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#431543 China Is an Entrepreneurial Hotbed That ...
Last week, Eric Schmidt, chairman of Alphabet, predicted that China will rapidly overtake the US in artificial intelligence…in as little as five years.
Last month, China announced plans to open a $10 billion quantum computing research center in 2020.
Bottom line, China is aggressively investing in exponential technologies, pursuing a bold goal of becoming the global AI superpower by 2030.
Based on what I’ve observed from China’s entrepreneurial scene, I believe they have a real shot of hitting that goal.
As I described in a previous tech blog, I recently traveled to China with a group of my Abundance 360 members, where I was hosted by my friend Kai-Fu Lee, the founder, chairman, and CEO of Sinovation Ventures.
On one of our first nights, Kai-Fu invited us to a special dinner at Da Dong Roast, which specializes in Peking duck, where we shared an 18-course meal.
The meal was amazing, and Kai-Fu’s dinner conversation provided us priceless insights on Chinese entrepreneurs.
Three topics opened my eyes. Here’s the wisdom I’d like to share with you.
1. The Entrepreneurial Culture in China
Chinese entrepreneurship has exploded onto the scene and changed significantly over the past 10 years.
In my opinion, one significant way that Chinese entrepreneurs vary from their American counterparts is in work ethic. The mantra I found in the startups I visited in Beijing and Shanghai was “9-9-6”—meaning the employees only needed to work from 9 am to 9 pm, 6 days a week.
Another concept Kai-Fu shared over dinner was the almost ‘dictatorial’ leadership of the founder/CEO. In China, it’s not uncommon for the Founder/CEO to own the majority of the company, or at least 30–40 percent. It’s also the case that what the CEO says is gospel. Period, no debate. There is no minority or dissenting opinion. When the CEO says “march,” the company asks, “which way?”
When Kai-Fu started Sinovation (his $1 billion+ venture fund), there were few active angel investors. Today, China has a rich ecosystem of angel, venture capital, and government-funded innovation parks.
As venture capital in China has evolved, so too has the mindset of the entrepreneur.
Kai -Fu recalled an early investment he made in which, after an unfortunate streak, the entrepreneur came to him, almost in tears, apologizing for losing his money and promising he would earn it back for him in another way. Kai-Fu comforted the entrepreneur and said there was no such need.
Only a few years later, the situation was vastly different. An entrepreneur who was going through a similar unfortunate streak came to Kai Fu and told him he only had $2 million left of his initial $12 million investment. He informed him he saw no value in returning the money and instead was going to take the last $2 million and use it as a final push to see if the company could succeed. He then promised Kai-Fu if he failed, he would remember what Kai-Fu did for him and, as such, possibly give Sinovation an opportunity to invest in him with his next company.
2. Chinese Companies Are No Longer Just ‘Copycats’
During dinner, Kai-Fu lamented that 10 years ago, it would be fair to call Chinese companies copycats of American companies. Five years ago, the claim would be controversial. Today, however, Kai-Fu is clear that claim is entirely false.
While smart Chinese startups will still look at what American companies are doing and build on trends, today it’s becoming a wise business practice for American tech giants to analyze Chinese companies. If you look at many new features of Facebook’s Messenger, it seems to very closely mirror TenCent’s WeChat.
Interestingly, tight government controls in China have actually spurred innovation. Take TV, for example, a highly regulated industry. Because of this regulation, most entertainment in China is consumed on the internet or by phone. Game shows, reality shows, and more will be entirely centered online.
Kai-Fu told us about one of his investments in a company that helps create Chinese singing sensations. They take girls in from a young age, school them, and regardless of talent, help build their presence and brand as singers. Once ready, these singers are pushed across all the available platforms, and superstars are born. The company recognizes its role in this superstar status, though, which is why it takes a 50 percent cut of all earnings.
This company is just one example of how Chinese entrepreneurs take advantage of China’s unique position, market, and culture.
3. China’s Artificial Intelligence Play
Kai-Fu wrapped up his talk with a brief introduction into the expansive AI industry in China. I previously discussed Face++, a Sinovation investment, which is creating radically efficient facial recognition technology. Face++ is light years ahead of anyone else globally at recognition in live videos. However, Face++ is just one of the incredible advances in AI coming out of China.
Baidu, one of China’s most valuable tech companies, started out as just a search company. However, they now run one of the country’s leading self-driving car programs.
Baidu’s goal is to create a software suite atop existing hardware that will control all self-driving aspects of a vehicle but also be able to provide additional services such as HD mapping and more.
Another interesting application came from another of Sinovation’s investments, Smart Finance Group (SFG). Given most payments are mobile (through WeChat or Alipay), only ~20 percent of the population in China have a credit history. This makes it very difficult for individuals in China to acquire a loan.
SFG’s mobile application takes in user data (as much as the user allows) and, based on the information provided, uses an AI agent to create a financial profile with the power to offer an instant loan. This loan can be deposited directly into their WeChat or Alipay account and is typically approved in minutes. Unlike American loan companies, they avoid default and long-term debt by only providing a one-month loan with 10% interest. Borrow $200, and you pay back $220 by the following month.
