Former head of Google China, Kai-fu Lee, insists—insists—that he is not happy that Google imploded its business in China. “Seeing the work that I put in, how could I be happy to see that?” he says. In fact, in a press release all about his incubator’s companies being built on top of Android he doesn’t use the G-word once. “Given the pull out, we’ll accept the situation and do our best,” he says humbly. Yeah, accept the situation like a fox.

As Lee begins to open up more about the types of companies being created at his incubator, Innovation Works, there’s a consistent theme—Android. Whether it’s address books, music programs, video games, maps, eCommerce marketplaces or e-readers, many of Lee’s companies are hoping to take advantage of the good things about Android—namely that it’s a free, robust operating system—but customize the core smartphone applications in a way that Google won’t or can’t.

It’s interesting that I had a conversation with Lee about this topic right about the time Google CEO Eric Schmidt was delivering a keynote touting that more than 200,000 Android-powered smartphones are activated daily, going beyond just the smartphone wielding “elite.” Lee would agree with everything his former boss said. It’s just that Google isn’t well positioned to make money off the apps and services in the world’s largest market. Oops.

Lee philosophically may have issues with the lack of openness in the Chinese Web, but it’s also giving him an advantage: The most popular applications for the Android phone like YouTube, Facebook, Twitter or Pandora aren’t available in China, and Google’s native apps may not be the top choice of manufacturers given the search engine’s stance on doing business in the country. So Innovation Works is collectively trying to build a new Web on top of the platform that’s customized for Chinese tastes.

For example, music services that show song lyrics as they play—an essential feature for China’s karaoke loving audience. Another example is a program that automatically enters different dialing prefixes that save money on calls to certain regions. Because 3G is so expensive in China, a video program called Wonderpod downloads videos onto your phone from your laptop at work, so you can watch them without having to stream them on the commute home. An eReader software company lets you read 60% of the book for free then asks for a payment to read the rest. Because of rampant piracy, there’s no chance of selling eBooks without giving anything away for free, but once people are hooked, if they enjoy it, they’ll pay for the rest of the book out of convenience, Lee argues. The incubator is making a few, broad platform plays with an Android-based operating system called Tapas, an analytics tool for developers called Umeng and Ascending Cloud, a publisher of social games.

At most, Lee’s mobile companies are getting a couple dollars per user for these apps so these ideas only become huge companies with massive scale. This can’t be just a game played for the top of the pyramid. And there’s no question in Lee’s mind that Android will be bigger in China than the iPhone, because the cost differential is much more pronounced. Because there aren’t many Android models in the US, hardware makers can price the phones close to the iPhone, but in manufacturing-heavy China prices will almost certainly be driven down much faster.

Lee says the Android devices coming out next year—including manufacturers his companies are working with—cost $200 to $300 per phone. He expects that to fall to around $100 the next year, and possible fall below $100 the year after that. The iPhone will never experience that kind of competitive pressure because only Apple makes it. (Although I could show you plenty of cheaper versions with the an Apple-like logo in the dodgy markets of Shenzhen…)

And there are no carrier subsidies in China, because 80% of phones are bought independently from airtime. So an iPhone will cost around $600. Already Android will enter the market at half the price. For a big swath of the Chinese population that will make a difference, especially if those prices can get under $100 per phone in just a few years with features more tailored for the market.

In a lot of ways, this is a strategy that would only work in China—it’s all about volume and counts on a market with hyper-aggressively competitive gadget manufacturing. But with billions of dollars in venture capital sloshing around China, the market to build the best mobile apps could be as cutthroat as the competition to win the hardware wars. Lee has recently inked some strategic partnerships with Foxconn, Chunghwa Telecom, MediaTek Inc and a raft of global investors to help his chances of being the one to profit from the opportunity.

He’s also moved Innovation Works from Google China’s building to a new location that features what any incubator needs—a hologram that greets you at the front door. I’m not kidding. He told his designer he needed it to look different than any other office and from the look of the pictures, he succeeded. His mobile bets are less certain. But if he wins he’ll have at least one guy to thank: Sergey Brin. A big juicy market opportunity is a lot better parting gift than a watch.

