SAN FRANCISCO - For Jack Jia, an entrepreneur and investor in California's Silicon Valley, sometimes a business' viability in its home market just isn't enough anymore.

In an interview with China Daily, Jia said when he considers funding a startup company, he sifts through the startup's business plans to see if it can tap not one but two markets.

"Sometimes we are leveraging the accidental niche between two markets," said Jia, who is a partner at GSR Ventures, a venture capital fund that focuses on tech companies in China.

Jia, whose firm has offices in Beijing and in the Silicon Valley, said that when a market is saturated with Western companies, a startup may have to look elsewhere to find a niche, such as in the Chinese market.

But that window for double-market attractiveness is closing fast. About eight months after GSR invested in China's e-commerce site Lashou.com, which sells items in bulk to groups of customers, US-based Groupon launched its Chinese site Gaopeng in late February. Lashou and Groupon are very similar in format.

Analysts said Groupon's Chinese partner Tencent would allow Groupon to tap into Tencent's massive number of users. They also said Groupon will be a threat to other e-commerce sites and realign China's thousands of fragmented sites that have the same business model as Lashou.

But Jia thinks websites such as Lashou have their own strengths.

"If you look closer at these local clones, their actual execution is quite different (from Groupon). Much like spaghetti is not Chinese noodles," Jia said.

Sites in China that allow group purchases of bulk items are normally tailored to cultural differences among regions. For instance, some websites know that lamb chops sell very well in Beijing but not in Shanghai, where customers view it as barbarian food, Jia said.

Apart from Lashou, GSR also invested in Shanghai Greatwisdom Software Develop Co, a developer for online stock analysis programs and AdChina Ltd, an advertising network.

GSR has about $700 million to invest, with 10 percent of their funds in renminbi, Jia said. About 99 percent of GSR's investments are in China-related projects, Jia said.

Jia is also founder and chairman of Baynote, a Silicon Valley-based software developer that collects information about users from clients and offers users recommendations on purchases.

While many Silicon Valley investors and executives are worried about a slowdown in innovation and ignoring intellectual property rights in China, Jia has his own perspective on copycats.

"Innovation is 99 percent imitation with 1 percent differentiation, and smart copying has been the core to the success of human civilization," Jia said on his blog.

"I give priority to team and market, rather than technology when selecting a project. Inspiration is nothing if it cannot get things down," he said in an interview with China Daily.

Venture investors in the Silicon Valley have traveled more frequently to China as the country has become the primary target for venture investors. Jia said the US now is the secondary target.

China's venture capital fundraising set records in 2010 with figures exceeding $11 billion, according to Zero2IPO Research Center, a Chinese investment research institution.

Internet and clean-tech companies lead the pack in attracting funds, said Zhou Shijie, an analyst at the center.

China Daily