A doctor who returned to Jiangsu province from overseas study shows students how to conduct experiments. Photo by Xiang Zhong Lin/For China Daily

Business blindness

Back in 2009, the subsidies that helped Li and Feng were not available, and Zhou concedes that he was "kind of blind" when it came to building up his business.

Born in 1976 in Yingkou, a small coastal city in the northeastern province of Liaoning, Zhou holds bachelor's and master's degrees from Tsinghua University in Beijing, one of China's top schools, and also has a doctorate in physics from Stanford University in California, where he studied from 2000 to 2005.

His five years of doctoral research into tunable diode laser absorption spectroscopy technology helped Zhou find a job in Los Angeles, earning $120,000 a year, directly after graduation. Three years later, he had become the company's chief scientist.

"But that was it. It was a good job. I guess the word 'scientist' was listed as a top career when we were little," Zhou said, with a laugh. "But that's just it. You can clearly see what your work and life will be in 10 years, in 20 years, by the time you are 60."

He needed a challenge: "Careers in foreign countries have limitations and ceilings, at least if you are unable to express yourself freely enough due to the language difference."

Zhou had the idea of starting a company in Beijing while he was watching Win in China, a popular TV program about entrepreneurship. His wife, who has an MBA from Stanford, supported the idea, so they relocated to China, bringing their 18-month-old daughter with them.

The product they had in mind was an advanced gas-detection instrument for use in coal mines.

The device used laser-detection technology, which lowered labor costs and raised the accuracy of detection.

Despite those advantages, the device was a failure because Zhou hadn't researched the Chinese market before launching it. As a result, he didn't realize that China's mining industry was accustomed to using old equipment and there was little desire to change.

"I think the most difficult thing for returnee startups is that your product needs to change customers' habits. Having lived away from China for so many years, I initially failed to study my target customers' behavior," he said.

"The company also lacked marketing channels. Coal mines are located far from Beijing, so the travel costs to introduce the product were huge," Zhou said.

"All this happened because I had lived outside China for many years so I was unfamiliar with the domestic market."

In addition, the device had to undergo a large number of tests and reviews before it could be used in coal mines, which took far longer than Zhou had expected.

Meanwhile, protection of his intellectual property rights was another key concern. Those factors prompted Zhou to conduct extensive market research.

Now, his clients are mostly electricity power plants where the device is used to help meet environmental protection standards.