BEIJING — It is just a simple piece of plywood, but it is a striking symbol of the frenzied adoration Kai-Fu Lee, perhaps China’s most prominent technologist, elicits in this country.

“One overanxious entrepreneur knocked down our door,” said Lee, explaining why the plywood used to cover the damage is on display in his spaceshiplike offices.

Few Chinese executives have the technology cred of Lee, who was tapped by Bill Gates to lead Microsoft’s operations in China, personally wooed away by Larry Page and Sergey Brin, and turned down an offer by Steve Jobs. His new venture, Innovation Works, a $115 million fund to back early-stage technology companies, is something of a laboratory to teach this nation of 1.2 billion people a course that could be best described as “Silicon Valley 101.” His efforts tap into the ambitions of a rising economic giant to someday have its own world-dominating technology companies.

Illustrating the importance the country places on his efforts, the government subsidizes the rent of Innovation Works. And Lee’s new headquarters was designed — for free — by one of the designers of Beijing’s National Stadium, also known as the Bird’s Nest, constructed for the 2008 Olympics.

On a recent October Saturday afternoon, he was mobbed by 100 wannabe entrepreneurs who won a competition sponsored by a local TV show that let them hear a presentation by Lee. They arrived at his office in formal business attire and cheered and squealed as if he were, well, Steve Jobs.

His musings on Tencent’s Twitter-like service are followed by 5 million people, and by 2 million on Sina.com.

“He is among the superstars,” said Meng Chang, an intern at Lee’s new fund, Innovation Works, who delayed beginning her MBA studies at Columbia University for the chance to work with the charismatic Lee, 48.

In China, Lee said he believes he can “add value in a way that no one else can.”

Cultivating startups

He has a daunting task, observed Mark Natkin, managing director of Beijing-based Marbridge Consulting.

“Lots of people, including investors, are very comfortable getting behind him,” Natkin added. “What it will come down to is whether the companies he chooses to incubate fly or fail.”

Lee, after all, had mixed results while at Google. During his tenure, Google China’s market share jumped from 16 percent to 31 percent, but it always remained a distant second to Baidu, the locally owned and dominant search engine in China, Natkin observed.

Lee recently unveiled five of the companies Innovation Works is backing, four of which are mobile-phone technology startups with a strong emphasis on Google’s Android operating system. None, though, is a company with revolutionary technologies. But they are a start in a nation that is still new to tech startups.

Unlike Silicon Valley, where many professionals are comfortable joining startups at virtually any stage of their career, most Chinese feel a clock ticking the moment they graduate from college, Lee said.

“Probably once you are 32, you have a family and a kid and you need to get them into a good school. Parents expect their kids to own a house, have a kid,” he said. “That might suppress or kill your startup dream.”

But Chinese ambitions for creating change-the-world businesses are growing.

On the day he announced the launch of Innovation Works, he was swamped with 7,000 résumés.

Long in demand

While young Chinese entrepreneurs are willing to break down doors to get to him, tech giants have gone to court to fight over him. When Google lured Lee away from Microsoft, a legal battle erupted between the two corporate giants. In the end, Microsoft failed to stop Lee from jumping to its competitor. Just as he signed on with Microsoft in the late 1990s, Lee turned away another suitor — Jobs.

One day, his wife told Lee, who worked at Apple before Jobs returned in the late 1990s, “Someone named Steve from Apple called you. He asked me to make sure you’ll call him back.”

“Steve?” Lee responded. “I don’t know a Steve from Apple.”

When Lee dialed the number, he was surprised to get Jobs, who told him, “All your former subordinates said you were a good boss. They asked me to bring you back. Why don’t you come back here to take a look before going to Microsoft?”

Lee resisted Jobs’ overtures because he had already committed to work for Microsoft.

He has generally refrained from talking about his former Mountain View employer, which clashed with government officials on censorship earlier this year before directing Chinese users to its Hong Kong site. But a slide presentation prepared for his Innovation Works lists a litany of the failings of foreign multinationals to successfully crack the world’s largest Internet market by users: “Too short-term profit focused; local team not empowered; insufficient attention to local market needs; ‘global’ product mentality; no willingness to tailor for China.”

