Silicon Valley’s Chinese Brain Drain

Lian Zi

“So this is life,” Liang sighed at his 35th birthday party.

To an outsider, Liang’s life was enviable—five years previously he had graduated with a PhD from an Ivy League school, then started work at Google. Because he had a doctorate and had some publications to his name, he was able to obtain a greencard not long after graduation.

He was even able to afford an apartment in Silicon Valley. He might not have been so well off as other engineers who had had smooth promotions and were buying two million dollar homes in the Stanford area, but compared to the average person outside of the tech industry, he was living the good life.

Yet the longer he lived in Silicon Valley, and the more work experience he accumulated, the more dissappointed he became in himself. “Is this it? I’m not going anywhere.” As he saw it, Silicon Valley was like a retirement home. He had a good salary and benefits at Google, but he wasn’t able to realize his individual value, had no way to break through the management ceiling, and he wasn’t willing to spend his life just in coding.

The week after his birthday, he bit the bullet and resigned from Google, and, leaving his wife and son in the US to maintain their residency, he returned to China to join Alibaba. He also left behind a group of others just like him, hesitating and hoping for something more.

The Ambitions of Middle-Aged Engineers

Who knows when it started, but somewhere along the line “35” became code for “midlife crisis,” even in spite of the fact that Silicon Valley’s middle-aged engineers live without too much stress or strain.

These people, envied the world over for their chance to work at the apex of the global tech industry, sometimes turn on themselves, believing that they could do still more, but are held back by some indiscernible “ceiling” and left to be just one more cog in the machine of their employers.

They don’t lack for money. According to a 2015 study, the median household income in the US is about $55,000, while the individual median income in Silicon Valley is $76,000. For those working at FLAG, FANG, or some other acronym combination of the top tier companies (Facebook, LinkedIn, Apple, Google, Netflix, etc.), that figure can easily rise to between 200 and 400,000 for an engineer.

“Although it wasn’t bad, I still wanted to try to go higher.” Liang said that even if he spent another 10 years in Silicon Valley, he still wouldn’t be able to break into the level where he would be involved in discussions of strategy. And yet, he says, he’s always wanted to “do something.”

“Being an engineer in the US, you can quickly get a comfortable life. But Chinese engineers want to break through that rigid hierarchy. More and more of them in Silicon Valley believe that if they want real money and real success, they have to return to China,” Wu Ruizhi, another engineer, told me. And they have precedents to look to: Li Zhifei, who left Google to found Mobvoi, or Mao Wenchao, who left Stanford to become CEO of Little Red Book.

And that desire among Silicon Valley-based engineers to reset their “destinies” by returning to China is always ready to be answered by a few headhunters, quietly lying in wait on LinkedIn.

Join a Unicorn

Wu, like Liang, was once an engineer in Silicon Valley, and later served as the CEO of the largest Chinese engineer community in Silicon Valley. He ending up having plenty of contact with Chinese companies, and then joined Rokid, one of China’s many upstart startups, an AI and robotics company, as its North American lead, which has him often travelling back and forth across the Pacific. For Wu, he is able to keep one foot in China, one in the US, a compromise rather than a radical break like Liang’s.

But even more, Chinese companies themselves want to bring people back, as shown by a new and recent recruitment battle among several competing Chinese companies who came directly to Silicon Valley. The knives have come out, and it’s been a free-for-all every bit as intense as the still ongoing fight between Mobike and Ofo.

As one insider explained, it’s comparable to what happened not so long ago with Uber. “Uber’s San Francisco team has basically been emptied out of its Chinese engineers. After Uber left China, Ofo and Mobike swooped in to poach their people, and they set their sights on Uber’s US headquarters’ Chinese engineers.” The two companies ended up escalating their fight, offering ever larger salaries and opportunities for advancement.

It is possible then for someone who spent years as an ordinary engineer in a company like Uber to return to China and suddenly find themselves elevated to the position of a director. “How much better their technical skills might be than the engineers already in China is hard to say, but bringing valuable people out of Silicon Valley makes for a good story, capital-wise,” said one person familiar with the recruitment drive.

And in the process, Ofo won its new product chief, Chen Wei.

In March, Chen Wei joined Ofo, after serving at Uber in China. A graduate of Stanford’s MBA program, and with experience at Microsoft, Oracle, SAP, and other major tech companies, she had joined Uber at its San Francisco office in 2015 as the lead for its China product team. With an international background and connections, especially from her time studying in Silicon Valley, she became a bridge for Ofo to other professional talent in Silicon Valley.

“Getting one Chen Wei is equivalent to getting half of Uber headquarters China team,” said one person.

There are plenty more like Chen Wei, and they all have one thing in common: they chose to return to China to join a unicorn company.

Born in Beijing, and having come to the US to study when he was in his teens, Zou Jia was also once part of Uber’s San Francisco team, where he led a small team responsible for product development. But he has since been persuaded by Mobike to move back to China and join them as their new vice president.

