InnovationWorks is a Chinese incubator focusing on early stage internet companies in China – interest in startups is exploding, and InnovationWorks saw 7,000 resumes in response to open applications for its first batch, “There’s nothing that matches the Chinese entrepreneurs desire for success,” he said.
Lee sees the future of InnovationWorks, which started out as sort of a Chinese IdeaLab, as a combination Andreessen Horowitz/Y Combinator. The incubator is moving increasingly towards VC, with a new fund totaling almost $200 million dollars. Lee wants to put a Chinese spin on Andreesen’s strategy of completing everything in house, ”We take advantage of a high valuation and low cost of building. Disadvantage is that we don’t have ten years to wait. “
Lee said that InnovationWorks currently looks for three characteristics in its Chinese startup founders in addition to the prerequisites of being hardworking, tec, a) doing their homework b) previous experience — real skillset and value add in spaces c) the characteristics of being a leader
On the “previous experience” point, Lacy brought up that Lee’s belief that China isn’t ready for an entrepreneur with a disruptive, “lightbulb on top of head” type idea — a Zukerberg, Andreeseen or even a Jerry Yang or Steve Chen.
“Chinese society is not as supportive of failures,” Lee explained, and because of that “in the current state it is very difficult to find that 20 year old dropout with the novel idea.”
Lee did not preclude the idea of a Chinese Mark Zuckerberg (a.k.a. a young kid that changes the world) but implied that Tencent founder Pony Ma was an exception and instead Innovation Works was banking on people like Renren’s Jack Shiu, Vincent Tang and Jeff Ma, “all experienced people.”
“We think our hit rate is very high,” he said “and we need to spend that time with people who will increase that hit rate.”