Betting on ideas

Google’s confrontation with the Communist government on censorship came months after Lee’s departure from the company. By defying the government’s censorship rules, Google lost a number of partnerships with Chinese companies, such as China Unicom, as well as market share and high-level R&D employees, who have left the company.

Thus, Lee indicated, Google’s Android mobile operating system faces a mixed future in the country.

“If their goal is to have a broad Android adoption, that will happen with or without their participation,” Lee said. “The wave of developer support is tremendous. The hardware manufacturing (support) is phenomenal. But if they want Google services connected to these Android devices, they will have to do something to make it happen.”

While most Chinese investors seek quick fortunes by sinking money in industries such as real estate, Lee is placing bets on ideas.

“This is the Warren Buffett thing: You do the opposite of what everyone else is doing,” he said. “We won’t be vindicated for at least five years. And this is someone who is an optimist speaking.”

By Peter Foster From Telegraph

It is almost exactly a year to the day that Kai-Fu Lee, the boss of Google China, surprised everyone by announcing he was quitting his post to take up the role of godfather-investor to the best of China’s software engineering talent.

Kai-Fu Lee, former boss of Google China, presented a casualty list of foreign multinationals which have entered China’s internet sector and exited bloodied. These include . . . Photo: Getty Images

Standing at the podium in his newly-appointed offices a stone’s throw from Beijing’s top universities, he is preparing to share the first fruits of Innovation Works, a $115m investment fund that aims to transform China’s smartest ideas into billion-dollar companies.

Mr Lee has never publicly discussed his reasons for leaving Google or commented on his former’s employer’s decision to pull the plug on its China search engine three months after his departure, but there is a heavy hint in the opening slide of his presentation.

“Chinese Internet: lucrative space reserved for locals!” he proclaims before presenting the long casualty list of foreign multinationals which have entered the arena of China’s internet and exited bloodied and bowed.

Yahoo! (0.5pc market share after 11 years); eBay (sold out 2006); MSN (not in top five in portal and search after six years); AOL (tried twice, but finally shut down 2009); Amazon(unprofitable and losing share); MySpace (“going nowhere”); YouTube (blocked 2008); Facebook (blocked 2009); Twitter(blocked 2010); and finally, of course, Google itself, which has left for Hong Kong.

It is therefore perhaps unsurprising that Mr Lee, a PhD-holding computer programmer who worked his way up through Apple, Microsoft and then Google, has decided to give up on the foreigners and focus on incubating Chinese products for the Chinese market.

On the face of it, Chinese innovation looks remarkably like the Silicon Valley variety where Mr Lee built his reputation. His new offices are as ergonomic as an Apple Mac, with smoothly curving white walls leading to football tables and pods where Chinese whizz-kids can dream up their ideas.

In the foyer, arrivals are greeted by a clutch of ceramic eggs in a basket backlit by softly pulsating light (geddit?), while an egg-shaped “incubation” room coated in whiteboard paint enables employees spontaneously to download their flashes of inspiration onto the walls.

In truth, however, the first ideas unveiled this month by Mr Lee – selected from more than 500 applications of which 12 have been selected for initial funding – appear more evolutionary than out-and-out innovatory.

“We are not trying to reinvent the wheel,” observes Mr Lee.

Each project is introduced, under their patron’s avuncular eye, by a pair of 20-something entrepreneurs who come to the podium to present their ideas, faltering like nervous children performing for their parents at the school play.

The first, a mobile-phone operating system called “Tapas” based on Google’s Android system, aims to improve the user-experience for the 300m Chinese who browse the web on their phones – 83pc of whom are under the age of 30.

It includes several neat tricks, such as a music player that includes scrolling lyrics (a must-have given China’s karaoke culture), an e-book reader for the subway (Chinese devour internet novels) and the ability to automatically synchronise a phone’s contact book with pictures from social networking sites.