To leave Silicon Valley and return to Beijing after 17 years was an enormous decision for him and his family, but he took only two days to consider it. “They found me just by talking around. Mobike’s CEO used to be Uber’s general manager, and seeing how he’s been able to advance, I had faith in the company’s vision, so I came to the decision quickly.”

Zou made note of Mobike’s international background multiple times, with not only the CEO, but also the CTO having spent over a year outside of China, and five other vice presidents all with overseas experience or at least experience in foreign-owned companies.

“In the US, I couldn’t touch the policy-level of a company. But at Mobike, I can really feel that we are able to change the world, or at least I can feel what value I bring to the company, and I can clearly see what space for growth the company gives me.”

Zou says that he has enjoyed the process: leading an even larger team and taking on new problems brings many challenges, but that only pushes him to learn more and become better.

“This is the life I’ve always wanted. Professionally the horizon is wider, and I can see farther.” Returning to China has indeed been what he hoped for, and his Silicon Valley halo has put him at an advantage over his peers, winning him a better salary and benefits.

But that halo can only last so long, and only his skills can help him maintain his position.

There are four or five others around him who also decamped from Uber and the US to make the move to Mobike, and it has been similarly smooth sailing for them. Where in the US they might have only been able to be a tech lead, at Mobike they have risen to high-level management. They have skipped up two or three rungs of the ladder, in what might have taken them at least six or seven years to achieve while at Uber.

After joining Mobike, Zou also lobbied some of his colleagues in Silicon Valley, but he is constrained by the former agreement he signed with Uber from actively poaching former coworkers. Still, some of them have moved of their own accord after seeing how he has prospered.

Choice Matters More Than Ability

Despite their many differences, each person interviewed emphasized one common point: choice is more important than ability.

In most cases, the Chinese companies trying to lure Chinese engineers back have their own calculations in mind, and one thing they have gradually become clear on is that Silicon Valley engineers are becoming less and less “worth it.”

“From 2013 to 2015, there was this Silicon Valley investment fever for Chinese investors. At the time, if someone ethnically Chinese founded a company, they’d get a horde of investors throwing cash at them,” Wu said. Mobvoi and Little Red Book were such cases. But in the last two years, the rush has been in the other direction, from Silicon Valley back to China.

That’s how Wu Jie, an international headhunter who previously worked at Oracle as an engineer and returned to China in 2015 to start his own company, sees it. Several months ago, he and his company went scouting for Chinese engineers in the US on behalf of Alibaba, Ctrip, JD.com, and several other companies. “We had almost 3000 people register for a job fair, with no fewer than 1000 showing up,” he says.

Those who have already gone back, each time they show off their achievements on social media, make the engineers lingering in Silicon Valley feel an itch in their feet. “It’s only ever good news in startup circles,” Wu joked.

Under the influence of such “good news,” some Silicon Valley engineers can’t help but be tempted to jump on the bandwagon, and instantaneously redouble their value by returning to China, carrying dreams of becoming the next Li Zhifei or Zou Jia.

But unfortunately, the words “Silicon Valley” are losing some of their shine, at least for those looking for a way into BAT (Baidu, Alibaba, and Tencent).

“When we give these sorts of big companies a resume from Silicon Valley, only one in 20 will get an offer, and sometimes the compensation is just middling,” Wu said. BAT are already reluctant to pay out too much just for Silicon Valley credentials.

“If you compare it to the last two years, when you could join a Chinese unicorn and become some CXO, or enter BAT and rise to a vice president’s position, the moment for Silicon Valley returnees has passed, and their value is growing less and less.” That’s especially true for those who aren’t already highly ranked in Silicon Valley, or who don’t work on a core team.

An ordinary engineer from Google’s advertising team might be able to get 20 offers, but even a more senior engineer from a more marginal team might get nothing. When hiring Silicon Valley technical professionals, ability and what the person can provide for a company come first, but many who want to return to China don’t have a clear measure of where they stand; they just feel that the badge of “Silicon Valley” still gives them some distinction. They aren’t yet aware that the difficulty of using a return to China as a springboard for a higher salary and higher position is growing worse.

So far as BAT are concerned, the skills gap between the average Silicon Valley engineer and those in China is narrowing. Thus would-be returnees are finding it harder to negotiate the money they had hoped for, and giving up. Wu has seen so many such cases already that he and team are no longer even willing to spend their energy on them.

But the choices made upon returning are incredibly important. As Wu noted, joining a company with promising prospects and that the returnee understands well will give a boost to their career, but joining a smaller startup, even one offering larger compensation, could just add to one’s troubles.

“Getting used up and squeezed dry by some startup and then cast aside has already become a cliché.”