Artificial intelligence is exploding in China, and Kai-Fu believes it will touch every single industry.
The only constant is change, and the rate of change is constantly increasing.
In the next 10 years, we’ll see tremendous changes on the geopolitical front and the global entrepreneurial scene caused by technological empowerment.
China is an entrepreneurial hotbed that cannot be ignored. I’m monitoring it closely. Are you?
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#431356 Humanoid Robot Tête-à-tête
“Sophia” and “Han” discuss the future of humanity with Hanson Robotics’ Ben Goertzel.
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#431142 Will Privacy Survive the Future?
Technological progress has radically transformed our concept of privacy. How we share information and display our identities has changed as we’ve migrated to the digital world.
As the Guardian states, “We now carry with us everywhere devices that give us access to all the world’s information, but they can also offer almost all the world vast quantities of information about us.” We are all leaving digital footprints as we navigate through the internet. While sometimes this information can be harmless, it’s often valuable to various stakeholders, including governments, corporations, marketers, and criminals.
The ethical debate around privacy is complex. The reality is that our definition and standards for privacy have evolved over time, and will continue to do so in the next few decades.
Implications of Emerging Technologies
Protecting privacy will only become more challenging as we experience the emergence of technologies such as virtual reality, the Internet of Things, brain-machine interfaces, and much more.
Virtual reality headsets are already gathering information about users’ locations and physical movements. In the future all of our emotional experiences, reactions, and interactions in the virtual world will be able to be accessed and analyzed. As virtual reality becomes more immersive and indistinguishable from physical reality, technology companies will be able to gather an unprecedented amount of data.
It doesn’t end there. The Internet of Things will be able to gather live data from our homes, cities and institutions. Drones may be able to spy on us as we live our everyday lives. As the amount of genetic data gathered increases, the privacy of our genes, too, may be compromised.
It gets even more concerning when we look farther into the future. As companies like Neuralink attempt to merge the human brain with machines, we are left with powerful implications for privacy. Brain-machine interfaces by nature operate by extracting information from the brain and manipulating it in order to accomplish goals. There are many parties that can benefit and take advantage of the information from the interface.
Marketing companies, for instance, would take an interest in better understanding how consumers think and consequently have their thoughts modified. Employers could use the information to find new ways to improve productivity or even monitor their employees. There will notably be risks of “brain hacking,” which we must take extreme precaution against. However, it is important to note that lesser versions of these risks currently exist, i.e., by phone hacking, identify fraud, and the like.
A New Much-Needed Definition of Privacy
In many ways we are already cyborgs interfacing with technology. According to theories like the extended mind hypothesis, our technological devices are an extension of our identities. We use our phones to store memories, retrieve information, and communicate. We use powerful tools like the Hubble Telescope to extend our sense of sight. In parallel, one can argue that the digital world has become an extension of the physical world.
These technological tools are a part of who we are. This has led to many ethical and societal implications. Our Facebook profiles can be processed to infer secondary information about us, such as sexual orientation, political and religious views, race, substance use, intelligence, and personality. Some argue that many of our devices may be mapping our every move. Your browsing history could be spied on and even sold in the open market.
While the argument to protect privacy and individuals’ information is valid to a certain extent, we may also have to accept the possibility that privacy will become obsolete in the future. We have inherently become more open as a society in the digital world, voluntarily sharing our identities, interests, views, and personalities.
“The question we are left with is, at what point does the tradeoff between transparency and privacy become detrimental?”
There also seems to be a contradiction with the positive trend towards mass transparency and the need to protect privacy. Many advocate for a massive decentralization and openness of information through mechanisms like blockchain.
The question we are left with is, at what point does the tradeoff between transparency and privacy become detrimental? We want to live in a world of fewer secrets, but also don’t want to live in a world where our every move is followed (not to mention our every feeling, thought and interaction). So, how do we find a balance?
Traditionally, privacy is used synonymously with secrecy. Many are led to believe that if you keep your personal information secret, then you’ve accomplished privacy. Danny Weitzner, director of the MIT Internet Policy Research Initiative, rejects this notion and argues that this old definition of privacy is dead.
From Witzner’s perspective, protecting privacy in the digital age means creating rules that require governments and businesses to be transparent about how they use our information. In other terms, we can’t bring the business of data to an end, but we can do a better job of controlling it. If these stakeholders spy on our personal information, then we should have the right to spy on how they spy on us.
The Role of Policy and Discourse
Almost always, policy has been too slow to adapt to the societal and ethical implications of technological progress. And sometimes the wrong laws can do more harm than good. For instance, in March, the US House of Representatives voted to allow internet service providers to sell your web browsing history on the open market.
More often than not, the bureaucratic nature of governance can’t keep up with exponential growth. New technologies are emerging every day and transforming society. Can we confidently claim that our world leaders, politicians, and local representatives are having these conversations and debates? Are they putting a focus on the ethical and societal implications of emerging technologies? Probably not.
We also can’t underestimate the role of public awareness and digital activism. There needs to be an emphasis on educating and engaging the general public about the complexities of these issues and the potential solutions available. The current solution may not be robust or clear, but having these discussions will get us there.
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