Next comes WonderPod, or “Wandoujia” in Chinese, a kind of iTunes for Android that, as the young presenter explains, will allow him to pre-download the next episode of his favourite soap from the web so he can keep his girlfriend amused while stuck in Beijing’s traffic and save on expensive 3G downloads. Then there is PhotoWonder, a kind of basic PhotoShop for mobiles aimed at China’s 20-something “Gen Y” girls who want to beautify themselves before sending their snapshots, erasing unsightly pimples, widening their eyes and lightening skin tones.

All of these ideas have a common thread, which is Mr Lee’s belief (which he espoused as boss of Google China) that mobile searches will provide the next great wave of growth on the Chinese internet.

Innovation Works will pick about 15 ventures a year, offering the hopeful start-ups access to the very best entrepreneurs and engineers – the company received 100,000 CVs for 150 positions – and, says Mr Lee, will be happy if it can bring its first company to IPO within five years.

“Mobile will be the explosive growth-catalyst,” he adds, predicting that the emergence of affordable smartphones will do for mobile search what the alignment of Intel with Microsoft did to bring personal computing to the masses.

The money will lie in entertainment – games for mobiles, video downloads, social networking – although the precise model of how “to turn eyeballs into dollars” is also specifically Chinese since attempts to charge directly for mobile Apps invariably end in failure.

“I’d envisage something of a ‘freemium’ model,” Mr Lee concludes, “where the App itself is free but you charge down the line for add-on and additional features once the user is hooked. There might also be advertising opportunities, but at this stage it is hard to predict.”

However, one thing is certain – having presumably had a bellyful of politics at Google, Mr Lee says he’ll be steering clear of anything that might stray into the fields of news or politics.

“We’ll tend to stay away from those types of areas. That’s not just because of principles or following the laws, for us it’s about return on investment,” he says with a weary smile.

“It’s easier to focus on products that users need and don’t have additional risks or regulatory concerns.”

Innovation Works, former head of Google China Kai-Fu Lee’s own venture platform company, has invested $4 million in a dozen projects covering areas of mobile Internet, Internet consumption, e-commerce and cloud computing, Lee said at his company’s one-year anniversary celebration in Beijing on Wednesday.

At the new site, where his 200-person team planned to move, Lee unveiled five projects, which included a smart phone operating system based on Android for Chinese users, a software assistant for Android phones, an analytics tool for mobile developers in China, a photo processing tool for mobile phones and an SNS and Web-based games publishing tool targeting the global market.

Lee emphasized that mobile Internet would still be the priority. “We put 75 percent of our energy on mobile computing, as this is the top priority, which also contains the biggest opportunities. Fifteen percent of our energy will be put into e-commerce and 10 percent for cloud computing,” he said.

Instead of generating ideas internally and investing in external projects, Innovation Works plans to put more emphasis on seeking external projects as it would be more efficient, Lee said when summarizing the gains of the past year and his aims for the future.

As a strategic adjustment, the venture launched three nurturing programs for entrepreneurs at different stages, proving funds, consultancy and other services and support.

The venture also established the Innovation Works Development Fund (IWDF) to provide larger funding to projects that have grown more mature and independent. After this stage, other venture capitals (VCs) will participate in and take the lead, Lee said.

Diverse strategy

After one year, Lee found seeking external projects to invest in and provide assistance with would be more efficient than creating internal projects.

“We will seek entrepreneurs who already had an idea or an area they have interest in and talk about possible development,” Lee said. He described it as an accelerating process.

Innovation Works will provide funding and other assistance to such entrepreneurs, helping their rough ideas grow into an early form.

All 12 projects that Innovation Works is invested in have gone through the Acceleration Program.

Innovation Works also had a three-month Jump-Start Program for beginners. Entrepreneurs who started businesses for the first time could submit applications online and receive funding and help if their ideas were chosen. He said these ideas might have a high failure rate, but it is worthwhile to encourage and create a start-up culture in China.

Lee will also invite experienced entrepreneurs to join their Entrepreneurs-in-Residence program. They may not have any concrete ideas but will try to work one out at Innovation Works. Once they have a feasible idea, they will join the Acceleration Program to realize it.

Five projects launched

On the wall next to the reception desk hang five logos of the five released projects under the logo of Innovation Works, which implies the operation mode here – the company provides early-stage funding and a team working as the matrix provides other needed assistance such as human resources, accounting, law, public relations and business consultancy.

