Ex-Googler Lee Backs China Companies to Foster Startup Culture

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"You almost have to have a sponsor to interface with the government and the marketplace in China, and that's the role he's taken up," says Kay Koplovitz, founder of USA Networks and chairman of Springboard Enterprises, an advocate for female entrepreneurs that has worked with Chinese startups.

Innovation Works raised $115 million to fund startups, Lee says. Lee received more than 7,000 résumés from Chinese entrepreneurs and software engineers in a single day. In all, he's received more than 100,000 and hired 150. After meeting with 500 young startups, his team picked 12 to invest in.

Finding good people is the biggest challenge for a startup, says Tian Hongfei, the founder of Beijing e-commerce startup Looa, which Innovation Works invested in. "In Chinese culture, many graduates go to work for the government, go to state-owned companies, or go to work for Google or Microsoft (MSFT). They are widely respected jobs."

"Geek Celebrity"

Lee's renown has helped recruit thousands of top engineers who want to work for startups, Tian says.

"He is a geek celebrity in China," says Jing Zhou, deputy director for the Girls in Tech conference in China.

Tapas, founded by Baidu alumnus Zhang Lei, was built by modifying the code of Google's Android mobile operating system. Rather than use Google's applications for e-mail, maps, and other basic functions, the Beijing startup has created programs that better suit the demands of mobile users in China, including a "smart dialer" for Chinese phone numbers and an app for displaying song lyrics while music plays.

The software will be shipped on 1 million phones in the next year, according to Innovation Works, and as many as 10 million phones by 2013. Sharp Corp. (6753:JP), Beijing Tianyu Communication Equipment Co., and Haier Group (1169:HK) are making models with the software.

Another mobile-software startup backed by Innovation Works is WonderPod, a store for music, videos, apps, and e-books that launched in June. The company is led by Wang Junyu, a former software designer for Google in China.

The investments also include Umeng, an analytics tool for developers of mobile apps; Photo Wonder, a program for sharing photos on mobile devices; and game company Ascending Cloud.

Douglas MacMillan is a staff writer for Bloomberg Businessweek in New York.

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