Forbidden City in Beijing

In my past two years at Berkeley, I have seen a rapid growth in interest in on campus entrepreneurship. However when it comes to entrepreneurship, Berkeley’s impact on the Valley is not as well known in popular culture. Berkeley is a system which teaches one how to adhere to a system and how to succeed in one, which sets its students up as great employees, but not as great employers.

In summary, the fundamental debilitating issue at Berkeley is the risk aversion exhibited by its students. This was the main reason why I chose to build out the Kairos Society fellowship at Berkeley in order to catalyse the undergraduate entrepreneurship spirit through creating a tight knit group of student entrepreneurs working.

When I reflect on my time in Asia this summer, I see similar issues between Berkeley and Asian society which hold back entrepreneurial activity. To clarify things before going forward, I must state that the form of entrepreneurship I am referring to here is of the ‘grassroots’ kind where a great idea is funded and grown from scratch.

In Asia, the notion of entrepreneurship is fundamentally different. For one, a greater majority of entrepreneurs are involved in mass scale manufacturing as opposed to less capital intensive and scalable businesses. It is often very hard to come by ‘grassroots’ type startups which are doing something truly innovative. For those ‘grassroots’ startups that are innovative, there is still the dogma of adhering to a process in creating a company. Now it is never bad to have plan or a process, but the process I am referring to here is of where teams apply for successive business plan applications to incrementally scale.

This kind of practice has its roots in shame-based Asian culture. In the West, guilt-culture is a form of social control whereby individuals are kept in line through an internal sense of morality. In Asian shame-based societies, social control is obtained through the connection of shame to the family name and the subsequent threat of ostracism. Thus, shame-based cultures have an associative effect for both good and bad actions. Applied in the context of entrepreneurship we see that the associative effect of one’s actions with one’s family creates substantially more downside risk for a budding Asian entrepreneur. In an industry where the likelihood of success is low, this specific cultural feature creates an even greater downside risk which for most is too much.

I wrote in April this year on the features which make the Valley what it is (Business Today Article) and a summary of that article would be that the Valley is truly a place where startup failure is not frowned up on. The same cannot be said in Asia, where startup failure becomes a social stigma.

Now there is no doubt there are a great number of startups that have also developed in this tougher environment (Alibaba, Baidu and Weibo to name a few), but you may also notice that the founders are generally older and came into the venture with good financial resources. For all the talk of building an entrepreneurial culture both in the workplace and more broadly for venture creation, Asia today is at a real crossroads with its ancient cultural practices. The question is not whether there will be more hot Chinese internet companies to emerge (these will develop for the most part as good geographical transplants of U.S. ideas), but whether more innovative and game changing companies will be created by the younger generation, people my age with little experience, but a creative mind and a hunger to realize them.