Tapas, a smart phone operating system based on the Android operating system, was built for the Chinese market. It will be pre-installed on smart phones manufactured by Haier, Sharp, and Tianyu.

Wang Junyu, product manager of a software assistant for Android phone Wonderpod, demonstrated the application for the guests. Wonderpod, launched two months ago, already has a number of users.

The projects also included Umeng, an analytics tool for mobile developers in China, Photo Wonder, a photo processing tool for mobile phones and an SNS and Web-based games publishing tool targeting the global market called Ascending Cloud.

Lee said engineers will get stakes in their own start-ups. In China, engineers don’t always get ownership in the projects they develop, he added.

Lee said this is part of the company’s culture – granting enough flexibility and freedom to engineers in order to build a sense of ownership – just like the slogan on their recruitment poster, “Join your company.”

Investment areas

Innovation Works still has its focus on the areas of mobile Internet, Internet consumption, e-commerce and cloud computing and puts the most energy in mobile Internet, as it is the top priority that also contains the biggest business opportunities, Lee said.

He said in the mobile Internet sector, they wanted to work with mobile manufacturers to push the birth of smart phones that cost only 1,000 yuan each but are as good as iPhones, as the iPhone still costs 4,000 to 5,000 yuan in China, too expensive for the majority.

Another urgent task is to create applications for high-end smart phones that require low bandwidth. As the majority of mobile Internet users in China are young people, functions such as photo taking, video, music and games should be improved to provide better entertainment experience to young users.

Unlike mobile Internet, e-commerce was more developed in China and not very suitable for start-ups, and cloud computing was still at a very early stage, leaving many problems yet to be solved, so Innovation Works would not concentrate on those two areas.

After a year of mystery and concealment, Kai-Fu Lee lifts the veil on some of the exciting new projects being developed under his new company, Innovation Works

Innovation Works new offices were open for a first public viewing on September 6, 2010.

For the past year, the companies and the products they have been developing within the offices of Incubation Works, an investment and incubation firm founded in 2009 by Kai-Fu Lee, have been shrouded in secrecy.

This week, the veil was at least partially lifted as Lee, the former head of Googleʼs operations in China, revealed five of the 12 start-ups and the technologies they are launching for the countryʼs 400 million Internet users and 700 mobile phone users.

Reporters were invited for a tour of the new offices Innovation Works will move into later this month, and the announcement and tour were held in conjunction with the celebration of the companyʼs first anniversary.

Lee and the Big Three

Originally from Taiwan and educated at prestigious American universities, including Columbia in New York and Carnegie Mellon in Pittsburg, Lee worked for Apple before moving to China in the late 1990s to head up Microsoftʼs research division here. In 2005, he joined Google to spearhead the companyʼs Chinese search operations.

Lee left the California-based company to start his own venture: Innovation Works.

According to Lee, the aim of Innovation Works is to provide young Chinese entrepreneurs with financial and other support they might not otherwise be able to find in order to get their start-ups off the ground.

“We want to attract great ideas, great entrepreneurs and great engineers and help matchmake them into great companies,” Lee says. “Chinese entrepreneurs donʼt have a whole lot of experience, and the ones who chose to come here want mentorship.”

Top talent and secrecy

The incubator has received 100,000 resumes, reviewed 500 business plans and garnered around $115 million from investors since it was launched last September, according to Lee. Innovation Works has also recruited top talent from big Internet companies, including Google, the Chinese search giant Baidu and the online shopping portal Alibaba.

Lee says he has intentionally kept who he has hired and the projects they are working on from the public, out of concern that outsiders will copy the concepts and launch them first. (Publicly, he has disclosed the venture is investing heavily in projects focused on the mobile Internet, e-commerce and cloud computing.)

The strategy has resulted in much anticipation coupled with skepticism about what, exactly, Incubation Works has been up to for the past 12 months and whether its projects will be successful in the market.

Those who are familiar with the start-ups, mainly investors who are interested in funding the new companies, say, so far, they are impressed with the products Innovation Works is developing.

