Where does one go after being the head of Google?s China operations? Considering Google?s history in the Asian country, it is no wonder Kai-Fu Lee, former VP and President of Google Greater China would want to get out and do something different. But the Internet gets into one?s blood.
 
The vehicle Lee is riding is called a business incubator, an investment company that funds new promising start ups. As CEO of Innovation Works, he is like a kid in a candy shop, where he can have his hands into a bit of this and a bit of that. This month he celebrates Innovation Works first anniversary.
 
Innovation Works, itself, was funded by several investors from both China and the US, led by WI Harper, a Chinese venture capital firm that has invested in clean technology and  healthcare companies in Mainland China, Taiwan, and Silicon Valley in the US. Steven Chen, a co-founder of YouTube, pitched in, saying: "I deeply believe that passion and dedication are critical success factors of start-ups. Every time I visited China, I am encouraged by the enthusiasm and commitment shown by the entrepreneurs there." Foxconn Technology Group also joined many others in bankrolling the incubator with $115 million.
 
How Innovation Works - Graphic
A Graphic on how Innovation Works – works.
 
Lee, who in addition to his Google association has experience at Apple and Microsoft, is hoping to tap into the emerging mobile, e-commerce, gaming, and cloud computing markets within China. As an indication of intense interest in the new technology, Lee says the company received 100,000 resumes, hired about 200 employees, some ex-Google employees, and talked with 500 startups. Lee explained: "What Innovation Works is looking at is a whole list of differences and unique aspects of the Chinese Internet and choosing where are the greatest opportunities for us."
 
Kai-Fu Lee, who earned his PhD from Carnegie Mellon University values an education. Innovation Works and many of the startups drew staff from computer science departments in China as well as from out-of-country universities, such as Oxford, Stanford, Yale and MIT. With so much talent to choose from, the company began by funding 12 companies mostly in the mobile arena. As an incubator, the company helps their chicks strengthen their product strategy and business plan, provides mentoring in all aspects of technology and business, and helps with legal and accounting requirements.
 
The fortunate companies to gain Lee?s blessing began with Tapas, which in this case might be called a Chinese appetizer, a taste of things to come for the incubator. The Innovation Works version of Tapas is an Android-based mobile operating system. China reports 277 million mobile Internet users ? not a bad potential customer base. They expect to ship around a million smartphones by 2011. Targeting the younger Chinese user, Tapas allows them to download photos from social networking sites, and display lyrics synced with the songs for the karaoke crowd.
 
A second company, commonly called WonderPod, provides a PC program for managing mobile content, enabling users to download videos, music and e-books over a USB cable, avoiding mobile bandwidth which is pricey in China.
 
Sticking with the mobile theme, Photo Wonder, which has developed mobile phone software for enhancing and sharing photos, was given a chance by Innovation Works. Ascending Cloud, which publishes social and Web-based games, also came under the incubator?s wing, with plans to work with an unnamed Chinese social game company which is claimed to have demonstrated international sophistication. Umeng, an analytics tool to help developers analyze the mobile market by providing reports on their users and market conditions, also joined the brood.
 
As Dr. Lee was founding his company, he said: "The Chinese entrepreneurial environment is still in its formative stage, with significant barriers for the early-stage entrepreneur: the lack of management experience and coaching, the reluctance of venture capitalists to invest in companies in the formation stage, and the lack of networking and experience to pull a company together." Its actions over the past year indicate that Innovation Works seems to be well on the road to filling that void.
 
However, the incubator company wants its chicks to be realistic and emphasizes that they need to be "passionate but humble, persistent but patient, and committed for the long road ahead, as start-ups are indeed a marathon race, not a 100m sprint."