CEO's Death Stirs Debate
Inspired by the rise of Alibaba Group Holding Ltd., which raised $25 billion in a 2014 initial public offering, China’s new generation of entrepreneurs have been engaged in a fierce battle for capital and talent. The country saw the startup of 1.2 new internet companies every day in the second quarter. While Silicon Valley is also renowned for its competitive culture and lengthy hours, China’s entrepreneurs face a unique set of challenges because the industry is more nascent, and regulations and funding are in constant flux.
“The China startup community is under a lot of pressure, if not as much but even more than in the Valley or in the states,” said Dave McClure, the founding partner of Mountain View, California-based venture firm 500 Startups. “Unfortunately, I think people don’t think about health issues that much.” McClure said that among the more than 3,000 founders that he has invested in globally, at least six have passed away, with even one committing suicide.
Zhang died at a critical juncture for Chunyu. In June, it completed a 1.2 billion yuan ($178 million) round of Series D fundraising at a valuation of about $1 billion and was planning to go public, according to Tan. Startups with a valuation exceeding that mark are known as "Unicorns."
For a few months when Chunyu was first founded the company sometimes required a so-called "996 schedule" -- Chinese slang for working from 9 a.m. to 9 p.m. six days a week -- Tan said, adding that the company is long past that stage. Zhang started out as a journalist at a Beijing newspaper, and worked as deputy editor-in-chief at NetEase, a Chinese internet portal. In 2011, he founded Chunyu, which allows patients to have online consultations with doctors, skipping the wait at overcrowded public hospitals.
Chinese executives have for years talked about the difficulties in balancing work and life. After fighting cancer, Kai-Fu Lee, a long-time tech executive, published a book last year saying that he saw the disease as a sign of protest from his body after decades of 15-hour workdays during a high-flying career.
Lee is currently running his own company called Sinovation Ventures that invests in startups and he previously held jobs at Apple Inc. and Microsoft Corp., and served as Google Inc.’s Greater China vice president from 2005 to 2009. Jean Liu, president of taxi-hailing app Didi Chuxing, has encouraged her staff at Didi to exercise more and take care of their health.
People who work for more than 55 hours a week face an increased risk of stroke and coronary heart disease compared to those working the standard hours of 35 to 40 a week, according to a study based on data from more than 600,000 individuals, published last October in the medical journal The Lancet.
The unexpected death of a founder can also highlight the importance of succession plans, according to Paul Asel, Palo Alto, California-based managing partner at Nokia Growth Partners. Chunyu in an Oct. 6 statement said its businesses are operating as normal with Zhang’s duties taken up by co-founder Li Guanghui.
Startup executives face long hours, conflicts with partners and family, and worries about fundraising, Wang Lifen, founder of Youmi, a provider of training courses for entrepreneurs, said in an article mourning Zhang’s death in her Weibo microblog.
"This is a group of people who are surrounded by envious looks from outsiders, who appear at forums and under the spotlight bearing the fine title of entrepreneurs, but do not have a moment of peace in their hearts," said Wang.