Former Google China president Kai-Fu Lee explains why paranoia is important

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TechCrunch

• Former Google China president Kai-Fu Lee has invested
  in 13 companies that have attained billion dollar
  valuations.
• Among his portfolio companies’ most successful
  entrepreneurs, Lee identifies one key quality: They’re
  paranoid.

Kai-Fu Lee is the former president of Google China and a
technology investor who has funded both American and Chinese
startups. Among his portfolio companies, thirteen have achieved
coveted unicorn status with valuations of a billion dollars or
more. 

Many of these successful companies have Chinese entrepreneurs at
their helm, who operate under a different mindset than the
typical American entrepreneur. A key quality that these
entrepreneurs possess is what Lee describes as being effectively
“paranoid.”

Chinese entrepreneurs aren’t afraid to duplicate good ideas,
often resulting in a number of companies fiercely competing for
industry dominance. In order to succeed, they build their
companies early on with the intent to monopolize the market.

“They are paranoid that there are copycats everywhere, ready to
copy what they did,” Lee told Business Insider. “They are always
thinking about the worst case scenario where these copycats could
give away what they’re selling for free.”

This paranoia, said Lee, has been a key component in driving
several of his companies’ successes. 

“It helps you stay one step ahead of the game so that you develop
a business model so effective that even if someone comes in at a
lower price, there’s something you can do that they can’t so they
can’t take your customers,” he said. “The Chinese method to
building a company is doing whatever it takes.”