Kaifu Lee: Constraints at Google and Dreams at Innovation Works

Kaifu Lee "running away" from Google. Source: YNET

On Saturday, Google China President Kaifu Lee resigned. On Sunday, CNReviews tracked the news on his next step, Innovation Works, an early-stage investment fund and startup incubator. To track the Chinese blogosphere, BloggerInsight asked Chinese bloggers for responses to three questions:

Q1 : Why did Kaifu Lee resign from Google China?

There was early speculation that government politics led to his resignation (which Kaifu Lee has adamantly dismissed), but internal Google politics do seem to have played a role. Remaining at Google China meant enduring continual corporate pressure and cultural conflict. Google didn’t offer him the freedom to grow Chinese entrepreneurship as he envisions it.

Blogger comments:

“Because of the suffocating constraints of a large company, Kaifu Lee was not free to localize Google into China. He was likely a mere figurehead, unable to capitalize upon his abilities or realize his dreams.”

“To outsiders it looks like Kaifu Lee lived the high life as Google China President, but there must have been hardships that we cannot imagine. He mentioned his entrepreneurial aspirations as early as August 2008, but had to shelve them because of the financial crisis. While sick in the hospital this June, he became determined to make his move into entrepreneurship.”

Q2: How will Kaifu Lee’s resignation impact Google China?

Opinions are mixed on how Kaifu Lee’s resignation will impact Google China. While his efforts led Google market share to double (from 16.1% in 2006 to 31% at present), the consensus is that Google still has a long way to go in China.

Blogger comments:

“With the loss of a man of Kaifu Lee’s character and vision, there will certainly be a slight change at Google China. It’s uncertain if his successor will be able to localize Google’s products as well, a key determinant of the company’s success in China.”

“[Kaifu Lee’s resignation] will not have much influence on the competitive balance between Google and Baidu. With its extensive coverage online and in the traditional media, it may even bring Google extra traffic!”

Q3: What can we expect from Innovation Works

Chinese bloggers’ expectations are tempered by realism. Angel investing is in its infancy in China, so it will likely take at least ten years to reach success. Finding a model to identify, assist, and profit alongside Chinese innovators will take time.

Yet that doesn’t stop bloggers from having lofty dreams for what Innovation Works could incubate—if not the next Google, then something close. And if anyone is up to the task, it’s Kaifu Lee. With his extensive R&D background in China, Kaifu Lee has a deep understanding of how to nurture innovation. Perhaps his strongest asset at Innovation Works will be his personal charisma and ability to connect budding entrepreneurs: the next Larry and Sergei with Eric, or Bill Gates with Steve Ballmer.

Blogger comments:

“The primary challenge will be how to screen people. With the domestic education system as it is and the underdevelopment of creativity, Kaifu Lee with have plenty to ponder.”

“Success at Innovation Works will not come easily or quickly. The first concern is that VCs are well-established, so Kaifu Lee will have to convince the market that his model is also viable. The second challenge will be managing relationships. Will young Chinese entrepreneurs embrace his model? How will they share profits? Will entrepreneurs submit to management from Innovation Works, and if so, in what format?”

“The first hope is that he will incubate companies of Google’s caliber with Chinese characteristics. This may just be a dream of course, but it’s a dream shared by all of China’s technology industry.”

Contributed by Kai Lukoff & Ying Xue.