Why Here, Why Now, Why Again?

I guess I owe an explanation to many of my friends who have watched and followed me with curiosity through all these years and numerous avant garden social networks.  I've moved back to the States since June and I haven't got the chance to call up many friends (actually, most) in the States yet to let them know of this news, which is very uncharacteristic of me. On the other side of the ocean, many of my friends in China are wondering why I suddenly disappeared in Beijing's social scene. The questions I've got a lot lately are: Why are you here in Stanford? Why are you back to the States? Why are you moving your home base again?

Admittedly I was a bit jaded explaining my recent endeavor to my friends, who constitute a fairly substantial group across the Pacific. Our annual newsletter at the end of the year still serves as an effective way to keep all our cared ones updated - a tradition we have been practicing since 2004 when living in Boston. However I stopped writing the English version of the newsletter two years ago because a Chinese version alone already exhausted all my creativity and inspiration (I don't think any English newsletter can beat my Chinese newsletter of 2010 and 2011. They're not as good as Umberto Eco's, but they are decent and pride attempts in that direction). The problem with the newsletter is that we've moving our lives too fast for the newsletter to catch up.

My feeble attempt on Sina Weibo also got buried in the sea of tweets quickly. I wrote this《出师表·2012》in May 22, but Sina Weibo already started its irreversible decline and much fewer users are still active. Nothing of much substance can really leave a trail on twitter-esque Sina Weibo.

So here's my latest update and why everything leads to right here, right now.

I've had US greencard since 2006. My wife and I actually gave up Singapore PR (permanent residence) after we got greencards (looking back that was probably not a smart idea, from a personal tax standpoint) thinking that US Greencard was all that we needed. When I left Boston to join a tech startup in Beijing in 2008, I sort of gave up Greencard mentally, expecting to settle down in Beijing in years to come. We did settle down in Beijing and lived there for more than four years, during which I joined two ambitious startup companies working with some of the
most influential VC firms. For a variety of reasons that can easily fill up my first novel and two long and exciting TV drama series, these two companies couldn't complete its IPO. So at the end of 2011 I was weighing other options going forward.

Then as we were trying to enter US for our West Coast Highway 101 road trip, we found that our greencard status faced serious challenge because we did not stay physically inside US long enough. Long story short, after consulting multiple immigration lawyers in the Bay area, we saw two options in front of us with no middle-ground: either we move our home base here, or we run the risk of giving up greencard on our next trip back to US.

We didn't want to give up greencard, so we decided to move back to US.

Moving back to US seems to be against the current trend, as many Chinese have flocked to Beijing, Shanghai and Hong Kong in recent years to pursue their wild wild east dreams. US was still recovering slowly from the painful sub-prime crisis since 2008 and China has been rising fast into a superpower, at least economically. Colorful and exciting rugs-to-riches stories roll off tongues in the bars and Starbucks in Beijing and Shanghai while young people fantasize being the next Jack Ma, Pony Ma, Robin Li, or Neil Shen.

However there are certain things that we value very much and we find very hard to come by in the environment where we became so intimate with in the last few years. I won't go into details here though. Come to Stanford and we can exchange some thoughts over a few glasses of Zinfandel. The only thing I wouldn't mind sharing here is tax, because it seems to be the first thing that comes to mind for many friends.

US is perceived to be a very high-taxed country, which is largely true. Nonetheless:

  • China's tax rate is just as high as US
  • China's tax laws' development in recent years is clearly on a trajectory to becoming more and more like US tax laws
  • Technically China also taxes its residents on a global basis, just like US does. It's obviously very hard to enforce, but its principles are very similar to those of US tax laws
  • US' tax rate is indeed very high for salaried workers, but if you work for yourself as an entrepreneur, you can maintain a fairly low effective tax rate. Romney famously has a tax rate of only 14%. Buffett keeps complaining his tax rate is too low.
  • At the very least, US' tax laws are well developed and there are many vehicles you can explore to bring down your effective tax laws. China's tax laws are far behind in sophistication. Some people might roll their eyes now and say I can get a lot of "gray" income in China through cash. Yes that's true. If that's your cup of tea or if you work in government departments/agencies, by all means stay where you are. Good for you.
  • There are actually benefits associated with paying high tax rate in US - you get the best protection of your personal assets. At a certain point in our lives,  tax rate is really not the top concern. Easy come, easy go.

After making up our mind to move over, we thought West Coast would be a better choice as it's closer to Beijing/Shanghai with non-stop flight. The weather is also much nicer on the west. Most importantly Silicon Valley is here, where I can start from scratch to continue/pursue my entrepreneurial ideas.

As I talked to friends in the Bay area to find out the startup scene in the valley, I asked them what would be a necessary factor to startup success. Invariably the answer was college network (company network has little use, unless you've made a lot of money together with a single-digit employ ID number). This sounds like a sad sad reality for me since my alma mater is National University of Singapore (NUS). NUS is an excellent university and it had huge influence over me in my
formative years, however its network in the US is fairly limited.

On the last day in Palo Alto during our Jan 2012 California trip, we drove to Sand Hill Road on a pilgrimage to take a look at some of the legendary venture capital firms here. Standing outside Andreessen Horowitz's office looking at the sunset, I thought about that afternoon of 12 years ago when Steve brought me here for the first time and showed me around. KPCB was there, so unassuming and low-profiled. I had no idea what KPCB was yet at that time, but I remembered Steve told me the day would come when I shall come back here to raise capital from those most prestigious and powerful investment firms in the world.

So...just like that, an idea naturally stroke us, why not go to Stanford, which is right here in the heart of Silicon Valley with the best alumni network there is?

I already knew about Stanford's Sloan Fellow program from a good friend who graduated there in 2010. I  just never pictured myself in this program because until very recently  I was very much immersed in the crazy and non-stop business and social life in Beijing. Now all of a sudden, coming to Stanford seems to make all the senses of the world. I would not want to be anywhere but Silicon Valley and which university would serve as a better platform to usher me into the startup and investment circles of the valley?

Once this seed had been planted, the rest of the execution was fairly easy. The past four years in Beijing saw tremendous professional and personal growth for me. I've been through a lot. Maybe I'm yet to figure out what works best, but at least I've known enough what does not work.

So here I am, in Stanford Graduate Business School's Sloan Fellow program. My decision on Stanford was straightforward because it was significantly location-based, which was by the way in sharp contrast to my friend Sten's highly methodological and scientific approach.

Many friends would ask me, so... is this move going to be permanent?

I don't know, my friend. I really don't know. When we lived in Cambridge, MA, we loved Charles River, Cambridge and Boston, and never thought about leaving there. When we moved to Beijing and bought a house there, we thought Beijing was the best place for us. We seem to have a blast everywhere and tend to live our lives to the fullest in general, regardless of where we are.  When we moved here... I no longer want to make any speculation and I no longer have any concept of "permanent" or "temporary". We live our lives, day by day. Carpe diem in Stanford!

Herbert Yang

Herbert Yang

Shanghai