“All of the projects they are working on are fairly interesting,” says one investor who declined to be identified due to his firmʼs ties with Innovation Works. “Whether they can be commercialized is a different thing but from what I see, I am very interested in getting closer with them to see if there is a chance we can go in for [the next round of funding].”

Others have expressed concern that Lee does not have enough experience to run such a venture here.

Inside the Innovation Works office.

Not everyone convinced

“He does not have a track record of entrepreneurialism himself,” says another investor who also declined to be identified for similar reasons. “He has not built a company or product and successfully sold it and made a lot of money.”

For now, making a lot of money does not seem to be the top priority for Lee, who says he is more concerned with supporting young entrepreneurs while creating a new climate of innovation within a country known more for copying concepts rather than creating them.

“I think we will be very proud of the work we do, but donʼt expect a Google or an iPhone,” Lee says. “This is not possible at the first iteration.”

As for the second iteration, Lee says he will unveil that later, perhaps on the companyʼs second anniversary. For now, here is what we know about the start-ups Incubation Works is incubating and the secret projects they have been working on.

Incubation Works companies and projects

Tapas: Android-based Mobile Phone Operating System

Aimed at China’s growing number of young mobile Internet users who are buying smartphones, which are increasingly becoming cheaper in the country, this operating system is based on Google’s Android and includes features tailored to Chinese users.

Such features include contact lists that sync with social networks, software that detects what cities subscribers are calling to or from, a music player that displays lyrics for karaoke fans and e-book reader, which is crucially important here as many Chinese have long read books and other content on handsets.

WonderPod: “iTunes+” for All Smart Phones

For Chinese mobile users, entertainment is a crucially important part of their handset experience.

As 3G access spreads and smartphone penetration increases across the country, more users will inevitably be downloading music, videos and games on their phones.

The problem is third-generation access remains expensive in China and also as more users convert to 3G, there is a risk networks will be clogged with data-heavy content sought by subscribers. This solution (called Wandoujia in Chinese) provides a PC program to manage mobile content.

Users can download videos, music and e-books via a USB cable, helping to alleviate the high cost of downloading data via 3G networks.

Umeng: Mobile Analytics

While it is becoming increasingly easier to track user behavior, demographics and other data from Internet users, figuring out exactly what people are doing on their mobile phones is another story.

This solution is aimed at giving developers a better understanding of who is using the applications they are creating, on what type of phones and identifying whether or not their programs have glitches across different mobile platforms.

It offers a special “Mobile Metrics Report” featuring information about users and the overall market based on data retrieved from more than 1 million phones. Other features include analytics tools enabling app developers to identify the user trends and behavior analytics of around 1 million end users.

PhotoWonder: Fun Photo App for Generation Y

It’s no secret that Chinese like to take photos of themselves, their friends, in fact everything. This is an application that enables China’s young mobile users (its target is particularly young girls) not only to take photos with their phones but also edit them with a Photoshop-like software that is installed right on the handset.

The software allows users to lighten skin color, enlarge eyes, even remove acne. Special designs and stickers can also be added to the photos. The application has been released in simplified and traditional Chinese and is also already proving to be highly popular outside of China, particularly in South Korea where it has also been released.

Ascending Cloud Technologies: Global Web & Social Game Platform

Once a developer creates an application, the complicated task of tailoring it to different mobile platforms and also distributing it in different markets must be completed. Ascending Cloud is intended to make this process easier.

The game publishing software, which is built on proprietary technology for developing and publishing social and Web games, enables publishing in over 30 countries, thus lowering the cost of multi-country game development and publishing. It will help developers reach more diverse markets, especially in smaller countries where there is high demand for games but few developers to create them for local demographics.

Don’t mention Google: Lee Kai Fu, former president of Google in China, in moving on with his new company Innovation Works.

Beijing, China (CNN) — Can Lee Kai Fu make innovation work in China?

Lee is the former president of Google in China who left the internet search giant last Fall just months before the company’s high profile scuffle with the Chinese government over censorship rules and alleged hacker attacks.

That furor raised Lee’s international profile, but the 48-year-old is now fully focused on the future, hoping to inject a new spirit of innovation into Chinese business with his investment and incubation company Innovation Works.

