Top Chinese VC says 90% of investors don’t think for themselves

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Zhou Wei is a name that commands respect in China’s investment scene. A managing partner at Kleiner Perkins Caufield & Byers (KPCB) China, Zhou won a Chinaventure award as one of China’s ten best VCs in 2011, and he’s helped KPCB helm a number of major investment deals. So when he speaks, people listen. And in a recent interview with Sina Tech, he had some interesting things to say.

The number of founders is rising fast, but the number of good founders is not.

A hallmark of China’s tech investment scene over the past few years has been trends that get really hot – daily deals, O2O, VR – and everyone starts buying in. Zhou doesn’t think much of that. “Some people say that 80 percent of venture investors lack independent thought,” he told Sina. “I think it’s more like 90 percent. People often don’t think much for themselves and just follow the trend.”

“For example the VR trend: it’s just that there were big investments and an acquisition in the US, and Chinese VCs got excited. Live streaming is the same; Zuckerberg announced that livestreaming had come and immediately everyone gets excited.”

In actuality, Zhou says, these trends are mostly manufactured, especially once an industry’s basic infrastructure is built out and business models have matured. That’s why, he says, the number of good companies doesn’t really change regardless of which market sector is considered hot by investors. “The number of entrepreneurs is rising fast,” he said, “but the number of good entrepreneurs is basically the same. Originally there were 20 truly excellent founders, and now there are maybe 30.”

What’s the key to finding the right investments, then? Zhou says that for KPCB China, it’s all about investing in founders and industries that have high rates of success. He also says that with the number of startups increasing, it’s important for organizations to create procedures and stick to them, rather than just having their VCs wandering around like “lone wolves.” That approach, Zhou says, gets less and less workable as the number of startups increases and the chances of picking the right future unicorn by chance get lower.