while they went back and forth and back and forth. No one got angry, but no one shifted positions an inch. I have no idea why or how, but finally the guard let us pass. We then arrived at Sofmit Group, where there were at least three times the cars as the parking spots. for a huge office building there is one underground level and maybe 50 outdoor spots there are cars squeezed in every tiny bit of space. After a bunch of honking, going back and forth.
An aside on cars The only people who can drive half-decently in China are the professional drivers. As David Chen from GM told me, they made 600 changes to the Buick when they brought it to China, the main one being to increase rear leg room: people who own cars in China sit in the back seat. An ex-pat on my last trip described driving in Beijing: imagine every 16 year old driver in Kansas dropped into Manhattan. Really, they cant drive, they havent had enough time to learn and they have very poor role models.
Finally, we managed to find a ramp to go down. But it was an exit ramp and had to back up, got stuck in a tight spot, which the parking attendant in full police-like uniform helped us out of and went down an entrance ramp. To find that the machine wouldnt dispense a ticket. After sufficient pounding the machine the arm went up and we happily drove in. But the guard in that lot said that we couldnt park there because we were under the wrong building. So we exited to find ourselves back where we started. This time we found the correct ramp, again couldnt get a ticket from the machine, but were saved by the guard who put up the arm, and we parked. Phew!
We then went to meet Zhang Wei the Founder and President of Sofmit. We were a few minutes early, but they were very ready for us. Many if not most of my meetings other than with start-ups have been prepared this way:
Sofmit is a 1,500 person 200 million yuan ($30m) offshoring company founded in 2002. Zhang had emigrated to Canada and helped a friend in Dallas with some offshoring, and decided that there was an opportunity so he moved back to Chengdu to pursue it. Today, in addition to typical offshoring, they do complete packaged China market penetration deals, mainly through joint ventures. You bring the product, they bring the sales (mainly government relations), service, support, and maintenance. I have no idea how it works, but it sounds like a very smart option. Sofmit is looking for partnerships and acquisitions with 50-100 person consulting firms in the U.S. let me know if youre interested or know anyone who might be.
Next we took a long drive to have lunch and a meeting at the Chengdu Textile College. The banquet was outstanding and I finally remembered to take photos!
Plus, somehow, I missed the dumplings and the rice.
My host, Vice President Xia Ping, recently went to the U.S. for some sort of program at SUNY Stonybrook and had travelled around the country to see various colleges and universities. His english was quite good, and I enjoyed our conversation. He commented on the beauty of American campuses and how fat Americans are. Right on both counts. We then drove over to the college for a meeting. The room was beautifully prepared with 15 places set
They thoughtfully had an English version of the agenda for me
I was concerned that it would be very stilted and that I wouldnt know what to say, but it turned out to be a lively and interesting conversation and genuinely enjoyable experience. Claire did an excellent job translating. It was chilly though. Many of the buildings in Chengdu arent heated the windows are open even though its 50 degrees out, and everyone just keeps their coats on. At the conclusion of the meeting they presented me with a beautiful embroidery (remember, its a textile school), celebrating their 70th anniversary
I was very proud of making a real, culturally appropriate joke: I said that this was much more beautiful than the gift I received at Tsinghua University and got a big laugh. I presented Dr. Xia with a pen in reciprocity (it is key in China to have a small gift at times like this.
The college called a driver to take us to my last meeting, since there are no taxis out this far from the city. One thing Ive learned is to not worry about things like this here they always work out. Gestures work well when no one speaks English, which is rare, and everyone is extremely helpful and friendly. I wish Id gotten into more such trouble than I did, just to learn how OK it really is.
Next was meeting with students at the University of Electronic Science and Technology of China. The main building is simply astounding, its brand new and enormous.
There were about 20 students, mainly software and CSE majors, who came because the event was posted on their web site. Claire did an introduction of Eisenhower, and I introduced myself, then I took questions for over an hour. These students were mostly studying software development, but we discussed topics including how to turn a project into a product into a company, ecommerce, differences in Internet use between China and the west, and privacy. The latter was fascinating it made all of the attendees, students and teachers, extremely uncomfortable that anyone would know their purchase history and might recommend products to them based on that history. This in a country where you cant move without permission. This group provided an intriguing contrast to the Tsinghua students. They seemed less constrained and more creative, more enthused.
The final challenge was getting back from the suburbs where there are no taxis. The coordinator called an illegal taxi for us, and we rode in Chevy comfort for an hour back through rush hour traffic for 80 yuan ($11).
I stayed in, worked, packed, and went to bed by 11 in preparation for my trip home.
I've started and/or run too many venture capital-backed software companies, plus one ill-fated food startup.