Entrepreneur He Bofei, CEO of Deep Glint, epitomizes the spirit of innovative energy in Zhongguancun

When China's biggest online commerce company Alibaba rang the bell at the New York Stock Exchange on September 19 and its CEO Ma Yun became the wealthiest man in China, Yang Yong, a graduate from Peking University, was also in the United States, sharing his experience of Chinese-style group funding.

Yang, now president of Peking University's Alumni Venture Association, met students at Harvard, Massachusetts Institute of Technology, Stanford as well as people from Silicon Valley who were interested in Chinese business start-ups.

With Ma claiming he would help fledgling entrepreneurs start a business, Yang said the funding plans of his group, which operates in a "smarter" way, will be just as popular in a few years. While Ma's headquarters are in Hangzhou, Zhejiang Province, Yang has chosen Beijing's Zhongguancun area, considered the center of business start-ups in China.

Deals over coffee

Zhongguancun, located in northeast Beijing's Haidian District, became a household name in the early 1980s when it was chosen to be the "Silicon Valley" of China. In 1988, the Central Government named it Beijing Hi-Tech Industry Development Experimental Zone, and in 1999, it was renamed the Zhongguancun Science Park.

In the 1990s and 2000s, Zhongguancun was packed with buildings filled with vendors selling electronic goods to bartering crowds. The market boomed for a number of years until online giants like JD.com emerged and won customers over with transparent operation and express delivery, leading to fewer customers for Zhongguancun.

In April 2011, a café opened on the second floor of a shabby hotel in Zhongguancun. Its sign was so small that few people on the street noticed it.

For the first few months, Su Di, the owner of the café, talked to every customer stepping in about his goal - to build a platform connecting investors to start-ups.

Three months later, as he was getting frustrated, a young college student received his first 200,000 yuan ($32,520) from an investor through the café.

Encouraged by this, Su persisted and more successes followed. In February 2012, Haidian authorities called his Garage Café an innovative incubator for start-ups.

"The decision to make Garage Café an incubator was opposed by some people in the government at the beginning," said Guo Hong, Director of Zhongguancun Administrative Committee. "They said how can a café be an incubator? But after visiting it, they changed their minds."

Everybody who goes to Garage Café can use it as an office and work from there the whole day for the cost of a single cup of coffee. The café also offers a 3D printer, a meeting room with iMac computers, and other services for business start-ups. "You can feel the heat of business start-ups and we can see the promising future of these energetic people right here," Yang commented.

Garage Café has now become a model for Zhongguancun's innovation. At the end of 2013, Su was invited to go to Silicon Valley in the United States to open a branch, which is next to Stanford University and near many important angel investment companies.

In early 2014, Garage Café officially opened in the United States. Customers pay $19 to stay there for the whole day and use the café's high-speed Internet connection for video conference calls and other purposes.

The success is not a fluke. Two other famous cafés in Zhongguancun, 3W Café and Beta Café, also cater to business start-ups.

Inspired by their success, Yang started his 1898 Café in 2012, taking the name from the year Peking University was founded. He and his partners invite successful entrepreneurs every weekend to share their experiences and help young undergraduates get a feel for the market.

Yang believes his group-funding model will create many opportunities for start-ups. In fact, another café opened in Financial Street of Beijing this year using his group-funding model. 

Winning welcome

When He Bofei made the decision to quit his job in Silicon Valley of the United States and start his own business in Zhongguancun, his friends in the United States could not understand him.

"They thought it was too difficult with the involvement of the government as a potential customer," said He, whose Deep Glint develops computational vision and artificial intelligence. "To be frank, I had similar concerns before I decided to go for it."

His first meeting with the government officials of Zhongguancun swept all his concerns away. "The first thing they said to me was - What can we do for you?" said He. "They are never late for any meeting and offer every possible help they can. Even the government in America can't help this much."

Zhao Yong, the co-founder of Deep Glint, previously worked for Google and was one of the developers of Google Glass. The two started their business in a three-bedroom apartment in Beijing in 2013 and within one year, it has grown to a company worth 1 billion yuan ($167 million). "Now our products are used in Tiananmen Square and three state-owned banks," He said excitedly.

Chen Xinyi used to be a student at Princeton University until she won the Thiel Fellowship for young entrepreneurs and innovators for her work in computer vision, which led her to work at Deep Glint.

"We have many great employees in the company," said Chen. "This is one of the advantages of Zhongguancun. China's most prestigious universities, Peking University and Tsinghua University, are close-by and provide a wonderful talent pool for business start-ups."

The Zhongguancun Science Park has seen more than 6,000 new tech enterprises register annually. Companies based in Zhongguancun have filed more than 18,100 patent applications, an increase of 18.2 percent year on year.

In June, Zhongguancun invested another 100 million yuan ($16.7 million) to create an innovation-focused street to help the area attract more start-ups and investors. There are 17 business incubators like Garage Café on Inno Way, the first street dedicated to innovation in the country.

"Before, when we said we want to make Zhongguancun China's 'Silicon Valley,' it ended up as a noisy consumer electronics market. Now I can say that we have finally achieved the spirit of Silicon Valley, which is innovation and creativity," said Guo.