Entrepreneurs Leadership Program fellows explore entrepreneurship ecosystem of China
Guest Blog by ELP fellows:
- Joe Saginaw – Mechanical Engineering – College of Engineering – Class of 2019
- Joe is interested in building sustainable transportation through the electrification of vehicles and larger scale logistic networks and will be a Chassis Engineering Intern at Tesla this summer.
- Ty Dunn – Cognitive Science – College of Literature, Science, and the Arts – Class of 2019
- Ty is interested in working with data scientists to turn experimental machine learning techniques into scalable, reliable software and will be a Software Engineering Intern at Clinc this summer.
Spring Break 2018: February 23rd to March 4th
We have spent all of our spring breaks visiting startups, and this year was no exception. Last year we went on NEXT, the CFE startup trek to Washington DC and New York City. The year before that we went on WUST, the trek to Silicon Valley. This year we traveled to China to visit fellow ELP16 alum Ziqi Guo and gain a better understanding of the Chinese market and startup ecosystems with a focus on our main areas of interest: artificial intelligence (AI), autonomous vehicles (AV), and electrified vehicles (EV).
Who did we visit?
- CyberInsight: startup developing a software solution that helps companies upgrade their existing factories and take advantage of “Industry 4.0” automation.
- Horizon Robotics: startup building machine learning tailored processors for applications that use embedded vision such as autonomous vehicles and surveillance cameras.
- Infervision: startup developing computer vision technology to support medical image diagnosis.
- Roboterra: startup creating an online learning platform that teaches students about programming and robotics through a self-paced curriculum and an accompanying physical robotics kit.
The Great Wall of China at Badaling
- Huasu Plastics: factory that manufactures plastic used for everything from tablecloths to pool liners.
- Yitu Tech: startup using machine learning to build intelligent security technologies and other industrial applications.
- Liulishuo: startup helping Chinese speakers learn English more efficiently with the help of a personal AI teacher.
- UM-SJTU JI CFE: center for entrepreneurship for students that are part of the Joint Institute at Shanghai Jiao Tong University.
- neoBay: incubator that helps startups scale with a space to work, legal consulting, financial assistance, and access to SJTU resources for its companies.
- Nio: startup producing premium, high-performance, electric, autonomous vehicles.
Nighttime on the Bund in Shanghai
Here are some of the things we learned…
5 Waves of Development in China
- China has experienced similar growth that the United States experienced over the past 200 years but only since 1978. Manufacturing and the boom of the internet age has fueled China’s 9% year over year GDP growth, but this trend is slowing and many expect the economy to grow even slower in the future.
- This had led President Xi Jinping to emphasize that China has entered a period of slower growth called the “new normal”, where he believes industries will begin to mature and expansion will be more stable.
Western Influence in China
- Many of the companies we visited had employees and founders who were educated at American universities or had experience at large western companies. Prestigious American universities and company names hold influence in China and make it easier for companies to raise venture capital or for graduates to find jobs.
- Many of the founders and employees we spoke with had the opportunity to start their companies or work in the United States but chose to return to China. The reason behind this decision included being closer to family, US visa issues, and how there is an incredible amount of opportunity in the Chinese market today.
- The Chinese government is swift to execute when there is a clear vision of what needs to be done. Recently, the government has declared more entrepreneurship an official mission of the state, which allows supported startups to gain access to partnerships with state-owned companies and funding resources. The government has also stated that China should be the world leader in Artificial Intelligence by 2030, a goal embraced by the AI startups we visited.
AV/EV in China
- Powered by subsidies and a an aggressive national policy for promoting EV adoption, China’s electric vehicle market is growing rapidly as domestic production continues to rise. China currently leads the world in manufacturing of electric vehicles, and is projected to continue to do so as EV deployment continues. Manufacturing quality has historically been an issue in this industry, but NIO and other companies aim to change that with their modern and luxurious EVs.
- China’s autonomous vehicle industry is growing rapidly as AI and computer vision experts continue to join Chinese startups and autonomous vehicles become more mainstream. A lot of the technology used for autonomous vehicles is also relevant to the surveillance industry, and we saw some of the companies we visited applying their technology to both spaces.
AI in China
- The Chinese have some important advantages when it comes to AI. The machine learning algorithms that have been the most successful to date, namely deep learning, require lots of data. The Chinese have a ton of data because not only do they have 1.3 billion people but they also are less concerned overall with individual privacy. Companies like Infervision have been able to form partnerships with hospitals and start taking advantage of patient data in a short amount of time. In the United States, sensitive patient data protections and regulations would make it much more difficult for AI startups to do the same. China also passed the US in the funding of AI startups and leaped far ahead of the US on deep-learning patents in 2017.
Manufacturing in China
- Manufacturing in China has grown rapidly over the past several decades, encouraged by government initiatives and lots of business due to the low price point factories have been able to offer. Many of these factories are becoming outdated, and the state has made advanced manufacturing and upgrading China’s manufacturing capabilities an official mission. Companies like CyberInsight are helping to bring about these upgrades and usher in Industry 4.0 to China.
- The Chinese market is incredibly unique and at 1.3 billion strong is the largest unified market in the world. The population has similar culture, and largely the same language and belief system, allowing multiple companies in the same industry to survive. Baidu, Alibaba, and Tencent are China’s equivalent internet giants to Google, Amazon, and Facebook in the United States. These big companies take all of the “low hanging fruit” and force startups to find their niche and work hard to create value.
Thank you to Ziqi Guo, Matt Gibson, and many others for making this once in a lifetime trip possible.