Midas List VC Jenny Lee spoke with TechRepublic about Chinese startups, her experience as a woman VC, and how she went from upgrading fighter jets to investing in tech companies.
With the recent Alibaba IPO, it seems the eyes of the tech world are on China this year. In fact, China has been a blossoming market for tech startups since the mid-2000s and no one knows that better than GGV Capital managing partner Jenny Lee.
Lee is a Shanghai-based venture capital investor who has been investing in Chinese technology companies since 2001. She works with a variety verticals, and her work has landed her on the Forbes Midas List multiple times, most recently coming in at no. 52 on the 100-person list in 2014.
Her portfolio is home to companies such as YY, with a market cap of close to $4.5 billion; 21Vianet, with a market cap hovering around $1.2 billion; and HiSoft, which later merged with VanceInfo to become Pactera. She has become majorly successful as an investor, but her career started off in a different direction.
Lee was born in Singapore and came to the US when she was 18 years old to attend Cornell University. She received both a bachelor's degree and master's degree in electrical engineering before moving back to Asia, where she joined the defense division of Singapore Technologies.
"Back then, I was actually in the electronic warfare division, where I was upgrading fighter jets," Lee said. "So, that was kind of my first job."
Yes, you read that correctly, Jenny Lee's first job was upgrading fighter jets in Singapore. Lee spent over four years working on cutting edge technology, with drones being one of the first projects she was a part of. At that point, all of her work had been very technical, so she decided to pursue a business education with a focus in marketing. So, she moved back to the the US to attend the Kellogg School of Management at Northwestern University where she worked towards her master's degree in business administration.
After she got her MBA, in 2001 Lee moved to Hong Kong to be close to the growing tech scene in China. Companies like Alibaba and Baidu were incorporated around this time, and Lee was able to get in early and become a major player in the Chinese VC market.
From a GGV view, she said, it's about convergence. According to Lee, the first wave of internet growth in China was about convergence, which Lee describes as, "Adopting the trends, the business models that have come out from the West, and then adapting them, localizing them to the growing China internet population."
When it comes to her success, Lee attributes it to two factors. The first of those factors is her independence. When Lee moved to the US, she showed up to Cornell with only two suitcases, not knowing anyone. When she moved to China in 2001, that was the first time she had ever been to the country. Second is her sensitivity to the market.
"I've always been a believer [in] the market. Let the market drive where you are," Lee said.
Letting the market drive her has definitely been a wild ride for Lee. In 2001 there were a bunch of firms trying to get into China, but they didn't know how to go about it. Questions around China's openness to foreign capital and misunderstanding of political policies made it an unsure bet for some.
Around 2005, Lee had her first few IPOs with portfolio companies. Around that same time, the tech talent pool started to develop as people realized that it was okay to not just work for a state-owned company or a major company like Microsoft. The culture was beginning to shift, and Chinese VC firms began to build their own identity.
"The China venture capital market is still in early development phase," Lee said. "So, the venture capital firms that have been successful in China, they are not extensions of the US firms. It's not about US VC forms just sending someone to China."
Lee said that China is a blank page, so the folks that want to be in the industry can start up firms. When the VC market first started, she said, it wasn't in tech. Instead, firms were focused on traditional industries such as factories, bicycle parts manufacturing, and agriculture.
Part of the "ground up" mentality means that many Chinese VC are supportive of female VCs as well. According to Lee, there isn't an "old boys club" in China.
"The Chinese culture has always been, very interestingly, very open and supportive of the women leaders," she said.
Another major difference is that most Chinese VCs don't come from designated business schools in China. Some are returnees from the US or other parts of Asia. Lee said that the first influx of private equity investors came from auditor roles. Being that there are many female auditors in China, firms were able to attract female VCs early on. According to Lee, private equity isn't foreign to females in China.
"The mom is a very central figure in Chinese households. In some cities in China as well, say in Shanghai, the women are the ones that take care of the family. The husband may be the breadwinner, but all the money is managed by the woman. So, I think some of it is cultural."
Lee's professional life has been defined by understanding convergence and its implications. Her work internationally has brought her an understanding of the convergence of the East and West, while her work with digital media and the internet of things brought her face to face with the convergence between hardware, software, and data. On that platform, she said that the East and West are on equal footing.
In her own words...
What's the most important piece of advice you wish someone had given you at the start your career?
"For folks coming in and wanting to be in the market, the number one advice I would give them is that, when in China, consider the whole market. Venture capital in China is not about investing within a three kilometer radius, it's investing from a global perspective. It's not possible for any VC to want do well in China to stay in one city, it's just not possible."
What do you do to unplug or clear your mind?
"When you are working, work hard; and when you are playing, play hard. I try to take vacations once every two years where I'm completely unplugged, literally. I will be someplace in the forest or up in the mountains where there is no communication, for a week or so. That literally helps to reset expectation, reset a lot of that fast-paced work and allow me to look at what's next, what's going to be the next disruption that's coming in the market."
What's the best thing you've read lately?
"I'm actually reading two different types of books. An interesting one is called Age of Context, it's tied to what we do around Internet of Things. How data is really tuned to allow a more contextual me, a more contextual person, a more contextual home to be built. Historically there's been very little convergence between hardware and software and I think the heart of the convergence is about data. And, data can only be useful if it's being contextual. So, very interesting book, extremely relevant to what we are doing today.
"On the other end of the spectrum, I am also reading this book that's about the end of the world. So, how to survive the end of the world as we know it."