Last week, Goldman Sachs invested US$25 million in Chinacars.com. Goldman’s investment comes just 10-months after Series A funding.

We’re very excited that Goldman is joining the Chinacars’ family and expect great things to come in the future.

Stay tuned!

This morning, as I was ripping through USAToday and wallowing in pain as reality set in that the dreaded Yankees whomped my beloved Red Sox in five straight games – I got to thinking, “why do some people/teams underperform and others overperform?”

Whether in sports, business or spelling bees, you’ve got to marvel at great competitors, especially those who, under tremendous pressure to replicate pristine performances, not only meet expectations but surpass them.

Coincidently, USAToday’s sport columnist, Jon Saraceno, wrote an article titled “Nobody better at the art of competition than Tiger” in today’s paper. For some of us who don’t enjoy playing golf but rather enjoy reading about it, Saraceno is a great journalist to follow and Tiger is the player to follow.

Tiger is coming off a win at this past weekend’s PGA Championship elevating him to a grand total of 12 major tour championships – just 6 behind the 18 major titles held by golf great Jack Nicklaus. Saraceno uses this opportunity to drill down Tiger’s winning characteristics in his article, ultimately surmising that it all comes down to roots.

I think entrepreneurs will find this an interesting read – below are some highlights:

I don’t know if Tiger is the quote-unquote “greatest athlete” of all time — Jim Thorpe and Bo Jackson are right up there — but there hasn’t been a more ferocious competitor. Smell blood? He goes for the jugular. In the cruelest game, Woods relies on the one thing he knows he can trust: himself. He has no teammates. No timeouts. Only his skill, resourcefulness and savvy. Tiger has every reason in the world to rest upon his numerous accomplishments, but somehow, someway, he retains the inner spirit to remain motivated despite all the millions, the major-trophy wife and the $40 million oceanfront estate. Do you know how many athletes get a sniff of money and fame and totally destroy their careers, if not themselves? Woods has good roots, and that cannot be underestimated. With whatever his late father Earl, and his mother Tida, watered their young offshoot, it provided the right mixture of self-discipline, self-awareness and confidence.

Ymer Venture Capital and Legend Capital closed a syndicate investment in Beijing based United Automobile Association (UAA) last week.

We are thrilled to be an investor in this great company which has been leading the way in China’s automotive roadside assistance (e.g. American Automotive Association) category since UAA was founded a little over a year ago. (Before you pass judgment on the “…a little over a year ago” keep in mind roadside assistance is an emerging segment in China that only took hold a couple years ago.)

We have been big fans of the company for a long time, specifically because we believe the management team, led by seasoned entrepreneur Charles (Zhengyao) Lu, has demonstrated time and time again that they are capable of immaculate execution on the back of solid domain knowledge.

Furthermore, we believe there are heaps of synergies waiting to be tapped (and developed) between UAA and our other automotive investment, Chinacars.

We plan to write a longer post about this investment in the next couple weeks explaining what we like about UAA, where we see roadside assistance and China’s overall automotive business heading, and what we hope UAA will become.

In the meantime, there are a number of car related blogs that we’ve posted over the past year which should provide a short-term fix.

Last week, The Economist ran an article titled “Something New: getting serious about innovation” about the Chinese government’s new found determination to push China’s economy up the technology value chain – shedding its manufacturing stripes and dawning a white laboratory coat.

The article is timely in that the government recently published its “National Medium-Term and Long-Term Programme for Scientific and Technological Development (2006 – 2020)” which outlines steps to spend more capital on science and technology and promote business reforms – the ultimate goal is to dramatically reduce China’s dependency on imported technology by as much as 30% by 2020.

The Economist reports that currently, on average, “China’s 20,000 large and medium-sized enterprises undertake fewer than five new development projects and generate only two and a half new products each year.” This is shockingly low when compared to Japan where the average products live cycle can be as short as 90 days.

The government’s plan also calls for an increase in R&D spending from 1.3% of GDP to 2.5% of GDP by 2020 – this would place China on par with America and Europe. In other words, China wants to crank out more engineers and scientists whilst fading “softer” skills, such as finance jockeys and marketing studs.

Admittedly, the plan’s time horizon is, well, a bit longish – who really knows what is going to happen in China over the next decade?! And frankly, this stuff ain’t all the interesting (numbers, figures, forecasts…dull) – so why am I spending time mulling this over, you ask?

What is interesting is the underlying debate this plan has generated between China’s officials – in one corner we have the nationalists who favor domestic homegrown “go-it-alone” technology innovation (i.e. mega-technology projects), in the other corner we have the internationalists who favor incremental innovation (i.e. small technology projects) of existing platforms and technology.