On (Not) Keeping Up and Looking Down

One thing Wu Jie has seen a lot of is this: Many startups, when poaching people from Silicon Valley, don’t really pick them for their skills, but to create a story around them that will capture investors’ attention. So they might make an offer with terms even better than those for their own CEOs, but once they get their new funding in hand, the value of the new hire diminishes. The company may not be willing to continue paying such a luxurious salary package, and if it runs into cash flow problems, the highly paid hire is apt to be the first to get cast aside.

“Joining a company you don’t know well has a very high risk.” Wu, based on his experience, estimated that engineers who return to join small companies may have to jump ship once every half a year. And if along the way they want to join the likes of Alibaba, it may be difficult to ensure the same rank and pay.

Those who join the larger firms, though, have their own complaints.

“It’s exhausting in China, not just physically but mentally, with more pressure. Silicon Valley is better.” Liang hinted to his wife over the phone after over a month of coughing in the terrible air that he was thinking of returning to Silicon Valley—and that he didn’t think much of domestic companies.

“He doesn’t approve of any of them,” his wife sighed when speaking to me.

It’s not just Liang who holds this “Silicon Valley elite” sense of superiority; almost all returnees have it. But their new employers do not always grant them the work environments, salary, or chances for promotion that will placate them.

“In Silicon Valley, everyone thinks that the reason they can’t advance is because white and Indian coworkers form a glass ceiling over them. So in the giant firms, becoming a director or a VP is as far as you can go, and most can only make it to senior engineer,” said one engineer, Zhang Xiao, who had left LinkedIn for Alibaba. “But in reality, it’s still easier to advance in the US. There’s too much competition in China, so it’s actually harder.”

Those harsh and sudden new realities have left Liang and other returnees who were hoping to be “valued” and receive better treatment feeling dejected.

“Now, the era of looking favorably on someone just because they came back from Silicon Valley is gradually passing.” Zhang believes that his peers in China are not necessarily better than those in Silicon Valley, but in soft skills, especially building connections, sometimes returnees are at a disadvantage compared to those who have remained local.

And so even as returnees like Liang look down on domestic companies, companies say that returnees can’t catch up.

“If I hire a returnee engineer at four times the local salary, then my expectations for them are not the same as for an ordinary engineer. I want to see results,” one CEO who wished to remain anonymous said.

“Chinese employers are more urgent when it comes to seeing results, and that puts huge pressure on returnee engineers. But for returnee engineers and scientists, turning their more extensive knowledge into products takes more time, especially when you’re talking about something that a local engineer could never do. If the employer lacks patience and the engineer can’t meet the ‘unreasonable’ deadline, then sooner or later there is going to be a problem,” Wu Rongzhi said.

In many cases, the problem isn’t one of ability, but one with managing people. And that is one thing that is not a forte of many Silicon Valley engineers.

“It’s not that the US doesn’t have a ‘wild west’ environment in the industry, it’s that most ethnic Chinese haven’t been promoted far enough to find themselves in it,” Wu said. He believes that office politics is something still very alien to most returnee engineers, especially for those dropped into a management position in a Chinese company, without any management experience of their own. “Just being airdropped in [to that position] isn’t easy.”

Can’t Stay, Can’t Leave

Some returnees think of running off again—to Silicon Valley, where they were once comfortable. But that’s not easily done.

Wu Jie says that in the US, engineers have more focused work. Once they join Chinese companies, though, because of personnel shortages, their work tends to become more varied: their technical knowledge falls behind, which means they then fall short when they go up for technical interviews with Silicon Valley companies.

For others, there are more lurid reasons for why they can’t return to Silicon Valley—such as infidelity, breaking them from their families left behind in the US.

Zhou Hong (not his real name) is one such example. Two years ago he returned to China, and has since divorced the wife he left behind in the US and remarried to a woman he began a relationship with in China.

In Silicon Valley, Zhou was one more brick in the wall, and there are plenty more like him. But upon returning to China, his newfound prestige and salary transformed him from an unremarkable “honest man” into someone else. Even now, he denies that he had an affair, claiming instead that he simply “met someone more suitable.”

“A lot of people who return have affairs. It’s already become common.” A number of those interviewed affirmed this, though they each insisted they themselves had not had any such relationships. Wu Ruizhi remains in the US largely because he does not wish to break up his family. “If I want to go back for my career, I’ll wait until my child is a little older, and then take my family back with me.”

Zou, for similar reasons, brought his Taiwanese wife with him to Beijing. Although she had difficulty adjusting at first, Zou believes it was important to keep his family together.

Wu, however, believes that the problem isn’t due to men’s promiscuity or temptations away from home, but because when couples are separated for long periods of time, there is a breakdown of communication and mutual understanding of the pressures they each face.

In spite of it all, Liang chose to return to China. He believes he will remain unchanged, though his wife is uneasy. Because of their child, she has no choice but to remain behind in the US.

“Remember to wear the ring I gave you!” she told him over dinner the day before he left. She hopes that over the next four years it will serve to remind those around him that Liang is a family man. But behind her remonstrations there is no end of doubt.

And so she tries to console herself: “Perhaps before long he will decide to come back.”