“People expect Innovation Works to be magical,” said Lee during an interview with CNN in June at his company’s offices, located just across the street from Google’s China headquarters.

“The great anticipation outside of Innovation Works is both a pressure for us as well as something that excites people. I want to make a plea for people not to expect miracles.”

That pressure comes as Lee has a good track record in the West and a reputation, especially among young Chinese, as a business role model.

Originally from Taiwan, Lee studied computer science at Columbia University in New York and later earned a doctorate in the same field from Pittsburgh’s Carnegie Mellon University where he was also a lecturer.

He then worked for Apple and moved to China in 1998 to head up Microsoft’s Research division in Beijing. In 2005, he joined Google to lead the company’s operations in China.

While Google’s share of the Chinese search market increased from nearly nothing to around 30 percent under Lee’s watch, some questioned his leadership skills and whether his exit was influenced by an early knowledge that Google would announce in January potential plans to close its Chinese operations.

“I don’t think he should be held responsible for the existing circumstances of Google in China,” said Keso, a Beijing-based tech blogger who traveled with Lee to Google’s Mountain View, California, headquarters in 2006.

“If there’s blame, Google’s choice to enter the Chinese market might have just been a mistake from the very beginning.”

Even so, Lee’s legacy with Google is one that remains with him today and won’t fade anytime soon.

However he’s reluctant to talk about his former employer.

“I can never please any audiences with what I have to say [about Google],” Lee told CNN. “So, I would rather not talk about it.”

Instead Lee would rather talk about is his efforts to foster a mentality that values long-term success rather than instant riches and the need to reform a Chinese education system that focuses on rote memorization over individualistic, out-of-the-box thinking.

In addition to the four books Lee has authored on such subjects, he also regularly lectures at Chinese universities and has become something of a mentor to many students.

“I have had a certain impact at Microsoft and Google but the larger impact have been the lectures and the books,” Lee said.

“I don’t think I have been particularly profound, but I think people need guidance and mentorship at a very confusing time.”

Lee and his staff offer young Chinese entrepreneurs, engineers and project managers financial support and guidance to help them build companies and launch products for China’s 400 million Internet users and 700 million mobile subscribers.

Since Innovation Works was launched, it has received 100,000 resumes, reviewed 500 business plans and amassed around $115 million in funds from investors, Lee said.

Today, it has 200 staff members and is incubating 12 start-ups, five of which Lee unveiled to journalists earlier this week during a tour of a new office space the investment company will move into later this month.

He also unveiled five of the companies Innovation Works are supporting and the products they are developing for the Chinese market. The projects, heavily focused towards mobile Internet, e-commerce and cloud computing, included an Android operating system called Tapas with features tailored for Chinese handset users.

“An early stage entrepreneur who wants to build up companies will face a lot of trouble in China,” Lee told reporters.

“It is not as good as it seems. Even though you hear a lot about the start-up world being wonderful, they face a lot of trouble.”

Some investors question whether Lee, who has never been an entrepreneur himself, has what it takes to help new companies succeed.

“A common perception is he is Google and he is a professional manager and pretty much has been his entire life and never really run a start-up before and never done investing before,” said an investor who declined to be identified due to his firm’s interest the companies Innovation Works is incubating.

“It is going to be tough for him.”

Others are concerned the start-ups Lee is coaching may not be able to survive in the harsh business climate of China where many deals are won under-the-table and profits are sometimes earned in down-and-dirty ways.

“I don’t think they can take the low ground because they have the burden to always be taking the higher ground,” said another investor who also declined to be identified.

“Most businesses in China make money doing business in gray areas or crossing lines. [Innovation Works] will always have to take the higher ground, which means they may never be making as much money as competitors.

“I think it will be innovation at work, which is not Innovation Works. But we have to give Lee the benefit of the doubt.”

Yet for Lee, the benefits he says Incubation Works is imparting to young entrepreneurs is far more important than the doubts anyone may have about him, the company and the success it may or may not have beyond its offices here in Beijing.

“Even if our result is not brilliant, or it is not changing the world, I am very certain the people who come out of here will be better people because of what we have done,” he said. “I do think in the end it is the result that will tell the story.”