I think a prime example of this polarization is evident in yet-to-be-resolved-though-likely-to-happen-next-year battle over China’s 3G wireless technology standard – lovingly known at TDS-CDMA. ‘Nough said!

I bring this up on the back of a recently published (July 2006) paper a friend from Columbia University’s business school emailed me over the weekend. The paper is written by Columbia Professor Amar Bhide titled “Venturesome Consumption, Innovation and Globalization”. Professor Bhide argues that policy makers and business managers, in general, are not only totally and completely clueless as to how innovation works but also its impact on economic growth.

In describing this misperception, Bhide points to the wayward individuals as prescribing to “techno-fetishism and techno-nationalism” as described by Ostry and Nelson in 1995. Bhide writes,

“The mindset incorporates two related tendencies. One is the focus on the upstream development of new products and technologies while glossing over their downstream consumption and use. The other is the belief that national prosperity requires upstream international leadership in upstream activities – “our” scientists, engineers, entrepreneurs, and firms have to better than everyone else’s – they must write more papers, file more patents and successfully launch more products.”

Furthermore, Bhide argues that,

“…the willingness and ability of individuals to acquire and use new products and technologies is as important as – and in small countries more important than – the development of such products and technologies. An innovation originating in one country does not impoverish other countries. Rather it tends to improve standards of living in all countries that have the downstream capacity to acquire and implement the innovation.”

Okay, this might be a lot to digest – to break it down in bite size chunks – Bhide believes that innovation, true innovation, doesn’t originate upstream in federally/state funded laboratories but rather downstream in the market place and in the hands of the consumers (i.e. demand for innovative products). And thus, the most vital part of innovation (demand side of the curve) is the willingness of consumers to purchase and play around with new products and services.

On the supply side of the curve, the most important catalyst for innovation is a manager’s ability to successfully adapt the organization to embrace innovation. In other words, the company’s got to figure out how to get consumers to dig deep into their pockets and purchase crap they already own (in one form or another) in an often highly competitive and oversaturated market.

My old boss (British) use to say “…you’ve got to love Americans! You can gift wrap dog crap and they’ll buy it…” I used to grunt and scratch my head (being American and all) and try can scrape together a counter argument but, to be honest, I never could, he was right. But this is the very reason why America is so good at innovation – we’ve got consumers willing to buy crap and companies willing to sell crap (but some of this stuff is really cool crap).

As a side note, the amount of capital US companies spend on developing technology is lower than the amount of capital extended on technology integration/adoption – when this cash ratio is plotted against other OECD countries (Japan, Germany, etc) America is below average.

Back to China’s “National Medium-Term and Long-Term Programme for Scientific and Technological Development (2006 – 2020)” initiative – the question begs, is this the right strategy for China? Should the country be developing mega projects whilst encouraging a go-it-alone mindset?

I’d argue that China’s infrastructure and education system is better positioned to focus on mega-projects employees heaps and heaps of engineers and scientists, however I believe a prolong attempt down this path will not yield the sort of innovation and success China’s leadership and consumers expect. I firmly believe China must find a balance between upstream innovation and downstream innovation, with emphasis on cultivating an environment that promotes incremental innovation.

China needs to develop Venturesome consumption with Chinese characteristics.

I unintentionally overlooked thanking Jacqueline and her colleagues at Sukamishi, the US based design firm responsible for designing Ymer’s fresh new logo.

Aside from designing logos, Sukamishi also does a lot of very cool multi-media work – including a recent TV spot for Pepsi Cola produced for the China market.

So, for the record, thanks for doing a wonderful job!

Okay, this has nothing to do with China (directly) but I can’t stop myself – it just too good – you’ve got to go to itune’s TV Show channel and download the pilot episode of the SciFi Channel’s new reality show “Who wants to be a superhero“.

Each contestant begins with an original idea for a superhero, a self-made costume, and their best superhero mojo. Over the course of the series, they will test their mettle, try to overcome their limitations, and do what it takes to prove that they truly are super. The finalists will leave their former lives behind and become their brainchild heroes, all under Stan Lee’s watchful eye.

I’m still trying to work out which superhero is my favorite but Fat Momma is definitely a leading contender – check out FM’s profile:

Superpowers: Can grow to five times her normal size when she gets angry.

Vulnerbility: Needs doughnuts to fuel her super-powers. Diet foods weaken her and shrink her to five inches in height.

Catch Phrase: “Saving the world, one doughnut at a time!”